NONRECOURSE COMMITTED FACILITY


                          MASTER REPURCHASE AGREEMENT

                                                    Dated as of March 24, 1998

BETWEEN:


NationsBanc Mortgage Capital Corporation, as buyer ("Buyer", which term  shall
include  any "Principal" as defined and provided for in Annex I), or as  agent
pursuant hereto ("Agent")

      and

Metropolitan Mortgage & Securities Co., Inc. and its subsidiary named  on  the
signature  page hereof, each, and jointly and severally, as seller (each,  and
jointly and severally, "Seller").


1.    APPLICABILITY
       Buyer  shall,  from  time to time, upon the terms and  subject  to  the
conditions set forth herein, agree to enter into transactions in which  Seller
transfers  to  Buyer  Purchased Securities against the transfer  of  funds  by
Buyer,  with  a  simultaneous agreement by Buyer to transfer  to  Seller  such
Purchased Securities at a date certain (not more than one year later), against
the  transfer of funds by Seller.  Each such transaction shall be referred  to
herein  as a "Transaction", and, unless otherwise agreed in writing, shall  be
governed by this Agreement.

2.    DEFINITIONS
      "Additional  Purchased  Securities"  shall  have  the  meaning  assigned
      thereto in Paragraph 6(a) hereof.
      "Adjusted LIBOR" shall mean with respect to any period a rate per  annum
      determined by Buyer in accordance with the following formula:
                                              LIBOR
                       1.00 - Eurocurrency Reserve Requirement
      "Affiliate"  means,  with  respect to any specified  Person,  any  other
      Person  controlling or controlled by or under common control  with  such
      specified Person.  For the purposes of this definition, "control"  means
      the power to direct the management and policies of such Person, directly
      or  indirectly,  whether  through the ownership  of  voting  equity,  by
      contract or otherwise.
      "Agent" means NationsBanc Mortgage Capital Corporation or any successor.
      "Agreement"  means  this  Master Repurchase  Agreement,  as  it  may  be
      amended, supplemented or otherwise modified from time to time.
      "Authorized Purchaser" means any bona fide purchaser acceptable to Buyer
      in its sole discretion..
      "Blocked  Account  Bank" means each entity acting as a  blocked  account
      bank  maintaining  an  account on behalf of the Buyer  pursuant  to  the
      Blocked Account Agreement.
      "Blocked  Account  Agreement" means the agreement so named  between  the
      Sellers and the Blocked Account Bank to be entered into on the Effective
      Date  and  in form and substance satisfactory to Buyer in its reasonable
      discretion.
      "Business Day" means any day other than (i) a Saturday or Sunday or (ii)
      a  public or bank holiday in New York City, Charlotte, North Carolina or
      Spokane, Washington.
      "Buyer's Margin Amount" means, with respect to any Transaction as of any
      date of determination, the amount obtained by application of the Buyer's
      Margin  Percentage  to the Repurchase Price for such Transaction  as  of
      such date.
      "Buyer's Margin Percentage" means, with respect to any Transaction as of
      any date of determination, a percentage agreed to by Buyer and Seller as
      set  forth in the related Confirmation, or, in the absence of  any  such
      agreement, the percentage obtained by dividing the Market Value  of  the
      Purchased Securities on the Purchase Date by the Purchase Price  on  the
      Purchase Date for such Transaction.
      "Code" shall mean the Internal Revenue Code of 1986, as amended.
      "Collateral"  shall  have the meaning assigned thereto  in  Paragraph  8
      hereof.
      "Collateral  Receipt"  means a document duly  executed  by  Seller  with
      respect  to  each  delivery  of  documents  relating  to  the  Purchased
      Securities to Custodian in the form attached to the Custody Agreement.
      "Commodity Account Control Agreement" means the agreement so named among
      the  Sellers and the Agent to be entered into on the Effective Date  and
      in   form   and  substance  satisfactory  to  Buyer  in  its  reasonable
      discretion.
      "Computer  Tape"  means  a  computer tape  or  other  electronic  medium
      generated by Seller and delivered to Buyer and Custodian which  provides
      information   relating  to  the  Purchased  Securities,  including   the
      information  set forth in the Loan Schedule, in a format  acceptable  to
      Buyer.
      "Confirmation" shall have the meaning assigned thereto in Paragraph 4(b)
      hereof.
      "Custodian"  means each entity acting as bailee of or  agent  for  Buyer
      with respect to any item of a Purchased Security.
      "Custody  Agreement" means each Tri-Party Custody Agreement, as amended,
      supplemented  or  otherwise modified from time to  time,  among  Seller,
      Buyer and a Custodian, with respect to any Purchased Security.
      "Custodian's  Loan File" shall have the meaning assigned thereto  or  to
      "Custodian's Loan File" in the Custody Agreement.
      "Default" means any event, that, with the giving of notice or the  lapse
      of time or both, would constitute an Event of Default..
      "Default Rate" means the Prime Rate as quoted in the Wall Street Journal
      plus 5%..
      "Effective Date" means a date which is the earlier of (i) May 1, 1998 or
      (ii) the date following the first securitization of the Loans by Seller.
      "Eurocurrency Reserve Requirement" shall mean, for any day as applied to
      a   Transaction,  the  aggregate  (without  duplication)  of  the  rates
      (expressed as a decimal fraction) of reserve requirements applicable  to
      the Buyer and in effect on such day (including without limitation basic,
      supplemental,  marginal and emergency reserves under any regulations  of
      the   Board  of  Governors  of  the  Federal  Reserve  System  or  other
      Governmental  Authority  having  jurisdiction  with  respect   thereto),
      dealing  with  reserve requirements prescribed for eurocurrency  funding
      (currently referred to as "Eurocurrency Liabilities" in Regulation D  of
      such Board) maintained by a member bank of such Governmental Authority.
      "Event  of Default" shall have the meaning assigned thereto in Paragraph
      18 hereof.
      "GAAP" shall mean generally accepted accounting principles in the United
      States of America in effect from time to time.
      "Governmental Authority" shall mean any nation or government, any  state
      or other political subdivision thereof, any entity exercising executive,
      legislative,  judicial,  regulatory  or  administrative  functions  over
      Seller.
      "Guarantee"  means,  as  to any Person, any obligation  of  such  Person
      directly or indirectly guaranteeing any Indebtedness of any other Person
      or  in  any manner providing for the payment of any Indebtedness of  any
      other Person.
      "Income" means, with respect to any Purchased Security at any time,  any
      principal  thereof  then payable and all interest,  dividends  or  other
      distributions thereon.
      "Indebtedness"  shall  mean, for any Person:  (a)  all  obligations  for
      borrowed  money;  (b)  obligations of such Person to  pay  the  deferred
      purchase or acquisition price of Property or services, other than  trade
      accounts  payable (other than for borrowed money) arising,  and  accrued
      expenses  incurred, in the ordinary course of business so long  as  such
      trade  accounts payable are payable within ninety (90) days of the  date
      the  respective  goods  are  delivered or the  respective  services  are
      rendered;  (c) Indebtedness of others secured by a lien on the  Property
      of  such  Person, whether or not the respective Indebtedness so  secured
      has  been  assumed  by  such  Person;  (d)  obligations  (contingent  or
      otherwise)  of  such Person in respect of letters of credit  or  similar
      instruments  issued  for  account  of such  Person;  (e)  capital  lease
      obligations  of  such  Person;  (f) obligations  of  such  Person  under
      repurchase agreements or like arrangements; (g) Indebtedness  of  others
      Guaranteed  by such Person; (h) all obligations of such Person  incurred
      in  connection with the acquisition or carrying of fixed assets by  such
      Person;  and  (i)  Indebtedness of general partnerships  of  which  such
      Person is a general partner.
      "Land Sale Contract" means a contract, together with all amendments  and
      modifications thereto, for the sale of real estate and the  improvements
      thereon  pursuant to which the mortgagor promises to pay the amount  due
      thereon  to  the holder thereof and pursuant to which fee title  to  the
      related  mortgaged property is held by such holder until  the  mortgagor
      has  made  all  of the payments required pursuant to such  contract,  at
      which time fee title is conveyed to the mortgagor.
      "LIBOR"  shall  mean the applicable London Inter-Bank Offered  Rate  for
      United States dollars as determined by Buyer from time to time.
      "Loan"  means  either (i) a 1-to-4 family residential mortgage  loan  or
      Land  Sale  Contract  described in Appendix A to the Custody  Agreement,
      (ii)  such  other type of loan, lease or other receivable  as  shall  be
      agreed  upon  by the parties as evidenced by Appendix A to  the  Custody
      Agreement,  as  amended  or  supplemented by  mutual  agreement  of  the
      parties,  or (iii) any interest in, or secured by, any such loan,  lease
      or other receivable.
      "Loan Note"  means, with respect to any Loan, the note together with all
      riders thereto and amendments thereof or other evidence of indebtedness,
      including in the case of a Land Sale Contract, a promise to pay which is
      the integral part of a Land Sale Contract.
      "Loan Schedule" means a list of Loans by Loan Type attached to the Trust
      Receipt and setting forth as to each Loan the information specified   by
      Buyer.
      "Loan Type" means the categorization of a Loan, based on information  on
      a Computer Tape, under one or more of the headings set forth on Appendix
      A to the Custody Agreement.
      "LTV" means the ratio of the outstanding principal balance of a Loan  to
      the  appraised  value of the related secured property or collateral,  if
      applicable, on the date of determination.
      "Margin  Deficit" shall have the meaning assigned thereto  in  Paragraph
      6(a) hereof.
      "Market Value" means, with respect to any Purchased Security, as of  any
      date  of determination, the market price as determined by Buyer in  good
      faith  without  credit  for  any interest accrued  and  unpaid  thereon.
      Buyer's  determination  of Market Value shall  be  conclusive  upon  the
      parties,  absent manifest error.  In no event shall Market Value  exceed
      102% of par for any Purchased Security.
      "Metwest  Subprime Program" shall have the meaning assigned  thereto  in
      Paragraph 9(b).
      "Mortgage"  means  a mortgage, deed of trust, or other instrument  which
      creates  a  lien on a fee simple or leasehold interest in real  property
      and secures a Loan Note.
      "Notice  Date"  shall  have the meaning assigned thereto  in  Section  4
      hereof.
      "Obligations" means (a) all of Seller's indebtedness, obligation to  pay
      the  Repurchase Price on the Repurchase Date, and other obligations  and
      liabilities, to Buyer, its affiliates or Custodian arising under, or  in
      connection  with,  the  Program  Documents  or  otherwise,  whether  now
      existing or hereafter arising; (b) any and all sums paid by Buyer or  on
      behalf  of  Buyer  in order to preserve any Purchased  Security  or  its
      interest  therein; (c) in the event of any proceeding for the collection
      or   enforcement  of  any  of  Seller's  indebtedness,  obligations   or
      liabilities  referred  to  in  clause (a), the  reasonable  expenses  of
      retaking,  holding, collecting, preparing for sale, selling or otherwise
      disposing of or realizing on any Purchased Security, or of any  exercise
      by  Buyer  of its rights under the Program Documents, including  without
      limitation,  attorneys'  fees and disbursements  and  court  costs;  and
      (d)  all of Seller's indemnity obligations to Buyer or Custodian or both
      pursuant to the Program Documents.
      "Obligor" means the obligor on a Loan.
      "Person"   shall  mean  any  legal  person,  including  any  individual,
      corporation,  partnership,  association,  joint-stock  company,   trust,
      limited  liability  company,  unincorporated organization,  governmental
      entity or other entity of similar nature.
      "Position  Report"  means the report defined  as  such  in  the  related
      Custody Agreement.
      "Price  Differential" means, with respect to each Transaction as of  any
      date,  the aggregate amount obtained by daily application of the Pricing
      Rate  to  the Purchase Price on a 360-day-per-year basis for the  actual
      number  of  days  during the period commencing on  (and  including)  the
      Purchase  Date  and ending on (but excluding) the date of  determination
      (reduced  by  any amount of such Price Differential in respect  of  such
      period previously paid by Seller to Buyer).
      "Pricing Rate" means the per annum percentage rate for determination  of
      the Price Differential.
      "Prime  Rate" means the daily prime loan rate as reported  in  The  Wall
      Street Journal.
      "Principal" shall have the meaning given to it in Annex I,
      "Program  Documents" means this Agreement, each Custody  Agreement,  any
      Servicing  Agreement, any lockbox, blocked account or similar agreement,
      the Commodity Account Control Agreement, and any other agreement entered
      into by Seller and Buyer in connection therewith.
      "Property"  means any right or interest in or to property  of  any  kind
      whatsoever,  whether  real, personal or mixed and  whether  tangible  or
      intangible.
      "Purchase Date" means the date on which Purchased Securities are  to  be
      transferred by Seller to Buyer.
      "Purchase  Price" means the price (calculated as provided  in  Paragraph
      3(b))  at which Purchased Securities are transferred by Seller to  Buyer
      in a Transaction.
      "Purchased Securities" means, with respect to a Transaction, the related
      Loans,  together  with the related Records, Servicing  Rights,  Take-Out
      Commitments,  if  any,  and other Collateral, and such  other  property,
      rights,  titles  or interests as are specified on a related  Transaction
      Notice or Position Report.  The term "Purchased Securities" with respect
      to  any  Transaction at any time also shall include Additional Purchased
      Securities delivered pursuant to Paragraph 6(a) hereof.
      "Records"  means  all instruments, agreements and other books,  records,
      and  other media for the storage of information maintained by Seller  or
      any  other  person  or  entity with respect  to  a  Purchased  Security.
      Records  shall  include  the Loan Notes, any  Mortgages  and  any  other
      instruments necessary to document or service a Loan.
      "REO Property" means a Mortgaged Property that is acquired by a servicer
      by foreclosure or by deed in lieu of foreclosure.
      "Repurchase  Date" shall have the meaning assigned thereto in  Paragraph
      3(b)  and  shall  also  include the date determined  by  application  of
      Paragraph 19.
      "Repurchase Price" means the price at which Purchased Securities are  to
      be  transferred from Buyer to Seller upon termination of a  Transaction,
      which will be determined in each case (including Transactions terminable
      upon demand) as the sum of the Purchase Price and the Price Differential
      as of the date of such determination.
      "Servicing  Agreement"  means  any  agreement  (other  than  a   Custody
      Agreement) giving rise or relating to Servicing Rights with respect to a
      Purchased Security, including any assignment or other agreement relating
      to such agreement.
      "Servicing  Rights"  means contractual, possessory or  other  rights  of
      Seller  or any other Person arising under a Servicing Agreement, Custody
      Agreement or otherwise, to administer or service a Purchased Security or
      to possess related Records.
      "Subsidiary"  means,  with  respect  to  any  Person,  any  corporation,
      partnership  or  other  entity of which  at  least  a  majority  of  the
      securities  or  other ownership interests having by  the  terms  thereof
      ordinary  voting power to elect a majority of the board of directors  or
      other   persons  performing  similar  functions  of  such   corporation,
      partnership or other entity (irrespective of whether or not at the  time
      securities or other ownership interests of any other class or classes of
      such  corporation, partnership or other entity shall have or might  have
      voting  power by reason of the happening of any contingency) is  at  the
      time directly or indirectly owned or controlled by such Person or one or
      more  Subsidiaries  of such Person or by such Person  and  one  or  more
      Subsidiaries of such Person.
      "Substitute Securities" has the meaning given to it in Paragraph 16(a).
      "Take-out  Commitment" means, with respect to any Loan,  an  irrevocable
      commitment  issued by an Authorized Purchaser in favor of the applicable
      originator,  pursuant  to  which  such Authorized  Purchaser  agrees  to
      purchase such Loan at a specific price.
      "Termination Date" has the meaning given to it in Paragraph 3(b).
      "Transaction  Notice" have the meaning assigned thereto in  Paragraph  4
      hereof.
      "Trust  Receipt" means a Trust Receipt as defined in the related Custody
      Agreement.
      "Underwriting Guidelines" means the standards, procedures and guidelines
      of  Seller  for  underwriting or originating  Loans  of  the  applicable
      previously submitted by Seller to, and approved by, Buyer.
      "Uniform Commercial Code" means the Uniform Commercial Code as in effect
      on  the  date hereof in the State of New York or the Uniform  Commercial
      Code as in effect in the applicable jurisdiction.

3.    THE TRANSACTIONS
      a)    Intentionally omitted.
       b)     Provided that the applicable conditions in Paragraphs  9(a)  and
9(b) have been satisfied, (i) each Purchased Security repurchased by Seller on
the  tenth day of a month (or the following Business Day if such day is not  a
Business Day) following the initial Purchase Date (each, a "Repurchase  Date")
shall  automatically  become  subject to a new  Transaction  unless  Buyer  is
notified  by  Seller at least two (2) Business Days prior  to  any  Repurchase
Date,  and  (ii)  the  Buyer shall from time to time, but  in  no  event  more
frequently  than  once  per month (unless otherwise agreed),  enter  into  new
Transactions with respect to additional Loans and in each case the  Repurchase
Date therefor shall be the date which is the same calendar day of the month as
the  Purchase  Date  for the initial Transaction hereunder (or  the  following
Business  Day  if  such  day  is not a Business Day),  provided  that  if  the
Repurchase  Date so determined is later than the one-year anniversary  of  the
initial  Purchase Date (the "Termination Date"), the Repurchase Date for  such
Transaction  shall  automatically reset to  such  anniversary  date,  and  the
provisions  of  this  sentence as it might relate to a new  Transaction  shall
expire  on such date.  For each new Transaction, unless otherwise agreed,  (i)
the  Purchase Price shall be equal to 95% ("Purchase Price Percentage") of the
related  Market  Value,  (ii) the percentage used in determining  the  Buyer's
Margin  Amount  shall be the percentage equivalent of the fraction  1/Purchase
Price Percentage, (iii) the Pricing Rate shall be equal to Adjusted LIBOR plus
one  hundred  basis  points  (1.00%), and (iv) the accrued  and  unpaid  Price
Differential shall be settled in cash on each related Repurchase Date.

4.    ENTERING INTO TRANSACTIONS; TRANSACTION NOTICE, CONFIRMATIONS
a)                 Unless otherwise agreed, Seller shall give Buyer  at  least
five(5)  Business Days' prior notice of any proposed Purchase Date other  than
the initial Purchase Date (the date on which such notice is given, the "Notice
Date"). On the Notice Date, Seller shall (i) request that Buyer enter  into  a
Transaction  by  furnishing  to  Buyer  (either  orally  or  in  writing)  the
information  specified in the form of Exhibit A hereto (each,  a  "Transaction
Notice"),  or by delivering a Position Report as such, (ii) deliver  to  Buyer
and Custodian a Loan Schedule and Computer Tape and (iii) deliver to Custodian
(a)  the Custodian's Loan File and (b) the related Collateral Receipt for each
Loan subject to such Transaction.  Unless otherwise agreed, the Purchase Price
for a Transaction shall at least be equal to $5,000,000.
b)                Unless otherwise agreed, upon receipt of the Transaction
Notice, Buyer shall, upon the terms and subject to the conditions herein, make
an offer to Seller specifying the terms for such Transaction, including the
Purchase Price, the Pricing Rate and the Repurchase Date in respect of such
Transaction.  Upon Seller agreeing to enter into a Transaction hereunder,
Buyer shall promptly deliver to Seller a confirmation of such Transaction (a
"Confirmation"). The terms of any Transaction Notice, if any, signed by Seller
shall be deemed incorporated by reference into the Confirmation and if the
terms of the Transaction Notice conflicts with the Confirmation, the terms of
the Confirmation shall prevail.
c)                Each Confirmation and Transaction Notice, together with this
Agreement, shall constitute conclusive evidence of the terms agreed between
Buyer and Seller with respect to the Transaction to which the Confirmation
relates, and Seller's acceptance of the related proceeds shall constitute
Seller's agreement to the terms of such Confirmation. It is the intention of
the parties that each Confirmation and Transaction Notice shall not be
separate from this Agreement but shall be made a part of this Agreement.

5.    PAYMENT AND TRANSFER
       Unless  otherwise  agreed, all transfers of funds  hereunder  shall  be
immediately available funds and all Purchased Securities transferred shall  be
transferred  to  the  Custodian  pursuant  to  the  Custody  Agreement.    Any
Repurchase  Price  received  by  Buyer after 3:00  p.m.  New  York  City  time
("Funding Deadline") shall be applied on the next succeeding Business Day, but
such  funds  (absent  a  Default) shall earn  overnight  interest  at  a  rate
established by Buyer.  Unless otherwise agreed, Buyer shall not wire  Purchase
Prices to Seller after the Funding Deadline.

6.    MARGIN MAINTENANCE
       a)     If  at  any  time the aggregate Market Value  of  all  Purchased
Securities  subject  to  all Transactions is less than the  aggregate  Buyer's
Margin  Amount for all such Transactions (a "Margin Deficit"), then Buyer  may
by notice to Seller require Seller in such Transactions, at Buyer's option, to
transfer to Buyer cash or additional Purchased Securities acceptable to  Buyer
and  (in  the  case of Loans) which conform in all respects to the  applicable
representations  and  warranties  set forth  in  Appendix  A  to  the  Custody
Agreement  ("Additional Purchased Securities"), so that the cash and aggregate
Market  Value  of  the  Purchased Securities, including  any  such  Additional
Purchased  Securities, will thereupon equal or exceed such  aggregate  Buyer's
Margin Amount.
       b)     Notice required pursuant to Paragraph 6(a) may be given  by  any
means.   A notice for the payment or delivery in respect of the Margin Deficit
received before 5:00 p.m. New York City time on a Business Day shall be met no
later  than  4:00 p.m. on the following Business Day.  Any notice given  on  a
Business  Day after 5:00 p.m., New York City time, shall be met no later  than
4:00 p.m. on the second following Business Day.  The failure of Buyer, on  any
one  or more occasions, to exercise its rights hereunder, shall not change  or
alter the terms and conditions to which this Agreement is subject or limit the
right  of Buyer to do so at a later date.  Seller and Buyer each agree that  a
failure or delay by Buyer to exercise its rights hereunder shall not limit  or
waive  Buyer's rights under this Agreement or otherwise existing by law or  in
any way create additional rights for Seller.

7.    INCOME PAYMENTS
       Subject  to  Paragraph  14, where a particular term  of  a  Transaction
extends  over  an Income payment date on the Purchased Securities  subject  to
that Transaction, such Income shall be the property of Buyer.  Notwithstanding
the  foregoing, and provided no Default has occurred, Buyer agrees that Seller
shall  be  entitled  to  receive an amount equal to all  Income  paid  on  the
Purchased  Securities that is not otherwise received by Seller,  to  the  full
extent  it would be so entitled if the Purchased Securities had not been  sold
to  Buyer.  Provided no Default has occurred, Buyer shall, as the parties  may
agree  with  respect  to  any Transaction (or, in  the  absence  of  any  such
agreement, as Buyer shall reasonably determine in its sole discretion), on the
date  such  Income  is  paid either (i) transfer to Seller  such  Income  with
respect to any Purchased Securities subject to such Transaction or (ii)  apply
the Income payment to reduce the amount, if any, to be transferred to Buyer by
Seller  upon termination of such Transaction. Furthermore, provided no Default
has  occurred,  Seller  shall  be  entitled to  any  proceeds  resulting  from
investments  made by the Blocked Account Bank pursuant to the Blocked  Account
Agreement.   Buyer shall not be obligated to take any action pursuant  to  the
preceding  sentences  to  the  extent that such action  would  result  in  the
creation of a Margin Deficit, unless prior thereto or simultaneously therewith
Seller  transfers to Buyer cash or Additional Purchased Securities  sufficient
to eliminate such Margin Deficit.

8.    SECURITY INTEREST
       Seller  and  Buyer intend that the Transactions hereunder be  sales  to
Buyer  of the Purchased Securities and not loans from Buyer to Seller  secured
by  the  Purchased Securities.  However, in order to preserve  Buyer's  rights
under  this Agreement in the event that a court or other forum recharacterizes
the  Transactions hereunder as other than sales, and as security for  Seller's
performance  of  all of its Obligations, Seller hereby grants  Buyer  a  fully
perfected  first  priority security interest in the Purchased Securities,  the
Records,  and  all  related  Servicing  Rights,  insurance,  Income,  accounts
(including  any interest of Seller in escrow accounts) and any other  contract
rights, payments, rights to payment (including payments of interest or finance
charges)  general  intangibles  and other assets  relating  to  the  Purchased
Securities or any interest in the Purchased Securities, the servicing  of  the
Purchased Securities, and any proceeds and distributions with respect  to  any
of  the  foregoing and any other property, rights, titles or interests as  are
specified  on  a  Transaction  Notice or Position  Report  (collectively,  the
"Collateral").

9.    CONDITIONS PRECEDENT
       a)     As conditions precedent to the initial Transaction, Buyer  shall
have  received on or before the day of such initial Transaction the following,
in form and substance satisfactory to Buyer and duly executed by Seller:
             i)     The Program Documents duly executed and delivered  by  the
parties hereto;
            ii)   Evidence that all other actions necessary or, in the opinion
of  Buyer,  desirable to perfect and protect Buyer's interest in the Purchased
Securities   and   other  Collateral  have  been  taken,  including,   without
limitation,  duly  executed  and  filed  Uniform  Commercial  Code   financing
statements on Form UCC-1;
            iii)  A certified copy of Seller's corporate resolutions approving
the  Program Documents and Transactions thereunder (either specifically or  by
general  resolution), and all documents evidencing other  necessary  corporate
action  or  governmental approvals as may be required in connection  with  the
Program Documents;
             iv)    An  incumbency certificate of Seller's corporate secretary
certifying  the  names,  true signatures and titles of Seller's  officers  and
employees  duly  authorized to request Transactions  hereunder  and  sign  the
Program  Documents and the other documents to be delivered thereunder,  and  a
certificate  of  an  officer of Seller, both of which shall  be  in  form  and
substance acceptable to Buyer;
             v)     An opinion of Seller's counsel as to such matters as Buyer
may reasonably request and in form and substance acceptable to Buyer;
                         vi)   A copy of the Underwriting Guidelines certified
                  by an officer of a Seller; and
            vii)  Any other documents reasonably requested by Buyer.
      b)    The obligation of Buyer to enter into each Transaction pursuant to
this Agreement is subject to the following conditions precedent:
             i)     Buyer or its designee shall have received on or before the
day  of  such  Transaction (unless otherwise specified in this Agreement)  the
following,  in  form and substance satisfactory to Buyer and  (if  applicable)
duly executed:
                                      A)     A  Transaction  Notice  delivered
                        pursuant to Paragraph 4(a);
                                     B)     The related Custodian's Loan  File
                        with  respect to each Purchased Security subject to  a
                        Transaction and the related Trust Receipt; and
                                      C)     Such  certificates,  opinions  of
                        counsel  or  other documents as Buyer may request  (i)
                        not  more  frequently  (absent  special  circumstances
                        regarding  Seller) than once every six (6) months  and
                        (ii)  upon  at  least ten (10) Business Days'  notice;
                        however  (absent such circumstances), the  failure  of
                        Seller to provide such documents, during such ten (10)
                        Business  Day  period  shall not preclude  Buyer  from
                        entering into a Transaction during such period.
            ii)   No Default shall have occurred and be continuing.
            iii)  No catastropic event or events shall have been determined by
Buyer  to have occurred resulting in the effective absence of a "repo  market"
for  a  period  of  at  least ten (10) consecutive days  respecting  loans  or
mortgage-  or  asset-backed securities such that Buyer is  or  was  unable  to
finance  or  fund purchases under this Agreement through the "repo market"  or
Buyer's customers.
             iv)   All representations and warranties in the Program Documents
hereof shall be true and correct on the date of such Transaction.
            v)    The then aggregate outstanding Purchase Price, when added to
the Purchase Price for the requested Transaction, shall not exceed ONE HUNDRED
MILLION  DOLLARS ($100,000,000); provided, however, that at no time shall  the
portion  of  the  aggregate outstanding Purchase Price attributable  to  Loans
originated  under  Metwest Mortgage Services, Inc.'s origination  program  for
subprime  mortgages (the "Metwest Subprime Program") without income, asset  or
employment  verification  exceed  fifteen  percent  (15%)  of  such  aggregate
outstanding  Purchase  Price.  Seller agrees that the  Market  Value  used  in
determining  such portion of the outstanding aggregate Purchase  Price  is  at
Buyer's sole discretion.

10.   RELEASE OF COLLATERAL
       Upon  timely  payment in full of the Repurchase  Price  and  all  other
Obligations owing with respect to the Purchased Securities, if no  Default  or
Event of Default has occurred and is continuing, Buyer shall, and shall direct
Custodian  to, release such Purchased Security unless such release would  give
rise  to  a Margin Deficit. Except as set forth in Paragraph 16, Seller  shall
give at least five (5) Business Days' prior notice to Buyer if such repurchase
shall  occur  on other than a Repurchase Date, provided, however, that  Seller
shall give at least one (1) day's prior notice to Buyer if such repurchase  is
in  connection  with  a securitization underwritten by Buyer  or  any  of  its
Affiliates.

11.   RELIANCE
       With respect to any Transaction, Buyer may conclusively rely upon,  and
shall  incur  no  liability to Seller in acting upon,  any  request  or  other
communication  that  Buyer believes to have been given or  made  by  a  person
authorized to enter into a Transaction on Seller's behalf, whether or not such
person  is  listed  on  the  certificate delivered  pursuant  to  subparagraph
9(a)(iv) hereof.  In each such case, Seller hereby waives the right to dispute
Buyer's   record  of  the  terms  of  the  Confirmation,  request   or   other
communication.

12.   REPRESENTATIONS AND WARRANTIES
       Seller  hereby  represents and warrants, and shall on  and  as  of  the
Purchase  Date  for  any  Transaction and on and as of  each  date  thereafter
through  and including the related Repurchase Date be deemed to represent  and
warrant, that:
a)                Due Organization and Qualification.  Seller is a corporation
duly  organized, validly existing and in good standing under the laws  of  the
jurisdiction  of  Seller's incorporation.  Seller  is  duly  qualified  to  do
business,  is  in  good  standing  and has obtained  all  necessary  licenses,
permits,   charters,  registrations  and  approvals  (together,   "approvals")
necessary for the conduct of its business as currently conducted (except where
the failure to be so qualified would not have a material adverse effect on the
Seller, on the Loans or on the ability of Seller or its assigns to enforce the
Loans), and the performance of its obligations under the Program Documents.
b)                Power and Authority. Seller has all necessary power and
authority to conduct its business as currently conducted, to execute, deliver
and perform its obligations under the Program Documents and to consummate the
Transactions.
c)                Due Authorization. The execution, delivery and performance
of the Program Documents by Seller have been duly authorized by all necessary
corporate action and do not require any additional approvals or consents or
other action by or any notice to or filing with any Person.
d)                Noncontravention. None of the execution and delivery of the
Program Documents by Seller or the consummation of the Transactions and
transactions thereunder:
                   i)    conflicts with, breaches or violates any provision of
            the  articles or certificate of incorporation or by-laws of Seller
            or  any  law, rule, regulation, order, writ, judgment, injunction,
            decree,   determination  or  award  currently  in  effect   having
            applicability to Seller, or its properties;
                   ii)    constitutes a material default by Seller  under  any
            loan   or  repurchase  agreement,  mortgage,  indenture  or  other
            agreement or instrument to which Seller is a party or by which  it
            or any of its properties is or may be bound or affected; or
                   iii)  results in or requires the creation of any lien  upon
            or  in  respect  of any of the assets of Seller  except  the  lien
            relating to the Program Documents.
a)                 Legal  Proceedings.   There is  no  action,  proceeding  or
investigation by or before any court, governmental or administrative agency or
arbitrator  affecting any of the Purchased Securities, Seller or  any  of  its
Affiliates, pending or threatened, which, if decided adversely, would  have  a
material adverse effect with respect to Seller or any Purchased Security.
b)                Valid and Binding Obligations.  Each of the Program
Documents to which Seller is a party when executed and delivered by Seller
will constitute the legal, valid and binding obligations of Seller,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equitable principles.
c)                Financial Statements.  The financial statements of Seller,
copies of which have been furnished to Buyer, (i) are, as of the dates and for
the periods referred to therein, complete and correct in all material
respects, (ii) present fairly the financial condition and results of
operations of Seller as of the dates and for the periods indicated and (iii)
have been prepared in accordance with GAAP consistently applied, except as
noted therein (subject as to interim statements to normal year-end
adjustments).  Since the date of the most recent financial statements, there
has been no material adverse change in such financial condition or results of
operations. Except as disclosed in such financial statements, Seller is not
subject to any contingent liabilities or commitments that, individually or in
the aggregate, have a material possibility of causing a material adverse
change in the business or operations of Seller.
d)                Accuracy of Information.  None of the documents or
information prepared by or on behalf of Seller and provided by Seller to Buyer
relating to Seller or its financial condition contain any statement of a
material fact with respect to Seller or the Transactions that was untrue or
misleading in any material respect when made. Since the furnishing of such
documents or information, there has been no change, nor any development or
event involving a prospective change known to Seller, that would render any of
such documents or information untrue or misleading in any material respect.
e)                No Consents.  No consent, license, approval or authorization
from, or registration, filing or declaration with, any regulatory body,
administrative agency, or other governmental instrumentality, nor any consent,
approval, waiver or notification of any creditor, lessor or other
nongovernmental person, is required in connection with the execution, delivery
and performance by Seller of this Agreement or the consummation of any other
Program Document.
f)                Compliance With Law. Etc.  No practice, procedure or policy
employed or proposed to be employed by Seller in the conduct of its businesses
violates any law, regulation, judgment, agreement, order or decree applicable
to it which, if enforced, would result in a material adverse effect upon
Seller.
g)                Solvency: Fraudulent Conveyance.  Seller is solvent and will
not be rendered insolvent by the Transaction and, after giving effect to such
Transaction, Seller will not be left with an unreasonably small amount of
capital with which to engage in its business. Seller does not intend to incur,
or believe that it has incurred, debts beyond its ability to pay such debts as
they mature. Seller is not contemplating the commencement of insolvency,
bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of
Seller or any of its assets. The amount of consideration being received by the
Seller upon the sale of the Purchased Securities to Buyer and thereafter upon
the sale of any Purchased Securities by the Seller to Buyer constitutes
reasonably equivalent value and fair consideration for such Purchased
Securities. Seller is not transferring any Purchased Securities with any
intent to hinder, delay or defraud any of its creditors.
h)                Investment Company Act Compliance.  Seller is neither
required to be registered as an "investment company" as defined under the
Investment Company Act nor under the control of an "investment company" as
defined under the Investment Company Act.
i)                Taxes. Seller has filed all federal and state tax returns
which are required to be filed and paid all taxes, including any assessments
received by it, to the extent that such taxes have become due (other than for
taxes that are being contested in good faith or for which it has established
adequate reserves). Any taxes, fees and other governmental charges payable by
Seller in connection with a Transaction and the execution and delivery of the
Program Documents have been paid (other than for taxes that are being
contested in good faith or for which it has established adequate reserves).
j)                Additional Representations. With respect to each Loan,
Seller makes all of the applicable representations and warranties set forth on
Appendix A of the Custody Agreement for the related Loan Type, as of the date
the documents related to such Loan are delivered to the Custodian,
continuously while such Loan is part of the Collateral and is subject to a
Transaction.
k)                Hedging. Effective as of the Effective Date, Seller has
entered into interest rate futures contracts which are fully subject to the
Commodity Account Control Agreement, having a notional amount at least equal
to 50% of the aggregate outstanding Purchase Price.  Effective as of the
Effective Date, all hedging for the Loans shall be subject to the Commodity
Account Control Agreement.
       In  the event Buyer engages in a repurchase transaction with any of the
Purchased Securities or otherwise pledges or hypothecates any of the Purchased
Securities,  Buyer shall have the right to assign to Buyer's counterparty  any
of  the  applicable representations or warranties in Appendix A of the Custody
Agreement, and the remedies for breach thereof as they relate to the Purchased
Securities that are subject to such repurchase transaction.
       The  representations and warranties set forth in this  Agreement  shall
survive  transfer of the Purchased Securities to Buyer and shall continue  for
so long as the Purchased Securities are subject to this Agreement.

13.   COVENANTS OF SELLER
      Seller hereby covenants with Buyer as follows:
             a)     Defense  of  Title.  Seller warrants and will  defend  the
      right, title and interest of Buyer in and to all Collateral against  all
      adverse claims and demands.
             b)    No Amendment or Compromise.  Without Buyer's prior consent,
      Seller and those acting on Seller's behalf shall not amend or modify, or
      waive  any  term or condition of, or settle or compromise any  claim  in
      respect  of, any item of the Purchased Securities or any related rights,
      provided,  however,  Seller may waive late charges, approve  assumptions
      and  changes  in  payment due dates, and establish escrow  accounts  and
      "ACH"  payment  plans with respect to the Purchased  Securities  without
      Buyer's prior consent.
             c)    No Assignment.  Seller shall not sell, assign, transfer  or
      otherwise  dispose of, or grant any option with respect to,  or  pledge,
      hypothecate  or  grant a security interest in or lien  on  or  otherwise
      encumber  (except  pursuant  to  the  Program  Documents),  any  of  the
      Purchased  Securities  or  any  interest  therein,  provided  that  this
      paragraph  shall  not  prevent any transfer of Purchased  Securities  in
      accordance with the Program Documents.
a)                 Servicing of Loans. Seller shall service, or  cause  to  be
serviced,  all  Loans that are part of the Purchased Securities in  accordance
with  the  standard industry practices, employing at least the same procedures
and  exercising  the  same care that Seller customarily employs  in  servicing
Loans  for its own account, and in accordance with all applicable requirements
of the relevant Agency or Authorized Purchaser.  Seller shall notify servicers
of  Buyer's  interest hereunder.  Seller shall notify Buyer of  the  name  and
address of all servicers.  Buyer shall have the right to approve each servicer
and  the form of all servicing agreements.  Seller shall hold or cause  to  be
held  all  escrow funds collected with respect to such Loans in trust accounts
and shall apply the same for the purposes for which such funds were collected.
Upon Buyer's request, Seller shall provide to Buyer a letter addressed to  and
agreed  to  by  each  servicer  of  Loans, in form  and  substance  reasonably
satisfactory  to Buyer, advising such servicer of such matters  as  Buyer  may
reasonably   request.   If  Seller  should  discover  that,  for  any   reason
whatsoever,  Seller  or  any  entity responsible to  Seller  by  contract  for
managing  or  servicing  any such Loan has failed to  perform  fully  Seller's
obligations  under  the Program Documents or any of the  obligations  of  such
entities  with  respect  to the Purchased Securities,  Seller  shall  promptly
notify Buyer.
b)                Preservation of Collateral; Collateral Value.  Seller shall
do all things necessary to preserve the Collateral so that it remains
effective security hereunder.  Without limiting the foregoing, Seller will
comply with all rules, regulations and other laws of any governmental
authority and cause the Collateral to comply with all applicable rules,
regulations and other laws.  Seller will not allow any default for which
Seller is responsible to occur under any Collateral, and Seller shall fully
perform or cause to be performed when due all of its obligations under any
Collateral or the Program Documents.
c)                Maintenance of Papers, Records and Files. Seller shall
acquire and Seller or servicer of the Purchased Securities shall build,
maintain and have available a complete file in accordance with industry custom
and practice for each Purchased Security.  Seller or the servicer of the
Purchased Securities will maintain all such Records not in the possession of
Custodian in good and complete condition in accordance with industry practices
and preserve them against loss.
                   i)     Seller  shall collect and maintain or  cause  to  be
            collected  and  maintained all Records relating to  the  Purchased
            Securities  in  accordance  with  industry  custom  and  practice,
            including those maintained pursuant to the preceding subparagraph,
            and   all  such  Records  shall  be  in  Custodian's  or  Seller's
            possession unless Buyer otherwise approves.  Seller will not allow
            any  such papers, records or files that are an original or an only
            copy  to  leave  Seller's  or Custodian's possession,  except  for
            individual  items removed in connection with servicing a  specific
            Loan, in which event Seller will obtain or cause to be obtained  a
            receipt from a financially responsible person for any such  paper,
            record or file.
                  ii)   For so long as Buyer has an interest in or lien on any
            Purchased  Security,  Seller will hold or cause  to  be  held  all
            Records in trust for Buyer.  Seller shall notify every other party
            holding  any  such  Records  of the interests  and  liens  granted
            hereby.
                   iii)   Upon  reasonable advance notice  from  Custodian  or
            Buyer, Seller shall (x) make any and all such Records available to
            Custodian or Buyer to examine any such Records, either by its  own
            officers  or employees, or by agents or contractors, or both,  and
            make copies of all or any portion thereof, (y) permit Buyer or its
            authorized agents to discuss the affairs, finances and accounts of
            Seller  with  its  respective chief operating  officer  and  chief
            financial  officer  and  to  discuss  the  affairs,  finances  and
            accounts of Seller with its independent accountants.
a)                   Financial   Statements:   Accountants'   Reports:   Other
Information. Seller shall keep or cause to be kept in reasonable detail  books
and  records  of account of its assets and business and shall clearly  reflect
therein  the  transfer  of  Purchased Securities to the  Buyer.  Seller  shall
furnish  or  cause to be furnished to Buyer promptly upon Buyer's request  the
following:
                  i)    Financial Statements.  (x) As soon as available and in
            any  event within 105 days after the end of each fiscal year,  the
            consolidated, audited balance sheets of Seller as of  the  end  of
            each fiscal year of Seller and the audited financial statements of
            income  and changes in equity of Seller for such fiscal year;  (y)
            As soon as available and in any event within 50 days after the end
            of  each  quarter, the consolidated, unaudited balance  sheets  of
            Seller  as  of the end of each quarter and the unaudited financial
            statements  of  income and changes in equity  of  Seller  for  the
            portion  of  the  fiscal  year then ended;  and  (z)  As  soon  as
            available  and in any event within 20 days after the end  of  each
            quarter,   the  consolidated, unaudited  balance  sheets,  without
            quarter  end and year end adjustments in accordance with GAAP,  of
            Seller  as  of  the end of such calendar month and  the  unaudited
            financial statements of income and changes in equity of Seller for
            the  portion  of  the fiscal year then ended, all  of  which  were
            prepared in accordance with GAAP.
                  ii)    Loan Performance Data. Upon request of Buyer, monthly
            reports  in  form and scope satisfactory to Buyer,  setting  forth
            data  regarding  the performance of the Purchased Securities,  and
            such other information as Buyer may reasonably request.
                   iii)   Monthly Servicing Diskettes.  Upon request of  Buyer
            and  on the fifth day of each month (or the following Business Day
            if  such  day is not a Business Day), a computer tape (which  tape
            may  be  the  Computer Tape referenced in Paragraph  4(a))  and  a
            diskette  (or  any  other  electronic transmission  acceptable  to
            Buyer) in a format acceptable to Buyer containing such information
            with  respect to the Purchased Securities as Buyer may  reasonably
            request.
                   iv)   Annual Budgets; Business Plans.  Such annual budgets,
            monthly  and  annual comparisons of conformity of operations  with
            annual  budgets,  annual projections of financial  and  operations
            results,  strategic  business plans  and  other  internal  reports
            prepared  or  reviewed  by  executive  management  as  Buyer   may
            reasonably request from time to time.
a)                 Notice  of  Material Events. Seller shall  promptly  inform
Buyer in writing of any event, circumstance or condition that has resulted, or
has a possibility of resulting, in a material adverse effect upon Seller.
b)                Maintenance of Licenses.  Seller shall maintain all
licenses, permits or other approvals necessary for Seller to conduct its
business (except where the failure to be so qualified would not have a
material adverse effect on the Seller, on the Loans or on the ability of
Seller or its assigns to enforce the Loans) and to perform its obligations
under the Program Documents.

14.   P&I COLLECTIONS
       Commencing  the Effective Date, Seller shall cause all  Income  on  the
Purchased Securities to be deposited, within one Business Day after receipt by
Seller,  into  the  deposit  account specified in,  and  with  the  depository
institution that is party to, the Blocked Account Agreement between Seller and
Buyer,  provided, however, that absent a Default, Seller need not  cause  such
Income  to  be  deposited  during a month in which  a  securitization  occurs.
Absent  an  Event  of Default, Buyer shall not terminate the  Blocked  Account
Agreement without the written consent of Seller.

15.   REPURCHASE OF PURCHASED SECURITIES
       Upon discovery by Seller of a breach of any of the representations  and
warranties set forth in Appendix A to the Custody Agreement, Seller shall give
prompt  written  notice thereof to Buyer.  Upon any such discovery  by  Buyer,
Buyer  will notify Seller.  If Seller does not cure such breach on  or  before
the  15th  day  following receipt of notice of such breach, then Seller  shall
repurchase  the  affected Purchased Security on the next  succeeding  Business
Day.

16.   SUBSTITUTION
             a)     Seller  may, subject to agreement with and  acceptance  by
      Buyer,  substitute other securities which are substantially the same  as
      the Purchased Securities (the "Substitute Securities") for any Purchased
      Securities.   Such substitution shall be made by transfer  to  Buyer  of
      such   other  Securities  and  transfer  to  Seller  of  such  Purchased
      Securities.   After  substitution, the Substitute  Securities  shall  be
      deemed to be Purchased Securities.
            b)    In the case of any Transaction for which the Repurchase Date
      is  other than the Business Day immediately following the Purchase  Date
      and  with  respect to which Seller does not have any existing  right  to
      substitute  Substitute Securities for the Purchased  Securities,  Seller
      shall  have  the  right, subject to the proviso to this  sentence,  upon
      notice to Buyer, which notice shall be given at or prior to 10 a.m. (New
      York   time)  on  the  second  preceding  Business  Day,  to  substitute
      Substitute  Securities for any Purchased Securities; provided,  however,
      that  Buyer  may  elect, by the close of business on  the  Business  Day
      following  which such notice is received, or by the close  of  the  next
      Business  Day if notice is given after 10 a.m. (New York time)  on  such
      day, not to accept such substitution.  In the event such substitution is
      accepted  by Buyer, such substitution shall be made by Seller's transfer
      to Buyer of such Substitute Securities and Buyer's transfer to Seller of
      such  Purchased Securities, and after such substitution, the  Substitute
      Securities  shall be deemed to be Purchased Securities.   In  the  event
      Buyer  elects not to accept such substitution, Buyer shall offer  Seller
      the right to terminate the Transaction.
             c)     In  the event Seller exercises its right to substitute  or
      terminate  under subparagraph (b), Seller shall be obligated to  pay  to
      Buyer,  by  the close of the Business Day of such substitution,  as  the
      case  may  be, an amount equal to (A) Buyer's actual cost in  bona  fide
      third  party transactions (including all fees, expenses and commissions)
      of  (i)  entering into replacement transactions; (ii) entering  into  or
      terminating hedge transactions; and/or (iii) terminating transactions or
      substituting  securities  in like transactions  with  third  parties  in
      connection with or as a result of such substitution or termination,  and
      (B)  to  the  extent  Buyer  determines not to  enter  into  replacement
      transactions, the loss incurred by Buyer directly arising  or  resulting
      from  such substitution or termination.  The foregoing amounts shall  be
      solely determined and calculated by Buyer in good faith.

17.   REPURCHASE TRANSACTIONS
       Buyer may, in its sole election, engage in repurchase transactions with
the Purchased Securities or otherwise pledge, hypothecate, assign, transfer or
otherwise  convey  the  Purchased Securities with a  counterparty  of  Buyer's
choice.

18.   EVENTS OF DEFAULT
       With  respect  to  any  Transactions covered  by  or  related  to  this
Agreement,  the occurrence of any of the following events shall constitute  an
"Event of Default":
a)                 Seller fails to transfer the Purchased Securities to  Buyer
on the applicable Purchase Date;
b)                Seller fails to repurchase the Purchased Securities on the
applicable Repurchase Date;
c)                Seller shall fail to perform, observe or comply with any
other material term, covenant or agreement contained in the Program Documents;
d)                Any representation or warranty made by Seller (or any of
Seller's officers) in the Program Documents or in any other document (other
than the representations or warranties in Appendix A to the Custody Agreement)
shall have been incorrect or untrue in any material respect when made or
repeated or deemed to have been made or repeated;
e)                Seller or any of Seller's Subsidiaries shall fail to pay any
of Seller's or Seller's Subsidiaries Indebtedness for borrowed money
(including non-recourse Indebtedness), or any interest or premium thereon when
due (whether by scheduled maturity, requirement prepayment, acceleration,
demand or otherwise), or shall fail to make any payment when due under
Seller's or Seller's Subsidiaries' Guarantee of another person's Indebtedness
for borrowed money, and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness or Guarantee; or any other default under any agreement or
instrument relating to any such Indebtedness or Guarantee, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement, instrument or Guarantee, if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness or Guarantee; or if any such Indebtedness or
Guarantee shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof;
f)                a custodian, receiver, conservator, liquidator, trustee,
sequestrator or similar official for Seller or any of Seller's Subsidiaries,
or of any of Seller's or their Property, is appointed or takes possession of
such property; or Seller or any of Seller's Subsidiaries generally fails to
pay Seller's or Seller's Subsidiaries' debts as they become due; or Seller or
any of Seller's Subsidiaries is adjudicated bankrupt or insolvent; or an order
for relief is entered under the Federal Bankruptcy Code, or any successor or
similar applicable statute, or any administrative insolvency scheme, against
Seller or any of Sellers Subsidiaries; or any of Seller's or Seller's
Subsidiaries' Property is sequestered by court or administrative order; or a
petition is filed against Seller or any of Seller's Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, moratorium, delinquency or liquidation law of any jurisdiction,
whether now or subsequently in effect;
g)                Seller or any of Seller's Subsidiaries files a voluntary
petition in bankruptcy or seeks relief under any provision of any bankruptcy,
reorganization, moratorium, delinquency, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction whether now or
subsequently in effect; or consents to the filing of any petition against it
under any such law; or consents to the appointment of or taking possession by
a custodian, receiver, conservator, trustee, liquidator, sequestrator or
similar official for Seller or any of Seller's Subsidiaries, or of all or any
part of Seller's or Seller's Subsidiaries' Property; or makes an assignment
for the benefit of Seller's or Seller's Subsidiaries' creditors;
h)                any judgment or order for the payment of money, not covered
by an insurance policy, in excess of $500,000 is rendered against Seller or
any of Seller's Subsidiaries;
i)                any Governmental Authority or any person, agency or entity
acting or purporting to act under governmental authority shall have taken any
action to condemn, seize or appropriate, or to assume custody or control of,
all or any substantial part of the Property of Seller or of any of Seller's
Subsidiaries, or shall have taken any action to displace the management of
Seller or of any of Seller's Subsidiaries or to curtail its authority in the
conduct of the business of Seller or of any of Seller's Subsidiaries, or
Governmental Authority takes any action to remove, limit or restrict the
approval of Seller as an issuer, lender or a seller/servicer of Loans;
j)                Seller or any of Seller's Subsidiaries shall default under,
or fail to perform as requested under, or shall otherwise breach the terms of
any instrument, agreement or contract between Seller and Buyer or any of
Buyer's Affiliates;
k)                in the good faith judgment of Buyer any material adverse
change shall have occurred in the financial condition, operations, business
prospects or corporate structure of Seller or any of Seller's Subsidiaries;
l)                Seller shall admit its inability to, or Seller's intention
not to, perform any of Seller's Obligations hereunder;
m)                Seller dissolves, merges or consolidates with another entity
unless Seller is the surviving party, or sells, transfers, or otherwise
disposes of a material portion of Seller's business or assets;
n)                this Agreement shall for any reason cease to create a valid,
first priority security interest in any of the Purchased Securities purported
to be covered hereby;
o)                Seller's audited annual financial statements or the notes
thereto or other opinions or conclusions stated therein shall be qualified or
limited by reference to the status of Seller, as a "going concern" or a
reference of similar import;
p)                any material amendment to the Underwriting Guidelines which
was not previously approved in writing by Buyer and a Loan underwritten
pursuant to such amended Underwriting Guidelines is a Purchased Security;
q)                a change in Control (as such term is defined in Rule 12b-2
of the Securities Exchange Act of 1934, as amended) of Seller shall have
occurred other than in connection with and as a result of the issuance and
sale by Seller of common stock;
r)                either (A) 10% or more of the aggregate number of Purchased
Securities, by outstanding principal balance, then subject to Transactions are
more than 30 days delinquent in payment, and Seller shall fail to finally
repurchase all Purchased Securities then subject to Transactions within thirty
days of such occurrence (such Loans shall be eligible for subsequent
Transactions hereunder only with the specific approval of Buyer (which
approval shall not be unreasonably withheld) on and after the date which is
five Business Days following delivery to Buyer of reasonable evidence that the
Purchased Securities are current and not susceptible to similar delinquency
experience) or (B) the delinquencies described in clause (A) are 12% or more,
and such repurchase shall fail to occur within 15 days of such occurrence
(such Loans shall be eligible for subsequent Transactions hereunder only with
the specific approval of Buyer (which approval shall not be unreasonably
withheld) on and after the date which is five Business Days following delivery
to Buyer of reasonable evidence that the Purchased Securities are current and
not susceptible to similar delinquency experience).  However, if Seller
provides sufficient evidence that a sale of the Purchased Securities is
pending, Buyer may grant an extension in accordance with the terms and
conditions set forth herein, which extension may not be unreasonably withheld;
or
s)                Metropolitan Mortgage & Securities Co., Inc. shall fail to
maintain (A) GAAP net worth of at least $45 million, (B) a ratio of
Indebtedness to GAAP net worth of 24:1 or less, or (C) at least $40,000,000 of
liquid assets (cash equivalents and market value of U.S. Treasury securities).

19.   REMEDIES
       Upon the occurrence of an Event of Default, Buyer, at its option (which
option  shall be deemed to have been exercised immediately upon the occurrence
of an Event of Default pursuant to Paragraph 18 (f) or (g) hereof), shall have
any  or  all  of the following rights and remedies, which may be exercised  by
Buyer:
      a)    The Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur.
       b)     Seller's  obligations  hereunder  to  repurchase  all  Purchased
Securities  at the Repurchase Price therefor on the Repurchase  Date  in  such
Transactions  shall thereupon become immediately due and payable;  all  Income
paid  after  such exercise or deemed exercise shall be retained by  Buyer  and
applied  to  the  aggregate Repurchase Prices and any other amounts  owing  by
Seller  hereunder; Seller shall immediately deliver to Buyer or  its  designee
any  and  all  original papers, records and files relating  to  the  Purchased
Securities  subject  to  such Transaction then in Seller's  possession  and/or
control;  and  all  right,  title and interest  in  and  entitlement  to  such
Purchased  Securities and Servicing Rights thereon shall be deemed transferred
to Buyer.
      Buyer may (A) immediately sell, without notice or demand of any kind, at
a  public  or private sale and at such price or prices as Buyer may reasonably
deem  satisfactory  any  or  all  Purchased Securities  or  (B)  in  its  sole
discretion  elect,  in  lieu  of selling all or a portion  of  such  Purchased
Securities, to give Seller credit for such Purchased Securities in  an  amount
equal  to  the Market Value of the Purchased Securities against the  aggregate
unpaid Repurchase Price and any other amounts owing by Seller hereunder.   The
proceeds of any disposition of Purchased Securities shall be applied first  to
the costs and expenses incurred by Buyer in connection with or as a result  of
an  Event  of  Default; second to consequential damages,  including,  but  not
limited to, costs of cover and/or related hedging transactions; third  to  the
aggregate Repurchase Prices; and fourth to all other Obligations.
       The  parties recognize that it may not be possible to purchase or  sell
all  of  the  Purchased  Securities on a particular  Business  Day,  or  in  a
transaction with the same purchaser, or in the same manner because the  market
for such Purchased Securities may not be liquid.  In view of the nature of the
Purchased  Securities, the parties agree that liquidation of a Transaction  or
the underlying Purchased Securities does not require a public purchase or sale
and  that  a good faith private purchase or sale shall be deemed to have  been
made  in  a commercially reasonable manner.  Accordingly, Buyer may elect  the
time  and  manner of liquidating any Purchased Security and nothing  contained
herein  shall  obligate  Buyer  to liquidate any  Purchased  Security  on  the
occurrence of an Event of Default or to liquidate all Purchased Securities  in
the  same  manner or on the same Business Day or constitute a  waiver  of  any
right or remedy of Buyer.
      Except as provided in Paragraph 23, in addition to its rights hereunder,
Buyer shall have the right to proceed against any of Seller's assets which may
be  in  the  possession  of Buyer or its designee (including  the  Custodian),
including  the  right  to liquidate such assets and to  set-off  the  proceeds
against monies owed by Seller to Buyer pursuant to this Agreement.  Except  as
provided  in  Paragraph  23,  Buyer may set off  cash,  the  proceeds  of  the
liquidation  of the Purchased Securities and Additional Purchased  Securities,
any other Collateral or its proceeds and all other sums or obligations owed by
Buyer  to  Seller  hereunder  against all of Seller's  Obligations  to  Buyer,
whether  under  this  Agreement,  under a  Transaction,  or  under  any  other
agreement  between the parties, or otherwise, whether or not such  Obligations
are then due, without prejudice to Buyer's right to recover any deficiency.
       Buyer may direct all Persons servicing the Purchased Securities to take
such  action  with  respect to the Purchased Securities  as  Buyer  determines
appropriate.
       Except as provided in Paragraph 23, Seller shall be liable to Buyer for
the  amount  of  all expenses (plus interest thereon at a rate  equal  to  the
Default  Rate), and consequential damages, including, without limitation,  all
costs   and   expenses  incurred  in  connection  with  hedging  or   covering
transactions.
      Seller shall cause all sums received by it with respect to the Purchased
Securities  to  be deposited pursuant to the Blocked Account  Agreement  after
receipt thereof.
       Buyer  shall  without regard to the adequacy of the  security  for  the
Obligations, be entitled to the appointment of a receiver by any court  having
jurisdiction,  without  notice, to take possession of  and  protect,  collect,
manage,  liquidate, and sell the Purchased Securities and any other Collateral
or any portion thereof, collect the payments due with respect to the Purchased
Securities  and any other Collateral or any portion thereof, and  do  anything
that  Buyer  is authorized hereunder to do.  Subject to Paragraph  23,  Seller
shall  pay  all  costs and expenses incurred by Buyer in connection  with  the
appointment and activities of such receiver.
       Buyer  may  enforce  its  rights and remedies hereunder  without  prior
judicial process or hearing, and Seller hereby expressly waives, to the extent
permitted  by law, any right Seller might otherwise have to require  Buyer  to
enforce  its  rights by judicial process.  Seller also waives, to  the  extent
permitted  by law, any defense Seller might otherwise have to the Obligations,
arising  from use of nonjudicial process, enforcement and sale of all  or  any
portion of the Collateral or Purchased Securities and any other Collateral  or
from  any  other  election  of remedies.  Seller recognizes  that  nonjudicial
remedies  are  consistent  with the usages of the  trade,  are  responsive  to
commercial necessity and are the result of a bargain at arm's length.
       Except as provided in Paragraph 23, Buyer shall have all the rights and
remedies provided herein, provided by applicable federal, state, foreign,  and
local laws in equity, and under any other agreement between Seller and Buyer.
       Except as provided in Paragraph 23, upon the occurrence of an Event  of
Default,  Buyer  shall  have the right to exercise any of  its  rights  and/or
remedies  without presentment, demand, protest or further notice of any  kind,
all of which are hereby expressly waived by Seller.

20.   DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE
      No failure on the part of Buyer to exercise, and no delay in exercising,
any  right,  power or remedy hereunder shall operate as a waiver  hereof,  nor
shall  any  single or partial exercise by Buyer of any right, power or  remedy
hereunder  preclude any other or further exercise thereof or the  exercise  of
any  other  right, power or remedy.  Except as provided in Paragraph  23,  all
rights  and  remedies  of  Buyer provided for herein  are  cumulative  and  in
addition to any and all other rights and remedies provided by law, the Program
Documents  and  the other instruments and agreements contemplated  hereby  and
thereby.   Except as provided in Paragraph 23, Buyer may exercise at any  time
after  the occurrence of an Event of Default one or more remedies,  as  it  so
desires,  and  may thereafter at any time and from time to time  exercise  any
other remedy or remedies.

21.   USE OF EMPLOYEE PLAN ASSETS
       If  assets of an employee benefit plan subject to any provision of  the
Employee Retirement Income Security Act of 1974 ("ERISA") are intended  to  be
used  by  either  party hereto (the "Plan Party") in a Transaction,  the  Plan
Party shall so notify the other party prior to the Transaction. The Plan Party
shall  represent in writing to the other party that the Transaction  does  not
constitute  a  prohibited  transaction under  ERISA  or  is  otherwise  exempt
therefrom, and the other party may proceed in reliance thereon but  shall  not
be required so to proceed.

22.   INDEMNITY
       The  powers conferred on Buyer hereunder are solely for its  protection
and  do not impose any duty on it to exercise any such powers.  Following  the
occurrence of an Event of Default, Buyer shall have no duty of care to  Seller
as  to  any Purchased Security or any other Collateral or with respect to  the
taking of any necessary steps to preserve rights against other parties, or any
other  obligation pertaining to such Purchased Security or Collateral.  Except
to  the  extent  of any loss, expense, liability or damage caused  by  Buyer's
breach  of  the Program Documents, Seller and Seller's successors and  assigns
waive all rights whatsoever against Buyer for any loss, expense, liability  or
damage  Seller may suffer as a result of actions taken pursuant to the Program
Documents,  including  those arising under any "mortgagee  in  possession"  or
similar doctrine.  Seller agrees to, and shall, indemnify Buyer, Agent,  their
respective  Affiliates  and  their respective officers,  directors,  partners,
employees,   representatives  and  agents  (collectively,   the   "Indemnified
Parties",  each an "Indemnified Party") from, and hold each of  them  harmless
against,   any  and  all  losses,  liabilities,  claims,  damages,  judgments,
penalties,  suits, actions, costs, disbursements or expenses  (including,  but
not  limited  to,  attorneys' fees, legal expenses and the allocated  cost  of
internal counsel) whether or not suit is brought and settlement costs  imposed
on, asserted against or incurred by any of them as a result of, or arising out
of,  or  in any way related to, or by reason of, any investigation, litigation
or other proceeding (whether or not such Indemnified Party is a party thereto)
relating to, resulting from or arising out of any of the Program Documents and
all  other documents related thereto, any breach of a representation, warranty
or  covenant  of  Seller or Seller's officer in this Agreement  or  any  other
Program  Document, and all actions taken pursuant thereto (but  excluding  any
such  costs  to the extent incurred by reason of gross negligence  or  willful
misconduct  on  the  part  of the Indemnified Party to  be  indemnified).   In
addition,  Seller  shall  compensate and indemnify Buyer  and  Agent  for  all
reasonable  costs and expenses that Buyer may sustain in connection  with  the
protection of Buyer's rights under or the enforcement of the Program Documents
or any other documents received by Buyer or Custodian in connection therewith.
Seller  agrees to pay, and reimburse Buyer, Agent and Custodian for, all  fees
and  taxes  in  connection  with the recording or filing  of  instruments  and
documents  in public offices, payment or discharge of any taxes or liens  upon
or  in respect of the Purchased Securities and all other fees, costs and other
expenses  in  connection  with  protecting,  maintaining  or  preserving   the
Purchased  Securities and Buyer's interest therein, whether  through  judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Purchased Securities.   Seller's
indemnity  obligations contained in this Paragraph 22 shall continue  in  full
force  and  effect  notwithstanding the full payment of  all  Obligations  and
notwithstanding the discharge thereof or termination of this Agreement.

23.   LIMITATION ON RECOURSE.
       Notwithstanding any provision of this Agreement, except as provided  in
this Paragraph 23, and except with respect to the indemnification provided  in
Paragraph  22  and  in  Section 6 of the Custody Agreement,  Buyer  shall  not
enforce  the  liability and obligation of Seller to perform  and  observe  the
obligations contained in this Agreement by any action or proceeding wherein  a
money  judgment shall be sought against Seller, except that Buyer may bring  a
foreclosure  action,  action  for specific performance  or  other  appropriate
action  or proceeding to enable Buyer to enforce and realize upon its interest
under  this Agreement, and its interest in the Purchased Securities,  and  any
other  Collateral  given  to  Buyer under the  Program  Documents  (including,
without limitation, any Income held in a deposit account pursuant to Paragraph
14);  provided,  however, that any judgment in any such action  or  proceeding
shall be enforceable against Seller only to the extent of Seller's interest in
the  Purchased Securities and in any other Collateral given to  Buyer.   Buyer
agrees  that  it  shall  not sue for, seek or demand any  deficiency  judgment
against  Seller  in any such action or proceeding, under or by  reason  of  or
under  or in connection with this Agreement.  The provisions of this Paragraph
23  shall not, however, (i) constitute a waiver, release or impairment of  any
obligation evidenced or secured by the Program Documents except to the  extent
of  the  limitations in money judgments and deficiency judgments set forth  in
this  Paragraph 23; (ii) impair the right of Buyer to name Seller as  a  party
defendant  in any action or suit for judicial foreclosure and sale  under  the
Program  Documents; (iii) impair the right of Buyer to obtain the  appointment
of  a receiver; (iv) impair the right of Buyer to bring suit (and seek a money
judgment  therein)  with respect to fraud or intentional misrepresentation  by
Seller or any other person or entity in connection with the Program Documents;
(v)  impair  the right of Buyer to obtain payments on the Purchased Securities
received  by  Seller after the occurrence of an Event of Default; (vi)  impair
the  right  of  Buyer to bring suit (and seek a money judgment  therein)  with
respect  to  any  misappropriation by Seller of  Loan  payments  collected  in
advance;  (vii)  impair  the right of Buyer to obtain  insurance  proceeds  or
condemnation  awards due to Buyer under this Agreement;  or  (viii)  apply  to
losses  arising out of any misrepresentation, wilful misconduct  or  fraud  by
Seller  or  its  agents or employees or to any suit or money judgment  related
thereto.

24.   WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS
       Except as provided in Paragraph 23, Seller hereby expressly waives,  to
the  fullest  extent  permitted  by law, every  statute  of  limitation  on  a
deficiency judgment, any reduction in the proceeds of any Purchased Securities
as  a  result of restrictions upon Buyer or Custodian contained in the Program
Documents or any other instrument delivered in connection therewith,  and  any
right  that  it  may have to direct the order in which any  of  the  Purchased
Securities  shall  be  disposed of in the event of  any  disposition  pursuant
hereto.

25.   REIMBURSEMENT
       All sums expended by Buyer in connection with the exercise of any right
or remedy provided for herein shall be and remain Seller's obligation.  Seller
agrees  to pay, with interest at the Default Rate, which interest shall accrue
30  days  after receipt by Seller of a written request (including all  related
invoices)  from Buyer for payment, the reasonable out-of-pocket  expenses  and
reasonable  attorneys'  fees  incurred by Buyer,  Agent  and/or  Custodian  in
connection  with the preparation, negotiation, administration and  enforcement
of  the  Program Documents, the taking of any action, including legal  action,
required  or  permitted to be taken by Buyer, Agent and/or Custodian  pursuant
thereto,  any "due diligence" or Loan Agent reviews conducted by Agent  or  on
its  behalf  or any refinancing or restructuring in the nature of a "workout";
provided, however, that (i) the fees of Buyer's counsel in connection with the
negotiation  of  this  Agreement prior to the date  hereof  shall  not  exceed
$30,000,  and (ii) the Agent's initial "due diligence" fees shall  not  exceed
$15,000,  and  subsequent "due diligence" fees shall not  exceed  $30,000  per
annum (absent a Default).

26.   UNDERWRITING GUIDELINE AMENDMENTS
       Buyer  shall review any proposed changes to the Underwriting Guidelines
submitted by Seller within ten (10) business days of receipt of such  proposed
change.   Seller  may assume that any such proposed change  is  acceptable  to
Buyer  if Seller has not received notice stating otherwise from Buyer  at  the
end of such period.

27.   FURTHER ASSURANCES
       Seller  agrees  to do such further acts and things and to  execute  and
deliver  to  Buyer  such additional assignments, acknowledgments,  agreements,
powers  and  instruments as are reasonably required by  Buyer  to  carry  into
effect the purposes of the Agreement, to perfect the interests of Buyer in the
Purchased  Securities or to better assure and confirm unto Buyer  its  rights,
powers and remedies hereunder.

28.   ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION
       This  Agreement  supersedes and integrates all  previous  negotiations,
contracts,  agreements and understandings between the parties  relating  to  a
sale   and   repurchase  of  Purchased  Securities  and  Additional  Purchased
Securities  thereto, and it, together with the other Program  Documents,  each
Confirmation,  and the other documents delivered pursuant hereto  or  thereto,
contains  the  entire final agreement of the parties.  No  prior  negotiation,
agreement,  understanding or prior contract shall have any validity hereafter.
This Agreement and the other Program Agreements are the result of negotiations
among and have been reviewed by counsel to the Agent, the Seller and the other
parties, and are the products of all parties.  Accordingly, they shall not  be
construed  against  the Buyer or the Agent merely because of  the  Agent's  or
Buyer's involvement in their preparation.

29.   TERMINATION
       This  Agreement  shall remain in effect until the earlier  of  (i)  the
Termination  Date  and  (ii) the occurrence of a Default.   However,  no  such
termination shall affect Seller's outstanding obligations to Buyer at the time
of such termination.  Seller's obligations to indemnify Buyer pursuant to this
Agreement shall survive the termination hereof.

30.   ASSIGNMENT
      The Program Documents are not assignable by Seller.  Buyer may from time
to  time  assign  all  or a portion of its rights and obligations  under  this
Agreement  and  the  Program Documents; provided,  however  that  Buyer  shall
maintain,  for review by Seller upon written request, a register of  assignees
and  a  copy  of an executed assignment and acceptance by Buyer  and  assignee
("Assignment  and Acceptance"), specifying the percentage or portion  of  such
rights  and  obligations assigned.  Upon such assignment,  (a)  such  assignee
shall  be  a  party hereto and to each Program Document to the extent  of  the
percentage  or portion set forth in the Assignment and Acceptance,  and  shall
succeed  to the applicable rights and obligations of Buyer hereunder, and  (b)
Buyer  shall,  to  the extent that such rights and obligations  have  been  so
assigned  by  it,  be released from its obligations hereunder  and  under  the
Program  Documents.  Unless otherwise stated in the Assignment and Acceptance,
Seller  shall  continue to take directions solely from Buyer unless  otherwise
notified  by  Buyer  in  writing.   Buyer may distribute  to  any  prospective
assignee any document or other information delivered to Buyer by Seller.

31.   AMENDMENTS, ETC.
       No  amendment  or  waiver of any provision of this  Agreement  nor  any
consent  to any failure to comply herewith or therewith shall in any event  be
effective unless the same shall be in writing and signed by Seller and  Buyer,
and  then  such amendment, waiver or consent shall be effective  only  in  the
specific instance and for the specific purpose for which given.

32.   SEVERABILITY
      If any provision of Program Document is declared invalid by any court of
competent  jurisdiction, such invalidity shall not affect any other  provision
of  the Program Documents, and each Program Document shall be enforced to  the
fullest extent permitted by law.

33.   BINDING EFFECT; GOVERNING LAW
       This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective successors and assigns, except that Seller may not
assign  or  transfer  any of its rights or obligations under  this  Agreement,
Confirmation  or any other Program Document without the prior written  consent
of  Buyer.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS PRINCIPLES THEREOF.

34.   CONSENT TO JURISDICTION
       SELLER HEREBY WAIVES TRIAL BY JURY.  SELLER HEREBY IRREVOCABLY CONSENTS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN
THE  UNITED  STATES  DISTRICT COURT FOR THE SOUTHERN  DISTRICT  OF  NEW  YORK,
ARISING  OUT  OF  OR  RELATING  TO THE PROGRAM  DOCUMENTS  IN  ANY  ACTION  OR
PROCEEDING.   SELLER  HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION  SELLER  MAY
HAVE  TO,  PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE  OF  NEW
YORK  AND  THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT  OF  NEW
YORK,  WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE  PROGRAM
DOCUMENTS.

35.   SINGLE AGREEMENT
       Seller  and Buyer acknowledge that, and have entered hereinto and  will
enter into each Transaction hereunder in consideration of and in reliance upon
the  fact  that, all Transactions hereunder constitute a single  business  and
contractual  relationship and have been made in consideration of  each  other.
Accordingly, Seller and Buyer each agree (i) to perform all of its obligations
in  respect  of  each  Transaction  hereunder,  and  that  a  default  in  the
performance  of  any  such obligations shall constitute a  default  by  it  in
respect of all Transactions hereunder, and (ii) that payments, deliveries  and
other transfers made by either of them in respect of any Transaction shall  be
deemed  to  have been made in consideration of payments, deliveries and  other
transfer in respect of any other Transaction hereunder, and the obligations to
make  any such payments, deliveries and other transfers may be applied against
each other and netted.

36.   INTENT
       Seller  and  Buyer  recognize that each Transaction  is  a  "repurchase
agreement"  as that term is defined in Section 101 of Title 11 of  the  United
States  Code, as amended ("USC") (except insofar as the Loans subject to  such
Transaction  or  the  term of such Transaction would  render  such  definition
inapplicable), and a "securities contract" as that term is defined in  Section
741  of  Title  11  of the USC (except insofar as the Loans  subject  to  such
Transaction  or  the  term of such Transaction would  render  such  definition
inapplicable).
       It  is  understood  that  Buyer's  right  to  liquidate  the  Purchased
Securities delivered to it in connection with the Transactions hereunder or to
exercise  any other remedies pursuant to Paragraph 19 hereof is a  contractual
right  to liquidate such Transaction as described in Sections 555 and  559  of
Title 112 of the USC.
       Seller  and  Buyer agree and acknowledge that if Seller is an  "insured
deposit institution," as such term is defined in the Federal Deposit Insurance
Act,  as  amended  ("FDIA"), then each Transaction hereunder is  a  "qualified
financial contract," as that term is defined in FDIA and any rules,  order  or
policy statements thereunder (except insofar as the Loans subject such to such
Transaction would render such definition inapplicable).
      It is understood that this Agreement constitutes a "netting contract" as
defined  in  and  subject  to  Title  IV  of  the  Federal  Deposit  Insurance
Corporation  Improvement Act of 1991 ("FDICIA"), and each payment  entitlement
and  payment  obligation under any Transaction hereunder  shall  constitute  a
"covered  contractual  payment  entitlement" or "covered  contractual  payment
obligation", respectively, as defined in and subject to FDICIA (except insofar
as one or both of the parties is not a "financial institution" as that term is
defined in FDICIA).

37.   INTERPRETATION
       The  paragraph  headings  appearing  herein  are  included  solely  for
convenience of reference and are not intended to affect the interpretation  of
any provision of this Agreement.

38.   NOTICES AND OTHER COMMUNICATIONS
       Any  notice required or permitted by this Agreement shall be in writing
and shall be effective and deemed delivered only when received by the party to
which  it  is sent; provided, however, that a facsimile transmission shall  be
deemed to be received when transmitted so long as the transmitting machine has
provided  an  electronic confirmation of such transmission.  Any  such  notice
shall  be sent to a party at the address or facsimile transmission number  set
forth  in  the  signature page of the Custody Agreement, as  such  address  or
number        may        be        changed        by        such        party.
            IN WITNESS WHEREOF, Seller and Buyer have caused their names to be
signed  to  this  Master  Repurchase Agreement by  their  respective  officers
thereunto duly authorized as of the date first above written.
METROPOLITAN  MORTGAGE  &  SECURITIES  CO.,  INC.,  as  Seller  (jointly   and
severally)
By:
Name:
Title:

METWEST MORTGAGE SERVICES, INC., as Seller
(jointly and severally)
By:
Name:
Title:

NATIONSBANC  MORTGAGE CAPITAL CORPORATION,
as Buyer and Agent, as applicable
By:
Name:
Title:

                                 EXHIBIT A
                              TRANSACTION NOTICE
                                                      DATE:
[Name and Address of Buyer]

      The undersigned executes and delivers this notice ("Transaction Notice")
pursuant to the requirements of the Master Repurchase Agreement, dated as of
March 24, 1998 (the "Repurchase Agreement") between NationsBanc Mortgage
Capital Corporation ("Buyer") and Metropolitan Mortgage & Securities Co., Inc.
("Seller"), as such Agreement may be modified from time to time, in connection
with the submission for sale thereunder of the Purchased Securities identified
on the Loan Schedule delivered herewith (together with any other Collateral
related thereto) and the delivery of the related Custodian's Loan Files to
Custodian.  All capitalized terms used in this Transaction Notice shall have
the same meanings herein as they have in the Repurchase Agreement.
      Seller hereby represents and certifies to Buyer that:

            1.    As of this date, Seller is in compliance with all of the
      terms and conditions of the Repurchase Agreement.

            2.    Except as otherwise previously disclosed in writing to
      Buyer, Seller's representations and warranties set forth in the Program
      Documents and any other related document are true and accurate as of the
      date of this Transaction Notice.

            3.    The Purchased Securities, which are identified on such Loan
      Schedule satisfy the requirements of the eligibility set forth in the
      Program Documents between Buyer and Seller.

            4.    Upon payment to Seller by Buyer of the Purchase Price in
      respect of the Transaction involving the Purchased Securities, all of
      Seller's right (including the power to convey title thereto), title and
      interest in and to each document constituting the Custodian's Loan Files
      delivered to Custodian or held by or on behalf of Seller with respect to
      each Purchased Security shall be transferred, assigned, set over and
      otherwise conveyed to Buyer.

            5.    The proposed general terms of the sale for the Purchased
      Securities as of the Purchase Date shall be:
                  A. Outstanding Principal Balance:  $______________
                  B. Number of Loans:                       _______________
                  C. Loan Type:                             _______________
                  D. Repurchase Date:                       _______________
                  E. Lien Payoff required:      No ____ Yes____
                     $______ to ________
                  F. Buyer's Margin Percentage  _______________%

            6.    Other items transferred (see definition of Purchased Assets)
                            ___________________, as Seller
                                                                       By:
                                    Title:
                                    Annex I
                             Buyer Acting as Agent

      This Annex I forms a part of the Master Repurchase Agreement dated as of
March 24, 1998 (the "Agreement") between NationsBanc Mortgage Capital
Corporation and Metropolitan Mortgage & Securities Co., Inc.  This Annex I
sets forth the terms and conditions governing all transactions in which a
party selling securities or buying securities, as the case may be ("Agent"),
in a Transaction is acting as agent for one or more third parties (each, a
"Principal").  Capitalized terms used but not defined in this Annex I shall
have the meanings ascribed to them in the Agreement.
1.    Additional Representations.  Agent hereby makes the following
      representations, which shall continue during the term of any
      Transaction: Principal has duly authorized Agent to execute and deliver
      the Agreement on its behalf, has the power to so authorize Agent and to
      enter into the Transactions contemplated by the Agreement and to perform
      the obligations of Seller or Buyer, as the case may be, under such
      Transactions, and has taken all necessary action to authorize such
      execution and delivery by Agent and such performance by it.
2.    Identification of Principals.  Agent agrees (a) to provide the other
      party, prior to the date on which the parties agree to enter into any
      Transaction under the Agreement, with a written list of Principals for
      which it intends to act as Agent (which list may be amended in writing
      from time to time with the consent of the other party), and (b) to
      provide the other party, before the close of business on the next
      Business Day after orally agreeing to enter into a Transaction, with
      notice of the specific Principal or Principals for whom it is acting in
      connection with such Transaction.  If (i) Agent fails to identify such
      Principal or Principals prior to the close of business on such next
      Business Day or (ii) the other party shall determine in its sole
      discretion that any Principal or Principals identified by Agent are not
      acceptable to it, the other party may reject and rescind any Transaction
      with such Principal or Principals, return to Agent any Purchased
      Securities or portion of the Purchase Price, as the case may be,
      previously transferred to the other party and refuse any further
      performance under such Transaction, and Agent shall immediately return
      to the other party any portion of the Purchase Price or Purchased
      Securities, as the case may be, previously transferred to Agent in
      connection with such Transaction; provided, however, that (A) the other
      party shall promptly (and in any event within one Business Day) notify
      Agent of its determination to reject and rescind such Transaction and
      (B) to the extent that any performance was rendered by any party under
      any Transaction rejected by the other party, such party shall remain
      entitled to any Price Differential or other amounts that would have been
      payable to it with respect to such performance if such Transaction had
      not been rejected.  The other party acknowledges that Agent shall not
      have any obligation to provide it with confidential information
      regarding the financial status of its Principals; Agent agrees, however,
      that it will assist the other party in obtaining from Agent's Principals
      such information regarding the financial status of such Principals as
      the other party may reasonably request.
3.    Limitation of Agent's Liability.  The parties expressly acknowledge that
      if the representations of Agent under the Agreement, including this
      Annex I, are true and correct in all material respects during the term
      of any Transaction and Agent otherwise complies with the provisions of
      this Annex I, then (a) Agent's obligations under the Agreement shall not
      include a guarantee of performance by its Principal or Principals and
      (b) the other party's remedies shall not include a right of setoff in
      respect of rights or obligations, if any, of Agent arising in other
      transactions in which Agent is acting as principal.
4.    Multiple Principals.
      (a)   In the event that Agent proposes to act for more than one
            Principal hereunder, Agent and the other party shall elect whether
            (i) to treat Transactions under the Agreement as transactions
            entered into on behalf of separate Principals or (ii) to aggregate
            such Transactions as if they were transactions by a single
            Principal. Failure to make such an election in writing shall be
            deemed an election to treat Transactions under the Agreement as
            transactions on behalf of separate Principals.
      (b)   In the event that Agent and the other party elect (or are deemed
            to elect) to treat Transactions under the Agreement as
            transactions on behalf of separate Principals, the parties agree
            that (i) Agent will provide the other party, together with the
            notice described in Paragraph 2(b) of this Annex I, notice
            specifying the portion of each Transaction allocable to the
            account of each of the Principals for which it is acting (to the
            extent that any such Transaction is allocable to the account of
            more than one Principal); (ii) the portion of any individual
            Transaction allocable to each Principal shall be deemed a separate
            Transaction under the Agreement; (iii) the margin maintenance
            obligations of Seller under Paragraph 6(a) of the Agreement shall
            be determined on a Transaction-by-Transaction basis (unless the
            parties agree to determine such obligations on a Principal-by-
            Principal basis); and (iv) Buyer's and Seller's remedies under the
            Agreement upon the occurrence of an Event of Default shall be
            determined as if Agent had entered into a separate Agreement with
            the other party on behalf of each of its Principals.
      (c)   In the event that Agent and the other party elect to treat
            Transactions under the Agreement as if they were transactions by a
            single Principal, the parties agree that (i) Agent's notice under
            Paragraph 2(b) of this Annex I need only identify the names of its
            Principals but not the portion of each Transaction allocable to
            each Principal's account; (ii) the margin maintenance obligations
            of Seller under Paragraph 6(a) of the Agreement shall, subject to
            any greater requirement imposed by applicable law, be determined
            on an aggregate basis for all Transactions entered into by Agent
            on behalf of any Principal; and (iii) Buyer's and Seller's
            remedies upon the occurrence of an Event of Default shall be
            determined as if all Principals were a single Seller or Buyer, as
            the case may be.
      (d)   Notwithstanding any other provision of the Agreement (including,
            without limitation, this Annex I), the parties agree that any
            Transactions by Agent on behalf of an employee benefit plan under
            ERISA shall be treated as Transactions on behalf of separate
            Principals in accordance with Paragraph 4(b) of this Annex I (and
            all margin maintenance obligations of the parties shall be
            determined on a Transaction-by-Transaction basis).
5.    Interpretation of Terms. All references to "Seller" or "Buyer", as the
      case may be, in the Agreement shall, subject to the provisions of this
      Annex I (including, among other provisions, the limitations on Agent's
      liability in Paragraph 3 of this Annex I), be construed to reflect that
      (i) each Principal shall have, in connection with any Transaction or
      Transactions entered into by Agent on its behalf, the rights,
      responsibilities, privileges and obligations of a "Seller" or "Buyer",
      as the case may be, directly entering into such Transaction or
      Transactions with the other party under the Agreement, and (ii) Agent's
      Principal or Principals have designated Agent as their sole agent for
      performance of Seller's  obligations to Buyer or Buyer's obligations to
      Seller, as the case may be, and for receipt of performance by Buyer of
      its obligations to Seller or Seller of its obligations to Buyer, as the
      case may be, in connection with any Transaction or Transactions under
      the Agreement (including, among other things, as Agent for each
      Principal in connection with transfers of Securities, cash or other
      property and as agent for giving and receiving all notices under the
      Agreement).  Both Agent and its Principal or Principals shall be deemed
      "parties" to the Agreement and all references to a "party" or "either
      party" in the Agreement shall be deemed revised accordingly.