GMACM HOME EQUITY LOAN TRUST 2000-HE2,


                                     Issuer,


                                       and


                  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,


                                Indenture Trustee

                            ------------------------


                                    INDENTURE

                            ------------------------


                            Dated as of June 29, 2000


                    GMACM HOME EQUITY LOAN-BACKED TERM NOTES


              GMACM HOME EQUITY LOAN-BACKED VARIABLE FUNDING NOTES

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                                Table of Contents

                                                                                          Page


<S>                                                                                        <C>
ARTICLE I         Definitions...............................................................2

        Section 1.01    Definitions.........................................................2

        Section 1.02    Incorporation by Reference of Trust Indenture Act...................2

        Section 1.03  Rules of Construction.................................................2

ARTICLE II        Original Issuance Of Notes................................................3

        Section 2.01  Form..................................................................3

        Section 2.02  Execution, Authentication and Delivery................................3

ARTICLE III       Covenants.................................................................4

        Section 3.01  Collection of Payments with Respect to the Mortgage Loans.............4

        Section 3.02  Maintenance of Office or Agency.......................................4

        Section 3.03  Money for Payments to Be Held in Trust; Paying Agent..................5

        Section 3.04  Existence.............................................................6

        Section 3.05  Priority of Distributions; Defaulted Interest.........................6

        Section 3.06  Protection of Trust Estate............................................9

        Section 3.07  Opinions as to Trust Estate..........................................10

        Section 3.08  Performance of Obligations; Servicing Agreement......................10

        Section 3.09  Negative Covenants...................................................11

        Section 3.10  Annual Statement as to Compliance....................................11

        Section 3.11  Recordation of Assignments...........................................12

        Section 3.12  Representations and Warranties Concerning the Mortgage Loans.........12

        Section 3.13  Assignee of Record of the Mortgage Loans.............................12

        Section 3.14  Servicer as Agent and Bailee of the Indenture Trustee................12

        Section 3.15  Investment Company Act...............................................12

        Section 3.16  Issuer May Consolidate, etc..........................................13

        Section 3.17  Successor or Transferee..............................................14

        Section 3.18  No Other Business....................................................15

        Section 3.19  No Borrowing.........................................................15

        Section 3.20  Guarantees, Loans, Advances and Other Liabilities....................15

        Section 3.21  Capital Expenditures.................................................15

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        Section 3.22  Owner Trustee Not Liable for Certificates or Related Documents.......15

        Section 3.23  Restricted Payments..................................................15

        Section 3.24  Notice of Events of Default..........................................16

        Section 3.25  Further Instruments and Acts.........................................16

        Section 3.26  Statements to Noteholders............................................16

        Section 3.27  Determination of Note Rate...........................................16

        Section 3.28  Payments under the Policy............................................16

        Section 3.29  Replacement Enhancement..............................................17

ARTICLE IV        The Notes; Satisfaction And Discharge Of Indenture.......................18

        Section 4.01  The Notes; Increase of Maximum Variable Funding Balance;
               Variable Funding Notes......................................................18

        Section 4.02  Registration of and Limitations on Transfer and Exchange of
               Notes; Appointment of Certificate Registrar.................................19

        Section 4.03  Mutilated, Destroyed, Lost or Stolen Notes...........................21

        Section 4.04  Persons Deemed Owners................................................22

        Section 4.05  Cancellation.........................................................22

        Section 4.06  Book-Entry Notes.....................................................23

        Section 4.07  Notices to Depository................................................23

        Section 4.08  Definitive Notes.....................................................24

        Section 4.09  Tax Treatment........................................................24

        Section 4.10  Satisfaction and Discharge of Indenture..............................24

        Section 4.11  Application of Trust Money...........................................25

        Section 4.12  Subrogation and Cooperation..........................................26

        Section 4.13  Repayment of Monies Held by Paying Agent.............................27

        Section 4.14  Temporary Notes......................................................27

ARTICLE V         Default And Remedies.....................................................27

        Section 5.01  Events of Default....................................................27

        Section 5.02  Acceleration of Maturity; Rescission and Annulment...................27

        Section 5.03  Collection of Indebtedness and Suits for Enforcement by
               Indenture Trustee...........................................................28

        Section 5.04  Remedies; Priorities.................................................30

        Section 5.05  Optional Preservation of the Trust Estate............................32

        Section 5.06  Limitation of Suits..................................................32

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        Section 5.07  Unconditional Rights of Noteholders to Receive Principal and
               Interest....................................................................33

        Section 5.08  Restoration of Rights and Remedies...................................33

        Section 5.09  Rights and Remedies Cumulative.......................................33

        Section 5.10  Delay or Omission Not a Waiver.......................................34

        Section 5.11  Control by Enhancer or Noteholders...................................34

        Section 5.12  Waiver of Past Defaults..............................................34

        Section 5.13  Undertaking for Costs................................................35

        Section 5.14  Waiver of Stay or Extension Laws.....................................35

        Section 5.15  Sale of Trust Estate.................................................35

        Section 5.16  Action on Notes......................................................37

        Section 5.17  Performance and Enforcement of Certain Obligations...................37

ARTICLE VI        The Indenture Trustee....................................................38

        Section 6.01  Duties of Indenture Trustee..........................................38

        Section 6.02  Rights of Indenture Trustee..........................................39

        Section 6.03  Individual Rights of Indenture Trustee...............................40

        Section 6.04  Indenture Trustee's Disclaimer.......................................40

        Section 6.05  Notice of Event of Default...........................................40

        Section 6.06  Reports by Indenture Trustee to Noteholders..........................41

        Section 6.07  Compensation and Indemnity...........................................41

        Section 6.08  Replacement of Indenture Trustee.....................................41

        Section 6.09  Successor Indenture Trustee by Merger................................42

        Section 6.10  Appointment of Co-Indenture Trustee or Separate Indenture
               Trustee.....................................................................43

        Section 6.11  Eligibility; Disqualification........................................44

        Section 6.12  Preferential Collection of Claims Against Issuer.....................44

        Section 6.13  Representations and Warranties.......................................44

        Section 6.14  Directions to Indenture Trustee......................................45

        Section 6.15  Indenture Trustee May Own Securities.................................45

ARTICLE VII       Noteholders' Lists and Reports...........................................45

        Section 7.01  Issuer to Furnish Indenture Trustee Names and Addresses of
               Noteholders.................................................................45

        Section 7.02  Preservation of Information; Communications to Noteholders...........46

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        Section 7.03  Reports by Issuer....................................................46

        Section 7.04  Reports by Indenture Trustee.........................................47

ARTICLE VIII      Accounts, Disbursements and Releases.....................................47

        Section 8.01  Collection of Money..................................................47
        Section 8.02  Trust Accounts.......................................................47

        Section 8.03  Officer's Certificate................................................48

        Section 8.04  Termination Upon Distribution to Noteholders.........................48

        Section 8.05  Release of Trust Estate..............................................48

        Section 8.06  Surrender of Notes Upon Final Payment................................49

ARTICLE IX        Supplemental Indentures..................................................49

        Section 9.01  Supplemental Indentures Without Consent of Noteholders...............49

        Section 9.02  Supplemental Indentures With Consent of Noteholders..................50

        Section 9.03  Execution of Supplemental Indentures.................................52

        Section 9.04  Effect of Supplemental Indenture.....................................52

        Section 9.05  Conformity with Trust Indenture Act..................................52

        Section 9.06  Reference in Notes to Supplemental Indentures........................52

ARTICLE X         Miscellaneous............................................................53

        Section 10.01 Compliance Certificates and Opinions, etc............................53

        Section 10.02 Form of Documents Delivered to Indenture Trustee.....................55

        Section 10.03 Acts of Noteholders..................................................55

        Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Enhancer and
               Rating Agencies.............................................................56

        Section 10.05 Notices to Noteholders; Waiver.......................................57

        Section 10.06 Alternate Payment and Notice Provisions..............................57

        Section 10.07 Conflict with Trust Indenture Act....................................58

        Section 10.08 Effect of Headings...................................................58

        Section 10.09 Successors and Assigns...............................................58

        Section 10.10 Severability.........................................................58

        Section 10.11 Benefits of Indenture................................................58

        Section 10.12 Legal Holidays.......................................................58

        Section 10.13 GOVERNING LAW........................................................58

        Section 10.14 Counterparts.........................................................58

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        Section 10.15 Recording of Indenture...............................................58

        Section 10.16 Issuer Obligation....................................................59

        Section 10.17 No Petition..........................................................59

        Section 10.18 Inspection...........................................................59


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                                    EXHIBITS

Exhibit A-1    -......Form of Term Notes
Exhibit A-2    -......Form of Variable Funding Notes
Exhibit B      -......Form of 144A Investment Representation
Exhibit C      -......Form of Investor Representation Letter
Appendix A     -......Definitions



<PAGE>







        This Indenture,  dated as of June 29, 2000, is between GMACM Home Equity
Loan Trust 2000-HE2,  a Delaware  business trust, as issuer (the "Issuer"),  and
Norwest  Bank  Minnesota,   National  Association,  as  indenture  trustee  (the
"Indenture Trustee").


                                   WITNESSETH:

        Each party  hereto  agrees as follows for the benefit of the other party
and for the equal and ratable  benefit of the Noteholders of the Issuer's Series
2000-HE2  GMACM  Home  Equity  Loan-Backed  Term  Notes  and GMACM  Home  Equity
Loan-Backed Variable Funding Notes (together the "Notes").


                                       GRANTING CLAUSE:

        The Issuer hereby  Grants to the Indenture  Trustee at the Closing Date,
as trustee  for the  benefit of the  Noteholders  and the  Enhancer,  all of the
Issuer's  right,  title and  interest  in and to all  accounts,  chattel  paper,
general intangibles, contract rights, certificates of deposit, deposit accounts,
instruments,  documents, letters of credit, money, advices of credit, investment
property,  goods and other  property  consisting of, arising under or related to
whether  now  existing or  hereafter  created in any of the  following:  (a) the
Initial  Mortgage  Loans and any Subsequent  Mortgage  Loans  (together with the
Cut-Off Date Principal  Balances and any Additional  Balances arising thereafter
to and including the date  immediately  preceding the  commencement of the Rapid
Amortization  Period),  and all monies due or to become due thereunder;  (b) the
Note Payment Account, all funds on deposit or credited thereto from time to time
and all proceeds thereof;  (c) the Capitalized  Interest  Account,  all funds on
deposit or credited  thereto from time to time (other than any income  thereon),
the Pre-Funding Account, the Reserve Account, and the Funding Account, all funds
on deposit or credited  thereto from time to time;  (d) the Policy;  and (e) all
present and future  claims,  demands,  causes and choses in action in respect of
any or all of the  foregoing  and all payments on or under,  and all proceeds of
every kind and nature  whatsoever in respect of, any or all of the foregoing and
all payments on or under,  and all proceeds of every kind and nature  whatsoever
in the conversion thereof,  voluntary or involuntary,  into cash or other liquid
property,  all cash proceeds,  accounts,  accounts  receivable,  notes,  drafts,
acceptances,  checks, deposit accounts, rights to payment of any and every kind,
and other forms of obligations and  receivables,  instruments and other property
which at any time  constitute  all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Trust Estate" or the "Collateral").

        The foregoing  Grant is made in trust to secure the payment of principal
of and  interest  on,  and any other  amounts  owing in  respect  of, the Notes,
equally and ratably without  prejudice,  priority or distinction,  and to secure
compliance  with the  provisions  of this  Indenture,  all as  provided  in this
Indenture.

        The  foregoing  Grant  shall  inure to the  benefit of the  Enhancer  in
respect of draws made on the Policy and amounts owing from time to time pursuant
to the Insurance  Agreement  (regardless  of whether such amounts  relate to the
Notes or the  Certificates),  and such Grant  shall  continue  in full force and
effect for the benefit of the Enhancer  until all such amounts  owing to it have
been repaid in full.


<PAGE>


        The Indenture  Trustee,  as trustee on behalf of the  Noteholders of the
Notes,  acknowledges  such  Grant,  accepts the trust  under this  Indenture  in
accordance  with the  provisions  hereof  and  agrees to  perform  its duties as
Indenture Trustee as required herein.

ARTICLE I

                                   Definitions

Section  1.01  Definitions.  For all  purposes  of  this  Indenture,  except  as
otherwise  expressly  provided herein or unless the context otherwise  requires,
capitalized  terms not otherwise defined herein shall have the meanings assigned
to such  terms in the  Definitions  attached  hereto  as  Appendix  A,  which is
incorporated by reference herein.  All other capitalized terms used herein shall
have the meanings specified herein.

Section 1.02  Incorporation  by Reference of Trust Indenture Act.  Whenever this
Indenture  refers to a provision of the Trust  Indenture  Act (the "TIA"),  such
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:

"Commission" means the Securities and Exchange Commission.

"indenture securities" means the Notes.

"indenture security holder" means a Noteholder.

"indenture to be qualified" means this Indenture.

"indenture trustee" or "institutional trustee" means the Indenture Trustee.

"obligor" on the indenture  securities means the Issuer and any other obligor on
     the indenture securities.

               All other TIA terms used in this  Indenture  that are  defined by
TIA,  defined by TIA reference to another  statute or defined by Commission rule
have the meaning assigned to them by such definitions.

Section 1.03   Rules of Construction. Unless the context otherwise requires:

(a)     a term has the meaning assigned to it;

(b)  an accounting term not otherwise  defined has the meaning assigned to it in
     accordance with generally accepted accounting  principles as in effect from
     time to time;


                                        2

<PAGE>


(c)     "or" includes "and/or";

(d)     "including" means "including without limitation";

(e)  words in the  singular  include the plural and words in the plural  include
     the singular;

(f)     the term "proceeds" has the meaning ascribed thereto in the UCC; and

(g) any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented and
includes  (in  the  case  of  agreements  or  instruments)   references  to  all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.



                                   ARTICLE II

                           Original Issuance Of Notes

Section 2.01 Form. The Term Notes and the Variable  Funding Notes,  in each case
together with the Indenture Trustee's certificate of authentication, shall be in
substantially  the forms set forth in Exhibits A-1 and A-2,  respectively,  with
such appropriate  insertions,  omissions,  substitutions and other variations as
are required or permitted by this  Indenture and may have such letters,  numbers
or other marks of identification and such legends or endorsements placed thereon
as may,  consistently  herewith,  be  determined  by the officers  executing the
Notes, as evidenced by their execution  thereof.  Any portion of the text of any
Note may be set forth on the  reverse  thereof,  with an  appropriate  reference
thereto on the face of such Note.

        The Notes shall be  typewritten,  printed,  lithographed  or engraved or
produced by any  combination  of these methods  (with or without steel  engraved
borders),  all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.

        The terms of the Notes set forth in Exhibits A-1 and A-2 are part of the
terms of this Indenture.

     Section 2.02  Execution,  Authentication  and Delivery.  The Notes shall be
executed  on  behalf  of the  Issuer  by any of  its  Authorized  Officers.  The
signature  of any  such  Authorized  Officer  on the  Notes  may  be  manual  or
facsimile.

        Notes bearing the manual or facsimile  signature of individuals who were
at  any  time  Authorized   Officers  of  the  Issuer  shall  bind  the  Issuer,
notwithstanding  that such  individuals  or any of them have ceased to hold such
offices prior to the  authentication  and delivery of such Notes or did not hold
such offices at the date of such Notes.


                                        3

<PAGE>
        The Indenture Trustee shall upon Issuer Request authenticate and deliver
Term  Notes for  original  issue in an  aggregate  initial  principal  amount of
$516,475,000  and  Variable  Funding  Notes for  original  issue in an aggregate
initial  principal  amount of $0.  The  Class A-1 Term  Notes and Class A-2 Term
Notes shall have an initial  principal  amount of $451,475,000  and $65,000,000,
respectively.  The  Variable  Funding  Balance of any Class of Variable  Funding
Notes in the aggregate may not exceed the Maximum  Variable  Funding Balance for
such Class.

        Each Note shall be dated the date of its authentication. The Notes shall
be issuable as registered Notes, and the Term Notes shall be issuable in minimum
denominations of $250,000 and integral multiples of $1,000 in excess thereof.

        Each Class of the Variable  Funding Notes shall be initially issued with
a Variable  Funding  Balance of $0 or, if  applicable,  with a Variable  Funding
Balance in an amount  equal to the Balance  Differential  for the  related  Loan
Group and the  Collection  Period related to the Payment Date following the date
of issuance of such Variable Funding Note pursuant to Section 4.01(b).

        No Note shall be  entitled  to any benefit  under this  Indenture  or be
valid or  obligatory  for any  purpose,  unless  there  appears  on such  Note a
certificate  of  authentication  substantially  in the form  provided for herein
executed  by  the  Indenture  Trustee  by  the  manual  signature  of one of its
authorized  signatories,  and such certificate upon any Note shall be conclusive
evidence, and the only evidence,  that such Note has been duly authenticated and
delivered hereunder.

                                  ARTICLE III

                                    Covenants

Section 3.01  Collection  of Payments  with Respect to the Mortgage  Loans.  The
Indenture  Trustee  shall  establish  and maintain  with itself the Note Payment
Account  in which the  Indenture  Trustee  shall,  subject  to the terms of this
paragraph,  deposit,  on the same day as it is received from the Servicer,  each
remittance received by the Indenture Trustee with respect to the Mortgage Loans.
The  Indenture  Trustee  shall make all payments of principal of and interest on
the Notes,  subject to Section  3.03 as  provided  in Section  3.05  herein from
monies on deposit in the Note Payment Account.

Section 3.02  Maintenance  of Office or Agency.  The Issuer will maintain in the
City  of  Minneapolis,   Minnesota,  an  office  or  agency  where,  subject  to
satisfaction  of  conditions  set forth  herein,  Notes may be  surrendered  for
registration  of transfer or exchange,  and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served.  The Issuer
hereby  initially  appoints the Indenture  Trustee to serve as its agent for the
foregoing  purposes.  If at any time the Issuer  shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof,  such  surrenders,  notices  and  demands  may be made or served at the
Corporate Trust Office,  and the Issuer hereby appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.

                                        4



<PAGE>


Section 3.03 Money for Payments to Be Held in Trust;  Paying Agent.  As provided
in Section  3.01,  all  payments of amounts due and payable  with respect to any
Notes that are to be made from amounts  withdrawn from the Note Payment  Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the  Indenture
Trustee  or by the Paying  Agent,  and no  amounts  so  withdrawn  from the Note
Payment Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer hereby appoints the Indenture  Trustee
to act as initial  Paying  Agent  hereunder.  The Issuer  will cause each Paying
Agent other than the  Indenture  Trustee to execute and deliver to the Indenture
Trustee an  instrument in which such Paying Agent shall agree with the Indenture
Trustee  (and if the  Indenture  Trustee  acts as  Paying  Agent,  it  hereby so
agrees),  subject to the provisions of this Section 3.03, that such Paying Agent
will:

(a) hold all sums held by it for the payment of amounts due with  respect to the
Notes in trust for the benefit of the Persons  entitled  thereto until such sums
shall be paid to such  Persons or otherwise  disposed of as herein  provided and
pay such sums to such Persons as herein provided;

(b) give the Indenture Trustee and the Enhancer written notice of any default by
the  Issuer  of which it has  actual  knowledge  in the  making  of any  payment
required to be made with respect to the Notes;

(c) at any time during the  continuance  of any such  default,  upon the written
request of the Indenture  Trustee,  forthwith  pay to the Indenture  Trustee all
sums so held in trust by such Paying Agent;

(d)  immediately  resign as  Paying  Agent and  forthwith  pay to the  Indenture
Trustee all sums held by it in trust for the payment of Notes, if at any time it
ceases to meet the standards required to be met by a Paying Agent at the time of
its appointment;

(e) comply with all  requirements  of the Code with  respect to the  withholding
from any payments made by it on any Notes of any  applicable  withholding  taxes
imposed  thereon and with respect to any applicable  reporting  requirements  in
connection therewith; and

(f) deliver to the  Indenture  Trustee a copy of the  statement  to  Noteholders
prepared  with respect to each Payment Date by the Servicer  pursuant to Section
4.01 of the Servicing Agreement.

        The  Issuer  may  at  any  time,   for  the  purpose  of  obtaining  the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent,  such sums to be held by the Indenture  Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such  payment by any Paying  Agent to the  Indenture  Trustee,  such Paying
Agent shall be released from all further liability with respect to such money.

                                        5

<PAGE>

        Subject to applicable  laws with respect to escheat of funds,  any money
held by the  Indenture  Trustee or any Paying  Agent in trust for the payment of
any amount due with  respect to any Note and  remaining  unclaimed  for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer  Request;  and the  Noteholder  of such Note
shall thereafter,  as an unsecured general creditor, look only to the Issuer for
payment  thereof  (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture  Trustee or such Paying Agent with respect to
such trust money shall thereupon cease;  provided,  however,  that the Indenture
Trustee or such Paying Agent,  before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published  once, in
an  Authorized  Newspaper,  notice that such money  remains  unclaimed and that,
after a date  specified  therein,  which shall not be less than 30 days from the
date of such  publication,  any unclaimed  balance of such money then  remaining
will be repaid to the Issuer.  The Indenture  Trustee may also adopt and employ,
at the  expense  and  direction  of the Issuer,  any other  reasonable  means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Noteholders the Notes which have been called but have not been
surrendered  for  redemption  or whose  right to or  interest  in monies due and
payable  but not  claimed is  determinable  from the  records  of the  Indenture
Trustee  or of any  Paying  Agent,  at the last  address of record for each such
Noteholder).

Section  3.04  Existence.  The Issuer  will keep in full  effect its  existence,
rights  and  franchises  as a  business  trust  under  the laws of the  State of
Delaware  (unless it becomes,  or any successor  Issuer hereunder is or becomes,
organized  under the laws of any other state or of the United States of America,
in which case the Issuer  will keep in full  effect  its  existence,  rights and
franchises  under  the laws of such  other  jurisdiction)  and will  obtain  and
preserve its  qualification  to do business in each  jurisdiction  in which such
qualification   is  or  shall  be   necessary   to  protect  the   validity  and
enforceability  of this Indenture,  the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.

Section 3.05   Priority of Distributions; Defaulted Interest.

(a) In accordance with Section 3.03(a) of the Servicing Agreement,  the priority
of distributions on each Payment Date is as follows:

(i)     from Principal Collections and Interest Collections for each Loan Group,
        to the Note  Payment  Account,  for  payment by the Paying  Agent to the
        Noteholders  of the  related  Class of Term  Notes and,  as  applicable,
        related  Class of Variable  Funding  Notes,  pro rata,  interest for the
        related  Interest  Period at the related  Note Rate on the related  Note
        Balance  immediately  prior to such Payment  Date,  including any Policy
        Draw Amount  deposited into the Note Payment Account pursuant to Section
        3.28(a)(ii), excluding any Interest Shortfalls;

(ii)    during  the  Amortization  Periods,  to the Note  Payment  Account,  the
        Principal  Distribution  Amount for each Loan  Group for  payment by the
        Paying Agent to the  Noteholders  of the related Class of Term Notes and
        the related Class of Variable  Funding Notes,  pro rata,  based on their
        respective  Note Balances,  after giving effect to any amount on deposit
        in the Note  Payment  Account on such Payment Date in respect of Section
        3.28(iii);

                                        6

<PAGE>
(iii)to the  Enhancer,  the amount of the premium for the Policy,  with interest
     thereon as provided in the Insurance Agreement;

(iv) to the Enhancer,  to reimburse it for prior draws made on the Policy,  with
     interest thereon as provided in the Insurance Agreement;

(v)     during the Revolving Period, to the Funding Account, the amount (but not
        in  excess of the  related  Group  Excess  Spread  for each Loan  Group)
        necessary   to  be   applied   on  such   Payment   Date  so  that   the
        Overcollateralization  Amount  for each Loan  Group is not less than the
        Overcollateralization Target Amount for each such Loan Group;

(vi)    during the Amortization Periods, to the Note Payment Account, the amount
        (but not in excess of the  related  Group  Excess  Spread  for each Loan
        Group)  necessary  to be applied on such Payment Date for payment by the
        Paying Agent to the  Noteholders of the related Class or Classes of such
        Notes so that the  Overcollateralization  Amount  for each Loan Group is
        not less than the Overcollateralization Target Amount for each such Loan
        Group;

(vii)if the aggregate  Overcollateralization Amount for both Loan Groups is less
     than the  aggregate  Overcollateralization  Target  Amount  for  both  Loan
     Groups,  the remaining  Group Excess Spread for each Loan Group and, if the
     Class A-1 Term Notes or Class A-2 Term Notes are no longer outstanding, the
     Principal  Collections  with  respect to the related  Loan Group,  shall be
     deposited in the Reserve  Account to be applied from time to time  pursuant
     to clause  (viii)  below;  and, at such time,  if any,  that the  aggregate
     Overcollateralization  Amount for both Loan  Groups  equals or exceeds  the
     aggregate  Overcollateralization  Target  Amount for both Loan Groups,  the
     remaining Group Excess Spread for each Loan Group,  together with any funds
     then on deposit  in the  Reserve  Account,  shall be  applied  pursuant  to
     clauses (ix) through (xii) below;

(viii)  to the Note  Payment  Account  from  funds  on  deposit  in the  Reserve
        Account,  the sum (but not in  excess  of the  amount,  if any,  then on
        deposit  in the  Reserve  Account)  of (A)  any  shortfalls  in  current
        interest  for any  Class of Term  Notes  and,  as  applicable,  Variable
        Funding  Notes  that  have  not  been  paid to the  related  Noteholders
        pursuant to clause (i) above on such Payment Date or prior Payment Dates
        (other  than  any  Interest  Shortfalls)  and (B) any  Liquidation  Loss
        Amounts for each Loan Group not otherwise  covered by payments  pursuant
        to clause (ii) above on such Payment Date or prior  Payment  Dates,  for
        payment by the Paying Agent to the  Noteholders  of the related Class or
        Classes of Term Notes and, as applicable,  Variable  Funding Notes,  pro
        rata,  based on the amount of unpaid  interest and/or  Liquidation  Loss
        Amounts;

                                        7

<PAGE>


(ix) to the  Enhancer,  any other  amounts owed to the Enhancer  pursuant to the
     Insurance Agreement;

(x)     from any remaining  Group Excess Spread for each Loan Group, to the Note
        Payment  Account,  for payment by the Paying Agent to the Noteholders of
        the related Class or Classes of Term Notes and, as applicable,  Variable
        Funding Notes,  pro rata, any Interest  Shortfalls not previously  paid,
        together  with  interest  thereon at the related  Note Rate (as adjusted
        from time to time),  based on the amount  remaining  unpaid with respect
        thereto;

(xi)    during the Amortization  Periods, to the Indenture Trustee,  any amounts
        owing to the  Indenture  Trustee  pursuant to Section 6.07 to the extent
        remaining unpaid; and

(xii)any remaining amount, to the Distribution  Account, for distribution to the
     Certificateholders by the Certificate Paying Agent;

(xiii)  provided,  that  (i) on the  Final  Payment  Date,  the  amount  that is
        required to be paid  pursuant to clause (ii) above shall be equal to the
        sum of the aggregate Term Note Balance and the Variable  Funding Balance
        immediately  prior to such Payment Date and shall  include any amount on
        deposit in the Note Payment  Account on such Payment Date in  accordance
        with Section 3.28(iii).  For purposes of the foregoing, the Note Balance
        of each class of Notes on each  Payment  Date  during  the  Amortization
        Periods for such class of Notes will be reduced (any such reduction,  an
        "Unpaid  Principal  Amount") by the pro rata  portion  allocable to such
        Notes of all Liquidation Loss Amounts for such Payment Date, but only to
        the extent that such Liquidation Loss Amounts are not otherwise  covered
        by payments  made  pursuant to clauses (ii) or (viii) above or by a draw
        on the Policy, and the Overcollateralization Amount for the related Loan
        Group or Groups is zero,  and (ii) on each Payment  Date the  limitation
        set forth in the  parenthetical  clauses in  clauses  (v) and (vi) above
        shall not apply with respect to such  Payment Date unless the  Indenture
        Trustee  has  received  on or  before  such  Payment  Date an  Officer's
        Certificate  of the  Servicer to the effect that such  limitation  shall
        apply with respect to such Payment Date.

        On each Payment  Date,  the Paying  Agent shall  apply,  from amounts on
deposit  in the Note  Payment  Account,  and in  accordance  with the  Servicing
Certificate,  the amounts  set forth  above in the order of  priority  set forth
above.

        Amounts  paid to  Noteholders  shall be paid in respect  of the  related
Class or Classes of Term Notes or the Variable  Funding  Notes,  as the case may
be, in accordance  with the applicable  percentage as set forth in paragraph (b)
below.  Any  installment  of interest or  principal  payable on any Note that is
punctually  paid or duly  provided for by the Issuer on the  applicable  Payment
Date  shall be paid to the  Noteholder  of  record  thereof  on the  immediately
preceding  Record Date by wire  transfer to an account  specified  in writing by
such Noteholder reasonably satisfactory to the Indenture Trustee, or by check or
money order mailed to such Noteholder at such Noteholder's  address appearing in

                                        8

<PAGE>


the Note Register,  the amount  required to be distributed to such Noteholder on
such  Payment  Date  pursuant to such  Noteholder's  Notes;  provided,  that the
Indenture  Trustee shall not pay to any such Noteholder any amounts  required to
be withheld from a payment to such Noteholder by the Code.

(b) Principal of each Note shall be due and payable in full on the Final Payment
Date as provided in the  applicable  form of Note set forth in Exhibits  A-1 and
A-2. All principal  payments on the Term Notes and the Variable Funding Notes of
each  Class  shall  be made in  accordance  with  the  priorities  set  forth in
paragraph (a) above to the Noteholders  entitled  thereto in accordance with the
related Percentage  Interests  represented  thereby.  Upon written notice to the
Indenture  Trustee by the Issuer,  the Indenture Trustee shall notify the Person
in the name of which a Note is registered at the close of business on the Record
Date  preceding  the  Final  Payment  Date  or  other  final  Payment  Date,  as
applicable.  Such notice shall be mailed no later than five  Business Days prior
to the Final Payment Date or such other final Payment Date and, unless such Note
is then a Book-Entry  Note,  shall specify that payment of the principal  amount
and any interest due with respect to such Note at the Final Payment Date or such
other final Payment Date will be payable only upon presentation and surrender of
such Note,  and shall  specify  the place where such Note may be  presented  and
surrendered for such final payment.

Section 3.06   Protection of Trust Estate.

(a) The Issuer shall from time to time execute and deliver all such  supplements
and  amendments   hereto  and  all  such  financing   statements,   continuation
statements,  instruments of further  assurance and other  instruments,  and will
take such other action necessary or advisable to:

(i)  maintain or  preserve  the lien and  security  interest  (and the  priority
     thereof)  of this  Indenture  or carry out more  effectively  the  purposes
     hereof;

(ii) perfect,  publish notice of or protect the validity of any Grant made or to
     be made by this Indenture;

(iii)   cause the Trust to enforce any of the Mortgage Loans; or

(iv)    preserve  and  defend  title to the Trust  Estate  and the rights of the
        Indenture  Trustee and the  Noteholders in such Trust Estate against the
        claims of all persons and parties.

(b) Except as otherwise provided in this Indenture,  the Indenture Trustee shall
not  remove  any  portion  of the  Trust  Estate  that  consists  of money or is
evidenced by an instrument,  certificate or other writing from the  jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant  to  Section  3.07 (or from  the  jurisdiction  in which it was held as
described in the Opinion of Counsel  delivered  at the Closing Date  pursuant to
Section  3.07(a),  if no Opinion of Counsel has yet been  delivered  pursuant to
Section  3.07(b))  unless the  Trustee  shall have first  received an Opinion of

                                        9

<PAGE>

Counsel  to the  effect  that the lien and  security  interest  created  by this
Indenture  with respect to such property  will  continue to be maintained  after
giving effect to such action or actions.

        The  Issuer  hereby  designates  the  Indenture  Trustee  its  agent and
attorney-in-fact to execute any financing statement,  continuation  statement or
other instrument required to be executed pursuant to this Section 3.06.

Section 3.07   Opinions as to Trust Estate.

        On the Closing Date,  the Issuer shall furnish to the Indenture  Trustee
and the Owner Trustee an Opinion of Counsel at the expense of the Issuer stating
that,  upon  delivery of the Loan  Agreements  relating to the Initial  Mortgage
Loans to the Indenture  Trustee or the  Custodian in the State of  Pennsylvania,
the Indenture Trustee will have a perfected, first priority security interest in
such Mortgage Loans.

        On or before December 31st in each calendar year, beginning in 2000, the
Issuer  shall  furnish  to the  Indenture  Trustee  an Opinion of Counsel at the
expense of the Issuer either  stating  that, in the opinion of such counsel,  no
further  action is necessary to maintain a perfected,  first  priority  security
interest in the Mortgage Loans until December 31 in the following  calendar year
or, if any such action is required to  maintain  such  security  interest in the
Mortgage  Loans,  such Opinion of Counsel  shall also  describe  the  recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other  requisite  documents  and the  execution and filing of any
financing  statements and  continuation  statements that will, in the opinion of
such  counsel,  be required to maintain  the  security  interest in the Mortgage
Loans until December 31 in the following calendar year.

Section 3.08   Performance of Obligations; Servicing Agreement.

(a) The Issuer shall  punctually  perform and observe all of its obligations and
agreements  contained  in  this  Indenture,  the  Basic  Documents  and  in  the
instruments and agreements included in the Trust Estate.

(b) The Issuer may contract with other  Persons to assist it in  performing  its
duties  under this  Indenture,  and any  performance  of such duties by a Person
identified to the Indenture  Trustee in an Officer's  Certificate  of the Issuer
shall be deemed to be action taken by the Issuer.

(c) The  Issuer  shall not take any  action or permit  any action to be taken by
others  that would  release any Person from any of such  Person's  covenants  or
obligations  under any of the documents  relating to the Mortgage Loans or under
any  instrument  included  in the  Trust  Estate,  or that  would  result in the
amendment, hypothecation,  subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the documents  relating to the Mortgage
Loans or any such  instrument,  except such actions as the Servicer is expressly
permitted to take in the Servicing Agreement.

                                        10
<PAGE>


(d) The Issuer may retain an  administrator  and may enter into  contracts  with
other Persons for the  performance of the Issuer's  obligations  hereunder,  and
performance  of  such  obligations  by  such  Persons  shall  be  deemed  to  be
performance of such obligations by the Issuer.

     Section 3.09 Negative Covenants. So long as any Notes are Outstanding,  the
Issuer shall not:

(a) except as expressly permitted by this Indenture, sell, transfer, exchange or
otherwise dispose of the Trust Estate, unless directed to do so by the Indenture
Trustee pursuant to Section 5.04 hereof;

(b) claim any credit on, or make any  deduction  from the  principal or interest
payable in respect of, the Notes (other than amounts properly withheld from such
payments  under the Code) or assert  any claim  against  any  present  or former
Noteholder  by reason of the payment of the taxes  levied or  assessed  upon any
part of the Trust Estate;

(c) (i) permit the validity or  effectiveness  of this Indenture to be impaired,
or permit the lien of this Indenture to be amended, hypothecated,  subordinated,
terminated or discharged, or permit any Person to be released from any covenants
or obligations  with respect to the Notes under this Indenture  except as may be
expressly  permitted  hereby,  (ii)  permit  any lien,  charge,  excise,  claim,
security  interest,  mortgage or other encumbrance  (other than the lien of this
Indenture)  to be created on or extend to or otherwise  arise upon or burden the
Trust Estate or any part thereof or any interest therein or the proceeds thereof
or (iii)  permit the lien of this  Indenture  not to  constitute  a valid  first
priority security interest in the Trust Estate; or

(d) impair or cause to be impaired the Issuer's  interest in the Mortgage Loans,
the Purchase Agreement or in any other Basic Document,  if any such action would
materially and adversely affect the interests of the Noteholders.

     Section 3.10 Annual Statement as to Compliance. The Issuer shall deliver to
the Indenture Trustee,  within 120 days after the end of each fiscal year of the
Issuer  (commencing  with the fiscal  year  ending on  December  31,  2000),  an
Officer's  Certificate  stating,  as to  the  Authorized  Officer  signing  such
Officer's Certificate, that:

(a) a  review  of the  activities  of the  Issuer  during  such  year and of its
performance  under this  Indenture  and the Trust  Agreement has been made under
such Authorized Officer's supervision; and

(b) to the best of such Authorized  Officer's  knowledge,  based on such review,
the Issuer has complied with all conditions  and covenants  under this Indenture
and the provisions of the Trust Agreement throughout such year, or, if there has
been a default in its compliance with any such condition or covenant, specifying
each such  default  known to such  Authorized  Officer and the nature and status
thereof.

                                        11

<PAGE>


Section 3.11 Recordation of Assignments. The Issuer shall enforce the obligation
of the Seller  under the  Purchase  Agreement to submit or cause to be submitted
for  recordation  all  Assignments  of  Mortgages  within 60 days of  receipt of
recording information by the Servicer.

Section 3.12  Representations and Warranties  Concerning the Mortgage Loans. The
Indenture  Trustee,  as pledgee of the Mortgage Loans, shall have the benefit of
the  representations  and  warranties  made by the Seller in Section  3.1(a) and
Section 3.1(b) of the Purchase  Agreement  concerning the Mortgage Loans and the
right to enforce the remedies against the Seller provided in such Section 3.1(a)
or  Section  3.1(b)  to the same  extent  as  though  such  representations  and
warranties were made directly to the Indenture Trustee.

Section  3.13  Assignee  of Record of the  Mortgage  Loans.  As  pledgee  of the
Mortgage  Loans,  the Indenture  Trustee shall hold record title to the Mortgage
Loans by being named as payee in the  endorsements  or  assignments  of the Loan
Agreements  and  assignee in the  Assignments  of Mortgage to be recorded  under
Section  2.1 of the  Purchase  Agreement.  Except as  expressly  provided in the
Purchase  Agreement or in the Servicing  Agreement  with respect to any specific
Mortgage  Loan,  the  Indenture  Trustee  shall not execute any  endorsement  or
assignment  or  otherwise  release or transfer  such record  title to any of the
Mortgage  Loans until such time as the  remaining  Trust  Estate may be released
pursuant to Section  8.05(b).  The  Indenture  Trustee's  holding of such record
title  shall in all  respects  be subject to its  fiduciary  obligations  to the
Noteholders hereunder.

Section 3.14 Servicer as Agent and Bailee of the Indenture  Trustee.  Solely for
purposes  of  perfection  under  Section  9-305  of  the  UCC or  other  similar
applicable  law,  rule or regulation of the state in which such property is held
by the Servicer,  the Issuer and the Indenture  Trustee hereby  acknowledge that
the Servicer is acting as agent and bailee of the  Indenture  Trustee in holding
amounts on deposit in the  Custodial  Account  pursuant  to Section  3.02 of the
Servicing  Agreement  that are allocable to the Mortgage  Loans,  as well as the
agent and  bailee of the  Indenture  Trustee in holding  any  Related  Documents
released to the Servicer pursuant to Section 3.06(c) of the Servicing Agreement,
and any other items  constituting  a part of the Trust Estate which from time to
time come into the  possession  of the  Servicer.  It is intended  that,  by the
Servicer's  acceptance of such agency  pursuant to Section 3.02 of the Servicing
Agreement,  the Indenture  Trustee,  as a pledgee of the Mortgage Loans, will be
deemed to have possession of such Related Documents,  such monies and such other
items  for  purposes  of  Section  9-305 of the UCC of the  state in which  such
property is held by the Servicer.

Section 3.15 Investment  Company Act. The Issuer shall not become an "investment
company" or under the  "control"  of an  "investment  company" as such terms are
defined in the  Investment  Company Act of 1940, as amended (or any successor or
amendatory  statute),  and the rules and  regulations  thereunder  (taking  into
account not only the general  definition  of the term  "investment  company" but
also any available  exceptions to such general definition);  provided,  however,
that the Issuer shall be in  compliance  with this Section 3.15 if it shall have
obtained an order  exempting it from  regulation as an  "investment  company" so
long as it is in compliance with the conditions imposed in such order.

                                        12

<PAGE>


Section 3.16   Issuer May Consolidate, etc.

(a)  The Issuer shall not  consolidate  or merge with or into any other  Person,
     unless:

(i)  the  Person  (if  other  than  the  Issuer)  formed  by or  surviving  such
     consolidation  or merger shall be a Person organized and existing under the
     laws of the  United  States  of  America  or any state or the  District  of
     Columbia and shall expressly assume, by an indenture  supplemental  hereto,
     executed  and  delivered  to the  Indenture  Trustee,  in  form  reasonably
     satisfactory to the Indenture Trustee,  the due and punctual payment of the
     principal of and interest on all Notes and to the Certificate Paying Agent,
     on behalf of the  Certificateholders  and the  performance or observance of
     every agreement and covenant of this Indenture on the part of the Issuer to
     be performed or observed, all as provided herein;

(ii) immediately  after giving effect to such  transaction,  no Event of Default
     shall have occurred and be continuing;

(iii)   the Enhancer shall have  consented  thereto and each Rating Agency shall
        have notified the Issuer that such  transaction  will not cause a Rating
        Event, without taking into account the Policy;

(iv)    the Issuer  shall have  received  an Opinion of Counsel  (and shall have
        delivered  copies thereof to the Indenture  Trustee and the Enhancer) to
        the effect that such  transaction will not have any material adverse tax
        consequence to the Issuer, any Noteholder or any Certificateholder;

(v)  any action that is necessary  to maintain  the lien and  security  interest
     created by this Indenture shall have been taken; and

(vi)    the Issuer shall have  delivered to the  Indenture  Trustee an Officer's
        Certificate   and  an  Opinion  of  Counsel   each   stating  that  such
        consolidation or merger and such supplemental indenture comply with this
        Article  III and that  all  conditions  precedent  herein  provided  for
        relating to such  transaction  have been  complied with  (including  any
        filing required by the Exchange Act).

(b) The Issuer  shall not convey or transfer  any of its  properties  or assets,
including those included in the Trust Estate, to any Person, unless:

(i)  the Person that  acquires by  conveyance  or transfer  the  properties  and
     assets  of the  Issuer  the  conveyance  or  transfer  of which  is  hereby
     restricted  shall (A) be a United States citizen or a Person  organized and
     existing  under the laws of the United States of America or any state,  (B)
     expressly  assumes,  by an  indenture  supplemental  hereto,  executed  and
     delivered to the Indenture  Trustee,  in form satisfactory to the Indenture
     Trustee,  the due and punctual  payment of the principal of and interest on

                                        13

<PAGE>


     all Notes and the performance or observance of every agreement and covenant
     of this  Indenture  on the part of the Issuer to be  performed or observed,
     all as provided herein,  (C) expressly agrees by means of such supplemental
     indenture  that all right,  title and  interest so conveyed or  transferred
     shall be subject and subordinate to the rights of Noteholders of the Notes,
     (D) unless otherwise  provided in such  supplemental  indenture,  expressly
     agrees to indemnify,  defend and hold harmless the Issuer  against and from
     any loss,  liability or expense  arising under or related to this Indenture
     and the  Notes  and (E)  expressly  agrees  by means  of such  supplemental
     indenture  that such Person (or if a group of Persons,  then one  specified
     Person)  shall  make  all  filings  with  the  Commission  (and  any  other
     appropriate  Person)  required by the Exchange Act in  connection  with the
     Notes;

(ii)    immediately after giving effect to such transaction, no Default or Event
        of Default shall have occurred and be continuing;

(iii)   the Enhancer shall have consented thereto,  and each Rating Agency shall
        have notified the Issuer that such  transaction  will not cause a Rating
        Event, if determined without regard to the Policy;

(iv)    the Issuer  shall have  received  an Opinion of Counsel  (and shall have
        delivered  copies  thereof to the Indenture  Trustee) to the effect that
        such  transaction  will not have any material adverse tax consequence to
        the Issuer or any Noteholder;

(v)  any action that is necessary  to maintain  the lien and  security  interest
     created by this Indenture shall have been taken; and

(vi)    the Issuer shall have  delivered to the  Indenture  Trustee an Officer's
        Certificate  and an Opinion of Counsel each stating that such conveyance
        or transfer and such supplemental indenture comply with this Article III
        and that all conditions  precedent  herein provided for relating to such
        transaction  have been complied with  (including any filing  required by
        the Exchange Act).

Section 3.17   Successor or Transferee.

(a) Upon any  consolidation  or merger of the Issuer in accordance  with Section
3.16(a),  the Person  formed by or surviving  such  consolidation  or merger (if
other than the  Issuer)  shall  succeed  to,  and be  substituted  for,  and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.

(b) Upon a conveyance or transfer of all the assets and properties of the Issuer
pursuant to Section  3.16(b),  the Issuer shall be released from every  covenant
and  agreement of this  Indenture to be observed or performed on the part of the
Issuer with respect to the Notes immediately upon the delivery of written notice
to the Indenture Trustee of such conveyance or transfer.


                                        14

<PAGE>


Section  3.18 No Other  Business.  The Issuer  shall not engage in any  business
other than financing,  purchasing,  owning and selling and managing the Mortgage
Loans and the issuance of the Notes and Certificates in the manner  contemplated
by this Indenture and the Basic Documents and all activities incidental thereto.

Section 3.19 No Borrowing.  The Issuer shall not issue, incur, assume, guarantee
or otherwise become liable, directly or indirectly,  for any indebtedness except
for the Notes.

Section  3.20  Guarantees,  Loans,  Advances  and Other  Liabilities.  Except as
contemplated  by this Indenture or the other Basic  Documents,  the Issuer shall
not make any loan or advance or credit to, or guarantee  (directly or indirectly
or by  an  instrument  having  the  effect  of  assuring  another's  payment  or
performance on any  obligation or capability of so doing or otherwise),  endorse
or otherwise become contingently liable,  directly or indirectly,  in connection
with the obligations,  stocks or dividends of, or own,  purchase,  repurchase or
acquire  (or agree  contingently  to do so) any  stock,  obligations,  assets or
securities  of, or any other interest in, or make any capital  contribution  to,
any other Person.

Section 3.21 Capital Expenditures. The Issuer shall not make any expenditure (by
long-term or operating  lease or otherwise) for capital assets (either realty or
personalty).

Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents. The
recitals  contained  herein shall be taken as the statements of the Issuer,  and
the Owner Trustee and the Indenture  Trustee  assume no  responsibility  for the
correctness  of the  recitals  contained  herein.  The  Owner  Trustee  and  the
Indenture Trustee make no  representations  as to the validity or sufficiency of
this Indenture or any other Basic Document,  of the Certificates (other than the
signatures of the Owner Trustee or the Indenture Trustee on the Certificates) or
the Notes,  or of any Related  Documents.  The Owner  Trustee and the  Indenture
Trustee shall at no time have any  responsibility  or liability  with respect to
the  sufficiency  of the Trust Estate or its ability to generate the payments to
be  distributed  to   Certificateholders   under  the  Trust  Agreement  or  the
Noteholders under this Indenture,  including, the compliance by the Depositor or
the Seller with any warranty or representation  made under any Basic Document or
in any related document or the accuracy of any such warranty or  representation,
or any action of the Certificate Paying Agent, the Certificate  Registrar or any
other person taken in the name of the Owner Trustee or the Indenture Trustee.

Section 3.23 Restricted Payments.  The Issuer shall not, directly or indirectly,
(i) pay any  dividend  or make any  distribution  (by  reduction  of  capital or
otherwise),  whether in cash, property,  securities or a combination thereof, to
the  Owner  Trustee  or any  owner of a  beneficial  interest  in the  Issuer or
otherwise with respect to any ownership or equity  interest or security in or of
the Issuer,  (ii) redeem,  purchase,  retire or otherwise  acquire for value any
such  ownership  or equity  interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose;  provided,  however, that the Issuer
may make, or cause to be made,  (x)  distributions  to the Owner Trustee and the
Certificateholders as contemplated by, and to the extent funds are available for

                                        15

<PAGE>


such  purpose  under,  the Trust  Agreement  and (y)  payments  to the  Servicer
pursuant to the terms of the Servicing Agreement.  The Issuer will not, directly
or  indirectly,  make payments to or  distributions  from the Custodial  Account
except in accordance with this Indenture and the other Basic Documents.

Section 3.24 Notice of Events of Default.  The Issuer  shall give the  Indenture
Trustee,  the Enhancer and the Rating  Agencies  prompt  written  notice of each
Event of Default hereunder and under the Trust Agreement.

Section  3.25  Further  Instruments  and Acts.  Upon  request  of the  Indenture
Trustee,  the Issuer shall execute and deliver such further  instruments  and do
such  further  acts as may be  reasonably  necessary or proper to carry out more
effectively the purposes of this Indenture.

Section  3.26  Statements  to  Noteholders.  On each Payment  Date,  each of the
Indenture  Trustee and the  Certificate  Registrar  shall forward by mail to the
Enhancer,  the Depositor,  the Owner Trustee and each Rating  Agency,  and shall
make available to each Noteholder and each Certificateholder,  respectively, the
Servicing Certificate provided to the Indenture Trustee by the Servicer relating
to such Payment  Date and  delivered  pursuant to Section 4.01 of the  Servicing
Agreement.

        The Indenture Trustee will make the monthly statement to Securityholders
(and, at its option,  any additional files containing the same information in an
alternative  format) available each month to  Securityholders  and the Enhancer,
and other parties to this Indenture via the Indenture Trustee's internet website
and its fax-on-demand service. The Indenture Trustee's fax-on-demand service may
be accessed by calling (301) 815-6610.  The Indenture Trustee's internet website
shall initially be located at "www.ctslink.com". Assistance in using the website
or the fax-on-demand  service can be obtained by calling the Indenture Trustee's
customer  service  desk at (301)  815-6600.  Parties  that are unable to use the
above distribution  options are entitled to have a paper copy mailed to them via
first class mail by calling the customer  service desk and indicating  such. The
Indenture  Trustee  shall  have the right to  change  the way the  statement  to
Securityholders  are  distributed  in  order  to  make  such  distribution  more
convenient and/or more accessible to the above parties and the Indenture Trustee
shall provide timely and adequate  notification  to all above parties  regarding
any such changes.

Section  3.27  Determination  of Note Rate.  On the second  LIBOR  Business  Day
immediately  preceding  (i) the Closing  Date in the case of the first  Interest
Period and (ii) the first day of each succeeding  Interest Period, the Indenture
Trustee shall  determine  LIBOR and the  applicable  Note Rate for such Interest
Period and shall inform the Issuer,  the Servicer and the  Depositor by means of
the Indenture Trustee's online service.

Section 3.28 Payments under the Policy.

(a) (i) If the  Servicing  Certificate  specifies  a Policy  Draw Amount for any
Payment Date, the Indenture Trustee shall make a draw on the Policy in an amount
specified in the Servicing Certificate for such Payment Date or, if no amount is
specified,  the Indenture  Trustee shall make a draw on the Policy in the amount
by which the amount on deposit in the Note Payment Account is less than interest
due on the Notes on such Payment Date.

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<PAGE>


               (ii) The Indenture Trustee shall deposit or cause to be deposited
such Policy Draw Amount into the Note  Payment  Account on such  Payment Date to
the extent such amount  relates to clause (a) of the  definition of  "Deficiency
Amount" or clause (b) of the definition of "Insured Amount".

               (iii) To the  extent  such  amount  relates  to clause (b) of the
definition of "Deficiency  Amount",  the Indenture  Trustee shall (i) during the
Revolving  Period,  deposit  such amount into the Funding  Account as  Principal
Collections and (ii) during the Amortization  Periods,  deposit such amount into
the Note Payment Account.

(b) The Indenture  Trustee shall submit, if a Policy Draw Amount is specified in
any  statement  to  Securityholders  prepared  pursuant  to Section  4.01 of the
Servicing Agreement,  the Notice of Nonpayment and Demand for Payment of Insured
Amounts (in the form  attached  as Exhibit A to the  Policy) to the  Enhancer no
later than 12:00 noon, New York City time, on the third (3rd) Business Day prior
to the applicable Payment Date.

Section 3.29 Replacement Enhancement. The Issuer (or the Servicer on its behalf)
may, at its expense,  in accordance with and upon satisfaction of the conditions
set forth herein,  but shall not be required to, obtain a surety bond, letter of
credit,  guaranty or reserve  account as a Permitted  Investment  for amounts on
deposit in the Capitalized  Interest Account,  or may arrange for any other form
of additional credit enhancement;  provided, that after prior notice thereto, no
Rating  Agency shall have informed the Issuer that a Rating Event would occur as
a result thereof (without taking the Policy into account); and provided further,
that the issuer of any such  instrument or facility and the timing and mechanism
for drawing on such additional  enhancement shall be acceptable to the Indenture
Trustee and the  Enhancer.  It shall be a condition to  procurement  of any such
additional  credit  enhancement that there be delivered to the Indenture Trustee
and the Enhancer (a) an Opinion of Counsel,  acceptable in form to the Indenture
Trustee and the Enhancer, from counsel to the provider of such additional credit
enhancement with respect to the enforceability thereof and such other matters as
the Indenture  Trustee or the Enhancer may require and (b) an Opinion of Counsel
to the effect that the procurement of such additional  enhancement would not (i)
adversely  affect in any  material  respect  the tax  status of the Notes or the
Certificates  or (ii) cause the Issuer to be  taxable  as an  association  (or a
publicly traded partnership) for federal income tax purposes or to be classified
as a taxable mortgage pool within the meaning of Section 7701(i) of the Code.

                                        17

<PAGE>


                                   ARTICLE IV

                      The Notes; Satisfaction And Discharge Of Indenture

     Section  4.01 The Notes;  Increase  of Maximum  Variable  Funding  Balance;
Variable Funding Notes.

(a) The Term Notes shall be  registered  in the name of a nominee  designated by
the Depository.  Beneficial Owners will hold interests in the Term Notes through
the  book-entry  facilities  of the  Depository  in  minimum  initial  Term Note
Balances of $250,000 and integral  multiples  of $1,000 in excess  thereof.  The
Capped Funding Notes will be issued as physical notes in fully  registered  form
in minimum initial Capped Funding Balances of $1,000,000 and integral  multiples
of $100,000 in excess thereof,  together with any additional amount necessary to
cover (i) the aggregate  initial  Capped  Funding  Balance of the Capped Funding
Notes  surrendered at the time of the initial  denominational  exchange  thereof
(with such initial  Capped  Funding  Balance in each case being deemed to be the
Capped  Funding  Balance of the Capped Funding Notes at the time of such initial
denominational  exchange  thereof) or (ii) the aggregate  initial Capped Funding
Balance  of  any  Capped  Funding  Notes  issued  in an  exchange  described  in
subsection (d) below.

        The  Indenture  Trustee may for all  purposes  (including  the making of
payments  due  on  the  Notes)  deal  with  the  Depository  as  the  authorized
representative  of the Beneficial  Owners with respect to the Term Notes for the
purposes of exercising the rights of Noteholders of Term Notes hereunder. Except
as provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial  Owners  with  respect  to the Term  Notes  shall be limited to those
established  by law  and  agreements  between  such  Beneficial  Owners  and the
Depository  and  Depository  Participants.  Except as provided in Section  4.08,
Beneficial Owners shall not be entitled to definitive  certificates for the Term
Notes as to which they are the Beneficial Owners.  Requests and directions from,
and votes of, the Depository as Noteholder of the Term Notes shall not be deemed
inconsistent if they are made with respect to different  Beneficial  Owners. The
Indenture  Trustee may  establish a reasonable  record date in  connection  with
solicitations  of consents from or voting by Noteholders  and give notice to the
Depository  of such  record  date.  Without  the  consent  of the Issuer and the
Indenture Trustee, no Term Note may be transferred by the Depository except to a
successor  Depository  that  agrees  to hold such  Note for the  account  of the
Beneficial Owners.

        In the event the  Depository  Trust  Company  resigns  or is  removed as
Depository,  the Indenture Trustee with the approval of the Issuer may appoint a
successor  Depository.  If no successor  Depository has been appointed within 30
days of the effective  date of the  Depository's  resignation  or removal,  each
Beneficial  Owner shall be entitled to  certificates  representing  the Notes it
beneficially owns in the manner prescribed in Section 4.08.

        The Notes shall,  on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner Trustee
and upon Issuer Order,  authenticated by the Note Registrar and delivered by the
Indenture Trustee to or upon the order of the Issuer.


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<PAGE>


(b) On each Payment Date, the aggregate  Variable  Funding Balance of each Class
of the  Variable  Funding  Notes shall be  increased  by an amount  equal to the
Balance  Differential for the related Loan Group for such Payment Date,  subject
to the Maximum  Variable  Funding Balance and the terms and conditions set forth
below.

(c) Each  Variable  Funding  Note  issued on the  Closing  Date  shall  bear the
Designation  "VFN 1" and each new Variable Funding Note related to the same Loan
Group  will  bear  sequential  numerical  designations  in the  order  of  their
issuance.

(d) Subject to the  following  conditions,  the  Variable  Funding  Notes may be
exchanged  pursuant to Section 4.02 for one or more Capped  Funding  Notes.  The
Indenture  Trustee shall not be required to authenticate any such Capped Funding
Note unless a form of such Capped  Funding Note has been  provided by the Issuer
to the Indenture  Trustee at the Issuer's  expense.  Prior to any such exchange,
the party requesting the exchange must provide an Opinion of Counsel,  addressed
to the Enhancer,  the Issuer and the Indenture  Trustee,  to the effect that the
Capped   Funding  Notes  shall  qualify  for  federal  income  tax  purposes  as
indebtedness  of the  Issuer  and the  Issuer  will not be  characterized  as an
association  (or a publicly  traded  partnership)  taxable as a corporation or a
taxable  mortgage  pool  within the meaning of Section  7701(i) of the Code.  If
required  by the  Opinion of  Counsel,  the Capped  Funding  Notes may be issued
concurrently  with a reduction in the Variable  Funding  Balance of the Variable
Funding  Notes and an  equivalent  increase  in the  Certificate  Balance of the
Certificates,  pursuant to Section 3.12 of the Trust Agreement.  Upon receipt of
the Opinion of Counsel,  the Indenture  Trustee shall issue Capped Funding Notes
with a Capped  Funding  Balance equal to the Capped  Funding  Balance  permitted
under  such  Opinion  of  Counsel,  in  minimum  denominations  as set  forth in
subsection  (a)  above.  The Capped  Funding  Notes  shall bear the  designation
"Capped" in addition to any other  applicable  designation,  and shall relate to
the Loan Group to which the Variable Funding Notes exchanged  therefor  related.
The initial Security Balance of the Variable Funding Note issued in exchange for
the Variable Funding Note so surrendered  shall be equal to the Security Balance
of  such  Note as of the  date of  surrender  minus  the sum of (i) the  initial
Security  Balance of the Capped Funding Notes so issued and (ii) any increase in
the Certificate  Balance of the  Certificates  referred to above.  The Indenture
Trustee  and the  Issuer  agree to  cooperate  with  each  other  and the  party
requesting the exchange of Variable  Funding Notes for Capped Funding Notes, the
Enhancer,  the  Depositor,  the  Seller  and the Owner  Trustee  and to cause no
unreasonable  delay in issuing  Capped  Funding  Notes in  connection  with this
Section  and Section  3.12 of the Trust  Agreement.  The Holder of the  Variable
Funding  Notes so  surrendered  shall  give prior  written  notice to the Rating
Agencies of any such exchange.

Section 4.02  Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate  Registrar.  The Issuer shall cause to be kept at the
Indenture Trustee's Corporate Trust Office a Note Register in which,  subject to
such  reasonable  regulations  as it may  prescribe,  the Note  Registrar  shall
provide for the registration of Notes and of transfers and exchanges of Notes as
herein provided. The Issuer hereby appoints the Indenture Trustee as the initial
Note Registrar.

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<PAGE>


        Subject  to the  restrictions  and  limitations  set forth  below,  upon
surrender  for  registration  of  transfer  of any Note at the  Corporate  Trust
Office, the Issuer shall execute,  and the Note Registrar shall authenticate and
deliver,  in the name of the designated  transferee or transferees,  one or more
new Notes in authorized  initial Note  Balances  evidencing  the same  aggregate
Percentage Interests.

        No Variable  Funding Note,  other than any Capped Funding Notes,  may be
transferred to any Person other than an Affiliate of the Seller.  Subject to the
provisions set forth below,  Capped Funding Notes may be  transferred,  provided
that with respect to the initial  transfer  thereof by the Seller prior  written
notification  of such transfer shall have been given to the Rating  Agencies and
to the Enhancer by the Seller.

        No transfer,  sale, pledge or other disposition of a Capped Funding Note
shall be made unless such transfer,  sale, pledge or other disposition is exempt
from the  registration  requirements  of the Securities  Act, and any applicable
state  securities  laws or is made in accordance  with said Act and laws. In the
event of any such  transfer,  the Indenture  Trustee or the Issuer shall require
the  transferee to execute either (i)(a) an investment  letter in  substantially
the form attached hereto as Exhibit B (or in such form and substance  reasonably
satisfactory to the Indenture  Trustee and the Issuer) which investment  letters
shall not be an  expense  of the  Owner  Trustee,  the  Indenture  Trustee,  the
Servicer,  the Depositor or the Issuer and which investment  letter states that,
among other things, such transferee (a) is a "qualified  institutional buyer" as
defined  under Rule 144A,  acting for its own  account or the  accounts of other
"qualified  institutional  buyers" as defined under Rule 144A,  and (b) is aware
that the proposed  transferor intends to rely on the exemption from registration
requirements  under  the  Securities  Act,  provided  by Rule  144A or (ii)  the
Indenture  Trustee shall require the transferee to execute an investment  letter
in  substantially  the form of Exhibit C acceptable to and in form and substance
reasonably  satisfactory to the Issuer and the Indenture  Trustee  certifying to
the Issuer and the Indenture Trustee the facts surrounding such transfer,  which
investment  letter  shall not be an  expense  of the  Indenture  Trustee  or the
Issuer.  Any  Noteholder  of a Capped  Funding Note that does not execute such a
certificate or transfer letter shall be deemed to have made the  representations
set forth  therein.  The  Noteholder of a Capped Funding Note desiring to effect
such transfer shall, and does hereby agree to, indemnify the Indenture  Trustee,
the  Enhancer  and the  Issuer  against  any  liability  that may  result if the
transfer  is not so exempt or is not made in  accordance  with such  federal and
state laws. In addition,  any  Noteholder  of a Capped  Funding Note desiring to
effect any such transfer shall deliver,  if any private placement  memorandum or
other offering  document prepared in connection with the offering of such Capped
Funding Notes  specifies  that such delivery will be required,  to the Indenture
Trustee and the Servicer,  either (i) a certificate  substantially to the effect
of the  certification  set forth in Exhibit G to the Trust  Agreement or (ii) an
Opinion of Counsel that establishes to the satisfaction of the Indenture Trustee
and the  Servicer  that  the  purchase  of  Certificates  is  permissible  under
applicable  law,  will not  constitute  or result in any  non-exempt  prohibited
transaction  under  ERISA or Section  4975 of the Code and will not  subject the
Indenture  Trustee or the Servicer to any  obligation  or  liability  (including
obligations or liabilities  under ERISA or Section 4975 of the Code) in addition
to those undertaken in this Indenture,  which Opinion of Counsel shall not be an
expense of the Indenture Trustee or the Servicer.

                                        20

<PAGE>

        Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor, in each case in authorized initial Note
Balances evidencing the same aggregate Percentage  Interests,  upon surrender of
the Notes to be exchanged at the Corporate  Trust Office of the Note  Registrar.
With respect to any  surrender of Capped  Funding  Notes for  exchange,  the new
Notes  delivered  in exchange  therefor  will bear the  designation  "Capped" in
addition  to any  other  applicable  designations.  Whenever  any  Notes  are so
surrendered for exchange,  the Issuer shall execute and the Note Registrar shall
authenticate  and deliver the Notes which the Noteholder  making the exchange is
entitled to receive.  Each Note presented or  surrendered  for  registration  of
transfer  or  exchange  shall (if so  required  by the Note  Registrar)  be duly
endorsed  by, or be  accompanied  by a written  instrument  of  transfer in form
reasonably  satisfactory  to the Note Registrar duly executed by, the Noteholder
thereof  or  his  attorney  duly  authorized  in  writing  with  such  signature
guaranteed  by  a  commercial   bank  or  trust  company  located  or  having  a
correspondent  located in The City of New York.  Notes  delivered  upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.

        No service charge shall be imposed for any  registration  of transfer or
exchange  of  Notes,  but the Note  Registrar  shall  require  payment  of a sum
sufficient  to cover  any tax or  governmental  charge  that may be  imposed  in
connection with any registration of transfer or exchange of Notes.

        All Notes surrendered for registration of transfer and exchange shall be
cancelled  by the Note  Registrar  and  delivered to the  Indenture  Trustee for
subsequent destruction without liability on the part of either.

        The  Issuer  hereby  appoints  the  Indenture   Trustee  as  Certificate
Registrar to keep at its Corporate Trust Office a Certificate  Register pursuant
to Section  3.09 of the Trust  Agreement  in which,  subject to such  reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges  thereof pursuant to
Section 3.05 of the Trust Agreement.  The Indenture  Trustee hereby accepts such
appointment.

        Each purchaser of a Note, by its acceptance of the Note, shall be deemed
to have  represented that the acquisition of such Note by the purchaser does not
constitute or give rise to a prohibited  transaction  under Section 406 of ERISA
or  Section  4975  of  the  Code,   for  which  no   statutory,   regulatory  or
administrative exemption is available.

Section 4.03  Mutilated,  Destroyed,  Lost or Stolen Notes. If (i) any mutilated
Note is surrendered to the Indenture Trustee,  or the Indenture Trustee receives
evidence to its satisfaction of the destruction,  loss or theft of any Note, and
(ii) there is delivered to the  Indenture  Trustee such security or indemnity as
may be required  by it to hold the Issuer and the  Indenture  Trustee  harmless,
then,  in the  absence  of  notice  to the  Issuer,  the Note  Registrar  or the
Indenture Trustee that such Note has been acquired by a bona fide purchaser, and
provided that the  requirements  of Section 8-405 of the UCC are met, the Issuer

                                        21
<PAGE>


shall execute, and upon its request the Indenture Trustee shall authenticate and
deliver,  in exchange for or in lieu of any such mutilated,  destroyed,  lost or
stolen Note, a replacement Note of the same class;  provided,  however,  that if
any such destroyed,  lost or stolen Note, but not a mutilated  Note,  shall have
become or within  seven  days  shall be due and  payable,  instead  of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or  payable  without  surrender  thereof.  If,  after the  delivery  of such
replacement Note or payment of a destroyed,  lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which  such  replacement  Note was  issued  presents  for  payment  such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any  Person  taking  such  replacement  Note  from  such  Person to whom such
replacement  Note was  delivered or any  assignee of such Person,  except a bona
fide purchaser,  and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

        Upon the issuance of any  replacement  Note under this Section 4.03, the
Issuer  may  require  the  payment  by the  Noteholder  of  such  Note  of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
relation  thereto  and any other  reasonable  expenses  (including  the fees and
expenses of the Indenture Trustee) connected therewith.

        Every   replacement  Note  issued  pursuant  to  this  Section  4.03  in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original  additional  contractual  obligation of the Issuer,  whether or not the
mutilated,  destroyed,  lost or stolen Note shall be at any time  enforceable by
anyone,  and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

        The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.

Section 4.04 Persons Deemed Owners. Prior to due presentment for registration of
transfer of any Note,  the Issuer,  the  Indenture  Trustee and any agent of the
Issuer or the  Indenture  Trustee may treat the Person in whose name any Note is
registered  (as of the day of  determination)  as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever,  whether or not such Note be overdue, and
none of the  Issuer,  the  Indenture  Trustee  or any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.

Section 4.05  Cancellation.  All Notes surrendered for payment,  registration of
transfer,  exchange or redemption shall, if surrendered to any Person other than
the  Indenture  Trustee,  be  delivered  to the  Indenture  Trustee and shall be
promptly cancelled by the Indenture Trustee.  The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.

                                        22

<PAGE>

No  Notes  shall  be  authenticated  in lieu  of or in  exchange  for any  Notes
cancelled as provided in this  Section  4.05,  except as expressly  permitted by
this Indenture.  All cancelled Notes may be held or disposed of by the Indenture
Trustee in  accordance  with its  standard  retention  or disposal  policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; provided,  however,  that such Issuer Request is
timely  and the Notes  have not been  previously  disposed  of by the  Indenture
Trustee.

Section 4.06 Book-Entry Notes. Each Class of Term Notes, upon original issuance,
shall be issued in the form of  typewritten  Notes  representing  the Book-Entry
Notes, to be delivered to The Depository Trust Company,  the initial Depository,
by, or on behalf of, the Issuer.  Such Term Notes shall  initially be registered
on the Note  Register  in the name of Cede & Co.,  the  nominee  of the  initial
Depository, and no Beneficial Owner shall receive a Definitive Note representing
such  Beneficial  Owner's  interest in such Note,  except as provided in Section
4.08.  Unless and until  definitive,  fully  registered  Notes (the  "Definitive
Notes") have been issued to Beneficial Owners pursuant to Section 4.08:

(a)     the provisions of this Section 4.06 shall be in full force and effect;

(b) the Note Registrar and the Indenture  Trustee shall be entitled to deal with
the  Depository  for all purposes of this  Indenture  (including  the payment of
principal  of and  interest  on the Notes  and the  giving  of  instructions  or
directions  hereunder)  as the sole holder of the Term Notes,  and shall have no
obligation to the Beneficial Owners;

(c) to the extent that the  provisions  of this Section 4.06  conflict  with any
other  provisions of this  Indenture,  the provisions of this Section 4.06 shall
control;

(d) the  rights  of  Beneficial  Owners  shall be  exercised  only  through  the
Depository  and shall be  limited  to those  established  by law and  agreements
between  such  Owners of Term Notes and the  Depository  and/or  the  Depository
Participants.  Unless and until  Definitive Notes are issued pursuant to Section
4.08, the initial Depository will make book-entry transfers among the Depository
Participants  and receive and transmit  payments of principal of and interest on
the Notes to such Depository Participants; and

(e) whenever this Indenture  requires or permits  actions to be taken based upon
instructions  or directions of Noteholders of Term Notes  evidencing a specified
percentage of the Term Note Balances of the Term Notes,  the Depository shall be
deemed to  represent  such  percentage  only to the extent that it has  received
instructions   to  such  effect  from   Beneficial   Owners  and/or   Depository
Participants owning or representing,  respectively,  such required percentage of
the beneficial interest in the Term Notes and has delivered such instructions to
the Indenture Trustee.

Section 4.07 Notices to Depository.  Whenever a notice or other communication to
the Noteholders of the Term Notes is required under this  Indenture,  unless and
until Definitive Term Notes shall have been issued to Beneficial Owners pursuant
to  Section  4.08,  the  Indenture  Trustee  shall  give  all such  notices  and
communications  specified herein to be given to Noteholders of the Term Notes to
the Depository, and shall have no obligation to the Beneficial Owners.

                                        23
<PAGE>

Section 4.08 Definitive Notes. If (i) the Indenture Trustee  determines that the
Depository   is  no  longer   willing  or  able  to   properly   discharge   its
responsibilities  with  respect to the Term Notes and the  Indenture  Trustee is
unable to locate a qualified  successor,  (ii) the Indenture  Trustee  elects to
terminate the  book-entry  system  through the  Depository,  (iii) the Indenture
Trustee  receives actual  knowledge of a proposed  transfer of a Term Note to an
"accredited  investor" in accordance with Section 4.02 and Exhibit C hereof,  or
(iv) after the  occurrence  of an Event of  Default,  Beneficial  Owners of Term
Notes representing  beneficial interests  aggregating at least a majority of the
aggregate  Term Note Balance of the Term Notes advise the  Depository in writing
that the continuation of a book-entry system through the Depository is no longer
in the best interests of the Beneficial Owners, then the Depository shall notify
all  Beneficial  Owners and the Indenture  Trustee of the occurrence of any such
event  and  of  the  availability  of  Definitive  Notes  to  Beneficial  Owners
requesting the same. Upon surrender to the Indenture  Trustee of the typewritten
Term Notes  representing  the Book-Entry  Notes by the Depository (or Percentage
Interest of the  Book-Entry  Notes being  transferred  pursuant to clause  (iii)
above), accompanied by registration  instructions,  the Issuer shall execute and
the Indenture Trustee shall authenticate the Definitive Notes in accordance with
the  instructions of the Depository.  None of the Issuer,  the Note Registrar or
the  Indenture  Trustee  shall  be  liable  for any  delay in  delivery  of such
instructions,  and each may  conclusively  rely on,  and shall be  protected  in
relying on,  such  instructions.  Upon the  issuance of  Definitive  Notes,  the
Indenture  Trustee shall  recognize the  Noteholders of the Definitive  Notes as
Noteholders.

Section 4.09 Tax Treatment.  The Issuer has entered into this Indenture, and the
Notes will be issued,  with the  intention  that,  for federal,  state and local
income,  single  business and franchise tax purposes,  the Notes will qualify as
indebtedness.  The Issuer, by entering into this Indenture, and each Noteholder,
by its acceptance of its Note (and each Beneficial Owner by its acceptance of an
interest  in the  applicable  Book-Entry  Note),  agree to treat  the  Notes for
federal,  state and local income,  single business and franchise tax purposes as
indebtedness.

Section 4.10 Satisfaction and Discharge of Indenture. This Indenture shall cease
to be of further  effect  with  respect to the Notes  except as to (i) rights of
registration  of  transfer  and  exchange,   (ii)   substitution  of  mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee  hereunder  (including the rights of the Indenture Trustee under Section
6.07 and the  obligations of the Indenture  Trustee under Section 4.11) and (vi)
the rights of Noteholders as  beneficiaries  hereof with respect to the property
so deposited with the Indenture  Trustee  payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer,  shall execute
proper  instruments  acknowledging  satisfaction and discharge of this Indenture
with respect to the Notes, when

                                        24

<PAGE>

                      (A)    either

(1)  all Notes  theretofore  authenticated  and delivered  (other than (i) Notes
     that have been  destroyed,  lost or stolen and that have been  replaced  or
     paid as provided in Section 4.03 and (ii) Notes for whose payment money has
     theretofore  been deposited in trust or segregated and held in trust by the
     Issuer and thereafter  repaid to the Issuer or discharged  from such trust,
     as provided in Section 3.03) have been  delivered to the Indenture  Trustee
     for cancellation; or

(2)  all  Notes  not  theretofore   delivered  to  the  Indenture   Trustee  for
     cancellation

a)      have become due and payable,

b)     will become due and payable at the Final Payment Date within one year, or

c)      have been declared immediately due and payable pursuant to Section 5.02.

        and the Issuer, in the case of a. or b. above, has irrevocably deposited
        or caused to be irrevocably deposited with the Indenture Trustee cash or
        direct obligations of or obligations  guaranteed by the United States of
        America  (which will mature prior to the date such amounts are payable),
        in trust for such purpose,  in an amount sufficient to pay and discharge
        the entire  indebtedness on such Notes and Certificates then outstanding
        not theretofore delivered to the Indenture Trustee for cancellation when
        due on the Final Payment Date;

(3)  the Issuer has paid or caused to be paid all other sums  payable  hereunder
     and under the Insurance Agreement by the Issuer; and

(4)  the Issuer has  delivered  to the  Indenture  Trustee  and the  Enhancer an
     Officer's   Certificate  and  an  Opinion  of  Counsel,  each  meeting  the
     applicable  requirements  of  Section  10.01  and  each  stating  that  all
     conditions  precedent  herein provided for relating to the satisfaction and
     discharge of this  Indenture have been complied with and, if the Opinion of
     Counsel relates to a deposit made in connection  with Section  4.10(A)(2)b.
     above,  such opinion  shall further be to the effect that such deposit will
     not  have  any  material  adverse  tax  consequences  to  the  Issuer,  any
     Noteholders or any Certificateholders.

Section 4.11 Application of Trust Money. All monies deposited with the Indenture
Trustee  pursuant to Section  4.10 hereof  shall be held in trust and applied by
it, in accordance  with the provisions of the Notes and this  Indenture,  to the
payment,  either  directly or through  any Paying  Agent or  Certificate  Paying

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<PAGE>

Agent,  as the  Indenture  Trustee  may  determine,  to the  Securityholders  of
Securities,  of all  sums  due and to  become  due  thereon  for  principal  and
interest;  but such monies need not be segregated from other funds except to the
extent required herein or required by law.

Section 4.12   Subrogation and Cooperation.

(a) The Issuer and the Indenture Trustee  acknowledge that (i) to the extent the
Enhancer  makes payments under the Policy on account of principal of or interest
on the Mortgage Loans,  the Enhancer will be fully  subrogated to the rights the
Noteholders to receive such principal of and interest on the Mortgage Loans, and
(ii) the  Enhancer  shall be paid  such  principal  and  interest  only from the
sources and in the manner provided herein and in the Insurance Agreement for the
payment of such principal and interest.

        The  Indenture   Trustee  shall  cooperate  in  all  respects  with  any
reasonable  request by the  Enhancer  for  action to  preserve  or  enforce  the
Enhancer's  rights or interest under this Indenture or the Insurance  Agreement,
consistent  with  this  Indenture  and  without   limiting  the  rights  of  the
Noteholders  as  otherwise  set  forth  in the  Indenture,  including  upon  the
occurrence and continuance of a default under the Insurance Agreement, a request
(which  request  shall be in writing)  to take any one or more of the  following
actions:

(i)     institute  Proceedings for the collection of all amounts then payable on
        the  Notes or under  this  Indenture  in  respect  to the  Notes and all
        amounts  payable  under  the  Insurance  Agreement  and to  enforce  any
        judgment obtained and collect from the Issuer monies adjudged due;

(ii)    sell the  Trust  Estate or any  portion  thereof  or rights or  interest
        therein,  at one or more public or private  Sales (as defined in Section
        5.15 hereof) called and conducted in any manner permitted by law;

(iii)   file or record all assignments that have not previously been recorded;

(iv) institute  Proceedings  from  time to  time  for the  complete  or  partial
     foreclosure of this Indenture; and

(v)  exercise any  remedies of a secured  party under the UCC and take any other
     appropriate  action to protect and  enforce the rights and  remedies of the
     Enhancer  hereunder.
                                        26

<PAGE>


     Following the payment in full of the Notes,  the Enhancer shall continue to
have all rights and  privileges  provided  to it under this  Section  and in all
other provisions of this Indenture, until all amounts owing to the Enhancer have
been paid in full.

Section 4.13  Repayment of Monies Held by Paying Agent.  In connection  with the
satisfaction  and  discharge of this  Indenture  with respect to the Notes,  all
monies then held by any Paying Agent (other than the  Indenture  Trustee)  under
the provisions of this  Indenture with respect to such Notes shall,  upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section  3.05;  and  thereupon,  such Paying Agent shall be released from all
further liability with respect to such monies.

Section 4.14 Temporary Notes.  Pending the preparation of any Definitive  Notes,
the Issuer may execute and upon its written direction, the Indenture Trustee may
authenticate and make available for delivery,  temporary Notes that are printed,
lithographed,   typewritten,   photocopied   or  otherwise   produced,   in  any
denomination,  substantially  of the  tenor of the  Definitive  Notes in lieu of
which  they  are  issued  and  with  such  appropriate  insertions,   omissions,
substitutions  and other  variations  as the officers  executing  such Notes may
determine, as evidenced by their execution of such Notes.

        If temporary Notes are issued, the Issuer will cause Definitive Notes to
be prepared without  unreasonable delay. After the preparation of the Definitive
Notes,  the temporary  Notes shall be  exchangeable  for  Definitive  Notes upon
surrender  of the  temporary  Notes at the  office or  agency  of the  Indenture
Trustee,  without charge to the Noteholder.  Upon surrender for  cancellation of
any one or more  temporary  Notes,  the Issuer shall  execute and the  Indenture
Trustee  shall  authenticate  and  make  available  for  delivery,  in  exchange
therefor,  Definitive  Notes of authorized  denominations  and of like tenor and
aggregate  principal amount.  Until so exchanged,  such temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as Definitive
Notes.

                                   ARTICLE V

                              Default And Remedies

Section  5.01  Events of  Default.  The Issuer  shall  deliver to the  Indenture
Trustee and the Enhancer,  within five days after  learning of the occurrence of
any event that with the  giving of notice and the lapse of time would  become an
Event of  Default  under  clause  (c) of the  definition  of "Event of  Default"
written  notice in the form of an Officer's  Certificate  of its status and what
action the Issuer is taking or proposes to take with respect thereto.

Section 5.02 Acceleration of Maturity;  Rescission and Annulment. If an Event of
Default shall occur and be continuing, then and in every such case the Indenture
Trustee,  acting at the direction of the Noteholders of Notes  representing  not
less than a majority  of the  aggregate  Note  Balance  of the  Notes,  with the
written consent of the Enhancer, may declare the Notes to be immediately due and
payable by a notice in writing to the Issuer  (and to the  Indenture  Trustee if
given by  Noteholders);  and upon any such  declaration,  the  unpaid  principal
amount of the Notes,  together with accrued and unpaid interest  thereon through
the date of acceleration, shall become immediately due and payable.


                                        27

<PAGE>

        At any time after such  declaration  of  acceleration  of maturity  with
respect to an Event of Default has been made and before a judgment or decree for
payment  of the  money  due  has  been  obtained  by the  Indenture  Trustee  as
hereinafter provided in this Article V, the Enhancer or the Noteholders of Notes
representing  a majority of the  aggregate  Note Balance of the Notes,  with the
written  consent  of the  Enhancer,  by  written  notice to the  Issuer  and the
Indenture Trustee, may in writing waive the related Event of Default and rescind
and annul such declaration and its consequences if:

(a)  the  Issuer  has  paid  or  deposited  with  the  Indenture  Trustee  a sum
     sufficient to pay:

(i)     all  payments of  principal  of and  interest on the Notes and all other
        amounts that would then be due  hereunder or upon the Notes if the Event
        of Default giving rise to such acceleration had not occurred;

(ii)    all sums paid or advanced by the  Indenture  Trustee  hereunder  and the
        reasonable  compensation,  expenses,  disbursements  and advances of the
        Indenture Trustee and its agents and counsel; and

(iii)   all Events of Default, other than the nonpayment of the principal of the
        Notes that has become due solely by such  acceleration,  have been cured
        or waived as provided in Section 5.12.

        No such  rescission  shall affect any  subsequent  default or impair any
right consequent thereto.

     Section  5.03  Collection  of  Indebtedness  and Suits for  Enforcement  by
Indenture Trustee.

(a) The Issuer  covenants  that if default in the payment of (i) any interest on
any Note when the same becomes due and payable, and such default continues for a
period  of five  days,  or  (ii)  the  principal  of or any  installment  of the
principal of any Note when the same becomes due and payable,  the Issuer  shall,
upon  demand  of the  Indenture  Trustee,  pay to it,  for  the  benefit  of the
Noteholders,  the entire  amount then due and payable on the Notes for principal
and interest,  with interest on the overdue  principal,  and in addition thereto
such further  amount as shall be  sufficient  to cover the costs and expenses of
collection,  including the reasonable compensation,  expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.

(b) In case the  Issuer  shall  fail  forthwith  to pay such  amounts  upon such
demand,  the  Indenture  Trustee,  in its own name and as  trustee of an express
trust,  subject to the  provisions  of Section  10.17  hereof,  may  institute a
Proceeding for the  collection of the sums so due and unpaid,  and may prosecute
such  Proceeding to judgment or final  decree,  and may enforce the same against
the Issuer or other  obligor on the Notes and collect in the manner  provided by
law out of the  property of the Issuer or other  obligor on the Notes,  wherever
situated, the monies adjudged or decreed to be payable.


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<PAGE>


(c) If an Event of Default shall occur and be continuing, the Indenture Trustee,
subject to the  provisions of Section 10.17  hereof,  may, as more  particularly
provided in Section 5.04, in its  discretion  proceed to protect and enforce its
rights and the rights of the Noteholders by such appropriate  Proceedings as the
Indenture  Trustee  shall deem most  effective  to protect  and enforce any such
rights,  whether for the  specific  enforcement  of any covenant or agreement in
this  Indenture or in aid of the  exercise of any power  granted  herein,  or to
enforce  any other  proper  remedy  or legal or  equitable  right  vested in the
Indenture Trustee by this Indenture or by law.

(d) If there  shall be pending,  relative to the Issuer or any other  obligor on
the Notes or any Person  having or claiming an  ownership  interest in the Trust
Estate,  Proceedings  under  Title 11 of the  United  States  Code or any  other
applicable federal or state bankruptcy, insolvency or other similar law, or if a
receiver,  assignee  or trustee in  bankruptcy  or  reorganization,  liquidator,
sequestrator  or  similar  official  shall  have  been  appointed  for or  taken
possession of the Issuer or its property or such other obligor or Person,  or if
there shall be any other comparable judicial  Proceedings relative to the Issuer
or other any other  obligor  on the  Notes,  or  relative  to the  creditors  or
property  of the  Issuer or such  other  obligor,  then the  Indenture  Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise, and irrespective of whether
the Indenture  Trustee shall have made any demand  pursuant to the provisions of
this  Section,  shall  be  entitled  and  empowered,  by  intervention  in  such
Proceedings or otherwise:

(i)  to file and prove a claim or claims for the entire  amount of principal and
     interest  owing and  unpaid in  respect of the Notes and to file such other
     papers or  documents  as may be necessary or advisable in order to have the
     claims  of the  Indenture  Trustee  (including  any  claim  for  reasonable
     compensation  to the  Indenture  Trustee  and  each  predecessor  Indenture
     Trustee,  and their  respective  agents,  attorneys  and  counsel,  and for
     reimbursement  of all expenses and liabilities  incurred,  and all advances
     made,  by the Indenture  Trustee and each  predecessor  Indenture  Trustee,
     except as a result of negligence,  willful  misconduct or bad faith) and of
     the Noteholders allowed in such Proceedings;

(ii) unless  prohibited by applicable law and regulations,  to vote on behalf of
     the  Noteholders in any election of a trustee,  a standby trustee or Person
     performing similar functions in any such Proceedings;

(iii)   to  collect  and  receive  any  monies  or  other  property  payable  or
        deliverable  on any such claims and to distribute  all amounts  received
        with  respect  to the  claims of the  Noteholders  and of the  Indenture
        Trustee on their behalf; and

(iv)    to file such  proofs of claim and other  papers or  documents  as may be
        necessary  or  advisable  in order to have the  claims of the  Indenture
        Trustee or the Noteholders allowed in any judicial  proceedings relative
        to the Issuer, its creditors and its property;

                                        29

<PAGE>


and any trustee,  receiver,  liquidator,  custodian or other similar official in
any such  Proceeding is hereby  authorized by each of such  Noteholders  to make
payments to the Indenture Trustee, and, in the event the Indenture Trustee shall
consent to the making of payments  directly to such  Noteholders,  to pay to the
Indenture  Trustee  such  amounts  as shall be  sufficient  to cover  reasonable
compensation to the Indenture  Trustee,  each predecessor  Indenture Trustee and
their  respective  agents,  attorneys  and counsel,  and all other  expenses and
liabilities  incurred,  and all advances made, by the Indenture Trustee and each
predecessor  Indenture  Trustee,  except  as a  result  of  negligence,  willful
misconduct or bad faith.

(e) Nothing herein contained shall be deemed to authorize the Indenture  Trustee
to  authorize  or  consent  to or vote for or  accept  or adopt on behalf of any
Noteholder any plan of  reorganization,  arrangement,  adjustment or composition
affecting the Notes or the rights of any Noteholder  thereof or to authorize the
Indenture  Trustee to vote in respect of the claim of any Noteholder in any such
proceeding  except,  as  aforesaid,  to vote for the  election  of a trustee  in
bankruptcy or similar Person.

(f) All rights of action and of asserting claims under this Indenture,  or under
any  of the  Notes,  may  be  enforced  by the  Indenture  Trustee  without  the
possession of any of the Notes or the  production  thereof in any trial or other
Proceedings relative thereto,  and any such action or proceedings  instituted by
the Indenture  Trustee shall be brought in its own name as trustee of an express
trust,  and any  recovery of judgment,  subject to the payment of the  expenses,
disbursements  and  compensation  of the  Indenture  Trustee,  each  predecessor
Indenture  Trustee and their respective  agents and attorneys,  shall be for the
ratable  benefit of the  Noteholders  of the Term Notes or the Variable  Funding
Notes, as applicable.

(g) In  any  Proceedings  to  which  the  Indenture  Trustee  shall  be a  party
(including any Proceedings involving the interpretation of any provision of this
Indenture),  the Indenture  Trustee shall be held to represent all  Noteholders,
and it  shall  not be  necessary  to make  any  Noteholder  a party  to any such
Proceedings.

Section 5.04   Remedies; Priorities.

(a) If an Event of  Default  shall have  occurred  and be  continuing,  then the
Indenture Trustee,  subject to the provisions of Section 10.17 hereof,  with the
written  consent  of the  Enhancer  may,  or, at the  written  direction  of the
Enhancer,  shall,  do one or more of the  following,  in each  case  subject  to
Section 5.05:

(i)     institute Proceedings in its own name and as trustee of an express trust
        for the  collection  of all amounts  then  payable on the Notes or under
        this  Indenture  with  respect   thereto,   whether  by  declaration  or
        otherwise,  and all  amounts  payable  under  the  Insurance  Agreement,
        enforce any judgment obtained, and collect from the Issuer and any other
        obligor on the Notes monies adjudged due;


                                        30

<PAGE>


(ii)    institute  Proceedings  from time to time for the  complete  or  partial
        foreclosure of this Indenture with respect to the Trust Estate;

(iii)   exercise  any  remedies  of a secured  party  under the UCC and take any
        other appropriate  action to protect and enforce the rights and remedies
        of the Indenture Trustee and the Noteholders; and

(iv)    sell the  Trust  Estate or any  portion  thereof  or rights or  interest
        therein,  at one or more public or private sales called and conducted in
        any manner permitted by law;

provided,  however,  that  the  Indenture  Trustee  may not  sell  or  otherwise
liquidate  the  Trust  Estate  following  an Event of  Default,  unless  (A) the
Indenture Trustee obtains the consent of the Enhancer, which consent will not be
unreasonably withheld, and the Noteholders of 100% of the aggregate Note Balance
of the Notes,  (B) the  proceeds of such sale or  liquidation  distributable  to
Noteholders  are sufficient to discharge in full all amounts then due and unpaid
upon the Notes for  principal and interest and to reimburse the Enhancer for any
amounts drawn under the Policy and any other amounts due the Enhancer  under the
Insurance  Agreement or (C) the Indenture  Trustee  determines that the Mortgage
Loans will not continue to provide sufficient funds for the payment of principal
of and  interest on the Notes as they would have become due if the Notes had not
been declared due and payable,  and the Indenture Trustee obtains the consent of
the  Enhancer,  which  consent  will  not  be  unreasonably  withheld,  and  the
Noteholders  of 66  2/3%  of  the  aggregate  Note  Balance  of  the  Notes.  In
determining such sufficiency or insufficiency with respect to clause (B) and (C)
above, the Indenture  Trustee may, but need not, obtain and rely upon an opinion
of an Independent  investment banking or accounting firm of national  reputation
as to the  feasibility of such proposed  action and as to the sufficiency of the
Trust Estate for such purpose.  Notwithstanding  the foregoing,  provided that a
Servicing Default shall not have occurred,  any Sale (as defined in Section 5.15
hereof) of the Trust Estate shall be made subject to the continued  servicing of
the Mortgage Loans by the Servicer as provided in the Servicing Agreement.

(b) If the  Indenture  Trustee  collects any money or property  pursuant to this
Article V, it shall pay out such money or property in the following order:

             FIRST:.to the Indenture Trustee for amounts due under Section 6.07;

               SECOND:to  the  Noteholders  for  amounts  due and  unpaid on the
               related  Notes  for  interest,  ratably,  without  preference  or
               priority of any kind, according to the amounts due and payable on
               such  Notes for  interest  from  amounts  available  in the Trust
               Estate for such Noteholders;

               THIRD:  to the  Noteholders  for  amounts  due and  unpaid on the
               related  Notes for  principal,  ratably,  without  preference  or
               priority of any kind, according to the amounts due and payable on
               such Notes for  principal,  from  amounts  available in the Trust
               Estate for such  Noteholders,  until the respective Note Balances
               of such Notes have been reduced to zero;

                                        31
<PAGE>


               FOURTH:to  the payment of all amounts due and owing the  Enhancer
               under the Insurance Agreement;

               FIFTH:  to the  Certificate  Paying  Agent for  amounts due under
               Article VIII of the Trust Agreement; and

               SIXTH: to the payment of the remainder,  if any, to the Issuer or
               any other person legally entitled thereto.

        The  Indenture  Trustee may fix a record  date and payment  date for any
payment to  Noteholders  pursuant to this Section  5.04. At least 15 days before
such record date, the Indenture  Trustee shall mail to each  Noteholder a notice
that states the record date, the payment date and the amount to be paid.

Section 5.05 Optional  Preservation of the Trust Estate.  If the Notes have been
declared due and payable  under  Section 5.02  following an Event of Default and
such declaration and its consequences have not been rescinded and annulled,  the
Indenture  Trustee may, but need not (but shall at the written  direction of the
Enhancer),  elect to take and maintain possession of the Trust Estate. It is the
desire of the  parties  hereto  and the  Noteholders  that there be at all times
sufficient  funds for the payment of  principal of and interest on the Notes and
other  obligations  of the Issuer  including  payment to the  Enhancer,  and the
Indenture  Trustee shall take such desire into account when determining  whether
or not to take and  maintain  possession  of the Trust  Estate.  In  determining
whether to take and  maintain  possession  of the Trust  Estate,  the  Indenture
Trustee  may,  but need not,  obtain and rely upon an opinion of an  Independent
investment  banking  or  accounting  firm  of  national  reputation  as  to  the
feasibility  of such  proposed  action  and as to the  sufficiency  of the Trust
Estate for such purpose.

Section  5.06  Limitation  of  Suits.  No  Noteholder  shall  have any  right to
institute any Proceeding, judicial or otherwise, with respect to this Indenture,
or for the  appointment  of a  receiver  or  trustee,  or for any  other  remedy
hereunder, unless and subject to the provisions of Section 10.17 hereof:

(a) such Noteholder  shall have previously given written notice to the Indenture
Trustee of a continuing Event of Default;

(b) the  Noteholders  of not less than 25% of the aggregate  Note Balance of the
Notes shall have made written request to the Indenture Trustee to institute such
Proceeding  in respect  of such  Event of  Default in its own name as  Indenture
Trustee hereunder;

(c) such  Noteholder or  Noteholders  shall have offered the  Indenture  Trustee
reasonable indemnity against the costs,  expenses and liabilities to be incurred
by it in complying with such request;

                                        32
<PAGE>

(d) the Indenture Trustee for 60 days after its receipt of such notice,  request
and offer of indemnity shall have failed to institute such Proceedings; and

(e) no direction inconsistent with such written request shall have been given to
the Indenture Trustee during such 60-day period by the Noteholders of a majority
of the aggregate Note Balance of the Notes or by the Enhancer.

        It is understood and intended that no Noteholder shall have any right in
any manner  whatever  by virtue of, or by  availing  of, any  provision  of this
Indenture to affect, disturb or prejudice the rights of any other Noteholders or
to obtain or to seek to obtain priority or preference over any other Noteholders
or to enforce  any right  under  this  Indenture,  except in the  manner  herein
provided.

        In  the  event  the  Indenture  Trustee  shall  receive  conflicting  or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing  less than a majority of the  aggregate  Note Balance of the Notes,
the Indenture  Trustee  shall act at the  direction of the group of  Noteholders
with the greater Note  Balance.  In the event that the  Indenture  Trustee shall
receive  conflicting  or  inconsistent  requests and indemnity  from two or more
groups of  Noteholders  representing  the same Note Balance,  then the Indenture
Trustee in its sole  discretion  may  determine  what action,  if any,  shall be
taken, notwithstanding any other provisions of this Indenture.

Section  5.07  Unconditional  Rights of  Noteholders  to Receive  Principal  and
Interest.  Subject to the  provisions of this  Indenture,  the Noteholder of any
Note shall have the  right,  which is  absolute  and  unconditional,  to receive
payment of the principal of and  interest,  if any, on such Note on or after the
respective due dates thereof  expressed in such Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Noteholder.

Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee or any
Noteholder  has  instituted  any Proceeding to enforce any right or remedy under
this Indenture and such  Proceeding has been  discontinued  or abandoned for any
reason or has been  determined  adversely  to the  Indenture  Trustee or to such
Noteholder,  then and in every such case the Issuer,  the Indenture  Trustee and
the Noteholders  shall,  subject to any  determination  in such  Proceeding,  be
restored  severally and  respectively to their former positions  hereunder,  and
thereafter all rights and remedies of the Indenture  Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.

Section 5.09 Rights and Remedies Cumulative. No right or remedy herein conferred
upon or reserved to the Indenture  Trustee,  the Enhancer or the  Noteholders is
intended  to be  exclusive  of any other  right or remedy,  and every  right and
remedy shall,  to the extent  permitted by law, be cumulative and in addition to
every other right and remedy given  hereunder  or now or  hereafter  existing at
law, in equity or otherwise.  The assertion or employment of any right or remedy
hereunder,  or  otherwise,   shall  not  prevent  the  concurrent  assertion  or
employment of any other appropriate right or remedy.

                                        33
<PAGE>

Section  5.10  Delay or  Omission  Not a  Waiver.  No delay or  omission  of the
Indenture  Trustee,  the  Enhancer or any  Noteholder  to exercise  any right or
remedy  accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence  therein.
Every  right  and  remedy  given by this  Article  V or by law to the  Indenture
Trustee or to the  Noteholders  may be exercised from time to time, and as often
as may be deemed expedient,  by the Indenture Trustee or by the Noteholders,  as
the case may be.

Section  5.11  Control by Enhancer or  Noteholders.  The Enhancer (so long as no
Enhancer  Default exists) or the Noteholders of a majority of the aggregate Note
Balance  of Notes  with the  consent  of the  Enhancer,  shall have the right to
direct the time,  method and place of conducting  any  Proceeding for any remedy
available to the Indenture  Trustee with respect to the Notes or exercising  any
trust or power conferred on the Indenture Trustee, provided that:

     (a) such  direction  shall not be in conflict  with any rule of law or with
this Indenture;

(b) subject to the express terms of Section 5.04, any direction to the Indenture
Trustee to sell or liquidate  the Trust Estate shall be by the Enhancer (so long
as no Enhancer  Default exists) or by the Noteholders of Notes  representing not
less than 100% of the  aggregate  Note  Balance of the Notes with the consent of
the Enhancer;

(c) if the  conditions  set forth in Section 5.05 shall have been  satisfied and
the  Indenture  Trustee  elects to  retain  the Trust  Estate  pursuant  to such
Section,  then any direction to the Indenture  Trustee by  Noteholders  of Notes
representing  less than 100% of the aggregate  Note Balance of the Notes to sell
or liquidate the Trust Estate shall be of no force and effect; and

(d) the  Indenture  Trustee  may take any  other  action  deemed  proper  by the
Indenture Trustee that is not inconsistent with such direction.

Notwithstanding the rights of Noteholders set forth in this Section,  subject to
Section 6.01, the Indenture  Trustee need not take any action that it determines
(in its sole  discretion)  might  involve it in  liability  or might  materially
adversely  affect the rights of any  Noteholders  not consenting to such action,
unless the Trustee has received  satisfactory  indemnity  from the Enhancer or a
Noteholder.

Section  5.12  Waiver  of  Past  Defaults.  Prior  to  the  declaration  of  the
acceleration  of the  maturity  of the Notes as provided  in Section  5.02,  the
Enhancer (so long as no Enhancer  Default exists) or the Noteholders of not less
than a majority of the aggregate Note Balance of the Notes,  with the consent of
the Enhancer,  may waive any past Event of Default and its consequences,  except
an Event of Default (a) with  respect to payment of  principal of or interest on
any of the Notes or (b) in respect of a covenant or provision hereof that cannot
be modified or amended  without the consent of the  Noteholder  of each Note. In
the  case  of any  such  waiver,  the  Issuer,  the  Indenture  Trustee  and the
Noteholders  shall be restored to their  respective  former positions and rights
hereunder;  but no such waiver shall extend to any  subsequent or other Event of
Default or impair any right consequent thereto.

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<PAGE>

        Upon any such waiver,  any Event of Default  arising  therefrom shall be
deemed to have been cured and not to have  occurred,  for every  purpose of this
Indenture;  but no such waiver shall extend to any  subsequent or other Event of
Default or impair any right consequent thereto.

Section 5.13  Undertaking for Costs.  All parties to this Indenture  agree,  and
each  Noteholder  by such  Noteholder's  acceptance of the related Note shall be
deemed to have  agreed,  that any court may in its  discretion  require,  in any
Proceeding for the enforcement of any right or remedy under this  Indenture,  or
in any Proceeding  against the Indenture Trustee for any action taken,  suffered
or omitted by it as Indenture Trustee,  the filing by any party litigant in such
Proceeding of an undertaking to pay the costs of such Proceeding,  and that such
court  may in its  discretion  assess  reasonable  costs,  including  reasonable
attorneys'  fees,  against  any party  litigant in such  Proceeding,  having due
regard to the merits and good faith of the claims or defenses made by such party
litigant;  but the  provisions  of this  Section 5.13 shall not apply to (a) any
Proceeding instituted by the Indenture Trustee, (b) any Proceeding instituted by
any Noteholder,  or group of Noteholders,  in each case holding in the aggregate
more than 10% of the aggregate  Note Balance of the Notes or (c) any  Proceeding
instituted by any Noteholder for the  enforcement of the payment of principal of
or interest on any Note on or after the respective  due dates  expressed in such
Note and in this Indenture.

Section  5.14 Waiver of Stay or Extension  Laws.  The Issuer  covenants  (to the
extent that it may lawfully do so) that it will not at any time insist upon,  or
plead or in any manner  whatsoever,  claim or take the benefit or advantage  of,
any stay or extension  law  wherever  enacted,  now or at any time  hereafter in
force,  that may affect the covenants or the performance of this Indenture;  and
the Issuer (to the extent that it may  lawfully do so) hereby  expressly  waives
all  benefit  or  advantage  of any such law,  and  covenants  that it shall not
hinder,  delay or impede  the  execution  of any  power  herein  granted  to the
Indenture Trustee,  but will suffer and permit the execution of every such power
as though no such law had been enacted.

Section 5.15   Sale of Trust Estate.

(a) The power to effect any sale or other  disposition (a "Sale") of any portion
of the Trust  Estate  pursuant  to  Section  5.04 is  expressly  subject  to the
provisions of Section 5.05 and this Section  5.15.  The power to effect any such
Sale shall not be  exhausted  by any one or more Sales as to any  portion of the
Trust Estate remaining  unsold,  but shall continue  unimpaired until the entire
Trust Estate shall have been sold or all amounts  payable on the Notes and under
this  Indenture  and under the  Insurance  Agreement  shall have been paid.  The
Indenture  Trustee  may from time to time  postpone  any  public  Sale by public
announcement  made at the time and place of such  Sale.  The  Indenture  Trustee
hereby expressly waives its right to any amount fixed by law as compensation for
any Sale.

     (b) The  Indenture  Trustee  shall not in any  private  Sale sell the Trust
Estate, or any portion thereof, unless:

(i)  the Noteholders of all Notes and the Enhancer direct the Indenture  Trustee
     to make, such Sale,

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<PAGE>

(ii)    the proceeds of such Sale would be not less than the entire  amount that
        would  be   payable   to  the   Noteholders   under   the   Notes,   the
        Certificateholders under the Certificates and the Enhancer in respect of
        amounts  drawn under the Policy and any other  amounts due the  Enhancer
        under the  Insurance  Agreement,  in full payment  thereof in accordance
        with Section 5.02, on the Payment Date next  succeeding the date of such
        Sale, or

(iii)   the  Indenture  Trustee  determines,  in its sole  discretion,  that the
        conditions  for  retention of the Trust Estate set forth in Section 5.05
        cannot be satisfied  (in making any such  determination,  the  Indenture
        Trustee may rely upon an opinion of an  Independent  investment  banking
        firm  obtained  and  delivered  as  provided in Section  5.05),  and the
        Enhancer  consents to such Sale (which consent shall not be unreasonably
        withheld), and the Noteholders of Notes representing at least 66 2/3% of
        the aggregate Note Balance of the Notes consent to such Sale.

The purchase by the Indenture  Trustee of all or any portion of the Trust Estate
at a private  Sale shall not be deemed a Sale or other  disposition  thereof for
purposes of this Section 5.15(b).

(c) Unless the  Noteholders  and the Enhancer shall have otherwise  consented or
directed the Indenture Trustee,  at any public Sale of all or any portion of the
Trust  Estate  at which a  minimum  bid  equal  to or  greater  than the  amount
described in paragraph  (ii) of subsection (b) of this Section 5.15 has not been
established  by the  Indenture  Trustee and no Person bids an amount equal to or
greater  than such amount,  then the  Indenture  Trustee  shall bid an amount at
least $1.00 more than the highest  other bid,  which bid shall be subject to the
provisions of Section 5.15(d)(ii) herein.

(d)     In connection with a Sale of all or any portion of the Trust Estate:

(i)  any Noteholder may bid for and, with the consent of the Enhancer,  purchase
     the property  offered for sale, and upon  compliance with the terms of sale
     may hold, retain and possess and dispose of such property,  without further
     accountability, and may, in paying the purchase money therefor, deliver any
     Notes or claims for interest thereon in lieu of cash up to the amount which
     shall,  upon  distribution  of the net  proceeds  of such sale,  be payable
     thereon,  and such Notes,  in case the amounts so payable  thereon shall be
     less than the amount due  thereon,  shall be  returned  to the  Noteholders
     thereof after being appropriately stamped to show such partial payment;

(ii) the Indenture Trustee may bid for and acquire the property offered for Sale
     in connection with any Sale thereof and,  subject to any  requirements  of,
     and to the extent permitted by, applicable law in connection therewith, may
     purchase all or any portion of the Trust Estate in a private  sale. In lieu
     of paying cash therefor,  the Indenture Trustee may make settlement for the
     purchase price by crediting the gross Sale price against the sum of (A) the
     amount   that  would  be   distributable   to  the   Noteholders   and  the
     Certificateholders  and amounts  owing to the  Enhancer as a result of such
     Sale in accordance with Section 5.04(b) on the Payment Date next succeeding

                                        36

<PAGE>

     the  date  of  such  Sale  and  (B) the  expenses  of the  Sale  and of any
     Proceedings in connection  therewith that are  reimbursable  to it, without
     being  required to produce the Notes in order to complete  any such Sale or
     in order for the net Sale price to be credited  against such Notes, and any
     property so acquired by the Indenture  Trustee shall be held and dealt with
     by it in accordance with the provisions of this Indenture;

(iii)   the  Indenture   Trustee  shall  execute  and  deliver  an   appropriate
        instrument of conveyance transferring its interest in any portion of the
        Trust Estate in connection with a Sale thereof;

(iv)    the  Indenture  Trustee is hereby  irrevocably  appointed  the agent and
        attorney-in-fact  of the Issuer to transfer  and convey its  interest in
        any portion of the Trust Estate in connection  with a Sale thereof,  and
        to take all action necessary to effect such Sale; and

(v)     no  purchaser or  transferee  at such a Sale shall be bound to ascertain
        the Indenture Trustee's authority,  inquire into the satisfaction of any
        conditions precedent or see to the application of any monies.

Section 5.16 Action on Notes. The Indenture  Trustee's right to seek and recover
judgment  on the Notes or under  this  Indenture  shall not be  affected  by the
seeking,  obtaining or  application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Indenture  Trustee or the  Noteholders  shall be impaired by the recovery of
any judgment by the Indenture  Trustee  against the Issuer or by the levy of any
execution  under such  judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer.  Any money or property  collected by the  Indenture
Trustee shall be applied in accordance with Section 5.04(b).

Section 5.17   Performance and Enforcement of Certain Obligations.

(a) Promptly  following a written  request  from the  Enhancer or the  Indenture
Trustee (with the written consent of the Enhancer),  the Issuer, in its capacity
as owner of the Mortgage Loans, shall, with the written consent of the Enhancer,
take all such lawful  action as the  Indenture  Trustee may request to cause the
Issuer to compel or secure the  performance and observance by the Seller and the
Servicer, as applicable,  of each of their obligations to the Issuer under or in
connection  with the Purchase  Agreement  and the  Servicing  Agreement,  and to
exercise any and all rights, remedies,  powers and privileges lawfully available
to the  Issuer  under or in  connection  with  the  Purchase  Agreement  and the
Servicing  Agreement to the extent and in the manner  directed by the  Indenture
Trustee, as pledgee of the Mortgage Loans, including the transmission of notices
of  default  on the  part  of the  Seller  or the  Servicer  thereunder  and the
institution  of legal or  administrative  actions  or  proceedings  to compel or
secure  performance  by the Seller or the Servicer of each of their  obligations
under the Purchase Agreement and the Servicing Agreement.

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<PAGE>

(b) If an Event of Default shall have occurred and be continuing,  the Indenture
Trustee, as pledgee of the Mortgage Loans, subject to the rights of the Enhancer
under the Servicing Agreement,  may, and at the direction (which direction shall
be in writing or by telephone (confirmed in writing promptly thereafter)) of the
Noteholders  of 66 2/3% of the  aggregate  Note  Balance  of the  Notes,  shall,
exercise  all  rights,  remedies,  powers,  privileges  and claims of the Issuer
against the Seller or the  Servicer  under or in  connection  with the  Purchase
Agreement and the Servicing Agreement,  including the right or power to take any
action to  compel  or secure  performance  or  observance  by the  Seller or the
Servicer,  as the  case  may be,  of each of  their  obligations  to the  Issuer
thereunder  and to give  any  consent,  request,  notice,  direction,  approval,
extension or waiver under the Purchase Agreement and the Servicing Agreement, as
the case may be,  and any right of the Issuer to take such  action  shall not be
suspended.  In connection therewith, as determined by the Indenture Trustee, the
Issuer  shall take all actions  necessary to effect the transfer of the Mortgage
Loans to the Indenture Trustee.

                                   ARTICLE VI

                              The Indenture Trustee

Section 6.01   Duties of Indenture Trustee.

(a) If an Event of Default shall have occurred and be continuing,  the Indenture
Trustee shall  exercise the rights and powers vested in it by this Indenture and
use the same  degree of care and  skill in their  exercise  as a prudent  Person
would  exercise or use under the  circumstances  in the conduct of such Person's
own affairs.

(b)     Except during the continuance of an Event of Default:

(i)     the  Indenture  Trustee  undertakes to perform such duties and only such
        duties as are  specifically  set forth in this  Indenture and no implied
        covenants or obligations  shall be read into this Indenture  against the
        Indenture Trustee; and

(ii)    in the  absence  of bad faith on its part,  the  Indenture  Trustee  may
        conclusively rely, as to the truth of the statements and the correctness
        of  the  opinions  expressed  therein,  upon  certificates,  reports  or
        opinions  furnished  to the  Indenture  Trustee  and  conforming  to the
        requirements of this Indenture;  provided,  however,  that the Indenture
        Trustee  shall  examine  the  certificates,   reports  and  opinions  to
        determine  whether  or not  they  conform  to the  requirements  of this
        Indenture.

(c)  The  Indenture  Trustee  may not be  relieved  from  liability  for its own
negligent  action,  its  own  negligent  failure  to  act  or  its  own  willful
misconduct, except that:

(i)  this  paragraph  does not limit the effect of paragraph (a) of this Section
     6.01;

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<PAGE>

(ii)    the Indenture Trustee shall not be liable for any error of judgment made
        in good  faith by a  Responsible  Officer  unless it is proved  that the
        Indenture Trustee was negligent in ascertaining the pertinent facts; and

(iii)   the Indenture  Trustee shall not be liable with respect to any action it
        takes or omits to take in good  faith  in  accordance  with a  direction
        received  by it  pursuant  to  Section  5.11 or any  direction  from the
        Enhancer  that the  Enhancer  is entitled to give under any of the Basic
        Documents.

(d) The Indenture Trustee shall not be liable for interest on any money received
by it except as the Indenture Trustee may agree in writing with the Issuer.

(e) Money held in trust by the  Indenture  Trustee need not be  segregated  from
other funds except to the extent  required by law or the terms of this Indenture
or the Trust Agreement.

(f) No provision of this Indenture shall require the Indenture Trustee to expend
or risk its own funds or otherwise incur financial  liability in the performance
of any of its  duties  hereunder  or in the  exercise  of any of its  rights  or
powers,  if it shall have  reasonable  grounds to believe that repayment of such
funds or adequate  indemnity  against such risk or  liability is not  reasonably
assured to it.

(g) Every  provision of this Indenture  relating to the conduct or affecting the
liability of or affording  protection to the Indenture  Trustee shall be subject
to the provisions of this Section and to the provisions of TIA.

(h) With respect to each Payment Date, on the Business Day following the related
Determination Date, the Indenture Trustee shall forward or cause to be forwarded
by mail, or other mutually agreed-upon method, to the Enhancer and the Servicer,
a statement setting forth, to the extent applicable,  (i) during the Pre-Funding
Period, the Pre-Funded Amount as of such Payment Date and any transfers of funds
in connection  therewith,  and (ii) during the Revolving  Period,  the amount of
Principal  Collections  to be deposited  into the Funding  Account in respect of
such Payment Date,  and the amount on deposit in the Funding  Account as of such
Payment Date, after giving effect to any amounts so deposited therein.

(i) The Indenture Trustee hereby accepts appointment as Certificate Paying Agent
under the Trust  Agreement and agrees to be bound by the provisions of the Trust
Agreement relating to the Certificate Paying Agent. The Indenture Trustee hereby
agrees to be bound by the provisions of Article IX of the Trust Agreement.

Section 6.02   Rights of Indenture Trustee.
               ---------------------------

(a) The Indenture  Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Indenture Trustee
need not investigate any fact or matter stated in any such document.

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<PAGE>

(b) Before the Indenture Trustee acts or refrains from acting, it may require an
Officer's  Certificate or an Opinion of Counsel. The Indenture Trustee shall not
be liable for any action it takes or omits to take in good faith in  reliance on
any such Officer's Certificate or Opinion of Counsel.
(c) The Indenture  Trustee may execute any of the trusts or powers  hereunder or
perform  any  duties  hereunder  either  directly  or by or  through  agents  or
attorneys  or a custodian or nominee,  and the  Indenture  Trustee  shall not be
responsible  for  any  misconduct  or  negligence  on the  part  of,  or for the
supervision of, any such agent,  attorney,  custodian or nominee  appointed with
due care by it hereunder.

(d) The  Indenture  Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers;  provided,  however,  that  the  Indenture  Trustee's  conduct  does not
constitute willful misconduct, negligence or bad faith.

(e) The Indenture Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters  relating to this  Indenture and the Notes
shall be full and  complete  authorization  and  protection  from  liability  in
respect to any action  taken,  omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.

Section 6.03 Individual  Rights of Indenture  Trustee.  The Indenture Trustee in
its  individual  or any other  capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Sections 6.11 and 6.12.

Section 6.04 Indenture Trustee's Disclaimer.  The Indenture Trustee shall not be
(i) responsible for and makes no  representation  as to the validity or adequacy
of this  Indenture or the Notes,  (ii)  accountable  for the Issuer's use of the
proceeds from the Notes or (iii)  responsible for any statement of the Issuer in
this  Indenture or in any  document  issued in  connection  with the sale of the
Notes  or in the  Notes,  other  than the  Indenture  Trustee's  certificate  of
authentication thereon.

Section 6.05 Notice of Event of Default.  If an Event of Default shall occur and
be continuing, and if such Event of Default is known to a Responsible Officer of
the Indenture  Trustee,  then the Indenture Trustee shall give notice thereof to
the Enhancer. The Indenture Trustee shall mail to each Noteholder notice of such
Event of Default within 90 days after it occurs.  Except in the case of an Event
of Default  with respect to the payment of principal of or interest on any Note,
the Indenture  Trustee may withhold such notice if and so long as a committee of
its Responsible  Officers in good faith  determines that withholding such notice
is in the interests of the Noteholders.

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<PAGE>

Section 6.06 Reports by Indenture Trustee to Noteholders.  The Indenture Trustee
shall deliver to each Noteholder  such  information as may be required to enable
such  Noteholder  to  prepare  its  federal  and state  income tax  returns.  In
addition, upon Issuer Request, the Indenture Trustee shall promptly furnish such
information  reasonably  requested by the Issuer that is reasonably available to
the  Indenture  Trustee to enable the Issuer to perform  its  federal  and state
income tax reporting obligations.

Section  6.07  Compensation  and  Indemnity.  The  Indenture  Trustee  shall  be
compensated  and  indemnified by the Servicer in accordance with Section 6.06 of
the Servicing  Agreement.  All amounts owing the Indenture  Trustee hereunder in
excess of such amount,  as well as any amount owed to the  Indenture  Trustee in
accordance  with  Section  6.06 of the  Servicing  Agreement,  to the extent the
Servicer  has failed to pay such  amount,  shall be paid  solely as  provided in
Section 3.05 hereof (subject to the priorities set forth therein). The Indenture
Trustee's  compensation  shall not be  limited by any law on  compensation  of a
trustee of an express trust.  The Issuer shall  reimburse the Indenture  Trustee
for all  reasonable  out-of-pocket  expenses  incurred or made by it,  including
costs of  collection,  in addition to the  compensation  for its services.  Such
expenses shall include the reasonable compensation,  expenses, disbursements and
advances of the Indenture  Trustee's agents,  counsel,  accountants and experts.
The Issuer  shall  indemnify  the  Indenture  Trustee  against any and all loss,
liability or expense  (including  attorneys'  fees) incurred by it in connection
with  the  administration  of this  trust  and  the  performance  of its  duties
hereunder.  The Indenture  Trustee shall notify the Issuer promptly of any claim
for which it may seek indemnity.  Failure by the Indenture  Trustee to so notify
the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend any such claim, and the Indenture Trustee may have separate counsel
and the Issuer  shall pay the fees and expenses of such  counsel.  The Issuer is
not obligated to reimburse any expense or indemnify against any loss,  liability
or expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.

        The Issuer's  payment  obligations to the Indenture  Trustee pursuant to
this  Section  6.07 shall  survive the  discharge  of this  Indenture.  When the
Indenture  Trustee  incurs  expenses after the occurrence of an Event of Default
specified  in clause (c) or (d) of the  definition  thereof  with respect to the
Issuer,  such  expenses are intended to  constitute  expenses of  administration
under  Title 11 of the United  States  Code or any other  applicable  federal or
state bankruptcy, insolvency or similar law.

Section 6.08 Replacement of Indenture Trustee.  No resignation or removal of the
Indenture  Trustee and no  appointment  of a successor  Indenture  Trustee shall
become effective until the acceptance of appointment by the successor  Indenture
Trustee  pursuant to this Section 6.08. The Indenture  Trustee may resign at any
time  by so  notifying  the  Issuer  and  the  Enhancer.  The  Enhancer  or  the
Noteholders  of a majority of the aggregate Note Balance of the Notes may remove
the Indenture Trustee by so notifying the Indenture Trustee and the Enhancer (if
given by such Noteholders) and may appoint a successor Indenture Trustee. Unless
a Servicer  Default has  occurred  and is  continuing,  the  appointment  of any
successor  Indenture  Trustee shall be subject to the prior written  approval of
the Servicer. The Issuer shall remove the Indenture Trustee if:

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<PAGE>


(a)     the Indenture Trustee fails to comply with Section 6.11;

(b)     the Indenture Trustee is adjudged a bankrupt or insolvent;

(c)  a receiver or other public officer takes charge of the Indenture Trustee or
     its property; or

(d)  the Indenture  Trustee otherwise becomes incapable of fulfilling its duties
     under the Basic Documents.

        If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the  Indenture  Trustee for any reason (the  Indenture  Trustee in
such event being  referred to herein as the  retiring  Indenture  Trustee),  the
Issuer shall promptly appoint a successor  Indenture Trustee with the consent of
the Enhancer, which consent shall not be unreasonably withheld. In addition, the
Indenture Trustee shall resign to avoid being directly or indirectly  controlled
by the Issuer.

        A successor  Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture.  The successor  Indenture Trustee
shall mail a notice of its succession to the Noteholders. The retiring Indenture
Trustee shall promptly  transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

        If a successor  Indenture  Trustee  does not take office  within 60 days
after the retiring  Indenture  Trustee resigns or is removed,  then the retiring
Indenture Trustee, the Issuer or the Noteholders of a majority of aggregate Note
Balance of the Notes may petition any court of  competent  jurisdiction  for the
appointment of a successor Indenture Trustee.

        If the  Indenture  Trustee  fails  to  comply  with  Section  6.11,  any
Noteholder may petition any court of competent  jurisdiction  for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.

        Notwithstanding  the  replacement of the Indenture  Trustee  pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

Section 6.09 Successor  Indenture  Trustee by Merger.  If the Indenture  Trustee
consolidates  with,  merges or converts into, or transfers all or  substantially
all its corporate  trust business or assets to,  another  corporation or banking
association, then the resulting, surviving or transferee corporation without any
further  act  shall be the  successor  Indenture  Trustee;  provided,  that such
corporation  or banking  association  shall be otherwise  qualified and eligible
under Section 6.11. The Indenture Trustee shall provide the Rating Agencies with
written notice of any such transaction occurring after the Closing Date.

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<PAGE>
        If at  the  time  of  any  such  succession  by  merger,  conversion  or
consolidation, any of the Notes shall have been authenticated but not delivered,
then any such  successor to the Indenture  Trustee may adopt the  certificate of
authentication   of  any  predecessor   trustee,   and  deliver  such  Notes  so
authenticated.   If  at  such  time  any  of  the  Notes  shall  not  have  been
authenticated,  any successor to the  Indenture  Trustee may  authenticate  such
Notes  either  in the name of any  predecessor  hereunder  or in the name of the
successor to the Indenture  Trustee;  and in all such cases,  such  certificates
shall have the full force that it is anywhere in the Notes or in this  Indenture
provided that the certificate of the Indenture Trustee shall have.

Section 6.1   Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal  requirement of any  jurisdiction in which any part
of the Trust Estate may at such time be located,  the  Indenture  Trustee  shall
have the power and may execute and  deliver  all  instruments  to appoint one or
more  Persons to act as a  co-trustee  or  co-trustees,  or separate  trustee or
separate trustees,  of all or any part of the Issuer, and to vest in such Person
or Persons, in such capacity and for the benefit of the Noteholders,  such title
to the Trust Estate,  or any part thereof,  and, subject to the other provisions
of this  Section,  such powers,  duties,  obligations,  rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or separate
trustee  hereunder  shall be  required  to meet the  terms of  eligibility  as a
successor  trustee  under  Section  6.11,  and no notice to  Noteholders  of the
appointment  of any  co-trustee  or separate  trustee  shall be  required  under
Section 6.08 hereof.

(b) Every separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:

(i)  all rights,  powers,  duties and obligations  conferred or imposed upon the
     Indenture  Trustee  shall be  conferred  or imposed  upon and  exercised or
     performed by the Indenture  Trustee and such separate trustee or co-trustee
     jointly (it being  understood  that such separate  trustee or co-trustee is
     not authorized to act separately  without the Indenture  Trustee joining in
     such act),  except to the extent that under any law of any  jurisdiction in
     which any particular act or acts are to be performed the Indenture  Trustee
     shall be  incompetent  or unqualified to perform such act or acts, in which
     event such rights, powers, duties and obligations (including the holding of
     title to the Trust Estate or any portion thereof in any such  jurisdiction)
     shall be  exercised  and  performed  singly  by such  separate  trustee  or
     co-trustee, but solely at the direction of the Indenture Trustee;

(ii) no trustee  hereunder  shall be  personally  liable by reason of any act or
     omission of any other trustee hereunder; and

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<PAGE>

(iii)   the  Indenture  Trustee  may at any time  accept the  resignation  of or
        remove any separate trustee or co-trustee.

(c) Any notice, request or other writing given to the Indenture Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as  effectively  as if given to each of them.  Every  instrument  appointing any
separate  trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred,  shall be vested with the estates or property specified in
its  instrument of  appointment,  either  jointly with the Indenture  Trustee or
separately,  as may be provided  therein,  subject to all the provisions of this
Indenture,  specifically including every provision of this Indenture relating to
the conduct of,  affecting  the liability  of, or affording  protection  to, the
Indenture  Trustee.  Every such  instrument  shall be filed  with the  Indenture
Trustee.

(d) Any separate  trustee or co-trustee may at any time constitute the Indenture
Trustee,  its agent or  attorney-in-fact  with full power and authority,  to the
extent not  prohibited  by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name.  If any separate  trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties,  rights,  remedies  and trusts shall vest in and be exercised by the
Indenture Trustee,  to the extent permitted by law, without the appointment of a
new or successor trustee.

Section 6.11 Eligibility;  Disqualification.  The Indenture Trustee shall at all
times satisfy the  requirements of TIA ss. 310(a).  The Indenture  Trustee shall
have a combined capital and surplus of at least  $50,000,000 as set forth in its
most recent published annual report of condition and it or its parent shall have
a long-term debt rating of A or better by Moody's.  The Indenture  Trustee shall
comply with TIA ss. 310(b),  including the optional  provision  permitted by the
second sentence of TIA ss.  310(b)(9);  provided,  however,  that there shall be
excluded  from the  operation of TIA ss.  310(b)(1)  any indenture or indentures
under which other  securities of the Issuer are outstanding if the  requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.

Section 6.12  Preferential  Collection of Claims Against  Issuer.  The Indenture
Trustee shall comply with TIA ss.  311(a),  excluding any creditor  relationship
listed in TIA ss. 311(b). An Indenture Trustee that has resigned or been removed
shall be subject to TIA ss. 311(a) to the extent indicated.

Section 6.13  Representations  and  Warranties.  The  Indenture  Trustee  hereby
represents and warrants that:

(a) The  Indenture  Trustee  is duly  organized,  validly  existing  and in good
standing under the laws of the United States of America with power and authority
to own its  properties  and to  conduct  its  business  as such  properties  are
currently owned and such business is currently conducted.

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<PAGE>

(b) The  Indenture  Trustee has the power and  authority  to execute and deliver
this  Indenture  and to carry out its terms;  and the  execution,  delivery  and
performance of this Indenture have been duly authorized by the Indenture Trustee
by all necessary corporate action.

(c) The consummation of the transactions  contemplated by this Indenture and the
fulfillment  of the terms hereof do not conflict  with,  result in any breach of
any of the terms and  provisions  of, or constitute  (with or without  notice or
lapse of time) a default under,  the articles of  organization  or bylaws of the
Indenture  Trustee or any  agreement or other  instrument to which the Indenture
Trustee is a party or by which it is bound.

(d) To the Indenture  Trustee's  best  knowledge,  there are no  Proceedings  or
investigations  pending  or  threatened  before  any  court,   regulatory  body,
administrative agency or other governmental  instrumentality having jurisdiction
over the Indenture  Trustee or its  properties  (A) asserting the  invalidity of
this  Indenture,  (B)  seeking  to  prevent  the  consummation  of  any  of  the
transactions  contemplated by this Indenture or (C) seeking any determination or
ruling  that  might  materially  and  adversely  affect the  performance  by the
Indenture  Trustee of its obligations  under, or the validity or  enforceability
of, this Indenture.

(e) The  Indenture  Trustee  does not have notice of any adverse  claim (as such
terms are used in Section  8-302 of the UCC in effect in the State of  Delaware)
with respect to the Mortgage Loans.

     Section 6.14  Directions to Indenture  Trustee.  The  Indenture  Trustee is
hereby directed:

(a)  to accept the pledge of the Mortgage Loans and hold the assets of the Trust
     in trust for the Noteholders and the Enhancer;

(b)  to authenticate and deliver the Notes  substantially in the form prescribed
     by Exhibit A in accordance with the terms of this Indenture; and

(c)  to take all other  actions as shall be required to be taken by the terms of
     this Indenture.

Section 6.15 Indenture Trustee May Own Securities. The Indenture Trustee, in its
individual or any other capacity,  may become the owner or pledgee of Securities
with the same rights it would have if it were not Indenture Trustee.

                                  ARTICLE VII

                         Noteholders' Lists and Reports

Section  7.01  Issuer  to  Furnish  Indenture  Trustee  Names and  Addresses  of
Noteholders.  The Issuer shall furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably  require,  of the names and addresses of
the  Noteholders  as of such  Record  Date,  and (b) at such other  times as the

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<PAGE>

Indenture Trustee and the Enhancer may request in writing,  within 30 days after
receipt by the Issuer of any such request, a list of similar form and content as
of a date  not more  than 10 days  prior to the  time  such  list is  furnished;
provided,  however,  that  for so  long as the  Indenture  Trustee  is the  Note
Registrar, no such list need be furnished.

Section 7.02   Preservation of Information; Communications to Noteholders.

(a) The Indenture Trustee shall preserve,  in as current a form as is reasonably
practicable,  the names and addresses of the  Noteholders  contained in the most
recent list  furnished to the Indenture  Trustee as provided in Section 7.01 and
the names and addresses of the Noteholders  received by the Indenture Trustee in
its  capacity  as Note  Registrar.  The  Indenture  Trustee may destroy any list
furnished  to it as provided in such  Section 7.01 upon receipt of a new list so
furnished.

(b)  Noteholders  may  communicate   pursuant  to  TIA  ss.  312(b)  with  other
Noteholders  with  respect to their  rights  under this  Indenture  or under the
Notes.

(c) The Issuer,  the  Indenture  Trustee and the Note  Registrar  shall have the
protection of TIAss. 312(c).

Section 7.03   Reports by Issuer.

(a)     The Issuer shall:

(i)     file with the  Indenture  Trustee,  within 15 days  after the  Issuer is
        required  to file the same with the  Commission,  copies  of the  annual
        reports and the  information,  documents and other reports (or copies of
        such portions of any of the foregoing as the Commission may from time to
        time by rules and regulations prescribe) that the Issuer may be required
        to file  with the  Commission  pursuant  to  Section  13 or 15(d) of the
        Exchange Act;

(ii)    file with the Indenture  Trustee and the Commission,  in accordance with
        rules and  regulations  prescribed  from time to time by the Commission,
        such  additional  information,  documents  and reports  with  respect to
        compliance  by the Issuer  with the  conditions  and  covenants  of this
        Indenture  as may be  required  from  time to time  by  such  rules  and
        regulations; and

(iii)   supply  to the  Indenture  Trustee  (and  the  Indenture  Trustee  shall
        transmit by mail to all  Noteholders  described in TIA ss.  313(c)) such
        summaries of any information, documents and reports required to be filed
        by the Issuer  pursuant to clauses (i) and (ii) of this Section  7.03(a)
        and by  rules  and  regulations  prescribed  from  time  to  time by the
        Commission.

(b) Unless the Issuer otherwise determines,  the fiscal year of the Issuer shall
end on December 31 of each year.

                                        46

<PAGE>


Section 7.04 Reports by Indenture Trustee. If required by TIA ss. 313(a), within
60 days after each  January 1,  beginning  with January 1, 2001,  the  Indenture
Trustee  shall make  available to each  Noteholder as required by TIA ss. 313(c)
and to the Enhancer a brief report dated as of such date that  complies with TIA
ss. 313(a). The Indenture Trustee also shall comply with TIA ss. 313(b).

        A copy of each  report at the time of its  distribution  to  Noteholders
shall be filed by the Indenture  Trustee with the Commission,  if required,  and
each stock  exchange,  if any,  on which the Term Notes are  listed.  The Issuer
shall notify the Indenture  Trustee if and when the Term Notes are listed on any
stock exchange.

                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

Section 8.01 Collection of Money. Except as otherwise expressly provided herein,
the Indenture  Trustee may demand  payment or delivery of, and shall receive and
collect,  directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture.  The Indenture Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or  performance  under any agreement or  instrument  that is part of the
Trust Estate,  the Indenture  Trustee may take such action as may be appropriate
to  enforce  such  payment  or   performance,   including  the  institution  and
prosecution  of  appropriate  Proceedings.  Any such  action  shall  be  without
prejudice  to any  right to claim a  Default  or Event  of  Default  under  this
Indenture and any right to proceed thereafter as provided in Article V.

Section 8.02   Trust Accounts.

(a) On or prior to the  Closing  Date,  the  Issuer  shall  cause the  Indenture
Trustee to establish and maintain, in the name of the Indenture Trustee, for the
benefit of the  Noteholders,  the  Certificate  Paying  Agent,  on behalf of the
Certificateholders,  and the Enhancer,  the Note Payment  Account as provided in
Section 3.01 of this Indenture and the Reserve Account.

(b) All monies  deposited from time to time in the Note Payment Account pursuant
to the Servicing  Agreement and all deposits  therein pursuant to this Indenture
are for the benefit of the Noteholders,  the Certificate Paying Agent, on behalf
of the Certificateholders,  and all investments made with such monies, including
all  income or other  gain from such  investments,  are for the  benefit  of the
Servicer as provided in Section 5.01 of the Servicing Agreement.

        On each Payment Date, the Indenture Trustee shall distribute all amounts
on deposit in the Note  Payment  Account  to the  Noteholders  in respect of the
Notes   and,   in  its   capacity   as   Certificate   Paying   Agent,   to  the
Certificateholders  from the  Distribution  Account in the order of priority set
forth in Section 3.05 (except as otherwise  provided in Section  5.04(b)) and in
accordance with the Servicing Certificate.

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<PAGE>

        All monies  deposited from time to time in the Reserve Account  pursuant
to this Indenture are for the benefit of the Noteholders  and the Enhancer,  and
all investments  made with such monies,  including all income or other gain from
such investments, are for the benefit of the Noteholders.

        The Indenture Trustee shall invest any funds in the Note Payment Account
and the  Reserve  Account in  Permitted  Investments  selected  by the  Servicer
maturing no later than the Business Day  preceding the next  succeeding  Payment
Date (except that any investment in the institution  with which the Note Payment
Account is maintained  may mature on such Payment Date) and shall not be sold or
disposed of prior to the maturity. In addition,  such Permitted Investment shall
not be purchased at a price in excess of par.

Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at least
seven days' notice when  requested by the Issuer to take any action  pursuant to
Section  8.05(a),  accompanied by copies of any instruments to be executed,  and
the  Indenture  Trustee shall also  require,  as a condition to such action,  an
Officer's  Certificate,  in form and  substance  satisfactory  to the  Indenture
Trustee,  stating  the legal  effect  of any such  action,  outlining  the steps
required to complete the same, and concluding  that all conditions  precedent to
the taking of such action have been complied with.

Section 8.04  Termination Upon  Distribution to Noteholders.  This Indenture and
the respective  obligations and responsibilities of the Issuer and the Indenture
Trustee created hereby shall terminate upon the distribution to the Noteholders,
the  Certificate  Paying  Agent  on  behalf  of the  Certificateholders  and the
Indenture Trustee of all amounts required to be distributed  pursuant to Article
III; provided, however, that in no event shall the trust created hereby continue
beyond  the  expiration  of 21 years  from  the  death  of the  survivor  of the
descendants  of Joseph P. Kennedy,  the late  ambassador of the United States to
the Court of St. James's, living on the date hereof.

Section 8.05   Release of Trust Estate.

(a) Subject to the payment of its fees and expenses,  the Indenture Trustee may,
and  when  required  by the  provisions  of  this  Indenture  or  the  Servicing
Agreement,  shall, execute instruments to release property from the lien of this
Indenture,  or convey the Indenture  Trustee's interest in the same, in a manner
and under  circumstances  that are not inconsistent  with the provisions of this
Indenture.  No Person  relying  upon an  instrument  executed  by the  Indenture
Trustee as provided in Article VIII  hereunder  shall be bound to ascertain  the
Indenture Trustee's  authority,  inquire into the satisfaction of any conditions
precedent, or see to the application of any monies.

(b) The  Indenture  Trustee  shall,  at  such  time as (i)  there  are no  Notes
Outstanding,  (ii) all sums due the Indenture Trustee pursuant to this Indenture
have been paid and (iii) all sums due the Enhancer  have been paid,  release any
remaining  portion of the Trust  Estate that  secured the Notes from the lien of
this Indenture.

                                        48

<PAGE>


(c) The Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.05 only upon receipt of an Issuer Request accompanied
by an  Officers'  Certificate  and a letter from the  Enhancer  stating that the
Enhancer has no objection to such request from the Issuer.

(d) The Indenture  Trustee shall, at the request of the Issuer or the Depositor,
surrender  the Policy to the Enhancer for  cancellation,  upon final  payment of
principal of and interest on the Notes.

Section 8.06 Surrender of Notes Upon Final  Payment.  By acceptance of any Note,
the Noteholder  thereof  agrees to surrender such Note to the Indenture  Trustee
promptly, prior to such Noteholder's receipt of the final payment thereon.

                                   ARTICLE IX

                             Supplemental Indentures

Section 9.01   Supplemental Indentures Without Consent of Noteholders.

(a) Without the consent of the Noteholders of any Notes but with prior notice to
the Rating Agencies and the Enhancer, the Issuer and the Indenture Trustee, when
authorized by an Issuer  Request,  at any time and from time to time,  may enter
into one or more  indentures  supplemental  hereto  (which shall  conform to the
provisions  of the Trust  Indenture Act as in force at the date of the execution
thereof),  in  form  satisfactory  to  the  Indenture  Trustee,  for  any of the
following purposes:

(i)     to  correct or  amplify  the  description  of any  property  at any time
        subject to the lien of this Indenture,  or better to assure,  convey and
        confirm unto the Indenture  Trustee any property  subject or required to
        be subjected to the lien of this Indenture, or to subject to the lien of
        this Indenture additional property;

(ii)    to evidence the succession, in compliance with the applicable provisions
        hereof, of another Person to the Issuer,  and the assumption by any such
        successor  of  the  covenants  of the  Issuer  herein  and in the  Notes
        contained;

(iii)to add to the covenants of the Issuer,  for the benefit of the  Noteholders
     or the Enhancer,  or to surrender any right or power herein  conferred upon
     the Issuer;

(iv) to convey, transfer, assign, mortgage or pledge any property to or with the
     Indenture Trustee;

                                        49
<PAGE>

(v)     to cure any ambiguity,  to correct any error or to correct or supplement
        any  provision  herein  or in any  supplemental  indenture  that  may be
        inconsistent  with any other  provision  herein  or in any  supplemental
        indenture;

(vi)    to make any other  provisions  with  respect  to  matters  or  questions
        arising under this Indenture or in any supplemental indenture; provided,
        that such action shall not materially and adversely affect the interests
        of the  Noteholders  or the  Enhancer  (as  evidenced  by an  Opinion of
        Counsel);

(vii)   to evidence and provide for the acceptance of the appointment  hereunder
        by a successor trustee with respect to the Notes and to add to or change
        any of the  provisions  of this  Indenture  as  shall  be  necessary  to
        facilitate the  administration  of the trusts hereunder by more than one
        trustee, pursuant to the requirements of Article VI; or

(viii)  to modify,  eliminate or add to the provisions of this Indenture to such
        extent  as  shall be  necessary  to  effect  the  qualification  of this
        Indenture  under  TIA or under any  similar  federal  statute  hereafter
        enacted and to add to this  Indenture  such other  provisions  as may be
        expressly required by TIA;

provided,  however,  that no such  supplemental  indenture shall be entered into
unless the  Indenture  Trustee  shall have received an Opinion of Counsel to the
effect that the execution of such  supplemental  indenture will not give rise to
any material adverse tax consequence to the Noteholders.

        The Indenture  Trustee is hereby  authorized to join in the execution of
any such supplemental  indenture and to make any further appropriate  agreements
and stipulations that may be therein contained.

(b) The Issuer and the Indenture Trustee,  when authorized by an Issuer Request,
may,  without the consent of any  Noteholder but with prior notice to the Rating
Agencies and the Enhancer,  enter into an indenture or  indentures  supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating  any of the  provisions  of, this  Indenture  or of modifying in any
manner the rights of the Noteholders  under this Indenture;  provided,  however,
that such action shall not, as evidenced by an Opinion of Counsel, (i) adversely
affect in any material  respect the interests of any  Noteholder or the Enhancer
or (ii) cause the Issuer to be subject to an entity level tax.

Section 9.02 Supplemental Indentures With Consent of Noteholders. The Issuer and
the Indenture  Trustee,  when authorized by an Issuer  Request,  may, with prior
notice to the  Rating  Agencies  and with the  consent of the  Enhancer  and the
Noteholders  of not less than a majority  of the Note  Balances of each Class of
Notes  affected  thereby,  by Act (as defined in Section  10.03  hereof) of such
Noteholders  delivered to the Issuer and the  Indenture  Trustee,  enter into an
indenture  or  indentures  supplemental  hereto  for the  purpose  of adding any
provisions  to, or changing in any manner or  eliminating  any of the provisions
of, this  Indenture or of modifying in any manner the rights of the  Noteholders
under this Indenture;  provided,  however,  that no such supplemental  indenture
shall, without the consent of the Noteholder of each Note affected thereby:

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<PAGE>

(a) change the date of payment of any installment of principal of or interest on
any Note,  or reduce the  principal  amount  thereof  or the Note Rate  thereon,
change  the  provisions  of  this  Indenture  relating  to  the  application  of
collections  on, or the  proceeds of the sale of, the Trust Estate to payment of
principal of or interest on the Notes,  or change any place of payment where, or
the coin or currency in which, any Note or the interest  thereon is payable,  or
impair the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor,  as provided in
Article V, to the  payment  of any such  amount due on the Notes on or after the
respective due dates thereof;

(b)  reduce  the  percentage  of the Note  Balances  of any Class of Notes,  the
consent  of the  Noteholders  of which  is  required  for any such  supplemental
indenture, or the consent of the Noteholders of which is required for any waiver
of  compliance  with certain  provisions of this  Indenture or certain  defaults
hereunder and their consequences provided for in this Indenture;

(c) modify or alter the  provisions of the proviso to the definition of the term
"Outstanding"  or modify or alter the  exception in the  definition  of the term
"Noteholder";

(d) reduce the percentage of the aggregate Note Balance of the Notes required to
direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust
Estate pursuant to Section 5.04;

(e) modify any provision of this Section 9.02 except to increase any  percentage
specified  herein or to  provide  that  certain  additional  provisions  of this
Indenture or the other Basic Documents  cannot be modified or waived without the
consent of the Noteholder of each Note affected thereby;

(f) modify any of the  provisions of this  Indenture in such manner as to affect
the calculation of the amount of any payment of interest or principal due on any
Note on any Payment Date  (including  the  calculation  of any of the individual
components of such calculation); or

(g) permit the  creation  of any lien  ranking  prior to or on a parity with the
lien of this  Indenture  with respect to any part of the Trust Estate or, except
as  otherwise  permitted  or  contemplated  herein,  terminate  the lien of this
Indenture on any property at any time subject  hereto or deprive the  Noteholder
of any Note of the security provided by the lien of this Indenture; and provided
further,  that such  action  shall not, as  evidenced  by an Opinion of Counsel,
cause the Issuer to be subject to an entity level tax.

        The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive  upon the Noteholders of all Notes,  whether  theretofore or
thereafter  authenticated and delivered  hereunder.  The Indenture Trustee shall
not be liable for any such determination made in good faith.

                                        51
<PAGE>

        It shall not be  necessary  for any Act (as  defined  in  Section  10.03
hereof) of Noteholders under this Section 9.02 to approve the particular form of
any proposed  supplemental  indenture,  but it shall be  sufficient  if such Act
shall approve the substance thereof.

        Promptly after the execution by the Issuer and the Indenture  Trustee of
any supplemental  indenture pursuant to this Section 9.02, the Indenture Trustee
shall  mail  to  the  Noteholders  of the  Notes  to  which  such  amendment  or
supplemental  indenture  relates a notice  setting  forth in  general  terms the
substance of such supplemental  indenture.  Any failure of the Indenture Trustee
to mail such  notice,  or any defect  therein,  shall not,  however,  in any way
impair or affect the validity of any such supplemental indenture.

Section 9.03 Execution of Supplemental  Indentures.  In executing, or permitting
the additional trusts created by, any supplemental  indenture  permitted by this
Article IX or the modification  thereby of the trusts created by this Indenture,
the Indenture Trustee shall be entitled to receive and, subject to Sections 6.01
and 6.02,  shall be fully  protected  in  relying  upon,  an  Opinion of Counsel
stating that the  execution of such  supplemental  indenture  is  authorized  or
permitted  by this  Indenture.  The  Indenture  Trustee  may,  but  shall not be
obligated  to,  enter into any such  supplemental  indenture  that  affects  the
Indenture  Trustee's own rights,  duties,  liabilities or immunities  under this
Indenture or otherwise.

Section  9.04  Effect  of  Supplemental  Indenture.  Upon the  execution  of any
supplemental  indenture pursuant to the provisions hereof,  this Indenture shall
be and shall be deemed to be modified and amended in accordance  therewith  with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations,  duties, liabilities and immunities under this Indenture of
the  Indenture  Trustee,  the Issuer and the  Noteholders  shall  thereafter  be
determined,  exercised  and enforced  hereunder  subject in all respects to such
modifications  and  amendments,  and all the  terms and  conditions  of any such
supplemental  indenture  shall  be and be  deemed  to be part of the  terms  and
conditions of this Indenture for any and all purposes.

Section  9.05  Conformity  with Trust  Indenture  Act.  Every  amendment of this
Indenture and every supplemental  indenture executed pursuant to this Article IX
shall  conform  to the  requirements  of TIA as in  effect  at the  time of such
amendment or supplement so long as this Indenture  shall then be qualified under
TIA.

Section 9.06 Reference in Notes to Supplemental Indentures.  Notes authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article IX may, and if required by the Indenture Trustee, shall, bear a notation
in form approved by the Indenture  Trustee as to any matter provided for in such
supplemental  indenture.  If  the  Issuer  or the  Indenture  Trustee  shall  so
determine,  new Notes so modified as to conform, in the opinion of the Indenture
Trustee and the Issuer, to any such  supplemental  indenture may be prepared and
executed by the Issuer and  authenticated and delivered by the Indenture Trustee
in exchange for Outstanding Notes.

                                        52
<PAGE>

                                   ARTICLE X

                                  Miscellaneous

Section 10.01  Compliance Certificates and Opinions, etc.

(a) Upon any  application  or request by the Issuer to the Indenture  Trustee to
take any action under any provision of this Indenture,  the Issuer shall furnish
to the  Indenture  Trustee  and to the  Enhancer  (i) an  Officer's  Certificate
stating that all conditions  precedent,  if any,  provided for in this Indenture
relating to the proposed  action have been  complied with and (ii) an Opinion of
Counsel  stating  that  in the  opinion  of such  counsel  all  such  conditions
precedent, if any, have been complied with, except that, in the case of any such
application  or  request  as to  which  the  furnishing  of  such  documents  is
specifically  required  by  any  provision  of  this  Indenture,  no  additional
certificate or opinion need be furnished.

        Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:

(i)     a statement that each signatory of such  certificate or opinion has read
        or has caused to be read such covenant or condition and the  definitions
        herein relating thereto;

(ii)    a brief  statement  as to the  nature  and scope of the  examination  or
        investigation  upon which the  statements or opinions  contained in such
        certificate or opinion are based;

(iii)   a statement that, in the opinion of each such signatory,  such signatory
        has made such  examination  or  investigation  as is necessary to enable
        such signatory to express an informed  opinion as to whether or not such
        covenant or condition has been complied with;

(iv) a statement  as to whether,  in the  opinion of each such  signatory,  such
     condition or covenant has been complied with; and

(v)  if the signer of such certificate or opinion is required to be Independent,
     the statement required by the definition of the term "Independent".

(b) (i) Prior to the deposit of any  Collateral or other  property or securities
with the  Indenture  Trustee that is to be made the basis for the release of any
property or securities subject to the lien of this Indenture,  the Issuer shall,
in addition to any obligation  imposed in Section  10.01(a) or elsewhere in this
Indenture,  furnish to the Indenture Trustee an Officer's Certificate certifying
or stating the opinion of each person  signing such  certificate  as to the fair
value (within 90 days of such deposit) to the Issuer of the  Collateral or other
property or securities to be so deposited.

                                        53
<PAGE>

(ii) Whenever  the Issuer is  required  to furnish to the  Indenture  Trustee an
     Officer's  Certificate  certifying  or  stating  the  opinion of any signer
     thereof as to the matters  described in clause (i) above,  the Issuer shall
     also deliver to the Indenture Trustee an Independent  Certificate as to the
     same  matters,  if the fair value to the Issuer of the  securities to be so
     deposited  and of all  other  such  securities  made the  basis of any such
     withdrawal or release since the  commencement  of the  then-current  fiscal
     year of the Issuer, as set forth in the certificates  delivered pursuant to
     clause (i) above and this clause (ii), is 10% or more of the aggregate Note
     Balance of the Notes,  but such a  certificate  need not be furnished  with
     respect to any  securities so  deposited,  if the fair value thereof to the
     Issuer  as set  forth in the  related  Officer's  Certificate  is less than
     $25,000  or less than one  percent  of the  aggregate  Note  Balance of the
     Notes.

(iii)   Whenever any property or securities  are to be released from the lien of
        this  Indenture,  the Issuer shall furnish to the  Indenture  Trustee an
        Officer's  Certificate  certifying or stating the opinion of each person
        signing such  certificate  as to the fair value  (within 90 days of such
        release) of the  property  or  securities  proposed  to be released  and
        stating that in the opinion of such person the proposed release will not
        impair  the  security  under  this  Indenture  in  contravention  of the
        provisions hereof.

(iv) Whenever  the Issuer is  required  to furnish to the  Indenture  Trustee an
     Officer's  Certificate  certifying  or  stating  the  opinion of any signer
     thereof as to the matters described in clause (iii) above, the Issuer shall
     also furnish to the Indenture Trustee an Independent  Certificate as to the
     same  matters if the fair value of the  property or  securities  and of all
     other property,  other than property as contemplated by clause (v) below or
     securities  released from the lien of this Indenture since the commencement
     of the  then-current  calendar  year,  as  set  forth  in the  certificates
     required by clause (iii) above and this clause (iv),  equals 10% or more of
     the aggregate Note Balance of the Notes,  but such  certificate need not be
     furnished in the case of any release of property or  securities if the fair
     value  thereof as set forth in the related  Officer's  Certificate  is less
     than $25,000 or less than one percent of the aggregate  Note Balance of the
     Notes.

(v)  Notwithstanding  any provision of this Indenture,  the Issuer may,  without
     compliance with the  requirements  of the other  provisions of this Section
     10.01, (A) collect upon, sell or otherwise dispose of the Mortgage Loans as
     and to the extent  permitted or required by the Basic Documents or (B) make
     cash  payments  out of  the  Note  Payment  Account  as  and to the  extent
     permitted or required by the Basic  Documents,  so long as the Issuer shall
     deliver to the Indenture Trustee every six months,  commencing December 31,
     1999,  an  Officer's  Certificate  of  the  Issuer  stating  that  all  the
     dispositions  of  Collateral  described  in  clauses  (A) or (B) above that
     occurred  during the preceding six calendar  months (or such longer period,
     in the case of the first such Officer's  Certificate)  were in the ordinary
     course of the Issuer's  business and that the proceeds thereof were applied
     in accordance with the Basic Documents.

                                        54
<PAGE>


Section 10.02  Form of Documents Delivered to Indenture Trustee.

        In any case where  several  matters are required to be certified  by, or
covered by an opinion of, any specified  Person,  it is not  necessary  that all
such  matters  be  certified  by, or covered by the  opinion  of,  only one such
Person,  or that they be so certified or covered by only one  document,  but one
such Person may certify or give an opinion  with respect to some matters and one
or more other such Persons as to other matters,  and any such Person may certify
or give an opinion as to such matters in one or several documents.

        Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or  representations
with respect to the matters upon which his  certificate  or opinion is based are
erroneous.  Any such certificate of an Authorized  Officer or Opinion of Counsel
may be based,  insofar as it relates to factual  matters,  upon a certificate or
opinion of, or  representations  by, an officer or officers of the Seller or the
Issuer,  stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of  reasonable  care should know,  that the  certificate  or opinion or
representations with respect to such matters are erroneous.

        Where any  Person  is  required  to make,  give or  execute  two or more
applications,  requests, consents,  certificates,  statements, opinions or other
instruments  under this Indenture,  they may, but need not, be consolidated  and
form one instrument.

        Whenever  in this  Indenture,  in  connection  with any  application  or
certificate or report to the Indenture  Trustee,  it is provided that the Issuer
shall  deliver any document as a condition of the granting of such  application,
or as evidence of the Issuer's  compliance with any term hereof,  it is intended
that the truth and accuracy,  at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and  opinions  stated in such  document  shall in such case be  conditions
precedent to the right of the Issuer to have such application  granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,  be
construed  to affect the  Indenture  Trustee's  right to rely upon the truth and
accuracy of any statement or opinion  contained in any such document as provided
in Article VI.

Section 10.03  Acts of Noteholders.

(a) Any request, demand,  authorization,  direction,  notice, consent, waiver or
other action  provided by this Indenture to be given or taken by Noteholders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor  signed by such  Noteholders  in person or by  agents  duly  appointed  in
writing;  and except as herein  otherwise  expressly  provided such action shall
become  effective  when such  instrument  or  instruments  are  delivered to the
Indenture Trustee,  and, where it is hereby expressly  required,  to the Issuer.
Such instrument or instruments  (and the action  embodied  therein and evidenced
thereby)  are  herein  sometimes  referred  to as the  "Act" of the  Noteholders
signing  such  instrument  or  instruments.  Proof  of  execution  of  any  such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this  Indenture and (subject to Section 6.01)  conclusive in favor of
the  Indenture  Trustee and the Issuer,  if made in the manner  provided in this
Section 10.03.

                                        55
<PAGE>

(b) The fact and date of the  execution by any person of any such  instrument or
writing may be proved in any manner that the Indenture Trustee deems sufficient.

(c)     The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand,  authorization,  direction,  notice, consent, waiver or
other action by the  Noteholder  of any Note shall bind the  Noteholder of every
Note issued  upon the  registration  thereof or in exchange  therefor or in lieu
thereof,  in respect of  anything  done,  omitted or  suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon,  whether or not notation of
such action is made upon such Note.

Section 10.04 Notices, etc., to Indenture Trustee,  Issuer,  Enhancer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in  writing  and if such  request,  demand,  authorization,  direction,
notice,  consent,  waiver or Act of  Noteholders  is to be made  upon,  given or
furnished to or filed with:

(a) the Indenture Trustee by any Noteholder or by the Issuer shall be sufficient
for every purpose hereunder if made, given,  furnished or filed in writing to or
with the Indenture  Trustee at its Corporate Trust Office with a copy to Norwest
Bank  Minnesota,  National  Association,  11000 Broken Land  Parkway,  Columbia,
Maryland 21044, Attention:  GMACM 2000-HE2. The Indenture Trustee shall promptly
transmit any notice received by it from the Noteholders to the Issuer,

(b) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient
for every  purpose  hereunder  if in  writing  and mailed  first-class,  postage
prepaid to the Issuer  addressed to: GMACM Home Equity Loan Trust  2000-HE2,  in
care of the Owner  Trustee,  or at any other  address  previously  furnished  in
writing to the  Indenture  Trustee by the  Issuer.  The  Issuer  shall  promptly
transmit  any  notice  received  by it from  the  Noteholders  to the  Indenture
Trustee, or

(c) the  Enhancer by the Issuer,  the  Indenture  Trustee or by any  Noteholders
shall be  sufficient  for every  purpose  hereunder  to in writing  and  mailed,
first-class  postage  pre-paid,  or personally  delivered or telecopied to: MBIA
Insurance  Corporation,  113 King  Street,  Armonk,  New York 10504,  Attention:
Insured Portfolio  Management - Structured Finance (GMACM Home Equity Loan Trust
2000-HE2),  telecopier  number  (914)  765-3810.  The  Enhancer  shall  promptly
transmit any notice received by it from the Issuer, the Indenture Trustee or the
Noteholders to the Issuer or Indenture Trustee, as the case may be.

                                        56
<PAGE>

        Notices  required to be given to the Rating Agencies by the Issuer,  the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified  mail,  return receipt  requested,  to (i) in the case of
Fitch, at the following address:  Fitch, Inc., One State Street Plaza, New York,
New York  10004,  Attention:  Residential  Mortgage  Group,  (ii) in the case of
Moody's,  at  the  following  address:  Moody's  Investors  Service,  Inc.,  ABS
Monitoring  Department,  99 Church Street, New York, New York 10007 and (iii) in
the case of Standard & Poor's, at the following  address:  Standard & Poor's, 26
Broadway,  15th  Floor,  New  York,  New York  10004,  Attention:  Asset  Backed
Surveillance Department;  or, as to each of the foregoing Persons, at such other
address as shall be designated by written notice to the other foregoing Persons.

Section 10.05 Notices to Noteholders;  Waiver. Where this Indenture provides for
notice to  Noteholders  of any event,  such notice shall be  sufficiently  given
(unless  otherwise  herein  expressly   provided)  if  in  writing  and  mailed,
first-class,  postage prepaid to each Noteholder affected by such event, at such
Person's  address as it appears on the Note Register,  not later than the latest
date, and not earlier than the earliest date,  prescribed for the giving of such
notice.  In any case where notice to Noteholders  is given by mail,  neither the
failure  to mail  such  notice  nor any  defect  in any  notice so mailed to any
particular  Noteholder  shall affect the sufficiency of such notice with respect
to other  Noteholders,  and any  notice  that is  mailed  in the  manner  herein
provided shall  conclusively  be presumed to have been duly given  regardless of
whether such notice is in fact actually received.

        Where this Indenture provides for notice in any manner,  such notice may
be waived in writing by any Person  entitled  to  receive  such  notice,  either
before or after the  event,  and such  waiver  shall be the  equivalent  of such
notice.  Waivers  of notice by  Noteholders  shall be filed  with the  Indenture
Trustee,  but such filing shall not be a condition  precedent to the validity of
any action taken in reliance upon such a waiver.

        In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity,  it shall be impractical to mail
notice of any event to  Noteholders  when such  notice is  required  to be given
pursuant  to any  provision  of this  Indenture,  then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.

        Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice  shall not affect any other  rights or  obligations  created
hereunder, and shall not under any circumstance constitute an Event of Default.

Section  10.06  Alternate  Payment and Notice  Provisions.  Notwithstanding  any
provision of this Indenture or any of the Notes to the contrary,  the Issuer may
enter into any agreement with any Noteholder  providing for a method of payment,
or notice by the Indenture  Trustee to such  Noteholder,  that is different from
the methods  provided for in this  Indenture for such  payments or notices.  The
Issuer shall furnish to the Indenture  Trustee a copy of each such agreement and
the Indenture Trustee shall cause payments to be made and notices to be given in
accordance with such agreements.

                                        57
<PAGE>

Section 10.07 Conflict with Trust Indenture Act. If any provision hereof limits,
qualifies or  conflicts  with  another  provision  hereof that is required to be
included  in this  Indenture  by any of the  provisions  of TIA,  such  required
provision shall control.

        The  provisions of TIA ss.ss.  310 through 317 that impose duties on any
Person  (including the provisions  automatically  deemed  included herein unless
expressly  excluded by this  Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

Section 10.08 Effect of Headings.  The Article and Section  headings  herein are
for convenience only and shall not affect the construction hereof.

Section 10.09  Successors  and Assigns.  All  covenants  and  agreements in this
Indenture  and the Notes by the Issuer  shall bind its  successors  and assigns,
whether so expressed or not. All  agreements  of the  Indenture  Trustee in this
Indenture shall bind its successors, co-trustees and agents.

Section 10.10  Severability.  In case any provision in this  Indenture or in the
Notes shall be held invalid, illegal or unenforceable,  the validity,  legality,
and  enforceability  of the remaining  provisions hereof shall not in any way be
affected or impaired thereby.

Section 10.11 Benefits of Indenture.  Nothing in this Indenture or in the Notes,
express or implied,  shall give to any Person, other than the parties hereto and
their successors  hereunder,  and the Noteholders,  the Enhancer,  and any other
party secured hereunder,  and any other Person with an ownership interest in any
part of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.  The Enhancer shall be a third party  beneficiary of
this Agreement.

Section 10.12 Legal Holidays. In any case where the date on which any payment is
due shall not be a Business Day, then  (notwithstanding  any other  provision of
the Notes or this  Indenture)  payment need not be made on such date, but may be
made on the next  succeeding  Business  Day with the same force and effect as if
made on the date on which  nominally  due, and no interest  shall accrue for the
period from and after any such nominal date.

Section 10.13  GOVERNING  LAW. THIS  INDENTURE  SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK,  WITHOUT  REFERENCE TO ITS  CONFLICTS OF
LAW  PROVISIONS,  AND  THE  OBLIGATIONS,  RIGHTS  AND  REMEDIES  OF THE  PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section  10.14  Counterparts.  This  Indenture  may be executed in any number of
counterparts,  each of which so executed shall be deemed to be an original,  but
all such counterparts shall together constitute but one and the same instrument.

Section 10.15 Recording of Indenture.  If this Indenture is subject to recording
in any appropriate public recording offices, such recording is to be effected by
the  Issuer and at its  expense  accompanied  by an  Opinion  of Counsel  (which

                                        58
<PAGE>

counsel may be counsel to the Indenture Trustee or any other counsel  reasonably
acceptable  to the  Indenture  Trustee)  to the effect  that such  recording  is
necessary  either for the  protection  of the  Noteholders  or any other  Person
secured  hereunder or for the  enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.

Section  10.16  Issuer  Obligation.  No  recourse  may  be  taken,  directly  or
indirectly,  with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other  writing  delivered in connection  herewith or therewith,  against (i) the
Indenture  Trustee or the Owner  Trustee in its  individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director,  employee  or agent  of the  Indenture
Trustee  or the  Owner  Trustee  in its  individual  capacity,  any  holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture  Trustee or the Owner Trustee in its
individual  capacity,  except as any such Person may have  expressly  agreed (it
being  understood that the Indenture  Trustee and the Owner Trustee have no such
obligations in their respective individual capacities), and except that any such
partner,  owner or beneficiary  shall be fully liable, to the extent provided by
applicable  law,  for  any  unpaid   consideration  for  stock,  unpaid  capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture,  in the performance of any duties or obligations
of the Issuer hereunder,  the Owner Trustee shall be subject to, and entitled to
the  benefits of, the terms and  provisions  of Articles VI, VII and VIII of the
Trust Agreement.

Section  10.17 No  Petition.  The  Indenture  Trustee,  by  entering  into  this
Indenture, and each Noteholder, by its acceptance of a Note, hereby covenant and
agree that they will not at any time  institute  against  the  Depositor  or the
Issuer,  or join in any institution  against the Depositor or the Issuer of, any
bankruptcy, reorganization,  arrangement, insolvency or liquidation proceedings,
or other  proceedings  under any United  States  federal or state  bankruptcy or
similar law in  connection  with any  obligations  relating  to the Notes,  this
Indenture or any of the other Basic Documents.

Section 10.18 Inspection. The Issuer agrees that, on reasonable prior notice, it
shall permit any  representative of the Indenture  Trustee,  during the Issuer's
normal business hours, to examine all the books of account, records, reports and
other papers of the Issuer, to make copies and extracts therefrom, to cause such
books to be audited by Independent certified public accountants,  and to discuss
the  Issuer's  affairs,  finances  and  accounts  with  the  Issuer's  officers,
employees, and Independent certified public accountants,  all at such reasonable
times and as often as may be reasonably  requested.  The Indenture Trustee shall
and shall cause its  representatives  to hold in confidence all such information
except to the  extent  disclosure  may be  required  by law (and all  reasonable
applications for confidential treatment are unavailing) and except to the extent
that the Indenture  Trustee may  reasonably  determine  that such  disclosure is
consistent with its obligations hereunder.

                                        59


<PAGE>


        IN WITNESS  WHEREOF,  the Issuer and the  Indenture  Trustee have caused
their names to be signed  hereto by their  respective  officers  thereunto  duly
authorized, all as of the day and year first above written.


                       GMACM HOME EQUITY LOAN TRUST 2000-HE2, as Issuer



                       By:  WILMINGTON TRUST COMPANY, not in its
                            individual capacity but solely as Owner
                            Trustee



                       By:  /s/ W. Chris Sponenberg
                            Name:  W. Chris Sponenberg
                            Title:     Assistant Vice President



                       NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
                       Indenture Trustee



                       By:  /s/ Peter A. Gobell
                            Name:   Peter A. Gobell
                            Title:  Assistant Vice President

NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
hereby  accepts the  appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.


By:     /s/ Peter A. Gobell
        Name:   Peter A. Gobell
        Title:  Assistant Vice President

Signatures and Seals

                                        60


<PAGE>


STATE OF Delaware           )
                            )       ss.:
COUNTY OF New Castle        )

        On this 23rd day of June 2000,  before me  personally  appeared W. Chris
Sponenberg,  to me known,  who being by me duly sworn,  did depose and say, that
he/she resides in Wilmington, DE, that he/she is the Assistant Vice President of
Wilmington Trust Company, the Owner Trustee,  one of the corporations  described
in and which executed the above  instrument;  that he/she knows the seal of said
corporation;  that the seal affixed to said  instrument is such corporate  seal;
that it was so affixed by order of the Board of Directors  of said  corporation;
and that he/she signed his/her name thereto by like order.

        /s/ Janel R. Havrilla
            Notary Public

Acknowledgements

                                        61

<PAGE>


STATE OF       Maryland             )
               .......              ) ss.:
COUNTY OF      Baltimore            )

        On this 29th day of June, 2000,  before me personally  appeared Peter A.
Gobell,  to me known, who being by me duly sworn, did depose and say, that he is
an Assistant Vice President of Norwest Bank Minnesota,  National Association, as
Indenture Trustee,  one of the corporations  described in and which executed the
above  instrument;  that he knows  the seal of said  corporation;  that the seal
affixed to said  instrument is such  corporate  seal;  that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.

        /s/ Sharon A. Surguy
            Notary Public

NOTORIAL SEAL

                                        62

<PAGE>








                                   EXHIBIT A-1
                               FORM OF TERM NOTES

UNLESS  THIS TERM  NOTE IS  PRESENTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"),  TO THE ISSUER OR ITS
AGENT FOR  REGISTRATION  OF  TRANSFER,  EXCHANGE OR  PAYMENT,  AND ANY TERM NOTE
ISSUED  IS  REGISTERED  IN THE NAME OF CEDE & CO.  OR IN SUCH  OTHER  NAME AS IS
REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND ANY PAYMENT IS MADE TO
CEDE  &  CO.  OR  TO  SUCH  OTHER  ENTITY  AS  IS  REQUESTED  BY  AN  AUTHORIZED
REPRESENTATIVE  OF DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE PRINCIPAL OF THIS TERM NOTE IS PAYABLE IN  INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY,  THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TERM NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THIS TERM NOTE DOES NOT  REPRESENT AN INTEREST IN OR  OBLIGATION  OF THE SELLER,
THE DEPOSITOR,  THE SERVICER,  THE INDENTURE TRUSTEE,  THE OWNER TRUSTEE OR GMAC
MORTGAGE GROUP, INC. OR ANY OF THEIR RESPECTIVE AFFILIATES,  EXCEPT AS EXPRESSLY
PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.

                            GMACM HOME EQUITY LOAN TRUST 2000-HE2

                      GMACM Home Equity Loan-Backed Term Note, Class A-1

Registered                                      Initial Note Balance:
                                                $451,475,000

No. R-1                                         Note Rate:  Variable

                                                CUSIP NO. 361856 AN 7

        GMACM Home Equity Loan Trust  2000-HE2,  a business trust duly organized
and existing under the laws of the State of Delaware  (herein referred to as the
"Issuer"),  for  value  received,  hereby  promises  to pay to Cede & Co. or its
registered  assigns,  the principal sum of four hundred  fifty-one  million four
hundred seventy-five  thousand dollars  ($451,475,000),  payable on each Payment
Date in an amount equal to the pro rata portion  allocable  hereto (based on the
Initial Note Balance  specified  above and the Initial Note Balance of all Class
A-1 Term Notes) of the aggregate  amount,  if any, payable from the Note Payment
Account in respect of principal  of the Class A-1 Term Notes (the "Term  Notes")
pursuant  to  Section  3.05 of the  indenture  dated  as of June 29,  2000  (the
"Indenture"),   between  the  Issuer  and  Norwest  Bank   Minnesota,   National



<PAGE>

Association, as indenture trustee (the "Indenture Trustee");  provided, however,
that the  entire  unpaid  principal  amount of this  Term Note  shall be due and
payable on the Payment Date in June 2030, to the extent not previously paid on a
prior Payment Date. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in Appendix A to the Indenture.

        Interest on the Term Notes will be paid  monthly on each Payment Date at
the Note Rate for the related  Interest  Period subject to limitations  that may
result in Interest Shortfalls (as further described in the Indenture).  The Note
Rate for each Interest  Period will be a floating rate equal to the least of (i)
LIBOR plus 0.22% per annum (or,  for the  Interest  Period  beginning  after any
Payment Date on which the aggregate Pool Balance is less than 10% of the initial
Pool  Balance,  LIBOR  plus 0.44% per  annum),  (ii) the Net Loan Rate and (iii)
14.00% per annum.  LIBOR for each applicable  Interest Period will be determined
on the second LIBOR Business Day  immediately  preceding (i) the Closing Date in
the case of the first Interest  Period and (ii) the first day of each succeeding
Interest  Period by the  Indenture  Trustee as set forth in the  Indenture.  All
determinations  of LIBOR by the  Indenture  Trustee  shall,  in the  absence  of
manifest  error,  be conclusive  for all purposes,  and each holder of this Term
Note,  by accepting  this Term Note,  agrees to be bound by such  determination.
Interest  on this Term  Note will  accrue  for each  Payment  Date from the most
recent  Payment  Date on which  interest has been paid (in the case of the first
Payment  Date,  from the  Closing  Date) to but  excluding  such  Payment  Date.
Interest  will be  computed  on the basis of the  actual  number of days in each
Interest  Period and a year  assumed to  consist of 360 days.  Principal  of and
interest on this Term Note shall be paid in the manner  specified on the reverse
hereof.

        Principal  of and interest on this Term Note are payable in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with  respect  to this Term Note  shall be  applied  first to  interest  due and
payable on this Term Note as provided above and then to the unpaid  principal of
this Term Note.

        Reference is made to the further  provisions of this Term Note set forth
on the reverse  hereof,  which  shall have the same  effect as though  fully set
forth on the face of this Term Note.

        Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual  signature,  this Term Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

        This Term Note is one of a duly  authorized  issue of Term  Notes of the
Issuer,  designated  as its GMACM Home Equity  Loan-Backed  Term  Notes,  Series
2000-HE2 (the "Series 2000-HE2 Term Notes"), all issued under the Indenture,  to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement  of the  respective  rights and  obligations  thereunder  of the
Issuer,  the Indenture  Trustee and the  Noteholders of the Series 2000-HE2 Term
Notes. The Series 2000-HE2 Term Notes are subject to all terms of the Indenture.


<PAGE>

        The  Series   2000-HE2  Term  Notes  and  the  Variable   Funding  Notes
(collectively,  the "Notes") are and will be equally and ratably  secured by the
collateral pledged as security therefor as provided in the Indenture.

        This  Term  Note is  entitled  to the  benefits  of an  irrevocable  and
unconditional  financial  guaranty  insurance  policy  issued by MBIA  Insurance
Corporation.

        Principal  of and  interest  on this Term Note will be  payable  on each
Payment  Date,  commencing  on July 25, 2000,  as  described  in the  Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next succeeding Business Day.

        The entire  unpaid  principal  amount of this Term Note shall be due and
payable in full on the Payment Date in June 2030 pursuant to the  Indenture,  to
the extent not  previously  paid on a prior  Payment Date.  Notwithstanding  the
foregoing,  if an Event of Default shall have occurred and be  continuing,  then
the Indenture Trustee, the Enhancer or the Noteholders of Notes representing not
less than a majority  of the  aggregate  Note  Balance  of the  Notes,  with the
consent of the Enhancer, may declare the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture.  All principal payments
on the  Term  Notes  shall be made pro  rata to the  Noteholders  of Term  Notes
entitled thereto.

        Any  installment of interest or principal,  if any,  payable on any Note
that is  punctually  paid or duly  provided for by the Issuer on the  applicable
Payment Date shall be paid to the related  Noteholder  on the  preceding  Record
Date,  by wire  transfer to an account  specified in writing by such  Noteholder
reasonably satisfactory to the Indenture Trustee as of the preceding Record Date
or, if no such  instructions  have been delivered to the Indenture  Trustee,  by
check or money order to such Noteholder mailed to such  Noteholder's  address as
it appears in the Note Register,  the amount  required to be distributed to such
Noteholder on such Payment Date pursuant to such Noteholder's  Notes;  provided,
however,  that the Indenture Trustee shall not pay to such Noteholder any amount
required  to be  withheld  from a payment to such  Noteholder  by the Code.  Any
reduction  in the  principal  amount  of  this  Term  Note  (or  any one or more
predecessor  Term Notes) effected by any payments made on any Payment Date shall
be binding  upon all future  Noteholders  of this Term Note and of any Term Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof,  whether or not noted hereon. If funds are expected to be available,  as
provided  in the  Indenture,  for payment in full of the then  remaining  unpaid
principal  amount  of this  Term  Note on a  Payment  Date,  then the  Indenture
Trustee,  in the name of and on behalf of the Issuer, will notify the Person who
was the  registered  Noteholder  hereof as of the  Record  Date  preceding  such
Payment Date by notice mailed or transmitted by facsimile  prior to such Payment
Date,  and  the  amount  then  due  and  payable  shall  be  payable  only  upon
presentation  and  surrender of this Term Note at the address  specified in such
notice of final payment.

        As provided in the  Indenture  and  subject to certain  limitations  set
forth  therein,  the  transfer of this Term Note may be  registered  on the Note
Register upon  surrender of this Term Note for  registration  of transfer at the
Corporate  Trust  Office  of  the  Indenture  Trustee,   duly  endorsed  by,  or
accompanied  by a written  instrument  of transfer in form  satisfactory  to the

<PAGE>

Indenture  Trustee duly executed by, the Noteholder  hereof or such Noteholder's
attorney  duly  authorized  in writing,  with such  signature  guaranteed  by an
"eligible guarantor institution" meeting the requirements of the Note Registrar,
which  requirements  include  membership  or  participation  in  the  Securities
Transfer Agent's Medallion Program ("STAMP") or such other "signature  guarantee
program"  as may be  determined  by the Note  Registrar  in  addition  to, or in
substitution  for, STAMP, all in accordance with the Exchange Act, and thereupon
one or more new Term Notes in authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees.  No
service charge will be charged for any  registration  of transfer or exchange of
this Term Note, but the Note Registrar shall require payment of a sum sufficient
to cover any tax or  governmental  charge that may be imposed in connection with
any registration of transfer or exchange of this Term Note.

        Each Noteholder or Beneficial Owner of a Term Note, by its acceptance of
a Term Note, or, in the case of a Beneficial  Owner of a Term Note, a beneficial
interest in a Term Note,  covenants  and agrees  that no recourse  may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee, the Seller, the Servicer, the Depositor or the Indenture Trustee on the
Term Notes or under the Indenture or any certificate or other writing  delivered
in connection therewith,  against (i) the Indenture Trustee or the Owner Trustee
in its  individual  capacity,  (ii) any owner of a  beneficial  interest  in the
Issuer or (iii) any partner,  owner,  beneficiary,  agent, officer,  director or
employee  of the  Indenture  Trustee  or the  Owner  Trustee  in its  individual
capacity,  any holder of a beneficial  interest in the Issuer, the Owner Trustee
or the Indenture  Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee in its individual  capacity,  except as any such Person may
have  expressly  agreed and except that any such partner,  owner or  beneficiary
shall be fully liable,  to the extent  provided by applicable law for any unpaid
consideration  for  stock,  unpaid  capital  contribution  or failure to pay any
installment or call owing to such entity.

        Each Noteholder or Beneficial Owner of a Term Note, by its acceptance of
a Term Note or, in the case of a  Beneficial  Owner of a Term Note, a beneficial
interest in a Term Note,  covenants  and agrees by accepting the benefits of the
Indenture  that  such  Noteholder  or  Beneficial  Owner  will  not at any  time
institute against the Depositor,  the Seller, the Servicer, GMAC Mortgage Group,
Inc. or the  Issuer,  or join in any  institution  against  the  Depositor,  the
Seller,  the  Servicer,  GMAC  Mortgage  Group,  Inc.  or  the  Issuer  of,  any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any  obligations  relating to the Term Notes,  the  Indenture  or the other
Basic Documents.

        The Issuer has entered into the  Indenture  and this Term Note is issued
with the intention  that, for federal,  state and local income,  single business
and franchise tax purposes,  the Term Notes will qualify as  indebtedness of the
Issuer.  Each  Noteholder of a Term Note, by its  acceptance of a Term Note (and
each Beneficial Owner of a Term Note by its acceptance of a beneficial  interest
in a Term  Note),  agrees to treat the Term Notes for  federal,  state and local
income,  single  business  and  franchise  tax purposes as  indebtedness  of the
Issuer.

<PAGE>

        Prior to the due presentment  for  registration of transfer of this Term
Note,  the  Issuer,  the  Indenture  Trustee  and any agent of the Issuer or the
Indenture  Trustee  may treat the  Person in the name of which this Term Note is
registered  (as of the day of  determination  or as of such other date as may be
specified in the Indenture) as the owner hereof for all purposes, whether or not
this Term Note be overdue,  and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.

        The Indenture permits,  with certain  exceptions  therein provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Issuer and the Indenture Trustee and the rights of the Noteholders of the Series
2000-HE2  Term  Notes  under the  Indenture  at any time by the  Issuer  and the
Indenture  Trustee with the consent of the Enhancer and the Noteholders of Notes
representing  a  majority  of the  aggregate  Note  Balance  of the  Notes  then
Outstanding  and with prior notice to the Rating  Agencies.  The Indenture  also
contains provisions  permitting the Noteholders of Notes representing  specified
percentages of the Note Balances of the Series 2000-HE2 Term Notes, on behalf of
the Noteholders of all Series  2000-HE2 Term Notes,  to waive  compliance by the
Issuer with certain  provisions of the Indenture and certain past defaults under
the  Indenture  and  their  consequences.  Any such  consent  or  waiver  by the
Noteholder of this Term Note (or any one of more  predecessor  Term Notes) shall
be conclusive and binding upon such  Noteholder and upon all future  Noteholders
of this Term Note and of any Term Note issued upon the  registration of transfer
hereof or in exchange  hereof or in lieu hereof  whether or not notation of such
consent or waiver is made upon this Term Note.  The  Indenture  also permits the
Issuer and the Indenture  Trustee to amend or waive certain terms and conditions
set forth in the  Indenture  without  the consent of  Noteholders  of the Series
2000-HE2  Term  Notes  issued  thereunder  but with  prior  notice to the Rating
Agencies and the Enhancer.

        The term  "Issuer" as used in this Term Note  includes any  successor or
the Issuer under the Indenture.

        The Issuer is permitted by the Indenture,  under certain  circumstances,
to merge or consolidate,  subject to the rights of the Indenture Trustee and the
Noteholders of Term Notes under the Indenture.

        The Term Notes are issuable only in registered form in  denominations as
provided in the Indenture, subject to certain limitations therein set forth.

        This Term Note and the Indenture  shall be construed in accordance  with
the laws of the State of New York,  without  reference  to its  conflicts of law
provisions,  and the obligations,  rights and remedies of the parties  hereunder
and thereunder shall be determined in accordance with such laws.

        No reference  herein to the Indenture and no provision of this Term Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and  unconditional,  to pay the  principal of and interest on this Term
Note  at the  times,  place  and  rate,  and  in the  coin  or  currency  herein
prescribed.

<PAGE>

        Anything  herein to the  contrary  notwithstanding,  except as expressly
provided  in the  Basic  Documents,  none of  Wilmington  Trust  Company  in its
individual  capacity,  Norwest  Bank  Minnesota,  National  Association  in  its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally  liable for, nor shall  recourse be
had to any of them for,  the  payment of  principal  of or interest on this Term
Note or the  performance  of, or the failure to perform,  any of the  covenants,
obligations or  indemnifications  contained in the Indenture.  The Noteholder of
this Term Note,  by its  acceptance  hereof,  agrees  that,  except as expressly
provided in the Basic  Documents,  in the case of an Event of Default  under the
Indenture,  such Noteholder shall have no claim against any of the foregoing for
any  deficiency,  loss or  claim  therefrom;  provided,  however,  that  nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the  assets  of  the  Issuer  for  any  and  all  liabilities,  obligations  and
undertakings contained in the Indenture or in this Term Note.



<PAGE>


        IN WITNESS WHEREOF,  the Owner Trustee,  on behalf of the Issuer and not
in its individual capacity, has caused this Term Note to be duly executed.




                             GMACM HOME EQUITY LOAN TRUST 2000-HE2



                             By:  WILMINGTON   TRUST   COMPANY,   not   in  its
                                  individual   capacity  but  solely  as  Owner
                                  Trustee

Dated:  June 29, 2000

                             By:___________________________________________
                                           Authorized Signatory





                          CERTIFICATE OF AUTHENTICATION

This is one of the Term Notes referred to in the within-mentioned Indenture.



                        NORWEST BANK MINNESOTA,
                        NATIONAL ASSOCIATION,
                        not in its individual capacity but solely as
                        Indenture Trustee



                        By:
                             Name:
                             Title:


Dated: June 29, 2000

                                       By:____________________________________
                                               Authorized Signatory



<PAGE>



                                   ASSIGNMENT

Social  Security  or  taxpayer  I.D. or other  identifying  number of  assignee:
_______________

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto

_________________________________
 (name and address of assignee)

the  within  Term  Note  and  all  rights  thereunder,  and  hereby  irrevocably
constitutes                             and                             appoints
______________________________________________________________________,
attorney, to transfer said Term Note on the books kept for registration thereof,
with full power of substitution in the premises.

Dated:________________________________      _____________________________  */
                                            Signature Guaranteed:

                                            _____________________________  */

____________________
NOTICE:  The signature to this  assignment  must correspond with the name of the
registered  owner as it  appears  on the face of the  within  Term Note in every
particular,  without  alteration,  enlargement  or  any  change  whatever.  Such
signature must be guaranteed by an "eligible guarantor  institution" meeting the
requirements of the Note Registrar,  which  requirements  include  membership or
participation  in STAMP or such other  "signature  guarantee  program" as may be
determined by the Note Registrar in addition to, or in substitution  for, STAMP,
all in  accordance  with the  Securities  Exchange  Act of 1934,  as amended.  /





<PAGE>






UNLESS  THIS TERM  NOTE IS  PRESENTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"),  TO THE ISSUER OR ITS
AGENT FOR  REGISTRATION  OF  TRANSFER,  EXCHANGE OR  PAYMENT,  AND ANY TERM NOTE
ISSUED  IS  REGISTERED  IN THE NAME OF CEDE & CO.  OR IN SUCH  OTHER  NAME AS IS
REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND ANY PAYMENT IS MADE TO
CEDE  &  CO.  OR  TO  SUCH  OTHER  ENTITY  AS  IS  REQUESTED  BY  AN  AUTHORIZED
REPRESENTATIVE  OF DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE PRINCIPAL OF THIS TERM NOTE IS PAYABLE IN  INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY,  THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TERM NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THIS TERM NOTE DOES NOT  REPRESENT AN INTEREST IN OR  OBLIGATION  OF THE SELLER,
THE DEPOSITOR,  THE SERVICER,  THE INDENTURE TRUSTEE,  THE OWNER TRUSTEE OR GMAC
MORTGAGE GROUP, INC. OR ANY OF THEIR RESPECTIVE AFFILIATES,  EXCEPT AS EXPRESSLY
PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.


                            GMACM HOME EQUITY LOAN TRUST 2000-HE2


                      GMACM Home Equity Loan-Backed Term Note, Class A-2

Registered                                   Initial Note Balance:
                                             $65,000,000

No. R-1                                      Note Rate:  Variable

                                             CUSIP NO. 361856 AP 2

        GMACM Home Equity Loan Trust  2000-HE2,  a business trust duly organized
and existing under the laws of the State of Delaware  (herein referred to as the
"Issuer"),  for  value  received,  hereby  promises  to pay to Cede & Co. or its
registered   assigns,   the  principal   sum  of  sixty  five  million   dollars
($65,000,000),  payable on each  Payment Date in an amount equal to the pro rata
portion  allocable hereto (based on the Initial Note Balance specified above and
the Initial Note Balance of all Class A-2 Term Notes) of the  aggregate  amount,
if any,  payable  from the Note  Payment  Account in respect of principal of the
Class  A-2 Term  Notes  (the  "Term  Notes")  pursuant  to  Section  3.05 of the
indenture  dated as of June 29, 2000 (the  "Indenture"),  between the Issuer and
Norwest  Bank  Minnesota,   National  Association,  as  indenture  trustee  (the
"Indenture Trustee"); provided, however, that the entire unpaid principal amount
of this Term Note shall be due and payable on the Payment Date in June 2030,  to
the extent not previously paid on a prior Payment Date.  Capitalized  terms used
herein that are not otherwise  defined shall have the meanings  ascribed thereto
in Appendix A to the Indenture.


                                        1

<PAGE>
        Interest on the Term Notes will be paid  monthly on each Payment Date at
the Note Rate for the related  Interest  Period subject to limitations  that may
result in Interest Shortfalls (as further described in the Indenture).  The Note
Rate for each Interest  Period will be a floating rate equal to the least of (i)
LIBOR plus 0.29% per annum (or,  for the  Interest  Period  beginning  after any
Payment Date on which the aggregate Pool Balance is less than 10% of the initial
Pool  Balance,  LIBOR  plus 0.58% per  annum),  (ii) the Net Loan Rate and (iii)
14.00% per annum.  LIBOR for each applicable  Interest Period will be determined
on the second LIBOR Business Day  immediately  preceding (i) the Closing Date in
the case of the first Interest  Period and (ii) the first day of each succeeding
Interest  Period by the  Indenture  Trustee as set forth in the  Indenture.  All
determinations  of LIBOR by the  Indenture  Trustee  shall,  in the  absence  of
manifest  error,  be conclusive  for all purposes,  and each holder of this Term
Note,  by accepting  this Term Note,  agrees to be bound by such  determination.
Interest  on this Term  Note will  accrue  for each  Payment  Date from the most
recent  Payment  Date on which  interest has been paid (in the case of the first
Payment  Date,  from the  Closing  Date) to but  excluding  such  Payment  Date.
Interest  will be  computed  on the basis of the  actual  number of days in each
Interest  Period and a year  assumed to  consist of 360 days.  Principal  of and
interest on this Term Note shall be paid in the manner  specified on the reverse
hereof.

        Principal  of and interest on this Term Note are payable in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with  respect  to this Term Note  shall be  applied  first to  interest  due and
payable on this Term Note as provided above and then to the unpaid  principal of
this Term Note.

        Reference is made to the further  provisions of this Term Note set forth
on the reverse  hereof,  which  shall have the same  effect as though  fully set
forth on the face of this Term Note.

        Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual  signature,  this Term Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

        This Term Note is one of a duly  authorized  issue of Term  Notes of the
Issuer,  designated  as its GMACM Home Equity  Loan-Backed  Term  Notes,  Series
2000-HE2 (the "Series 2000-HE2 Term Notes"), all issued under the Indenture,  to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement  of the  respective  rights and  obligations  thereunder  of the
Issuer,  the Indenture  Trustee and the  Noteholders of the Series 2000-HE2 Term
Notes. The Series 2000-HE2 Term Notes are subject to all terms of the Indenture.

        The  Series   2000-HE2  Term  Notes  and  the  Variable   Funding  Notes
(collectively,  the "Notes") are and will be equally and ratably  secured by the
collateral pledged as security therefor as provided in the Indenture.

        This  Term  Note is  entitled  to the  benefits  of an  irrevocable  and
unconditional  financial  guaranty  insurance  policy  issued by MBIA  Insurance
Corporation.

                                        2
<PAGE>

        Principal  of and  interest  on this Term Note will be  payable  on each
Payment  Date,  commencing  on July 25, 2000,  as  described  in the  Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next succeeding Business Day.

        The entire  unpaid  principal  amount of this Term Note shall be due and
payable in full on the Payment Date in June 2030 pursuant to the  Indenture,  to
the extent not  previously  paid on a prior  Payment Date.  Notwithstanding  the
foregoing,  if an Event of Default shall have occurred and be  continuing,  then
the Indenture Trustee, the Enhancer or the Noteholders of Notes representing not
less than a majority  of the  aggregate  Note  Balance  of the  Notes,  with the
consent of the Enhancer, may declare the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture.  All principal payments
on the  Term  Notes  shall be made pro  rata to the  Noteholders  of Term  Notes
entitled thereto.

        Any  installment of interest or principal,  if any,  payable on any Note
that is  punctually  paid or duly  provided for by the Issuer on the  applicable
Payment Date shall be paid to the related  Noteholder  on the  preceding  Record
Date,  by wire  transfer to an account  specified in writing by such  Noteholder
reasonably satisfactory to the Indenture Trustee as of the preceding Record Date
or, if no such  instructions  have been delivered to the Indenture  Trustee,  by
check or money order to such Noteholder mailed to such  Noteholder's  address as
it appears in the Note Register,  the amount  required to be distributed to such
Noteholder on such Payment Date pursuant to such Noteholder's  Notes;  provided,
however,  that the Indenture Trustee shall not pay to such Noteholder any amount
required  to be  withheld  from a payment to such  Noteholder  by the Code.  Any
reduction  in the  principal  amount  of  this  Term  Note  (or  any one or more
predecessor  Term Notes) effected by any payments made on any Payment Date shall
be binding  upon all future  Noteholders  of this Term Note and of any Term Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof,  whether or not noted hereon. If funds are expected to be available,  as
provided  in the  Indenture,  for payment in full of the then  remaining  unpaid
principal  amount  of this  Term  Note on a  Payment  Date,  then the  Indenture
Trustee,  in the name of and on behalf of the Issuer, will notify the Person who
was the  registered  Noteholder  hereof as of the  Record  Date  preceding  such
Payment Date by notice mailed or transmitted by facsimile  prior to such Payment
Date,  and  the  amount  then  due  and  payable  shall  be  payable  only  upon
presentation  and  surrender of this Term Note at the address  specified in such
notice of final payment.

        As provided in the  Indenture  and  subject to certain  limitations  set
forth  therein,  the  transfer of this Term Note may be  registered  on the Note
Register upon  surrender of this Term Note for  registration  of transfer at the
Corporate  Trust  Office  of  the  Indenture  Trustee,   duly  endorsed  by,  or
accompanied  by a written  instrument  of transfer in form  satisfactory  to the
Indenture  Trustee duly executed by, the Noteholder  hereof or such Noteholder's
attorney  duly  authorized  in writing,  with such  signature  guaranteed  by an
"eligible guarantor institution" meeting the requirements of the Note Registrar,
which  requirements  include  membership  or  participation  in  the  Securities
Transfer Agent's Medallion Program ("STAMP") or such other "signature  guarantee
program"  as may be  determined  by the Note  Registrar  in  addition  to, or in
substitution  for, STAMP, all in accordance with the Exchange Act, and thereupon
one or more new Term Notes in authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees.  No

                                        3
<PAGE>

service charge will be charged for any  registration  of transfer or exchange of
this Term Note, but the Note Registrar shall require payment of a sum sufficient
to cover any tax or  governmental  charge that may be imposed in connection with
any registration of transfer or exchange of this Term Note.

        Each Noteholder or Beneficial Owner of a Term Note, by its acceptance of
a Term Note, or, in the case of a Beneficial  Owner of a Term Note, a beneficial
interest in a Term Note,  covenants  and agrees  that no recourse  may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee, the Seller, the Servicer, the Depositor or the Indenture Trustee on the
Term Notes or under the Indenture or any certificate or other writing  delivered
in connection therewith,  against (i) the Indenture Trustee or the Owner Trustee
in its  individual  capacity,  (ii) any owner of a  beneficial  interest  in the
Issuer or (iii) any partner,  owner,  beneficiary,  agent, officer,  director or
employee  of the  Indenture  Trustee  or the  Owner  Trustee  in its  individual
capacity,  any holder of a beneficial  interest in the Issuer, the Owner Trustee
or the Indenture  Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee in its individual  capacity,  except as any such Person may
have  expressly  agreed and except that any such partner,  owner or  beneficiary
shall be fully liable,  to the extent  provided by applicable law for any unpaid
consideration  for  stock,  unpaid  capital  contribution  or failure to pay any
installment or call owing to such entity.

        Each Noteholder or Beneficial Owner of a Term Note, by its acceptance of
a Term Note or, in the case of a  Beneficial  Owner of a Term Note, a beneficial
interest in a Term Note,  covenants  and agrees by accepting the benefits of the
Indenture  that  such  Noteholder  or  Beneficial  Owner  will  not at any  time
institute against the Depositor,  the Seller, the Servicer, GMAC Mortgage Group,
Inc. or the  Issuer,  or join in any  institution  against  the  Depositor,  the
Seller,  the  Servicer,  GMAC  Mortgage  Group,  Inc.  or  the  Issuer  of,  any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any  obligations  relating to the Term Notes,  the  Indenture  or the other
Basic Documents.

        The Issuer has entered into the  Indenture  and this Term Note is issued
with the intention  that, for federal,  state and local income,  single business
and franchise tax purposes,  the Term Notes will qualify as  indebtedness of the
Issuer.  Each  Noteholder of a Term Note, by its  acceptance of a Term Note (and
each Beneficial Owner of a Term Note by its acceptance of a beneficial  interest
in a Term  Note),  agrees to treat the Term Notes for  federal,  state and local
income,  single  business  and  franchise  tax purposes as  indebtedness  of the
Issuer.

        Prior to the due presentment  for  registration of transfer of this Term
Note,  the  Issuer,  the  Indenture  Trustee  and any agent of the Issuer or the
Indenture  Trustee  may treat the  Person in the name of which this Term Note is
registered  (as of the day of  determination  or as of such other date as may be
specified in the Indenture) as the owner hereof for all purposes, whether or not
this Term Note be overdue,  and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.

        The Indenture permits,  with certain  exceptions  therein provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Issuer and the Indenture Trustee and the rights of the Noteholders of the Series

                                        4
<PAGE>

2000-HE2  Term  Notes  under the  Indenture  at any time by the  Issuer  and the
Indenture  Trustee with the consent of the Enhancer and the Noteholders of Notes
representing  a  majority  of the  aggregate  Note  Balance  of the  Notes  then
Outstanding  and with prior notice to the Rating  Agencies.  The Indenture  also
contains provisions  permitting the Noteholders of Notes representing  specified
percentages of the Note Balances of the Series 2000-HE2 Term Notes, on behalf of
the Noteholders of all Series  2000-HE2 Term Notes,  to waive  compliance by the
Issuer with certain  provisions of the Indenture and certain past defaults under
the  Indenture  and  their  consequences.  Any such  consent  or  waiver  by the
Noteholder of this Term Note (or any one of more  predecessor  Term Notes) shall
be conclusive and binding upon such  Noteholder and upon all future  Noteholders
of this Term Note and of any Term Note issued upon the  registration of transfer
hereof or in exchange  hereof or in lieu hereof  whether or not notation of such
consent or waiver is made upon this Term Note.  The  Indenture  also permits the
Issuer and the Indenture  Trustee to amend or waive certain terms and conditions
set forth in the  Indenture  without  the consent of  Noteholders  of the Series
2000-HE2  Term  Notes  issued  thereunder  but with  prior  notice to the Rating
Agencies and the Enhancer.

        The term  "Issuer" as used in this Term Note  includes any  successor or
the Issuer under the Indenture.

        The Issuer is permitted by the Indenture,  under certain  circumstances,
to merge or consolidate,  subject to the rights of the Indenture Trustee and the
Noteholders of Term Notes under the Indenture.

        The Term Notes are issuable only in registered form in  denominations as
provided in the Indenture, subject to certain limitations therein set forth.

        This Term Note and the Indenture  shall be construed in accordance  with
the laws of the State of New York,  without  reference  to its  conflicts of law
provisions,  and the obligations,  rights and remedies of the parties  hereunder
and thereunder shall be determined in accordance with such laws.

        No reference  herein to the Indenture and no provision of this Term Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and  unconditional,  to pay the  principal of and interest on this Term
Note  at the  times,  place  and  rate,  and  in the  coin  or  currency  herein
prescribed.

        Anything  herein to the  contrary  notwithstanding,  except as expressly
provided  in the  Basic  Documents,  none of  Wilmington  Trust  Company  in its
individual  capacity,  Norwest  Bank  Minnesota,  National  Association  in  its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally  liable for, nor shall  recourse be
had to any of them for,  the  payment of  principal  of or interest on this Term
Note or the  performance  of, or the failure to perform,  any of the  covenants,
obligations or  indemnifications  contained in the Indenture.  The Noteholder of
this Term Note,  by its  acceptance  hereof,  agrees  that,  except as expressly
provided in the Basic  Documents,  in the case of an Event of Default  under the
Indenture,  such Noteholder shall have no claim against any of the foregoing for

                                        5

<PAGE>

any  deficiency,  loss or  claim  therefrom;  provided,  however,  that  nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the  assets  of  the  Issuer  for  any  and  all  liabilities,  obligations  and
undertakings contained in the Indenture or in this Term Note.

                                        6

<PAGE>


        IN WITNESS WHEREOF,  the Owner Trustee,  on behalf of the Issuer and not
in its individual capacity, has caused this Term Note to be duly executed.


                            GMACM HOME EQUITY LOAN TRUST 2000-HE2



                            By:  WILMINGTON   TRUST   COMPANY,   not   in  its
                                 individual   capacity  but  solely  as  Owner
                                 Trustee

Dated:  June 29, 2000

                                       By:____________________________________
                                                          Authorized Signatory





                          CERTIFICATE OF AUTHENTICATION

This is one of the Term Notes referred to in the within-mentioned Indenture.



                          NORWEST BANK MINNESOTA,
                          NATIONAL ASSOCIATION,
                          not in its individual capacity but solely as
                          Indenture Trustee

Dated: June 29, 2000

                                       By:____________________________________
                                                          Authorized Signatory



<PAGE>



                                   ASSIGNMENT

     Social Security or taxpayer I.D. or other  identifying  number of assignee:
_______________

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto

_____________________________________
 (name and address of assignee)

the  within  Term  Note  and  all  rights  thereunder,  and  hereby  irrevocably
constitutes and appoints  _____________________________________________________,
attorney, to transfer said Term Note on the books kept for registration thereof,
with full power of substitution in the premises.

Dated:_________________________________     ______________________________ */
                                            Signature Guaranteed:

                                            ______________________________ */


___________________________--
NOTICE:  The signature to this  assignment  must correspond with the name of the
registered  owner as it  appears  on the face of the  within  Term Note in every
particular,  without  alteration,  enlargement  or  any  change  whatever.  Such
signature must be guaranteed by an "eligible guarantor  institution" meeting the
requirements of the Note Registrar,  which  requirements  include  membership or
participation  in STAMP or such other  "signature  guarantee  program" as may be
determined by the Note Registrar in addition to, or in substitution  for, STAMP,
all in  accordance  with the  Securities  Exchange  Act of 1934,  as amended.  /




<PAGE>



                                   EXHIBIT A-2
                         FORM OF VARIABLE FUNDING NOTES

THIS  VARIABLE  FUNDING NOTE HAS NOT BEEN AND WILL NOT BE  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED  PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER  APPLICABLE  STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.

THE PRINCIPAL OF THIS VARIABLE  FUNDING NOTE IS PAYABLE IN  INSTALLMENTS  AS SET
FORTH HEREIN.  ACCORDINGLY,  THE OUTSTANDING  PRINCIPAL  AMOUNT OF THIS VARIABLE
FUNDING NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THIS  VARIABLE  FUNDING NOTE DOES NOT  REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER,  THE  DEPOSITOR,  THE  SERVICER,  THE INDENTURE  TRUSTEE,  THE OWNER
TRUSTEE OR GMAC  MORTGAGE  GROUP,  INC. OR ANY OF THEIR  RESPECTIVE  AFFILIATES,
EXCEPT AS EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.


                      GMACM HOME EQUITY LOAN TRUST 2000-HE2


                 GMACM Home Equity Loan-Backed Variable Funding Note, Class I

Registered                       Aggregate Class I and Class II Variable
                                 Funding Balance:  $75,000,000

No.VFN 1                         Note Rate:  Floating

        GMACM Home Equity Loan Trust  2000-HE2,  a business trust duly organized
and existing under the laws of the State of Delaware  (herein referred to as the
"Issuer"),  for  value  received,  hereby  promises  to  pay  to  GMAC  Mortgage
Corporation  or its  registered  assigns,  the  principal  amount  set  forth on
Schedule A attached hereto (or otherwise owing hereunder as determined  pursuant
to the  Indenture as defined  below),  payable on each Payment Date in an amount
equal to the pro rata portion  allocable  hereto (based on the Variable  Funding
Balances  of  all  Variable  Funding  Notes  related  to  the  same  Loan  Group
immediately prior to such Payment Date) of the aggregate amount, if any, payable
from the Note Payment  Account in respect of  principal on the Variable  Funding
Note,  Class I (the "Variable  Funding  Notes")  pursuant to Section 3.05 of the
indenture  dated as of June 29, 2000 (the  "Indenture"),  between the Issuer and
Norwest  Bank  Minnesota,   National  Association,  as  indenture  trustee  (the
"Indenture Trustee"); provided, however, that the entire unpaid principal amount
of this  Variable  Funding  Note shall be due and payable on the Payment Date in
June  2030,  to  the  extent  not  previously  paid  on a  prior  Payment  Date.
Capitalized  terms used herein that are not otherwise  defined have the meanings
ascribed thereto in Appendix A to the Indenture.

<PAGE>
               Interest on this  Variable  Funding  Note will be paid monthly on
each Payment Date at the Note Rate for the related Interest  Period,  subject to
limitations that may result in Interest  Shortfalls (as further described in the
Indenture). The Note Rate for each Interest Period will be a floating rate equal
to the rate determined in accordance with the Indenture, which shall be not more
than the least of (i) LIBOR plus 0.22% per annum (or,  for the  Interest  Period
beginning  after any Payment  Date on which the  aggregate  Pool Balance is less
than 10% of the initial Pool Balance,  LIBOR plus 0.44% per annum), (ii) the Net
Loan  Rate and  (iii)  14.00%  per  annum.  All  determinations  of LIBOR by the
Indenture Trustee shall, in the absence of manifest error, be conclusive for all
purposes,  and each Noteholder of this Variable  Funding Note, by accepting this
Variable  Funding Note,  agrees to be bound by such  determination.  Interest on
this  Variable  Funding  Note will  accrue for each  Payment  Date from the most
recent  Payment  Date on which  interest  has been paid (or,  in the case of the
First Payment Date,  from the Closing Date) to but excluding  such Payment Date.
Interest  will be  computed  on the basis of the  actual  number of days in each
Interest  Period and a year  assumed to  consist of 360 days.  Principal  of and
interest on this Variable  Funding Note shall be paid in the manner specified on
the reverse hereof.

               Principal  of and  interest  on this  Variable  Funding  Note are
payable in such coin or currency of the United  States of America as at the time
of payment is legal tender for payment of public and private debts. All payments
made by the Issuer with respect to this  Variable  Funding Note shall be applied
first to interest  due and  payable on this  Variable  Funding  Note as provided
above and then to the unpaid principal of this Variable Funding Note.

               Reference  is made to the  further  provisions  of this  Variable
Funding Note set forth on the reverse  hereof,  which shall have the same effect
as though fully set forth on the face of this Variable Funding Note.

               Unless the certificate of authentication hereon has been executed
by the  Indenture  Trustee whose name appears  below by manual  signature,  this
Variable  Funding Note shall not be entitled to any benefit  under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.

               This Variable  Funding Note is one of a duly authorized  issue of
Variable  Funding  Notes of the  Issuer,  designated  as its GMACM  Home  Equity
Loan-Backed  Variable Funding Notes,  Series 2000-HE2 (herein called the "Series
2000-HE2  Variable  Funding  Notes"),  all issued under the Indenture,  to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture  Trustee and the Noteholders of the Series 2000-HE2  Variable  Funding
Notes.  The Series 2000-HE2  Variable  Funding Notes are subject to all terms of
the Indenture.

               The Series  2000-HE2  Variable  Funding  Notes and the Term Notes
(collectively,  the "Notes") are and will be equally and ratably  secured by the
collateral pledged as security therefor as provided in the Indenture.

<PAGE>

               This  Variable  Funding  Note is entitled  to the  benefits of an
irrevocable and unconditional financial guaranty insurance policy issued by MBIA
Insurance Corporation.

               Principal of and interest on this  Variable  Funding Note will be
payable on each Payment  Date,  commencing on July 25, 2000, as described in the
Indenture.  "Payment Date" means the  twenty-fifth day of each month, or, if any
such day is not a Business Day, then the next succeeding Business Day.

               The entire unpaid  principal amount of this Variable Funding Note
shall be due and  payable in full on the Payment  Date in June 2030  pursuant to
the  Indenture,  to the  extent not  previously  paid on a prior  Payment  Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, then the Indenture Trustee, the Enhancer or the Noteholders of Notes
representing  not less than a  majority  of the  aggregate  Note  Balance of the
Notes, with the consent of the Enhancer, may declare the Notes to be immediately
due and payable in the manner  provided in Section  5.02 of the  Indenture.  All
principal  payments on the Variable  Funding Notes shall be made pro rata to the
Noteholders of Variable Funding Notes entitled thereto.

               Payments  of  interest  on this  Variable  Funding  Note  due and
payable on each Payment Date,  together with the  installment  of principal,  if
any, to the extent not in full payment of this Variable  Funding Note,  shall be
made by  check  mailed  to the  Person  whose  name  appears  as the  registered
Noteholder of this Variable Funding Note (or one or more  Predecessor  Notes) on
the Note Register as of the close of business on each Record Date. Any reduction
in the  principal  amount  of this  Variable  Funding  Note  (or any one or more
predecessor Variable Funding Notes) effected by any payments made on any Payment
Date shall be binding upon all future  noteholders of this Variable Funding Note
and of any Variable Funding Note issued upon the registration of transfer hereof
or in exchange hereof or in lieu hereof,  whether or not noted hereon.  If funds
are expected to be available, as provided in the Indenture,  for payment in full
of the then remaining unpaid principal amount of this Variable Funding Note on a
Payment Date,  then the Indenture  Trustee,  in the name of and on behalf of the
Issuer,  will notify the Person who was the registered  Noteholder  hereof as of
the Record Date  preceding  such Payment Date by notice mailed or transmitted by
facsimile  prior to such Payment Date and the amount then due and payable  shall
be payable only upon presentation and surrender of this Variable Funding Note at
the address specified in such notice of final payment.

               As provided in the Indenture  and subject to certain  limitations
set forth therein,  the transfer of this Variable Funding Note may be registered
on  the  Note  Register  upon  surrender  of  this  Variable  Funding  Note  for
registration of transfer at the Corporate Trust Office of the Indenture Trustee,
duly endorsed by, and  accompanied  by a written  instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof or
such  Noteholder's  attorney  duly  authorized in writing,  with such  signature
guaranteed by an "eligible  guarantor  institution"  meeting the requirements of
the Note Registrar,  which  requirements  include membership or participation in
the  Securities  Transfer  Agent's  Medallion  Program  ("STAMP")  or such other
"signature  guarantee  program" as may be  determined  by the Note  Registrar in
addition  to,  or in  substitution  for,  STAMP,  all  in  accordance  with  the
Securities  Exchange  Act of 1934,  as amended,  and  thereupon  one or more new
Variable  Funding Notes in authorized  denominations  and in the same  aggregate
principal amount will be issued to the designated transferee or transferees.  No
service charge will be charged for any  registration  of transfer or exchange of
this Variable  Funding Note, but the Note Registrar  shall require  payment of a
sum  sufficient to cover any tax or  governmental  charge that may be imposed in
connection  with any  registration  of transfer  or  exchange  of this  Variable
Funding Note.

<PAGE>

               Each Noteholder of a Variable  Funding Note, by its acceptance of
a Variable  Funding  Note,  covenants  and agrees that no recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee, the Seller, the Servicer, the Depositor or the Indenture Trustee on the
Variable  Funding  Notes or under  the  Indenture  or any  certificate  or other
writing delivered in connection therewith,  against (i) the Indenture Trustee or
the Owner  Trustee in its  individual  capacity,  (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director  or  employee  of the  Indenture  Trustee  or the Owner  Trustee in its
individual  capacity,  any holder of a  beneficial  interest in the Issuer,  the
Owner  Trustee or the  Indenture  Trustee or of any  successor  or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid  consideration for stock,  unpaid capital  contribution or failure to
pay any installment or call owing to such entity.

               Each  Noteholder of a Variable  Funding Note covenants and agrees
by accepting the benefits of the Indenture that such  Noteholder will not at any
time institute against the Depositor,  the Seller,  the Servicer,  GMAC Mortgage
Group, Inc. or the Issuer, or join in any institution against the Depositor, the
Seller,  the  Servicer,  GMAC  Mortgage  Group,  Inc.  or  the  Issuer  of,  any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations  relating to the Variable  Funding Notes,  the Indenture or
the other Basic Documents.

               No  transfer,  sale,  pledge or other  disposition  of a Variable
Funding  Note  shall  be made  unless  such  transfer,  sale,  pledge  or  other
disposition is exempt from the registration  requirements of the Securities Act,
and any applicable  state securities laws or is made in accordance with said Act
and laws. In the event of any such transfer, the Indenture Trustee or the Issuer
shall require the  transferee to execute  either (i)(a) an investment  letter in
substantially  the form  attached to the Indenture as Exhibit B (or in such form
and substance  reasonably  satisfactory to the Indenture Trustee and the Issuer)
which  investment  letters  shall  not be an  expense  of the  Trust,  the Owner
Trustee,  the Indenture Trustee,  the Servicer,  the Depositor or the Issuer and
which investment letter states that, among other things,  such transferee (a) is
a "qualified institutional buyer" as defined under Rule 144A, acting for its own
account or the  accounts of other  "qualified  institutional  buyers" as defined
under Rule 144A, and (b) is aware that the proposed  transferor  intends to rely
on the  exemption  from  registration  requirements  under the  Securities  Act,
provided by Rule 144A or (ii) the Indenture Trustee shall require the transferee
to execute an investment  letter in  substantially  the form of Exhibit C to the
Indenture,  acceptable to and in form and substance  reasonably  satisfactory to
the Issuer and the Indenture Trustee  certifying to the Issuer and the Indenture
Trustee the facts  surrounding such transfer,  which investment letter shall not
be an expense  of the  Indenture  Trustee or the  Issuer.  Any  Noteholder  of a
Variable  Funding  Note that does not  execute  such a  certificate  or transfer
letter shall be deemed to have made the representations  set forth therein.  The
Noteholder of a Variable  Funding Note  desiring to effect such transfer  shall,
and does hereby agree to, indemnify the Indenture Trustee,  the Enhancer and the
Issuer against any liability that may result if the transfer is not so exempt or
is not made in accordance with such federal and state laws.
               The Issuer  has  entered  into the  Indenture  and this  Variable
Funding Note is issued with the  intention  that,  for federal,  state and local
income,  single business and franchise tax purposes,  the Variable Funding Notes
will  qualify as  indebtedness  of the  Issuer.  Each  Noteholder  of a Variable
Funding Note, by its acceptance of a Variable Funding Note,  agrees to treat the
Variable Funding Notes for federal,  state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.

<PAGE>
               Prior to the due presentment for registration of transfer of this
Variable  Funding Note, the Issuer,  the Indenture  Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name this Variable
Funding Note (as of the day of  determination or as of such other date as may be
specified in the  Indenture) is registered as the owner hereof for all purposes,
whether or not this  Variable  Funding Note be overdue,  and none of the Issuer,
the  Indenture  Trustee or any such  agent  shall be  affected  by notice to the
contrary.

               The  Indenture  permits,   with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the  Issuer  and the  Indenture  Trustee  and the  rights of the
Noteholders of the Series 2000-HE2 Variable Funding Notes under the Indenture at
any  time by the  Issuer  and the  Indenture  Trustee  with the  consent  of the
Enhancer and the  Noteholders of Notes  representing a majority of the aggregate
Note Balance of the Notes at the time  Outstanding  and with prior notice to the
Rating  Agencies.   The  Indenture  also  contains  provisions   permitting  the
Noteholders of Notes  representing  specified  percentages of the aggregate Note
Balance  of the  Series  2000-HE2  Variable  Funding  Notes,  on  behalf  of the
Noteholders of all Series 2000-HE2  Variable  Funding Notes, to waive compliance
by the Issuer with certain provisions of the Indenture and certain past defaults
under the  Indenture and their  consequences.  Any such consent or waiver by the
Noteholder  of this  Variable  Funding  Note  (or  any  one of more  predecessor
Variable Funding Notes) shall be conclusive and binding upon such Noteholder and
upon all future  Noteholders  of this Variable  Funding Note and of any Variable
Funding  Note issued  upon the  registration  of transfer  hereof or in exchange
hereof or in lieu  hereof,  whether or not notation of such consent or waiver is
made upon this Variable  Funding Note.  The Indenture also permits the Indenture
Trustee  to  amend  or waive  certain  terms  and  conditions  set  forth in the
Indenture  without the consent of  Noteholders of the Series  2000-HE2  Variable
Funding Notes issued thereunder but with prior notice to the Rating Agencies and
the Enhancer.

               The term "Issuer" as used in this Variable  Funding Note includes
any successor to the Issuer under the Indenture.

               The  Issuer  is  permitted  by  the   Indenture,   under  certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the Noteholders of Variable Funding Notes under the Indenture.

<PAGE>

               The Variable  Funding Notes are issuable only in registered  form
in  denominations as provided in the Indenture,  subject to certain  limitations
therein set forth.

               This Variable  Funding Note and the Indenture  shall be construed
in accordance with the laws of the State of New York,  without  reference to its
conflicts of law  provisions,  and the  obligations,  rights and remedies of the
parties  hereunder and  thereunder  shall be determined in accordance  with such
laws.

               No  reference  herein to the  Indenture  and no provision of this
Variable  Funding Note or of the Indenture  shall alter or impair the obligation
of the Issuer, which is absolute and unconditional,  to pay the principal of and
interest on this Variable Funding Note at the times,  place and rate, and in the
coin or currency herein prescribed.

               Anything  herein  to  the  contrary  notwithstanding,  except  as
expressly  provided in the Basic Documents,  none of Wilmington Trust Company in
its individual  capacity,  Norwest Bank Minnesota,  National  Association in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally  liable for, nor shall  recourse be
had to any of them for, the payment of principal of or interest on this Variable
Funding Note or  performance  of, or omission to perform,  any of the covenants,
obligations or  indemnifications  contained in the Indenture.  The Noteholder of
this  Variable  Funding Note by its  acceptance  hereof  agrees that,  except as
expressly  provided in the Basic  Documents,  in the case of an Event of Default
under the  Indenture,  such  Noteholder  shall have no claim  against any of the
foregoing for any deficiency,  loss or claim therefrom;  provided, however, that
nothing  contained herein shall be taken to prevent recourse to, and enforcement
against,  the assets of the Issuer for any and all liabilities,  obligations and
undertakings contained in the Indenture or in this Variable Funding Note.



<PAGE>


               IN WITNESS  WHEREOF,  the Owner Trustee,  on behalf of the Issuer
and not in its individual capacity,  has caused this Variable Funding Note to be
duly executed.


                           GMACM HOME EQUITY LOAN TRUST 2000-HE2



                           By:  WILMINGTON   TRUST   COMPANY,   not   in  its
                                individual   capacity  but  solely  as  Owner
                                Trustee

Dated:  June 29, 2000

                                       By:____________________________________
                                                          Authorized Signatory





                          CERTIFICATE OF AUTHENTICATION

This is one of the Variable  Funding Notes  referred to in the  within-mentioned
Indenture.



                            NORWEST BANK MINNESOTA,
                            NATIONAL ASSOCIATION,
                            not in its individual capacity but solely as
                            Indenture Trustee

Dated: June 29, 2000

                                       By:____________________________________
                                                          Authorized Signatory



<PAGE>



                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee:

    FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto


                                (name and address of assignee)

the  within  Variable  Funding  Note  and  all  rights  thereunder,  and  hereby
irrevocably  constitutes  and  appoints   _____________________,   attorney,  to
transfer said Variable Funding Note on the books kept for registration  thereof,
with full power of substitution in the premises.

Dated:                                                                       */
        -----------------------      ------------------------------------
                                           Signature Guaranteed:

                                   ______________________________________   //


____________________________
NOTICE:  The signature to this  assignment  must correspond with the name of the
registered  owner as it appears on the face of the within Variable  Funding Note
in every  particular,  without  alteration,  enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership or
participation  in STAMP or such other  "signature  guarantee  program" as may be
determined by the Note Registrar in addition to, or in substitution  for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.


<PAGE>


                                   SCHEDULE A



                GMACM HOME EQUITY LOAN TRUST 2000-HE2 GMACM Home
                Equity Loan-Backed Variable Funding Note, Class I

<TABLE>
<CAPTION>

========== ================== =============== ==================== ============================
<S>        <C>                <C>             <C>                  <C>
Date       Percentage         Principal       Variable Funding     Authorized Signature
           Interest           Payment         Balance Outstanding  of Indenture Trustee
---------- ------------------ --------------- -------------------- ----------------------------

---------- ------------------ --------------- -------------------- ----------------------------

---------- ------------------ --------------- -------------------- ----------------------------

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========== ================== =============== ==================== ============================


</TABLE>


<PAGE>



                                        2


THIS  VARIABLE  FUNDING NOTE HAS NOT BEEN AND WILL NOT BE  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED  PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER  APPLICABLE  STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.

THE PRINCIPAL OF THIS VARIABLE  FUNDING NOTE IS PAYABLE IN  INSTALLMENTS  AS SET
FORTH HEREIN.  ACCORDINGLY,  THE OUTSTANDING  PRINCIPAL  AMOUNT OF THIS VARIABLE
FUNDING NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THIS  VARIABLE  FUNDING NOTE DOES NOT  REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER,  THE  DEPOSITOR,  THE  SERVICER,  THE INDENTURE  TRUSTEE,  THE OWNER
TRUSTEE OR GMAC  MORTGAGE  GROUP,  INC. OR ANY OF THEIR  RESPECTIVE  AFFILIATES,
EXCEPT AS EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.


                            GMACM HOME EQUITY LOAN TRUST 2000-HE2


                GMACM Home Equity Loan-Backed Variable Funding Note, Class II

Registered                                 Aggregate Class I and Class II
                                           Variable Funding Balance:
                                           $75,000,000

No. VFN 1                                  Note Rate:  Floating

        GMACM Home Equity Loan Trust  2000-HE2,  a business trust duly organized
and existing under the laws of the State of Delaware  (herein referred to as the
"Issuer"),  for  value  received,  hereby  promises  to  pay  to  GMAC  Mortgage
Corporation  or its  registered  assigns,  the  principal  amount  set  forth on
Schedule A attached hereto (or otherwise owing hereunder as determined  pursuant
to the  Indenture as defined  below),  payable on each Payment Date in an amount
equal to the pro rata portion  allocable  hereto (based on the Variable  Funding
Balances  of  all  Variable  Funding  Notes  related  to  the  same  Loan  Group
immediately prior to such Payment Date) of the aggregate amount, if any, payable
from the Note Payment  Account in respect of  principal on the Variable  Funding
Note,  Class II (the "Variable  Funding Notes")  pursuant to Section 3.05 of the
indenture  dated as of June 29, 2000 (the  "Indenture"),  between the Issuer and
Norwest  Bank  Minnesota,   National  Association,  as  indenture  trustee  (the
"Indenture Trustee"); provided, however, that the entire unpaid principal amount
of this  Variable  Funding  Note shall be due and payable on the Payment Date in
June  2030,  to  the  extent  not  previously  paid  on a  prior  Payment  Date.
Capitalized  terms used herein that are not otherwise  defined have the meanings
ascribed thereto in Appendix A to the Indenture.

<PAGE>

        Interest  on this  Variable  Funding  Note will be paid  monthly on each
Payment  Date at the Note  Rate for the  related  Interest  Period,  subject  to
limitations that may result in Interest  Shortfalls (as further described in the
Indenture). The Note Rate for each Interest Period will be a floating rate equal
to the rate determined in accordance with the Indenture, which shall be not more
than the least of (i) LIBOR plus 0.29% per annum (or,  for the  Interest  Period
beginning  after any Payment  Date on which the  aggregate  Pool Balance is less
than 10% of the initial Pool Balance,  LIBOR plus 0.58% per annum), (ii) the Net
Loan  Rate and  (iii)  14.00%  per  annum.  All  determinations  of LIBOR by the
Indenture Trustee shall, in the absence of manifest error, be conclusive for all
purposes,  and each Noteholder of this Variable  Funding Note, by accepting this
Variable  Funding Note,  agrees to be bound by such  determination.  Interest on
this  Variable  Funding  Note will  accrue for each  Payment  Date from the most
recent  Payment  Date on which  interest  has been paid (or,  in the case of the
First Payment Date,  from the Closing Date) to but excluding  such Payment Date.
Interest  will be  computed  on the basis of the  actual  number of days in each
Interest  Period and a year  assumed to  consist of 360 days.  Principal  of and
interest on this Variable  Funding Note shall be paid in the manner specified on
the reverse hereof.

        Principal of and interest on this  Variable  Funding Note are payable in
such coin or currency of the United  States of America as at the time of payment
is legal tender for payment of public and private  debts.  All payments  made by
the Issuer with respect to this Variable  Funding Note shall be applied first to
interest due and payable on this  Variable  Funding  Note as provided  above and
then to the unpaid principal of this Variable Funding Note.

        Reference is made to the further  provisions  of this  Variable  Funding
Note set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Variable Funding Note.

        Unless the certificate of authentication hereon has been executed by the
Indenture  Trustee whose name appears below by manual  signature,  this Variable
Funding Note shall not be entitled to any benefit under the  Indenture  referred
to on the reverse hereof, or be valid or obligatory for any purpose.

        This Variable Funding Note is one of a duly authorized issue of Variable
Funding  Notes of the Issuer,  designated  as its GMACM Home Equity  Loan-Backed
Variable  Funding Notes,  Series  2000-HE2  (herein called the "Series  2000-HE2
Variable Funding Notes"), all issued under the Indenture, to which Indenture and
all indentures  supplemental thereto reference is hereby made for a statement of
the respective  rights and obligations  thereunder of the Issuer,  the Indenture
Trustee and the Noteholders of the Series 2000-HE2  Variable  Funding Notes. The
Series  2000-HE2  Variable  Funding  Notes  are  subject  to  all  terms  of the
Indenture.

        The  Series  2000-HE2   Variable   Funding  Notes  and  the  Term  Notes
(collectively,  the "Notes") are and will be equally and ratably  secured by the
collateral pledged as security therefor as provided in the Indenture.

        This Variable Funding Note is entitled to the benefits of an irrevocable
and unconditional  financial  guaranty insurance policy issued by MBIA Insurance
Corporation.

                                        2

<PAGE>

        Principal of and interest on this Variable  Funding Note will be payable
on each  Payment  Date,  commencing  on  July  25,  2000,  as  described  in the
Indenture.  "Payment Date" means the  twenty-fifth day of each month, or, if any
such day is not a Business Day, then the next succeeding Business Day.

        The entire unpaid  principal  amount of this Variable Funding Note shall
be due and  payable in full on the  Payment  Date in June 2030  pursuant  to the
Indenture,  to  the  extent  not  previously  paid  on  a  prior  Payment  Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, then the Indenture Trustee, the Enhancer or the Noteholders of Notes
representing  not less than a  majority  of the  aggregate  Note  Balance of the
Notes, with the consent of the Enhancer, may declare the Notes to be immediately
due and payable in the manner  provided in Section  5.02 of the  Indenture.  All
principal  payments on the Variable  Funding Notes shall be made pro rata to the
Noteholders of Variable Funding Notes entitled thereto.

        Payments of interest on this  Variable  Funding  Note due and payable on
each Payment Date,  together with the  installment of principal,  if any, to the
extent not in full payment of this Variable Funding Note, shall be made by check
mailed to the Person whose name  appears as the  registered  Noteholder  of this
Variable Funding Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date.  Any  reduction  in the  principal
amount of this Variable  Funding Note (or any one or more  predecessor  Variable
Funding  Notes)  effected  by any  payments  made on any  Payment  Date shall be
binding upon all future  noteholders  of this  Variable  Funding Note and of any
Variable  Funding  Note issued upon the  registration  of transfer  hereof or in
exchange  hereof or in lieu hereof,  whether or not noted  hereon.  If funds are
expected to be available,  as provided in the Indenture,  for payment in full of
the then remaining  unpaid  principal  amount of this Variable Funding Note on a
Payment Date,  then the Indenture  Trustee,  in the name of and on behalf of the
Issuer,  will notify the Person who was the registered  Noteholder  hereof as of
the Record Date  preceding  such Payment Date by notice mailed or transmitted by
facsimile  prior to such Payment Date and the amount then due and payable  shall
be payable only upon presentation and surrender of this Variable Funding Note at
the address specified in such notice of final payment.

        As provided in the  Indenture  and  subject to certain  limitations  set
forth therein,  the transfer of this Variable  Funding Note may be registered on
the Note Register upon surrender of this Variable  Funding Note for registration
of  transfer  at the  Corporate  Trust  Office of the  Indenture  Trustee,  duly
endorsed  by,  and  accompanied  by a written  instrument  of  transfer  in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof or
such  Noteholder's  attorney  duly  authorized in writing,  with such  signature
guaranteed by an "eligible  guarantor  institution"  meeting the requirements of
the Note Registrar,  which  requirements  include membership or participation in
the  Securities  Transfer  Agent's  Medallion  Program  ("STAMP")  or such other
"signature  guarantee  program" as may be  determined  by the Note  Registrar in
addition  to,  or in  substitution  for,  STAMP,  all  in  accordance  with  the
Securities  Exchange  Act of 1934,  as amended,  and  thereupon  one or more new
Variable  Funding Notes in authorized  denominations  and in the same  aggregate
principal amount will be issued to the designated transferee or transferees.  No
service charge will be charged for any  registration  of transfer or exchange of
this Variable  Funding Note, but the Note Registrar  shall require  payment of a
sum  sufficient to cover any tax or  governmental  charge that may be imposed in
connection  with any  registration  of transfer  or  exchange  of this  Variable
Funding Note.

                                        3

<PAGE>

        Each  Noteholder  of a Variable  Funding  Note,  by its  acceptance of a
Variable  Funding  Note,  covenants  and agrees that no  recourse  may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee, the Seller, the Servicer, the Depositor or the Indenture Trustee on the
Variable  Funding  Notes or under  the  Indenture  or any  certificate  or other
writing delivered in connection therewith,  against (i) the Indenture Trustee or
the Owner  Trustee in its  individual  capacity,  (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director  or  employee  of the  Indenture  Trustee  or the Owner  Trustee in its
individual  capacity,  any holder of a  beneficial  interest in the Issuer,  the
Owner  Trustee or the  Indenture  Trustee or of any  successor  or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid  consideration for stock,  unpaid capital  contribution or failure to
pay any installment or call owing to such entity.

        Each  Noteholder  of a Variable  Funding  Note  covenants  and agrees by
accepting the benefits of the  Indenture  that such  Noteholder  will not at any
time institute against the Depositor,  the Seller,  the Servicer,  GMAC Mortgage
Group, Inc. or the Issuer, or join in any institution against the Depositor, the
Seller,  the  Servicer,  GMAC  Mortgage  Group,  Inc.  or  the  Issuer  of,  any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations  relating to the Variable  Funding Notes,  the Indenture or
the other Basic Documents.

        No transfer,  sale,  pledge or other  disposition of a Variable  Funding
Note shall be made unless such transfer,  sale,  pledge or other  disposition is
exempt  from  the  registration  requirements  of the  Securities  Act,  and any
applicable  state  securities  laws or is made in  accordance  with said Act and
laws. In the event of any such  transfer,  the  Indenture  Trustee or the Issuer
shall require the  transferee to execute  either (i)(a) an investment  letter in
substantially  the form  attached to the Indenture as Exhibit B (or in such form
and substance  reasonably  satisfactory to the Indenture Trustee and the Issuer)
which  investment  letters  shall  not be an  expense  of the  Trust,  the Owner
Trustee,  the Indenture Trustee,  the Servicer,  the Depositor or the Issuer and
which investment letter states that, among other things,  such transferee (a) is
a "qualified institutional buyer" as defined under Rule 144A, acting for its own
account or the  accounts of other  "qualified  institutional  buyers" as defined
under Rule 144A, and (b) is aware that the proposed  transferor  intends to rely
on the  exemption  from  registration  requirements  under the  Securities  Act,
provided by Rule 144A or (ii) the Indenture Trustee shall require the transferee
to execute an investment  letter in  substantially  the form of Exhibit C to the
Indenture,  acceptable to and in form and substance  reasonably  satisfactory to
the Issuer and the Indenture Trustee  certifying to the Issuer and the Indenture
Trustee the facts  surrounding such transfer,  which investment letter shall not
be an expense  of the  Indenture  Trustee or the  Issuer.  Any  Noteholder  of a
Variable  Funding  Note that does not  execute  such a  certificate  or transfer
letter shall be deemed to have made the representations  set forth therein.  The
Noteholder of a Variable  Funding Note  desiring to effect such transfer  shall,
and does hereby agree to, indemnify the Indenture Trustee,  the Enhancer and the
Issuer against any liability that may result if the transfer is not so exempt or
is not made in accordance with such federal and state laws.

                                        4
<PAGE>

        The Issuer has entered into the Indenture and this Variable Funding Note
is issued with the intention that, for federal,  state and local income,  single
business and franchise tax purposes,  the Variable Funding Notes will qualify as
indebtedness of the Issuer.  Each Noteholder of a Variable  Funding Note, by its
acceptance  of a Variable  Funding  Note,  agrees to treat the Variable  Funding
Notes for federal,  state and local  income,  single  business and franchise tax
purposes as indebtedness of the Issuer.

        Prior  to the due  presentment  for  registration  of  transfer  of this
Variable  Funding Note, the Issuer,  the Indenture  Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name this Variable
Funding Note (as of the day of  determination or as of such other date as may be
specified in the  Indenture) is registered as the owner hereof for all purposes,
whether or not this  Variable  Funding Note be overdue,  and none of the Issuer,
the  Indenture  Trustee or any such  agent  shall be  affected  by notice to the
contrary.

        The Indenture permits, with certain exceptions as therein provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Issuer and the Indenture Trustee and the rights of the Noteholders of the Series
2000-HE2  Variable  Funding  Notes under the Indenture at any time by the Issuer
and the Indenture  Trustee with the consent of the Enhancer and the  Noteholders
of Notes  representing  a majority of the aggregate Note Balance of the Notes at
the time Outstanding and with prior notice to the Rating Agencies. The Indenture
also  contains  provisions  permitting  the  Noteholders  of Notes  representing
specified  percentages of the aggregate Note Balance of the Notes,  on behalf of
the  Noteholders  of all Notes,  to waive  compliance by the Issuer with certain
provisions of the  Indenture  and certain past defaults  under the Indenture and
their  consequences.  Any such  consent  or  waiver  by the  Noteholder  of this
Variable  Funding Note (or any one of more  predecessor  Variable Funding Notes)
shall be  conclusive  and  binding  upon  such  Noteholder  and upon all  future
Noteholders  of this  Variable  Funding  Note and of any  Variable  Funding Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof,  whether  or not  notation  of such  consent or waiver is made upon this
Variable Funding Note. The Indenture also permits the Indenture Trustee to amend
or waive certain  terms and  conditions  set forth in the Indenture  without the
consent of  Noteholders  of the Series  2000-HE2  Variable  Funding Notes issued
thereunder but with prior notice to the Rating Agencies and the Enhancer.

        The term  "Issuer" as used in this  Variable  Funding Note  includes any
successor to the Issuer under the Indenture.

        The Issuer is permitted by the Indenture,  under certain  circumstances,
to merge or consolidate,  subject to the rights of the Indenture Trustee and the
Noteholders of Variable Funding Notes under the Indenture.

        The Variable  Funding  Notes are  issuable  only in  registered  form in
denominations  as  provided  in the  Indenture,  subject to certain  limitations
therein set forth.

                                        5
<PAGE>

        This  Variable  Funding  Note and the  Indenture  shall be  construed in
accordance  with the laws of the State of New  York,  without  reference  to its
conflicts of law  provisions,  and the  obligations,  rights and remedies of the
parties  hereunder and  thereunder  shall be determined in accordance  with such
laws.

        No reference  herein to the  Indenture and no provision of this Variable
Funding Note or of the  Indenture  shall alter or impair the  obligation  of the
Issuer,  which  is  absolute  and  unconditional,  to pay the  principal  of and
interest on this Variable Funding Note at the times,  place and rate, and in the
coin or currency herein prescribed.

        Anything  herein to the  contrary  notwithstanding,  except as expressly
provided  in the  Basic  Documents,  none of  Wilmington  Trust  Company  in its
individual  capacity,  Norwest  Bank  Minnesota,  National  Association  in  its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally  liable for, nor shall  recourse be
had to any of them for, the payment of principal of or interest on this Variable
Funding Note or  performance  of, or omission to perform,  any of the covenants,
obligations or  indemnifications  contained in the Indenture.  The Noteholder of
this  Variable  Funding Note by its  acceptance  hereof  agrees that,  except as
expressly  provided in the Basic  Documents,  in the case of an Event of Default
under the  Indenture,  such  Noteholder  shall have no claim  against any of the
foregoing for any deficiency,  loss or claim therefrom;  provided, however, that
nothing  contained herein shall be taken to prevent recourse to, and enforcement
against,  the assets of the Issuer for any and all liabilities,  obligations and
undertakings contained in the Indenture or in this Variable Funding Note.

                                        6


<PAGE>


        IN WITNESS WHEREOF,  the Owner Trustee,  on behalf of the Issuer and not
in its  individual  capacity,  has caused this Variable  Funding Note to be duly
executed.


                                GMACM HOME EQUITY LOAN TRUST 2000-HE2



                                By:  WILMINGTON TRUST COMPANY, not in its
                                     individual capacity but solely as Owner
                                     Trustee

Dated:  June 29, 2000

                                       By:____________________________________
                                                          Authorized Signatory





                          CERTIFICATE OF AUTHENTICATION

This is one of the Variable  Funding Notes  referred to in the  within-mentioned
Indenture.



                               NORWEST BANK MINNESOTA,
                               NATIONAL ASSOCIATION,
                               not in its individual capacity but solely as
                               Indenture Trustee

Dated: June 29, 2000

                                       By______________________________________
                                                          Authorized Signatory


                                        7

<PAGE>



                                   ASSIGNMENT

Social   Security   or   taxpayer   I.D.   or  other   identifying   number   of
assignee:_____________________

     FOR VALUE  RECEIVED,  the undersigned  hereby sells,  assigns and transfers
unto

                                _________________________________
                                (name and address of assignee)

the  within  Variable  Funding  Note  and  all  rights  thereunder,  and  hereby
irrevocably  constitutes  and  appoints   _____________________,   attorney,  to
transfer said Variable Funding Note on the books kept for registration  thereof,
with full power of substitution in the premises.

Dated:                                                                     */
        ------------------------------------       ----------------------
                                                   Signature Guaranteed:

                                                  _______________________  //
____________________
 NOTICE:  The signature to this assignment must correspond with the name of the
registered  owner as it appears on the face of the within Variable  Funding Note
in every  particular,  without  alteration,  enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership or
participation  in STAMP or such other  "signature  guarantee  program" as may be
determined by the Note Registrar in addition to, or in substitution  for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.



<PAGE>

<TABLE>
<CAPTION>

                                   SCHEDULE A

                            GMACM HOME  EQUITY  LOAN TRUST  2000-HE2  GMACM Home
                Equity Loan-Backed Variable Funding Note, Class II

========== ================== =============== ==================== ============================
<S>        <C>                <C>             <C>                  <C>
Date       Percentage         Principal       Variable Funding     Authorized Signature
           Interest           Payment         Balance Outstanding  of Indenture Trustee
---------- ------------------ --------------- -------------------- ----------------------------

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========== ================== =============== ==================== ============================

</TABLE>


<PAGE>





                                    EXHIBIT B


                  [FORM OF RULE 144A INVESTMENT REPRESENTATION]

             Description of Rule 144A Securities, including numbers:
                 ===============================================
                 ===============================================

        The  undersigned  buyer (the "Buyer"),  intends to acquire the Rule 144A
Securities described above from the seller (the "Seller").

        1.  In  connection  with  such  transfer  and  in  accordance  with  the
agreements  pursuant to which the Rule 144A Securities  were issued,  the Seller
hereby  certifies the following  facts:  Neither the Seller nor anyone acting on
its behalf has offered, transferred,  pledged, sold or otherwise disposed of the
Rule 144A  Securities,  any  interest in the Rule 144A  Securities  or any other
similar security to, or solicited any offer to buy or accept a transfer,  pledge
or other disposition of the Rule 144A Securities,  any interest in the Rule 144A
Securities  or any other  similar  security  form,  or otherwise  approached  or
negotiated  with respect to the Rule 144A  Securities,  any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general  solicitation  by means of general  advertising or in any other
manner,  or taken any other action,  that would constitute a distribution of the
Rule 144A  Securities  under the  Securities  Act of 1933, as amended (the "1933
Act"),  or that  would  render the  disposition  of the Rule 144A  Securities  a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or  another  "qualified  institutional  buyer" as defined in Rule
144A under the 1933 Act.

        2. The Buyer  warrants  and  represents  to,  and  covenants  with,  the
Indenture  Trustee and the Issuer (as defined in the indenture  dated as of June
29, 2000 (the  "Indenture"),  between GMACM Home Equity Loan Trust 2000-HE2,  as
Issuer, and Norwest Bank Minnesota,  National Association, as Indenture Trustee,
pursuant to Section 4.02 of the Indenture, as follows:

               a. The Buyer  understands  that the Rule 144A Securities have not
          been  registered  under  the  1933 Act or the  securities  laws of any
          state.

               b.  The  Buyer  considers  itself  a  substantial,  sophisticated
        institutional investor having such knowledge and experience in financial
        and  business  matters that it is capable of  evaluating  the merits and
        risks of investment in the Rule 144A Securities.

               c. The Buyer has been  furnished with all  information  regarding
        the Rule 144A  Securities  that it has  requested  from the Seller,  the
        Indenture Trustee, the Owner Trustee or the Servicer.

<PAGE>

               d. Neither the Buyer nor anyone acting on its behalf has offered,
        transferred,  pledged,  sold or  otherwise  disposed  of the  Rule  144A
        Securities,  any  interest  in the Rule  144A  Securities  or any  other
        similar security to, or solicited any offer to buy or accept a transfer,
        pledge or other disposition of the Rule 144A Securities, any interest in
        the  Rule  144A  Securities  or any  other  similar  security  from,  or
        otherwise  approached  or  negotiated  with  respect  to the  Rule  144A
        Securities,  any  interest  in the Rule  144A  Securities  or any  other
        similar  security  with,  any person in any manner,  or made any general
        solicitation by means of general  advertising or in any other manner, or
        taken any other action, that would constitute a distribution of the Rule
        144A Securities  under the 1933 Act or that would render the disposition
        of the Rule 144A  Securities a violation of Section 5 of the 1933 Act or
        require  registration  pursuant  thereto,  nor  will it act,  nor has it
        authorized  or will it authorize  any person to act, in such manner with
        respect to the Rule 144A Securities.

               e. The Buyer is a "qualified institutional buyer" as that term is
        defined in Rule 144A under the 1933 Act and has completed  either of the
        forms of  certification  to that  effect  attached  hereto as Annex 1 or
        Annex 2.  The  Buyer  is  aware  that  the  sale to it is being  made in
        reliance on Rule 144A.  The Buyer is acquiring the Rule 144A  Securities
        for its own  account or the  accounts of other  qualified  institutional
        buyers,  understands  that  such  Rule 144A  Securities  may be  resold,
        pledged or transferred only (i) to a person reasonably  believed to be a
        qualified  institutional buyer that purchases for its own account or for
        the account of a qualified  institutional  buyer to whom notice is given
        that the  resale,  pledge or  transfer is being made in reliance on Rule
        144A, or (ii) pursuant to another exemption from registration  under the
        1933 Act.

        3. This document may be executed in one or more  counterparts and by the
different  parties  hereto on  separate  counterparts,  each of  which,  when so
executed, shall be deemed to be an original; such counterparts,  together, shall
constitute one and the same document.

        IN WITNESS WHEREOF,  the Buyer has executed this document as of the date
set forth below.

_____________________________
Print Name of Buyer


By:__________________________
Name:
Title:

Taxpayer Identification:

No.__________________________
Date:________________________



<PAGE>


                              ANNEX 1 TO EXHIBIT B

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

             [For Buyers Other Than Registered Investment Companies]

        The undersigned  hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:

     1. As indicated  below,  the undersigned is the President,  Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.

        2. In connection with purchases by the Buyer,  the Buyer is a "qualified
institutional  buyer" as that term is defined in Rule 144A under the  Securities
Act of 1933,  as  amended  ("Rule  144A")  because  (i) the Buyer  owned  and/or
invested  on  a  discretionary  basis  $______________________**  in  securities
(except  for the  excluded  securities  referred  to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance with
Rule 144A) and (ii) the Buyer  satisfies  the  criteria in the  category  marked
below.

        ___    Corporation,  etc. The Buyer is a corporation (other than a bank,
               savings   and   loan   association   or   similar   institution),
               Massachusetts   or  similar  business  trust,   partnership,   or
               charitable  organization  described  in Section  501(c)(3) of the
               Internal Revenue Code.

        ___    Bank.  The Buyer (a) is a national  bank or  banking  institution
               organized under the laws of any State,  territory or the District
               of Columbia,  the business of which is substantially  confined to
               banking and is  supervised  by the State or  territorial  banking
               commission or similar official or is a foreign bank or equivalent
               institution,  and  (b)  has an  audited  net  worth  of at  least
               $25,000,000  as  demonstrated  in  its  latest  annual  financial
               statements, a copy of which is attached hereto.
____________________
** Buyer must own and/or invest on a discretionary  basis at least  $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.


<PAGE>


        ___    Savings   and  Loan.   The  Buyer  (a)  is  a  savings  and  loan
               association,  building and loan  association,  cooperative  bank,
               homestead association or similar institution, which is supervised
               and examined by a State or Federal  authority having  supervision
               over any  such  institutions  or is a  foreign  savings  and loan
               association or equivalent  institution and (b) has an audited net
               worth of at  least  $25,000,000  as  demonstrated  in its  latest
               annual financial statements.

          ___  Broker-Dealer.  The  Buyer is a  dealer  registered  pursuant  to
               Section 15 of the Securities Exchange Act of 1934, as amended.

        ___    Insurance  Company.  The  Buyer  is an  insurance  company  whose
               primary  and  predominant  business  activity  is the  writing of
               insurance or the  reinsuring of risks  underwritten  by insurance
               companies  and which is subject to  supervision  by the insurance
               commissioner  or a  similar  official  or  agency  of a state  or
               territory or the District of Columbia.

        ___    State  or  Local  Plan.  The  Buyer  is a  plan  established  and
               maintained by a state, its political subdivisions,  or any agency
               or  instrumentality  of the state or its political  subdivisions,
               for the benefit of its employees.

        ___    ERISA  Plan.  The Buyer is an  employee  benefit  plan within the
               meaning of Title I of the Employee Retirement Income Security Act
               of 1974, as amended.

          ___  Investment Adviser. The Buyer is an investment adviser registered
               under the Investment Advisers Act of 1940, as amended.

          ___  SBIC. The Buyer is a Small Business  Investment  Company licensed
               by the U.S. Small Business Administration under Section 301(c) or
               (d) of the Small Business Investment Act of 1958, as amended.

          ___  Business Development Company. The Buyer is a business development
               company  as  defined  in  Section  202(a)(22)  of the  Investment
               Advisers Act of 1940, as amended.

        ___    Trust Fund.  The Buyer is a trust fund whose trustee is a bank or
               trust company and whose  participants  are  exclusively (a) plans
               established   and   maintained   by  a   State,   its   political
               subdivisions,  or any agency or  instrumentality  of the State or
               its political subdivisions,  for the benefit of its employees, or
               (b) employee  benefit  plans within the meaning of Title I of the
               Employee  Retirement  Income  Security Act of 1974,  but is not a
               trust fund that includes as  participants  individual  retirement
               accounts or H.R. 10 plans.

        3. The term  "securities" as used herein does not include (i) securities
of issuers that are Affiliated with the Buyer,  (ii) securities that are part of
an unsold  allotment to or  subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit,  (iv) loan participations,
(v) repurchase  agreements,  (vi)  securities  owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.

<PAGE>

        4. For purposes of determining the aggregate  amount of securities owned
and/or invested on a discretionary  basis by the Buyer,  the Buyer used the cost
of such  securities  to the  Buyer  and did not  include  any of the  securities
referred to in the preceding  paragraph.  Further, in determining such aggregate
amount,  the Buyer may have included  securities  owned by  subsidiaries  of the
Buyer,  but only if such  subsidiaries  are  consolidated  with the Buyer in its
financial  statements  prepared in accordance with generally accepted accounting
principles  and if the  investments of such  subsidiaries  are managed under the
Buyer's direction.  However, such securities were not included if the Buyer is a
majority-owned,  consolidated  subsidiary of another enterprise and the Buyer is
not itself a reporting  company  under the  Securities  Exchange Act of 1934, as
amended.

        5.  The  Buyer  acknowledges  that it is  familiar  with  Rule  144A and
understands  that the  seller to it and other  parties  related to the Rule 144A
Securities are relying and will continue to rely on the  statements  made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.

  ___ ___ Will the Buyer be purchasing the Rule 144A Yes No Securities  only for
  the Buyer's own account?

        6. If the answer to the  foregoing  question is "no",  the Buyer  agrees
that,  in connection  with any purchase of securities  sold to the Buyer for the
account of a third party  (including  any separate  account) in reliance on Rule
144A,  the Buyer will only purchase for the account of a third party that at the
time is a "qualified  institutional  buyer"  within the meaning of Rule 144A. In
addition,  the Buyer  agrees that the Buyer will not purchase  securities  for a
third party unless the Buyer has obtained a current  representation  letter from
such third party or taken other appropriate  steps  contemplated by Rule 144A to
conclude that such third party  independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.



<PAGE>


        7. The Buyer will notify each of the parties to which this certification
is made of any changes in the  information and  conclusions  herein.  Until such
notice is given,  the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such purchase.


                                            Print Name of Buyer

                                       By:
                                      Name:
                                     Title:

                                      Date:




<PAGE>


                              ANNEX 2 TO EXHIBIT B

                   QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

                    [For Buyers That Are Registered Investment Companies]

        The undersigned  hereby certifies as follows in connection with the Rule
144A Investment Representation to which this certification is attached:

               1. As indicated  below,  the undersigned is the President,  Chief
Financial  Officer or Senior Vice  President  of the Buyer or, if the Buyer is a
"qualified  institutional  buyer" as that term is defined in Rule 144A under the
Securities  Act of 1933  ("Rule  144A")  because  Buyer is part of a  Family  of
Investment  Companies (as defined below),  is such an officer of the Adviser (as
defined below).

               2.  In  connection  with  purchases  by  Buyer,  the  Buyer  is a
"qualified  institutional  buyer" as  defined in SEC Rule 144A  because  (i) the
Buyer is an investment  company  registered under the Investment  Company Act of
1940,  and (ii) as marked  below,  the Buyer  alone,  or the  Buyer's  Family of
Investment Companies,  owned at least $100,000,000 in securities (other than the
excluded  securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining  the amount of securities  owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used.

____    The Buyer owned $________________ in securities (other than the excluded
        securities  referred to below) as of the end of the Buyer's  most recent
        fiscal year (such amount being calculated in accordance with Rule 144A).

____    The Buyer is part of a Family of Investment Companies which owned in the
        aggregate   $______________  in  securities  (other  than  the  excluded
        securities  referred to below) as of the end of the Buyer's  most recent
        fiscal year (such amount being calculated in accordance with Rule 144A).

               3. The term "Family of Investment Companies" as used herein means
two or more  registered  investment  companies (or series thereof) that have the
same  investment  adviser or investment  advisers  (each, an "Adviser") that are
affiliated (by virtue of being majority owned subsidiaries of the same parent or
because one investment adviser is a majority owned subsidiary of the other).

               4. The term  "securities"  as used  herein  does not  include (i)
securities  of  issuers  that are  affiliated  with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of  deposit,  (iii)  loan  participations,   (iv)  repurchase  agreements,   (v)
securities  owned but  subject  to a  repurchase  agreement  and (vi)  currency,
interest rate and commodity swaps.

               5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made are relying and will continue
to rely on the  statements  made  herein  because one or more sales to the Buyer
will be in reliance on Rule 144A. In addition,  the Buyer will only purchase for
the Buyer's own account.

<PAGE>

               6. The undersigned  will notify each of the parties to which this
certification is made of any changes in the information and conclusions  herein.
Until such notice,  the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this  certification by the undersigned as of the date of such
purchase.


                                            Print Name of Buyer

                                       By:
                                      Name:
                                     Title:

                                            IF AN ADVISER:



                                            Print Name of Buyer

                                      Date:



<PAGE>




                                    EXHIBIT C


                     FORM OF INVESTOR REPRESENTATION LETTER

----------, ----

Residential Asset Mortgage Products, Inc.
8400 Normandale Lake Boulevard
Minneapolis, Minnesota 55437

GMACM Home Equity Loan Trust 2000-HE2
c/o Wilmington Trust Company, as Owner Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890 0001

Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-0070

Attention:  Corporate Trust Administration

               Re:    Home Equity Loan-Backed Capped Funding Notes,
                      Series 2000-HE2

Ladies and Gentlemen:

        (the  "Purchaser")  intends to  purchase  from (the  "Seller")  $ Capped
Funding Notes of Series 2000-HE2 (the "Notes"), issued pursuant to the indenture
dated as of June 29,  2000 (the  "Indenture"),  between  GMACM Home  Equity Loan
Trust 2000-HE2, as issuer (the "Issuer"),  and Norwest Bank Minnesota,  National
Association,  as indenture trustee (the "Indenture Trustee").  Capitalized terms
used herein that are not  otherwise  defined  shall have the  meanings  ascribed
thereto  in  Appendix  A to  the  Indenture.  The  Purchaser  hereby  certifies,
represents  and warrants to, and  covenants  with,  the Issuer and the Indenture
Trustee that:

                      1. The Purchaser  understands  that (a) the Notes have not
        been and will not be registered or qualified under the Securities Act of
        1933,  as  amended  (the  "Act") or any state  securities  law,  (b) the
        Company is not  required to so  register  or qualify the Notes,  (c) the
        Notes may be resold  only if  registered  or  qualified  pursuant to the
        provisions  of the Act or any state  securities  law, or if an exemption
        from such registration and qualification is available, (d) the Indenture
        contains  restrictions  regarding  the transfer of the Notes and (e) the
        Notes will bear a legend to the foregoing effect.

<PAGE>

                      2.  The  Purchaser  is  acquiring  the  Notes  for its own
        account  for  investment  only  and not  with a view  to or for  sale in
        connection  with any  distribution  thereof  in any  manner  that  would
        violate the Act or any applicable state securities laws.

                      3.  The  Purchaser  is  (a) a  substantial,  sophisticated
        institutional investor having such knowledge and experience in financial
        and business  matters,  and, in particular,  in such matters  related to
        securities  similar to the Notes,  such that it is capable of evaluating
        the merits and risks of  investment  in the Notes,  (b) able to bear the
        economic risks of such an investment  and (c) an  "accredited  investor"
        within the  meaning  of  clauses  (1),  (2),  (3) or (7) of Rule  501(a)
        promulgated pursuant to the Act.

                      4. The Purchaser has been  furnished  with, and has had an
        opportunity to review a copy of the Indenture and such other information
        concerning  the Notes,  the  Mortgage  Loans and the Company as has been
        requested  by the  Purchaser  from  the  Company  or the  Seller  and is
        relevant  to  the  Purchaser's  decision  to  purchase  the  Notes.  The
        Purchaser has had any questions arising from such review answered by the
        Company or the Seller to the satisfaction of the Purchaser.

                      5.  The  Purchaser  has  not  and  will  not  nor  has  it
        authorized or will it authorize any person to (a) offer,  pledge,  sell,
        dispose of or otherwise  transfer any Note,  any interest in any Note or
        any other similar security to any person in any manner,  (b) solicit any
        offer to buy or to accept a pledge, disposition of other transfer of any
        Note,  any interest in any Note or any other  similar  security from any
        person in any manner,  (c) otherwise  approach or negotiate with respect
        to any Note, any interest in any Note or any other similar security with
        any person in any manner, (d) make any general  solicitation by means of
        general advertising or in any other manner or (e) take any other action,
        that  (as  to  any  of  (a)  through  (e)  above)  would   constitute  a
        distribution   of  any  Note  under  the  Act,  that  would  render  the
        disposition of any Note a violation of Section 5 of the Act or any state
        securities  law, or that would  require  registration  or  qualification
        pursuant thereto.  The Purchaser will not sell or otherwise transfer any
        of the Notes, except in compliance with the provisions of the Indenture.

                                            Very truly yours,


                                       By:
                                      Name:
                                     Title:




<PAGE>
                                 EXECUTION COPY


                                   APPENDIX A

                                   DEFINITIONS


        Addition  Notice:  With respect to the transfer of  Subsequent  Mortgage
Loans to the  Issuer  pursuant  to Section  2.2 of the  Purchase  Agreement  (in
substantially the form set forth in Exhibit 3 to such agreement), a notice given
to the Rating  Agencies,  the  Indenture  Trustee,  the  Enhancer  and the Owner
Trustee,  which shall be given not later than seven  Business  Days prior to the
related Subsequent Transfer Date, of (i) the Seller's  designation of Subsequent
Mortgage Loans to be sold to the Issuer, (ii) the aggregate principal balance as
of the Subsequent  Cut-Off Date of such Subsequent  Mortgage Loans and (iii) the
Loan  Group or Groups  into  which  such  Subsequent  Mortgage  Loans  have been
assigned.

        Additional  Balance:  With respect to any HELOC, any future Draw made by
the related  Mortgagor  pursuant to the related Loan Agreement after the Cut-Off
Date or Subsequent Cut-Off Date, together with all money due or to become due in
respect  of such  Draw;  provided,  however,  that any  Draw  during  the  Rapid
Amortization  Period shall be an Excluded  Amount,  shall not be acquired by the
Trust and shall not be an Additional Balance.

        Additional  Certificate Balance:  With respect to the issuance of Capped
Funding Notes pursuant to Section 4.01(d) of the Indenture,  the amount, if any,
required in accordance with the Opinion of Counsel in connection therewith to be
added to the Certificate Balances of the Certificates in accordance with Section
3.12 of the Trust Agreement.

        Affiliate:  With respect to any Person,  any other  Person  controlling,
controlled  by or under common  control  with such Person.  For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly,  whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled"  shall have meanings
correlative to the foregoing.

        Aggregate Balance Differential: With respect to any Payment Date and any
Variable Funding Note, the sum of all Balance Differentials that have been added
to the  Variable  Funding  Balance of such  Variable  Funding Note prior to such
Payment Date.

     Amortization Periods: Collectively, the Managed Amortization Period and the
Rapid Amortization Period.

        Appraised Value: With respect to any Mortgaged Property,  either (x) the
value as generally set forth in an appraisal of such Mortgaged  Property used to
establish compliance with the underwriting criteria then in effect in connection
with  the  later  of the  application  for the  Mortgage  Loan  secured  by such
Mortgaged  Property  or (in the  case of a HELOC)  any  subsequent  increase  or
decrease in the related  Credit  Limit,  or to reduce or eliminate the amount of
any primary  mortgage  insurance,  or (y) if the sales  price of such  Mortgaged
Property is considered in accordance with the underwriting  criteria  applicable
to the related  Mortgage Loan, the lesser of (i) the appraised value referred to
in (x) above and (ii) the sales price of such Mortgaged Property.

<PAGE>

        Assignment  of Mortgage:  With respect to any Mortgage,  an  assignment,
notice of transfer or  equivalent  instrument,  in recordable  form,  sufficient
under the laws of the  jurisdiction in which the related  Mortgaged  Property is
located to reflect the conveyance of such Mortgage, which assignment,  notice of
transfer  or  equivalent  instrument  may be in the form of one or more  blanket
assignments  covering Mortgage Loans secured by Mortgaged  Properties located in
the same jurisdiction.

        Authorized Newspaper:  A newspaper of general circulation in the Borough
of  Manhattan,  The  City of New  York,  printed  in the  English  language  and
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays, Sundays or holidays.

        Authorized Officer: With respect to the Issuer, any officer of the Owner
Trustee who is authorized  to act for the Owner  Trustee in matters  relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).

        Balance Differential: With respect to any Payment Date:

(a) during the Revolving Period, the amount, if any, by which (i) the sum of the
aggregate  Principal Balance of all Subsequent  Mortgage Loans and the amount of
any Additional  Balances  transferred to the Trust Estate and included in a Loan
Group during the related Collection Period exceeds (ii) the sum of (A) Principal
Collections for such Loan Group and Collection Period; (B) the amount on deposit
in the Funding  Account as of such Payment Date and allocable to such Loan Group
and (C) the Pre-Funded Amount as of such Payment Date and allocable to such Loan
Group (but only to the extent of the aggregate  Principal  Balance of Subsequent
Mortgage  Loans in clause (i) above for any Payment  Date other than the Payment
Date relating to the end of the Pre-Funding Period); and

(b) during the Managed Amortization Period, the amount, if any, by which (i) the
amount of any Additional  Balances  transferred to the Trust Estate and included
in Loan  Group  I or II  during  the  related  Collection  Period  exceeds  (ii)
Principal Collections for such Loan Group and Collection Period.

        Bankruptcy Code:  The Bankruptcy Code of 1978, as amended.

        Basic  Documents:  The Trust  Agreement,  the  Indenture,  the  Purchase
Agreement,  the Insurance Agreement,  the Policy, the Servicing  Agreement,  the
Custodial  Agreement,  any Subsequent Transfer Agreement and the other documents
and certificates delivered in connection with any of the above.

        Beneficial  Owner:  With  respect  to any Note,  the  Person  who is the
beneficial  owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository  Participant  or  indirectly  through a  Depository  Participant,  in
accordance with the rules of such Depository).

     Billing Cycle: With respect to any Mortgage Loan and Due Date, the calendar
month preceding such Due Date.

                                        2
<PAGE>


        Book-Entry  Notes:  Beneficial  interests  in the Notes,  ownership  and
transfers  of which shall be made  through  book  entries by the  Depository  as
described in Section 4.06 of the Indenture.

        Business  Day:  Any day other than (i) a Saturday  or a Sunday or (ii) a
day on which  banking  institutions  in the  States of New  York,  Pennsylvania,
Minnesota, Maryland or Delaware are required or authorized by law to be closed.

     Business  Trust  Statute:  Chapter 38 of Title 12 of the Delaware  Code, 12
Del. Code ss.ss.3801 et seq., as the same may be amended from time to time.

     Capitalized  Interest  Account:  The  account  established  and  maintained
pursuant to Section 3.19 of the Servicing Agreement.

        Capitalized  Interest  Requirement:  With  respect to each  Payment Date
during the  Pre-Funding  Period,  the  excess,  if any of (i) the sum of (A) the
amount  of  interest  accrued  at the  applicable  Note  Rate  or  Rates  on the
respective  Note  Balances  for the  related  Interest  Period on the  amount on
deposit in the  Pre-Funding  Account as of the preceding  Payment Date (or as of
the Closing  Date,  in the case of the first Payment Date) and (B) the amount of
any fees paid to the Enhancer, the Owner Trustee and the Indenture Trustee, over
(ii) the amount of  reinvestment  earnings  for the related  Interest  Period on
funds on deposit in the Pre-Funding Account.

        Capped Funding Balance:  With respect to any date of  determination  and
Capped Funding Note, the  outstanding  principal  balance of such Capped Funding
Note as of such date.

     Capped Funding Note:  Any Capped Funding Note issued in connection  with an
exchange pursuant to Section 4.01(d) of the Indenture.

        Certificate   Balance:   With  respect  to  any  Payment  Date  and  any
Certificate,  the  Initial  Certificate  Balance,  increased  by any  Additional
Certificate  Balance added to such  Certificate  pursuant to Section 3.12 of the
Trust  Agreement,  and any Balance  Differential  for any Loan Group that is not
added to the Variable  Funding  Balance of any Class of Variable  Funding  Notes
pursuant to Section  4.01(b) of the  Indenture,  and reduced by all  payments of
principal on such Certificate prior to such Payment Date.

     Certificate  Distribution Amount: For any Payment Date, the amount, if any,
distributable  on the  Certificates  for such Payment  Date  pursuant to Section
3.05(a)(xii) of the Indenture.

     Certificate  Paying  Agent:  The meaning  specified  in Section 3.10 of the
Trust Agreement.

     Certificate  Percentage Interest:  With respect to any Payment Date and any
Certificate, the Percentage Interest for such Certificate.

     Certificate Register:  The register maintained by the Certificate Registrar
in which  the  Certificate  Registrar  shall  provide  for the  registration  of
Certificates and of transfers and exchanges of Certificates.

                                        3
<PAGE>

     Certificate of Trust: The Certificate of Trust filed for the Trust pursuant
to Section 3810(a) of the Business Trust Statute.

     Certificate Registrar: Initially, the Indenture Trustee, in its capacity as
Certificate Registrar.

        Certificateholder:  The Person in whose name a Certificate is registered
in the Certificate Register except that, any Certificate  registered in the name
of the Issuer,  the Owner Trustee or the  Indenture  Trustee or any Affiliate of
the Owner Trustee or the Indenture Trustee shall be deemed not to be outstanding
and the  registered  holder  will  not be  considered  a  Certificateholder  for
purposes  of giving  any  request,  demand,  authorization,  direction,  notice,
consent or waiver under the Indenture or the Trust Agreement;  provided that, in
determining  whether  the  Indenture  Trustee  or the  Owner  Trustee  shall  be
protected in relying upon any such request,  demand,  authorization,  direction,
notice,  consent or waiver,  only Certificates that the Indenture Trustee or the
Owner  Trustee  knows  to  be  so  owned  shall  be so  disregarded.  Owners  of
Certificates   that  have  been  pledged  in  good  faith  may  be  regarded  as
Certificateholders  if  the  pledgee  establishes  to  the  satisfaction  of the
Indenture Trustee or the Owner Trustee,  as the case may be, the pledgee's right
so to act with  respect  to such  Certificates  and that the  pledgee is not the
Issuer,  any other obligor upon the  Certificates  or any Affiliate of the Owner
Trustee or the Indenture Trustee.

     Certificates:  The  certificates  in  substantially  the form set  forth in
Exhibit A to the Trust Agreement.

        Class:  With  respect  to any Note,  all Notes  that bear the same class
designation,  (i.e.,  the  Class A-1 Term  Notes as a group,  the Class A-2 Term
Notes as a group,  the Variable Funding Notes Class I as a group or the Variable
Funding Notes Class II as a group).

        Class A-1 Term Notes:  The Class A-1 GMACM Home Equity  Loan-Backed Term
Notes,  Series 2000-HE2,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

        Class A-2 Term Notes:  The Class A-2 GMACM Home Equity  Loan-Backed Term
Notes,  Series 2000-HE2,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

        Closing Date: June 29, 2000.

     Code:  The  Internal  Revenue Code of 1986,  as amended,  and the rules and
regulations promulgated thereunder.

     Collateral: The meaning specified in the Granting Clause of the Indenture.

     Collection Period:  With respect to any Mortgage Loan and Payment Date, the
calendar month preceding any such Payment Date.

     Collections:   With  respect  to  any  Collection   Period,   all  Interest
Collections and Principal Collections during such Collection Period.


                                        4

<PAGE>


        Combined  Loan-to-Value  Ratio or CLTV:  With respect to (a) each HELOC,
the ratio,  expressed  as a  percentage,  of the sum of (i) the Credit Limit and
(ii) any  outstanding  principal  balance,  at origination of such HELOC, of all
other mortgage  loans,  if any,  secured by senior or  subordinate  liens on the
related Mortgaged Property, to the Appraised Value, or, when not available,  the
Stated  Value,  and (b) with  respect  to each HEL,  the ratio,  expressed  as a
percentage, of the sum of (i) the initial principal balance of such HEL and (ii)
any  outstanding  principal  balance,  at  origination of such HEL, of all other
mortgage  loans, if any,  secured by senior or subordinate  liens on the related
Mortgaged Property,  to the Appraised Value, or, when not available,  the Stated
Value.

        Commission:  The Securities and Exchange Commission.

        Corporate  Trust  Office:   With  respect  to  the  Indenture   Trustee,
Certificate Registrar,  Certificate Paying Agent and Paying Agent, the principal
corporate  trust office of the Indenture  Trustee and Note Registrar at which at
any particular  time its corporate trust business shall be  administered,  which
office at the date of the  execution  of this  instrument  is located at Norwest
Center,  Sixth and  Marquette,  Minneapolis,  Minnesota  55479-0070,  Attention:
Corporate  Trust.  With respect to the Owner  Trustee,  the principal  corporate
trust office of the Owner Trustee at which at any particular  time its corporate
trust business shall be administered,  which office at the date of the execution
of this Trust  Agreement is located at Rodney  Square  North,  1100 North Market
Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration.

     Credit  Limit:  With respect to any HELOC,  the maximum  Principal  Balance
permitted under the terms of the related Loan Agreement.

        Custodial Account: The account or accounts created and maintained by the
Servicer  pursuant to Section 3.02(b) of the Servicing  Agreement,  in which the
Servicer  shall deposit or cause to be deposited  certain  amounts in respect of
the Mortgage Loans.

     Custodial  Agreement:  Any Custodial  Agreement  among the  Custodian,  the
Indenture  Trustee,  the Issuer and the Servicer  relating to the custody of the
Mortgage Loans and the Related Documents.

        Custodian:  Escrow Bank USA, an industrial loan corporation  established
under the laws of the State of Utah,  and its  successors  and  assigns,  or any
successor  custodian for the Mortgage Files  appointed by the Indenture  Trustee
and reasonably acceptable to the Enhancer and the Servicer.

        Cut-Off Date:  June 1, 2000.

        Cut-Off Date  Principal  Balance:  With respect to any Initial  Mortgage
Loan or Subsequent Mortgage Loan, the unpaid principal balance thereof as of the
close of business on the last day of the Billing Cycle  immediately prior to the
Cut-Off Date or Subsequent Cut-Off Date, as the case may be.

     Default:  Any  occurrence  which is or with  notice or the lapse of time or
both would become an Event of Default.

                                        5
<PAGE>

        Deficiency Amount:  As defined in the Policy.

     Definitive Notes: The meaning specified in Section 4.06 of the Indenture.

     Deleted  Loan: A Mortgage  Loan replaced or to be replaced with an Eligible
Substitute Loan.

     Depositor:   Residential   Asset  Mortgage   Products,   Inc.,  a  Delaware
corporation, or its successor in interest.

        Depository: The Depository Trust Company or a successor appointed by the
Indenture  Trustee  with  the  approval  of the  Issuer.  Any  successor  to the
Depository shall be an organization  registered as a "clearing  agency" pursuant
to  Section  17A of the  Exchange  Act and  the  regulations  of the  Commission
thereunder.

     Depository  Participant:  A  Person  for  whom,  from  time  to  time,  the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.

        Determination  Date:  With respect to any Payment Date,  the 18th day of
the month in which  such  Payment  Date  occurs or if such day is not a Business
Day, the next succeeding Business Day.

        Distribution  Account: The account or accounts created and maintained by
the Certificate Paying Agent pursuant to Section 3.10(c) of the Trust Agreement.
The Certificate  Paying Agent will make all  distributions  on the  Certificates
from money on deposit in the Distribution Account.

     Draw: With respect to any HELOC, a borrowing by the related Mortgagor under
the related Loan Agreement.

        Draw Period: With respect to each HELOC, the period consisting of either
the first  five,  ten or fifteen  years  after the date of  origination  of such
HELOC, during which the related Mortgagor is permitted to make Draws.

        Due Date: With respect to the Mortgage Loans, the 15th day of the month.

        Eligible  Account:  An  account  that  is  any  of  the  following:  (i)
maintained  with a depository  institution  the short-term  debt  obligations of
which have been  rated by each  Rating  Agency in its  highest  rating  category
available,  or (ii) an account or accounts in a depository  institution in which
such accounts are fully insured to the limits established by the FDIC,  provided
that any deposits not so insured shall, to the extent  acceptable to each Rating
Agency,  as evidenced in writing,  be  maintained  such that (as evidenced by an
Opinion of Counsel  delivered to the Indenture  Trustee and each Rating  Agency)
the Indenture  Trustee have a claim with respect to the funds in such account or
a perfected  first  security  interest  against any  collateral  (which shall be
limited to Permitted Investments) securing such funds that is superior to claims
of any other  depositors or creditors of the depository  institution  with which
such account is maintained,  or (iii) an account or accounts  maintained  with a
depository  institution  or  trust  company,  as long  as its  short  term  debt
obligations are rated at least P-1 by Moody's, A-1+ by Standard & Poor's and F1,

                                        6

<PAGE>

if rated by Fitch (or the  equivalent),  and its long term debt  obligations are
rated at least A2 by  Moody's,  AA- by  Standard & Poor's  and AA-,  if rated by
Fitch (or the  equivalent),  or (iv) a  segregated  trust  account  or  accounts
maintained in the corporate trust division of a depository  institution or trust
company,  acting in its fiduciary  capacity,  or (v) an account or accounts of a
depository institution acceptable to each Rating Agency (as evidenced in writing
by each Rating Agency that use of any such account will not cause a Rating Event
(if determined without regard to the Policy).

        Eligible  Substitute Loan: A Mortgage Loan substituted by the Seller for
a Deleted Loan, which must, on the date of such substitution, as confirmed in an
Officers'   Certificate   delivered  to  the  Indenture  Trustee,  (i)  have  an
outstanding  principal balance,  after deduction of the principal portion of the
monthly  payment  due  in the  month  of  substitution  (or  in  the  case  of a
substitution  of more than one Mortgage  Loan for a Deleted  Mortgage  Loan,  an
aggregate outstanding principal balance, after such deduction), not in excess of
the  outstanding  principal  balance  of the  Deleted  Loan  (the  amount of any
shortfall to be deposited by the Seller in the Custodial Account in the month of
substitution);  (ii) comply with each  representation  and warranty set forth in
Section 3.1(b) of the Purchase  Agreement,  other than clauses  (viii),  (xiii),
(xiv),  (xxiv),  (xxv)(B)(1),   (xxv)(B)(2)  and  (xxvi),  as  of  the  date  of
substitution;  (iii) have a Loan Rate,  Net Loan Rate and Gross  Margin no lower
than and not more than 1% per annum higher than the Loan Rate, Net Loan Rate and
Gross Margin, respectively,  of the Deleted Loan as of the date of substitution;
(iv) have a CLTV at the time of  substitution no higher than that of the Deleted
Loan at the time of  substitution;  (v) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted Loan
and (vi) not be 30 days or more delinquent.

     Enhancer:  MBIA  Insurance  Corporation,   any  successor  thereto  or  any
replacement Enhancer substituted pursuant to the Indenture.

     Enhancer  Default:  Any failure by the Enhancer to make a payment  required
under the Policy in accordance with its terms.

     Enhancer  Optional  Deposit:  Amounts  deposited  by or on  behalf  of  the
Enhancer in the Note Payment Account,  other than Insured Amounts, to be applied
to the Term Notes.

        ERISA:  The Employee Retirement Income Security Act of 1974, as amended.

        Event  of  Default:  With  respect  to  the  Indenture,  any  one of the
following  events  (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment,  decree or order of any court or any order,  rule or regulation
of any administrative or governmental body):

(a) a default  in the  payment  of the  principal  of,  any  installment  of the
principal of or interest on any Note when the same becomes due and payable,  and
such default shall continue for a period of five days;

(b) there  occurs a default in the  observance  or  performance  in any material
respect of any covenant or agreement of the Issuer made in the Indenture, or any
representation  or  warranty  of the  Issuer  made  in the  Indenture  or in any
certificate  delivered pursuant hereto or in connection herewith proving to have
been  incorrect in any material  respect as of the time when the same shall have
been made that has a material adverse effect on the Noteholders or the Enhancer,
and  such  default  shall  continue  or not be  cured,  or the  circumstance  or

                                        7

<PAGE>


condition  in respect of which such  representation  or warranty  was  incorrect
shall not have been eliminated or otherwise cured, for a period of 30 days after
there shall have been given,  by registered or certified  mail, to the Issuer by
the Indenture Trustee or to the Issuer and the Indenture Trustee by the Enhancer
or the Noteholders of at least 25% of the aggregate Note Balance of the Notes, a
written notice  specifying such default or incorrect  representation or warranty
and  requiring  it to be remedied  and  stating  that such notice is a notice of
default hereunder;

(c) there  occurs the  filing of a decree or order for relief by a court  having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Trust Estate in an involuntary  case under any  applicable  federal or state
bankruptcy,  insolvency  or other  similar law now or  hereafter  in effect,  or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar  official of the Issuer or for any substantial part of the Trust Estate,
or ordering the  winding-up or  liquidation  of the Issuer's  affairs,  and such
decree  or  order  shall  remain  unstayed  and in  effect  for a  period  of 60
consecutive days; or

(d) there occurs the  commencement  by the Issuer of a voluntary  case under any
applicable  federal or state bankruptcy,  insolvency or other similar law now or
hereafter  in effect,  or the consent by the Issuer to the entry of an order for
relief in an  involuntary  case under any such law, or the consent by the Issuer
to the  appointment or taking  possession by a receiver,  liquidator,  assignee,
custodian,  trustee,  sequestrator or similar  official of the Issuer or for any
substantial part of the assets of the Trust Estate,  or the making by the Issuer
of any general  assignment  for the benefit of creditors,  or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of any
action by the Issuer in furtherance of any of the foregoing.

     Exchange  Act: The  Securities  Exchange Act of 1934,  as amended,  and the
rules and regulations promulgated thereunder.

     Excess  Spread:  With respect to each Loan Group,  the related Group Excess
Spread for such Loan Group.

        Excluded  Amount:  For any Payment  Date  during the Rapid  Amortization
Period,  all  Draws  made  to an  obligor  under  any  HELOC  during  the  Rapid
Amortization  Period which shall not be transferred to the Trust Estate, and the
portion of the  Principal  Collections  and Interest  Collections  for each Loan
Group for each  Collection  Period  allocated to such Excluded Amount based on a
pro rata  allocation  between  the  related  Excluded  Amount and the  Principal
Balance of such HELOC in proportion to the respective amounts  outstanding as of
the end of the calendar month preceding such Collection Period.

        Expenses:  The meaning specified in Section 7.02 of the Trust Agreement.

     Fannie Mae: Fannie Mae, formerly the Federal National Mortgage Association,
or any successor thereto.

     FDIC: The Federal Deposit Insurance Corporation or any successor thereto.

                                        8
<PAGE>

        Final Payment Date:  The Payment Date in June 2030.

     Fiscal Year:  The fiscal year of the Trust,  which shall end on December 31
of each year.

     Fitch: Fitch, Inc., or its successor in interest.

        Foreclosure  Profit:  With respect to a Liquidated  Mortgage  Loan,  the
amount,  if any,  by which (i) the  aggregate  of  Liquidation  Proceeds  net of
Liquidation  Expenses  exceeds  (ii) the  Principal  Balance of such  Liquidated
Mortgage Loan (plus accrued and unpaid  interest  thereon at the applicable Loan
Rate from the date  interest  was last paid  through  the date of receipt of the
final  Liquidation  Proceeds)  immediately  prior to the final  recovery  of the
related Liquidation Proceeds.

     Freddie  Mac:  Freddie  Mac,   formerly  the  Federal  Home  Loan  Mortgage
Corporation, or any successor thereto.

     Funding Account: The account established and maintained pursuant to Section
3.18 of the Servicing Agreement.

     GAAP: Generally accepted accounting principles.

        Grant:  Pledge,  bargain,  sell,  warrant,  alienate,  remise,  release,
convey, assign, transfer,  create, and grant a lien upon and a security interest
in and right of set-off against,  deposit,  set over and confirm pursuant to the
Indenture.  A Grant of the  Collateral  or of any other  agreement or instrument
shall include all rights,  powers and options (but none of the  obligations)  of
the granting party  thereunder,  including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such  collateral or other  agreement or  instrument  and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other  agreements,  to exercise  all rights and  options,  to
bring proceedings in the name of the granting party or otherwise,  and generally
to do and receive  anything that the granting  party is or may be entitled to do
or receive thereunder or with respect thereto.

     Gross Margin:  With respect to any HELOC,  the  percentage set forth as the
"Margin" for such HELOC on the Mortgage Loan Schedule.

        Group Excess Spread: With respect to any Payment Date and Loan Group and
without  taking into account any Draw on the Policy for such Payment  Date,  the
excess,  if any, of (i) Interest  Collections for the related  Collection Period
with  respect to Mortgage  Loans in such Loan Group over (ii) the sum of (x) the
portion of the  Servicing  Fee and the premium for the Policy  allocable to such
Loan Group for such Payment Date,  and (y) the amounts paid on such Payment Date
to the Noteholders of the Term Notes and the Variable  Funding Notes pursuant to
Section 3.05(a)(i) of the Indenture.

     GMAC:  General  Motors  Acceptance  Corporation,  and  its  successors  and
assigns.

        GMACM:  GMAC Mortgage Corporation, and its successors and assigns.

                                        9

<PAGE>

     HEL:  Each  closed-end,  fixed rate home equity loan  included in the Trust
Estate.

     HELOC: Each adjustable-rate,  home equity revolving line of credit included
in the Trust Estate.

     Indemnified  Party:  The  meaning  specified  in Section  7.02 of the Trust
Agreement.

     Indenture:  The indenture  dated as of June 29, 2000 between the Issuer and
the Indenture Trustee.

     Indenture Trustee:  Norwest Bank Minnesota,  National Association,  and its
successors and assigns or any successor  indenture trustee appointed pursuant to
the terms of the Indenture.

        Independent: When used with respect to any specified Person, such Person
(i) is in fact  independent of the Issuer,  any other obligor on the Notes,  the
Seller,  the Depositor and any Affiliate of any of the foregoing  Persons,  (ii)
does not have any direct financial  interest or any material indirect  financial
interest in the Issuer, any such other obligor, the Seller, the Depositor or any
Affiliate of any of the foregoing  Persons and (iii) is not  connected  with the
Issuer,  any such other obligor,  the Seller,  the Depositor or any Affiliate of
any of the foregoing  Persons as an officer,  employee,  promoter,  underwriter,
trustee, partner, director or person performing similar functions.

        Independent Certificate: A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances  described in, and otherwise complying
with, the applicable requirements of Section 10.01 of the Indenture,  made by an
Independent  appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.

     Index:  With respect to any HELOC, the prime rate from time to time for the
adjustment of the Loan Rate set forth as such on the related Loan Agreement.

        Initial Certificate Balance: $0.

        Initial Mortgage Loans: The HELs and HELOCs initially transferred by the
Depositor  to the Issuer on the Closing  Date,  which are listed on the Mortgage
Loan Schedule on such date.

        Initial Aggregate Term Note Balance:  $516,475,000.

        Initial Class A-1 Term Note Balance:  $451,475,000.

        Initial Class A-2 Term Note Balance:  $65,000,000.

     Initial  Variable  Funding  Balance:  With  respect to Class I, $0 and with
respect to Class II, $0.

        Insolvency Event: With respect to a specified Person,  (a) the filing of
a decree or order for relief by a court having  jurisdiction  in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any  applicable  bankruptcy,  insolvency  or other similar law now or

                                        10
<PAGE>

hereafter in effect, or appointing a receiver, liquidator,  assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation of such Person's
affairs,  and such decree or order  shall  remain  unstayed  and in effect for a
period of 60  consecutive  days;  or (b) the  commencement  by such  Person of a
voluntary case under any applicable bankruptcy,  insolvency or other similar law
now or  hereafter  in effect,  or the  consent by such Person to the entry of an
order for relief in an  involuntary  case under any such law,  or the consent by
such  Person  to  the  appointment  of  or  taking  possession  by  a  receiver,
liquidator,  assignee,  custodian, trustee, sequestrator or similar official for
such Person or for any substantial  part of its property,  or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture  Trustee shall have notice)
of its  inability  to pay its debts  generally,  or the adoption by the Board of
Directors  or managing  member of such Person of a resolution  which  authorizes
action by such Person in furtherance of any of the foregoing.

        Insurance  Agreement:  The Insurance Agreement dated as of June 1, 2000,
among the  Servicer,  the  Seller,  the  Depositor,  the Issuer,  the  Indenture
Trustee,  the Owner  Trustee and the  Enhancer,  including  any  amendments  and
supplements thereto.

        Insurance  Proceeds:  Proceeds  paid  by any  insurer  (other  than  the
Enhancer)  pursuant to any insurance  policy  covering a Mortgage Loan which are
required to be remitted to the Servicer,  or amounts  required to be paid by the
Servicer  pursuant to the next to last sentence of Section 3.04 of the Servicing
Agreement, net of any component thereof (i) covering any expenses incurred by or
on behalf of the Servicer in connection with obtaining such proceeds,  (ii) that
is applied to the restoration or repair of the related Mortgaged Property, (iii)
released to the related  Mortgagor  in  accordance  with the  Servicer's  normal
servicing  procedures  or (iv)  required  to be paid to any holder of a mortgage
senior to such Mortgage Loan.

        Insured Amount:  As defined in the Policy.

        Interest  Collections:  With respect to any Payment Date, the sum of all
payments  by or on  behalf of  Mortgagors  and any  other  amounts  constituting
interest (including without limitation such portion of Insurance  Proceeds,  Net
Liquidation  Proceeds and  Repurchase  Prices as is allocable to interest on the
applicable  Mortgage  Loan) as is paid by the Seller or the Servicer  (including
any  optional  servicing  advance) or is  collected  by the  Servicer  under the
Mortgage Loans,  exclusive of the pro rata portion  thereof  attributable to any
Excluded  Amounts,  and reduced by the Servicing Fee for the related  Collection
Period  and by any fees  (including  annual  fees) or late  charges  or  similar
administrative fees paid by Mortgagors during the related Collection Period. The
terms of the related Loan Agreement  shall determine the portion of each payment
in respect of such Mortgage Loan that constitutes principal or interest.

        Interest  Coverage Amount:  The amount to be paid from proceeds received
from the sale of the Notes for deposit  into the  Capitalized  Interest  Account
pursuant to Section 3.19 of the Servicing  Agreement on the Closing Date,  which
amount  initially  shall be, and  thereafter,  shall be the amount  computed  in
accordance with Section 3.19.

                                        11
<PAGE>

        Interest Period:  With respect to any Payment Date (other than the first
Payment Date), the period beginning on the preceding  Payment Date and ending on
the day preceding  such Payment Date, and in the case of the first Payment Date,
the period  beginning  on the Closing Date and ending on the day  preceding  the
first Payment Date.

        Interest Rate Adjustment  Date: With respect to each HELOC,  the date or
dates on which the Loan Rate is adjusted  in  accordance  with the related  Loan
Agreement.

        Interest Shortfall:  On any Payment Date for which the related Note Rate
for any Class of Term Notes has been  determined  pursuant to clause (ii) of the
definition  of Note Rate,  the excess of (a) the amount of  interest  that would
have accrued on such Class of Term Notes during the related  Interest Period had
such amount been  determined  pursuant to clause (i) of the  definition  of Note
Rate (but not at a rate in excess of 14.00%  per  annum)  over (b) the  interest
actually  accrued on such  Class of Term  Notes  during  such  Interest  Period.
Interest  Shortfalls will not be included as interest payments on the Term Notes
for such Payment  Date and such amount will accrue  interest at the related Note
Rate (as adjusted  from time to time) and will be paid on future  Payment  Dates
only to the extent funds are available  therefor as set forth in Section 3.05(a)
of the Indenture.

     Issuer or Trust:  The GMACM Home  Equity  Loan Trust  2000-HE2,  a Delaware
business trust, or its successor in interest.

        Issuer Order or Issuer Request: A written order or request signed in the
name of the Issuer by any one of its  Authorized  Officers and  delivered to the
Indenture Trustee.

        LIBOR: As to any Interest Period, (a) for any Interest Period other than
the first Interest  Period,  the rate for United States dollar  deposits for one
month that  appears on the Telerate  Screen Page 3750 as of 11:00 a.m.,  London,
England  time,  on the second LIBOR  Business Day prior to the first day of that
Interest Period or (b) with respect to the first Interest  Period,  the rate for
United States dollar  deposits for one month that appears on the Telerate Screen
Page 3750 as of 11:00 a.m., London,  England time, two LIBOR Business Days prior
to the Closing Date. If such rate does not appear on such page (or other page as
may replace that page on that service,  or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be reasonably
selected by the Indenture  Trustee after  consultation  with the Servicer),  the
rate will be the Reference Bank Rate. If no such  quotations can be obtained and
no  Reference  Bank Rate is  available,  LIBOR will be LIBOR  applicable  to the
preceding Payment Date.

        LIBOR  Business  Day:  Any day other than (i) a Saturday  or a Sunday or
(ii) a day on which banking  institutions in the city of London,  England or New
York, New York are required or authorized by law to be closed.

        Lien: Any mortgage,  deed of trust, pledge,  conveyance,  hypothecation,
assignment,  participation, deposit arrangement, encumbrance, lien (statutory or
other),  preference,  priority right or interest or other security  agreement or
preferential  arrangement of any kind or nature whatsoever,  including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  lease having  substantially  the same  economic  effect as any of the

                                        12

<PAGE>

foregoing  and the filing of any financing  statement  under the UCC (other than
any  such  financing  statement  filed  for  informational   purposes  only)  or
comparable law of any  jurisdiction to evidence any of the foregoing;  provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.

        Liquidated Mortgage Loan: With respect to any Payment Date, any Mortgage
Loan in respect of which the Servicer has  determined,  in  accordance  with the
servicing procedures specified in the Servicing Agreement,  as of the end of the
related Collection Period that  substantially all Liquidation  Proceeds which it
reasonably  expects to recover,  if any, with respect to the  disposition of the
related REO Property have been recovered.

        Liquidation Expenses: All out-of-pocket expenses (exclusive of overhead)
incurred by or on behalf of the Servicer in connection  with the  liquidation of
any Mortgage Loan and not recovered under any insurance policy,  including legal
fees  and  expenses,  any  unreimbursed  amount  expended  (including,   without
limitation,  amounts  advanced to correct defaults on any mortgage loan which is
senior to such Mortgage  Loan and amounts  advanced to keep current or pay off a
mortgage loan that is senior to such  Mortgage  Loan)  respecting  such Mortgage
Loan and any  related and  unreimbursed  expenditures  for real estate  property
taxes or for property  restoration,  preservation or insurance  against casualty
loss or damage.

        Liquidation  Loss  Amount:  With  respect  to any  Payment  Date and any
Mortgage Loan in a Loan Group that became a Liquidated  Mortgage Loan during the
related Collection  Period, the unrecovered  portion of the Principal Balance of
such Mortgage Loan at the end of such Collection Period,  after giving effect to
the Net Liquidation Proceeds applied in reduction of such Principal Balance.

        Liquidation  Proceeds:  Proceeds  (including  Insurance Proceeds but not
including amounts drawn under the Policy) if any received in connection with the
liquidation  of any  Mortgage  Loan or related  REO  Property,  whether  through
trustee's sale, foreclosure sale or otherwise.

        Loan  Agreement:  With respect to a HEL, the  promissory  note, or, with
respect to a HELOC,  the credit  line  agreement,  pursuant to which the related
Mortgagor  agrees to pay the indebtedness  evidenced  thereby and secured by the
related Mortgage as modified or amended.

        Loan Group:  Each of Loan Group I and Loan Group II.

        Loan  Group I: The  HELOCs  and HELs  identified  on the  Mortgage  Loan
Schedule as being assigned to Loan Group I.

        Loan  Group II:  The HELOCs and HELs  identified  on the  Mortgage  Loan
Schedule as being assigned to Loan Group II.

     Loan Rate:  With  respect to any  Mortgage  Loan and any day, the per annum
rate of interest applicable under the related Loan Agreement.

        Lost Note  Affidavit:  With respect to any Mortgage Loan as to which the
original Loan Agreement has been  permanently lost or destroyed and has not been
replaced,  an  affidavit  from the  Seller  certifying  that the  original  Loan
Agreement  has been lost,  misplaced or destroyed  (together  with a copy of the
related Loan Agreement, if available).

                                        13
<PAGE>

        Managed  Amortization  Event:  The  occurrence  of any date prior to the
commencement of the Managed  Amortization  Period on which the amount on deposit
in the Funding Account equals or exceeds $10,000,000.

        Managed  Amortization  Period: The period beginning on the first Payment
Date following the end of the related Revolving Period and ending on the earlier
of (i) December 31, 2005 and (ii) the occurrence of a Rapid Amortization Event.

     Maximum  Loan Rate:  With  respect to each  HELOC,  the  maximum  loan rate
thereon specified in the related Loan Agreement.

        Maximum Variable Funding Balance:  Shall mean $75,000,000.

     Minimum Monthly  Payment:  With respect to any Mortgage Loan and any month,
the minimum amount required to be paid by the related Mortgagor in such month.

        Moody's:  Moody's Investors Service, Inc., or its successor in interest.

        Mortgage:  The mortgage,  deed of trust or other  instrument  creating a
first or second  lien on an  estate  in fee  simple  interest  in real  property
securing a Mortgage Loan.

        Mortgage File: The file containing the Related Documents pertaining to a
particular  Mortgage  Loan and any  additional  documents  required  to be added
thereto pursuant to the Purchase Agreement or the Servicing Agreement.

        Mortgage Loan Schedule:  The initial  schedule of Initial Mortgage Loans
as of the Cut-Off Date set forth in Exhibit A of the Servicing Agreement, and as
of each Subsequent  Cut-Off Date, any Subsequent  Mortgage Loans, which schedule
sets forth as to each Mortgage Loan (i) the Cut-Off Date Principal Balance, (ii)
in the case of a HELOC, the Credit Limit and Gross Margin, (iii) the name of the
related  Mortgagor,  (iv) in the case of a HELOC, the Maximum Loan Rate, if any,
(v) the loan number,  (vi) the lien  position of the related  Mortgage and (vii)
the Loan Group into which such Mortgage Loan has been assigned.

        Mortgage Loans:  At any time, all Initial  Mortgage Loans and Subsequent
Mortgage Loans,  including Additional  Balances,  if any, that have been sold to
the  Issuer  pursuant  to,  in the case of  Initial  Mortgage  Loans,  the Trust
Agreement,  or, in the case of Subsequent  Mortgage Loans, a Subsequent Transfer
Agreement,  together with all monies due or become due thereunder or the Related
Documents, and that remain subject to the terms thereof.

     Mortgaged Property:  The underlying  property,  including real property and
improvements thereon, securing a Mortgage Loan.

        Mortgagor:  The obligor or obligors under a Loan Agreement.


                                        14
<PAGE>

        Net Liquidation Proceeds:  With respect to any Liquidated Mortgage Loan,
Liquidation  Proceeds net of Liquidation  Expenses minus the pro rata portion of
such amount that is  attributable  to any Excluded Amount (but not including the
portion,  if any,  of such amount that  exceeds  the  Principal  Balance of such
Mortgage  Loan at the end of the  Collection  Period  immediately  preceding the
Collection  Period in which such  Mortgage  Loan  became a  Liquidated  Mortgage
Loan).

        Net Loan Rate: With respect to any Payment Date and any Loan Group,  the
weighted  average of the Loan Rates of the Mortgage  Loans in such Loan Group as
of the first day of the  calendar  month in which the  related  Interest  Period
begins,  net of the premium  rate on the  Policy,  the  Servicing  Fee Rate and,
beginning on the thirteenth  Payment Date, 0.50% (50 basis points),  adjusted to
an effective rate reflecting  interest calculated on the basis of a 360-day year
and the actual number of days in such Interest Period.

        Net Principal Collections: With respect to any Payment Date and any Loan
Group, the excess, if any, of Principal Collections for such Loan Group for such
Payment Date over the aggregate amount of Additional Balances created during the
related  Collection  Period,  conveyed  to the Issuer and  assigned to such Loan
Group.

     Net Worth: As of any date of determination,  the net worth of GMACM and its
consolidated subsidiaries, as determined in accordance with GAAP.

     Note Balance: The Term Note Balance or the Variable Funding Balance, as the
context may require.

        Note Owner or Owner:  The Beneficial Owner of a Note.

        Note Payment Account:  The account  established by the Indenture Trustee
pursuant to Section  8.02 of the  Indenture  and Section  5.01 of the  Servicing
Agreement.  Amounts deposited in the Note Payment Account will be distributed by
the Indenture Trustee in accordance with Section 3.05 of the Indenture.

        Note Rate: As to the Notes, the following rates:

               Class A-1 Term Notes:  a floating  rate equal to the least of (i)
        LIBOR plus 0.22% per annum (or, for any Interest Period commencing after
        the first Payment Date on which the aggregate  Pool Balance is less than
        10% of the Pool  Balance as of the  Closing  Date,  LIBOR plus 0.44% per
        annum), (ii) the related Net Loan Rate and (iii) 14.00% per annum;

               Class A-2 Term Notes:  a floating  rate equal to the least of (i)
        LIBOR plus 0.29% per annum (or, for any Interest Period commencing after
        the first Payment Date on which the aggregate  Pool Balance is less than
        10% of the Pool  Balance as of the  Closing  Date,  LIBOR plus 0.58% per
        annum), (ii) the related Net Loan Rate and (iii) 14.00% per annum; and

               Variable  Funding Notes or any Capped  Funding Notes: a per annum
        floating rate equal to the least of (i) LIBOR plus a margin agreed to in
        writing  between the Noteholder of such Note and the Indenture  Trustee,
        which margin,  subject to the prior written  approval of the Enhancer in

                                        15

<PAGE>

        its  sole  discretion,   shall  not  significantly   exceed  the  margin
        applicable  to the Term Notes (or,  for any Interest  Period  commencing
        after the first Payment Date on which the aggregate Pool Balance is less
        than 10% of the Pool  Balance as of the Closing  Date,  LIBOR plus twice
        the agreed upon margin),  (ii) the related Net Loan Rate for the related
        Loan Group or Groups and (iii) 14.00% per annum.  Such Noteholders shall
        give  prior  written  notice  to the  Rating  Agencies  of any  rate  so
        determined.

     Note Register:  The register  maintained by the Note Registrar in which the
Note Registrar shall provide for the  registration of Notes and of transfers and
exchanges of Notes.

      Note Registrar:  The Indenture Trustee, in its capacity as Note Registrar.

        Noteholder:  The Person in whose name a Note is  registered  in the Note
Register,  except that, any Note  registered in the name of the  Depositor,  the
Issuer or the Indenture  Trustee or any Affiliate of any of them shall be deemed
not to be  outstanding  and the  registered  holder  will  not be  considered  a
Noteholder for purposes of giving any request, demand, authorization, direction,
notice, consent or waiver under the Indenture or the Trust Agreement;  provided,
that in determining  whether the Indenture Trustee shall be protected in relying
upon any such request,  demand,  authorization,  direction,  notice,  consent or
waiver,  only Notes that the Indenture  Trustee or the Owner Trustee knows to be
so owned shall be so disregarded. Owners of Notes that have been pledged in good
faith may be regarded as Noteholders if the pledgee  thereof  establishes to the
satisfaction of the Indenture  Trustee or the Owner Trustee such pledgee's right
so to act with  respect to such Notes and that such  pledgee is not the  Issuer,
any other obligor on the Notes or any Affiliate of any of the foregoing Persons.

     Notes:  The Term Notes or the Variable  Funding  Notes,  as the context may
require.

        Officer's  Certificate:  With  respect to the  Servicer,  a  certificate
signed by the President,  Managing Director,  a Director, a Vice President or an
Assistant  Vice  President,  of the  Servicer  and  delivered  to the  Indenture
Trustee.  With respect to the Issuer,  a  certificate  signed by any  Authorized
Officer of the  Issuer,  under the  circumstances  described  in, and  otherwise
complying  with, the applicable  requirements of Section 10.01 of the Indenture,
and  delivered  to  the  Indenture  Trustee.  Unless  otherwise  specified,  any
reference in the Indenture to an Officer's  Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.

        Opinion  of  Counsel:  A  written  opinion  of  counsel  of a  law  firm
reasonably  acceptable to the recipient thereof.  Any Opinion of Counsel for the
Servicer  may be  provided by in-house  counsel for the  Servicer if  reasonably
acceptable.

        Original  Pre-Funded  Amount:  The amount deposited from the proceeds of
the sale of the  Securities  into the  Pre-Funding  Account on the Closing Date,
which amount is $129,118,495.28.

     Outstanding:  With respect to the Notes,  as of the date of  determination,
all Notes theretofore executed, authenticated and delivered under this Indenture
except:

                                        16

<PAGE>

               (i)  Notes  theretofore   cancelled  by  the  Note  Registrar  or
          delivered to the Indenture Trustee for cancellation; and

               (ii) Notes in  exchange  for or in lieu of which other Notes have
        been  executed,  authenticated  and delivered  pursuant to the Indenture
        unless proof satisfactory to the Indenture Trustee is presented that any
        such Notes are held by a holder in due course;

provided,  however,  that for purposes of effectuating  the Enhancer's  right of
subrogation  as set forth in Section 4.12 of the Indenture  only, all Notes that
have been paid  with  funds  provided  under  the  Policy  shall be deemed to be
Outstanding until the Enhancer has been reimbursed with respect thereto.
        Overcollateralization  Amount:  With  respect  to any Loan Group and any
Payment Date, the amount (but not less than zero),  if any, by which (a) the sum
of the outstanding Principal Balance of the Mortgage Loans in such Loan Group as
of the  close of  business  on the last day of the  related  Collection  Period,
together  with the related  portion of the  property of the Issuer  allocable to
such Loan  Group  (including  the  allocable  portion of the  Pre-Funded  Amount
(excluding  any  investment  earnings  thereon)  and  amounts  on deposit in the
Funding  Account  (excluding  any investment  earnings  thereon) and the Reserve
Account),  exceeds  (b) the Note  Balance of the  related  Class of Term  Notes,
together  with,  the portion,  if any, of the Variable  Funding Notes related to
such Loan Group.

        Overcollateralization  Target  Amount:  As to any Loan Group and Payment
Date prior to the thirtieth  (30th)  Payment Date, an amount equal to the sum of
(i)  1.75% of the Note  Balance  of the  related  Class of Term  Notes as of the
Closing Date,  together with the portion,  if any, of the Variable Funding Notes
related  to such Loan  Group  (after  taking  into  account  the  payment of the
Principal Distribution Amount for such Loan Group on such Payment Date) and (ii)
100% of the Principal Balances of all Mortgage Loans in such Loan Group that are
180 or more  days  contractually  delinquent  as of the last day of the  related
Collection  Period,  and as to any Loan Group and  Payment  Date on or after the
thirtieth  (30th)  Payment Date, an amount equal to the lesser of (x) the amount
described  in  clauses  (i) and  (ii)  and (y) the sum of (1)  3.50% of the Pool
Balance for the related Loan Group and (2) 100% of the Principal Balances of all
Mortgage  Loans  in such  Loan  Group  that are 180 or more  days  contractually
delinquent as of the last day of the related Collection Period.

     Owner  Trust:  GMACM  Home  Equity  Loan  Trust  2000-HE2,  created  by the
Certificate of Trust pursuant to the Trust Agreement.

        Owner Trustee:  Wilmington Trust Company, not in its individual capacity
but solely as owner  trustee,  and its  successors  and assigns or any successor
Owner Trustee appointed pursuant to the terms of the Trust Agreement.

     Paying Agent:  Any paying agent or co-paying  agent  appointed  pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.

     Payment Date: The 25th day of each month,  or if such day is not a Business
Day, then the next Business Day.

                                        17
<PAGE>


        Percentage  Interest:  With  respect to any Note and Payment  Date,  the
percentage  obtained by dividing the Note Balance of such Note by the  aggregate
Note  Balance  of all Notes  prior to such  Payment  Date.  With  respect to any
Certificate and any Payment Date, the Percentage  Interest stated on the face of
such Certificate.

        Permitted Investments:  One or more of the following:

        (i)  obligations  of or  guaranteed  as to principal and interest by the
United States or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States;

        (ii) repurchase  agreements on obligations specified in clause (i) above
maturing not more than one month from the date of acquisition thereof; provided,
that  the  unsecured  obligations  of the  party  agreeing  to  repurchase  such
obligations  are  at the  time  rated  by  each  Rating  Agency  in its  highest
short-term rating category available;

        (iii) federal funds,  certificates  of deposit,  demand  deposits,  time
deposits and bankers' acceptances (which shall each have an original maturity of
not more  than 90 days and,  in the case of  bankers'  acceptances,  shall in no
event have an original maturity of more than 365 days or a remaining maturity of
more than 30 days)  denominated in United States dollars of any U.S.  depository
institution or trust company incorporated under the laws of the United States or
any state thereof or of any domestic branch of a foreign depository  institution
or  trust  company;  provided  that  the  debt  obligations  of such  depository
institution  or trust  company  (or,  if the only  Rating  Agency is  Standard &
Poor's,  in the case of the  principal  depository  institution  in a depository
institution  holding  company,  debt  obligations of the depository  institution
holding  company)  at the date of  acquisition  thereof  have been rated by each
Rating Agency in its highest short-term rating category available;  and provided
further,  that if the  only  Rating  Agency  is  Standard  &  Poor's  and if the
depository or trust company is a principal  subsidiary of a bank holding company
and the debt  obligations  of such  subsidiary  are not  separately  rated,  the
applicable  rating  shall  be that of the bank  holding  company;  and  provided
further,  that if the only Rating  Agency is Standard & Poor's and the  original
maturity  of such  short-term  obligations  of a  domestic  branch  of a foreign
depository  institution  or trust company shall exceed 30 days,  the  short-term
rating of such institution shall be A-1+;

        (iv) commercial paper (having  original  maturities of not more than 365
days) of any corporation incorporated under the laws of the United States or any
state  thereof  which on the date of  acquisition  has been rated by each Rating
Agency in its highest short-term rating category available;  provided, that such
commercial paper shall have a remaining maturity of not more than 30 days;

        (v) a money  market  fund or a qualified  investment  fund rated by each
Rating  Agency in one of its two highest  long-term  rating  category  available
including any fund advised by the Indenture Trustee or an Affiliate thereof;

        (vi) other  obligations or securities that are acceptable to each Rating
Agency as a Permitted  Investment  hereunder  and will not cause a Rating Event,
and which are  acceptable  to the Enhancer,  as evidenced in writing;  provided,
that if the  Servicer  or any other  Person  controlled  by the  Servicer is the

                                        18
<PAGE>

issuer or the obligor of any  obligation  or security  described  in this clause
(vi),  such  obligation  or security must have an interest rate or yield that is
fixed or is variable  based on an  objective  index that is not  affected by the
rate or amount of losses on the Mortgage Loans; and

        (vii)  GMAC   Variable   Denomination   Adjustable   Rate  Demand  Notes
constituting  unsecured,  senior debt  obligations of General Motors  Acceptance
Corporation  as  outlined  in the  prospectus  dated June 17, 1998 rated by each
Rating Agency in its highest short-term rating category available;

provided,  however,  that no  instrument  shall be a Permitted  Investment if it
represents,  either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest  payments derived from  obligations  underlying such instrument and the
principal and interest payments with respect to such instrument  provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations  References  herein to the highest  rating  available  on  unsecured
long-term debt shall mean AAA in the case of Standard & Poor's,  Aaa in the case
of  Moody's  and AAA in the case of  Fitch,  if rated by Fitch,  and  references
herein  to the  highest  rating  available  on  unsecured  commercial  paper and
short-term debt obligations shall mean A-1 in the case of Standard & Poor's, P-1
in the case of Moody's and F1 in the case of Fitch, if rated by Fitch.

        Person: Any legal individual,  corporation,  partnership, joint venture,
association,    joint-stock   company,   limited   liability   company,   trust,
unincorporated organization or government or any agency or political subdivision
thereof.

        Plan:  The meaning specified in Section 3.05 of the Trust Agreement.

     Plan Assets: The meaning specified in Section 3.05 of the Trust Agreement.

     Policy: The Note Guaranty Insurance Policy #32632,  dated as of the Closing
Date, issued by the Enhancer.

     Policy Draw Amount: With respect to any Payment Date, the Insured Amount.

     Pool Balance:  With respect to any date, the aggregate Principal Balance of
all  Mortgage  Loans as of such date and  (during  the  Pre-Funding  Period) the
Pre-Funded Amount.

        Pre-Funded Amount: With respect to any date of determination  during the
Pre-Funding Period, the amount on deposit in the Pre-Funding Account.

        Pre-Funding  Account: The account established and maintained pursuant to
Section 3.17 of the Servicing Agreement.

        Pre-Funding  Period: The period commencing on the Closing Date until the
earliest  of (i) the date on which the  amount  on  deposit  in the  Pre-Funding
Account is less than $50,000, (ii) September 27, 2000 or (iii) the occurrence of
a Rapid Amortization Event.

                                        19
<PAGE>

        Predecessor  Note:  With  respect  to  any  Note,  every  previous  Note
evidencing  all or a portion  of the same debt as that  evidenced  by such Note;
and, for the purpose of this definition,  any Note  authenticated  and delivered
under Section 4.03 of the Indenture in lieu of a mutilated,  lost,  destroyed or
stolen Note shall be deemed to evidence the same debt as such  mutilated,  lost,
destroyed or stolen Note.

        Principal  Balance:  With  respect to any  Mortgage  Loan,  other than a
Liquidated  Mortgage Loan, and as of any day, the related Cut-Off Date Principal
Balance, plus (i) with respect to a HELOC, any Additional Balances in respect of
such  HELOC  conveyed  to the  Trust,  minus (ii) all  collections  credited  as
principal in respect of any such Mortgage  Loan in  accordance  with the related
Loan Agreement  (except,  with respect to a HELOC, any such collections that are
allocable  to any Excluded  Amount) and applied in  reduction  of the  Principal
Balance  thereof.  For purposes of this definition,  a Liquidated  Mortgage Loan
shall be deemed to have a Principal  Balance equal to the  Principal  Balance of
the  related  Mortgage  Loan   immediately   prior  to  the  final  recovery  of
substantially all related  Liquidation  Proceeds and a Principal Balance of zero
thereafter.

     Principal  Collections:  With respect to any Payment Date and Mortgage Loan
in a Loan Group, the aggregate of the following amounts:

        (i) the total  amount of  payments  made by or on behalf of the  related
Mortgagor,  received and applied as payments of principal on such  Mortgage Loan
during the related Collection Period, as reported by the Servicer or the related
Subservicer;

        (ii) any  Liquidation  Proceeds  allocable  as a recovery  of  principal
received in connection  with such  Mortgage  Loan during the related  Collection
Period;

        (iii) if such Mortgage Loan was  repurchased  by the Seller  pursuant to
the  Purchase  Agreement  during  the  related  Collection  Period,  100% of the
Principal  Balance  thereof as of the date of such  purchase and if any Eligible
Substitute  Loan is  substituted  for a Deleted Loan,  the related  Substitution
Adjustment Amount; and

        (iv) any other  amounts  received  as  payments  on or  proceeds of such
Mortgage Loan during the Collection  Period,  to the extent applied in reduction
of the Principal Balance thereof;

provided,  that Principal  Collections shall be reduced by any amounts withdrawn
from the  Custodial  Account  pursuant to clauses (c),  (i), (j), (l) and (m) of
Section 3.03 of the  Servicing  Agreement,  and shall not include any portion of
such amounts attributable to any Excluded Amount in respect of any Mortgage Loan
that are allocable to principal of such Mortgage Loan and not otherwise excluded
from the amounts specified in (i) through (iv) above.

        Principal  Distribution  Amount: For any Payment Date and any Loan Group
(i) during the  Revolving  Period,  the  amount,  if any,  transferred  from the
Pre-Funding  Account to the Note  Payment  Account  related to such Loan  Group,
pursuant to Section 3.17(b) of the Servicing Agreement,  (ii) during the Managed
Amortization  Period,  Net Principal  Collections for the Mortgage Loans in such
Loan  Group,  and  (iii)  during  the  Rapid  Amortization   Period,   Principal
Collections  for the Mortgage  Loans in such Loan Group;  provided,  that on any
Payment Date during the Amortization Periods, the Principal  Distribution Amount
for such Payment Date and Loan Group shall include,  from the Excess Spread,  to
the extent available, or, to the extent not available, from a draw on the Policy
(but only to the extent the Overcollateralization  Amount for such Loan Group is
zero), an amount equal to the aggregate of the Liquidation Loss Amounts for such
Payment Date and Loan Group.

                                        20
<PAGE>

     Proceeding:  Any  suit  in  equity,  action  at law or  other  judicial  or
administrative proceeding.

     Program Guide:  The GMACM Home Equity  Servicing  Guidelines,  as in effect
from time to time.

     Prospectus  Supplement:  The  prospectus  supplement  dated June 26,  2000,
relating to the Term Notes.

     Purchase  Agreement:  The mortgage loan purchase agreement dated as of June
29, 2000, among the Seller, the Purchaser, the Issuer and the Indenture Trustee.

     Purchase  Price:  The meaning  specified in Section  2.6(a) of the Purchase
Agreement.

     Purchaser:  Residential Asset Mortgage  Products,  Inc., as purchaser under
the Purchase Agreement.

        Rapid Amortization Event:  Any one of the following events:

(a) the  failure on the part of the  Seller  (i) to make any  payment or deposit
required to be made under the Purchase Agreement within five Business Days after
the date such  payment or deposit is required to be made;  or (ii) to observe or
perform in any material  respect any other covenants or agreements of the Seller
set forth in the Purchase  Agreement,  which failure continues  unremedied for a
period of 60 days after written notice and such failure materially and adversely
affects the interests of the Securityholders or the Enhancer; provided, however,
that a Rapid  Amortization  Event  shall not be deemed to have  occurred  if the
Seller  has  repurchased  or caused to be  repurchased  or  substituted  for the
affected  Mortgage Loan during such period (or within an additional 60 days with
the consent of the Indenture  Trustee and the  Enhancer) in accordance  with the
provisions of the Indenture;

(b) if any  representation  or  warranty  made  by the  Seller  in the  Purchase
Agreement  proves to have been  incorrect in any material  respect when made and
which continues to be incorrect in any material  respect for a period of 45 days
with  respect to any  representation  or  warranty of the Seller made in Section
3.1(a) of the Purchase  Agreement or 90 days with respect to any  representation
or warranty  made in Section  3.1(b) of the  Purchase  Agreement  after  written
notice  and as a result of which the  interests  of the  Securityholders  or the
Enhancer are materially and adversely affected;  provided, however, that a Rapid
Amortization  Event  shall not be  deemed to have  occurred  if the  Seller  has
repurchased or caused to be repurchased or substituted for the affected Mortgage
Loan during such period (or within an additional 60 days with the consent of the
Indenture  Trustee and the  Enhancer) in accordance  with the  provisions of the
Indenture;

(c) the entry  against  the  Seller of a decree or order by a court or agency or
supervisory  authority having  jurisdiction  under Title 11 of the United States

                                        21

<PAGE>


Code or any other applicable  federal or state  bankruptcy,  insolvency or other
similar  law,  or  if  a  receiver,   assignee  or  trustee  in   bankruptcy  or
reorganization,  liquidator,  sequestrator  or similar  official shall have been
appointed  for or taken  possession  of the  Servicer or its  property,  and the
continuance  of any such decree or order  unstayed and in effect for a period of
60 consecutive days;

(d) the Seller shall  voluntarily  submit to  Proceedings  under Title 11 of the
United  States  Code  or any  other  applicable  federal  or  state  bankruptcy,
insolvency  or other  similar law  relating to the Seller or the Issuer or of or
relating  to all or  substantially  all of its  property;  or the  Seller or the
Issuer shall admit in writing its  inability to pay its debts  generally as they
become due, file a petition to take  advantage of any  applicable  insolvency or
reorganization  statute,  make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations;

     (e) the Issuer shall become  subject to regulation by the  Commission as an
investment  company within the meaning of the Investment Company Act of 1940, as
amended;

     (f) a Servicing  Default shall occur and be unremedied  under the Servicing
Agreement and a qualified successor Servicer shall not have been appointed;

(g) the  occurrence  of a draw on the Policy and the failure by the  Servicer to
reimburse  the  Enhancer  for any amount  owed to the  Enhancer  pursuant to the
Insurance  Agreement on account of the draw, which failure continues  unremedied
for a period of 90 days after written notice to the Servicer;

     (h) the Issuer is determined  to be an  association  (or a  publicly-traded
partnership)  taxable as a  corporation  or a taxable  mortgage pool for federal
income tax purposes; or

(i) an event of default under the Insurance  Agreement  (except for a default by
the  Enhancer,  unless  such  Enhancer  cannot be  replaced  without  additional
expense).

(j) In the case of any event  described  in (a),  (b),  (f), (g) or (i), a Rapid
Amortization  Event  shall  be  deemed  to have  occurred  only  if,  after  any
applicable grace period described in such clauses, any of the Indenture Trustee,
the Enhancer or, with the consent of the  Enhancer,  Securityholders  evidencing
not less than 51% of the aggregate  Securities Balance, by written notice to the
Seller, the Servicer,  the Depositor and the Owner Trustee (and to the Indenture
Trustee, if given by the Enhancer or the Securityholders),  declare that a Rapid
Amortization  Event has occurred as of the date of such  notice.  In the case of
any event described in clauses (c), (d), (e) or (h), a Rapid  Amortization Event
shall be deemed to have occurred  without any notice or other action on the part
of the Indenture Trustee,  the Securityholders or the Enhancer  immediately upon
the occurrence of such event; provided, that any Rapid Amortization Event may be
waived and deemed of no effect with the written consent of the Enhancer and each
Rating Agency, subject to the satisfaction of any conditions to such waiver.

        Rapid  Amortization  Period:  As to each Class of Term Notes, the period
beginning on the earlier of (i) the first Payment Date  following the end of the
Managed  Amortization  Period and (ii) the  occurrence  of a Rapid  Amortization
Event, and ending upon the termination of the Issuer.

        Rating Agency: Each of Moody's, Standard & Poor's, Fitch or, if any such
organization or a successor  thereto is no longer in existence,  such nationally
recognized   statistical  rating  organization,   or  other  comparable  Person,
designated by the Depositor,  notice of which  designation shall be given to the
Indenture Trustee.  References herein to the highest short term unsecured rating

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category of a Rating  Agency  shall mean A-1 or better in the case of Standard &
Poor's,  P-1 or  better in the case of  Moody's  and F1 or better in the case of
Fitch;  and in the case of any other Rating Agency,  shall mean such  equivalent
ratings.  References herein to the highest long-term rating category of a Rating
Agency  shall mean "AAA" in the case of Standard & Poor's,  "Aaa" in the case of
Moody's  and  "AAA" in the case of Fitch;  and in the case of any  other  Rating
Agency, such equivalent rating.

     Rating Event: The qualification, reduction or withdrawal by a Rating Agency
of its then-current rating of the Notes.

        Record Date:  With respect to any Payment Date, the close of business on
the last  Business  Day  preceding  such  Payment  Date and with  respect to the
Certificates  or the  Variable  Funding  Notes and any  Payment  Date,  the last
Business Day of the month preceding the month of such Payment Date.

        Reference Bank Rate:  With respect to any Interest  Period,  as follows:
the arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth
of one percent) of the offered rates for United  States dollar  deposits for one
month which are offered by the Reference Banks as of 11:00 a.m., London, England
time,  on the second LIBOR  Business Day prior to the first day of such Interest
Period to prime banks in the London  interbank  market for a period of one month
in amounts approximately equal to the sum of the outstanding Note Balance of the
Notes;  provided,  that at least two Reference Banks provide such rate. If fewer
than two offered rates appear,  the Reference  Bank Rate will be the  arithmetic
mean of the rates  quoted by one or more major banks in New York City,  selected
by the Indenture Trustee after  consultation with the Servicer and the Enhancer,
as of 11:00  a.m.,  New York  time,  on such date for loans in U.S.  Dollars  to
leading European Banks for a period of one month in amounts  approximately equal
to the  aggregate  Note  Balance  of the  Notes.  If no such  quotations  can be
obtained,  the Reference Bank Rate will be the Reference Bank Rate applicable to
the preceding Interest Period.

     Reference Banks:  Barclays Bank plc, National Westminster Bank and Deutsche
Bank, A.G.

        Related  Documents:  With respect to each Mortgage  Loan,  the documents
specified in Section 2.1(c) of the Purchase Agreement and any documents required
to be added to such  documents  pursuant to the  Purchase  Agreement,  the Trust
Agreement or the Servicing Agreement.

        Relief  Act  Shortfalls:  With  respect  to any  Payment  Date,  for any
Mortgage  Loan as to which there has been a reduction  in the amount of interest
collectible  thereon  for the  related  Collection  Period  as a  result  of the
application  of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended,
the  shortfall,  if any,  equal to (i) one  month's  interest  on the  Principal
Balance  of such  Mortgage  Loan at the  applicable  Loan  Rate,  over  (ii) the
interest collectible on such Mortgage Loan during such Collection Period.

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        REO  Property:  A  Mortgaged  Property  that is acquired by the Trust in
foreclosure or by deed in lieu of foreclosure.

        Repurchase  Event:  With  respect  to any  Mortgage  Loan,  either (i) a
discovery that, as of the Closing Date with respect to an Initial  Mortgage Loan
or the related Subsequent  Transfer Date with respect to any Subsequent Mortgage
Loan,  the  related  Mortgage  was not a valid  lien  on the  related  Mortgaged
Property  subject  only to (A) the lien of any prior  mortgage  indicated on the
Mortgage Loan Schedule,  (B) the lien of real property taxes and assessments not
yet due and payable, (C) covenants, conditions, and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage and such other permissible title exceptions as are customarily accepted
for similar  loans and (D) other matters to which like  properties  are commonly
subject that do not materially  adversely  affect the value,  use,  enjoyment or
marketability  of the related  Mortgaged  Property  or (ii) with  respect to any
Mortgage Loan as to which the Seller  delivers an affidavit  certifying that the
original Loan Agreement has been lost or destroyed, a subsequent default on such
Mortgage  Loan  if  the  enforcement  thereof  or of  the  related  Mortgage  is
materially  and  adversely  affected  by  the  absence  of  such  original  Loan
Agreement.

        Repurchase  Price:  With  respect to any  Mortgage  Loan  required to be
repurchased  on any date pursuant to the Purchase  Agreement or purchased by the
Servicer pursuant to the Servicing Agreement,  an amount equal to the sum of (i)
100% of the Principal Balance thereof (without reduction for any amounts charged
off) and (ii) unpaid  accrued  interest at the Loan Rate (or with respect to the
last day of the month in the month of repurchase, the Loan Rate will be the Loan
Rate in effect as of the  second to last day in such  month) on the  outstanding
Principal  Balance  thereof from the Due Date to which interest was last paid by
the  related  Mortgagor  to the first day of the  month  following  the month of
purchase.  No portion of any Repurchase  Price shall be included in any Excluded
Amount for any Payment Date during the Rapid Amortization Period.

     Reserve Account: The account established and maintained pursuant to Section
3.20 of the Servicing Agreement.

        Responsible Officer:  With respect to the Indenture Trustee, any officer
of the Indenture Trustee with direct  responsibility  for the  administration of
the Trust  Agreement and also,  with respect to a particular  matter,  any other
officer to whom such matter is referred  because of such officer's  knowledge of
and familiarity with the particular subject.

        Revolving Period: The period beginning on the Closing Date and ending on
the earlier of (i)  December  31,  2001,  and (ii) the  occurrence  of a Managed
Amortization Event or a Rapid Amortization Event.

        Rolling Six-Month Annualized  Liquidation Loss Amounts:  With respect to
any  Determination  Date,  the  product of (i) the  aggregate  Liquidation  Loss
Amounts  as of the  end  of  each  of the  six  Collection  Periods  immediately
preceding such  Determination  Date divided by the Initial Pool Balance and (ii)
two (2).

        Secretary of State:  The Secretary of State of the State of Delaware.

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     Securities  Act: The Securities Act of 1933, as amended,  and the rules and
regulations promulgated thereunder.

     Securities  Balance:  The Term Note Balance,  Variable  Funding  Balance or
Certificate Balance, as the context may require.

        Security:  Any Certificate or a Note, as the context may require.

        Securityholder:  Any Noteholder or Certificateholder.

     Seller:  GMAC Mortgage  Corporation,  a Pennsylvania  corporation,  and its
successors and assigns.

     Servicer: GMAC Mortgage Corporation,  a Pennsylvania  corporation,  and its
successors and assigns.

     Servicing  Agreement:  The  servicing  agreement  dated as of June 29, 2000
among the Servicer, the Issuer and the Indenture Trustee.

     Servicing Certificate:  A certificate completed and executed by a Servicing
Officer  on  behalf of the  Servicer  in  accordance  with  Section  4.01 of the
Servicing Agreement.

     Servicing  Default:  The meaning specified in Section 7.01 of the Servicing
Agreement.

        Servicing  Fee:  With  respect to any Mortgage  Loan and any  Collection
Period,  the product of (i) the  Servicing  Fee Rate  divided by 12 and (ii) the
Pool Balance as of the first day of such Collection Period.

        Servicing Fee Rate:  0.50% per annum.

        Servicing  Officer:   Any  officer  of  the  Servicer  involved  in,  or
responsible  for, the  administration  and servicing of the Mortgage Loans whose
name and specimen  signature appear on a list of servicing officers furnished to
the Indenture  Trustee  (with a copy to the  Enhancer) by the Servicer,  as such
list may be amended from time to time.

     Standard  &  Poor's:  Standard  & Poor's,  a  division  of The  McGraw-Hill
Companies, Inc. or its successor in interest.

        Stated Value: With respect to any Mortgage Loan, the stated value of the
related Mortgaged  Property  determined in accordance with the Program Guide and
given by the related Mortgagor in his or her application.

     Subsequent Cut-Off Date: With respect to any Subsequent  Mortgage Loan, the
date specified in the related Subsequent Transfer Agreement.

        Subsequent  Cut-Off  Date  Principal   Balance:   With  respect  to  any
Subsequent  Mortgage  Loan,  the  Principal  Balance  thereof as of the  related
Subsequent Cut-Off Date.

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<PAGE>

        Subsequent  Mortgage  Loan:  A HEL or HELOC  sold by the  Seller  to the
Issuer  pursuant to Section  2.2 of the  Purchase  Agreement,  such HEL or HELOC
being  identified  on  the  Mortgage  Loan  Schedule  attached  to  the  related
Subsequent  Transfer  Agreement,  as  set  forth  in  such  Subsequent  Transfer
Agreement.

        Subsequent Transfer Agreement:  Each Subsequent Transfer Agreement dated
as of a  Subsequent  Transfer  Date  executed  by  the  Seller  and  the  Issuer
substantially in the form of Exhibit 2 to the Purchase  Agreement,  by which the
related Subsequent Mortgage Loans are sold to the Issuer.

     Subsequent   Transfer  Date:  With  respect  to  each  Subsequent  Transfer
Agreement,  the date on which the related Subsequent  Mortgage Loans are sold to
the Issuer.

     Subservicer:  Each Person that enters into a  Subservicing  Agreement  as a
subservicer of Mortgage Loans.

        Subservicing  Agreement:  The written  contract between the Servicer and
any Subservicer  relating to servicing and  administration  of certain  Mortgage
Loans as provided in Section 3.01 of the Servicing Agreement.

        Substitution  Adjustment Amount: With respect to any Eligible Substitute
Loan and any Deleted Loan, the amount, if any, as determined by the Servicer, by
which the aggregate  principal balance of all such Eligible  Substitute Loans as
of the date of substitution is less than the aggregate  Principal Balance of all
such Deleted Loans (after  application  of the principal  portion of the Monthly
Payments  due in the month of  substitution  that are to be  distributed  to the
Securityholders in the month of substitution).

        Tangible Net Worth:  Net Worth,  less the sum of the following  (without
duplication):  (a) any other assets of GMACM and its  consolidated  subsidiaries
that would be treated as intangibles under GAAP including,  without  limitation,
any  write-up of assets  (other than  adjustments  to market value to the extent
required  under GAAP with  respect to excess  servicing,  residual  interests in
offerings  of  asset-backed  securities  and  asset-backed  securities  that are
interest-only   securities),   good-will,   research  and   development   costs,
trade-marks,  trade names, copyrights, patents and unamortized debt discount and
expenses and (b) loans or other extensions of credit to officers of GMACM or its
consolidated  subsidiaries other than mortgage loans made to such Persons in the
ordinary course of business.

        Tax Matters Partner:  GMACM, as initial Certificateholder.

        Telerate  Screen Page 3750: The display page so designated on the Bridge
Telerate  Capital Markets Report (or such other page as may replace page 3750 on
such service for the purpose of  displaying  London  interbank  offered rates of
major  banks).  If such rate does not appear on such page (or such other page as
may replace such page on such service,  or if such service is no longer offered,
such other service for displaying  LIBOR or comparable  rates as may be selected
by the Indenture Trustee after  consultation with the Servicer),  the rate shall
be the Reference Bank Rate.

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        Term Note  Balance:  With  respect to any Payment  Date and any Class of
Term Notes,  the Initial Term Note Balance of such Class reduced by all payments
of principal on such Class prior to such Payment Date.

     Term Notes: The GMACM Home Equity Loan-Backed Term Notes,  Series 2000-HE2,
Class A-1 and Class A-2.

     Transfer Date: As defined in Section 3.15(c) of the Servicing Agreement.

     Transfer  Notice  Date:  As  defined in  Section  3.15(c) of the  Servicing
Agreement.

        Treasury  Regulations:  Regulations,  including  proposed  or  temporary
Regulations,   promulgated  under  the  Code.   References  herein  to  specific
provisions  of  proposed  or  temporary   regulations  shall  include  analogous
provisions  of  final   Treasury   Regulations  or  other   successor   Treasury
Regulations.

     Trust Agreement: The trust agreement dated as of June 29, 2000, between the
Owner Trustee and the Depositor.

     Trust  Estate:  The  meaning  specified  in  the  Granting  Clause  of  the
Indenture.

        Trust  Indenture Act or TIA: The Trust Indenture Act of 1939, as amended
from time to time, as in effect on any relevant date.

     UCC:  The Uniform  Commercial  Code,  as amended  from time to time,  as in
effect in any specified jurisdiction.

        Underwriter:  Bear, Stearns & Co. Inc.

     Underwriting  Agreement:  The  underwriting  agreement dated June 26, 2000,
between the Depositor and the Underwriter.

        Uniform Single  Attestation  Program for Mortgage  Bankers:  The Uniform
Single  Attestation  Program for Mortgage Bankers,  as published by the Mortgage
Bankers  Association  of America and  effective  with respect to fiscal  periods
ending on or after December 15, 1995.

     Unpaid Principal Amount: As defined in Section 3.05(a) of the Indenture.

        Variable  Funding  Balance:  With  respect to any  Payment  Date and any
Variable  Funding Notes,  the Initial  Variable Funding Balance thereof prior to
such Payment Date (a) increased by the Aggregate  Balance  Differential for such
Variable Funding Note immediately  prior to such Payment Date and (b) reduced by
all distributions of principal thereon prior to such Payment Date.

     Variable Funding Notes: The GMACM Home Equity Loan-Backed  Variable Funding
Notes,  Series  2000-HE2,  Class I and Class II,  including  any Capped  Funding
Notes.

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