AMENDMENT
      NO. 3 TO
      THE


POOLING
      AND SERVICING
      AGREEMENT





THIS
      AMENDMENT NO. 3 (this "Amendment") is made as of July 17, 1998, by and among
      Navistar Financial Securities Corporation, a Delaware corporation ("NFSC"),
      Navistar Financial Corporation, a Delaware corporation ("NFC"), and The Bank
      of
      New York, as Master Trust Trustee (the "Master Trust Trustee").





NFSC,
      as
      Seller, NFC, as Servicer, The Chase Manhattan Bank (formerly known as Chemical
      Bank), as 1990 Trust Trustee, and the Master Trust Trustee are parties to a
      Pooling and Servicing Agreement, dated as of June 8, 1995, and amended by
      Amendment No. 1, dated as of September 12, 1995 and by Amendment No. 2,
      dated March 27, 1996 (as amended, the "Pooling and Servicing
      Agreement").   In order to (i) include within the definition of
      Eligible Investments certain additional investments and (ii) change the
      concentration of Eligible Investments allowed in the Series Principal Account,
      Excess Funding Account, Negative Carry Account and the Liquidity Reserve
      Account, the Seller, the Servicer and the Master Trust Trustee have agreed
      to
      amend the Pooling and Servicing Agreement in the manner set forth
      herein.  Capitalized terms used herein but not otherwise defined have
      the meanings set forth in the Pooling and Servicing Agreement.





1.           Amendment
      to Section
      1.01.   The definition of "Eligible Investments" in
      Section 1.01 of the Pooling and Servicing Agreement is hereby deleted in its
      entirety and replaced with the following:





“Eligible
      Investments” shall
      mean





(a)     book-entry securities, negotiable
      instru­ments or securities represented by instruments in bearer or
      regis­tered form having (except in the case of clauses (iv) or
      vii)  below) remaining maturities occurring not later than the
      Distribution Date next succeeding the Master Trust Trustee's acquisition
      thereof, except as otherwise described herein or the related Supplement, that
      evidence:





(
      i
      )           direct
      obligations of, and obligations fully guaran­teed as to timely payment by,
      the United States of America;





(ii)           demand
      deposits, time deposits or certificates of deposit of, or bankers' acceptances
      issued by, any depository institution or trust company incorporated under the
      laws of the United States of America or any state thereof (or any domestic
      branch of a foreign bank) and subject to supervision and examination by federal
      or state banking or depository institution authorities; provided, however, that at
      the time of the Master Trust's investment or contractual commitment to invest
      therein, the commercial paper or other short-term unsecured debt obligations
      (other than such obligations the rating of which is based on the credit of
      a
      person or entity other than such depository institution or trust company) of
      such depository institution or trust company shall have a credit rating not
      lower than the highest investment category for short term unsecured debt
      obligations granted by the applicable Rating Agency from each Rating Agency
      then
      Rating the affected Series of Investor Certificates;





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(iii)           com­mer­cial
      paper having, at the time of the Master Trust's investment or contractual
      commitment to invest therein, a rating not lower than the highest investment
      category for short term unsecured debt obligations granted by the applicable
      Rating Agency from each Rating Agency then Rating the affected Series of
      Investor Certificates;




(iv)           except
      during an Investment Period, investments in money market funds or common trust
      funds having a rating not lower than the highest investment category for short
      term unsecured debt obligations granted by the applicable Rating Agency from
      each Rating Agency then Rating the affected Series of Investor Certificates
      or
      otherwise approved in writing by each of such Rating Agencies (including funds
      for which the Master Trust Trustee or the 1990 Trust Trustee or any of their
      respective affiliates is investment manager or advisor, so long as such fund
      shall have such rating);





(v)           repurchase
      obligations (x) with respect to any security that is a direct obligation of,
      or
      fully guaranteed by, the United States of America or any agency or
      instrumentality thereof the obligations of which are backed by the full faith
      and credit of the United States of America, in either case, entered into with
      a
      depository institution or trust company (acting as principal) described in
      clause (ii) or (y) the counterparty for which has a rating not lower than the
      highest investment category for short term unsecured debt obligations granted
      by
      the applicable Rating Agency from each Rating Agency then Rating the affected
      Series of Investor Certificates, the collateral for which is held by a custodial
      bank for the benefit of the Trust or the Indenture Trustee, is marked to market
      daily and is maintained in an amount that exceeds the amounts of such repurchase
      obligation, and which required liquidation of the collateral immediately upon
      the amount of such collateral being less than the amount of such repurchase
      obligation (unless the counterparty immediately satisfies the repurchase
      obligation upon being notified of such shortfall); or





(vi
      )  commercial paper master notes where the issuer has, at the time of
      the Master Trust’s investment or contractual commitment to invest therein, a
      rating not lower than the highest investment category for short term unsecured
      debt obligations granted by the applicable Rating Agency from each Rating Agency
      then Rating the affected Series of Investor Certificates; or




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(vii
      )
      with respect to the Excess Funding Account only, obligations of a trust (the
      assets of which consist solely of Investor Certificates issued by the Master
      Trust and of one or more liquidity swap arrangements for the benefit of
      investors in such trust) having, at the time of the Master Trust’s investment or
      contractual commitment to invest therein, a rating not lower than the highest
      rating category for short term unsecured debt obligations granted by the
      applicable Rating Agency from each Rating Agency then Rating the affected Series
      of Investor Certificates; and





(b)  any
      other investment consisting of a financial asset that by its terms converts
      to
      cash within a finite period of time, provided that the Rating Agency Condition
      is satisfied.





Unless
      the Rating Agency Condition is satisfied, Eligible Investments of funds in
      the
      Series Principal Account, Excess Funding Account, Negative Carry Reserve Fund
      and the Liquidity Reserve Account will be subject to the following additional
      restrictions:  (x) no more than the greater of (A) $1,000,000 and (B)
      20% of the aggregate Eligible Investments in all such accounts collectively
      shall be obligations of or investments in any single issuer (except that such
      20% limitation shall not apply to Eligible Investments of the type specified
      in
      clause (a)(i) or, with respect to the Excess Funding Account, Eligible
      Investments of the type specified in clauses (a)(iv) or (a)(vii)); and (y)
      each
      Eligible Investment shall be denominated and be payable solely in U.S. dollars,
      shall bear interest at a specified rate that is, or is based upon, LIBOR or
      a
      commercial paper rate, shall entitle the holder to a fixed principal amount
      at
      maturity and shall have a yield that is not inversely or disproportionately
      affected by changes in interest rates.





2.           Amendment
      to Section
      4.02.  Clause (b)(ii) of Section 4.02 of the Pooling and
      Servicing Agreement is deleted in its entirety and replaced with the
      following:





"(ii
      )           Funds on
      deposit in the Excess Funding Account overnight or for a longer period shall
      at
      all times be invested by the Master Trust Trustee in Eligible Investments at
      the
      direction of the Servicer or its agent, subject to the restrictions set forth
      below and in Section 4.06.  Except as otherwise permitted by the
      Rating Agencies then rating the Investor Certificates and except for Eligible
      Investments of the type specified in clause (vii) of the definition of Eligible
      Investments, any Eligible Investments with a stated maturity shall mature no
      later than the following Transfer Date.  Net interest and earnings
      (less investment expenses) on funds on deposit in the Excess Funding Account
      shall be included in the calculation of Investment Income for the relevant
      Due
      Period."


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3.           Miscellaneous.  This
      Amendment shall be construed in accordance with the internal laws of the State
      of Illinois, without reference to its conflict of law provisions, except that
      the obligations, rights and remedies of the Master Trust Trustee shall be
      determined in accordance with the internal laws of the State of New York,
      without regard to conflict of law provisions.  This Amendment may be
      executed in two or more counterparts, each of which shall be an original, but
      all of which together constitute one and the same instrument.  The
      provisions of this Amendment shall be deemed to be incorporated in, and made
      a
      part of, the Pooling and Servicing Agreement; and the Pooling and Servicing
      Agreement, as amended by this Amendment, shall be read, taken and construed
      as
      one and the same instrument.  Promptly after the execution of this
      Amendment the Master Trust Trustee shall furnish written notification of the
      substance of this Amendment to each Investor Certificateholder.








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IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to the
      Pooling and Servicing Agreement to be duly executed by their respective officers
      as of the date first written above.





NAVISTAR
      FINANCIAL SECURITIES CORPORATION


as
      Seller








By:  ______________________________________





Its:  ______________________________________








NAVISTAR
      FINANCIAL CORPORATION


as
      Servicer





By:  ______________________________________





Its:  ______________________________________








THE
      BANK
      OF NEW YORK


as
      Master
      Trust Trustee





By:  ______________________________________





Its:  ______________________________________





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