EXHIBIT 10.22


                             SUBSERVICING AGREEMENT


         THIS SUBSERVICING AGREEMENT  ("Agreement"),  made as of the 15th day of
April,  1998, by and between  Continental  Capital Corp., a New York corporation
(herein,  "Lender/Servicer")  and Essex Home Mortgage Servicing  Corporation,  a
Virginia corporation (herein, "Subservicer").

                                    RECITALS:

         WHEREAS,  Subservicer  is engaged in the  business of  servicing  loans
including  residential mortgage loans evidenced by notes and secured by deeds of
trust, mortgages, trust deeds or like security instruments; and

         WHEREAS,  Lender/Servicer desires that Subservicer subservice the Loans
as hereinafter defined; and

         WHEREAS, Subservicer has agreed to subservice the Loans, as hereinafter
defined.

         NOW, THEREFORE,  in consideration of the mutual recitals,  promises and
covenants set forth  herein,  and other good and valuable  consideration  herein
receipted  for,  but  not  herein  recited,  the  receipt  of  which  is  hereby
acknowledged, the parties hereto agree and covenant as follows:

                                    ARTICLE I
                                   DEFINITIONS

         For purposes of this Agreement  each of the following  terms shall have
the meaning specified with respect thereto.

1.1      Agreement.  "Agreement"  shall mean this  Agreement  as the same may be
         from time to time amended.

1.2      Borrower. "Borrower" shall mean any maker, endorser, guarantor or other
         person or entity obligated for the payment of a Note in accordance with
         its terms.

1.3      Deconversion  Fee.  The fee  described  in  Section  4.3  below  and on
         Schedule II attached hereto.

1.4      Direct  Cost.  The term  "Direct  Cost" shall mean all  reasonable  and
         customary  costs  incurred by  Subservicer  in accepting  the Loans for
         subservicing,  including costs of travel,  meals and lodging,  costs of
         transferring   data  to  Subservicer   from  the  current  servicer  or
         subservicer  and letters to  Borrowers  advising  them of the change in
         servicing.

1.5      Effective Date.  "Effective Date" shall mean June 1, 1998.

1.6      FDIC.  "FDIC" shall mean the Federal Deposit Insurance Corporation.

1.7      FHA.  "FHA" shall mean the Federal Housing Administration.

1.8      FHLMC. "FHLMC" shall mean the Federal Home Loan Mortgage Corporation.

1.9      FNMA.  "FNMA" shall mean the Federal National Mortgage Association.

1.10     GE.  "GE" shall mean General Electric Credit Corporation.

1.11     GNMA.  "GNMA" shall mean the Government National Mortgage Association.

1.12     Guide.  The FNMA  Selling  Guide and the FNMA,  FHLMC,  GNMA,  HUD, GE,
         Investor,  Mortgage  Insurance  Company Servicing Guide appropriate for
         each Loan and all announcements, bulletins and exhibits thereto, all as
         amended and updated from time to time.

1.13     HUD.  "HUD" shall mean the Department of Housing and Urban Development.

1.14     Investor.  "Investor" shall mean the owner and holder of a Note.

1.15     Lender/Servicer. "Lender/Servicer" shall mean Continental Capital Corp.
         a New York corporation.

1.16     Loan  Documents.  "Loan  Documents"  shall  mean all of the  Notes  and
         Mortgages and any other  documents  evidencing or securing the Loans or
         otherwise related to the Loans.

1.17     Loans.  "Loans"  shall mean the loans  described  on Schedule I and any
         other loans made subject to this Agreement on a periodic basis. Any one
         of the Loans shall be referred to herein as a "Loan".

1.18     Mortgage. "Mortgage" shall mean the original security deed, trust deed,
         deed of trust, security agreement, financing statement, guaranty and/or
         other  document  securing  a  Loan,  including  any  riders,   addenda,
         assumption agreements, modifications and amendments thereto.

1.19     Mortgagor.  "Mortgagor"  or  "Mortgagors"  shall mean the  grantors  or
         makers of any  Mortgages,  including  mortgagors  and trustors of trust
         deeds and deeds of trust.

1.20     Note.  "Note" shall mean for each Loan, the original  promissory  note,
         bond or other  evidence  of  indebtedness  executed  by a Borrower  and
         evidencing  the  indebtedness  of such Borrower under such Loan and any
         riders, addenda, modification or amendments thereto.

1.21     OTS.  "OTS" shall mean the Office of Thrift Supervision.

1.22     Subservicer.  "Subservicer"  shall mean Essex Home  Mortgage  Servicing
         Corporation, a Virginia corporation.

1.23     Prime.  "Prime" shall mean the prime rate of interest  published in The
         Wall Street Journal or any successor publication.

1.24     Taxes.  "Taxes"  shall  mean all real  estate  taxes  and  other  taxes
         assessed against property  securing Loans, the nonpayment of which will
         result in a lien taking priority over the Mortgage.

1.25     Termination  Fee.  The fee  described on Schedule II that is payable to
         Subservicer under Article V hereof.

1.26     VA.  "VA" shall mean the Veterans Administration.

                                   ARTICLE II
                            AGREEMENTS OF SUBSERVICER

2.1      General.

         Subservicer  hereby agrees to service each Loan pursuant and subject to
the terms of this Agreement.  Lender/Servicer  and  Subservicer  agree that this
Agreement shall be effective as of the Effective Date.

2.2      Compliance.

         Subservicer  will comply with, and Subservicer will use best efforts to
cause each Borrower and Mortgagor to comply with, (a) all  applicable  state and
federal  rules  and  regulations,  (b)  the  requirements  of  private  mortgage
insurance companies for Loans insured by private mortgage  insurance,  including
those requiring the giving of notices, and (c) the Guide.

2.3      Procedure.

         Until the principal and interest of each Note and all obligations under
each Note and Mortgage are paid in full,  unless sooner  terminated  pursuant to
the terms  hereof,  Subservicer  shall  perform the  following  services in full
compliance with the Guide:

         (a)      Collect  as they  become due (i)  payments  of  principal  and
                  interest (ii) any sums to be held in escrow for the payment of
                  Taxes, assessments and other public charges that are generally
                  impounded,   hazard  and/or  flood  insurance  premiums,   FHA
                  insurance or private mortgage insurance premiums,  condominium
                  association  dues and  fees  and  other  sums  required  to be
                  collected and disbursed for Borrowers  (collectively "Escrowed
                  Sums")  and (iii) all other  payments  from  Borrowers  and/or
                  Mortgagors.

         (b)      Accept payments of principal and interest and impound deposits
                  only in  accordance  with the Loan  Documents  or  information
                  provided by  Lender/Servicer  including  information  received
                  from  Lender/Servicer's  servicing system.  Deficiencies in or
                  excess in payments or deposits  shall be accepted  and applied
                  in  accordance  with the Loan  Documents or, if not covered in
                  such  documents,  in  accordance  with  Investor  or  mortgage
                  insurer guidelines.

         (c)      Apply all installments  and impound  deposits  collected by it
                  from  the  Borrower  or  Mortgagor,   and  maintain  permanent
                  mortgage account records capable of producing, at any time and
                  in  chronological  order:  the  date,  amount,   distribution,
                  installment  due  date or  other  transactions  affecting  the
                  amounts  due  from or to the  Borrower  and/or  Mortgagor  and
                  indicating  the  latest  outstanding  balances  of  principal,
                  impound deposits, advances, and unapplied payments.

         (d)      Pending disbursement,  segregate and hold by it in a custodial
                  account or accounts in a financial  institution insured by the
                  FDIC ("Custodial  Accounts";  each a "Custodial Account"),  in
                  such manner as to show the custodial  nature  thereof,  and so
                  that the Investor and each separate  Borrower whose funds have
                  been   contributed   to  such  account  or  accounts  will  be
                  individually   protected   under   the   rules  of  the  FDIC.
                  Subservicer's  records shall show the  respective  interest of
                  the Investor and each Borrower in all Custodial Accounts.  All
                  funds  collected for  principal and interest  shall be held by
                  and carried in records of the Subservicer as "trustee" for the
                  Investor,  and  shall be  established  in such a manner  as to
                  comply  with  all  applicable  rules  and  regulations  of any
                  governmental agency insuring or guaranteeing each Loan.

         (e)      Maintain deposits received for the payment of Escrowed Sums in
                  a separate  custodial account as specified in subparagraph (d)
                  of  this  section  for  each  Borrower  ("Borrower   Custodial
                  Account").  If any  federal  or state  statute  or rule of law
                  requires  or may  require  the  payment  of  interest  on such
                  deposits,  Subservicer  will pay such  interest  on each  such
                  Borrower  Custodial  Account  which it  maintains or controls.
                  Lender/Servicer  shall reimburse Subservicer for said interest
                  immediately  upon  billing.  Subservicer  will  determine  the
                  amount of deposits to be made by Borrowers and will furnish to
                  each  Borrower,  at least once a year,  an analysis of his/her
                  Borrower  Custodial  Account and in  accordance  with  written
                  instructions from the Lender/Servicer, if given.

         (f)      Maintain  accurate  records  reflecting  the  status of Taxes,
                  ground rents and other recurring charges generally accepted by
                  the mortgage  servicing  industry which would become a lien on
                  the  property  given as security  for the loan (the  "Security
                  Property").  For all Loans  providing  for the  payment to and
                  collection by Subservicer  of any Escrowed  Sums,  Subservicer
                  shall pay such charges  before any penalty  date.  Subservicer
                  assumes  responsibility for the timely payment of all Escrowed
                  Sums and will hold harmless and indemnify  Lender/Servicer and
                  Investor from all  penalties,  loss or damage  resulting  from
                  Subservicer's failure to discharge said responsibility.

         (g)      For all Loans which have no provisions  for the payment to and
                  collection  by   Subservicer   of  Escrowed  Sums  for  Taxes,
                  Subservicer  shall,  upon  notification  by its  tax  service,
                  promptly contact Lender/Servicer  regarding the delinquency of
                  any such  Taxes.  Subservicer  will pay any  delinquent  Taxes
                  pursuant to the Guide. Additionally,  Subservicer shall not be
                  responsible  for payment of ground rents or other  charges for
                  any Loan for which it is not  obligated  to  collect  Escrowed
                  Sums  and  will  pay  such   charges   only  upon  receipt  of
                  notification  by  Subservicer  that such  other  charges  will
                  result in a lien  against a Security  Property.  Reimbursement
                  for  any  such  payments  will  be  made  in  accordance  with
                  subparagraph 2.3(h) below.

         (h)      When  Escrowed Sums held in a Borrower  Custodial  Account are
                  insufficient  to pay Taxes,  assessments,  mortgage  insurance
                  premiums,  hazard or flood insurance premiums,  or other items
                  due therefrom,  Lender/Servicer  shall  reimburse  Subservicer
                  monthly  for  all  outstanding  deficiencies,  and  any  other
                  advances  made by  Subservicer  to  protect  the  security  of
                  Lender/Servicer  and Investor and  Lender/Servicer  shall wire
                  funds  necessary  to  reimburse  Subservicer  for any advances
                  within  five  (5)  business  days  of  receipt  of an  invoice
                  therefor.  Funds  received after the fifth day will be subject
                  to a finance  charge at a rate per annum  equal to two percent
                  (2%) over  Prime.  Subservicer  shall  attempt  to obtain  the
                  necessary  additional funds from each Borrower to recover such
                  advances made on behalf of each Borrower and Lender/Servicer.

         (i)      Maintain  in full force and  effect at all times FHA  mortgage
                  insurance,  or private mortgage insurance,  as applicable,  in
                  accordance   with   the  type  of   Loan,   and  will   assume
                  responsibility for the payment of the premium thereon for each
                  Loan,  with  reimbursement  for such  payments  being  made in
                  accordance with subparagraph 2.3(h) above.

         (j)      Assure that  improvements on Security  Property  securing each
                  Mortgage are insured by hazard  insurance  issued by companies
                  acceptable  to  Investor  in an amount  at least  equal to the
                  unpaid  principal  balance  of the loan or the full  insurable
                  value of the  improvements,  whichever  is less,  of a type at
                  least  as  protective  as  fire  and  extended  coverage,  and
                  containing a "standard" or "union"  mortgage  clause  (without
                  contribution)  in the  form  customarily  used in the  area in
                  which the  Security  Property is located.  In all events,  the
                  provisions of the Loan Documents shall prevail.  The mortgagee
                  clause  will  be  reflected  as  running  to  the  benefit  of
                  Lender/Servicer, its successors and assigns. During the course
                  of subservicing,  the mortgagee clause in the hazard insurance
                  will read as follows:

                            Continental Capital Corp.
                           Its Successors and Assigns
                  C/O Essex Home Mortgage Servicing Corporation
                                  P.O. Box 8068
                            Virginia Beach, VA 23450

                  Subservicer shall maintain evidence of the original  insurance
                  policy for any Loan  delivered  for  subservicing  as provided
                  within Subservicer's mortgage impairment insurance policy.

2.4      Other.

         Subservicer  shall be responsible for further  safeguarding  Investor's
interest and rights in any real property, mobile home or other Security Property
under any Mortgage by performing the following  services in full compliance with
the Guide:

         (a)      Inspecting  such Security  Property when any Borrower  becomes
                  sixty (60) days or more delinquent in the payment of principal
                  and interest or Escrowed  Sums under the Note and perform such
                  other  inspections  as  prudent  and sound  business  judgment
                  suggests;

         (b)      To the extent possible and pursuant to the Guide, securing any
                  such Security  Property  found to be vacant or abandoned,  and
                  advising Lender/Servicer of the status thereof;

         (c)      Notifying Investor and  Lender/Servicer  whenever  Subservicer
                  receives  notice or otherwise  becomes  aware of any notice of
                  liens,  bankruptcy,  condemnations,  probate  proceeding,  tax
                  sale,  partition,  local ordinance violation,  condemnation or
                  proceeding  in the nature of eminent  domain or similar  event
                  that  would,  in  Subservicer's  reasonable  judgment,  impair
                  Investor's security;  and Subservicer shall assist Investor in
                  undertaking appropriate action to preserve its security;

         (d)      Advising Investor and Lender/Servicer with respect to requests
                  for  partial  releases,  easements,  substitutions,  division,
                  subordination,  alterations, or waivers of security instrument
                  terms;

         (e)      Advising Investor and  Lender/Servicer,  if requested,  of any
                  change in ownership of such Security Property,  and subject to
                  governing laws and  regulations,  comply with all instructions
                  from Investor with respect to the acceleration or modification
                  of the Note; Subservicer, at the direction of Lender/Servicer,
                  will forward all requests for Loan assumption immediately upon
                  receipt.  Subservicer will, upon request,  provide the initial
                  paperwork  necessary  to obtain Loan  assumption  information.
                  This information will be forwarded to  Lender/Servicer  and/or
                  Investor   for  approval   and  all   necessary   disclosures.
                  Lender/Servicer  and/or  Investor  will prepare the  necessary
                  assumption papers and forward to Subservicer for processing.

         (f)      Maintaining  in force  at all  times a policy  of  errors  and
                  omissions  insurance  coverage at Subservicer's  sole expense.
                  The purpose of such coverage is to provide Lender/Servicer and
                  Investor  protection  in  liquidating  a Loan against net loss
                  that can be attributed to damage to the Security Property from
                  a hazard or peril  required to be insured by the  Investor and
                  that  otherwise   would  be  insured  but  for   Subservicer's
                  negligence in allowing  insurance coverage to lapse or failing
                  to keep a sufficient amount of insurance in force;

         (g)      Disbursing  insurance loss  settlements  according to Investor
                  guidelines.

Except as otherwise provided above, all advices and notifications required to be
given in the Section 2.4 shall be provided at least monthly.

2.5      Investor Accounting.

         In full compliance with the Guide, Subservicer shall:

         (a)      Make interest rate  adjustments in compliance  with applicable
                  regulatory  adjustable loan  requirements  and the Note, which
                  reflect the applicable  movements of the applicable  loan rate
                  index.   Applicable   interest  rate   adjustments   shall  be
                  implemented  in accordance  with  applicable  adjustable  loan
                  regulations  and  the  Note.  Subservicer  shall  execute  and
                  deliver  all  appropriate   notices   required  by  applicable
                  adjustable  loan  regulations  and  the  Note  regarding  such
                  interest  rate  adjustments   including  but  not  by  way  of
                  limitation,  timely  notification to Investor or to Investor's
                  successors  or assigns,  of  applicable  date and  information
                  regarding  such  interest  rate  adjustment,  and  methods  of
                  implementation   of  such  interest  rate   adjustments,   new
                  schedules  of  Investor's  pro rata  share of  collections  of
                  principal and  interest,  and of all  prepayments  of any Loan
                  hereunder by Borrower or Mortgagor.

         (b)      Perform  such other  duties,  furnish  such other  reports and
                  execute  such other  documents in  connection  with its duties
                  hereunder as  Lender/Servicer  and Investor  from time to time
                  may require  consistent with  requirements  performed by other
                  servicers of loans in accordance with the Guide.

         (c)      Not accept any  prepayment  of any Loan except as specified by
                  law or as  authorized by law and permitted by the terms of the
                  Loan  Documents,  nor  waive,  modify,  release  or consent to
                  postponement  on the part of the  Borrower or Mortgagor of any
                  term or  provision of the Loan  Documents  without the written
                  consent of Investor;  notwithstanding the foregoing,  however,
                  Subservicer  shall not be required to obtain  written  consent
                  for the waiver of any late charge or the waiver, modification,
                  release or consent postponement of any term or provision which
                  may be waived, modified,  released or consented to without the
                  consent  of the  Investor  under  the  terms  of  its  written
                  instructions ("Investors Instructions") or under the Guide.

         (d)      Upon  payment of a Loan in full,  have  prepared  and file any
                  necessary  release  or  satisfaction   documents,   and  shall
                  continue  subservicing  of the Loan pending final  settlement,
                  and refund any Escrowed Sums within state mandated time frames
                  or pay penalties  associated  with failure to so comply unless
                  such failure  results  from  Lender/Servicer's  or  Investor's
                  delay.

         (e)      Where Investors  require  interest paid through the end of the
                  month although interest due from the Borrower is to the actual
                  date  of the  payoff,  advance  its own  funds  to  cover  any
                  uncollected  interest due the  Investor and will  periodically
                  bill  Lender/Servicer  for  reimbursement  of  such  advances.
                  Lender/Servicer  will reimburse  Subservicer for said advances
                  immediately upon billing.

         (f)      Remit to the Investor,  on a date and in a manner specified by
                  Investor,  all principal and interest collected from Borrowers
                  or Mortgagors, retaining as compensation the fees set forth in
                  Schedule  II  attached  hereto.  Subservicer  will  remit  any
                  guaranty  fees to the  appropriate  Investor as  required.  By
                  mutual   agreement,   Subservicer   will   remit   monthly  to
                  Lender/Servicer the remaining portion of the gross service fee
                  collected.

         (g)      Where  Investors  such  as  FHLMC,   FNMA,  GNMA  require  the
                  reporting of balances and cash  remittances to be reported and
                  remitted  at one  time  and  consolidated  on the  appropriate
                  reports, service one hundred percent (100%) of Loans which are
                  servicing  retained  by  Lender/Servicer  for those  Investors
                  which follow such  reporting  requirements.  Subservicer  also
                  will submit all reports to  Investor  under  Lender/Servicer's
                  assigned  "seller/servicer"  number or such other  number that
                  Lender/Servicer  and  Investor  may  designate  in  writing to
                  Subservicer.

         (h)      In the event the Investor instructs Lender/Servicer to service
                  release any Loan(s), and Lender/Servicer shall deliver written
                  notice thereof to  Subservicer,  Subservicer  shall proceed in
                  accordance  with the  Investor's  Instructions.  In the  event
                  Lender/Servicer  determines and instructs  Subservicer  not to
                  proceed  with  the  Investor's  Instructions,  Lender/Servicer
                  agrees to hold  Subservicer  harmless  from any  action  taken
                  against  Subservicer  by the  Investor,  and  from any loss or
                  damage,   including   reasonable   attorney  fees,   resulting
                  therefrom.   With   respect  to  servicing   released   Loans,
                  Subservicer  shall be responsible to provide such  information
                  as Investor and  Lender/Servicer  shall reasonably request and
                  shall assist Lender/Servicer in resolving routine problems and
                  issues with Investor.

         (i)      In the event Investor sells all or any part of its interest in
                  any Loan to a third  party or parties,  including  the sale of
                  participating   interests  therein,  and  such  third  parties
                  succeed to all of the right of Investor hereunder for the Loan
                  interest  purchased  and this  Agreement  shall remain in full
                  force  and   effect,   remit  all   principal   and   interest
                  installments  collected  under the Loan Documents  directly to
                  such third  party or parties in  accordance  with the terms of
                  the applicable  servicing  agreement,  after  deduction of the
                  servicing  fee  which  is  paid  to  the  Lender/Servicer  and
                  subservicing fees and other fees, costs and charges chargeable
                  by  Subservicer  under  the  terms  of  this  Agreement.   The
                  obligation to make direct  remittances  to such third party or
                  parties  shall arise upon thirty (30) days  written  notice of
                  such   assignments   given  by  such   third   party(ies)   to
                  Subservicer.  Subservicer  shall be entitled to and be paid an
                  additional One Dollar ($1.00) per Loan per remittee per month,
                  for each such  third  party  remittance  beyond the first one,
                  excluding GNMA security holders.

         (j)      Hold   Custodial   Accounts   associated   with  the  receipt,
                  disbursement  and  accumulation  of principal  and interest as
                  "trustee"  for  Lender/Servicer   and/or  Investors  and  each
                  Borrower  Custodial  Account as  "trustee"  for the benefit of
                  each Borrower in accordance with Investor's Instructions,  and
                  where  none  apply,  the  Guide,  with the  exception  of GNMA
                  servicing. Pursuant to GNMA's regulations,  Subservicer is not
                  permitted to  withdraw/disburse  funds from Custodial Accounts
                  for principal and interest.  Any benefit or value derived from
                  all  demand  deposits  shall  accrue  to  the  benefit  of the
                  Subservicer or Lender/Servicer as set forth on Schedule II.

         (k)      Subservicer  shall be  responsible  for  accurate  and  timely
                  reporting and remittance  pursuant to the  requirements of the
                  Guide as well as costs and  penalties  that may be incurred in
                  failing to meet such  responsibility  unless such failure is a
                  result of Lender/Servicer's actions or inactions.

2.6      Delinquency Control.

         In full compliance with the Guide, Subservicer shall:

         (a)      Be  responsible  for protecting  Investor's  investment in the
                  Loans by maintaining the maximum possible number of Loans in a
                  current status, dealing quickly and effectively with Borrowers
                  who are  delinquent  or in default.  Subservicer's  delinquent
                  mortgage   servicing   program   shall   include  an  adequate
                  accounting   system  which  will  immediately  and  positively
                  indicate the existence of delinquent  Loans,  a procedure that
                  provides  for  sending  delinquent  notices,   assessing  late
                  charges, and returning inadequate payment, and a procedure for
                  the   individual   analysis  of  distressed   or   chronically
                  delinquent  Loans.  Attached to this Agreement is Schedule III
                  which is a  minimum  sample of  reports  required  under  this
                  Agreement.

         (b)      Maintain a  collection  department  and an  on-line  automated
                  collection  system.  All delinquent Loans shall be serviced in
                  accordance  with Investors  Instructions  or where none apply,
                  the Guide.

         (c)      Provide   Lender/Servicer   and  Investor   with  a  month-end
                  collection and delinquency  report  identifying and describing
                  the status of any delinquent Loans, and will from time to time
                  as the need may arise,  provide  Lender/Servicer  and Investor
                  with loan service reports relating to any items of information
                  which  Subservicer is otherwise  required to provide hereunder
                  per Schedule IV attached hereto,  or detailing any matters the
                  Subservicer  reasonably  believes  should  be  brought  to the
                  special attention of Lender/Servicer and Investor. The reports
                  as   outlined   in  Schedule   III  shall  be   delivered   to
                  Lender/Servicer    via   hard   copy.   All   information   in
                  Subservicer's    custody   and   control   with   respect   to
                  Lender/Servicer's  Loans  shall be  immediately  available  to
                  Lender/Servicer and, in no event, later than five (5) business
                  days  following  receipt  of a request  therefor.  Subservicer
                  shall  provide  a master  file tape to  Lender/Servicer  twice
                  monthly.

         (d)      Upon the request and under the  direction  of  Lender/Servicer
                  and Investor,  assist in the foreclosure or other  acquisition
                  of the Security Property pursuant to a Mortgage,  the transfer
                  of such Security  Property to the FHA or VA and the collection
                  of any applicable mortgage  insurance,  and pending completion
                  of these steps,  protect such Security Property from waste and
                  vandalism.  Subservicer  shall be  responsible  for filing all
                  reimbursement claim forms. Subservicer will have title to such
                  Security Property conveyed in the name designated by Investor.
                  Upon receipt of billing by Subservicer,  Lender/Servicer  will
                  immediately  reimburse  Subservicer for all of its expenses so
                  incurred  under  this   paragraph,   provided  that  they  are
                  reimbursable pursuant to the Guide,  including court costs and
                  reasonable  attorney's  fees.  In case of a voluntary  deed in
                  lieu of foreclosure, and purchase by Investor for its account,
                  Subservicer will protect the Security Property while so owned.
                  These  operations  shall be on  terms  and as  determined  and
                  directed by Investor from time to time. Under the sale of such
                  Security  Property,  on terms as  specified  by  Investor,  if
                  payments are deferred and payable under  contract or Mortgage,
                  Subservicer will service the same until completely liquidated.

2.7      Books and Records.

         Upon  Lender/Servicer's  written request,  Subservicer  shall furnish a
detailed statement of its financial condition, shall give Lender/Servicer or its
authorized  representative  opportunity  at any time during its normal  business
hours to examine  Subservicer's  books and  records,  or shall cause a certified
public  accountant  selected and employed by it to provide  Lender/Servicer  not
later than ninety (90) days after the close of Subservicer's fiscal year, with a
certified statement of Subservicer's  financial condition as of the close of its
fiscal  year.  Any  additional  requests for Loan audit or  confirmations  to be
performed by Subservicer's  audit firm on Loans,  shall be at  Lender/Servicer's
sole expense.  Subservicer will keep records satisfactory to Lender/Servicer and
Investor  pertaining  to each Loan,  and such  records  shall be the property of
Lender/Servicer  and upon  termination of this  Agreement  shall be delivered to
Lender/Servicer at Lender/Servicer's expense.

Notwithstanding the foregoing,  however, Subservicer at its own expense may copy
any such record  before  delivering  it to the  Lender/Servicer,  so long as the
Guide does not prohibit such copying.

2.8      Insurance.

         Subservicer  will  maintain  in effect at all times and at its cost,  a
blanket  fidelity bond and an errors and omission  policy in accordance with the
requirements of the Guide.  Subservicer shall cause certificates  evidencing the
existence of such coverage to be delivered to Lender/Servicer.

                                   ARTICLE III
                          AGREEMENTS OF LENDER/SERVICER

3.1      Documentation.

         Lender/Servicer shall provide to Subservicer at Lender/Servicers'  sole
cost and expense:

         (a)      Any documents or records  which are  necessary or  appropriate
                  for Subservicer to receive in order to service the Loans.

         (b)      Applicable  documentation for each Loan submitted hereunder to
                  enable  Subservicer  to place  and  continue  each Loan on its
                  computer system.  All such documentation must be received in a
                  reasonable  amount  of  time  by  Subservicer,  prior  to  any
                  reporting due Investor.

         (c)      Its pro-rata portion of the fee required for any extraordinary
                  audit expense levied by any state or other jurisdiction.

         (d)      If applicable and as soon as possible,  a complete  listing of
                  any  Loans  where  the  mortgage  payment  is  inclusive  of a
                  personal or group  insurance  premium.  This list will include
                  the name of the insurance  company;  type of premium coverage;
                  premium  amount;  and the name  and  telephone  number  of the
                  individual   at   Lender/Servicer's    firm   or   affiliation
                  knowledgeable   of   such   coverage.    Furthermore,   should
                  Lender/Servicer  misrepresent,  misinform,  provide inadequate
                  information  or no  information  regarding  the status of such
                  personal or group insurance coverages (e.g.,  mortgage life or
                  disability insurance) which would cause Subservicer to incur a
                  loss or  damage,  Lender/Servicer  agrees to hold  Subservicer
                  harmless from any and all claims,  liabilities,  damages,  and
                  loss,   including   reasonable   attorneys   fees,   resulting
                  therefrom.

         (e)      Physical  evidence that a hazard  insurance policy is in force
                  for each Mortgage  delivered to Subservicer  for  subservicing
                  and allowing  Subservicer  sufficient time to receive evidence
                  in  house  that  all  notifications   shall  be  forwarded  to
                  Subservicer.   Further,   Lender/Servicer   agrees   to   hold
                  Subservicer  harmless  from  any  loss  or  damage  caused  by
                  insufficient  evidence of hazard insurance  coverage delivered
                  to Subservicer  or any loss or damage which occurred  during a
                  lapsed policy prior to delivery of servicing to Subservicer.

         (f)      Remittance by check for an amount sufficient to pay for a real
                  estate tax contract issued by Subservicer's tax service.  If a
                  tax contract is in existence,  pay any fees  associated with a
                  transfer to Subservicer.

3.2      Further Notification.

         Lender/Servicer shall:

                  (a) Advise  Subservicer  upon delivery of each Loan  submitted
                  for  subservicing,  as to whether  the Loan is in a  warehouse
                  (unsold) status or, if sold,  specific  information  regarding
                  the permanent Investor.  If a Loan which has been delivered to
                  Subservicer   in  a   warehouse   (unsold)   status  is  sold,
                  Lender/Servicer  will  immediately  notify  Subservicer of the
                  sale by phone and will deliver a written copy of the permanent
                  Investor's   purchase   advice  or  funding   detailed  report
                  immediately  thereafter.  In the event the permanent  Investor
                  charges a penalty for late reporting, remittances, etc., which
                  were   caused   by   Lender/Servicer's   delay  in   notifying
                  Subservicer  of  the  permanent  Investor's  purchase  of  the
                  Loan(s),  Lender/Servicer  agrees to promptly  pay the penalty
                  and Subservicer shall have no liability on account therof.

         (b)      Discharge  Subservicer  from all liability for any advances of
                  principal and interest  resulting from delinquent  whole Loans
                  and  delinquent  Loans which are included in any pool that has
                  been   created   through    "mortgage-backed   pass   through"
                  certificates or securities, as well as for all advances due to
                  negative   amortization.   Lender/Servicer   will  immediately
                  reimburse, by wire, Subservicer for such advances. Subservicer
                  will reimburse Lender/Servicer if and when recoveries are made
                  from Borrowers or Mortgagors.

3.3      Default.

         In the event  Lender/Servicer shall fail to pay to Subservicer any sums
due and payable to  Subservicer  under this Agreement when and as the same shall
be due and  payable,  whether  as  compensation,  reimbursement,  or  otherwise,
Subservicer shall be entitled to adjust  Lender/Servicer's "net service fee due"
in  set-off  of the  amount of any sum so owing  and  unpaid  together  with any
finance  charges payable in accordance with paragraph 9.12 below or as otherwise
provided herein.


                                   ARTICLE IV
                                  COMPENSATION

4.1      Compensation to Subservicer.

         For  providing  the services  contained in this  Agreement it is agreed
that:

         (a)      Subservicer   shall  be  paid  in  accordance  with  the  fees
                  established by Schedule II, attached hereto.

         (b)      Any   miscellaneous   costs  incurred  by   Subservicer   from
                  extraordinary  requests  for items  beyond  the scope of those
                  required by the Guide shall be billed to  Lender/Servicer  and
                  promptly paid by Lender/Servicer upon receipt of billing.

         (c)      All monthly fees and charges (including guaranty fees on pools
                  of  mortgage-backed  securities  and  unrecoverable  scheduled
                  interest  and all bank  charges  and/or  interest  related  to
                  negative   balances,   for   example,   interest   charged  by
                  Subservicer's  depository  bank for payments  received but not
                  collected from Borrower's depository bank and disbursed to the
                  appropriate  Custodial  Accounts  but not  collected as of the
                  date of disbursement)  shall be billed to the  Lender/Servicer
                  and due  within  five  (5)  days  of  receipt  of the  invoice
                  therefor. All invoices for special services will be due within
                  five  (5)  days of  receipt  of the  invoice  therefor.  Funds
                  received  after  five (5) days  will be  subject  to a finance
                  charge of two percent (2%) above Prime.  Subservicer  reserves
                  the  right  to  deduct  any  unpaid  fees  and  charges   from
                  Lender/Servicer's gross servicing fee remittance.

4.2      Insurance Commissions; Solicitation.

         While  Subservicer  is servicing any Loan, all  commissions  related to
force place  insurance  and other fees  payable  for  obtaining  such  insurance
coverage or collecting premiums and other charges, excluding all sums payable to
the insurer,  shall be retained by Subservicer as ancillary income.  Subservicer
warrants that  subsequent to the date of this  Agreement,  Subservicer  will not
solicit in any  manner,  directly  or  indirectly,  or  intentionally  assist or
participate in any solicitation by a third party, whether by telephone, mail, or
direct  contact,  any Borrower for the purpose of  refinancing  or recasting any
Loan, the Servicing of which is being transferred pursuant to this Agreement.

4.3      Deconversion Fee.

         If  subservicing  hereunder is terminated with respect to any or all of
the Loans for any reason  other than  foreclosure,  acquisition  of the Security
Property  in lieu of  payment  or  payment  in full or for cause (as  defined in
Section 5.2(b) below), Lender/Servicer shall pay to Subservicer the Deconversion
Fee described on Schedule II in consideration of Subservicer's work in assisting
with the transfer of servicing for any such Loans. The Deconversion Fee shall be
withheld by Subservicer from Lender/Servicer's  remittance. Any amount still due
after this offset is exhausted  shall be paid within five (5)  business  days of
receipt of an invoice therefor.  If termination is made for cause (as defined in
Section  5.2(b)  below),  Lender/Servicer  will pay all costs charged by the new
servicer for transferring data to the new servicer.

                                    ARTICLE V
                              TERM AND TERMINATION

5.1      Term.

         The term of this Agreement  shall be for two (2) year(s) for commencing
upon the Effective Date and ending at twelve  o'clock  midnight on May 31, 2000.
If neither  party shall  terminate  this  Agreement  by ninety (90) days written
notice to the other prior to the expiration of the initial term,  this Agreement
shall  renew  itself  and exist and  continue  for  successive  terms of two (2)
year(s) each until terminated by such notice.

5.2      Notice.

                  (a) In the event  Lender/Servicer  terminates  this  Agreement
                  during the  initial two (2) year term,  Lender/Servicer  shall
                  pay Subservicer the Termination Fee and the  Deconversion  Fee
                  described in Schedule II. After the  expiration of the initial
                  two (2) term,  either party may,  without cause by ninety (90)
                  days  prior  written  notice  to  the  other,  terminate  this
                  Agreement  as to any  or all  Loans  then  being  subserviced.
                  Termination for "cause" is described in  subparagraphs  5.2(b)
                  and 5.2(c) below).  If any termination of subservicing for 75%
                  or more of the Loans  occurs at any time  during  the  initial
                  term of this Agreement,  Lender/Servicer shall pay Subservicer
                  the Termination Fee and Deconversion Fee.

         (b)      At Lender/Servicer's option, this Subservicing Agreement shall
                  immediately  terminate  for  cause  after  fifteen  (15)  days
                  written notice to Subservicer. The term "for cause" as applied
                  to termination of Subservicer shall mean (i) the occurrence of
                  any event which  constitutes a material  breach on the part of
                  the  Subservicer  of its servicing  obligations  and covenants
                  described  in Articles  II,  VII,  VIII and IX (ii) a material
                  change in Subservicer's  financial  circumstances  which would
                  adversely   affect   Subservicer's   ability  to  perform  its
                  obligations  under  this  Agreement,  (iii) any breach of such
                  servicing   obligations   that  may  result  in  immediate  or
                  irreparable harm, or (iv) if any representation or warranty of
                  Subservicer  under  Article VII is inaccurate or untrue in any
                  material  respect.  If  terminated  pursuant  to this  Section
                  5.2(b),  Lender/Servicer  shall be  entitled  to all  remedies
                  available at law.

         (c)      This Subservicing  Agreement shall immediately  terminate,  at
                  Subservicer's  option,  upon fifteen (15) days written  notice
                  after the  occurrence of any event which  constitutes a breach
                  on the  part of the  Lender/Servicer  of the  obligations  and
                  covenantsdescribed in Articles III, VI, VIII, and IX or in the
                  event of any  breach of such  obligations  that may  result in
                  immediate or irreparable harm as determined by the Subservicer
                  or upon Subservicer's determination that any representation or
                  warranty of Lender/Servicer  under Article VI is inaccurate or
                  untrue in any material respect. If terminated pursuant to this
                  Section  5.2(c),  Subservicer  shall be  entitled to receive a
                  Termination  Fee and  Deconversion  Fee  with  respect  to all
                  Loans.

         (d)      Notwithstanding the provisions of paragraphs 5.2(b) and 5.2(c)
                  above, any party receiving  notice of termination  under those
                  paragraphs shall have thirty (30) days to cure any breach of a
                  covenant  (other  than a covenant to make  payments  hereunder
                  which  shall  be made in  strict  accordance  with  the  terms
                  hereof),  or to correct any untrue or inaccurate facts, unless
                  curing any such failure requires acts to be done or conditions
                  to be removed  which cannot,  by their  nature,  be performed,
                  done or removed,  as the case may be,  within such thirty (30)
                  day  period,  in which  event,  the  curing  party  may  avoid
                  termination  so long as such curing party shall have commenced
                  curing such failure  within fifteen (15) days from the receipt
                  of said  notice  and shall  diligently  prosecute  the cure to
                  completion,  provided that the curing party shall in any event
                  complete such cure within  forty-five  (45) days after written
                  notice of termination and termination  shall become  effective
                  upon  such  date if the  cure has not  been  completed  at the
                  expiration of such forty-five (45) day period.

5.3      Subservicer's Contingencies.

         Subservicer's obligations and duties hereunder shall be contingent upon
(a)  Lender/Servicer  providing  the  information  and  documents  described  in
paragraphs 3.1 and 3.2(a) above,  (b) receipt by Subservicer of letters or other
documents  from all Investors  approving  this  Agreement and  Subservicer  as a
servicer of such Loans and (c) receipt by Subservicer of certified copies of the
Lender/Servicer's audited financial statements for 1997.

5.4      Reimbursement of Servicing Released Loans.

         Subservicer's   right  to  reimbursement   for  actual  expenses,   and
reimbursement  for any  advances of  principal  and  interest and escrow made on
behalf of  Lender/Servicer  in accordance with the terms of this Agreement shall
also apply to any Loans sold by Lender/Servicer as an Investor to a new Investor
on a "servicing released" basis.

5.5      Accounting.

         Upon termination of this Agreement under this section, Subservicer will
account for and turn over to Lender/Servicer, Lender/Servicer's designee, or the
Investor  or  Investor's  designee,  all  funds  collected  under  each Note and
Mortgage,  less the compensation and any fees then due Subservicer,  and deliver
to Lender/Servicer,  Lender/Servicer's designee, Investor or Investor's designee
all records and documents relating to each Loan then subserviced and will advise
Borrowers  that their Loans will  henceforth  be  serviced  by  Lender/Servicer,
Lender/Servicer's  designee,  Investor or Investor's designee in accordance with
the Guide.

                                   ARTICLE VI
           REPRESENTATION, WARRANTIES AND COVENANTS OF LENDER/SERVICER

6.1      Assistance.

         Lender/Servicer  warrants and  represents  to, and covenants and agrees
with Subservicer that, to the extent possible,  Lender/Servicer  shall cooperate
with and assist  Subservicer  as  requested  by  Subservicer,  in  carrying  out
Subservicer's  covenants,  agreements,  duties and  responsibilities  under this
Agreement and in connection therewith shall execute and deliver all such papers,
documents and  instruments  as may be necessary and  appropriate  in furtherance
therof.

6.2      Notice of Breach.

         Lender/Servicer shall immediately notify Subservicer (i) of any failure
or  anticipated  failure on its part to observe  and  perform  any  covenant  or
agreement  required to be observed and performed by it as a Lender/Servicer  and
(ii) if any  representation  or warranty of  Lender/Servicer  made in connection
with this Agreement is untrue or inaccurate in any material respect.

6.3      Taxes.

         As of the Effective Date,  Lender/Servicer warrants that to the best of
their  knowledge  all Taxes  have been paid  prior to the tax  delinquent  date.
Lender/Servicer will indemnify and hold Subservicer harmless of and from any tax
penalties and interest  which arose or accrued  prior to the Effective  Date and
for any other  claims,  demands,  costs fees or expenses,  including  reasonable
attorneys'  fees,  resulting  from any  failure  to pay  such  Taxes in a timely
manner.

6.4      Authority; Prior Servicing.

         Lender/Servicer is a duly organized and validly existing corporation in
good standing under the laws of its state of incorporation and has all requisite
power and authority to enter into this Agreement and the persons  executing this
Agreement  on  behalf  of   Lender/Servicer   are  duly  authorized  so  to  do.
Lender/Servicer  is  the  owner  of all  servicing  rights  for  all  Loans  and
represents  and  warrants  that all  information  contained  in any  database or
document related to Loans is true, accurate and correct in every respect.

6.5      Financial Statements.

         Lender/Servicer  shall provide  Subservicer  with copies of its audited
financial  statements on an annual basis within  thirty (30) days  following the
date of their  issuance but in no event later than one hundred twenty (120) days
following the end of its fiscal year.

                                   ARTICLE VII
            REPRESENTATIONS, WARRANTIES AND COVENANTS OF SUBSERVICER

         Subservicer  warrants and represents to, and covenants and agrees with,
Lender/Servicer as follows:

7.1      Notice of Breach.

         Subservicer shall immediately notify Lender/Servicer (i) of any failure
or  anticipated  failure on its part to observe  and  perform  any  covenant  or
agreement required to be observed and performed by it as Subservicer and (ii) if
any  representation  or warranty of  Subservicer  made in  connection  with this
Agreement is untrue or inaccurate in any material respect.

7.2      Agency Approvals.

         Subservicer is an approved Servicer for FHLMC, FNMA, HUD, GE and GNMA.

7.3      Authority.

         Subservicer  is a duly  organized and validly  existing  corporation in
good standing under the laws of its state of incorporation and has all requisite
power and authority to enter into this Agreement and the persons  executing this
Agreement on behalf of Subservicer are duly authorized so to do.

7.4      Financial Statements.

         Subservicer  shall provide  Lender/Servicer  with copies of its audited
financial  statements on an annual basis within  thirty (30) days  following the
date of their  issuance but in no event later than one hundred twenty (120) days
following   the  end  of  its  fiscal  year.   Subservicer   has   delivered  to
Lender/Servicer their financial statements for the year 1997.

7.5      Approvals.

         To the extent  reasonably  necessary  for  Subservicer  to fulfill  its
obligations  hereunder and so long as the cost of obtaining  same is reasonable,
Subservicer  shall obtain any  approvals  from  government  entities,  Investors
and/or   mortgage   insurance   companies   that  are  necessary  to  effectuate
transactions to be undertaken hereunder.

7.6      Compliance; No Violations; Litigation.

         Subservicer  is in compliance  with,  and will continue to comply with,
the Guide in all material respects. Subservicer is not in violation or breach of
any  agreement  and not a party to any pending or  threatened  litigation  which
would have a material adverse effect upon Subservicer's  ability to perform this
Agreement.

                                  ARTICLE VIII
                INDEPENDENCE OF PARTIES; INDEMNIFICATION SURVIVAL

8.1      Independence of Parties.

         The   following   terms   shall   govern   the   relationship   between
Lender/Servicer and Subservicer:

                  (a)  Subservicer  shall  have  the  status  of  and  act as an
                  independent  contractor.  Nothing  herein  contained  shall be
                  construed to create a  partnership  or joint  venture  between
                  Lender/Servicer and Subservicer.

         (b)      Subservicer  shall  not be  responsible  for  representations,
                  warranties or contractual  obligations in connection  with (1)
                  sale to an Investor of any of the Loans,  or (2) the servicing
                  of any such Loans prior to the assumption of  subservicing  of
                  the Loans pursuant to this Agreement.

         (c)      Anything herein contained in this Article VIII or elsewhere in
                  this   Agreement   to  the   contrary   notwithstanding,   the
                  representations  and  warranties of  Subservicer  contained in
                  this  Agreement  shall  not  be  construed  as a  warranty  or
                  guarantee by Subservicer as to future payments by any Borrower
                  or Mortgagor.

         (d)      Anything herein contained in this Article VIII or elsewhere in
                  this  Agreement to the contrary  notwithstanding,  Subservicer
                  shall not be responsible for  performance or compliance  under
                  any loan repurchase agreements,  representations or warranties
                  of an origination  nature, or those servicing  representations
                  and   warranties   directly  or  indirectly   related  to  the
                  origination  process  made  between  Lender/Servicer  and  any
                  Investor, either prior or subsequent to this Agreement.

8.2      Indemnification by Subservicer.

         Except as otherwise  stated herein,  Subservicer  indemnifies and holds
harmless Lender/Servicer from any liabilities, claims, losses, damages, actions,
claims, fees, costs and expenses including reasonable  attorneys' fees, directly
or indirectly resulting from or arising out of Subservicer's  failure to observe
or perform any or all of  Subservicer's  covenants,  agreements,  warranties  or
representations contained in this Agreement.

8.3      Indemnification by Lender/Servicer.

         Lender/Servicer indemnifies and holds harmless the Subservicer from any
liabilities, claims, losses, damages, actions, claims, fees, expenses and costs,
including  reasonable  attorneys' fees, directly or indirectly resulting from or
arising out of (i) Lender/Servicer's failure to observe or perform any or all of
Lender/Servicer's covenants, agreements, warranties or representations contained
in this Agreement, (ii) the performance,  negligence,  actions or failure to act
of any Servicer or subservicer of the Loans,  other than Subservicer,  (iii) any
inaccuracies in any information provided by Lender/Servicer and (iv) the untruth
or inaccuracy of any of the representations and warranties set for in paragraphs
6.4 and the following  additional  representations and warranties to the best of
Lender/Servicer's knowledge:

         (a)      Each  Loan,  the  Note and  Mortgage,  any  insurance  policy,
                  certificate  of  coverage,  or  other  contract  or  agreement
                  relating to each Loan is in every respect genuine; is complete
                  in all respects;  is the legal, valid, binding and enforceable
                  obligation of the Borrower  thereunder in accordance  with its
                  terms  and is  free  from  all  claims,  defenses,  rights  of
                  rescission, any discount,  allowance,  set-off,  counterclaim,
                  presently  pending  bankruptcy or other defenses or contingent
                  liability by any  Borrower  which could  adversely  affect the
                  value or  collectibility  of any  Loan;  none of the  Notes or
                  Mortgages  nor anything  contained in the Loan  Documents,  is
                  forged or has affixed  thereto any  unauthorized  signature or
                  has been  entered  into by any persons  without  the  required
                  legal  capacity;  and no foreclosure or any other legal action
                  has been  brought  by any  Servicer  in  connection  therewith
                  except as identified on Schedule I.

         (b)      The  applicable  Loan  Documents  have been duly and  properly
                  executed by the Borrower,  acknowledged,  and  recorded.  Each
                  Loan is valid and complies  with all  applicable  lending laws
                  and  regulations,  including  the  Truth-In-Lending  Act, Real
                  Estate Settlement and Procedures Act, Equal Credit Opportunity
                  Act,  Fair Housing and  Disclosure  Act and  Regulation Z (the
                  "Acts").  The Loan  Documents  have been duly  executed on the
                  dates indicated and in due and proper form.

         (c)      In  connection  with  the  creation,  acquisition,  ownership,
                  servicing,  execution and content of all Loans, all applicable
                  federal and state laws,  rules and regulations  have been, and
                  are  being,  complied  with  by  each  Servicer  thereof.  All
                  information  requested  to be disclosed to the Borrower by the
                  Acts  has  been  properly  and  accurately  disclosed  to  the
                  Borrower by each Servicer  thereof,  in full compliance and in
                  accordance  with the  Acts.  The  Borrower  has duly  executed
                  appropriate documents or evidence indicating that the Borrower
                  has   received  the   disclosure   materials  as  required  by
                  applicable  law and  regulations,  including the Acts and such
                  evidence is located among the Loan Documents.

         (d)      The servicing and collection  procedures used by each Servicer
                  and subservicer  (other than Subservicer) with respect to each
                  Loan have been in all respects legal, proper and prudent.

         (e)      All of the terms,  conditions  and  provisions of the interest
                  rate adjustments,  payment  adjustments and adjustments of the
                  outstanding   principal   balance  are   enforceable  and  all
                  adjustments have been timely and properly made, including, but
                  not limited to all required  notices,  and any  adjustments so
                  made will not affect the enforceability of each Note.

8.4      Survival.

         The  indemnifications,  representations and warranties set forth herein
shall survive the termination of this Agreement.

                                   ARTICLE IX
                                  MISCELLANEOUS

9.1      Changes in Practices.

         The  parties  hereto   acknowledge  that  the  standard  practices  and
procedures of the mortgage servicing industry change or may change over a period
of time. To accommodate these changes,  Subservicer may from time to time notify
Lender/Servicer  of such changes in practices  and  procedures.  Should any such
proposed  changes,  made  in good  faith  by  Subservicer,  be  unacceptable  to
Lender/Servicer,  then Subservicer shall have no further  obligation to continue
to accept subservicing under the terms of this Agreement, and may terminate this
Agreement in accordance with Article V.

9.2      Assignment.

         This  Agreement  may be assigned  only after  obtaining  prior  written
consent of both Lender/Servicer and Subservicer.

9.3      Prior Agreements.

         If any  provision  of this  Agreement  is  inconsistent  with any prior
Agreements  between the parties,  oral or written,  the terms of this  Agreement
shall prevail, and after the effective date of this Agreement,  the relationship
and agreements  between  Lender/Servicer  and  Subservicer  shall be governed in
accordance with the terms of this Agreement.

9.4      Entire Agreement.

         This Agreement contains the entire agreement between the parties hereto
and cannot be modified in any respect  except by an amendment in writing  signed
by both parties.

9.5      Invalidity.

         The invalidity of any portion of this Agreement  shall in no way affect
the remaining portions hereof.

9.6      Effect.

         Except as  otherwise  stated  herein,  this  Agreement  shall remain in
effect  until  Lender/Servicer's  interest  in all of the  Loans  including  the
underlying  security,  are  liquidated  completely,   unless  sooner  terminated
pursuant to the terms hereof.

9.7      Applicable Law.

         This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of Virginia.

9.8      Notices.

         All  notices,  requests,  demands  and other  communications  which are
required or permitted to be given under this  Agreement  shall be in writing and
shall be deemed to have been duly given upon the delivery or mailing thereof, as
the case may be, sent by registered or certified mail,  return receipt requested
to the address set forth on the signature page hereof.

9.9      Waivers.

         Either  Lender/Servicer or Subservicer may, upon mutual written consent
of both parties, by written notice to the other:

         (a)      Waive  compliance  with  any  of  the  terms,   conditions  or
                  covenants required to be complied with by the other hereunder;
                  and

         (b)      Waive or modify  performance of any of the  obligations of the
                  other hereunder.

         The waiver by either party hereto of a breach of any  provision of this
Agreement shall not operate or be construed as a waiver of any other  subsequent
breach.

9.10     Binding Effect.

         This  Agreement  shall inure to the benefit of and be binding  upon the
parties hereto and their successors and assigns.

9.11     Headings; Certain Terms.

         Headings  of the  Articles  and  Sections  in  this  Agreement  are for
reference purposes only and shall not be deemed to have any substantive  effect.
The term  "include" or  "including"  shall mean without  limitation by reason of
enumeration.   References   herein  to   "paragraphs,"   "sections"   and  other
subdivisions  without a reference  to  document  are to  designated  paragraphs,
sections and other subdivisions of this Agreement. The words "herein," "hereof,"
"hereunder" and other words of similar import refer to this Agreement as a whole
and  not to any  particular  provision.  All  personal  pronouns  used  in  this
Agreement,  whether  used in the  masculine,  feminine or neuter  gender,  shall
include all genders, the singular shall include the plural and vice versa.

9.12     Due Date of Payments.

         Unless otherwise stated herein, all fees, payments,  charges, expenses,
advances and any other sums payable to Subservicer by Lender/Servicer hereunder,
shall  be  due  and  payable   within  five  (5)  business  days  from  date  of
subservicer's  invoice  and  thereafter,  all sums shall be subject to a finance
charge at a rate per annum equal to two percent (2%) over Prime.

9.13     Multiple Counterparts.

         This Agreement may be executed in multiple counterparts,  each of which
shall  constitute  an  original,  but all of which  when  taken  together  shall
constitute one and the same  Agreement.  Any signature page from one counterpart
may be appended to another  counterpart to create a fully  executed  counterpart
hereof.

         IN WITNESS WHEREOF,  each party has caused this instrument to be signed
in its corporate name on its behalf by its proper  officials duly  authorized as
of the day, month and year first above written.

                                  Subservicer:
                                  Essex Home Mortgage Servicing Corporation


                                  By:  /s/ Stephen K. Sager 
                                     --------------------------------
                                           Stephen K. Sager
                                           Vice President

                                  P.O. Box 8068
                                  Virginia Beach, VA 23450

                                  Lender/Servicer:
                                  Continental Capital Corp.


                                  By:  /s/ Michael J. Wallace, Jr.
                                     --------------------------------
                                            Michael J. Wallace, Jr.
                                            Chief Executive Officer

                                  1841 New York Avenue
                                  Huntington Station, NY  11746


<PAGE>



                                 SCHEDULE INDEX


                           SCHEDULE I - List of Loans

          SCHEDULE II - Subservicing Fee Schedule for Schedule I Loans

                   SCHEDULE III - Investor Accounting Reports

                          SCHEDULE IV - Default Reports