AMBAC                                            Ambac Assurance Corporation
                                          One State Street Plaza, 15th Floor
                                                   New York, New York  10004
                                                   Telephone: (212) 668-0340

CERTIFICATE GUARANTY INSURANCE POLICY



Insured Obligations:                                      Policy Number:

Home Equity Loan Trust  2001-HS3  AB0490BE Home Equity  Loan-Backed  Term Notes,
Series  2001-HS3,  Class  A-II  and Home  Equity  Loan-Backed  Variable  Funding
Premium:
Notes,                                                    Series   2001-HS3   As
                                                          specified    in    the
                                                          endorsement   attached
                                                          hereto.

AMBAC ASSURANCE CORPORATION (AMBAC), a Wisconsin stock insurance corporation, in
consideration  of the  payment of the  premium  and subject to the terms of this
Policy, hereby agrees  unconditionally and irrevocably to pay to the Trustee for
the  benefit of the  Holders of the  Insured  Obligations,  that  portion of the
Insured Amounts which shall become Due for Payment but shall be unpaid by reason
of Nonpayment.

Ambac will make such  payments to the Trustee from its own funds on the later of
(a) one (1) Business Day  following  notification  to Ambac of Nonpayment or (b)
the Business Day on which the Insured Amounts are Due for Payment. Such payments
of principal or interest shall be made only upon  presentation  of an instrument
of assignment in form and substance satisfactory to Ambac, transferring to Ambac
all rights  under such  Insured  Obligations  to receive  the  principal  of and
interest  on the  Insured  Obligation.  Ambac  shall  be  subrogated  to all the
Holders'  rights to  payment  on the  Insured  Obligations  to the extent of the
insurance  disbursements so made. Once payments of the Insured Amounts have been
made to the Trustee, Ambac shall have no further obligation hereunder in respect
of such Insured Amounts.

In the event the Trustee for the Insured Obligations has notice that any payment
of  principal  or  interest  on an Insured  Obligation  which has become Due for
Payment  and which is made to a Holder by or on behalf of the  Trustee  has been
deemed a  preferential  transfer  and  theretofore  recovered  from  its  Holder
pursuant  to the  United  States  Bankruptcy  Code in  accordance  with a final,
nonappealable  order of a court of competent  jurisdiction,  such Holder will be
entitled  to payment  from Ambac to the extent of such  recovery  if  sufficient
funds are not otherwise available.

This  Policy is  noncancelable  by Ambac for any  reason,  including  failure to
receive payment of any premium due hereunder.  The premium on this Policy is not
refundable  for any  reason.  This Policy  does not insure  against  loss of any
prepayment  or other  acceleration  payment  which at any time may become due in
respect of any Insured  Obligation,  other than at the sole option of Ambac, nor
against any risk other than Nonpayment, including failure of the Trustee to make
any payment due Holders of Insured Amounts.

To the fullest  extent  permitted by  applicable  law,  Ambac hereby  waives and
agrees not to assert any and all rights and defenses,  to the extent such rights
and  defenses may be available  to Ambac,  to avoid  payment of its  obligations
under this Policy in accordance with the express provisions hereof.

Any capitalized terms not defined herein shall have the meaning given such terms
in the endorsement attached hereto or in the Agreement.

In  witness  whereof,  Ambac  has  caused  this  Policy to be  affixed  with its
corporate seal and to be signed by its duly authorized  officers in facsimile to
become  effective as their original  signatures and binding upon Ambac by virtue
of the countersignature of its duly authorized representative.

 /s/ Robert J. Genader                              /s/ Anne G. Gill
------------------------------------               ----------------------------

President                                          Secretary

                                          [seal]    /s/ Thomas J. Adams, III
                                                   ----------------------------

Effective Date:  September 27, 2001                Authorized Representative


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2


                                  EXHIBIT 10.2



                CERTIFICATE GUARANTY INSURANCE POLICY ENDORSEMENT

Attached to and forming                       Effective Date of Endorsement:
part of Policy No. AB0490BE                               September 27, 2001
issued to:
The Chase  Manhattan  Bank, as In- denture Trustee on behalf of Home Equity Loan
Trust  2001-HS3,  and  for  the  benefit  of  the  Holders  of the  Home  Equity
Loan-Backed Notes, Series 2001-HS3, Class A-II, and the Variable Funding Notes

        For all  purposes of this  Policy,  the  following  terms shall have the
following meanings:

        "Agreement" shall mean the Indenture (including Appendix A thereto).

        "Dissolution  Payment Date" shall mean the first  Business Day following
the date on which the sale,  liquidation  or other  disposition of the assets of
the Owner Trust Estate occurs as a result of the liquidation of the Trust Estate
as permitted under the Indenture following an Event of Default thereunder.

        "Due for Payment" shall mean, with respect to any Insured Amounts,  such
amount that is due and payable under the  Indenture on the related  Payment Date
or Dissolution Payment Date, as the case may be.

        "Final Payment Date" shall mean the Payment Date in February 2027.

        "First Payment Date" shall mean October 25, 2001.

        "Holder" shall mean any person who is the registered owner or beneficial
owner of any of the Insured Notes.

        "Indenture"  shall mean the  Indenture,  dated as of September 27, 2001,
between  Home Equity Loan Trust  2001-HS3,  as Issuer,  and The Chase  Manhattan
Bank,  as  Indenture  Trustee,  as such  Indenture  may be amended,  modified or
supplemented from time to time as set forth in the Indenture.

        "Indenture  Trustee"  shall  mean  The  Chase  Manhattan  Bank,  or  its
successor-in-interest, in its capacity as indenture trustee under the Indenture,
or if any  successor  indenture  trustee or any  co-indenture  trustee  shall be
appointed as provided  therein,  then  "Indenture  Trustee" shall also mean such
successor  indenture trustee or such co-indenture  trustee,  as the case may be,
subject to the provisions thereof.

        Insurance  Agreement"  shall mean the Insurance and Indemnity  Agreement
(as may be  amended,  modified  or  supplemented  from time to time) dated as of
September 27, 2001, by and among the Insurer,  Residential Funding  Corporation,
as Seller and Master Servicer, the Depositor, the Issuer and The Chase Manhattan
Bank, as Indenture Trustee.

        "Insurance  Draw  Amount"  (1) shall mean,  with  respect to any Payment
Date,  the sum of (x) the amount by which accrued  interest on the Insured Notes
at the  applicable  Note Rate on such Payment Date  (exclusive of any Basis Risk
Shortfalls and any Relief Act  Shortfalls)  exceeds the amount on deposit in the
Payment  Account  available for interest  distributions  on the Insured Notes on
such Payment Date, (y) any  Liquidation  Loss Amount with respect to the Insured
Notes (other than any Excess Loss Amount) not currently covered by a Liquidation
Loss Distribution Amount or a reduction in the Outstanding Overcollateralization
Amount and (z) any Excess  Loss  Amount,  (2) shall  mean,  with  respect to the
Dissolution  Payment  Date,  the amount of the  Dissolution  Draw payable to the
Noteholders  of the  Insured  Notes  following  the sale,  liquidation  or other
disposition  of the  assets of the Owner  Trust  Estate in  connection  with the
liquidation  of the Trust Estate as permitted  under the Indenture  following an
Event of Default  thereunder,  (3) shall mean, with respect to the Final Payment
Date, the amount by which the Security  Balances on the Insured  Notes,  and any
accrued and unpaid interest thereon  (exclusive of any Basis Risk Shortfalls and
any Relief Act Shortfalls) to the extent not paid pursuant to clause (1) of this
definition,  exceeds the payments otherwise  available to be made to the Holders
thereof  on the Final  Payment  Date and (4) shall  mean,  with  respect  to the
Insured  Undercollateralization Payment Date, the Undercollateralization Amount.
Any Basis Risk Shortfalls and any Relief Act Shortfalls shall not be included in
an Insurance Draw Amount.

        "Insurance  Policy" or  "Policy"  shall mean this  Certificate  Guaranty
Insurance Policy together with each and every endorsement hereto.

        "Insured  Amounts" (1) shall mean, with respect to any Payment Date, the
Insurance Draw Amount for such Payment Date plus any Preference  Amount for such
Payment Date, (2) shall mean, with respect to the Dissolution  Payment Date, the
Insurance Draw Amount for the  Dissolution  Payment Date,  (3) shall mean,  with
respect to the Final  Payment  Date,  the  Insurance  Draw  Amount for the Final
Payment   Date   and   (4)   shall   mean,   with   respect   to   the   Insured
Undercollateralization Payment Date, the Undercollateralization Amount.

        "Insured Notes" shall mean the Class A-II Notes and the Variable Funding
Notes.

        "Insured  Payments"  shall mean,  with respect to any Payment Date,  the
aggregate  amount  actually  paid by the  Insurer  to the  Indenture  Trustee in
respect of Insured Amounts for such Payment Date.

        "Insurer"  shall  mean Ambac  Assurance  Corporation,  or any  successor
thereto, as issuer of the Insurance Policy.

        "Late  Payment Rate" shall mean the lesser of (a) the greater of (i) the
per annum rate of interest  publicly  announced  from time to time by  Citibank,
N.A. as its prime or base  lending  rate (any change in such rate of interest to
be effective on the date such change is announced by Citibank,  N.A.),  and (ii)
the then applicable highest rate of interest on any of the Insured Notes and (b)
the maximum rate  permissible  under  applicable  usury or similar laws limiting
interest  rates.  The Late  Payment  Rate shall be  computed on the basis of the
actual number of days elapsed over a year of 360 days for any Payment Date.

        "Nonpayment"  shall  mean,  with  respect  to any  Payment  Date or with
respect to the  Dissolution  Payment  Date,  an Insured  Amount which is Due for
Payment but has not and will not be paid in respect of such  Payment Date or the
Dissolution Payment Date, as the case may be, pursuant to the Indenture.

        "Notice"  shall mean the  telephonic  or  telegraphic  notice,  promptly
confirmed in writing by telecopy  substantially  in the form of Exhibit A to the
Policy,  the  original  of which is  subsequently  delivered  by  registered  or
certified mail, from the Indenture  Trustee  specifying the Insured Amount which
shall be due and owing on the applicable Payment Date or the Dissolution Payment
Date.

        "Payment Account" shall mean the account created and maintained with the
Indenture Trustee for the benefit of the Noteholders and the Certificate  Paying
Agent on behalf of the  Certificateholders  and the Insurer  pursuant to Section
3.01 of the Indenture.

        "Payment  Date"  shall  mean the 25th day of each month (or if such 25th
day is not a  Business  Day,  the  first  Business  Day  immediately  following)
beginning with the First Payment Date.

        "Preference  Amount" shall mean any amount  previously  distributed to a
Holder that is recoverable  and sought to be recovered as a voidable  preference
by a trustee in bankruptcy  pursuant to the Bankruptcy Code in accordance with a
final non-appealable order of a court having competent jurisdiction.

        "Premium" shall have the meaning  assigned to that term in the Insurance
Agreement.

        "Reimbursement  Amount" shall mean,  as to any Payment Date,  the sum of
(x) (i) all Insured Payments paid by the Insurer,  but for which the Insurer has
not been reimbursed prior to such Payment Date pursuant to Section 3.05(a)(v) of
the  Indenture,  plus (ii)  interest  accrued  thereon,  calculated  at the Late
Payment Rate from the date the Indenture  Trustee  received the related  Insured
Payments  except  with  respect to any Insured  Payments  made as a result of an
Undercollateralization Amount, in which case interest shall be calculated at the
Undercollateralization Late Payment Rate, and (y) (i) any other amounts then due
and  owing to the  Insurer  under  the  Insurance  Agreement,  but for which the
Insurer has not been  reimbursed  prior to such Payment Date pursuant to Section
3.05 (a) (vii) of the  Indenture  plus (ii) interest on such amounts at the Late
Payment Rate.

        "Trustee" shall mean the Indenture Trustee.

        "Undercollateralization  Late Payment Rate" shall mean the lesser of (a)
the per annum rate of interest publicly announced from time to time by Citibank,
N.A. as its prime or base  lending  rate (any change in such rate of interest to
be effective on the date such change is announced by Citibank,  N.A.) plus 2.00%
per annum and (b) the maximum rate permissible under applicable usury or similar
laws limiting interest rates. The Undercollateralization Late Payment Rate shall
be computed on the basis of the actual number of days elapsed over a year of 360
days for any Payment Date.

        Capitalized used herein and not otherwise defined shall have the meaning
assigned to them in the Indenture (including Appendix A thereto).

        The Insurer hereby agrees that if, as of any Payment Date, it has become
subrogated  to the rights of Holders by virtue of a previous  payment under this
Policy,  no recovery of such  payment  will occur  unless the full amount of the
Holders' allocable distributions for such Payment Date can be made. In so doing,
the Insurer does not waive its rights to seek full payment of all  Reimbursement
Amounts owed to it under the Indenture and the Insurance Agreement

        As  provided  by the Policy,  the  Insurer  will pay any amount  payable
hereunder,  other than  Preference  Amounts,  no later than 12:00 noon, New York
City time, on the later of the Payment Date on which the related  Insured Amount
is due or the Business Day following  actual  receipt in New York, New York on a
Business  Day by the  Insurer  of a Notice;  provided  that,  if such  Notice is
received after 12:00 noon, New York City time, on such Business Day, it shall be
deemed to be received on the  following  Business Day. If any such Notice is not
in proper form or is  otherwise  insufficient  for the purpose of making a claim
under the Policy,  it shall be deemed not to have been  received for purposes of
this paragraph,  and the Insurer shall promptly so advise the Indenture  Trustee
and the Indenture Trustee may submit an amended or corrected Notice.

        The Insurer shall pay any Preference Amount when due to be paid pursuant
to the Order  referred  to  below,  but in any  event on the  Payment  Date next
following  receipt on a Business Day by the Insurer of (i) a certified copy of a
final,  non-appealable order of a court or other body exercising jurisdiction in
such  insolvency  proceeding  to the effect that the  Trustee or the Holder,  as
applicable, is required to return such Preference Amount paid during the term of
this Policy  because such  payments were avoided as a  preferential  transfer or
otherwise rescinded or required to be restored by the Trustee or the Holder (the
"Order"),  (ii) a certificate  by or on behalf of the Trustee that the Order has
been entered and is not subject to any stay,  (iii) an  assignment,  in form and
substance  satisfactory  to the  Insurer,  duly  executed  and  delivered by the
Trustee or the Holder, as applicable,  irrevocably  assigning to the Insurer all
rights and claims of the Trustee or the Holder,  as  applicable,  relating to or
arising under the Agreement  against the estate of the Trustee or otherwise with
respect  to such  Preference  Amount and (iv) a Notice of  Nonpayment  (attached
hereto as Exhibit A) appropriately  completed and executed by the Trustee.  Such
payment shall be disbursed to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy  named in the Order, and not to the Trustee or the Holder,
as applicable,  directly,  unless the Trustee or the Holder, as applicable,  has
made  a  payment  of the  Preference  Amount  to the  court  or  such  receiver,
conservator,  debtor-in-possession  or trustee in bankruptcy named in the Order,
in which case the Insurer will pay the Trustee on behalf of the Holder,  subject
to the  delivery of (a) the items  referred to in clauses (i) , (ii),  (iii) and
(iv) above to the  Insurer and (b)  evidence  satisfactory  to the Insurer  that
payment   has   been   made   to   such   court   or   receiver,    conservator,
debtor-in-possession   or   trustee   in   bankruptcy   named   in  the   Order.
Notwithstanding the foregoing two sentences,  the Insurer shall not be obligated
to pay any Preference  Amount in respect of principal (other than principal paid
in connection with Liquidation Loss Amounts) except on the Final Insured Payment
Date or earlier  termination  of the Trust  Estate  pursuant to the terms of the
Agreement.

        The terms and  provisions of the Indenture  constitute the instrument of
assignment referred to in the second paragraph of the face of this Policy.

        A  Premium  will be  payable  on this  Policy  on each  Payment  Date as
provided  in Section  3.05 (a) (II) (iv) of the  Indenture,  beginning  with the
First Payment Date, in the amount specified in Section 3.02 (c) of the Insurance
Agreement.

        THE   INSURANCE   PROVIDED   BY  THE  POLICY  IS  NOT   COVERED  BY  THE
PROPERTY/CASUALTY  INSURANCE  SECURITY  FUND  SPECIFIED IN ARTICLE 76 OF THE NEW
YORK INSURANCE LAW.

        The Policy to which this Endorsement is attached and of which it forms a
part is hereby  amended to provide that there shall be no  acceleration  payment
due under the  Policy  unless  such  acceleration  is at the sole  option of the
Insurer.  The Policy is further  hereby  amended,  to the extent  necessary,  to
clarify that the reference to "loss of any prepayment or any other  acceleration
payment"  in the fourth  paragraph  of the face of the Policy  does not refer to
that  portion of any  shortfall,  if any, in interest on any Home Equity Loan in
any month in which such Home Equity Loan is paid prior to its stated maturity.

        Nothing herein contained shall be held to vary,  alter,  waive or extend
any of the terms, conditions, provisions, agreements or limitations of the above
mentioned  Policy  other than as above  stated.  Notwithstanding  the  foregoing
sentence,  if there is any conflict or inconsistency between the Policy and this
Endorsement, the terms of this Endorsement shall control.

        No waiver of any  rights or powers of the  Insurer,  the  Holders or the
Trustee or consent by any of them shall be valid unless  signed by an authorized
officer or agent thereof.

        This  Policy is issued  under and  pursuant  to, and shall be  construed
under,  the laws of the State of New York (without giving effect to the conflict
of laws provisions thereto.

        IN WITNESS  WHEREOF,  the  Insurer has caused  this  Endorsement  to the
Policy to be signed by its duly authorized officers.

Managing Director                                   Assistant Secretary




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                                    EXHIBIT A
                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY
                               Policy No. AB0490BE


                         NOTICE OF NONPAYMENT AND DEMAND
                         FOR PAYMENT OF INSURED AMOUNTS

                                            Date:[             ]


AMBAC ASSURANCE CORPORATION
One State Street Plaza
New York, New York 10004
Attention: General Counsel

        Reference is made to Certificate  Guaranty Insurance Policy No. AB0490BE
(the  "Policy")  issued  by  Ambac  Assurance   Corporation   ("Ambac").   Terms
capitalized  herein and not otherwise defined shall have the meanings  specified
in the Policy and the  Indenture  (including  Appendix A  thereto),  dated as of
September 27, 2001,  between Home Loan Trust 2001-HS3,  as Issuer, and The Chase
Manhattan Bank, as Indenture Trustee (as such Indenture may be amended, modified
or supplemented  from time to time as set forth in the  Indenture),  as the case
may be, unless the context otherwise requires.

        The Indenture Trustee hereby certifies as follows:

          1.   The  Indenture   Trustee  is  the  Indenture  Trustee  under  the
               Indenture for the Noteholders.

          2.   The  relevant   Payment  Date,   Final   Payment  Date,   Insured
               Undercollateralization  Payment Date or Dissolution  Payment Date
               is [date].

          3.   Payment on the Notes in respect of the Payment  Date is due to be
               received on _______________________ under the Servicing Agreement
               and    the     Indenture,     in    an     amount     equal    to
               $__________________________.

          [3.  The  amount to be paid to the  Holders  of the Notes on the Final
               Payment Date is $----------.]

          [3.  The Undercollateralization Amount is $__________________.]

          [3.  The amount to be received on ____________________  from the sale,
               liquidation or other disposition of the assets of the Owner Trust
               is $____________.]

        4.     There is an Insurance Draw Amount and/or  Preference  Amount of $
               in  respect  of the  Notes,  which  amount is an  Insured  Amount
               pursuant to the terms of the Policy.

          5.   The sum of  $________________  is the Insured  Amount that is Due
               For Payment.

        6.     The Indenture  Trustee has not  heretofore  made a demand for the
               Insured  Amount in respect of the  Payment  Date,  Final  Payment
               Date, Insured  Undercollateralization Payment Date or Dissolution
               Payment Date, as the case may be.

        7.     The Indenture  Trustee hereby requests the payment of the Insured
               Amount  that is Due for Payment be made by Ambac under the Policy
               and  directs  that  payment  under  the  Policy  be  made  to the
               following  account  by bank wire  transfer  of  federal  or other
               immediately  available  funds in accordance with the terms of the
               Policy to:

               ____________________________________  Indenture Trustee's account
number.

        8.     The Indenture  Trustee hereby agrees that,  following  receipt of
               the Insured Amount from Ambac,  it shall (a) hold such amounts in
               trust and apply the same directly to the  distribution of payment
               on the Notes  when due;  (b) not apply  such  funds for any other
               purpose;  (c) deposit  such funds to the Payment  Account and not
               commingle  such  funds with  other  funds  held by the  Indenture
               Trustee and (d) maintain an accurate record of such payments with
               respect  to the Notes and the  corresponding  claim on the Policy
               and proceeds thereof.

        ANY PERSON  WHO  KNOWINGLY  AND WITH  INTENT TO  DEFRAUD  ANY  INSURANCE
COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM
CONTAINING  ANY  MATERIALLY  FALSE  INFORMATION;  OR CONCEALS FOR THE PURPOSE OF
MISLEADING,   INFORMATION  CONCERNING  ANY  FACT  MATERIAL  THERETO,  COMMITS  A
FRAUDULENT  INSURANCE ACT, WHICH IS AND SHALL ALSO BE SUBJECT TO A CIVIL PENALTY
NOT TO EXCEED FIVE  THOUSAND  DOLLARS AND THE STATED VALUE OF THE CLAIM FOR EACH
SUCH VIOLATION.

                                                   By:    Indenture Trustee
                                                       -------------------------

                                                   Title:
                                                         -----------------------
                                                                       (Officer)

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