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                                                                      Exhibit 10

                      AMENDED AND RESTATED CREDIT AGREEMENT


         THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is made as
of the 30th day of June, 2000, by and between DeWOLFE MORTGAGE SERVICES, INC., a
Massachusetts corporation (the "Company") and FIRST UNION NATIONAL BANK, a
national banking corporation (the "Lender").

                              STATEMENT OF PURPOSE

         The Company and the Lender have previously entered into that certain
Mortgage Loan Warehousing and Security Agreement dated as of June 15, 1993, as
subsequently amended and modified from time to time (as so amended and modified,
the "Existing Agreement"). The parties hereto desire to amend and restate the
Existing Agreement in its entirety and hereby agree that from and after the date
hereof, this Amended and Restated Credit Agreement between the parties, together
with the Security Agreement (as defined below), shall supersede the Existing
Agreement in all respects and shall constitute the entire agreement between the
parties hereto with respect to the subject matter contained therein. All
capitalized terms not otherwise defined herein are defined in Paragraph 10
hereof.

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

                                    AGREEMENT

         1. CREDIT FACILITY.

                  1(a) LENDING LIMIT. Subject to the conditions set forth
herein, the Lender agrees that it shall, from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance loans (the
"Loans" or a "Loan") to the Company in amounts not to exceed, in the aggregate
at any one time outstanding (determined after giving effect to the other
transactions contemplated by the Loan Request pursuant to which said Loan was
requested), the lesser of:

                       (1)      The Credit Limit; and

                       (2)      The Collateral Value of the Borrowing Base.

                  1(b) INTEREST RATE. All Loans shall bear interest at the
lesser of the Applicable Fed Funds Rate or the Prime Rate, as permitted herein.

                  1(c) PAYMENT OF INTEREST. The Company shall pay to the Lender
interest on Loans outstanding hereunder from the date disbursed to but not
including the date of payment, such interest to be payable monthly, in arrears,
as provided in Paragraph 2(d) below.

                  1(d) REQUIREMENTS OF LAW; INCREASED COSTS. In the event that
any change subsequent to the date hereof in any applicable law, order,
regulation, treaty or directive issued by any central bank or other Governmental
Authority, or in the governmental or judicial interpretation or application
thereof, or compliance by the Lender with any request or directive (whether or
not having the force of law) by any central bank or other Governmental
Authority:


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                           (1) subjects the Lender to any tax of any kind
         whatsoever with respect to this Agreement or any Loans made hereunder,
         or change the basis of taxation of payments to the Lender of principal,
         fee, interest or any other amount payable hereunder (except for change
         in the rate of tax on the overall net income of the Lender);

                           (2) imposes, modifies or holds applicable any
         reserve, capital requirement, special deposit, compulsory loan or
         similar requirements against assets held by, or deposits or other
         liabilities in or for the account of, advances or loans by, or other
         credit extended by, or any other acquisition of funds by, any office of
         the Lender which are not otherwise included in the determination of the
         Applicable Fed Funds Rate; or

                           (3) imposes on the Lender any other condition; and
         the result of any of the foregoing is to increase the cost to the
         Lender of making, renewing or maintaining any Loan or to reduce any
         amount receivable in respect thereof or to reduce the rate of return on
         the capital of the Lender or any Person controlling the Lender as a
         result of or in connection with the making, renewal or maintenance of
         the Loans, then, in any such case, the Company shall promptly pay to
         the Lender, upon written demand therefor by the Lender, which demand
         shall be accompanied by documentation of such additional cost or costs,
         any additional amounts necessary to compensate the Lender for such
         additional cost or reduced amounts receivable or rate of return as
         determined by the Lender with respect to this Agreement or Loans made
         hereunder. If the Lender becomes entitled to claim any additional
         amounts pursuant to this Paragraph 1(d), it shall promptly notify the
         Company of the event by reason of which it has become so entitled. A
         certificate as to any additional amounts payable pursuant to the
         foregoing sentence containing the calculation thereof in reasonable
         detail submitted by the Lender to the Company shall be conclusive in
         the absence of manifest error. The provisions hereof shall survive the
         termination of this Agreement and payment of the outstanding Loans and
         all other amounts payable hereunder.

         2. MISCELLANEOUS LENDING PROVISIONS.

                  2(a) USE OF PROCEEDS. The proceeds of all Loans shall be used
by the Company solely for the purpose of originating and acquiring Mortgage
Loans (except that the proceeds of that amount of the Loans outstanding
hereunder at any time which corresponds to the FNMA Servicing Percentage of the
amount of all Loans outstanding hereunder at such time may be used only to
acquire Assigned Servicing Rights pertaining to Servicing Contracts with respect
to which FNMA is the investor).

                  2(b) REQUEST FOR LOANS; MAKING OF LOANS. If the Company
desires to borrow a Loan hereunder, the Company shall make a Loan Request to the
Lender no later than 3:00 p.m. (Charlotte, North Carolina time) on the proposed
funding date. The Lender shall make available the proposed Loan by crediting the
amount thereof in immediately available same day funds to the Funding Account no
later than 4:00 p.m. (Charlotte, North Carolina time) on such date.

                  2(c) NOTE. The obligation of the Company to repay the Loans
shall be evidenced by a note payable to the order of the Lender in the form
attached hereto as EXHIBIT A (the "Note").

                  2(d) INTEREST AND FEE BILLING AND PAYMENT. The Lender shall,
on or before the fifth Business Day of each month, deliver to the Company an
interest and fee billing for the immediately preceding month, which billing
shall set forth interest accrued and payable on Loans and fees payable


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hereunder for such month and which billing shall be payable no later than the
second Business Day following receipt thereof by the Company.

                  2(e) REPAYMENT OF PRINCIPAL. Subject to the prepayment
requirements of Paragraph 2(j) below and the required application of proceeds
from the sale or other disposition of Mortgage Loans as provided in the Security
Agreement, the Company shall pay the principal amount of all Loans on the
Maturity Date.

                  2(f)     BORROWING BASE CONFORMITY.

                           (1) The Company shall cause to be maintained with the
         Lender a Borrowing Base such that the Collateral Value of the Borrowing
         Base is not less than, at any date, the sum of the aggregate dollar
         amount of outstanding Loans.

                           (2) The Company shall prepay Loans to the Lender,
         upon telephonic or facsimile demand by the Lender, on any day in the
         amount by which the aggregate principal amount of outstanding Loans
         exceeds the Collateral Value of the Borrowing Base, said prepayment to
         be made on the date on which demand is made by the Lender if made prior
         to 4:00 p.m. (Charlotte, North Carolina time) or, if made later than
         4:00 p.m. (Charlotte, North Carolina time), before 9:00 a.m.
         (Charlotte, North Carolina time) on the next Business Day.

                           (3) If at such time as the Company shall be required
         to prepay Loans under this Paragraph 2(f) there shall not have occurred
         and be continuing an Event of Default or Potential Default hereunder,
         in lieu of prepaying the Loans as required, the Company may deliver to
         the Lender additional Eligible Borrowing Base Loans such that the
         Collateral Value of the Borrowing Base, after giving effect to the
         inclusion of such Eligible Borrowing Base Loans in the Borrowing Base,
         shall be in compliance with the requirements of subparagraphs (1) and
         (2) above.

                  2(g) NATURE AND PLACE OF PAYMENTS. All payments made on
account of the Obligations shall be made to the Lender and the Lender is hereby
irrevocably authorized to debit the Settlement Account on account thereof. All
payments made on account of the Obligations shall be made without setoff or
counterclaim in lawful money of the United States of America in immediately
available same day funds, free and clear of and without deduction for any taxes,
fees or other charges of any nature whatsoever imposed by any taxing authority
and if received by the Lender by 4:00 p.m. (Charlotte, North Carolina time) such
payment will be credited on the Business Day received. If a payment is received
after 4:00 p.m. (Charlotte, North Carolina time) by the Lender, such payment
will be credited on the next succeeding Business Day and interest thereon shall
be payable at the then applicable rate until credited. If any payment required
to be made by the Company hereunder becomes due and payable on a day other than
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall be payable at the then applicable rate
during such extension.

                  2(h) POST-MATURITY INTEREST. Any Obligations not paid when due
(whether at stated maturity, upon acceleration or otherwise) shall bear interest
from the date due until paid in full at a per annum rate equal to four percent
(4%) above the interest rate otherwise applicable thereto, or, if such
Obligations do not otherwise bear interest, four percent (4%) above the
Corporate Base Rate.


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                  2(i) COMPUTATIONS. All computations of interest and fees
payable hereunder shall be based upon a year of 360 days for the actual number
of days elapsed.

                  2(j) PREPAYMENTS.

                           (1) The Company may voluntarily prepay Loans
         hereunder in whole or in part at any time.

                           (2) Loans hereunder are subject to mandatory
         prepayment pursuant to Paragraph 2(f) above and, in addition, by
         application of proceeds of the sale or other disposition of Collateral
         as provided in the Security Agreement.

                           (3) The Company shall pay in connection with any
         prepayment hereunder all interest accrued but unpaid on Loans to which
         such prepayment is applied concurrently with payment to the Lender of
         any principal amounts.

                  2(k) ALLOCATION OF PAYMENTS RECEIVED.

                           (1) Prior to the occurrence of an Event of Default
         and acceleration of all Loans outstanding hereunder or termination of
         the commitment of the Lender to advance Loans hereunder, all amounts
         received by the Lender shall be applied against the outstanding
         Obligations.

                           (2) Following the occurrence of an Event of Default
         and acceleration of all Loans outstanding hereunder or termination of
         the commitments of the Lender to advance Loans hereunder, all amounts
         received by the Lender on account of the Obligations shall be applied
         by the Lender as follows:

                              (i) First, to the payment of reasonable costs and
                  expenses incurred by the Lender in the enforcement of its
                  rights under the Credit Documents, including, without
                  limitation, all costs and expenses of collection, attorneys'
                  fees, court costs and foreclosure expenses;

                              (ii) Second, to the Lender to be applied against
                  the Obligations until the Obligations shall have been paid in
                  full; and

                              (iii) Third, to such Persons as may be legally
                  entitled thereto.

                  2(l) FEES. The Company shall pay the following fees to the
Lender:

                           (1) Such closing fees as are agreed to in writing by
the Company and the Lender, said fees to be payable on or before the date of
making the first Loan hereunder.

                           (2) A subprime lending fee, such fee to be computed
on a per annum basis payable in monthly installments, in arrears, on the dates
set forth for payment of interest in Paragraph


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2(d) hereof, each such installment to be in an amount equal to the product of:
(i) the average daily aggregate principal amount of Loans outstanding during the
preceding month; MULTIPLIED BY (ii) the quotient of (A) the average daily Unit
Collateral Values for all Eligible Subprime Mortgage Loans included in the
Borrowing Base during the preceding month; DIVIDED BY (B) the average daily
aggregate Unit Collateral Values for all Eligible Borrowing Base Loans included
in the Borrowing Base during the preceding month; MULTIPLIED BY (iii) 1.00%;
DIVIDED BY (iv) 12.

                           (3) A collateral handling fee of $4.00 with respect
to each Mortgage Loan (and related Required Documents) delivered to the Lender
for inclusion in the Borrowing Base, such fee to be payable in monthly
installments, in arrears, on the dates set forth for payment of interest in
Paragraph 2(d) hereof.

         3. SECURITY AGREEMENT; ADDITIONAL DOCUMENTS.

                  3(a) SECURITY AGREEMENT AND FINANCING STATEMENTS. On or before
the date hereof (except as specifically noted herein), the Company shall execute
and deliver to the Lender: (1) a security agreement in the form of that attached
hereto as EXHIBIT B (the "Security Agreement"), pursuant to which the Company
shall pledge, assign and grant to the Lender a perfected, first priority
security interest in and lien upon the Collateral, (2) such UCC financing
statements as the Lender may request, and (3) within sixty (60) days following
the date hereof, acknowledgment and consent forms, each in form and substance
acceptable to the Lender, duly executed by each investor under a Servicing
Contract or, if such acknowledgment and consent forms are not available with
respect to any Servicing Contract, other evidence reasonably satisfactory to the
Lender that the Company's interest in such Servicing Contract can be pledged as
Collateral (for the purposes of the foregoing, a consent may consist of one or
more separate documents which, taken as a whole, evidence the consent of the
applicable investor to the assignment of the Company's interest, an agreement to
appoint an entity acceptable to the Lender as a successor servicer, and a
suitable Resignation Letter).

                  3(b) FURTHER DOCUMENTS. The Company agrees to execute and
deliver and to cause to be executed and delivered to the Lender from time to
time such confirmatory and supplementary security agreements, financing
statements and other documents, instruments and agreements as the Lender may
reasonably request, which are in the Lender's judgment necessary or desirable to
obtain for the Lender the benefit of the Credit Documents and the Collateral.
The Company also hereby authorizes the Lender to execute and file, on behalf of
the Company, all financing statements which are in the Lender's judgment
necessary or desirable to obtain for the Lender the benefit of the Credit
Documents and the Collateral.

         4. CONDITIONS TO MAKING OF LOANS.

                  4(a) FIRST LOAN. As conditions precedent to the Lender's
obligation to make the first Loan hereunder:

                  (1) The Company shall have delivered to the Lender, in form
         and substance satisfactory to the Lender and its counsel, each of the
         following:

                              (i) A duly executed copy of this Agreement;

                              (ii) A duly executed copy of the Security
                  Agreement;


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                              (iii) A duly executed copy of the Note;

                              (iv) Duly executed copies of all financing
                  statements and other documents, instruments and agreements,
                  properly executed, deemed necessary or appropriate by the
                  Lender, in its reasonable discretion, to obtain for the Lender
                  a perfected, first priority security interest in and lien upon
                  the Collateral and, within sixty (60) days following the date
                  hereof, acknowledgments and consents duly executed by each
                  investor under a Servicing Contract covering Assigned Rights
                  and by the Company, as more particularly set forth in
                  Paragraph 3(a)(3) above;

                                    (v) Such credit applications, financial
                  statements, authorizations and such information concerning the
                  Company and its business, operations and conditions (financial
                  and otherwise) as the Lender may reasonably request;

                              (vi) Certified copies of resolutions of the Board
                  of Directors of the Company approving the execution and
                  delivery of the Credit Documents to which the Company is a
                  party, the performance of the Obligations thereunder and the
                  consummation of the transactions contemplated thereby;

                              (vii) A certificate of the Secretary or an
                  Assistant Secretary of the Company certifying the names and
                  true signatures of the officers of the Company authorized to
                  execute and deliver the Credit Documents to which the Company
                  is a party;

                              (viii) A copy of the Articles of Incorporation of
                  the Company, certified by the respective Secretary or an
                  Assistant Secretary of the Company as of the date of this
                  Agreement as being accurate and complete;

                              (ix) A copy of the Bylaws of the Company,
                  certified by the respective Secretary or an Assistant
                  Secretary of the Company as of the date of this Agreement as
                  being accurate and complete;

                              (x) A certificate of the Secretary of State of the
                  Commonwealth of Massachusetts, certifying as of a recent date
                  that the Company is in good standing;

                              (xi) An opinion of counsel for the Company
                  substantially in the form of EXHIBIT C attached hereto and
                  covering such other matters as the Lender may reasonably
                  request;

                              (xii) Evidence satisfactory to the Lender that
                  each of the Funding Account and the Settlement Account has
                  been opened;

                              (xiii) A schedule of the initial Approved
                  Investors duly approved by the Lender;

                              (xiv) A duly completed Borrowing Base Schedule
                  dated as of the date of the first Loan hereunder and certified
                  by the Company to be true in all respects; and


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                              (xv) A Covenant Compliance Certificate
                  demonstrating in detail satisfactory to the Lender that the
                  Company is in compliance with the covenants set forth in
                  Paragraphs 7(j), 7(k) and 7(l) below.


                           (2) All acts and conditions (including, without
         limitation, the obtaining of any necessary regulatory approvals and the
         making of any required filings, recordings or registrations) required
         to be done and performed and to have happened precedent to the
         execution, delivery and performance of the Credit Documents and to
         constitute the same legal, valid and binding obligations, enforceable
         in accordance with their respective terms, shall have been done and
         performed and shall have happened in due and strict compliance with all
         applicable laws.

                           (3) All documentation, including, without limitation,
         documentation for corporate and legal proceedings in connection with
         the transactions contemplated by the Credit Documents shall be
         satisfactory in form and substance to the Lender and its counsel.

                           (4) All fees required to be paid on or before the
         date hereof pursuant to Paragraph 2(l) above shall have been paid prior
         to (or will be paid concurrently with) the making of the first Loan
         hereunder.

                  4(b) ONGOING LOANS. As conditions precedent to the Lender's
obligation to make any Loan hereunder, including the first Loan, at and as of
the date of advance thereof;

                           (1) There shall have been delivered to the Lender a
         Loan Request therefor;

                           (2) The representations and warranties of the Company
         contained in the Credit Documents (as modified pursuant to additional
         information which may be provided in writing by the Company to the
         Lender from time to time) shall be accurate and complete in all
         respects as if made on and as of the date of such advance;

                           (3) There shall not have occurred an Event of Default
         or Potential Default;

                           (4) Following the funding of the requested Loan, the
         aggregate principal amount of Loans outstanding will not exceed the
         lesser of: (i) the Credit Limit and (ii) the Collateral Value of the
         Borrowing Base;

                           (5) There shall not have occurred any material
         adverse change in the financial condition, assets, nature of assets,
         operations or prospects of the Company from that represented in this
         Agreement, the other Credit Documents, or the documents or information
         furnished to the Lender in connection herewith or therewith; and

                           (6) The Required Documents for the Mortgage Loan(s)
         being funded therewith shall have been received by the Lender (except
         as otherwise provided in subsection (o) of the definition of Eligible
         Mortgage Loan).


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By making a Loan Request to the Lender hereunder, the Company shall be deemed to
have represented and warranted the accuracy and completeness of the statements
set forth in subparagraphs (b)(2) through (b)(6) above.

         5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to the Lender that:

                  5(a) FINANCIAL CONDITION. The financial statements, dated the
Statement Date and the Interim Date, copies of which have been furnished to the
Lender, are complete and correct and have been prepared to present fairly, in
accordance with GAAP, the financial condition of the Company at such dates and
the results of its operations and changes in financial position for the fiscal
periods then ended.

                  5(b) NO CHANGE. As of the date hereof, there has been no
material adverse change in the business, operations, assets or financial or
other condition of the Company from that shown on the financial statements dated
as of the Interim Date referred to in Paragraph 5(a) above.

                  5(c) CORPORATE EXISTENCE; COMPLIANCE WITH LAW. The Company:
(1) is duly organized, validly existing and in good standing as a corporation
under the laws of the Commonwealth of Massachusetts and is qualified to do
business in each jurisdiction where its ownership of property or conduct of
business requires such qualification and where failure to qualify could have a
material adverse effect on the Company or its property or business or on the
ability of the Company to pay or perform the Obligations, (2) has the corporate
power and authority and the legal right to own and operate its property and to
conduct business in the manner in which it does and proposes so to do, and (3)
is in compliance with all Requirements of Law and Contractual Obligations, the
failure to comply with which could have a material adverse effect on the
business, operations, assets or financial or other condition of the Company or
on the Collateral or the Collateral Value of the Borrowing Base.

                  5(d) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
The Company has the corporate power and authority and the legal right to
execute, deliver and perform the Credit Documents and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Credit Documents. The Credit Documents have been duly executed and delivered on
behalf of the Company and constitute legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, subject to the effect of applicable bankruptcy and other similar laws
affecting the rights of creditors generally and the effect of equitable
principles whether applied in an action at law or a suit in equity.

                  5(e) NO LEGAL BAR. The execution, delivery and performance of
the Credit Documents, the borrowing hereunder and the use of the proceeds
thereof, will not violate any Requirement of Law or any Contractual Obligation
of the Company the violation of which could have a material adverse effect on
the business, operations, assets or financial or other condition of the Company
or on the Collateral or the Collateral Value of the Borrowing Base or create or
result in the creation of any Lien (except the Lien created by the Security
Agreement) on any assets of the Company.

                  5(f) NO MATERIAL LITIGATION. Except as disclosed on EXHIBIT D
hereto, no litigation, investigation or proceeding of or before any court,
arbitrator or Governmental Authority is pending or, to


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the knowledge of the Company, threatened by or against the Company or against
any of its properties or revenues which is likely to be adversely determined and
which, if adversely determined, is likely to have a material adverse effect on
the business, operations, property or financial or other condition of the
Company or on the Collateral or the Collateral Value of the Borrowing Base.

                  5(g) TAXES. To the best of the Company's knowledge, all tax
returns that are required to be filed by or on behalf of the Company have been
filed and all taxes shown to be due and payable on said returns or on any
assessments made against the Company or any of its property (other than taxes
which are being contested in good faith by appropriate proceedings and as to
which the Company has established adequate reserves in conformity with GAAP)
have been paid.

                  5(h) INVESTMENT COMPANY ACT. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.

                  5(i) FEDERAL RESERVE BOARD REGULATIONS. The Company is not
engaged and will not engage, principally or as one of its important activities,
in the business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" within the respective meanings of such terms under
Regulation U. No part of the proceeds of any Loan issued hereunder will be used,
directly or indirectly, for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of the Board of Governors of the Federal
Reserve System.

                  5(j) ERISA. The Company and each of its ERISA Affiliates are
in compliance in all respects with the requirements of ERISA and no Reportable
Event has occurred under any Plan maintained by the Company or any of its ERISA
Affiliates which is likely to result in the termination of such Plan for
purposes of Title IV of ERISA.

                  5(k) ASSETS. The Company has good and marketable title to all
property and assets reflected in the financial statements referred to in
Paragraph 5(a) above, except property and assets sold or otherwise disposed of
in the ordinary course of business subsequent to the respective dates thereof.
The Company has no outstanding Liens on any of its properties or assets and
there are no security agreements to which the Company is a party, nor any title
retention agreements, whether in the form of leases or otherwise, of any
personal property except as permitted under Paragraph 7(a) below.

                  5(l) SECURITIES ACTS. The Company has not issued any
unregistered securities in violation of the registration requirements of
Paragraph 5 of the Securities Act of 1933, as amended, or any other law, and is
not violating any rule, regulation or requirement under the Securities Act of
1933, as amended, or the Securities and Exchange Act of 1934, as amended. The
Company is not required to qualify an indenture under the Trust Indenture Act of
1939, as amended, in connection with its execution and delivery of the Note.

                  5(m) CONSENTS, ETC. No consent, approval, authorization of, or
registration, declaration or filing with, any Governmental Authority is required
on the part of the Company in connection with the execution and delivery of the
Credit Documents (other than filings to perfect the security interests granted
by it) or the performance of or compliance with the terms, provisions and
conditions hereof or thereof.


                                       9
<PAGE>

                  5(n) OWNERSHIP AND SUBSIDIARIES. SCHEDULE II attached hereto
and incorporated herein by reference lists (i) all of the shareholders of the
Company and (ii) all of the Subsidiaries of the Company, each as of the
effective date of this Agreement.

                  5(o) STATUS. The Company is a FNMA and FHLMC approved
seller/servicer, and a GNMA approved issuer/servicer.

         6. AFFIRMATIVE COVENANTS. The Company hereby covenants and agrees with
the Lender that, as long as any Obligations remain unpaid or the Lender has any
obligation to make Loans hereunder, the Company shall:

                  6(a) FINANCIAL STATEMENTS. Furnish or cause to be furnished to
the Lender:

                           (1) Within ninety (90) days after the last day of
         each fiscal year of the Company, statements of income and cash flows
         for such year and balance sheets as of the end of such year of the
         Company, presented fairly in accordance with GAAP and accompanied by an
         unqualified report of a firm of independent certified public
         accountants acceptable to the Lender and including therewith all
         schedules and comments thereto and a copy of any management letter from
         such certified public accountants;

                           (2) Within ninety (90) days after the last day of
         each fiscal year of the Parent, consolidated and consolidating
         statements of income and cash flows for such year and consolidated and
         consolidating balance sheets as of the end of such year of the Parent,
         presented fairly in accordance with GAAP and accompanied by an
         unqualified report of a firm of independent certified public
         accountants acceptable to the Lender and including therewith all
         schedules and comments thereto and a copy of any management letter from
         such certified public accountants;

                           (3) Within forty-five (45) days after the last day of
         each calendar quarter, statements of income and cash flows for such
         calendar quarter and balance sheets as of the last day of such calendar
         quarter of the Company, certified by the President or the Chief
         Financial Officer of the Company to be true and correct and prepared
         fairly in accordance with GAAP;

                           (4) Within forty-five (45) days after the last day of
         each calendar quarter, a consolidated and consolidating statement of
         income for such calendar quarter of the Parent, certified by the
         President or the Chief Financial Officer of the Parent to be true and
         correct and prepared fairly in accordance with GAAP;

                           (5) Within forty-five (45) days after the last day of
         each calendar month, statements of income for such month and balance
         sheets as of the end of such month of the Company accompanied in each
         case by a Covenant Compliance Certificate of the President or the Chief
         Financial Officer of the Company, stating that such financial
         statements are true and correct and prepared fairly in accordance with
         GAAP and demonstrating in detail satisfactory to the Lender the
         Company's compliance with the financial covenants set forth in
         Paragraphs 7(j), 7(k) and 7(l) below as of and at the end of such
         month; and

                           (6) Within thirty (30) days after the last day of
         each fiscal year of the Company, projected statements of income and
         cash flow for the succeeding fiscal year and a


                                       10
<PAGE>

         projected balance sheet as of the end of such succeeding fiscal year,
         prepared by the Company in accordance with GAAP and in accordance with
         reasonable assumptions and forecasts.

                  6(b) CERTIFICATES; REPORTS; OTHER INFORMATION. Furnish or
cause to be furnished to the Lender:

                           (1) Within thirty (30) days after the last day of
         each calendar month unless otherwise requested in writing by the
         Lender, a Monthly Production Report for such month;

                           (2) Promptly, such additional financial and other
         information, including, without limitation, financial statements of the
         Company or any Approved Investor (other than FNMA or FHLMC) to the
         extent available to the Company, and information regarding the
         Collateral as the Lender may from time to time reasonably request;

                           (3) Promptly, and in any event within five (5)
         business days after received or sent by the Company, (i) true and
         complete copies of all audits, reports, studies and similar
         documentation prepared by, or on behalf of FNMA, FHLMC, GNMA, FHA, VA
         or the Department of Housing and Urban Development or similar agency
         relating to the Company's operations, servicing or lending practices or
         which have been done in connection with a review, extension or
         conditioning of any licenses and approvals issued to the Company by
         FNMA, FHLMC, GNMA, FHA or VA; and (ii) copies of all correspondence
         between any of the foregoing departments and agencies and the Company
         related to any such audits, reports, studies and similar documents;

                           (4) Promptly, copies of any and all forms, reports,
         supplements or other documents of any kind filed by the Company with
         the Securities and Exchange Commission;

                           (5) Promptly, upon request therefor by the Lender, a
         Pipeline Position Report;

                           (6) Promptly, and in any event within five (5)
         Business Days after received or sent by the Company, true and complete
         copies of any and all notices, correspondences and similar
         documentation prepared by, or on behalf of, any investor under a
         Servicing Contract in the event such notices, correspondence or
         documentation declare or allege that the Company is (or will be after
         the passage of time) in default under a Servicing Contract or which
         terminates or threatens to terminate a Servicing Contract;

                           (7) Upon entry by the Company into any Servicing
         Contract with a new investor which Servicing Contract is to be included
         in the Assigned Servicing Rights, an acknowledgement and consent
         executed by such investor in form and content satisfactory to the
         Lender; and

                           (8) Within forty-five (45) days after the end of each
         calendar month, a servicing portfolio report detailing the aggregate
         delinquency status of Mortgage Loans being serviced by the Company and
         such other reports regarding servicing as may be requested by the
         Lender.


                                       11
<PAGE>

                  6(c) PAYMENT OF INDEBTEDNESS. Pay or otherwise satisfy at or
before maturity or before it becomes delinquent or accelerated, as the case may
be, all its Indebtedness (including taxes), except Indebtedness being contested
in good faith by appropriate proceedings and for which provision is made to the
satisfaction of the Lender for the payment thereof in the event the Company is
found to be obligated to pay such Indebtedness and which Indebtedness is
thereupon promptly paid by the Company.

                  6(d) MAINTENANCE OF EXISTENCE AND PROPERTIES. Maintain its
corporate existence and obtain and maintain all rights, privileges, licenses,
approvals, franchises, properties and assets necessary in the normal conduct of
its business, including but not limited to all approvals with respect to FNMA,
FHLMC, GNMA, FHA and VA, and comply with all Contractual Obligations and
Requirements of Law (including, without limitation, any Requirements of Law
under or in connection with ERISA), except where the failure to so comply is not
likely to have a material adverse effect on the business, operations, assets or
financial or other condition of the Company or on the Collateral or the
Collateral Value of the Borrowing Base. The Company will at all times be a FNMA
and FHLMC approved Seller/Servicer, and a GNMA approved Issuer/Servicer, such
approved status not to be subject to any material limiting conditions unique to
the Company other than conditions acceptable to the Lender in its reasonable
business judgment.

                  6(e) INSPECTION OF PROPERTY; BOOKS AND RECORDS; AUDITS.

                           (1) Keep proper books of record and account in which
         full, true and correct entries in conformity with GAAP and all
         Requirements of Law shall be made of all dealings and transactions in
         relation to its business and activities; and

                           (2) Permit: (i) representatives of the Lender to (A)
         visit and inspect any of its properties and examine and make abstracts
         from any of its books and records at any reasonable time and as often
         as may reasonably be desired by the Lender (but, prior to the
         occurrence of an Event of Default, only upon not less than two Business
         Days' prior notice) no more frequently than once per calendar quarter
         prior to the occurrence of an Event of Default, and (B) discuss the
         business, operations, properties and financial and other condition of
         the Company with officers and employees of the Company, and with its
         independent certified public accountants (provided that the Lender
         shall not disclose to any officer or employee of the Company the terms
         and conditions of this Agreement or any other agreement without the
         Company's express consent), and (ii) representatives of the Lender to
         conduct periodic operational audits of the Company's business and
         operations no more frequently than once per calendar quarter prior to
         the occurrence of an Event of Default; PROVIDED, HOWEVER, that such
         visits, inspections, discussions or audits shall be conducted so as not
         to unreasonably interfere with the business of the Company.

                  6(f) NOTICES. Promptly give written notice to the Lender of:

                           (1) The occurrence of any Potential Default or Event
         of Default known to responsible management personnel of the Company and
         the proposed method of cure thereof;

                           (2) Any litigation or proceeding affecting the
         Company or the Collateral which is likely, in the reasonable judgment
         of the Company, to have a material adverse effect on the Collateral,
         the Collateral Value of the Borrowing Base or the business, operations,
         property, or financial or other condition of the Company;


                                       12
<PAGE>

                           (3) A material adverse change known to responsible
         management personnel of the Company in the business, operations,
         property or financial or other condition of the Company; and

                           (4) Any changes in the following senior management
         positions of the Company or the Parent: James A. Marcotte as Senior
         Vice President and CFO of the Parent or of the Company, or Gail Hayes
         as President of the Company.

                  6(g) EXPENSES. Pay all reasonable out-of-pocket costs and
expenses (including fees and disbursements of legal counsel) of the Lender: (1)
incident to the preparation, negotiation and administration of the Credit
Documents, including with respect to or in connection with any waiver or
amendment thereof or thereto, and (2) incident to the enforcement of payment of
the Obligations, whether by judicial proceedings or otherwise, including,
without limitation, in connection with bankruptcy, insolvency, liquidations
reorganization moratorium or other similar proceedings involving the Company or
a "workout" of the Obligations. The obligations of the Company under this
Paragraph 6(g) shall be effective and enforceable whether or not any Loan is
advanced by the Lender hereunder and shall survive payment of all other
Obligations.

                  6(h) CREDIT DOCUMENTS. Comply with and observe all terms and
conditions of the Credit Documents.

                  6(i) INSURANCE. Obtain and maintain insurance with responsible
companies in such amounts and against such risks as are usually carried by
corporations engaged in similar businesses similarly situated, including,
without limitation, errors and omissions coverage and fidelity coverage in form
and substance acceptable under FNMA, FHLMC or GNMA guidelines, and furnish the
Lender on request full information as to all such insurance, and to provide
within five (5) days after receipt, certificates or other documents evidencing
the renewal of each such policy.

                  6(j) WET FUNDING MORTGAGE LOAN TRANSMITTAL FORM. Furnish or
cause to be furnished to the Lender, with each Eligible Borrowing Base Loan
shipped or delivered which is of the type described in the proviso contained in
subsection (o) of the definition of Eligible Mortgage Loan, a Wet Funding
Mortgage Loan Transmittal Form substantially in the form attached as EXHIBIT L
hereto.

         7. NEGATIVE COVENANTS. The Company hereby agrees that, as long as any
Obligations remain unpaid or the Lender has any obligation to make Loans
hereunder, the Company shall not at any time, directly or indirectly:

                  7(a) LIENS. Create, incur, assume or suffer to exist, any Lien
upon the Collateral except as contemplated by the Security Agreement, or create,
incur, assume or suffer to exist any Lien upon any of its other property and
assets (including the Assigned Servicing Rights and any other servicing rights)
except:

                           (1) Liens for current taxes, assessments or other
         governmental charges which are not delinquent or which remain payable
         without penalty, or the validity of which are contested in good faith
         by appropriate proceedings upon stay of execution of the enforcement
         thereof, provided the Company shall have set aside on its books and
         shall maintain adequate reserves for the payment of same in conformity
         with GAAP;


                                       13
<PAGE>

                           (2) Liens, deposits or pledges made to secure
         statutory obligations, surety or appeal bonds, or bonds for the release
         of attachments or for stay of execution, or to secure the performance
         of bids, tenders, contracts (other than for the payment of borrowed
         money), leases or for purposes of like general nature in the ordinary
         course of the Company's business;

                           (3) Purchase money security interests for property
         (except Mortgage Loans) hereafter acquired, conditional sale
         agreements, or other title retention agreements, with respect to
         property hereafter acquired; provided, however, that no such security
         interest or agreement shall affect any servicing rights or extend to
         any property other than the property acquired; and

                           (4) Liens securing Permitted Secured Debt.

                  7(b) INDEBTEDNESS. Create, incur, assume or suffer to exist,
or otherwise become or be liable in respect of any Indebtedness except:

                           (1) The Obligations;

                           (2) Trade debt incurred in the ordinary course of
         business, paid within thirty (30) days after the same has become due
         and payable or which is being contested in good faith, provided
         provision is made to the satisfaction of the Lender for the eventual
         payment thereof in the event it is found that such contested trade debt
         is payable by the Company;

                           (3) Indebtedness secured by Liens permitted under
         Paragraph 7(a) above;

                           (4) Capitalized Lease Obligations and chattel
         mortgages in an aggregate amount not to exceed at any one time
         outstanding $750,000; and

                           (5) Permitted Other Debt.

                  7(c) CONSOLIDATION AND MERGER; CHANGE OF BUSINESS. Liquidate
or dissolve or enter into any consolidation, merger, partnership, joint venture,
syndicate or other combination or make any change in the nature of its business
as a mortgage banker as presently conducted.

                  7(d) ACQUISITIONS. Purchase or acquire or incur liability for
the purchase or acquisition of any or all of the assets or business of any
Person, other than in the normal course of business as currently conducted (it
being expressly agreed and understood that the acquisition of non-recourse
servicing is a normal course of business activity and that the acquisition of
recourse servicing is not a normal course of business activity), without the
prior written consent of the Lender, which consent shall not be unreasonably
withheld.

                  7(e) TRANSFER OF STOCK. Permit the acquisition, purchase,
redemption, retirement, transfer or issuance of any shares of its capital stock
now or hereafter outstanding which would result in the Parent owning less than
one hundred percent (100%) of its outstanding capital stock.

                  7(f) SUBSIDIARIES. Organize any Subsidiary.


                                       14
<PAGE>

                  7(g) INVESTMENTS; ADVANCES; GUARANTIES. Make or commit to make
any advance (other than Servicing Advances), loan or extension of credit (other
than Mortgage Loans made in the ordinary course of the Company's business) or
capital contribution to, or purchase any stocks, bonds, notes, debentures or
other securities of, or make any other investment in, or guaranty the
indebtedness or other obligations of, any Person; PROVIDED, HOWEVER, that the
Company shall be permitted to make advances or loans to the Parent or to any of
the Company's Affiliates so long as the outstanding amount of all such loans and
advances does not exceed $500,000 at any time.

                  7(h) SALE OF ASSETS. Sell, lease, assign, transfer or
otherwise dispose of any of its assets (other than obsolete or worn out
property), whether now owned or hereafter acquired, other than in the ordinary
course of business as currently conducted and at fair market value (it being
expressly agreed and understood that the sale or other disposition of
Mortgage-Backed Securities and Mortgage Loans with or without servicing released
and of mortgage servicing rights is in the ordinary course of business).

                  7(i) Intentionally Deleted.

                  7(j) MINIMUM ADJUSTED TANGIBLE NET WORTH. Permit its Adjusted
Tangible Net Worth at any date to be less than $2,400,000.00.

                  7(k) LIABILITIES TO ADJUSTED TANGIBLE NET WORTH RATIO. Permit
its ratio at any date of Total Liabilities to Adjusted Tangible Net Worth to be
more than 15.0:1.0.

                  7(l) CURRENT RATIO. Permit its ratio at any time of total
assets (as determined in accordance with GAAP) to Total Liabilities to be less
than 1.0:1.0.

                  7(m) DIVIDENDS. During any fiscal quarter, declare and pay any
dividends, or return any capital, to its shareholders or authorize or make any
other distribution, payment or delivery of property or cash to its shareholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital stock
now or hereafter outstanding (or any option or warrants issued by it for or with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes.

         8. EVENTS OF DEFAULT. Upon the occurrence of any of the following
events (an "Event of Default"):

                  8(a) The Company shall fail to pay, on the date when due,
principal or interest on any Loan or any fee payable pursuant to Paragraph 2(l)
above or any amount payable pursuant to Paragraph 2(f)(2) above (PROVIDED,
HOWEVER, that the Lender shall promptly give notice to the Company of any
nonpayment which would give rise to an Event of Default under this Paragraph
8(a) and the Company shall have one (1) Business Day in which to cure such
nonpayment, during which period the Lender agrees that it shall not exercise its
remedies to collect the Obligations except as the Lender reasonably deems
necessary to protect its interest in the Collateral; PROVIDED, FURTHER, that the
Company shall have no right to exercise this right to cure more than two (2)
times during any twelve (12) month period); or

                  8(b) Any representation or warranty made or deemed made by
the Company in any Credit Document or in connection with any Credit Document
shall be inaccurate or incomplete in any material respect on or as of the
date made or deemed made (PROVIDED, HOWEVER, that in the event the Lender, in
its sole discretion, determines any representation or warranty inaccurate or
incomplete in any

                                       15
<PAGE>

material respect, the Lender shall promptly give notice to the Company of
such determination and the Company shall have two (2) Business Days in which
to present evidence satisfactory to the Lender, in the Lender's sole
discretion, that such inaccuracy or incompleteness does or did not exist,
during which period the Lender agrees that it shall not exercise its remedies
to collect the Obligations except as the Lender reasonably deems necessary to
protect its interest in the Collateral); or

                  8(c) The Company shall fail to maintain its corporate
existence or shall default in the observance or performance of any covenant or
agreement contained in Paragraph 7 above or in the Security Agreement; or

                  8(d) The Company shall fail to observe or perform any other
term or provision contained in the Credit Documents and such failure shall
continue for thirty (30) days after the Company first becomes aware of such
failure; or

                  8(e) The Company shall default in any payment of principal of
or interest on any Indebtedness in the aggregate principal amount of $100,000.00
or more (and without regard for the dollar amount of the defaulted payment), or
any other event shall occur, the effect of which is to permit such Indebtedness
to be declared or otherwise to become due prior to its stated maturity; or

                  8(f) (1) The Company shall commence any case, proceeding or
other action (i) relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to the
Company, or seeking to adjudicate the Company, a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the Company or its
debts, or (ii) seeking appointment of a receiver, trustee, custodian or other
similar official for the Company or for all or any substantial part of its
assets, or the Company shall make a general assignment for the benefit of its
creditors; or (2) there shall be commenced against the Company any case,
proceeding or other action of a nature referred to in clause (1) above which (i)
results in the entry of an order for relief or any such adjudication or
appointment, or (ii) remains undismissed, undischarged or unbonded for a period
of ninety (90) days; or (3) there shall be commenced against the Company any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or substantially all of its
assets which results in the entry of an order for any such relief which shall
not have been vacated, discharged, stayed, satisfied or bonded pending appeal
within ninety (90) days from the entry thereof; or (4) the Company shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in (other than in connection with a final settlement), any of the
acts set forth in clauses (1), (2) or (3) above; or (5) the Company shall
generally not, or shall be unable to, or shall admit in writing its inability to
pay its debts as they become due; or

                  8(g) (1) The Company or any of its ERISA Affiliates shall
engage in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (2) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan, (3) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or institution of proceedings is, in the reasonable
opinion of the Lender, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, and, in the case of a Reportable Event, the
continuance of such Reportable Event unremedied for ten days after notice of
such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given
or the continuance of such proceedings for ten days after commencement thereof,
as the case may be, (4) any


                                       16
<PAGE>

Single Employer Plan shall terminate for purposes of Title IV of ERISA, (5) any
withdrawal liability to a Multiemployer Plan shall be incurred by the Company or
any of its ERISA Affiliates or (6) any other event or condition shall occur or
exist; and in each case in clauses (1) through (6) above, such event or
condition, together with all other such events or conditions, if any, is likely
to subject the Company or any of its respective ERISA Affiliates to any tax,
penalty or other liabilities in the aggregate material in relation to the
business, operations, property or financial or other condition of the Company or
any of its ERISA Affiliates; or

                  8(h) One or more judgments or decrees in an aggregate amount
in excess of $100,000.00 shall be entered against the Company and all such
judgments or decrees shall not have been vacated, discharged, stayed, satisfied
or bonded pending appeal within ninety (90) days from the entry thereof; or

                  8(i) Any acquisition, purchase, redemption, retirement,
transfer or issuance of the company's capital stock shall occur in violation of
Paragraphs 7(e) or 7(m) above, or any change in the management of the Company
shall occur in violation of Paragraph 7(i) above, or any Change of Control shall
occur;

                                      THEN:

                           (1) Automatically upon the occurrence of an Event of
         Default under Paragraph 8(f) above; and

                           (2) In all other cases, at the option of the Lender,

the Lender's obligation to make Loans hereunder shall terminate and the
principal balance of outstanding Loans and interest accrued but unpaid thereon
shall become immediately due and payable, without demand upon or presentment to
the Company, which are expressly waived by the Company.


         9. MISCELLANEOUS PROVISIONS.

                  9(a) ASSIGNMENT. The Company may not assign its rights or
obligations under this Agreement without the prior written consent of the
Lender. The Lender shall not assign its rights and obligations under this
Agreement to any other party not a party to this Agreement as of the date
hereof; PROVIDED, HOWEVER, that the Lender may at any time pledge or assign all
or any portion of the Lender's rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank. Subject to the foregoing, all provisions
contained in this Agreement or any document or agreement referred to herein or
relating hereto shall inure to the benefit of the Lender, its successors and
assigns, and shall be binding upon the Company, its successors and assigns.

                  9(b) AMENDMENT. Neither this Agreement nor any of the other
Credit Documents may be amended or terms or provisions hereof or thereof waived
unless such amendment or waiver is in writing and signed by the Lender and the
Company. It is expressly agreed and understood that the failure by the Lender to
elect to accelerate amounts outstanding hereunder or to terminate the obligation
of the


                                       17
<PAGE>

Lender to make Loans hereunder shall not constitute an amendment or waiver of
any term or provision of this Agreement.

                  9(c) CUMULATIVE RIGHTS; NO WAIVER. The rights, powers and
remedies of the Lender under the Credit Documents are cumulative and in addition
to all rights, powers and remedies provided under any and all agreements among
the Company and the Lender relating hereto, at law, in equity or otherwise. Any
delay or failure by the Lender to exercise any right, power or remedy shall not
constitute a waiver thereof by the Lender, and no single or partial exercise by
the Lender of any right, power or remedy shall preclude other or further
exercise thereof or any exercise of any other rights, powers or remedies.

                  9(d) ENTIRE AGREEMENT. This Agreement and the documents and
agreements referred to herein embody the entire agreement and understanding
between the parties hereto and supersede all prior agreements and understandings
relating to the subject matter hereof and thereof.

                  9(e) SURVIVAL. All representations, warranties, covenants and
agreements on the part of the Company contained in the Credit Documents shall
survive the termination of this Agreement and shall be effective until the
Obligations are paid and performed in full or longer as expressly provided
herein.

                  9(f) NOTICES. All notices given by any party to the others
under the Credit Documents shall be in writing unless otherwise provided for
herein, delivered personally, by facsimile transmission at the number set forth
on SCHEDULE I attached hereto, or by depositing the same in the United States
mail, registered, with postage prepaid, addressed to the party at the address
set forth on SCHEDULE I attached hereto. Any party may change the address to
which notices are to be sent by notice of such change to each other party given
as provided herein. Such notices shall be effective on the date received or, if
mailed, on the third Business Day following the date mailed.

                  9(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.

                  9(h) SUB-PARTICIPATION BY LENDER. The Lender may at any time
sell to one or more financial institutions (each of such financial institutions
being herein called a "Participant") participating interests in any of the
Obligations held by the Lender and its commitments hereunder; provided, however,
that: (1) no participation contemplated by this Paragraph 9(h) shall relieve the
Lender from its obligations hereunder or under any other Credit Document; (2)
the Lender shall remain solely responsible for the performance of such
obligations; (3) the Company shall continue to deal solely and directly with the
Lender in connection with the Lender's rights and obligations under the Credit
Documents; and (4) no participant shall have the right to declare a default or
to exercise remedies hereunder independent of the Lender.

                  9(i) COUNTERPARTS. This Agreement and the other Credit
Documents may be executed in any number of counterparts, all of which together
shall constitute one agreement.

                  9(j) EXCULPATORY PROVISIONS. Neither the Lender nor any of its
officers, directors, employees, agents, counsel, attorneys-in-fact or Affiliates
shall be liable to the Company for any action taken or omitted to be taken by it
or such Person under or in connection with the Credit Documents or


                                       18
<PAGE>

with respect to the Collateral (except for its or such Person's own gross
negligence or willful misconduct).

                  9(k) INDEMNIFICATION. The Company agrees to indemnify, defend
and hold harmless the Lender from and against any and all claims, obligations,
penalties, actions, suits, judgments, costs, disbursements, losses, liabilities
and damages (including, without limitation, attorneys' fees) of any kind
whatsoever which may at any time be imposed on, assessed against or incurred by
the Lender in any way relating to or arising out of the Credit Documents or any
documents contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted to be taken by the Lender in
connection with the foregoing; provided, the Company shall not be liable for any
portion of any such claims, obligations, etc., arising out of or resulting from
the gross negligence or willful misconduct of the Lender or of the Lender's
agents, representatives, employees or contractors, and provided further that the
Company shall not indemnify or hold harmless the Lender from and against any
such claims, obligations, penalties, actions, suits, judgments, costs,
disbursements, losses, liabilities or damages arising out of or resulting from a
claim, action or cause of action between the Lender and one or more shareholders
of the Lender whether or not relating to the Credit Documents or the Company.
The indemnification obligations of the Company under this Paragraph 9(k) shall
survive termination of this Agreement and payment in full of the Obligations.

                  9(l) BINDING ARBITRATION. Upon demand of any party hereto,
whether made before or after institution of any judicial proceeding, any
dispute, claim or controversy arising out of, connected with or relating to the
Note or any other Credit Document ("Disputes"), between or among parties to the
Note or any other Credit Document shall be resolved by binding arbitration as
provided herein. Institution of a judicial proceeding by a party does not waive
the right of that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaim, claims brought as class actions,
claims arising from Credit Documents executed in the future, or claims
concerning any aspect of the past, present or future relationships arising out
of or connected with the Credit Documents. Arbitration shall be conducted under
the and governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association and Title 9 of the
U.S. Code. All arbitration hearings shall be conducted in Charlotte, North
Carolina. the expedited procedures set forth in Rule 51, ET SEQ. of the
Arbitration Rules shall be applicable to claims of less than $1,000,000. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. The panel from which
all arbitrators are selected shall be comprised of licensed attorneys. The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal. of the state where
the hearing will be conducted. Notwithstanding the foregoing, this paragraph
shall not apply to any hedging arrangement that is a Credit Document.

         10. DEFINITIONS. For purposes of this Agreement, the terms set forth
below shall have the following meanings:

         "ADDITIONAL REQUIRED DOCUMENTS" shall mean for any Mortgage Loan those
items described on EXHIBIT E attached hereto.

         "ADJUSTED TANGIBLE NET WORTH" shall mean at any date:

                  (a) Book Net Worth, MINUS


                                       19
<PAGE>

                  (b) the sum of: (1) all assets which would be classified as
intangible assets under GAAP, including, without limitation, purchased and
capitalized value of servicing rights, goodwill (whether representing the excess
cost over book value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs and
research and product development costs) plus (2) all receivables due and owing
to the Company by its Affiliates or by its officers, directors, employees or
shareholders; PLUS

                  (c) one percent (1.00%) of the aggregate outstanding principal
balances of Mortgage Loans included in the Company's Eligible Servicing
Portfolio.

         "AFFILIATE" shall mean, as to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with, such Person. "Control" as used herein means the power to direct the
management and policies of such Person.

         "AGREEMENT" shall mean this Agreement, as the same may be amended,
modified, renewed, restated, extended or replaced from time to time.

         "APPLICABLE FED FUNDS RATE" shall mean, at any time, the Fed Funds Rate
at such time plus one and one-half percent (1.50%) per annum.

         "APPROVED INVESTOR" shall mean any Person pre-approved in writing
(which pre-approval may be limited in dollar amounts by type and otherwise) by
the Lender (including those shown on SCHEDULE III) and which approval has not
been revoked by the Lender in its sole discretion (such revocation to be
effective on the tenth Business Day following notice thereof given to the
Company in writing).

         "ASSIGNED SERVICING RIGHTS" shall mean all now existing and hereafter
arising rights of the Company to service, collect and administer Mortgage Loans,
and to receive fees and other compensation therefore, under Servicing Contracts
(whether directly or as assignee of the right of the original servicer
thereunder) between the Company and investors.

         "BOOK NET WORTH" shall mean the excess of total assets of the Company
over Total Liabilities of the Company determined in accordance with GAAP.

         "BORROWING BASE" shall mean at any date all Eligible Borrowing Base
Loans delivered to and held by the Lender or otherwise identified as Collateral
under the Security Agreement as collateral security for the Obligations.

         "BORROWING BASE SCHEDULE" shall mean a schedule prepared by the Lender
and certified to by the Company in the form of that attached hereto as EXHIBIT
F.

         "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banks in Charlotte, North Carolina are authorized or obligated to
close their regular banking business.

         "CAPITALIZED LEASE OBLIGATIONS" of any Person shall mean the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of


                                       20
<PAGE>

this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.

         "CHANGE OF CONTROL" shall mean if the persons who are directors of the
Company as of the date hereof (together with those who subsequently become
directors of the Company and whose election, or nomination for election by the
Company's stockholders, is approved by the vote of at least three-quarters of
the directors who were either directors as of the date hereof or directors
elected or nominated to succeed them as herein provided), shall cease to
constitute a majority of the Board of Directors of the Company.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "COLLATERAL" shall have the meaning given such term in the Security
Agreement.

         "COLLATERAL VALUE OF THE BORROWING BASE" shall mean at any date the sum
of the Unit Collateral Values of all Eligible Borrowing Base Loans included in
the Borrowing Base at such date.

         "COMMONLY CONTROLLED ENTITY" of a Person shall mean a Person, whether
or not incorporated, which is under common control with such Person within the
meaning of Section 414(c) of the Internal Revenue Code.

         "COMPANY" shall have the meaning given such term in the introductory
paragraph hereof.

         "CONTACT OFFICE" shall mean the office of the Lender at One First Union
Center, 301 South College Street, Charlotte, North Carolina 28288.

         "CONTRACTUAL OBLIGATION" as to any Person shall mean any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "CORPORATE BASE RATE" shall mean a rate per annum equal to the rate
announced from time to time by the Lender to be its "Prime Rate" as such "Prime
Rate" may change from time to time, said changes to occur on the first date the
"Prime Rate" changes; it being understood that the "Prime Rate" is the rate
announced by the Lender from time to time as its "Prime Rate" and is not
necessarily the lowest interest rate charged by the Lender to its customers.

         "COVENANT COMPLIANCE CERTIFICATE" shall mean a certificate in the form
of EXHIBIT G attached hereto.

         "CREDIT DOCUMENTS" shall mean this Agreement, the Security Agreement,
the Note and each other document, instrument and agreement executed by the
Company in connection herewith, as any of the same may be amended, extended or
replaced from time to time.

         "CREDIT LIMIT" shall mean $40,000,000.00.

         "DEFAULT-RELATED ADVANCE" shall mean an advance made by the Company
with respect to a Servicing Contract (which advance has not been repaid or
reimbursed to the Company) to inspect, protect, preserve or repair a Property
subject to a Mortgage Loan that is in default and which is serviced


                                       21
<PAGE>

by the Company or for similar or related purposes, as required by the FNMA
Guide, the FHLMC Guide or other investor guidelines or as a prudent servicer
would reasonably deem appropriate, including, but not limited to, necessary
legal fees and costs expended for foreclosure, bankruptcy, eviction or
litigation actions as well as costs to obtain clear title, to protect the
priority of the Lien created by such Mortgage Loan, and to pay insurance
premiums.

         "DEFAULT-RELATED ADVANCE RECEIVABLE" shall mean, on any date, the
aggregate amount expected to be recovered by the Company from the applicable
mortgagors in respect of Default-Related Advances outstanding as of such date if
such mortgagors reinstate, pay off or redeem the related Mortgage Loans or from
the FHA, the VA or the applicable investor, as the case may be, upon liquidation
of such Mortgage Loans.

         "ELIGIBLE BORROWING BASE LOANS" shall mean, collectively, Eligible
Jumbo Mortgage Loans, Eligible Mortgage Loans, Eligible Second Mortgage Loans
and Eligible Subprime Mortgage Loans.

         "ELIGIBLE JUMBO MORTGAGE LOAN" shall mean a Mortgage Loan with respect
to which each of the following are accurate and complete (and the Company by
confirming the inclusion of such Mortgage Loan in any computation of the
Collateral Value of the Borrowing Base by the Lender shall be deemed to so
represent and warrant to the Lender at and as of the date of such computation):

                  (a) Said Mortgage Loan would be an Eligible Mortgage Loan
except for its failure to comply with subparagraph (u) of the definition
thereof;

                  (b) Said Mortgage Loan conforms in all material respects to
the underwriting and other requirements of FNMA or FHLMC except as to acceptable
original principal balance;

                  (c) The original principal balance of said Mortgage Loan did
not exceed $800,000; PROVIDED, HOWEVER, that the original principal balance of
said Mortgage Loan may exceed $800,000 SO LONG AS said Mortgage Loan has been
specifically approved by the Lender in its sole discretion prior to its
submission for inclusion in the Borrowing Base, which approval shall be
conditioned upon, at the least, submission of a pre-closing package in form and
content satisfactory to the Lender no fewer than three (3) Business Days prior
to closing of said Mortgage Loan, which pre-closing package shall include a copy
of the loan application, a copy of the appraisal and a copy of the Take-Out
Commitment related thereto, together with any other documents which may be
requested by the Lender; and PROVIDED FURTHER, HOWEVER, that in no event shall
the original principal balance of said Mortgage Loan exceed $1,200,000; and

                  (d) The Unit Collateral Value of said Mortgage Loan, when
added to the Unit Collateral Values of all Mortgage Loans included in the
Borrowing Base with an original principal balance in excess of the underwriting
and other requirements of FNMA or FHLMC, does not exceed thirty percent (30%) of
the Credit Limit.

         "ELIGIBLE MORTGAGE LOAN" shall mean a Mortgage Loan with respect to
which each of the following statements shall be accurate and complete (and the
Company by confirming the inclusion of such Mortgage Loan in any computation of
the Collateral Value of the Borrowing Base shall be deemed to so represent and
warrant to the Lender at and as of the date of such computation):


                                       22
<PAGE>

                  (a) Said Mortgage Loan is a binding and valid obligation of
the Obligor thereon, in full force and effect and enforceable in accordance with
its terms.

                  (b) Said Mortgage Loan is genuine in all respects as appearing
on its face and as represented in the books and records of the Company and all
information set forth therein is true and correct.

                  (c) Said Mortgage Loan is free of any default of any party
thereto (including the Company), counterclaims, offsets and defenses and from
any rescission, cancellation or avoidance, whether by operation of law or
otherwise.

                  (d) No payment under said Mortgage Loan is more than thirty
(30) days past due the payment due date set forth in the underlying promissory
note and deed of trust (or mortgage).

                  (e) Said Mortgage Loan contains the entire agreement of the
parties thereto with respect to the subject matter thereof, has not been
modified or amended in any respect and is free of concessions or understandings
with the Obligor thereon of any kind not expressed in writing therein.

                  (f) Said Mortgage Loan is in all respects as required by and
in accordance with all applicable laws and regulations governing the same,
including, without limitation, the federal Consumer Credit Protection Act and
the regulations promulgated thereunder and all applicable usury laws and
restrictions, and all notices, disclosures and other statements or information
required by law or regulation to be given, and any other act required by law or
regulation to be performed, in connection with said Mortgage Loan have been
given and performed as required.

                  (g) All advance payments and other deposits on said Mortgage
Loan have been paid in cash, and no part of said sums has been loaned, directly
or indirectly, by the Company to the Obligor and there have been no prepayments
on account of said Mortgage Loan.

                  (h) At all times said Mortgage Loan will be free and clear of
all Liens, except in favor of the Lender.

                  (i) The Property covered by said Mortgage Loan is insured
against loss or damage by fire and all other hazards normally included within
standard extended coverage in accordance with the provisions of said Mortgage
Loan with the Company named as a loss payee thereon.

                  (j) The Property covered by said Mortgage Loan is free and
clear of all Liens except of the Company subject only to (1) the Lien of current
real property taxes and assessments not yet due and payable; (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record, as of the date of recording, as are acceptable to mortgage
lending institutions generally and specifically referred to in a lender's title
insurance policy delivered to the originator of the Mortgage Loan and (i)
referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan or (ii) which do not materially adversely affect the appraised
value of the Property as set forth in such appraisal; (3) other matters to which
like properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage Loan or the
use, enjoyment, value or marketability of the related Property; and (4) Liens
subordinate in priority to the Lien in favor of the Company.


                                       23
<PAGE>

                  (k) If said Mortgage Loan has been withdrawn from the
possession of the Lender and:

                           (1) If said Mortgage Loan was withdrawn by the
         Company for purposes of correcting clerical or other nonsubstantive
         documentation problems pursuant to a trust receipt, as permitted under
         Paragraph 6 of the Security Agreement, the Unit Collateral Value of
         said Mortgage Loan when added to the Unit Collateral Value of other
         Mortgage Loans included in the calculation of the Collateral Value of
         the Borrowing Base the promissory notes for which have been similarly
         withdrawn by the Company does not exceed $600,000, and the promissory
         note and other documents relating to said Mortgage Loan are returned to
         the Lender within ten (10) calendar days from the date of withdrawal;
         and

                           (2) If said Mortgage Loan was shipped by the Lender
         directly to a permanent investor for purchase, the full purchase price
         therefor has been received by the Lender (or said Mortgage Loan has
         been returned to the Lender) within thirty-one (31) days from the date
         of shipment by the Lender.

         (l) INTENTIONALLY OMITTED.

                  (m) If said Mortgage Loan is FHA insured or VA guaranteed,
such insurance or guaranty (or a binding commitment to issue such insurance or
guaranty) is in full force and effect.

                  (n) The improvements on the Property consist of a completed
one-to-four unit single family residence, including but not limited to a
condominium, planned unit development or townhouse but excluding in any event a
co-op.

                  (o) There has been delivered to the Lender the Required
Documents for said Mortgage Loan, PROVIDED, HOWEVER, that the Required Documents
for said Mortgage Loan may be delivered to the Lender within seven (7) Business
Days of the inclusion of said Mortgage Loan in the Borrowing Base so long as the
Unit Collateral Value of said Mortgage Loan, for which the Required Documents
are delivered within seven (7) Business Days after its inclusion in the
Borrowing Base, when added to the Unit Collateral Value of all other such
Mortgage Loans for which the Required Documents are delivered within seven (7)
Business Days after its inclusion in the Borrowing Base, does not exceed (i)
during the first five (5) Business Days and last five (5) Business Days of any
month, $25,000,000, and (ii) at all other times, $15,000,000.

                  (p) Said Mortgage Loan is not subject to any servicing
arrangement with any Person other than the Company or another Person
pre-approved in writing by the Lender, nor are any servicing rights relating to
said Mortgage Loan subject to any Lien, claim, interest or negative pledge in
favor of any Person other than as permitted hereunder.

                  (q) Said Mortgage Loan has not been included in the Borrowing
Base for more than sixty (60) days; PROVIDED, HOWEVER, that a Mortgage Loan
which has been included in the Borrowing Base for more than sixty (60) days may
be an Eligible Mortgage Loan SO LONG AS (i) (A) said Mortgage Loan has been
certified by an Approved Investor for inclusion in a specified pool of Mortgage
Loans, as evidenced by documentation delivered by the Company to the Lender and
reasonably satisfactory to the Lender, and (B) said Mortgage Loan has not been
included in the Borrowing Base for more than ninety (90) days, OR (ii) (A) said
Mortgage Loan is a "FHLMC/MA" loan which has been certified for inclusion


                                       24
<PAGE>

in a specified pool of Mortgage Loans pursuant to a program in the Commonwealth
of Massachusetts, as evidenced by documentation delivered by the Company to the
Lender and reasonably satisfactory to the Lender, (B) said Mortgage Loan has not
been included in the Borrowing Base for more than one hundred twenty (120) days,
and (C) the Unit Collateral Value of said Mortgage Loan, when added to the Unit
Collateral Values of all other similarly certified Mortgage Loans, does not
exceed five percent (5%) of the Credit Limit.

                  (r) Said Mortgage Loan has not previously been included in the
Borrowing Base, then shipped to an investor or certifying custodian and
returned, for whatever reason, to the Lender.

                  (s) The Company obtained such appraisal in connection with the
origination of said Mortgage Loan as would satisfy all appraisal requirements
for said Mortgage Loan if such had been originated by a federally insured
depositary institution.

                  (t) Said Mortgage Loan is covered by a Take-Out Commitment
specifically relating to said Mortgage Loan which is in full force and effect on
the date such Mortgage Loan was closed and continues to be so covered, and the
Company and the Mortgage Loan are in full compliance therewith.

                  (u) Said Mortgage Loan is insured by the FHA, guaranteed by
the VA (or subject to a binding commitment to issue such insurance or guarantee)
or fully conforms to all underwriting and other requirements of FNMA or FHLMC.

                  (v) Said Mortgage Loan is secured by a first priority mortgage
or deed of trust on the Property covered thereby.

         "ELIGIBLE SECOND MORTGAGE LOAN" shall mean a Mortgage Loan with respect
to which each of the following are accurate and complete (and the Company by
confirming the inclusion of such Mortgage Loan in any computation of the
Collateral Value of the Borrowing Base by the Lender shall be deemed to so
represent and warrant to the Lender at and as of the date of such computation):

                  (a) Said Mortgage Loan would be an Eligible Mortgage Loan
except for its failure to comply with subparagraphs (j)(4) and (v) of the
definition thereof;

                  (b) Said Mortgage Loan is secured by a second priority
mortgage or deed of trust on the Property covered thereby (and may be a home
equity line of credit); and

                  (c) The Unit Collateral Value of said Mortgage Loan, when
added to the Unit Collateral Values of all Mortgage Loans included in the
Borrowing Base which are secured by second priority mortgages or deeds of trust
on the Properties covered thereby, does not exceed five percent (5%) of the
Credit Limit.

         "ELIGIBLE SERVICING PORTFOLIO" shall mean the aggregate outstanding
principal amount at the time of determination of the Mortgage Loans comprising
the Company's first priority mortgage/deed of trust servicing portfolio,
exclusive of (a) any servicing of Mortgage Loans owned by the Company, (b) any
servicing performed pursuant to subservicing arrangements (other than that
technically styled as subservicing but performed under a contract directly
between the Company and FNMA, FHLMC, GNMA or the master servicer under a private
mortgage-related security program) and (c) any servicing subject to a Lien in
favor of any Person other than the Lender.


                                       25
<PAGE>

         "ELIGIBLE SUBPRIME MORTGAGE LOAN" shall mean a Mortgage Loan with
respect to which each of the following are accurate and complete (and the
Company by confirming the inclusion of such Mortgage Loan in any computation of
the Collateral Value of the Borrowing Base shall be deemed to so represent and
warrant to the Lender at and as of the date of such computation):

                  (a) Said Mortgage Loan would be an Eligible Mortgage Loan
except for its failure to comply with subparagraph (u) of the definition
thereof;

                  (b) Said Mortgage Loan fails to comply with the underwriting
and other requirements of FNMA and FHLMC for reasons other than the original
principal balance thereof; and

                  (c) The Unit Collateral Value of said Mortgage Loan, when
added to the Unit Collateral Values of all other Eligible Subprime Mortgage
Loans included in the Borrowing Base, does not exceed five percent (5%) of the
Credit Limit.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be supplemented or amended.

         "ERISA AFFILIATE" shall mean, with respect to any Person, any trade or
business (whether or not incorporated) that is a member of the group of which
such Person is a member and which is treated as a single employer under Section
414 of the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder in effect from time to time.

         "EVENT OF DEFAULT" shall have the meaning set forth in Paragraph 8
above.

         "FAIR MARKET VALUE" shall mean, with respect to any Eligible Borrowing
Base Loan, the market bid price obtainable for such Eligible Borrowing Base
Loan, as determined on a reasonable basis by the Lender (based upon whole loan
prices currently available to the Company) at such time or times as it shall
elect.

         "FED FUNDS RATE" shall mean for any day a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
Funds brokers for such day as reported by the Federal Reserve Bank of New York,
or if no longer so reported then as published in Statistical Release H 15 of the
Federal Reserve System, or if such rate is not so published for any day, the
average of the quotations for such day of such transactions received by the
Lender from three (3) Federal funds brokers of recognized standing selected by
the Lender.

         "FHA" shall mean the Federal Housing Administration and any successor
agency.

         "FHLMC" shall mean the Federal Home Loan Mortgage Corporation and any
successor agency.

         "FNMA" shall mean the Federal National Mortgage Association and any
successor agency.

         "FNMA SERVICING PERCENTAGE" shall mean at any time the dividend of (i)
the outstanding value at such time of all Assigned Servicing Rights pertaining
to Servicing Contracts with respect to which FNMA is the investor, DIVIDED BY
(ii) the sum of (A) the outstanding value at such time of all Assigned


                                       26
<PAGE>

Servicing Rights PLUS (B) the outstanding value at such time of all Servicing
Receivables PLUS (C) the Collateral Value of the Borrowing Base at such time.

         "FORECLOSURE ADVANCE" shall mean an advance made by the Company with
respect to a Servicing Contract (which advance has not been repaid or reimbursed
to the Company) to repurchase or foreclose an FHA-insured or VA-guaranteed first
priority Mortgage Loan or a first priority conventional Mortgage Loan out of a
pool of Mortgage Loans underlying GNMA, FNMA or FHLMC Mortgage-Backed Securities
or mortgage-backed securities issued by an investor, in each case for which a
foreclosure sale has been commenced or completed or a deed in lieu of
foreclosure has been executed and for which a claim against the FHA, the VA or
the applicable investor has been filed or is in process.

         "FORECLOSURE ADVANCE RECEIVABLE" shall mean, on any date, the aggregate
amount receivable by the Company from the FHA, the VA, or the applicable
investor or out of the first proceeds of foreclosure, as the case may be, as of
such date as reimbursement of Foreclosure Advances.

         "FUNDING ACCOUNT" shall mean Account No. 2100017417089 maintained in
Lender's name alone with the Lender at the Contact Office.

         "GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.

         "GNMA" shall mean the Government National Mortgage Association and any
successor agency.

         "GOVERNMENTAL AUTHORITY" shall mean any nation or governments any state
or other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

         "INDEBTEDNESS" of any Person shall mean all items of indebtedness
which, in accordance with GAAP and practices thereof, would be included in
determining liabilities as shown on the liability side of a statement of
condition of such Person as of the date as of which indebtedness is to be
determined, including: without limitation, all obligations for money borrowed
and Capitalized Lease Obligations, all amounts for which such Person may be
obligated under gestation or other repurchase facilities, and shall also include
all indebtedness and liabilities of others assumed or guaranteed by such Person
or in respect of which such Person is secondarily or contingently liable (other
than by endorsement of instruments in the course of collection) whether by
reason of any agreement to acquire such indebtedness or to supply or advance
sums or otherwise.

         "INTERIM DATE" shall mean March 31, 2000.

         "LENDER" shall have the meaning given such term in the introductory
paragraph hereof.

         "LIEN" shall mean any security interest, mortgage, pledge, lien, claim
on property, charge or encumbrance (including any conditional sale or other
title retention agreement), any lease in the nature thereof, and the filing of
or agreement to give any financing statement under the Uniform Commercial Code
of any jurisdiction.

         "LOAN" shall have the meaning given such term in Paragraph 1(a) above.


                                       27
<PAGE>

         "LOAN REQUEST" shall mean a request for a Loan conveyed to the Lender
from a duly authorized officer of the Company, with such request to be confirmed
in writing upon the request of the Lender.

         "MATURITY DATE" shall mean the earlier of: (a) June 29, 2001 as such
date may be extended from time to time in writing by the Lender, in its sole
discretion, and (b) the date the Lender terminates its obligation to make
further Loans hereunder pursuant to Paragraph 8 or 9 above.

         "MONTHLY PRODUCTION REPORT" shall mean a report containing information
regarding the Company's monthly production statistics, including total
origination volume, an investor sales report containing Take-Out Prices, and
such other information as may be reasonably requested by the Lender, which
report shall be substantially in the form of that attached hereto as EXHIBIT K.

         "MORTGAGE-BACKED SECURITY" shall mean any security (including, without
limitation, a participation certificate) that represents an interest in a pool
of mortgages, deeds of trusts or other instruments creating a Lien on Property
which is improved by a completed single family residence, including but not
limited to a condominium, planned unit development or townhouse.

         "MORTGAGE LOAN" shall mean a residential real estate secured loan,
including, without limitation: (a) a promissory note, any reformation thereof
and related deed of trust (or mortgage) and security agreement; (b) all
guaranties and insurance policies, including, without limitation, all mortgage
and title insurance policies and all fire and extended coverage insurance
policies and rights of the Company to return premiums or payments with respect
thereto; and (c) all right, title and interest of the Company in the Property
covered by said deed of trust (or mortgage).

         "MULTIEMPLOYER PLAN" shall mean, as to the Company or any of its ERISA
Affiliates, a Plan of such Person which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

         "NOTE" shall mean have the meaning given such term in Paragraph 2(c)
hereof.

         "OBLIGATIONS" shall mean any and all debts, obligations and liabilities
of the Company to the Lender (whether now existing or hereafter arising,
voluntary or involuntary, whether or not jointly owed with others, direct or
indirect, absolute or contingent, liquidated or unliquidated, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred), arising out of or related to the Credit Documents.

         "OBLIGOR" shall mean the Person or Persons obligated to pay the
Indebtedness which is the subject of a Mortgage Loan.

         "P&I ADVANCE" shall mean an advance of principal and interest (or
reimbursement of previous such advances) made by the Company (which advance has
not been repaid or reimbursed to the Company), pursuant to the Company's
obligation to do so under a Servicing Contract with respect to the servicing of
first priority Mortgage Loans, which advance is reimbursable by the FHA, the VA
or the applicable investor or out of the first proceeds of foreclosure.

         "P&I ADVANCE RECEIVABLE" shall mean, on any date, the aggregate amount
receivable by the Company from the FHA, the VA or the applicable investor or out
of the first proceeds of foreclosure, as the case may be, as of such date as
reimbursement of P&I Advances.


                                       28
<PAGE>

         "PARENT" shall mean THE DeWOLFE COMPANIES, INC., a Massachusetts
corporation.

         "PARTICIPANT" shall have the meaning given such term in Paragraph 9(h)
above.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.

         "PERMITTED OTHER DEBT" shall mean that Indebtedness described as
"Permitted Other Debt" on EXHIBIT H attached hereto.

         "PERMITTED SECURED DEBT" shall mean that Indebtedness which is the
subject of a Lien and described as "Permitted Secured Debt" on EXHIBIT H
attached hereto.

         "PERSON" shall mean any corporation, natural person, firm, joint
venture, partnerships, trust, unincorporated organization or Governmental
Authority.

         "PIPELINE POSITION REPORT" shall mean a report substantially in the
form of that attached hereto as EXHIBIT I.

         "PLAN" shall mean, as the Company or any of its ERISA Affiliates, any
pension plan that is covered by Title IV of ERISA and in respect of which such
Person or a Commonly Controlled Entity of such Person is an "employer" as
defined in Section 3(5) of ERISA.

         "POTENTIAL DEFAULT" shall mean an event which but for the lapse of time
or the giving of notice, or both, would constitute an Event of Default.

         "PROCEEDS" shall mean whatever is receivable or received when
Collateral or proceeds are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including return premiums, with respect to
any insurance relating thereto.

         "PROPERTY" shall mean the real property, including the improvements
thereon, and the personal property (tangible and intangible) which are
encumbered pursuant to a Mortgage Loan.

         "REPORTABLE EVENT" shall mean a reportable event as defined in Title IV
of ERISA, except actions of general applicability by the Secretary of Labor
under Section 110 of ERISA.

         "REQUIRED DOCUMENTS" shall mean for any Mortgage Loan those items
described on EXHIBIT J attached hereto.

         "REQUIREMENTS OF LAW" shall mean, as to any Person, the Articles or
Certificate of Incorporation and Bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or a final
and binding determination of an arbitrator or a determination of a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.


                                       29
<PAGE>

         "RESIGNATION LETTER" shall mean, with respect to any Servicing Contract
covering Assigned Servicing Rights, a letter from the Company to the applicable
investor thereunder whereunder the Company resigns as servicer, such letter to
be in a form acceptable to the Lender.

         "SECURITY AGREEMENT" shall have the meaning given such term in
Paragraph 3(a) above, as the same may be amended, extended or replaced from time
to time.

         "SERVICING ADVANCES" shall mean, collectively, Default-Related
Advances, Foreclosure Advances, P&I Advances, and T&I Advances.

         "SERVICING CONTRACT" shall mean the agreement (which need not be in the
form of a written contract and which may include contracts under bond indentures
or pass-through trusts) between an investor and the Company providing for the
servicing of Mortgage Loans, including pools of Mortgage Loans underlying
Mortgage-Backed Securities, and shall include all manuals, guides, laws, rules
and regulations incorporated by reference in or otherwise governing the terms of
the relationship of such investor and the Company thereunder.

         "SERVICING RECEIVABLES" shall mean, collectively, Default-Related
Advance Receivables, Foreclosure Advance Receivables, P&I Advance Receivables
and T&I Advance Receivables.

         "SETTLEMENT ACCOUNT" shall mean Account No. 2100017417241 maintained in
the name of the Lender at the Contact Office.

         "SINGLE EMPLOYER PLAN" shall mean, as to the Company or any of its
ERISA Affiliates, any Plan of such Person which is not a Multiemployer Plan.

         "STATEMENT DATE" shall mean December 31, 1999.

         "SUBSIDIARY" shall mean any corporation, partnership or joint venture
more than fifty percent (50%) of the stock or other ownership interest of which
having by the terms thereof ordinary voting power to elect the board of
directors, managers or trustees of such corporation, partnership or joint
venture (irrespective of whether or not at the time stock of any other class or
classes of such corporation, partnership or joint venture shall have or might
have voting power by reason of the happening of any contingency) shall, at the
time as of which any determination is being made, be owned, either directly or
through Subsidiaries.

         "T&I ADVANCE" shall mean an advance made by the Company (which advance
has not been repaid or reimbursed to the Company), of tax and insurance escrow
amounts required to be, but not, paid by the mortgagor under a Mortgage Loan
serviced by the Company, which advance is made by the Company pursuant to the
Company's obligation to do so under a Servicing Contract and which is eligible
for reimbursement by the FHA, the VA, or the applicable investor or out of the
first proceeds of foreclosure.

         "T&I ADVANCE RECEIVABLE" shall mean, on any date, the aggregate amount
receivable by the Company from the applicable mortgagor, the FHA, the VA or the
applicable investor or out of the first proceeds of foreclosure, as the case may
be, as of such date as reimbursement of T&I Advances.


                                       30
<PAGE>

         "TAKE-OUT COMMITMENT" with respect to any Mortgage Loan shall mean a
bona fide current, unused and unexpired whole loan commitment or forward sale
Mortgage Backed Security commitment issued in favor of and held by the Company
made by an Approved Investor, under which said Approved Investor agrees, prior
to the expiration thereof, upon the satisfaction of certain terms and conditions
therein, to purchase such specific Mortgage Loan or related Mortgage Backed
Security at a Take-Out Price, which commitment is not subject to any term or
condition which is not customary in commitments of like nature or which, in the
reasonably anticipated course of events, cannot be fully complied with prior to
the expiration thereof.

         "TAKE-OUT PRICE" with respect to any Mortgage Loan shall mean the
specified price to be paid for such Mortgage Loan under the applicable Take-Out
Commitment covering said Mortgage Loan.

         "TOTAL LIABILITIES" shall mean total liabilities of the Company
determined in accordance with GAAP.

         "TYPE" shall mean with respect to any Mortgage Loan, an Eligible Jumbo
Mortgage Loan, an Eligible Mortgage Loan, an Eligible Second Mortgage Loan or an
Eligible Subprime Mortgage Loan .

         "UNIT COLLATERAL VALUE" shall mean:

         (i)      with respect to each Eligible Mortgage Loan included in the
                  Borrowing Base, ninety-eight percent (98%) of the least of:
                  (A) the Take-Out Price as set forth on the Delivery
                  Certificate (as defined in the Security Agreement) delivered
                  together with such Mortgage Loan, (B) the current outstanding
                  principal value thereof at the time said Mortgage Loan is
                  included in the Borrowing Base, and (C) the Fair Market Value
                  thereof;

         (ii)     with respect to each Eligible Jumbo Mortgage Loan included in
                  the Borrowing Base, the lesser of : (A) ninety-seven percent
                  (97%) of the least of: 1. the Take-Out Price as set forth on
                  the Delivery Certificate (as defined in the Security
                  Agreement) delivered together with such Mortgage Loan, 2. the
                  current outstanding principal value thereof at the time said
                  Mortgage Loan is included in the Borrowing Base, and 3. the
                  Fair Market Value thereof, or (B) $625,000;

         (iii)    with respect to each Eligible Second Mortgage Loan included in
                  the Borrowing Base, ninety-six percent (96%) of the least of:
                  (A) the Take-Out Price as set forth on the Delivery
                  Certificate (as defined in the Security Agreement) delivered
                  together with such Mortgage Loan, (B) the current outstanding
                  principal value thereof at the time said Mortgage Loan is
                  included in the Borrowing Base, and (C) the Fair Market Value
                  thereof; and

         (iv)     with respect to each Eligible Subprime Mortgage Loan included
                  in the Borrowing Base, ninety-five percent (95%) of the least
                  of: (A) the Take-Out Price as set forth on the Delivery
                  Certificate (as defined in the Security Agreement) delivered
                  together with such Mortgage Loan, (B) the current outstanding
                  principal value thereof at the time said Mortgage Loan is
                  included in the Borrowing Base, and (C) the Fair Market Value
                  thereof.


                                       31
<PAGE>

         "VA" shall mean the Veterans Administration and any successor agency.


                                       32
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the day and year first above written.

                        DeWOLFE MORTGAGE SERVICES, INC.,
       [CORPORATE SEAL]                   a Massachusetts corporation

ATTEST:

By__________________________               By_________________________________

Name_________________________              Name_______________________________

Title_______________________               Title______________________________


                                           FIRST UNION NATIONAL BANK, a national
                                           banking association

                                           By_________________________________

                                           Name_______________________________

                                           Title______________________________


                                       33
<PAGE>

                           REPLACEMENT PROMISSORY NOTE

                                                                   June 30, 2000

         FOR VALUE RECEIVED, DeWOLFE MORTGAGE SERVICES, INC., a Massachusetts
corporation (the "Company"), hereby unconditionally promises to pay to the order
of FIRST UNION NATIONAL BANK, a national banking association (the "Lender"), at
its office located at One First Union Center, TW-09, 301 South College Street,
Charlotte, North Carolina 28288-0610, in lawful money of the United States and
in immediately available funds, on the dates required under that certain Amended
and Restated Credit Agreement dated as of June 30, 2000 by and between the
Company and the Lender (as the same may be amended, extended or replaced from
time to time, the "Agreement" and with the capitalized terms not otherwise
defined herein used with the meanings given such terms in the Agreement), the
principal amount of each Loan made under the Agreement.

         The Company further agrees to pay interest in like money and funds at
the office of the Lender referred to above, on the unpaid principal balance
hereof from the date advanced until paid in full on the dates and at the
applicable rates set forth in the Agreement. The holder of this Note is hereby
authorized to record the date and amount of each Loan, the date and amount of
each payment of principal and interest, and applicable interest rates and other
information with respect thereto, on the schedules annexed to and constituting a
part of this Note (or by any analogous method the holder hereof may elect
consistent with its customary practices) and any such recordation shall, absent
manifest error, constitute PRIMA FACIE evidence of the accuracy of the
information so recorded; provided, however, that the failure to make a notation
or the inaccuracy of any notation shall not limit or otherwise affect the
obligations of the Company under the Credit Documents.

         This Note is the Note referred to in, and is entitled to all the
benefits of, the Agreement. Reference is hereby made to the Agreement and to the
Security Agreement for rights and obligations of payment and prepayment,
collateral security, Events of Default and the rights of acceleration of the
maturity hereof upon the occurrence of an Event of Default.

         This Note is being given in modification, replacement and restatement
of, but not extinguishment of the unpaid indebtedness evidenced by, that certain
Promissory Note dated as of June 18, 1999 made by the Company payable to the
order of the Lender. This Note modifies and replaces, but does not repay, said
Promissory Note dated as of June 18, 1999, and all indebtedness formerly
evidenced by said Promissory Note dated as of June 18, 1999 and unpaid on the
date hereof shall now be evidenced by this Note. This Note shall not be
considered to be a novation of said Promissory Note dated as of June 18, 1999 as
this Note evidences the same indebtedness and is secured by the same collateral.


                                        1
<PAGE>

         This Note shall be governed by, and construed in accordance with, the
laws of the State of North Carolina, and is being executed and sealed by the
duly authorized officers of the Company as of the day and year first above
written.

                                              DeWOLFE MORTGAGE SERVICES, INC., a
                                              Massachusetts corporation

        [CORPORATE SEAL]

ATTEST:                                       By:______________________________
                                              Name:____________________________
By: _________________________                 Title:___________________________
Name:_______________________
Title:______________________


                                       2
<PAGE>

                     AMENDED AND RESTATED SECURITY AGREEMENT


         THIS AMENDED AND RESTATED SECURITY AGREEMENT (the "Security Agreement")
is made and dated as of the 30th day of June, 2000, by and among DeWOLFE
MORTGAGE SERVICES, INC., a Massachusetts corporation (the "Company"), in favor
of FIRST UNION NATIONAL BANK, a national banking association (the "Lender").

                                    RECITALS

         A. Pursuant to that certain Mortgage Warehousing Loan and Security
Agreement dated as of June 15, 1993 by and between the Company and the Lender
(as the same has been amended, modified, renewed, replaced, restated or extended
from time to time, the "Existing Credit Agreement"), the Lender agreed to extend
credit to the Company on the terms and subject to the conditions set forth
therein, and the Company granted a security interest in favor of the Lender in
certain assets owned by the Company as collateral security therefor.

         B. The Company and the Lender have agreed to amend and restate the
Existing Credit Agreement pursuant to (i) that certain Amended and Restated
Credit Agreement of even date herewith between the Company and the Lender (as
the same may be amended, extended or replaced from time to time, the "Credit
Agreement" and with capitalized terms not otherwise defined herein used with the
same meanings as in the Credit Agreement), and (ii) this Security Agreement. The
parties hereto agree that from and of the date hereof, the Credit Agreement
together with this Security Agreement, shall supersede the Existing Credit
Agreement in all respects and shall constitute the entire agreement among the
parties hereto with respect to the subject matter contained therein.

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

                                    AGREEMENT

         1. GRANT OF SECURITY INTEREST. The Company hereby pledges, assigns and
grants to the Lender, a first perfected security interest in the property
described in Paragraph 2 below (collectively and severally, the "Collateral"),
to secure payment and performance of the Obligations.

         2. COLLATERAL. The Collateral shall consist of all now existing and
hereafter arising right, title and interest of the Company in, under and to each
of the following:

                  (a) All Mortgage Loans, now owned or hereafter acquired or
originated by the Company and delivered to the Lender for inclusion in the
Borrowing Base or otherwise identified by the Company for inclusion in the
Borrowing Base, including, without limitation, the promissory notes or other
instruments or agreements evidencing the indebtedness of Obligors thereon, all
mortgages, deeds to secure debt, trust deeds and security agreements related
thereto, all rights to payment thereunder, all rights in the Properties securing
payment of the indebtedness of the Obligors thereon, all rights under documents
related thereto, such as guaranties and insurance policies (issued by
governmental agencies or otherwise), including, without limitation, mortgage and
title insurance policies, fire and extended coverage insurance policies
(including the right to any return premiums) and FHA Insurance and VA


                                        1
<PAGE>

guaranties, and all rights in cash deposits consisting of impounds, insurance
premiums or other funds held on account thereof;

                  (b) All rights of the Company (but not its obligations) under
all Take-Out Commitments, now existing or hereafter arising, covering any part
of the foregoing Collateral, all rights to deliver Mortgage Loans described in
subparagraph (a) above to permanent investors and other purchasers pursuant
thereto and all proceeds resulting from the disposition of such Collateral
pursuant thereto;

                  (c) All now existing and hereafter arising rights to service,
administer and collect Mortgage Loans included in the computation of the
Collateral Value of the Borrowing Base at any date (it being acknowledged and
agreed that prior to the occurrence of an Event of Default and acceleration of
the Obligations, the security interest in such servicing rights granted
hereunder shall be automatically terminated without need for further action upon
the sale, transfer or other disposition of the related Mortgage Loan in
accordance with the provisions of the Credit Documents), and all rights to the
payment of money on account of such servicing, administration and collection
activities;

                  (d) All Servicing Contracts now owned and hereafter acquired
by the Company which are listed on SCHEDULE 1 hereto (as such SCHEDULE 1 may be
amended, modified or replaced from time to time), including, without limitation,
all now existing and hereafter arising rights to service, administer or collect
Mortgage Loans, including pools of Mortgage Loans underlying Mortgage-Backed
Securities, thereunder;

                  (e) All now existing and hereafter arising rights to the
payment of monies under such Servicing Contracts, on account of servicing,
administration or collection activities thereunder, on account of the
termination of any such Servicing Contract and as reimbursement for costs and
expenses incurred and advances made by the Company on account of obligations of
the Obligors under the Mortgage Loans serviced pursuant thereto (but excluding
any rights to any principal, interest or other payments made by such Obligors
and held in trust by the Company for the account of the owners of said Mortgage
Loans);

                  (f) All acknowledgments and consents executed by FNMA, FHLMC,
GNMA (if any) and any other Person which is a party to any Servicing Contract
pledged as Collateral hereunder, whereunder each such agency or other Person
acknowledges and consents to the pledge of the Collateral hereunder, and all
rights of the Company thereunder;

                  (g) All now existing and hereafter arising rights to the
payment of monies under any Servicing Contracts to which the Company is a party
as reimbursement for costs and expenses incurred and advances made by the
Company on account of obligations of the Obligors under the Mortgage Loans
serviced pursuant thereto, said rights to include, without limitation, the
Servicing Receivables;

                  (h) All now existing and hereafter arising rights under
guaranties, indemnifications and other documents, instruments and agreements
providing collateral security or credit support for the obligations of the
investors to make the payments referred to in subparagraphs (e) and (g) above;

                  (i) All now existing and hereafter arising accounts, contract
rights, payment intangibles and general intangibles constituting or relating to
any of the foregoing Collateral;


                                       2
<PAGE>

                  (j) All now existing and hereafter acquired files, documents,
instruments, surveys, certificates, correspondence, appraisals, computer
programs, tapes, discs, cards, accounting records and other books, records,
information and data of the Company relating to the foregoing Collateral
(including all information, records, data, programs, tapes, discs, and cards
necessary or helpful in the administration or servicing of the foregoing
Collateral or in providing servicing as required under the Servicing Contracts
or any other servicing contract described above);

                  (k) The Funding Account and the Settlement Account and any and
all funds at any time held in any such accounts; and

                  (l) All products and Proceeds of the foregoing Collateral.

         PROVIDED, HOWEVER, that (A) the grant of a security interest in and
pledge of the foregoing Collateral is junior and subordinate to the rights of
FNMA, FHLMC or GNMA or any related investor in and to amounts payable to each of
them under and in respect of said Collateral; and (B) the grant of a security
interest and pledge hereunder with respect to any trust or escrow accounts
maintained by the Company for the benefit of other Persons shall be subject to
the rights of such other Persons in such accounts.

         NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE PARTIES HERETO
SPECIFICALLY AGREE AND ACKNOWLEDGE THAT THE COLLATERAL SHALL INCLUDE ANY AND ALL
RIGHTS, TITLE AND INTEREST OF THE COMPANY IN AND TO THAT CERTAIN PROPERTY OF THE
COMPANY REFERRED TO AND CHARACTERIZED AS "COLLATERAL" UNDER THE EXISTING CREDIT
AGREEMENT.

         Notwithstanding anything contained herein to the contrary, the Lender
shall have the right at any time to submit for filing a UCC-3 financing
statement amendment containing a revised SCHEDULE 1 to this Financing Statement,
and upon the filing of said UCC-3 financing statement amendments, said revised
SCHEDULE 1 shall constitute SCHEDULE 1 for all purposes under this Financing
Statement.

         3. DELIVERY OF COLLATERAL. The Company shall deliver the Collateral or
cause the Collateral to be delivered to the Lender, it being agreed and
understood that all Mortgage Loans acquired or originated by the Company
following the date hereof, and all Assigned Servicing Rights and Servicing
Receivables acquired by the Company after the date hereof, are to be delivered
to the Lender as provided herein. Delivery of Collateral consisting of Mortgage
Loans shall be effected by delivery of the Required Documents therefor on or
before 5:00 p.m. on the Business Day preceding the date on which such Mortgage
Loans are to be initially included in the Borrowing Base. The Lender's
responsibility to review such Collateral is limited to the review steps
described on EXHIBIT 1 hereto, said review of Collateral delivered on any
Business Day to be completed before 10:00 a.m. on the next succeeding Business
Day. All Mortgage Loans, and all documentation relating to Assigned Servicing
Rights or Servicing Receivables, at any time delivered to the Lender hereunder
shall be held by the Lender in a fire resistant vault, drawer or other suitable
depositary maintained and controlled solely by the Lender, conspicuously marked
to show the interests of the Lender and the Company therein and not commingled
with any other assets or property of, or held by, the Lender. The Lender is not,
and shall not at any time in the future be, subject, with respect to the
Collateral, in any manner or to any extent, to the direction or control of the
Company except as expressly permitted hereunder or under the other Credit
Documents. Under no circumstances will the Lender deliver possession of the
Collateral to the Company except in accordance with the express terms of this
Security Agreement and the Credit Agreement.


                                       3
<PAGE>

         4. LENDER'S REVIEW OF COLLATERAL. Each delivery of Mortgage Loans to
the Lender shall be accompanied by a certificate in form acceptable to the
Lender (the "Delivery Certificate"). Upon any receipt of Required Documents for
any Mortgage Loan, Assigned Servicing Right or Servicing Receivable the Lender
shall review the same and verify that:

                  (a) All Required Documents relating to such item of Collateral
appear regular on their face and are in the Lender's possession; and

                  (b) The statements set forth on EXHIBIT 1 hereto are accurate
and complete in all respects.

Such verification for Collateral delivered shall be set forth in the schedule
referred to in Paragraph 5(b) below. If the Lender notes any exception in the
review described in subparagraph (a) or (b) above or questions, in its
reasonable discretion, the genuineness, regularity, propriety, or accuracy of
any item of Collateral, the Lender shall so note in the next such schedule
delivered. In the event that the Company had been requested to deliver the
Additional Required Documents with respect to any Mortgage Loan, the Lender
shall review and verify such Additional Required Documents consistent with the
obligations of the Lender above.

         5. COLLATERAL VALUE DETERMINATION.

                  (a) No later than 2:00 p.m. (Charlotte, North Carolina time)
on each Business Day, the Lender shall compute the Collateral Value of the
Borrowing Base (a "Collateral Value Determination") as of 10:00 a.m. on such
Business Day and make a notation thereof.

                  (b) No later than 2:00 p.m. (Charlotte, North Carolina time)
on each Business Day, the Lender shall prepare and deliver to the Company via
facsimile a schedule showing the composition of the Borrowing Base, on a
per-Mortgage Loan basis, as of such time. The Company shall certify as to the
accuracy of such schedule and shall return such schedule, with such
certification attached, to the Lender via facsimile no later than 3:00 p.m.
(Charlotte, North Carolina time) on each such Business Day.

         6. HANDLING OF COLLATERAL; SETTLEMENT ACCOUNT.

                  (a) Prior to the occurrence of an Event of Default, from time
to time, the Lender may release documentation relating to Mortgage Loans to the
Company against a trust receipt executed by the Company in the form of EXHIBIT 2
hereto. The Company and the Lender will comply with the trust receipt procedures
specified on EXHIBIT 3 hereto. The Company hereby represents and warrants that
any request by the Company for release of Collateral under this subparagraph
6(a) shall be solely for the purposes of correcting clerical or other
non-substantial documentation problems in preparation of returning such
Collateral to the Lender for ultimate sale or exchange and that the Company has
requested such release in compliance with all terms and conditions of such
release set forth herein and in the Credit Agreement, including, without
limitation, subparagraph (k)(1) of the definition of Eligible Mortgage Loan.

                  (b) Prior to the occurrence of an Event of Default, upon
delivery by the Company to the Lender of a shipping request in the form of that
attached hereto as EXHIBIT 4, the Lender will transmit Mortgage Loans in the
possession of the Lender in connection with the sale thereof to a permanent
investor, such transmittal to be under cover of a transmittal letter in the form
of that attached hereto as EXHIBIT 5 (or such other form as may be required
under any government program pursuant to which the


                                       4
<PAGE>

relevant Mortgage Loans are being shipped). In no event shall the Lender have
any obligation to obtain written acknowledgement of receipt from the addressee
of any transmittal letter or other communication sent by the Lender hereunder.

                  (c) All amounts payable on account of the sale of Mortgage
Loans will be instructed to be paid directly by the purchaser to the Settlement
Account. Pursuant to Paragraph 1 above the Company has granted a security
interest in and lien upon the Settlement Account and in any and all amounts at
any time held therein to the Lender as collateral security for the Obligations.
This Paragraph 6(c) shall constitute notice to any and all Persons of such
security interest pursuant to the Uniform Commercial Code of all relevant
jurisdictions and any other law or regulation requiring such notice. This
Paragraph 6(c) shall further constitute irrevocable notice to any and all
Persons that the Settlement Account referred to in Paragraph 2(k) above is a "no
access" account to the Company except to the extent expressly permitted
hereunder. The Lender shall hold such security interest in and lien upon the
Settlement Account referred to in Paragraph 2(k) above and all funds at any time
held therein for its benefit with all rights of a secured party under the
Uniform Commercial Code of all relevant jurisdictions.

                  (d) Prior to the occurrence of an Event of Default, the Lender
shall take such steps as it may be reasonably directed from time to time by the
Company in writing which are not inconsistent with the provisions of this
Security Agreement and the other Credit Documents and which the Company deems
necessary to enable the Company to perform and comply with Take-Out Commitments
and with other agreements for the sale or other disposition in whole or in part
of Mortgage Loans.

                  (e) Prior to the occurrence of an Event of Default and
acceleration of the Obligations and if, but only if, such action is not
inconsistent with the express provisions of this Security Agreement and the
other Credit Documents and would not create an Event of Default or Potential
Default, the Company may, in connection with its residential mortgage banking
business: originate, acquire and service Mortgage Loans; receive payments on
Mortgage Loans from the Obligors thereon and impounds and fees in connection
therewith; retain, use and apply fees and payments made on account of the
Mortgage Loans by the Obligors thereunder; disburse from impound accounts; in
the ordinary course of the Company's business, create, use, destroy and transfer
records, files and other items described in Paragraph 2(j) above; sell or
otherwise dispose of Mortgage Loans not included in the computation of the
Collateral Value of the Borrowing Base, with or without servicing rights; pledge
Mortgage Loans to the extent permitted under the Credit Documents; sell
servicing rights; and enter into, exercise rights under, perform, modify, waive
and cancel any Take-Out Commitments.

                  (f) Following the occurrence of an Event of Default, the
Lender shall not, and shall incur no liability to the Company or any other
Person for refusing, in its sole discretion, to, deliver any item of Collateral
to the Company or any other Person (other than under existing Take-Out
Commitments).

                  (g) Upon the receipt of the Lender of proceeds from an
investor with respect to any item of Collateral in an amount equal to or greater
than the Unit Collateral Value of such Collateral, the security interest of the
Lender in such item of Collateral shall automatically terminate without the need
for further action by any Person or any notice to any Person.


                                       5
<PAGE>

         7. COSTS AND EXPENSES. The Lender shall notify the Company of all
extraordinary costs and expenses (including, without limitation, expenses of
legal counsel to the Lender) of the Lender directly relating to the Lender's
performance of this Security Agreement, and such extraordinary costs and
expenses shall be paid promptly by the Company or, if already paid by the
Lender, the Company promptly shall reimburse the Lender therefor.

         8. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants that: (a) the Company is the sole owner of the Collateral (or, in the
case of after-acquired Collateral, at the time the Company acquires rights in
the Collateral, will be the sole owner thereof); (b) except for security
interests in favor of the Lender, no Person (other than the investors party to
the Servicing Contracts, as expressly set forth therein) has (or, in the case of
after-acquired Collateral, at the time the Company acquires rights therein, will
have) any right, title, claim or interest (by way of Lien or otherwise) in,
against or to the Collateral and, in any event, the Lender has a perfected,
first priority security interest thereon; (c) all information heretofore, herein
or hereafter supplied to the Lender by or on behalf of the Company with respect
to the Collateral is or will be accurate and complete; and (d) each Mortgage
Loan is, at all dates when it is submitted by Company for inclusion in the
computation of the Collateral Value of the Borrowing Base, an Eligible Jumbo
Mortgage Loan, an Eligible Mortgage Loan, an Eligible Second Mortgage Loan or an
Eligible Subprime Mortgage Loan.

         9. COVENANTS OF THE COMPANY. The Company hereby agrees: (a) to procure,
execute and deliver from time to time any endorsements, assignments, financing
statements and other writings deemed necessary or appropriate by the Lender to
perfect, maintain and protect its security interest hereunder and the priority
thereof and to deliver promptly to the Lender all originals of Collateral or
Proceeds consisting of chattel paper or instruments; (b) not to surrender or
lose possession of (other than to the Lender), sell, encumber, or otherwise
dispose of or transfer, any Collateral or right or interest therein other than
shipment of Mortgage Loans and under Take-Out Commitments and as otherwise
permitted under Paragraph 6 above; (c) at all times to account fully for and
promptly to deliver to the Lender, in the form received, all Collateral or
Proceeds received, endorsed to the Lender as appropriate and accompanied by such
assignments and powers, duly executed, as the Lender shall request, and until so
delivered all Collateral and Proceeds shall be held in trust for the Lender,
separate from all other property of the Company and identified as the property
of the Lender; (d) at any reasonable time, upon demand by the Lender, to exhibit
to and allow inspection by the Lender (or Persons designated by the Lender) of
the Collateral and the records concerning the Collateral; (e) to keep the
records concerning the Collateral at the location(s) set forth in Paragraph 16
below and not to remove the records from such location(s) without the prior
written consent of the Lender; (f) at the request of the Lender, to place on
each of its records pertaining to the Collateral a legend, in form and content
satisfactory to the Lender, indicating that such Collateral has been assigned to
the Lender; (g) not to modify, compromise, extend, rescind or cancel any deed of
trust, mortgage, note or other document, instrument or agreement connected with
any Mortgage Loan pledged under this Security Agreement or any document relating
thereto or connected therewith or consent to a postponement of strict compliance
on the part of any party thereto with any term or provision thereof; (h) to keep
the Collateral insured against loss, damage, theft, and other risks customarily
covered by insurance, and such other risks as the Lender may reasonably request;
(i) to do all acts that a prudent investor would deem necessary or desirable to
maintain, preserve and protect the Collateral; (j) not knowingly to use or
permit any Collateral to be used unlawfully or in violation of any provision of
this Security Agreement or any applicable statute, regulation or ordinance or
any policy of insurance covering the Collateral; (k) to pay (or require to be
paid) prior to their


                                       6
<PAGE>

becoming delinquent all taxes, assessments, insurance premiums, charges,
encumbrances, and liens now or hereafter imposed upon or affecting any
Collateral; (l) to notify the Lender before any such change shall occur of any
change in the Company's name, identity or structure through merger,
consolidation or otherwise; (m) to appear in and defend, at the Company's cost
and expense, any action or proceeding which may affect its title to or the
Lender's interest in the Collateral; (n) to keep accurate and complete records
of the Collateral and to provide the Lender with such records and such reports
and information relating to the Collateral as the Lender may request from time
to time; and (o) to comply with the terms and conditions of all Servicing
Contracts to which the Company is a party and to comply with all laws,
regulations and ordinances relating to the possession, operation, maintenance
and control of the Collateral.

         10. COLLECTION OF COLLATERAL PAYMENTS.

                  (a) The Company shall, at its sole cost and expense, endeavor
to obtain payment, when due and payable, of all sums due or to become due with
respect to any Collateral (each such payment being referred to as a "Collateral
Payment"), including, without limitation, the taking of such action with respect
thereto as the Lender may request, or, in the absence of such request, as the
Company may reasonably deem advisable; provided, however, that the Company shall
not, without the prior written consent of the Lender, grant or agree to any
rebate, refund, compromise or extension with respect to any Collateral Payment
or accept any prepayment on account thereof. Upon the request of the Lender
following the occurrence of an Event of Default (and subject to the requirements
of applicable law), the Company will notify and direct any party who is or might
become obligated to make any Collateral Payment, to make payment thereof to the
Lender (or to the Company in care of the Lender) at such address as the Lender
may designate. The Company will reimburse the Lender promptly upon demand for
all out-of-pocket costs and expenses, including reasonable attorneys' fees and
litigation expenses, incurred by the Lender in seeking to collect any Collateral
Payment.

                  (b) If there shall occur an Event of Default, upon the request
of the Lender the Company will transmit and deliver to the Lender, forthwith
upon receipt and in the form received, all cash, checks, drafts and other
instruments for the payment of money (properly endorsed where required so that
such items may be collected by the Lender) which may be received by the Company
at any time as payment on account of any Collateral Payment and if such request
shall be made, until delivery to the Lender, such items will be held in trust
for the Lender and will not be commingled by the Company with any of its other
funds or property. Thereafter, the Lender is hereby authorized and empowered to
endorse the name of the Company on any check, draft or other instrument for the
payment of money received by the Lender on account of any Collateral Payment if
the Lender believes such endorsement is necessary or desirable for purposes of
collection.

                  (c) The Company hereby agrees to indemnify, defend and save
harmless the Lender and its agents, officers, employees and representatives from
and against all reasonable liabilities and expenses on account of any adverse
claim asserted against the Lender relating to any moneys received by the Lender
on account of any Collateral Payment (other than as a direct result of the gross
negligence or willful misconduct of the Lender) and such obligation of the
Company shall continue in effect after and notwithstanding the discharge of the
Obligations and the release of the security interest granted in Paragraph 1
above.


                                       7
<PAGE>

         11. AUTHORIZED ACTION BY LENDER.

                  (a) The Company hereby irrevocably appoints the Lender as its
attorney-in-fact to do (but the Lender shall not be obligated to and shall incur
no liability to the Company or any third party for failure so to do) at any time
and from time to time following the occurrence of an Event of Default, any act
which the Company is obligated by this Security Agreement to do, and to exercise
such rights and powers as the Company might exercise with respect to the
Collateral, including, without limitation, the right to (i) collect by legal
proceedings or otherwise and endorse, receive and receipt for all dividends,
interest, payments, proceeds and other sums and property now or hereafter
payable on or on account of the Collateral; (ii) enter into any extension,
reorganization, deposit, merger, consolidation or other agreement pertaining to,
or deposit, surrender, accept, hold or apply other property in exchange for the
Collateral; (iii) insure, process and preserve the Collateral; (iv) transfer the
Collateral to the Lender's own or its nominee's name; and (v) make any
compromise or settlement, and take any other action it deems advisable with
respect to the Collateral. Notwithstanding anything contained herein, in no
event shall the Lender be required to make any presentment, demand or protest,
or give any notice and the Lender need not take any action to preserve any
rights against any prior party or any other person in connection with the
Obligations or with respect to the Collateral.

                  (b) In addition to the power-of-attorney granted above, the
Company hereby agrees to execute and deliver, simultaneously with the execution
and delivery of this Security Agreement, a Power of Attorney in a form
reasonably satisfactory to the Lender, whereby the Company shall irrevocably
constitute and appoint the Lender its true and lawful attorney to deal with all
parties (other than the Company) to the Servicing Contracts and the related
acknowledgments and consents, including making a request of FNMA, FHLMC, GNMA or
any other investor party to a Servicing Contract for (i) the remittance to the
Lender of any proceeds of any sale of servicing rights under a Servicing
Contract pledged as Collateral hereunder or any termination fee with respect to
the termination of a Servicing Contract pledged as Collateral hereunder or (ii)
the sale or transfer to the Lender or to its designee of servicing rights under
a Servicing Contract pledged as Collateral hereunder

         12. DEFAULT AND REMEDIES.

                  (a) Upon the occurrence of an Event of Default and following
the acceleration of the Obligations, the Lender shall have the right to, without
notice to or demand upon the Company: (i) foreclose or otherwise enforce the
Lender's security interest in the Collateral in any manner permitted by law or
provided for hereunder; (ii) sell or otherwise dispose of the Collateral or any
part thereof at one or more public or private sales, whether or not such
Collateral is present at the place of sale, for cash or credit or future
delivery and without assumption of any credit risk, on such terms and in such
manner as the Lender may determine; (iii) require the Company to assemble the
Collateral or books and records relating thereto and make such available to the
Lender at a place to be designated by the Lender; (iv) enter onto property where
any Collateral or books and records relating thereto are located and take
possession thereof with or without judicial process; and (v) prior to the
disposition of the Collateral, prepare it for disposition in any manner and to
the extent the Lender deems appropriate. Upon any sale or other disposition
pursuant to this Security Agreement, the Lender shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral or portion thereof
so sold or disposed of and all proceeds thereof shall be applied to the
Obligations. Each purchaser at any such sale or other disposition shall hold the
Collateral free from any claim or right of whatever kind, including any equity
or right of


                                       8
<PAGE>

redemption of the Company, and the Company specifically waives (to the extent
permitted by law) all rights of redemption, stay or appraisal which it has or
may have under any rule of law or statute now existing or hereafter adopted.

                  (b) Unless prohibited by the terms of a particular Servicing
Contract, the Company agrees that during the exercise by the Lender of any of
its remedies, then pending any sale or transfer of Servicing Contracts included
in the Collateral or of rights thereunder or with respect thereto, the Lender
may appoint a subservicer (which may be the Lender or an Affiliate of the
Lender) for the Mortgage Loans that are the subject of such Servicing Contracts
and the Company shall take all necessary action to implement said appointment.
Said subservicer shall be entitled to compensation for its services as
subservicer in accordance with its schedule of fees for such services, said fees
to be paid solely from the compensation otherwise payable under such Servicing
Contracts.

                  (c) The Company acknowledges that the Company and the Lender
have entered into, and the Company may from time to time hereafter enter into,
acknowledgment and consent agreements with FNMA, FHLMC, GNMA and other private
investors in order to obtain the consent of FNMA, FHLMC, GNMA and such private
investors to the assignment of and security interest granted in the Servicing
Contracts included in the Collateral and in the rights thereunder or with
respect thereto. The Company further acknowledges that any of the acknowledgment
and consent agreements may contain provisions concerning the enforcement by the
Lender of its security interest in such Servicing Contracts and in the rights
thereunder or with respect thereto. The Company agrees that the disposition of
its rights in any Servicing Contract included in the Collateral or in any rights
thereunder or with respect thereto pursuant to the terms of any applicable
acknowledgment and consent agreement shall be deemed commercially reasonable
within the meaning of Section 9-504(3) of the Uniform Commercial Code. The
Company hereby waives any claims it might otherwise have against the Lender as a
result of the Lender's compliance with the terms of any acknowledgment and
consent agreement.

         13. BINDING UPON SUCCESSORS. All rights of the Lender under this
Security Agreement shall inure to the benefit of its successors and assigns, and
all obligations of the Company shall bind its successors and assigns.

         14. ENTIRE AGREEMENT; SEVERABILITY. This Security Agreement contains
the entire security agreement with respect to the Collateral between the Lender
and the Company. All waivers by the Company provided for in this Security
Agreement have been specifically negotiated by the parties with full cognizance
and understanding of their rights. If any of the provisions of this Security
Agreement shall be held invalid or unenforceable, this Security Agreement shall
be construed as if not containing such provisions, and the rights and
obligations of the parties hereto shall be construed and enforced accordingly.

         15. CHOICE OF LAW. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of North Carolina and,
where applicable and except as otherwise defined herein, terms used herein shall
have the meanings given them in the Uniform Commercial Code as in effect from
time to time in the State of North Carolina.


                                       9
<PAGE>

         16. PLACE OF BUSINESS; RECORDS. The Company represents and warrants
that its chief place of business is at 80 Hayden Avenue, Lexington,
Massachusetts 02421, and that its books and records concerning the Collateral
are kept at its chief place of business.

         17. NOTICE. Any written notice, consent or other communication provided
for in this Security Agreement shall be delivered or sent as provided in the
Credit Agreement.

         18. GNMA SERVICING. The Servicing Contracts included in the Collateral
(or under which Servicing Receivables are created) include a Servicing Contract
or Servicing Contracts with GNMA (the "GNMA Servicing").
It is hereby acknowledged and agreed by the Lender as follows:

                  (a) The Company is entitled to servicing income with respect
to the GNMA Servicing only so long as it is an issuer in good standing with
GNMA;

                  (b) Upon loss of issuer status by the Company, the Lender's
rights to any servicing income with respect to the GNMA Servicing terminates;
and

                  (c) The pledge of rights to servicing income conveys no rights
(such as a right to become a substitute servicer or issuer) that are not
otherwise specifically provided for in the GNMA Guide.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       10
<PAGE>

         EXECUTED and sealed the day and year first above written.


                                           DeWOLFE MORTGAGE
                                           SERVICES, INC., a Massachusetts
                                           corporation
[CORPORATE SEAL]

ATTEST:

By______________________________           By:______________________________

Name____________________________           Name:____________________________

Title:__________________________           Title:___________________________


                                           FIRST UNION NATIONAL BANK, a
                                           national banking association

                                           By:______________________________

                                           Name:____________________________

                                           Title____________________________


                                       11
<PAGE>

                              SCHEDULE OF EXHIBITS
                                       TO
                     AMENDED AND RESTATED SECURITY AGREEMENT


EXHIBIT                                   DOCUMENT
-------                                   --------
      1                             Required Review Steps

      2                             Form of Trust Receipt

      3                             Trust Receipt Procedures

      4                             Form of Shipping Request

      5                             Form of Whole Loan Sale Transmittal Letter

SCHEDULE                                  DOCUMENT
--------                                  --------
      1                             Servicing Contracts


                                       12
<PAGE>

                                                                       EXHIBIT 1
                                                                     TO SECURITY
                                                                       AGREEMENT

                              REQUIRED REVIEW STEPS

WITH RESPECT TO ANY MORTGAGE LOAN:

1.       All submitted documents, including the report attached to the Delivery
         Certificate, are consistent as to borrower name, loan face amount, loan
         type (FHA, VA, conventional, jumbo, subprime or second; FRM or ARM) and
         the Company's loan number.

2.       The note and mortgage/deed of trust each bears an original signature or
         signatures which appear to be those of the person or persons named as
         the maker and mortgagor/trustor, or, in the case of a certified copy of
         the mortgage/deed of trust, such copy bears what appears to be a
         reproduction of such signature or signatures.

3.       Except for (a) the endorsement to the Company of the note in the event
         such loan was purchased by the Company and (b) the endorsement in blank
         of the note by the Company, neither the note, the mortgage/deed of
         trust, nor the assignment(s) of the mortgage/deed of trust contain any
         irregular writings which appear on their face to affect the validity of
         any such endorsement or to restrict the enforceability of the document
         on which they appear.

4.       The note is endorsed in blank and such endorsement bears an original
         signature of an authorized officer of the Company, based on the current
         list of such officers supplied by the Company.

5.       The assignment of the mortgage/deed of trust bears an original
         signature of an authorized officer of the Company, based on the current
         list of such officers supplied by the Company.

WITH RESPECT TO ANY ASSIGNED SERVICING RIGHTS:

1.       The copies of each Servicing Contract have been certified as being true
         and complete by an authorized representative of the Company and bear
         what appears to be a reproduction of signatures of authorized
         representatives of the Company and signatures of persons purporting to
         be officers of all other parties thereto.

2.       The original consent or acknowledgment bears the original signature of
         persons purporting to be officers of each party to the Servicing
         Contract which, according to the terms of the Servicing Contract, are
         required to consent or acknowledge the assignment.

WITH RESPECT TO ALL SERVICING ADVANCES:

1.       The copies of each related Servicing Contract have been certified as
         being true and complete by an authorized representative of the Company,
         and bear what appears to be a reproduction of signatures of authorized
         representatives of the Company and signatures of persons purporting to
         be officers of all other parties thereto.


                                       13
<PAGE>

                                                                       EXHIBIT 2
                                                           TO SECURITY AGREEMENT

                              FORM OF TRUST RECEIPT

                                                         Date: ___________, 20__

         The undersigned, DeWOLFE MORTGAGE SERVICES, INC., a Massachusetts
corporation (the "Company"), acknowledges receipt from FIRST UNION NATIONAL BANK
(the "Lender") pursuant to the Security Agreement (as those terms and
capitalized terms not otherwise defined herein are defined in that certain
Amended and Restated Credit Agreement dated as of ______________, 2000, among
the Lender and the Company), or from its duly appointed agent, of the following
described documentation for the identified Mortgage Loans (the "Collateral
Documents"), possession of which is herewith entrusted to the Company solely for
the purpose of correcting documentary defects relating thereto:


                                                              Loan Document
BORROWER NAME     LOAN NUMBER      NOTE AMOUNT            DELIVERED
-------------     -----------      -----------            ---------

         It is hereby acknowledged that a security interest pursuant to the
Uniform Commercial Code as in effect in the State of North Carolina in the
Collateral hereinabove described and in the Proceeds of said Collateral has been
granted to the Lender pursuant to the Security Agreement.

         The Company hereby represents and warrants that the Unit Collateral
Value of the Mortgage Loans for which the Collateral Documents are requested to
be released hereunder when added to the Unit Collateral Value of all other
Mortgage Loans included in the computation of the Collateral Value of the
Borrowing Base the Collateral Documents for which have been similarly released
does not exceed $600,000.

         In consideration of the aforesaid delivery by the Lender (or by its
duly appointed agent), the Company hereby agrees to hold said Collateral
Documents in trust for the Lender as provided under and in accordance with all
provisions of the Security Agreement and to return said Collateral Documents to
the Lender no later than the close of business on the tenth calendar day
following the date hereof or, if such day is not a Business Day, on the
immediately succeeding Business Day.

                                    DeWOLFE MORTGAGE
                                    SERVICES, INC., a Massachusetts corporation

                                    By:________________________________________

                                    Name:______________________________________

                                    Title:_____________________________________


                                       14
<PAGE>

                                                                       EXHIBIT 3
                                                           TO SECURITY AGREEMENT

                            TRUST RECEIPT PROCEDURES

The Company and Lender will adhere to the following procedures with respect to
trust receipts:

         The Lender will maintain all original trust receipts in a vault, drawer
         or other suitable depositary with a one hour fire rating maintained and
         controlled solely by the Lender.


                                       15
<PAGE>

                                                                       EXHIBIT 4
                                                           TO SECURITY AGREEMENT

                            FORM OF SHIPPING REQUEST
                           (For Whole Loan Deliveries)

Date:_________________

FIRST UNION NATIONAL BANK
One First Union Center
301 South College Street
Charlotte, North Carolina  28288
Attention:______________________


This letter is to serve as authorization for you to endorse and ship the
following loans:

Loan Number                     Borrower Name                     Note Amount

to the following address under Commitment #____________ (the "Commitment") from
an Approved Investor as follows:

NAME:
ADDRESS:

ATTENTION:

Please endorse the notes as follows:

Please ship the loan documents either by ___________________ or by such other
courier service as we have designated to you as "approved." The courier shall
act as an independent contractor bailee acting solely on your behalf as Lender,
as defined in that certain Amended and Restated Credit Agreement dated as of
__________, 2000, as the same may be amended, extended or replaced from time to
time, but we acknowledge and agree that you are not responsible for any delays
in shipment or any other actions or inactions of the courier; however, because
the Commitment expires on ______________, 20___, we ask that you deliver the
loan documents to the courier no later than _________________, 20___.

Please have the courier bill us by using our acct #____________. If you should
have any questions, or should feel the need for additional documentation, please
do not hesitate to call _________________

                                    DeWOLFE MORTGAGE
                                    SERVICES, INC., a Massachusetts corporation

                                    By:________________________________________

                                    Name:______________________________________

                                    Title:_____________________________________


                                       16
<PAGE>

                                                                       EXHIBIT 5
                                                           TO SECURITY AGREEMENT
                                                               (DIRECT INVESTOR)

                   FORM OF WHOLE LOAN SALE TRANSMITTAL LETTER
                             [LETTERHEAD OF LENDER]

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

Dear [Approved Investor]:

         Enclosed is(are) _____ original promissory note(s) in the original
principal amount of $_________________ ("Notes") evidencing the Mortgage Loans
described on the attached SCHEDULE A, along with other related documents
(collectively, "Collateral"). A security interest in the Collateral has been
granted to First Union National Bank ("FUNB") by DeWolfe Mortgage Services, Inc.
("Seller").

         All Collateral now or hereafter delivered to you is to be held by you
as a bailee for the benefit of FUNB, and subject to FUNB's direction and
control. By taking possession of Collateral, you agree to the terms of bailments
as set forth in this letter.

***WIRE INSTRUCTIONS***

         Payments for all notes accepted for purchase are to be wire transferred
to FIRST UNION NATIONAL BANK (ABA #053000219) at One First Union Center,
Charlotte, NC 28288-0731, for the account of DeWolfe Mortgage Services, Inc.
(Acct. #________________). Please reference the Mortgagor(s)' name on the wire
instructions.

         Upon FUNB's receipt of proceeds in an amount which is equal to or
greater than the Unit Collateral Value of the Collateral so sold, FUNB's
security interest in the Collateral shall terminate without further action. The
Collateral has not been assigned or transferred by FUNB to any other party and
FUNB has not recorded any security interests therein.

         Notes which are not accepted for purchase, together with all other
related documents, should be returned, within 31 days after the date of this
letter to: First Union National Bank, One First Union Center, Charlotte, NC
28288-0731, Attention: ______________, Corporate Banking Group Loan Operations,
CORP-2, TW-18.

         Please do not honor any communications from Seller relating to any
Collateral or payment without the written consent of FUNB, or until FUNB has
received proceeds of the sale of such Note(s). Do not deliver any Collateral or
payment to any third party without the written consent of FUNB. If you have any
questions, please feel free to call.

                                Very truly yours,
                            First Union National Bank


                                       17
<PAGE>

                                    By:________________________________

                                       ________________________

                                       ________________________
                                       Specialized Industries/Mortgage Banking

                                       (704) ____ - ______

***UPON RECEIPT***

NOTE: By accepting the mortgage loan(s) delivered to you with this letter, you
consent to be the custodian, agent and bailee for the lenders on the terms
described in this letter. The above-signed, as collateral agent, requests that
you acknowledge receipt of the enclosed mortgage loan(s) and this letter by
signing and returning the enclosed copy of this letter and attached SCHEDULE A
to the above-signed; however, your failure to do so does not nullify such
consent.

____________________________                         _______________________
Agreed and Accepted by                                           Date
authorized representative
of [Approved Investor]


                                       18
<PAGE>

                                                                      SCHEDULE 1
                                                           TO SECURITY AGREEMENT

                      LIST OF SERVICING CONTRACTS ASSIGNED


                                       19