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                                                                    EXHIBIT 10.4



                                 AMENDMENT NO. 1
                             TO CUSTODIAL AGREEMENT


     This AMENDMENT NO. 1, dated as of April 2, 2001 (this "AMENDMENT"), to the
Custodial Agreement (the "CUSTODIAL AGREEMENT"), dated as of December 1, 2000,
is by and among NC Capital Corporation, as Borrower, U.S. Bank Trust National
Association, as Custodian, and Morgan Stanley Dean Witter Mortgage Capital Inc.,
as Lender.

                                   WITNESSETH:

     WHEREAS, the parties desire to make certain amendments to the Custodial
Agreement as hereinafter set forth; and

     WHEREAS, pursuant to Section 19 of the Custodial Agreement, the parties
hereto are permitted to amend the same;

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

     SECTION 1. DEFINITIONS. Capitalized terms used herein but not defined shall
have the meanings set forth in the Custodial Agreement.

     SECTION 2. AMENDMENT. The Custodial Agreement is hereby amended as set
forth below:

          (A) Section 1 is hereby amended to add the following defined terms
after the term "Authorized Representative."

          "BAILEE" shall mean the Bailee named in the Bailee Letter.

          "BAILEE LETTER" shall mean the letter with respect to a Limited File
     Loan, substantially in the form of Annex 12 attached hereto.

          "BAILEE TRUST RECEIPT" shall mean the trust receipt delivered by the
     Bailee pursuant to a Bailee Letter, substantially in the form of Attachment
     B to Annex 12 attached hereto.

          (B) The definition of "Exception" is hereby amended and restated as
follows:

          "EXCEPTION" shall mean, with respect to any Mortgage Loan, any of the
     following: (i) the variances from the requirements of Section 2 hereof with
     respect to the Mortgage Files (giving effect to the Borrower's right to
     deliver certified copies in lieu of original documents in certain
     circumstances), (ii) a Mortgage Loan which has been pledged to the Lender
     under the Loan Agreement in excess of 120 calendar days, (iii) a Mortgage
     Loan that has been released to the Borrower pursuant to Section 5(a) hereof
     in excess of fifteen (15) calendar days, (iv) an Eligible Mortgage Loan
     that has been released under any Transmittal Letter in the form of ANNEX 10
     AND 11 hereto in excess of the time period stated in

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     such Transmittal Letter for release and (v) any Mortgage Loan with respect
     to which the Custodian receives written notice or has actual knowledge of a
     lien subject or security interest in favor of a Person other than the
     Lender with respect to such Mortgage Loan.

          (C) Section 1 is amended to add the definition of the following
defined term after the term "Exception":

          "LIMITED FILE LOAN" shall mean a Mortgage Loan with respect to
which a Bailee Letter has been delivered to the Lender and Custodian on the
Business Day prior to its related Funding Date, but as to which the Custodian
does not possess a complete Mortgage File on such date.

          (D) The definition of the term "Mortgage Loan Schedule and
Exception Report" is amended and restated as follows:

          "MORTGAGE LOAN SCHEDULE AND EXCEPTION REPORT" means a list of Eligible
     Mortgage Loans delivered by the Custodian to the Lender on each Business
     Day, reflecting the Mortgage Loans held by the Custodian for the benefit of
     the Lender, which includes codes indicating any Exceptions with respect to
     each Mortgage Loan listed thereon. Each Mortgage Loan Schedule and
     Exception Report shall set forth (a) the Mortgage Loans being pledged to
     the Lender on any applicable Funding Date as well as the Mortgage Loans
     previously pledged to the Lender and held by the Custodian hereunder, (b)
     all Exceptions with respect thereto, with any updates thereto from the time
     last delivered and (c) whether any of the Mortgage Loans being pledged to
     the Lender on any applicable Funding Date as well as the Mortgage Loans
     previously pledged to the Lender and held by the Custodian hereunder are
     Limited File Loans.

          (C) Section 2(a) is hereby amended and restated as follows:

          (a)(I) No later than 12:00 p.m., New York City time, two (2) Business
     Days prior to any Funding Date, the Borrower shall release to the Custodian
     the following original documents pertaining to each Eligible Mortgage Loan,
     other than a Limited File Loan, to be pledged to the Lender and included in
     the Borrowing Base on such Funding Date, each of which Mortgage Loans shall
     be identified in a Mortgage Loan Schedule delivered therewith, with a copy
     of such Mortgage Loan Schedule delivered to the Lender (or, if another time
     is specified below for such release or delivery, at such other time):

               (i) The original Mortgage Note bearing all intervening
          endorsements, endorsed "Pay to the order of _________ without
          recourse" and signed in the name of the last endorsee (the "LAST
          ENDORSEE") by an authorized Person (in the event that the Mortgage
          Loan was acquired by the Last Endorsee in a merger, the signature must
          be in the following form: "[Last Endorsee], successor by merger to
          [name of predecessor]"; in the event that the Mortgage Loan was
          acquired or originated by the Last

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          Endorsee while doing business under another name, the signature must
          be in the following form: "[Last Endorsee], formerly known as
          [previous name]").

               (ii) The original of the guarantee executed in connection with
          the Mortgage Note (if any).

               (iii) The original Mortgage with evidence of recording thereon,
          or a copy thereof together with an Officer's Certificate of the
          Borrower certifying that such represents a true, correct and complete
          copy of the original and that such original has been submitted for
          recordation in the appropriate governmental recording office of the
          jurisdiction where the Mortgaged Property is located.

               (iv) The originals of all assumption, modification, consolidation
          or extension agreements with evidence of recording thereon, or copies
          thereof together with an Officer's Certificate of the Borrower
          certifying that such represent true, correct and complete copies of
          the originals and that such originals have each been submitted for
          recordation in the appropriate governmental recording office of the
          jurisdiction where the Mortgaged Property is located.

               (v) The original Assignment of Mortgage in blank for each
          Mortgage Loan, in form and substance acceptable for recording and
          signed in the name of the Last Endorsee (in the event that the
          Mortgage Loan was acquired by the Last Endorsee in a merger, the
          signature must be in the following form: "[Last Endorsee], successor
          by merger to [name of predecessor]"; in the event that the Mortgage
          Loan was acquired or originated while doing business under another
          name, the signature must be in the following form: "[Last Endorsee],
          formerly known as [previous name]").

               (vi) The originals of all intervening assignments of mortgage
          with evidence of recording thereon, showing an unbroken chain of title
          from the originator thereof to the Last Endorsee or copies thereof
          together with an Officer's Certificate of the Borrower certifying that
          such represent true, correct and complete copies of the originals and
          that such originals have each been submitted for recordation in the
          appropriate governmental recording office of the jurisdiction where
          the Mortgaged Property is located.

               (vii) The original attorney's opinion of title and abstract of
          title or the original mortgagee title insurance policy, or if the
          original mortgagee title insurance policy has not been issued, the
          irrevocable commitment to issue the same.

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               (viii) The original of any security agreement, chattel mortgage
          or equivalent document executed in connection with the Mortgage Loan.

          (II) No later than 12:00 p.m., New York City time, on the related
     Funding Date, the Borrower shall cause the Bailee to deliver to the
     Custodian with respect to each Limited File Loan to be pledged to the
     Lender and included in the Borrowing Base on such Funding Date, a Bailee
     Trust Receipt.

          (III) No later than 12:00 p.m., New York City time, three (3) Business
     Days following the related Funding Date, the Borrower shall cause the
     Bailee to deliver to the Custodian with respect to each Limited File Loan
     that was pledged to the Lender and included in the Borrowing Base on such
     Funding Date, all of the documents comprising the Mortgage File described
     in Section 2(a)(I) above to the extent available, but in no event less than
     the original Mortgage Note described in Section 2(a)(I)(i) above and the
     original Assignment of Mortgage described in Section 2(a)(I)(v) above.

          (IV) No later than 12:00 p.m., New York City time, five (5) Business
     Days following the related Funding Date, the Borrower shall cause the
     Bailee to deliver to the Custodian with respect to each Limited File Loan
     that was pledged to the Lender and included in the Borrowing Base on such
     Funding Date, any document comprising the Mortgage Loan File described in
     Section (2)(a)(I) above which had not yet been previously delivered to the
     Custodian.

          (D) Section 3(a) is hereby amended and restated as follows:

          No later than 10:00 a.m., New York City time, on each Funding Date,
     the Borrower shall provide the Custodian with a Custodial Identification
     Certificate and a related Mortgage Loan Schedule (such information
     contained on the Mortgage Loan Schedule shall be delivered to the Custodian
     in computer-readable form) with respect to the Eligible Mortgage Loans to
     be pledged to the Lender on such Funding Date, and if any Eligible Mortgage
     Loans are Limited File Loans, by 12:00 p.m. New York City time, the
     Borrower shall provide or shall cause to be provided to the Custodian a
     Bailee Trust Receipt with respect to each Limited File Loan to be pledged
     to the Lender on such Funding Date. If, by the time set forth above on a
     Funding Date, the Custodian has received (i) such Custodial Identification
     Certificate, (ii) the related Mortgage Loan Schedule, (iii) only with
     respect to each Limited File Loan, a Bailee Trust Receipt and (iv) a
     Mortgage File for each Mortgage Loan that is not a Limited File Loan
     identified on the Mortgage Loan Schedule, then on such Funding Date, the
     Custodian will deliver, via facsimile and by modem, no later than 1:00
     p.m., New York City time, to the Lender and the Borrower a Mortgage Loan
     Schedule and Exception Report for each Mortgage Loan pledged hereunder on
     such date, with Exceptions identified by the Custodian as current as of the
     date and time of delivery of such Mortgage Loan Schedule and Exception
     Report.


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          (E) Section 3(c) is hereby amended and restated as follows:

          Each Mortgage Loan Schedule and Exception Report shall list all
     Exceptions using such codes as shall be in form and substance agreed to by
     the Custodian, the Borrower and the Lender; PROVIDED, that with respect to
     Limited File Loans, the Mortgage Loan Schedule and Exception Report shall
     also list as an Exception if the Mortgage File documents to be delivered
     pursuant to Section 2(a)(III) has not been delivered to the Custodian
     within the time provided therein. The delivery of each Mortgage Loan
     Schedule and Exception Report to the Lender shall be the Custodian's
     representation that, other than the Exceptions listed as part of the
     Exception Report: (i) all documents required to be delivered in respect of
     such Mortgage Loan pursuant to Section 2 of this Custodial Agreement have
     been delivered and are in the possession of the Custodian as part of the
     Mortgage File for such Mortgage Loan, (ii) all such documents have been
     reviewed by the Custodian in accordance with the review procedures attached
     hereto as ANNEX 4 (the "REVIEW PROCEDURES") and appear on their face to be
     regular and to relate to such Mortgage Loan and to satisfy the requirements
     set forth in Section 2 of this Custodial Agreement, (iii) the amount of the
     Mortgage Note is the same as the amount specified on the related Mortgage,
     and based upon a review of the Mortgage Note, items (a), (b), (c), (l),
     (n), (q), (t) and (u) of ANNEX 1 as set forth in the Mortgage Loan Schedule
     delivered by the Borrower to the Custodian are correct, (iv) each Mortgage
     Loan identified on such Mortgage Loan Schedule and Exception Report is
     being held by the Custodian as the bailee for the Lender and/or its
     designees pursuant to this Agreement and (v) with respect to each Limited
     File Loan, a Bailee Trust Receipt has been received and reviewed and that
     the same has been executed and appears regular on its face.

          (F) Section 5(a) is hereby amended and restated by deleting the
phrase "ten (10) calendar days" in the fourth sentence thereof and replacing
the same with the following: "fifteen (15) calendar days."

          (G) Annex I is hereby amended and restated by adding the following:

          (hhh) whether the mortgage loan is a Limited File Loan.


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     SECTION 3. SURVIVAL. Except as expressly amended hereby, the Custodial
Agreement shall continue in full force and effect in accordance with the
provisions thereof and the Custodial Agreement is in all respects hereby
ratified, confirmed and preserved. This Amendment and all its provisions shall
be deemed a part of the Custodial Agreement in the manner and to the extent
herein provided.

     SECTION 4. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

     SECTION 5. GOVERNING LAW. This Amendment shall be governed by New York law
without reference to its choice of law doctrine.

     SECTION 6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment by signing
any such counterpart.

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be duly executed as of this 2nd day of April 2001.



                                      NC CAPITAL CORPORATION


                                      By:/s/ PATRICK FLANAGAN
                                         ------------------------------------
                                         Name:  Patrick Flanagan
                                         Title: President


                                      U.S. BANK TRUST NATIONAL
                                      ASSOCIATION


                                      By:
                                          ----------------------------------
                                          Name:
                                          Title:


                                      MORGAN STANLEY DEAN WITTER MORTGAGE
                                      CAPITAL INC.


                                      By:
                                          ----------------------------------
                                          Name:
                                          Title:


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