UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                            Form 10-K

     [X]     ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934
         For the fiscal year ended December 31, 1996
                               OR
     [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(D)
             OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE
             REQUIRED]
         For the transition period from   to  .

               Commission File number 33-99346.02

AMRESCO Residential Securities Corporation Mortgage Loan Trust 1996-2
     (Exact name of registrant as specified in its charter)
          New York                        33-0711440
 (State of other jurisdiction      
              of                          (I.R.S. Employer
incorporation or organization)          Identification No.)
                                   
 c/o Bankers Trust Company of   
          California               
   3 Park Plaza, 16th Floor                    
      Irvine, California                        92714
    (Address of principal                     (Zip Code)
      executive offices)
                                        
                                
 Registrant's telephone number, including area code: (909) 605-7600
                                
   Securities registered pursuant to Section 12(b) of the Act:
                                
             None                               None
    (Title of each class)            (Name of each exchange on
                                         which registered)
  Securities registered pursuant to Section 12 (g) of the Act:
                              None
                        (Title of class)

      Indicate by check mark whether the registrant (1) has filed
all  reports required to be filed by Section 13 or 15(d) of the
Securities  Exchange Act of 1934 during the preceding 12 months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject to such filing
requirements for the past 90 days.  Yes   X   No     .

      Indicate  by check mark if disclosure of delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and will not be contained, to the best of registrant's knowledge,
in  definitive  proxy or information statements  incorporated  by
reference in Part III of this Form 10-K or any amendment to  this
Form 10-K.  [ X ]

     State the aggregate market value of the voting stock held by
non-affiliates of registrant.  The aggregate market  value  shall
be  computed  by reference to the price at which  the  stock  was
sold,  or the average bid and asked prices of such stock,  as  of
specified  date within 60 days prior to the date of filing:   Not
Applicable

               Documents Incorporated by Reference
 Not Applicable
                                
                             PART I

ITEM 1 - BUSINESS

     Not Applicable.

ITEM 2 - PROPERTIES

     Not Applicable.

ITEM 3 - LEGAL PROCEEDINGS

     AMRESCO Residential Securities Corporation (the "Depositor")
is  not aware of any material pending legal proceedings involving
either  the  AMRESCO Residential Securities Corporation  Mortgage
Loan  Trust  1996-2  (the "Trust") established  pursuant  to  the
Pooling  and Servicing Agreement dated April 1, 1996,  among  the
Depositor,  AMRESCO  Residential  Mortgage  Corporation  in   its
capacity  as seller, Long Beach Mortgage Company and  Option  One
Mortgage  Corporation  as the servicers  (the  "Servicers"),  and
Bankers  Trust  Company of California, N.A., a  national  banking
association in its capacity as trustee.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No  matter  has been submitted to a vote of the holders  of
beneficial  interests in the Trust through  the  solicitation  of
proxies or otherwise.

                            PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

      To  the  best  knowledge  of the  Depositor,  there  is  no
established public trading market for any beneficial interests in
the Trust.

      All  of  the Class A-1 and A-2 Certificates issued  by  the
Trust  are held by the Depository Trust Company ("DTC") which  in
turn maintains records of holders of beneficial interests in such
Certificates.  Based on information obtained from the DTC  as  of
March   17,  1997,  there  were  2  holders  of  the  Class   A-1
Certificates, and 7 holders of the Class A-2 Certificates.

ITEM 6 - SELECTED FINANCIAL DATA

     Not applicable.

ITEM  7  -  MANAGEMENT'S  DISCUSSION AND  ANALYSIS  OF  FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

     Not applicable.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      In  addition  to  the information included  in  the  Annual
Complication of Monthly Trustee's Statements attached as  Exhibit
99.3  hereto,  the  gross  servicing  compensation  paid  to  the
Servicers for the year ended December  31, 1996 was $784,109.

ITEM  9  -  CHANGES  IN  AND DISAGREEMENTS  WITH  ACCOUNTANTS  ON
ACCOUNTING AND FINANCIAL DISCLOSURE

      There  were  no changes of accountants or disagreements  on
accounting  or financial disclosures between the Issuer  and  its
accountants.

                            PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Not applicable.

ITEM 11 - EXECUTIVE COMPENSATION

     Not applicable.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

      The following table sets forth (i) the name and address  of
each  entity  owning  more than 5% of the  outstanding  principal
amount  of each Class of Class A Certificates of the Trust;  (ii)
the  principal amount of the Class of Certificates owned by  each
and  (iii) the percent that the principal amount of the Class  of
Certificates  owned by such entity represents of the  outstanding
principal  amount of such Class of Certificates.  The information
set forth in the table for the Class A Certificates is based upon
information  obtained  from the DTC and represents  ownership  of
beneficial  interest in the Certificates held by  the  DTC.   The
Depositor  is not aware of any Schedules 13D or 13G's filed  with
the   Securities  and  Exchange  Commission  in  respect  of  the
Certificates.


                                               Amount Owned
                                          (All Dollar Amounts Are
                                               in Thousands)
Name and Address                  Class  Principal   Percent
Chase Manhattan Bank/Broker &      A-1   30,442,000          93.8%
Dealer Clearance Department
4 New York Plaza, 21 st Floor
New York, NY  10015

First Union National Bank          A-1   2,000,000            6.2%
401 South Tryon Street
TR OPSCMG NC 1151
Charlotte, NC  28288
                                                                  
Bankers Trust Company              A-2   79,000,000          35.1%
c/o BT Services Tennessee, Inc.
Custody Services
648 Grassmere Park Road
Nashville, TN  37211
                                                                  
Chase Manhattan Bank               A-2   40,000,000          17.8%
Two Chase Manhattan Plaza,
5th Floor
New York, NY  10081
                                                                  
Chase Manhattan Bank/Chemical      A-2   65,500,000          29.1%
Auto Settle Department
4 New York Plaza, 4th Floor
New York, NY  10004
                                                                  
Republic National Bank of New York A-2   12,750,000           5.7%
- Investment Account
One Hanson Place, Lower Level
Brooklyn, NY  11243
                                                                  
Smith Barney Harris Upham & Co.,   A-2   16,750,000           7.4%
Inc. (SB)
C/o ADP Proxy Services
51 Mercedes Way
Edgewood, NY  11717



ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     [None]

                            PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS  ON
          FORM   8-K

    (a)  The following documents are filed as part of this report:

     1.   Financial Statements:

          Not applicable.

     2.   Financial Statement Schedules:

          Not applicable.

     3.   Exhibits:

           Exhibit No.                Description
             99.1(a)        Statement of Compliance of the
                             Servicer. - Option One
             99.1(b)        Statement of Compliance of the
                             Servicer. - Long Beach
             99.2(a)        Annual Report of Independent Accountants with
                             respect to the Servicer's overall servicing
                             operations. - KPMG Peat Marwick LLP
             99.2(b)        Annual Report of Independent Accountants with
                             respect to the Servicer's overall servicing
                             operations. - Deloitte & Touche LLP
              99.3          Annual compilation of Monthly Trustee's
                             Statement.

(b)  Reports on Form 8-K.

                Reports on Form 8-K have been filed by the Issuer
during the last quarter of the period covered by this report.

                                   Items Reported/Financial
        Date of Reports on             Statements Filed
             Form 8-K
       October 25, 1996     Trustee's Monthly Report for the
                            October Monthly Period.
       November 25, 1996    Trustee's Monthly Report for the
                            November Monthly Period.
       December 26, 1996    Trustee's Monthly Report for the
                            December Monthly Period.

                           SIGNATURES

      Pursuant to the requirements of Section 13 and 15(d) of the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  Report  to  be  signed on its behalf  by  the  undersigned,
thereunto duly authorized.

               AMRESCO RESIDENTIAL SECURITIES CORPORATION
           on behalf of AMRESCO Residential Securities Corporation
           Mortgage Loan Trust 1996-2


                    By:  /s/ Ronald B. Kirkland
                    Name:  Ronald B. Kirkland
                    Title:  Vice President and Chief Accounting
                            Officer


Date:  March 26, 1997

                       INDEX TO EXHIBITS
                           Item 14(C)


             Exhibit No.                   Description
               99.1(a)           Statement of Compliance of the
                                 Servicer. - Option One
               99.1(b)           Statement of Compliance of the
                                 Servicer. - Long Beach
               99.2(a)           Annual Report of Independent
                                 Accountants with respect to
                                 the Servicer's overall
                                 servicing operations. - KPMG
                                 Peat Marwick LLP
               99.2(b)           Annual Report of Independent
                                 Accountants with respect to
                                 the Servicer's overall
                                 servicing operations. -
                                 Deloitte & Touche LLP
                 99.3            Annual compilation of Monthly
                                 Trustee's Statement.