--------------------------------------------------------------------------------
                                                                 Exhibit 10.47
     
Chubb Group of Insurance Companies                                 DECLARATIONS
                                               DIRECTORS AND OFFICERS LIABILITY
                                                AND REIMBURSEMENT EXCESS POLICY
15 Mountain View Road, Warren, New Jersey 07059
--------------------------------------------------------------------------------


Item 1.   Parent Corporation:                      Policy Number   7022-61-40(C)

          North American Mortgage Company

Item 2.   Principal Address:             FEDERAL INSURANCE COMPANY
          Insurance Risk Management
          P.O. Box 808005                Incorporated under the laws of Indiana,
          Petaluma, CA  94975-8005       a stock insurance company, herein
                                         called the Company

--------------------------------------------------------------------------------

Item 3.   Limit of Liability:

          Each Policy Year                             $ See Endorsement No. 1

Item 4.   Underlying Policy(ies):      National Union Fire Insurance Company of
          (A) Primary Policy:          Pittsburgh, PA
                                       Policy No.  483-54-02
                                       Limit of Liability:  $10,000,000 excess
                                       deductible

          (B) Other Policy(ies):       None



Item 5.   Policy Period:      From     July 8, 1996
                              To       July 8, 1997

Item 6.   Endorsement(s) Effective At Inception:  1 - 5

Item 7.   Termination of Prior Policy(ies):   None


IN WITNESS WHEREOF, the Company issuing this policy has caused this policy to be
signed by its Authorized Officers,  but it shall not be valid unless also signed
by a duly authorized representative of the Company.

                            FEDERAL INSURANCE COMPANY




/s/Henry Gulich                           /s/Dean O'Hare
---------------                           --------------
Secretary                                 President


                                          /s/Marc Beaulieu
                                          -------------------------
                                          Authorized Representative

                                          October 8, 1996
                                          ---------------
                                          Date


<PAGE>

        DIRECTORS AND OFFICERS LIABILITY AND REIMBURSEMENT EXCESS POLICY

     In  consideration  of  payment  of  required  premiums  and  subject to the
Declarations made a part hereof and the limitations,  conditions, provisions and
other terms of this policy, the Company agrees with the Insureds as follows:

                                 INSURING CLAUSE

     The Company  shall provide the Insureds  with  insurance  during the Policy
Period excess of the Underlying Insurance.  Coverage hereunder shall attach only
after all such  Underlying  Insurance has been exhausted and shall then apply in
conformance  with the terms,  conditions and  endorsements of the Primary Policy
except as specifically  set forth in the terms,  and conditions and endorsements
of this policy.

                       MAINTENANCE OF UNDERLYING INSURANCE

     All of the underlying  Policy(ies)  scheduled in Item 4 of the Declarations
shall be  maintained  during the  Policy  Period in full  effect  and  affording
coverage at least as broad as the Primary  Policy,  except for any  reduction of
the aggregate  limit(s) of liability  available  under the Underlying  Insurance
solely by reason of payment  of losses  thereunder.  Failure to comply  with the
foregoing  shall not invalidate  this policy but the Company shall not be liable
to a greater extent than if this condition had been complied with.

     In the event of any actual or alleged (a)  failure by the  Insureds to give
notice or to exercise  any  extensions  under any  Underlying  Insurance  or (b)
misrepresentation or breach of warranties by any of the Insureds with respect to
any Underlying Insurance, the Company shall not be liable hereunder to a greater
extent than it would have been in the absence of such actual or alleged failure,
misrepresentation or breach.

                        DEPLETION OF UNDERLYING LIMIT(S)

     In the  event  of  the  depletion  of  the  limit(s)  of  liability  of the
Underlying Insurance solely as the result of payment of losses thereunder,  this
policy shall, subject to the Company's limit of liability and to the other terms
of the policy,  continue to apply for subsequent losses as excess insurance over
the amount of insurance remaining under such Underlying Insurance.  In the event
of the  exhaustion  of all of the  limit(s)  of  liability  of  such  Underlying
Insurance  solely as a result of payment  of losses  thereunder,  the  remaining
limits  available  under this policy shall,  subject to the  Company's  limit of
liability and to the other terms of this policy,  continue for subsequent losses
as primary insurance and any retention  specified in the Primary Policy shall be
imposed  under this policy;  otherwise no retention  shall be imposed under this
policy.

                               LIMIT OF LIABILITY

     The  amount  set  forth  in  Item 3 of the  Declarations  is the  limit  of
liability  of the Company and shall be the maximum  liability  of the Company in
each Policy Year.

                               CLAIM PARTICIPATION

     The  Company  may,  at its sole  discretion,  elect to  participate  in the
investigation,  settlement  or defense of any claim  against any of the Insureds
for matters covered by this policy even if the Underlying Insurance has not been
exhausted.

                            SUBROGATION - RECOVERIES

     In the  event of any  payment  under  this  policy,  the  Company  shall be
subrogated  to all the  Insureds'  rights  of  recovery  against  any  person or
organization,  as stated in the Primary  Policy,  and the Insureds shall execute
and deliver  instruments  and papers and do whatever else is necessary to secure
such rights.

     Any amounts  recovered after payment of loss hereunder shall be apportioned
in the inverse order of payment to the extent of actual payment. The expenses of
all such recovery  proceedings  shall be  apportioned in the ratio of respective
recoveries.

                                     NOTICE

     The Company shall be given notice in writing as soon as is practicable  (a)
in the event of the  cancellation  of any  Underlying  Insurance  and (b) of any
notice given or additional or return premiums charged or paid in connection with
any Underlying Insurance.

     Notice of any claim shall be given in writing to the Company at 15 Mountain
View Road, Warren, New Jersey 07060.

                          COMPANY AUTHORIZATION CLAUSE

     By acceptance of this policy, the Parent Corporation named in Item 1 of the
Declarations  agrees to act on behalf of all Insureds with respect to the giving
and receiving of notice of claim or  cancellations,  the payment of premiums and
the receiving of any return premiums that may become due under this policy;  and
the Insureds agree that the Parent Corporation shall act on their behalf.

                                   ALTERATION

     No change in or modification of this policy shall be effective  except when
made by written  endorsement  signed by an  authorized  employee of Chubb & Son,
Inc.

                               POLICY TERMINATION
     This  policy  may be  canceled  by the  Parent  Corporation  at any time by
written  notice or by surrender  of this policy to the Company.  This policy may
also be  canceled  by or on behalf of the  Company  by  delivery  to the  Parent
Corporation or by mailing to the Parent Corporation, by registered, certified or
other  first class mail,  at the  address  shown in Item 2 of the  Declarations,
written  notice  stating  when,  not  less  than  thirty  days  thereafter,  the
cancellation  shall  become  effective.  The mailing of such notice as aforesaid
shall be sufficient  proof of notice and this policy shall terminate at the date
and hour specified in such notice.

     If the period of limitation  relating to the giving of notice is prohibited
or made void by any law controlling the construction  thereof, such period shall
be deemed to be amended so as to be equal to the  minimum  period of  limitation
permitted by such law.

     The Company shall refund the unearned  premium  computed at customary short
rates if the policy is  terminated  in its  entirety by the Parent  Corporation.
Under any other circumstances the refund shall be computed pro rata.

                          TERMINATION OF PRIMARY POLICY

     This policy shall terminate immediately upon the termination of the Primary
Policy,  whether by the Insureds or the primary insurer.  Notice of cancellation
or  non-renewal  of the Primary  Policy duly given by the primary  insurer shall
serve as  notice  of the  cancellation  or  non-renewal  of this  policy  by the
Company.

                        TERMINATION OF PRIOR POLICY(IES)

     The  taking  effect  of  this  policy  shall  terminate,   if  not  already
terminated, the policy(ies) specified in Item 7 of the Declarations.

                               POLICY DEFINITIONS

     Insureds  means those  persons or  organizations  insured under the Primary
Policy.

Primary Policy means the policy  scheduled in Item 4 (A) of the  Declarations or
any policy of the same insurer replacing or renewing such policy.

Policy Year means the one year period between the  anniversaries  of the Primary
Policy,  provided  that:  (1) the first  Policy Year of this policy shall be the
period between the inception of this policy and the next subsequent  anniversary
of the Primary Policy,  and (2) the last Policy Year of this policy shall be the
period between the termination of this policy and the anniversary of the Primary
Policy immediately preceding such termination. If any discovery period extension
is exercised such extension shall be treated as set forth in the Primary Policy.

Underlying  Insurance  means  all  those  policies  scheduled  in  Item 4 of the
Declarations and any policies replacing them.

<PAGE>

Chubb Group of Insurance Companies
                                                 RENEWAL APPLICATION FORM FOR
                                                 EXECUTIVE LIABILITY INSURANCE
                                                 NON BANK FINANCIAL INSTITUTIONS
15 Mountain View Road, P.O. Box 1615             AND SUBSIDIARIES
Warren, New Jersey 07059
--------------------------------------------------------------------------------

 UNDERWRITTEN IN FEDERAL INSURANCE COMPANY, TEXAS PACIFIC INDEMNITY COMPANY, OR
                     NORTHWESTERN PACIFIC INDEMNITY COMPANY

(If coverage is desired for more than one Company,  a separate  Application must
be completed for each.)

NORTH AMERICAN MORTGAGE COMPANY
-------------------------------
Company Name

3883 Airway Drive
-----------------
Street Address

Santa Rosa         California                  95403             (707) 546-3310
----------         ----------                  -----             --------------
City                State                     Zip Code            Telephone

1.   Officer  designated,  as agent of the Company and of all insured  Directors
     and  Officers,  to receive  any and all  notices  from the Insurer or their
     authorized representative(s) concerning this insurance:

     Martin S. Hughes                   Executive Vice President
     ----------------                   ------------------------
     Name of Officer                    Title of Officer

2.   Type of ownership:  X Stock  _  Mutual.  If stock, complete the following
     information regarding common stock:

      a.   933*                       Total number of shareholders

      b.  15,021,600 (approx.)*       Total number of shares outstanding

      c.  674,266*                    Total number of shares owned directly or
                                      beneficially by Directors and Officers
        
                  See attachment 2.c.

     *As of March 15, 1996

      d. Give names and percent owned of any  shareholders  holding  directly or
         beneficially 10% or more of the common stock (if none, so indicate).

                  See attachment 2.d.

      e. During the policy period has there been a change in controlling
         ownership (10% or more)? __ Yes  __ No.  If yes, provide details.

                  See attachment 2.e.

      f. Are there any  negotiations  now  pending for the sale of stock in this
         Company in excess of 10% of the total stock outstanding __ Yes X No. If
         yes, provide details.

      g. Are there any other securities which are convertible to common stock?
         X  Yes  __ No.  If yes, provide details.

                  See attachment 2.g.

3.    a. Have any plans for merger, acquisition, consolidation or divestiture
         been currently approved by the Board of Directors?  __ Yes   X  No.

      b. If yes, have such plans been submitted to the shareholders for
         approval? __ Yes  __ No.  Kindly provide details and current status of
         such plans (attach separate sheet if necessary).

      c. Does the Company or any Subsidiary  anticipate any new public  offering
         of securities or registration of securities under the Securities Act of
         1933 or any  other  similar  Federal,  State or  Municipal  Statute  or
         qualification  of  securities  under  Regulation A or any other similar
         Federal,  State or Municipal  Regulation  within the next year __ Yes X
         No. If yes, provide details and submit prospectus.

4.    Has any  regulatory  agency  denied or indicated  that they would deny any
      contemplated merger,  acquisition or divestment in the last 5 years.
      __ Yes  X No. If yes, provide details.

5.    Provide the following information on Page 6 for all Subsidiaries
      (including Subsidiaries of Subsidiaries). If none, please indicate.

      a. Name                            h.  Total revenues       most
      b. Date created or acquired        i.  Total assets         recent
      c. State of Incorporation          j.  Net income           year end
      d. Percent of ownership                                     figures
      e. Nature of business
      f. Domestic or foreign
      g. Name of parent institution

     It is agreed that coverage is not provided for  Subsidiaries  unless listed
     above or by an attachment herein providing similar information.

     k. Is coverage to include all listed Subsidiaries? X Yes __ No. If no,
        specify which Subsidiaries are not to be included.

6.    Provide the following information for the Company and Subsidiaries:

      a. _________  Number of Directors

      b. _________  Number of Officers                 See attachment 6.

7.    Is the Company or any of its Subsidiaries currently offering or planning
      to offer any of the following services?

      a. Actuarial Services                  __  Yes     X  No
      b. Appraisal Services                   X  Yes    __  No
      c. Data Processing Services            __  Yes    __  No
      d. Discount Brokerage Services         __  Yes     X  No
      e. Insurance Agent/Agency               X  Yes    __  No
      f. Investment Advisor/Counselor        __  Yes     X  No
      g. Real Estate Agent/Agency            __  Yes     X  No  See attachment
      h. Real Estate Investment Trust
         Advisory Services                   __  Yes     X  No
      i. Security Broker/Dealer              __  Yes     X  No
      j. Travel Agent/Agency                 __  Yes     X  No
      k. Underwriting of Securities          __  Yes     X  No

8.    Attach a list of names  and  principal  business  affiliations,  including
      directorships  of financial  institutions,  for all  Directors  and Senior
      Officers proposed for this insurance.

                  See Attachment 8.

      It is agreed that  coverage is not provided  under this policy for outside
      positions listed in conjunction with the above question.

9.    a. Have there been any changes in senior management during the policy
         period?   X  Yes  __ No.  If yes, provide details.

                  See Attachment 9.a.

     b. In the last 5 years has the Company changed the Certified Public
        Accounting firm that prepares its independent audited financial
        statements? Yes X No. If yes, provide the time of the change and the
        reasons for making the change.

10.   Have there been during the policy  period,  or are there now pending,  any
      suits, claims or proceedings against this Company or Subsidiaries?
      X Yes __ No. If yes, provide details.

                  See Attachment 10.

11.   a. Are there any outstanding loans to any Director or Officer of the
         Company or of any Subsidiary? X   Yes  __ No.

                  See attachment 11.a.

      b. Are there any outstanding loans to any corporations or partnerships in
         which a Director or Officer of the Company or its Subsidiaries owns or
         controls more than 10% interest?  __ Yes   X  No.

         If Questions  11(a) or 11(b) is answered yes,  please provide  separate
         schedule of such loans with the following information:

         i.     name of borrower
         ii.    type of loan
         iii.   whether secured or unsecured
         iv.    outstanding balance
         v.     final due date
         vi.    amount past due

12.   Provide the following information:             See Attachment 12.

      a. Blanket Bond                  Limit:               Deductible:
                                       Expiration Date:     Insurer:

      b. Trust Department E&O          Limit:               Retention:
         (Surcharge Liability)         Expiration Date:     Insurer:

      c. General Liability Insurance   Limit:               Deductible:
                                       Expiration Date:     Insurer:

      It is represented  and agreed that above coverages in current amounts will
      be maintained by the Company and its Subsidiaries during the policy period
      of the  proposed  insurance  and that the  Insurer  is  relying  upon such
      representation when issuing a policy.

13.   During the policy period has this Company or any Subsidiary made any claim
      in excess of $25,000 under its Blanket Bond?  __ Yes   X   No.
      If yes, provide details.

14.   How often are Board of Directors meetings held?
      Generally, once each quarter

15.   List the Board of Directors committees which are in existence and indicate
      the frequency of meetings.

      a.   Compensation Comm.,          c.   Nominating Comm., has not yet met,
           meets as needed                   will meet as needed

      b.  Audit Comm., meets as needed  d.

16.   Indicate the areas in which formal written policies and/or procedures have
      been implemented by the Board of Directors to address the following:

      ___   Asset-Liability Management Policy
      ___   Audit Policy
      ___   Conflicts of Interest Policy
      ___   Duties of Directors and Officers
      ___   Investment Policy
      ___   Loan Policy
      ___   Merger and Tender Offers
      ___   Operation Procedures
      ___   Personnel Policy
      ___   Risk Management Policy
      ___   Selection Process for New Directors

      Except as  disclosed  on  Attachment  16, the Board of  Directors  has not
      implemented  formal written  policies and/or  procedures to address any of
      the above.

17.   How often does the Board of Directors review the following:

      Financial Statements of the
        Institution                          Generally, once each quarter
      Investment Activities                  Generally, once each quarter
      (Purchase, Sales, Gains & Losses)
      Insurance Coverages                    Annually
      Changes in Lending Policy              Generally, once each quarter
      Loan Delinquencies                     Each meeting, to extent significant
      Charged Off Loans                      Each meeting, to extent significant
      Significant Overdrafts                 Not applicable
      Threatened or Actual Litigation        Generally, once each quarter

18.   One copy of each of the following documents is to be attached and made a
      part of this Application:

      a. latest Annual Audited Financial Statement;
      b. latest C.P.A. Management Letters and Response;
      c. latest Annual Report to Stockholders;
      d. all subsequent Quarterly Reports to Stockholders;
      e. notice to Stockholders and Proxy Statement for both the last and next
         scheduled meetings;
      f. most recent S.E.C. Form 10-K filing;
      g. all subsequent 10-Q and 8-K filings; and
      h. all Registration Statements of securities made in the last year.

                See Attachment 18.

     The  undersigned  persons  declare that to the best of their  knowledge the
statements  set forth  herein are true and correct and that  reasonable  efforts
have been made to obtain sufficient  information from each and every Director or
Officer  proposed  for this  insurance  to  facilitate  the proper and  accurate
completion of this Application.  The undersigned  further agree that, if between
the date of this  Application  and the  effective  date of this Policy,  (1) any
material  change in the condition of the applicant is discovered or (2) there is
any material changes in the answers to the questions contained herein, either of
which would render this  Application  inaccurate or  incomplete,  notice of such
change will be reported in writing to the Insurer  immediately  and if necessary
any outstanding quotation may be modified or withdrawn.

     The signing of this  Application  does not bind the undersigned to purchase
the insurance, but it is agreed by the Company and all persons proposed for this
insurance  that  the  particulars  and  statements  contained  in  this  Renewal
Application  Form and materials  submitted  with this Renewal  Application  Form
(which shall be retained on file by the Insurer and shall be deemed  attached to
the Policy, if insurance is provided,  as if physically attached thereto) are 1)
supplemental  to  Application  Form(s) for all Policies of which this  Insurance
would be a renewal  and 2) true and correct and will be the basis of the Policy,
and 3) considered as incorporated in and  constituting a part of the Policy.  It
is further  agreed by the Company and all persons  proposed  for this  insurance
that such  particulars  and  statements  are material to the decision to provide
this  insurance and that any Policy will be issued in reliance upon the truth of
such  particulars and statements.  All such  particulars and statements shall be
deemed  to be made by each  and  every  one of the  persons  proposed  for  this
insurance,  provided that, except for any  misstatements  omissions of which the
signers of this Renewal Application Form are aware, any misstatement or omission
in this Renewal  Application  Form, or the attachments  and materials  submitted
with it,  concerning any matter which any person proposed for this insurance has
reason to suppose might afford  grounds for a future claim against him shall not
be imputed,  for purposes of any rescission of the Policy,  to any other persons
proposed for this  insurance who are not aware of the omission or the falsity of
the statement.

False Information

     Any person who,  knowingly and with intent to defraud any insurance company
or other  person,  files an  Application  for  insurance  containing  any  false
information,  or conceals for the purpose of misleading,  information concerning
any fact material thereto, commits a fraudulent insurance act, which is a crime.

                                       NORTH AMERICAN MORTGAGE COMPANY
                                       -------------------------------
                                       Company

/s/Terrance G. Hodel                   /s/John F. Farrell, Jr.
------------------------------------   -----------------------------------------
Signature of Chief Executive Officer   Signature of Chairman, Board of Directors
or other Senior Officer if the Chief   John F. Farrell, Jr.
Executive Officer is also the          Chairman of the Board and
Chairman, Board of Directors           Chief Executive Officer
Terrance G. Hodel
President  and Chief Operating Officer Date:  July 10, 1996

     A Policy cannot be issued  unless the  Application  is properly  signed and
dated by the Chief  Executive  Officer  (or other  Senior  Officer  if the Chief
Executive  Officer is also the Chairman,  Board of Directors)  and the Chairman,
Board of Directors.

NOTE:  This   Application  and  all  exhibits  shall  be  treated  in  strictest
confidence.

<PAGE>
<TABLE>
                           SUBSIDIARY INFORMATION FORM
<CAPTION>
                                                                                       Financial Information for
                                                                                         Most Recent Year End
                    Date      State   Percent               Domestic
                 Created  or   of       of       Nature of     or      Name of Parent      Total   Total    Net
Name of SubsidiaryAcquired   Incorp, Ownership   Business    Foreign     Institution     Revenues Assets  Income
                                                                                              (in Millions)
-------------------------------------------------------------------------------------------------------------------

<S>               <C>        <C>     <C>       <C>             <C>    <C>                    <C>     <C>    <C>
Fairfield Financial                             Not presently          North American    
Holdings, Inc.     7/15/92    Del     100%      active          D      Mortgage Company       See attachment 5

IC Capital Co., Inc7/15/96    Del     100%      Not presently   D      North American         0        0      0
                                                active                 Mortgage Company

IMCO Capital                                                           North American
Co., Inc.          7/15/92    Del     100%      *               D      Mortgage Company       0        0      0

Sonoma                                          Acts as trustee
Conveyancing                                    under deeds            North American
Company            7/15/96    Cal     100%      of trust        D      Mortgage Company       0        0      0

North American
Mortgage Insurance                              Insurance              Sonoma Conveyancing
Services           7/15/92    Cal     100%      Agency          D      Company               $3.38    $7.65  $1.11

Vintage Reinsurance                             Reinsurance of         North American
Company            3/14/96    Vt      100%      mortgage        D      Mortgage Company       0       $0.60    0**
                                                insurance


This  information  is attached to and forms a part of the  Application  Form for
Executive Liability.

*Not presently active except for payments under Promissory Notes.
**Not in operation  during  1995;  Financial  Information  stated is for quarter
ended 3/31/96.
</TABLE>
<PAGE>
                                                                    ENDORSEMENT


                                            Insurer:  FEDERAL INSURANCE COMPANY


Effective date of
this Endorsement:  July 8, 1996

                                           Endorsement No. 1

                                           To be attached to and form part of
                                           Policy No. 7022-61-40(C)

Issued to: North American Mortgage Company

--------------------------------------------------------------------------------


                           AMENDED LIMIT OF LIABILITY


It is understood and agreed that Item 3. of the Declarations, Limit of Liability
shall read as follows:


     "Item 3. Limit of Liability:

           $10,000,000        Annual Aggregate each Policy Year excess of

           $10,000,000        Annual Aggregate each Policy Year which in turn is
                              excess of the following retention:

           RETENTION:

           Company  Reimbursement  and  Indemnifiable  Loss:  $250,000  for Loss
           arising  from  claims  alleging  the  same  Wrongful  Act or  related
           Wrongful Acts."



Nothing herein  contained  shall be held to vary,  alter,  waive,  or extend the
provisions of the above mentioned Policy other than as above stated.


                                                      /s/Marc Beaulieu
                                                      -------------------------
                                           By:        AUTHORIZED REPRESENTATIVE

                                           Date:      October 8, 1996


<PAGE>

                                                                    ENDORSEMENT



                                             Insurer: FEDERAL INSURANCE COMPANY

Effective date of
this Endorsement: July 8, 1996

                                            Endorsement No. 2

                                            To be attached to and form part of
                                            Policy No. 7022-61-40(C)

Issued to: North American Mortgage Company

--------------------------------------------------------------------------------


                         RESTATEMENT OF INSURING CLAUSE


It is hereby understood and agreed that the Insuring Clause as set forth on Page
2 of 4 shall be deleted in its entirety and replaced with the following:

                                "INSURING CLAUSE

The company shall provide the Insureds with  insurance  during the Policy Period
excess of the Underlying  Insurance.  Coverage for any loss shall attach 1) only
after all Underlying  Insurance  carriers have duly admitted liability and shall
have paid the full amount of their respective  liability,  and 2) all Underlying
Insurance has been  exhausted,  and 3) shall then apply in conformance  with the
terms,  conditions,  exclusions and endorsements of the Primary Policy, together
with  all  limitations,  restrictions  or  exclusions  contained  in or added by
endorsement to any other Underlying Insurance,  except as specifically set forth
in the terms and conditions and  endorsements of this Policy.  In no event shall
this  Policy  grant  broader  coverage  than  would  be  provided  by any of the
exhausted Underlying Insurance."



Nothing herein  contained  shall be held to vary,  alter,  waive,  or extend the
provisions of the above mentioned Policy other than as above stated.




                                                      /s/Marc Beaulieu
                                                      -------------------------
                                                  By: AUTHORIZED REPRESENTATIVE

                                                  Date:  October 8, 1996



<PAGE>

                                                                   ENDORSEMENT


                                            Insurer: FEDERAL INSURANCE COMPANY

Effective date of
this Endorsement: July 8, 1996

                                            Endorsement No. 3

                                            To be attached to and form part of
                                            Policy No. 7022-61-40(C)

Issued to: North American Mortgage Company

--------------------------------------------------------------------------------

                       PRIOR & PENDING LITIGATION - EXCESS

It is  understood  and agreed that the  Company  shall not be liable to make any
payment  for Loss in  connection  with any Claim  based  upon,  arising  out of,
relating to, in consequence of, or in any way involving:

(1)   based upon,  arising from, or in consequence of any demand,  suit or other
      proceeding  pending,  or order,  decree or  judgment  entered  against any
      Insureds  on or  prior to July 8,  1993 or the  same or any  substantially
      similar fact, circumstance or situation underlying or alleged therein;

(2)   any subsequent litigation arising from, or based on substantially the same
      matters  as alleged in the prior or  pending  litigation  included  in (1)
      above; or

(3)   any Wrongful  Act of the Insureds  which gave rise to the prior or pending
      litigation included in (1) above.


Nothing herein  contained  shall be held to vary,  alter,  waive,  or extend the
provisions of the above mentioned Policy other than as above stated.




                                                      /s/Marc Beaulieu
                                                      -------------------------
                                                 By:  AUTHORIZED REPRESENTATIVE
                                               
                                                 Date:    October 8, 1996



<PAGE>

                                                                   ENDORSEMENT



                                            Insurer: FEDERAL INSURANCE COMPANY

Effective date of
this Endorsement: July 8, 1996

                                            Endorsement No. 4

                                            To be attached to and form part of
                                            Policy No. 7022-61-40(C)

Issued to: North American Mortgage Company

--------------------------------------------------------------------------------


It is  understood  and agreed that the Policy is amended by adding the following
SECTION:

                                DISCOVERY CLAUSE

If the  Company  shall  cancel  or  refuse  to  renew  this  Policy  the  Parent
Corporation shall have the right, upon payment of an additional  premium of 75%.
of the full annual premium, to a period of one year following the effective date
of such cancellation or non-renewal (herein referred to as the Discovery Period)
in which to give written  notice to the Company of claims first made against the
Insureds during said one year period for any wrongful act occurring prior to the
end of the Policy Year and  otherwise  covered by this  Policy.  As used herein,
"full annual premium" means the premium level in effect immediately prior to the
end of the Policy Year.

The rights  contained in this clause shall  terminate,  however,  unless written
notice of such election together with the additional  premium due is received by
the  Company  within  ten (10) days of the  effective  date of  cancellation  or
non-renewal.  The  additional  premium for the  Discovery  Period shall be fully
earned at the inception of the  Discovery  Period.  The Discovery  Period is not
cancelable.  This clause and the rights  contained herein shall not apply to any
cancellation resulting from non-payment of premium.

The offer by the  Company  of renewal  terms,  conditions,  limits of  liability
and/or premiums different from those of the expiring policy shall not constitute
refusal to renew.

Nothing herein  contained  shall be held to vary,  alter,  waive,  or extend the
provisions of the above mentioned Policy other than as above stated.





                                                      /s/Marc Beaulieu
                                                      -------------------------
                                                 By:  AUTHORIZED REPRESENTATIVE


                                                 Date:    October 8, 1996



<PAGE>

                                                                    ENDORSEMENT



                                            Insurer: FEDERAL INSURANCE COMPANY

Effective date of
this Endorsement: July 8, 1996

                                            Endorsement No. 5

                                            To be attached to and form part of
                                            Policy No. 7022-61-40(C)

Issued to: North American Mortgage Company

--------------------------------------------------------------------------------


It is understood and agreed that:

      1. The premium for the Policy Period July 8, 1996 to July 8, 1997 is:

         Premium: $214,000

      2. It is further  understood  and agreed  that this  premium is subject to
         change during this period if amendments  are made to this Policy at the
         request of the Parent Corporation.


Nothing herein  contained  shall be held to vary,  alter,  waive,  or extend the
provisions of the above mentioned Policy other than as above stated.




                                                      /s/Marc Beaulieu
                                                      -------------------------
                                                By:   AUTHORIZED REPRESENTATIVE

                                                Date: October 8, 1996