EXHIBIT 10.29


                               CUSTODIAL AGREEMENT


            CUSTODIAL AGREEMENT (this "Custodial Agreement") dated as of August
2, 2002, made by and among:

            (i)   AMERICAN HOME MORTGAGE CORP., a New York corporation, as
                  borrower, (the "Borrower");

            (ii)  DEUTSCHE BANK NATIONAL TRUST COMPANY, as custodian for the
                  Lender pursuant to this Custodial Agreement referred to below
                  (in such capacity, the "Custodian"); and

            (iii) MORGAN STANLEY BANK (the "Lender").


                                    RECITALS

            The Borrower and the Lender are parties to the Master Loan and
Security Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified and in effect from time to time, the "Loan Agreement"),
pursuant to which the Lender has agreed, subject to the terms and conditions of
the Loan Agreement, to make revolving credit loans to the Borrower to finance
Eligible Mortgage Loans (as defined therein) owned by the Borrower.

            It is a condition precedent to the effectiveness of the Loan
Agreement that the parties hereto execute and deliver this Custodial Agreement
to provide for the appointment of the Custodian as custodian hereunder.
Accordingly, the parties hereto agree as follows:

SECTION 1. DEFINITIONS.

            Unless otherwise defined herein, terms defined in the Loan Agreement
shall have their respective assigned meanings when used herein, and the
following terms shall have the following meanings:

            "Affiliate" shall mean (i) with respect to the Lender, MS & Co. and
Morgan Stanley Dean Witter & Co., and (ii) with respect to any other Person, any
"affiliate" of such Person as such term is defined in the United States
Bankruptcy Code in effect from time to time.

            "Agency" shall mean Fannie Mae or Freddie Mac.

            "Agency Guide" shall mean, with respect to Fannie Mae securities,
the Fannie Mae Selling Guide and the Fannie Mae Servicing Guide, with respect to
Freddie Mac securities, the Freddie Mac Sellers' and Servicers' Guide, and with
respect to California Program securities, the applicable program manual and the
servicer's guide, in each case including all exhibits thereto, as such Agency
Guide may be amended, supplemented or otherwise modified from time to time."

            "Agency Program" shall mean a specific mortgage backed securities
swap or purchase program under the relevant Agency Guide or as otherwise
approved by the Agency with respect to Mortgage Loans originated pursuant to the
Agency Guide.

            "Assignment of Mortgage" means, with respect to any mortgage, an
assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related mortgaged property is located to reflect the assignment and pledge of
the mortgage.

            "Authorized Representative" shall have the meaning specified in
Section 18 hereof.

            "Business Day" shall mean any day other than (i) a Saturday or
Sunday or (ii) a day on which the New York Stock Exchange, the Federal Reserve
Bank of New York or the Custodian is authorized or obligated by law or executive
order to be closed.

            "Collateral" shall have the meaning assigned thereto in the Loan
Agreement.

            "Cooperative Corporation" shall mean the cooperative apartment
corporation that holds legal title to a Cooperative Project and grants occupancy
rights to units therein to stockholders through Proprietary Leases or similar
arrangements.

            "Cooperative Mortgage Loan" shall mean a Mortgage Loan that is
secured by a first lien on a perfected security interest in Cooperative Shares
and the related Proprietary Lease granting exclusive rights to occupy the
related Cooperative Unit in the building owned by the related Cooperative
Corporation.

            "Cooperative Project" shall mean all real property owned by a
Cooperative Corporation including the land, separate dwelling units and all
common elements.

            "Cooperative Shares" shall mean the shares of stock issued by a
Cooperative Corporation and allocated to a Cooperative Unit and represented by a
stock certificate.

            "Cooperative Unit" shall mean a specific unit in a Cooperative
Project.

            "Custodial Agreement" shall mean this Agreement, as the same shall
be amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.

            "Custodial Identification Certificate" shall mean the certificate
executed by the Borrowers in connection with the pledge of Eligible Mortgage
Loans to the Lender to be held by the Custodian pursuant to this Custodial
Agreement, a form of which is attached as Annex 3 hereto.

            "Electronic Agent" shall have the meaning assigned to such term in
Section 2 of the Electronic Tracking Agreement.

            "Electronic Tracking Agreement" shall mean the Electronic Tracking
Agreement, dated as of the date hereof, among the Borrowers, the Lender, the
Electronic Agent and MERS, as the same shall be amended, supplemented or
otherwise modified from time to time.

            "Eligible Cooperative Mortgage Loan" shall mean a Cooperative
Mortgage Loan as to which the representations and warranties in Section 6.10 of
the Loan Agreement and the eligibility criteria set forth in Part I of Schedule
1 of the Loan Agreement are correct.

            "Eligible Mortgage Loan" shall mean a Mortgage Loan secured by a
first mortgage lien on a one-to-four family residential property (a) as to which
the representations and warranties in Section 6.10 and Part I of Schedule 1 of
the Loan Agreement are correct and (b) which is either an Agency Eligible
Mortgage Loan, an Alternate `A' Mortgage Loan, a California Program Mortgage
Loan, an Eligible Cooperative Mortgage Loan, a Jumbo Mortgage Loan, a MERS
Designated Mortgage Loan or a Conduit Eligible Mortgage Loan; provided, that in
no event shall any Eligible Mortgage Loan be a security for purposes of any
securities or blue sky laws.

            "Exception" shall mean, with respect to any Mortgage Loan, any of
the following: the variances from the requirements of Section 2 hereof with
respect to the Mortgage Files (giving effect to the Borrowers' right to deliver
certified copies in lieu of original documents in certain circumstances).

            "MERS Designated Mortgage Loan" shall have the meaning assigned to
such term in Section 3 of the Electronic Tracking Agreement.

            "MERS Identification Number" shall mean the eighteen digit number
permanently assigned to each MERS Designated Mortgage Loan.

            "MERS Procedures Manual" shall mean the MERS Procedures Manual
attached as Exhibit B to the Electronic Tracking Agreement, as it may be
amended, supplemented or modified from time to time.

            "MERS Report" shall mean the schedule listing MERS Designated
Mortgage Loans and other information prepared by the Electronic Agent pursuant
to the Electronic Tracking Agreement.

            "MERS(R) System" shall mean the Electronic Agent's mortgage
electronic registry system, as more particularly described in the MERS
Procedures Manual."

            "Mortgage File" shall mean, as to each Mortgage Loan, those
documents listed in Section 2 of this Custodial Agreement that are delivered to
the Custodian or which at any time come into the possession of the Custodian.

            "Mortgage Loan" shall mean a mortgage loan which the Custodian has
been instructed to hold for the Lender pursuant to this Custodial Agreement.

            "Mortgage Loan Schedule" shall mean a list (in computer readable
form) of Eligible Mortgage Loans to be pledged pursuant to the Loan Agreement,
attached to a Custodial Identification Certificate, setting forth, as to each
Eligible Mortgage Loan, the applicable information specified on Annex 1 to this
Custodial Agreement.

            "Mortgage Loan Schedule and Exception Report" shall mean a list of
Eligible Mortgage Loans delivered by the Custodian to the Lender on each
Business Day, reflecting the Mortgage Loans held by the Custodian for the
benefit of the Lender, which includes codes indicating any Exceptions with
respect to each Mortgage Loan listed thereon. Each Mortgage Loan Schedule and
Exception Report shall set forth (a) the Mortgage Loans being pledged to the
Lender on any applicable Funding Date as well as the Mortgage Loans previously
pledged to the Lender and held by the Custodian hereunder, (b) any Mortgage Loan
that has been released to the Borrower pursuant to Section 5 hereof and the date
such Mortgage Loan was released and (c) all Exceptions with respect thereto,
with any updates thereto from the time last delivered.

            "Officer's Certificate" shall mean a certificate signed by a
Responsible Officer of the Person delivering such certificate and delivered as
required by this Custodial Agreement.

            "Opinion of Counsel" shall mean a written opinion letter of counsel
in form and substance reasonably acceptable to the party receiving such opinion
letter.

            "Proceeds" shall mean whatever is receivable or received when
Collateral or proceeds are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including return premiums, with respect to
any insurance relating thereto.

            "Proprietary Lease" shall mean a lease on (or occupancy agreement
with respect to) a Cooperative Unit evidencing the possessory interest of the
owner of the Cooperative Shares or the Seller in such Cooperative Unit.

            "Recognition Agreement" shall mean, with respect to a Cooperative
Mortgage Loan, an agreement executed by a Cooperative Corporation which, among
other things, acknowledges the lien of the Mortgage on the Mortgaged Property in
question.

            "Report" shall mean a report in computer readable form prepared by
the Custodian, which shall be in a form acceptable to the Lender and the
Custodian detailing, with respect to any Mortgage Loan that has been released by
the Custodian, the following: (i) the Mortgage Loan identification number and
borrower name, (ii) the location to which such Mortgage File was delivered by
the Custodian and (iii) the date on which such Mortgage File was released by the
Custodian.

            "Review Procedures" shall have the meaning specified in Section 3(c)
hereof.

            "Security Agreement" the specific security agreement creating a
security interest on and pledge of the Cooperative Shares and the appurtenant
Proprietary Lease securing a Cooperative Mortgage Loan.

            "Trust Receipt" shall mean a Trust Receipt in the form annexed
hereto as Annex 2 delivered to the Lender by the Custodian covering all of the
Mortgage Loans subject to this Custodial Agreement from time to time, as
reflected on the Mortgage Loan Schedule and Exception Report attached thereto in
accordance with Section 3(e).

SECTION 2. DELIVERY OF MORTGAGE FILES.

            No later than 11:00 p.m., New York City time, one (1) Business Day
prior to any Funding Date (in the case of the first 150 Eligible Mortgage Loans
delivered in connection with any Funding Date) plus one additional Business Day
prior to any Funding Date (for each additional 100 Eligible Mortgage Loans in
excess thereof delivered in connection with any Funding Date) (provided, that,
such timing requirements shall be inapplicable in the case of Mortgage Loans
already held by the Custodian for any other reason), the Borrower shall release
to the Custodian the following original documents pertaining to each Eligible
Mortgage Loan to be pledged to the Lender and included in the Borrowing Base on
such Funding Date, each of which Mortgage Loans shall be identified in a
Mortgage Loan Schedule delivered therewith, in a computer readable format
acceptable to the Borrower and the Custodian, with a copy of such Mortgage Loan
Schedule delivered to the Lender (or, if another time is specified below for
such release or delivery, at such other time):

      (A)   With respect to each Eligible Mortgage Loan:

            (a)   The original Mortgage Note bearing all intervening
                  endorsements, endorsed "Pay to the order of _________ without
                  recourse" and signed in the name of the last endorsee (the
                  "Last Endorsee") (in the event that the Mortgage Loan was
                  acquired by the Last Endorsee in a merger, the signature must
                  be in the following form: "[Last Endorsee], successor by
                  merger to [name of predecessor]"; in the event that the
                  Mortgage Loan was acquired or originated by the Last Endorsee
                  while doing business under another name, the signature must be
                  in the following form: "[Last Endorsee], formerly known as
                  [previous name]").

            (b)   The original of the guarantee executed in connection with the
                  Mortgage Note (if any).

            (c)   The original Mortgage with evidence of recording thereon, or a
                  copy thereof together with an Officer's Certificate of the
                  related Borrower, title company, escrow agent or closing
                  attorney certifying that such represents a true and correct
                  copy of the original and that such original has been submitted
                  for recordation in the appropriate governmental recording
                  office of the jurisdiction where the Mortgaged Property is
                  located.

            (d)   The originals of all assumption, modification, consolidation
                  or extension agreements (if any) with evidence of recording
                  thereon, or copies thereof together with an Officer's
                  Certificate of the related Borrower, title company, escrow
                  agent or closing attorney certifying that such represent true
                  and correct copies of the originals and that such originals
                  have each been submitted for recordation in the appropriate
                  governmental recording office of the jurisdiction where the
                  Mortgaged Property is located (provided, that the Custodian
                  shall have no duty to verify whether any such documents
                  exist).

            (e)   Except in the case of a MERS Designated Mortgage Loan, the
                  original Assignment of Mortgage in blank for each Mortgage
                  Loan, in form and substance acceptable for recording and
                  signed in the name of the Last Endorsee (in the event that the
                  Mortgage Loan was acquired by the Last Endorsee in a merger,
                  the signature must be in the following form: "[Last Endorsee],
                  successor by merger to [name of predecessor]"; in the event
                  that the Mortgage Loan was acquired or originated while doing
                  business under another name, the signature must be in the
                  following form: "[Last Endorsee], formerly known as [previous
                  name]").

            (f)   Except in the case of a MERS Designated Mortgage Loan, the
                  originals of all intervening assignments of mortgage (if any)
                  with evidence of recording thereon, showing an unbroken chain
                  of title from the originator thereof to the Last Endorsee or
                  copies thereof together with an Officer's Certificate of the
                  related Borrower, title company, escrow agent or closing
                  attorney certifying that such represent true and correct
                  copies of the originals and that such originals have each been
                  submitted for recordation in the appropriate governmental
                  recording office of the jurisdiction where the Mortgaged
                  Property is located.

            (g)   The original attorney's opinion of title and abstract of title
                  or the original mortgagee title insurance policy, or if the
                  original mortgagee title insurance policy has not been issued,
                  the irrevocable commitment to issue the same; provided, that,
                  notwithstanding anything to the contrary herein, in the case
                  of any Mortgage Loan delivered hereunder, such documents shall
                  be delivered to the Custodian not later than 12:00 noon, New
                  York City time, 14 calendar days following the related Funding
                  Date; provided, further, that the foregoing proviso shall in
                  no way modify the Custodian's duties and reporting obligations
                  otherwise set forth herein or impose additional reporting
                  obligations upon the Custodian.

            (h)   The original of any security agreement, chattel mortgage or
                  equivalent document executed in connection with the Mortgage
                  Loan; provided, that the Custodian shall have no duty to
                  verify whether any such documents exist.

            (i)   Solely with respect to each MERS Designated Mortgage Loan, a
                  MERS Report.

      (B)   With respect to each Eligible Cooperative Mortgage Loan:

            (a)   the original Security Agreement;

            (b)   the original Cooperative Shares;

            (c)   a stock power executed in blank by the Person in whose name
                  the Cooperative Shares are issued;

            (d)   the Proprietary Lease or occupancy agreement, accompanied by
                  an assignment in blank of such proprietary lease;

            (e)   a Recognition Agreement executed by the Cooperative
                  Corporation, which requires the Cooperative Corporation to
                  recognize the rights of the lender and its successors in
                  interest and assigns, under the Cooperative Mortgage Loan,
                  accompanied by an assignment of such recognition agreement in
                  blank;

            (f)   UCC-1 financing statements with recording information thereon
                  from the appropriate governmental recording offices if
                  necessary to perfect the security interest of the Cooperative
                  Mortgage Loan under the Uniform Commercial Code in the
                  jurisdiction in which the Cooperative Project is located,
                  accompanied by UCC-3 financing statements executed in blank
                  for recordation of the change in the secured party thereunder;
                  and

            (g)   any guarantees, if applicable.

            From time to time, the Borrower shall forward to the Custodian
additional original documents or additional documents evidencing any assumption,
modification, consolidation or extension of a Mortgage Loan approved by the
Borrower, in accordance with the terms of the Loan Agreement, and upon receipt
of any such other documents. Subject to the inclusion of these documents within
the Custodial Identification Certificate and Mortgage Loan Schedule delivered by
the Borrower, upon receipt, the Custodian shall hold such additional documents.

            With respect to any documents which have been delivered or are being
delivered to recording offices for recording and have not been returned to the
Borrower in time to permit their delivery hereunder at the time required, in
lieu of delivering such original documents, the Borrower shall deliver to
Custodian a true copy thereof with an Officer's Certificate of the applicable
Borrower, title company, escrow agent or closing attorney certifying that such
copy is a true, correct and complete copy of the original, which has been
transmitted for recordation. The Borrower shall deliver such original documents
to the Custodian promptly when they are received.

SECTION 3.  CUSTODIAL IDENTIFICATION CERTIFICATE; MORTGAGE LOAN SCHEDULE AND
EXCEPTION REPORT; TRUST RECEIPT.

            (a) No later than 12:00 p.m., New York City time, two (2) Business
Days prior to each Funding Date, the Borrower shall provide the Custodian with a
Custodial Identification Certificate and a related Mortgage Loan Schedule (such
information contained on the Mortgage Loan Schedule shall be delivered to the
Custodian in computer-readable form) with respect to the Eligible Mortgage Loans
to be pledged to the Lender on such Funding Date. If the Custodian has received
such Custodial Identification Certificate by the time set forth above, and has
received a Mortgage File for a Mortgage Loan identified on the Mortgage Loan
Schedule attached thereto by the time set forth in Section 2 hereof, then on
such Funding Date, the Custodian will deliver, via electronic transmission
acceptable to the Lender and the Custodian (or via facsimile in the event of a
delivery failure via such electronic transmission), no later than 11:00 a.m.,
New York City time, to the Lender a Mortgage Loan Schedule and Exception Report
for each Mortgage Loan pledged hereunder on such date, with Exceptions
identified by the Custodian as current as of the date and time of delivery of
such Mortgage Loan Schedule and Exception Report.

            (b) Notwithstanding and in addition to the foregoing, on each
Business Day, as of the opening of business on such Business Day, the Custodian
shall deliver to the Borrower and the Lender, via electronic transmission
acceptable to the Lender and the Custodian (or via facsimile in the event of a
delivery failure via such electronic transmission), a superceding Mortgage Loan
Schedule and Exception Report, in each case no later than 12:00 noon, New York
City time, which shall supercede and replace any and all previously delivered
Mortgage Loan Schedule and Exception Reports and which shall reflect the
Exceptions identified by the Custodian as of the Business Day prior to the date
of delivery of the applicable Mortgage Loan Schedule and Exception Report.

            (c) Each Mortgage Loan Schedule and Exception Report shall list all
Exceptions using such codes as shall be in form and substance agreed to by the
Custodian and the Lender. Each Mortgage Loan Schedule and Exception Report shall
be superseded by a subsequently issued Mortgage Loan Schedule and Exception
Report. The delivery of each Mortgage Loan Schedule and Exception Report to the
Lender shall be the Custodian's representation that, other than the Exceptions
listed as part of the Exception Report: (i) all documents required to be
delivered in respect of such Mortgage Loan pursuant to Section 2 of this
Custodial Agreement have been delivered and are in the possession of the
Custodian as part of the Mortgage File for such Mortgage Loan, (ii) all such
documents have been reviewed by the Custodian in accordance with the review
procedures attached hereto as Annex 4 (the "Review Procedures") and appear on
their face to be regular and to relate to such Mortgage Loan and to satisfy
(except in the case of a MERS Designated Mortgage Loan) the requirements set
forth in Section 2 of this Custodial Agreement, (iii) each Mortgage Loan (except
in the case of a MERS Designated Mortgage Loan) identified on such Mortgage Loan
Schedule and Exception Report is being held by the Custodian as the bailee for
the Lender and/or its designees pursuant to this Agreement and (iv) each MERS
Designated Mortgage Loan is being held by MERS as the bailee for the Lender
and/or its designees pursuant to the Loan Agreement.

            (d) In connection with a Mortgage Loan Schedule and Exception Report
delivered hereunder by the Custodian, the Custodian shall make no
representations as to and shall not be responsible to verify (A) the validity,
legality, enforceability, due authorization, recordability, sufficiency, or
genuineness of any of the documents contained in each Mortgage File, (B) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (C) whether such Mortgage Loan is an "Eligible Mortgage Loan" pursuant
to the Loan Agreement. Subject to the following sentence, the Borrower and the
Lender hereby give the Custodian notice that from and after the Funding Date,
the Lender shall have a security interest in each Mortgage Loan identified on a
Mortgage Loan Schedule and Exception Report until such time that the Custodian
receives written notice from the Lender that the Lender no longer has a security
interest in such Mortgage Loan. In the event that the Lender does not make a
Loan to the Borrower prior to 5:00 p.m., New York City time, on such Funding
Date, upon written notice thereof from the Borrower, acknowledged by the Lender,
the Custodian shall hold or release to the Borrower, pursuant to the Borrowers'
written instructions, the Mortgage Loans in respect of the Mortgage Loan
Schedule and Exception Report delivered by the Custodian on such Funding Date.
Each Mortgage Loan Schedule and Exception Report delivered to the Lender by the
Custodian, via electronic transmission acceptable to the Lender and the
Custodian (or via facsimile in the event of a delivery failure via such
electronic transmission), shall be deemed superseded and canceled upon the
delivery of a subsequent Mortgage Loan Schedule and Exception Report.

            (e) In addition to the foregoing, on the initial Funding Date, the
Custodian shall deliver to the Lender, no later than 11:00 a.m., New York City
time, a Trust Receipt with a Mortgage Loan Schedule and Exception Report
attached thereto via electronic transmission acceptable to the Lender and the
Custodian (or via facsimile in the event of a delivery failure via such
electronic transmission) (with the original to follow on the next Business Day).
Each Mortgage Loan Schedule and Exception Report delivered by the Custodian to
the Lender shall supersede and cancel the Mortgage Loan Schedule and Exception
Report previously delivered by the Custodian to the Lender hereunder, and shall
replace the then existing Mortgage Loan Schedule and Exception Report to be
attached to the Trust Receipt. Notwithstanding anything to the contrary set
forth herein, in the event that the Mortgage Loan Schedule and Exception Report
attached to the Trust Receipt is different from the most recently delivered
Mortgage Loan Schedule and Exception Report, then the most recently delivered
Mortgage Loan Schedule and Exception Report shall control and be binding upon
the parties hereto.

SECTION 4. OBLIGATIONS OF THE CUSTODIAN.

            (a) The Custodian shall maintain continuous custody of all items
constituting the Mortgage Files in secure facilities in accordance with
customary standards for such custody and shall reflect in its records the
interest of the Lender therein. Each Mortgage Note (and Assignment of Mortgage)
shall be maintained in fire resistant facilities.

            (b) With respect to the documents constituting each Mortgage File
relating to a Mortgage Loan listed on the related Mortgage Loan Schedule and
Exception report, the Custodian shall (i) act exclusively as the bailee of, and
custodian for, the Lender, (ii) hold all documents constituting such Mortgage
File received by it for the exclusive use and benefit of the Lender, and (iii)
make disposition thereof only in accordance with the terms of this Custodial
Agreement or with written instructions furnished by the Lender; provided,
however, that in the event of a conflict between the terms of this Custodial
Agreement and the written instructions of the Lender, the Lender's written
instructions shall control.

            (c) In the event that (i) the Lender, the Borrower or the Custodian
shall be served by a third party with any type of levy, attachment, writ or
court order with respect to any Mortgage File or any document included within a
Mortgage File or (ii) a third party shall institute any court proceeding by
which any Mortgage File or a document included within a Mortgage File shall be
required to be delivered otherwise than in accordance with the provisions of
this Custodial Agreement, the party receiving such service shall promptly
deliver or cause to be delivered to the other parties to this Custodial
Agreement copies of all court papers, orders, documents and other materials
concerning such proceedings. The Custodian shall, to the extent permitted by
law, continue to hold and maintain all the Mortgage Files that are the subject
of such proceedings pending a final, nonappealable order of a court of competent
jurisdiction permitting or directing disposition thereof. Upon final
determination of such court, the Custodian shall dispose of such Mortgage File
or any document included within such Mortgage File as directed by the Lender,
which shall give a direction consistent with such court determination. Expenses
and fees (including, without limitation, attorney's fees) of the Custodian
incurred as a result of such proceedings shall be borne by the Borrower.

            (d) The Lender hereby acknowledges that the Custodian shall not be
responsible for the validity and perfection of the Lender's security interest in
the Collateral hereunder, other than the Custodian's obligation to take
possession of Collateral as set forth in Section 2 hereof.

            (e) The Custodian shall have no duties or responsibilities except
those that are specifically set forth herein, shall not be liable except for the
performance of such duties and obligations and no implied covenants or
obligations shall be read into this Custodial Agreement against the Custodian.

            (f) The Custodian shall have no responsibility nor duty with respect
to any Mortgage Files while not in its possession.

            (g) The Custodian shall be under no obligation to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, acknowledgement, consent, order, document in the Mortgage File, or
any other document.

            (h) The Custodian shall not be liable with respect to any action
taken or omitted to be taken in accordance with the written direction,
instruction, acknowledgment, consent or any other communication from the Lender.

            (i) The provisions of this Section 4 shall survive the resignation
or removal of the Custodian and the termination of this Custodial Agreement.

SECTION 5. RELEASE OF COLLATERAL.

            (a) From time to time until the Custodian is otherwise notified in
writing by the Lender, which notice shall be given by the Lender only following
the occurrence of an Event of Default, the Custodian shall, upon receipt of
written request of the Borrower and written authorization of the Lender, to
release documentation relating to Mortgage Loans in the possession of the
Custodian to the Borrower, or its designee, for the purpose of correcting
documentary deficiencies relating thereto against a Request for Release and
Receipt executed by the Borrower in the form of Annex 5-A hereto. The Borrower
or its designee shall return to the Custodian each document previously released
from the Custodian's Mortgage File within eighteen (18) calendar days of receipt
thereof. The Borrower hereby further represent and warrant to the Lender that
any such request by the Borrower for release of Collateral shall be solely for
the purposes of correcting clerical or other non-substantial documentation
problems in preparation for returning such Collateral to the Custodian for
ultimate sale or exchange and that the Borrower has requested such release in
compliance with all terms and conditions of such release set forth in the Loan
Agreement.

            (b) From time to time until the Custodian is otherwise notified in
writing by the Lender, which notice shall be given by the Lender only following
the occurrence of an Event of Default, the Custodian shall, upon written receipt
from the Borrower or its designee of a Request for Release of Documents and
Receipt in the form of Annex 5-B hereto and written authorization of the Lender,
release to the Borrower or its designee the related Custodian's Mortgage File or
the documents set forth in such request and receipt. The Borrower or its
designee shall hold each Mortgage File delivered to it pursuant to this Section
5(b) as bailee for the Lender. The Borrower or its designee shall return to the
Custodian each document previously released from the Custodian's Mortgage File
within eighteen (18) calendar days of receipt thereof. The Borrower hereby
further represent and warrant to the Lender that any such request by the
Borrower or its designee for release of Collateral shall be solely for the
purposes of foreclosure or servicing of any of the Mortgage Loans.

            (c) (i) Upon receipt of a Request for Release of Documents executed
by the Borrower in the form of Annex 5-C hereto, with an electronic copy to the
Lender, the Custodian shall release Mortgage Files in its possession to approved
third-party purchasers listed on Annex 12 attached hereto (each an "Approved
Purchaser") for the purpose of resale thereof. The Borrower or such Approved
Purchaser shall return to the Custodian each document previously released from
the Custodian's Mortgage File within eighteen (18) calendar days of receipt
thereof.

            (ii) Any transmittal of documentation for Mortgage Loans in the
      possession of the Custodian in connection with the sale thereof to an
      Approved Purchaser will be under cover of a transmittal letter
      substantially in the form attached hereto as Annex 10 duly completed by
      the Custodian and executed by the Custodian.

            (iii) Any transmittal of documentation for Mortgage Loans in the
      possession of the Custodian in connection with the shipment to a custodian
      or trustee in connection with the formation of a mortgage pool supporting
      a mortgage-backed security (an "MBS") will be under cover of a transmittal
      letter substantially in the form attached hereto as Annex 11. Promptly
      upon (x) the remittance by such Approved Purchaser of the full purchase
      price of the Mortgage Loan or (y) the issuance of such MBS, the Lender
      shall notify the Custodian thereof. In connection with any request to
      deliver Mortgage Files pursuant to this Section 5(c), the Borrower shall
      provide the Custodian with a Mortgage Loan Schedule in computer readable
      form and shall provide no less than one Business Day's notice for each 150
      Mortgage Files requested for release; provided, that such prior notice
      shall not be required if the Custodian is to be the recipient of such
      files on behalf of such third-party purchaser or is the custodian or
      trustee in respect of such MBS.

            (d) From time to time until the Custodian is otherwise notified in
writing by the Lender, and with the prior written consent of the Lender, the
Borrower may substitute for one or more Eligible Mortgage Loans constituting the
Collateral one or more substitute Eligible Mortgage Loans having aggregate
Collateral Value equal to or greater than the Collateral Value of the Mortgage
Loans being substituted for, or obtain the release of one or more Mortgage Loans
constituting Collateral hereunder; provided that, after giving effect to such
substitution or release, the Secured Obligations then outstanding shall not
exceed the Borrowing Base, which determination shall be made solely by the
Lender. In connection with any such requested substitution or release, the
Borrower will provide notice to the Custodian and the Lender in the form of
Annex 5-D attached hereto no later than 3:00 p.m., New York City time, on the
date of such request, specifying the Mortgage Loans to be substituted for or
released and the substitute Mortgage Loans to be pledged hereunder in
substitution therefor, if any, and shall deliver with such notice a Custodial
Identification Certificate and a revised Mortgage Loan Schedule indicating any
substitute Mortgage Loans. The Custodian will effect the requested substitution
or release no later than 8:00 p.m., New York City time, two Business Days
following the day on which such request was timely made for the first 150 such
substitute Mortgage Loans (with one additional Business Day for each 100
additional substitute Mortgage Loans) (provided, that, such timing requirements
shall be inapplicable in the case of Mortgage Loans already held by the
Custodian for any other reason) after the Custodian has certified to the Lender
on such Business Day that the matters set forth in Section 3(c) hereof with
respect to any substitute Mortgage Loans are true and correct. Each such
substitution or release shall be deemed to be a representation and warranty by
the Borrower that any substitute Mortgage Loans are Eligible Mortgage Loans and
that after giving effect to such substitution or release, the Secured
Obligations then outstanding shall not exceed the Borrowing Base.

            (e) So long as the Custodian has not received written notice that
any Event of Default has occurred and is continuing, the Custodian and the
Lender shall take such steps as they may reasonably be directed from time to
time by the Borrower in writing, which the Borrower deem necessary and
appropriate, to transfer promptly and deliver to the Borrower any Mortgage File
in the possession of the Custodian relating to any Mortgage Loan previously
included in the Borrowing Base as an Eligible Mortgage Loan but which the
Borrower, with the written consent of the Lender, have notified the Custodian
has ceased to be an Eligible Mortgage Loan. In furtherance of the foregoing,
upon receipt of written request from the Borrower in the form of Annex 5-D
hereto, which must be acknowledged by the Lender, and provided that no Event of
Default has occurred and is continuing of which the Custodian shall have
received written notice, the Custodian shall release to the Borrower the
requested Mortgage Files.

            (f) Following the Lender's written instructions to the Custodian not
to release any item of Collateral, the Custodian shall not release, or incur any
liability to any Borrower or any other Person for refusing to release, any item
of Collateral to any Borrower or any other Person without the express prior
written consent and at the direction of the Lender.

            (g) The Custodian shall at all times monitor any release of
Collateral under this Section 5 and shall track the period of time which has
elapsed for any such release of Collateral.

            (h) Notwithstanding the foregoing, any Request for Release of
Documents may be delivered to the Lender via electronic mail which attaches the
appropriate form referenced in clauses (a) and (b) above, and the Lender's
affirmative response via return electronic mail with an electronic copy to the
Custodian shall constitute written consent for the purpose of this Section 5.

SECTION 6. FEES AND EXPENSES OF CUSTODIAN.

            The Custodian shall charge such fees for its services under this
Custodial Agreement as are set forth in a separate agreement between the
Custodian and the Borrower, the payment of which fees, together with the
Custodian's expenses (including, without, limitation, attorney's fees) in
connection herewith, shall be solely the obligation of the Borrower. The
provisions of this Section 6 shall survive any resignation or removal of the
Custodian or the termination or assignment of this Custodial Agreement.

SECTION 7. REMOVAL OR RESIGNATION OF CUSTODIAN.

            (a) The Custodian may at any time resign and terminate its
obligations under this Custodial Agreement upon at least 60 days' prior written
notice to the Borrower and the Lender. Promptly after receipt of notice of the
Custodian's resignation, the Lender shall appoint, by written instrument, a
successor custodian, subject to written approval by the Borrower (which approval
shall not be unreasonably withheld). One original counterpart of such instrument
of appointment shall be delivered to each of the Borrower, the Custodian and the
successor custodian.

            (b) The Lender, with the consent of the Borrower, upon at least
sixty (60) days' prior written notice to the Custodian and the Lender, may
remove and discharge the Custodian (or any successor custodian thereafter
appointed) from the performance of its obligations under this Custodial
Agreement. Promptly after the giving of notice of removal of the Custodian, the
Lender shall appoint, by written instrument, a successor custodian, with the
consent of the Borrower. One original counterpart of such instrument of
appointment shall be delivered to each of the Lender, the Borrower, the
Custodian and the successor custodian.

            (c) In the event of any such resignation or removal, upon the
surrender of any outstanding Trust Receipts, the Custodian shall promptly
transfer to the successor custodian, as directed in writing, all the Mortgage
Files being administered under this Custodial Agreement and, if the endorsements
on the Mortgage Notes and the Assignments of Mortgage have been completed in the
name of the Custodian, assign the Mortgages and endorse without recourse the
Mortgage Notes to the successor Custodian or as otherwise directed in writing by
the Lender. The cost of the shipment of Mortgage Files arising out of the
resignation of the Custodian, if such resignation occurs within one year from
the date of this Custodial Agreement, shall be at the expense of the Custodian;
provided, however, that if the reason for the Custodian's resignation is due to
the non-payment of the fees and expenses due it hereunder, then such shipment
costs shall not be an expense of the Custodian, but shall be at the expense of
the Borrower. Any cost of shipment arising out of the removal of the Custodian
or the resignation of the Custodian after one year from the date of this
Custodial Agreement shall be at the expense of the Borrower. The Borrower shall
be responsible for the fees and expenses of the successor custodian and the fees
and expenses for endorsing the Mortgage Notes and assigning the Mortgages to the
successor custodian if required pursuant to this paragraph.

            (d) In the event that no successor Custodian shall have been
appointed within the 60 day notice period described in Section 7(a) or 7(b)
hereof, the Custodian may either (i) deliver the Mortgage Files to the Lender or
its designee upon surrender of all outstanding Trust Receipts or (ii) in the
event that the Lender or its designee fails to accept the Mortgage Files,
petition any court of competent jurisdiction to appoint a successor custodian.

SECTION 8. EXAMINATION OF MORTGAGE FILES.

            Upon reasonable prior notice to the Custodian and at the Borrowers'
expense, the Lender, the Borrower and each of their respective agents,
accountants, attorneys and auditors will be permitted during normal business
hours at its offices to examine the Mortgage Files, documents, records and other
papers in the possession of or under the control of the Custodian relating to
any or all of the Mortgage Loans.

SECTION 9. INSURANCE OF CUSTODIAN.

            At its own expense, the Custodian shall maintain at all times during
the existence of this Custodial Agreement and keep in full force and effect
fidelity insurance, theft of documents insurance, forgery insurance and errors
and omissions insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, all as is customary for insurance typically
maintained by banks which act as custodian of collateral substantially similar
to the Collateral. Upon written request, the Lender shall be entitled to receive
a certificate of the respective insurer that such insurance is in full force and
effect.

SECTION 10. REPRESENTATIONS AND WARRANTIES.

            (a) Each party represents and warrants to each other party that:

                  (i) each party has the requisite power and authority and the
            legal right to execute and deliver, and to perform its obligations
            under, this Custodial Agreement, and has taken all necessary
            corporate action to authorize its execution, delivery and
            performance of this Custodial Agreement;

                  (ii) no consent or authorization of, filing with, or other act
            by or in respect of, any arbitrator or Governmental Authority and no
            consent of any other Person (including, without limitation, any
            stockholder or creditor of such party) is required in connection
            with the execution, delivery, performance, validity or
            enforceability of this Custodial Agreement; and

                  (iii) this Custodial Agreement has been duly executed and
            delivered on behalf of the Custodian and constitutes a legal, valid
            and binding obligation of the Custodian enforceable in accordance
            with its terms, except as enforceability may be limited by
            bankruptcy, insolvency, reorganization, moratorium or similar laws
            affecting the enforcement of creditors' rights generally and by
            general principles of equity (whether enforcement is sought in a
            proceeding in equity or at law).

            (b) The Custodian and the Borrower each represent to the Lender that
the Custodian is not an Affiliate of either Borrower.

SECTION 11. STATEMENTS.

            (a) Upon the reasonable written request of the Lender or the
Borrower, the Custodian shall provide the Lender or the Borrower, as applicable,
with a list of all the Mortgage Loans for which the Custodian holds a Mortgage
File pursuant to this Custodial Agreement. Such list shall be in the form of a
Mortgage Loan Schedule and Exception Report.

            (b) No later than 12:00 noon, New York City time, on each Business
Day, and otherwise upon the reasonable request of the Lender, the Custodian
shall deliver to the Lender and the Borrower a Report with respect to all
Mortgage Loans currently held by the Custodian pursuant to this Custodial
Agreement.

SECTION 12. NO ADVERSE INTEREST OF CUSTODIAN.

            By execution of this Custodial Agreement, the Custodian represents
and warrants that it currently holds, and during the existence of this Custodial
Agreement shall hold, no adverse interest, by way of security or otherwise, in
any Mortgage Loan, and hereby waives and releases any such interest which it may
have in any Mortgage Loan as of the date hereof. The Mortgage Loans shall not be
subject to any security interest, lien or right to set-off by Custodian or any
third party claiming through Custodian, and Custodian shall not pledge,
encumber, hypothecate, transfer, dispose of, or otherwise grant any third party
interest in, the Mortgage Loans.

SECTION 13. INDEMNIFICATION OF CUSTODIAN.

            (a) Except as set forth in this Section 12, neither the Custodian
nor any of its directors, officers, agents or employees shall be liable to the
Lender or the Borrower for any action taken or not taken by it or them hereunder
other than as a result of the breach by the Custodian of its obligations
hereunder, which breach was caused by negligence, lack of good faith or willful
misconduct on the part of the Custodian or any of its directors, officers,
agents or employees, provided that in no event shall the Custodian or any of its
directors, officers, agents or employees have any liability with respect to any
special, indirect, punitive or consequential damages suffered by the Lender or
the Borrower.

            (b) The Borrower, agrees to indemnify and hold the Custodian and its
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of this Custodial
Agreement or any action taken or not taken by it or them hereunder unless such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements were imposed on, incurred by or asserted
against the Custodian because of the breach by the Custodian of its obligations
hereunder, which breach was caused by negligence, lack of good faith or willful
misconduct on the part of the Custodian or any of its directors, officers,
agents or employees. The foregoing indemnification shall survive any resignation
or removal of the Custodian or the termination or assignment of this Custodial
Agreement.

            (c) In the event that the Custodian fails to produce a Mortgage
Note, Assignment of Mortgage or any other document related to a Mortgage Loan
that was in its possession pursuant to Section 2 within two (2) Business Days
after required or requested by the Borrowers or Lender, and provided that (i)
Custodian previously delivered to the Lender a Mortgage Loan Schedule and
Exception Report which did not list such document as an Exception on the related
Funding Date; (ii) such document is not outstanding pursuant to a Request for
Release and Receipt in the form annexed hereto as Annex 5-A; and (iii) such
document was held by the Custodian on behalf of the Borrower or Lender, as
applicable, (a "Custodial Delivery Failure"), then the Custodian shall (a) with
respect to any missing Mortgage Note, with respect to which a Custodial Delivery
Failure has occurred and has continued in excess of three (3) Business Days,
promptly deliver to the Lender or Borrower upon request, a Lost Note Affidavit
in the form of Annex 9 hereto unless the original Mortgage Note shall have been
delivered prior to such time and (b) with respect to any missing document
related to such Mortgage Loan, including but not limited to a missing Mortgage
Note, (1) indemnify the Borrower or Lender in accordance with the succeeding
paragraph of this Section 13 and, (2) at the Lender's option, at any time the
long term obligations of the Custodian are rated below the second highest rating
category of Moody's Investors Service, Inc. or Standard and Poor's Ratings
Group, a division of McGraw-Hill, Inc., obtain and maintain an insurance bond in
the name of the Lender, and its successors in interest and assigns, insuring
against any losses associated with the loss of such document, in an amount equal
to the then outstanding principal balance of the related Mortgage Loan or such
lesser amount requested by the Lender in the Lender's sole discretion.

            (d) The Custodian agrees to indemnify and hold the Lender and the
Borrower, and their respective designees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of a Custodial Delivery
Failure or the Custodian's negligence, lack of good faith or willful misconduct.
The foregoing indemnification shall survive any termination or assignment of
this Custodial Agreement.

SECTION 14. RELIANCE OF CUSTODIAN.

            (a) In the absence of bad faith on the part of the Custodian, the
Custodian may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any request, instruction
certificate, opinion or other document furnished to the Custodian, reasonably
believed by the Custodian to have been signed or presented by an Authorized
Representative and conforming in form only to the requirements of this Custodial
Agreement; but in the case of any certificate or opinion which by any provision
hereof is specifically required to be furnished to the Custodian, the Custodian
shall be under a duty to examine the same in accordance with the requirements of
this Custodial Agreement.

            (b) In the absence of bad faith on the part of the Custodian, the
Custodian may conclusively rely upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, coupon or other paper or document reasonably believed by the
Custodian to be genuine and to have been signed or presented by an Authorized
Representative.

            (c) In the absence of bad faith on the part of the Custodian, the
Custodian shall be entitled to conclusively rely in good faith upon the written
direction, order, instruction or other communication from the Lender or the
Borrower reasonably believed by the Custodian to be genuine and to have been
signed or presented by an Authorized Representative.

            (d) This Section shall not be construed to limit the effect of any
provision of this Custodial Agreement respecting the rights or remedies of the
Custodian or any other right of the Custodian.

            (e) If the Custodian requests instructions from the Lender with
respect to any act, action or failure to act in connection with this Custodial
Agreement, Custodian shall be entitled (without incurring any liability therefor
to Lender, the Borrower or any other person) to refrain from taking such action
and continue to refrain from acting unless and until the Custodian shall have
received written instructions from the Lender with respect to a Mortgage File.

            (f) The Custodian may consult with counsel and the advice or any
opinion of counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or opinion of counsel.

            (g) None of the provisions of this Custodial Agreement shall require
the Custodian to expend or risk its own funds or otherwise to incur any
liability, financial or otherwise, in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.

            (h) Any corporation into which the Custodian may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Custodian shall be a
party, or any corporation succeeding to the business of the Custodian shall be
the successor of the Custodian hereunder without the execution or filing of any
paper with any party hereto or any further act on the part of any of the parties
hereto except where an instrument of transfer or assignment is required by law
to effect such succession, anything herein to the contrary notwithstanding.

SECTION 15. TERM OF CUSTODIAL AGREEMENT.

            Promptly after written notice from the Lender of the termination of
the Loan Agreement and payment in full of all amounts owing to the Lender
thereunder and under the Note, the Custodian shall deliver all documents
remaining in the Mortgage Files to the Borrower, and this Custodial Agreement
shall thereupon terminate.

SECTION 16. NOTICES.

            All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given when received by the
recipient party at the address shown on its signature page hereto, or at such
other addresses as may hereafter be furnished to each of the other parties by
like notice. Any such demand, notice or communication hereunder shall be deemed
to have been received on the date delivered to or received at the premises of
the addressee. The Custodian's office is located at the address set forth on its
signature page hereto, and the Custodian shall notify the Lender and the
Borrower if such address should change.

SECTION 17. GOVERNING LAW.

            This Custodial Agreement shall be construed in accordance with the
laws of the State of New York, and the obligations, rights, and remedies of the
parties hereunder shall be determined in accordance with such laws without
regard to the conflict of laws doctrine applied in such state (other than
Section 5-1401 of the New York General Obligations Law).

SECTION 18. AUTHORIZED REPRESENTATIVES.

                  Each individual designated as an authorized representative of
the Lender or its successors or assigns, the Borrower and the Custodian,
respectively (an "Authorized Representative"), is authorized to give and receive
notices, requests and instructions and to deliver certificates and documents in
connection with this Custodial Agreement on behalf of the Lender, the Borrower
and the Custodian, as the case may be, and the specimen signature for each such
Authorized Representative, initially authorized hereunder, is set forth on
Annexes 6, 7 and 8 hereof, respectively. From time to time, the Lender, the
Borrower and the Custodian or their respective successors or permitted assigns
may, by delivering to the others a revised annex, change the information
previously given pursuant to this Section 18, but each of the parties hereto
shall be entitled to rely conclusively on the then current annex until receipt
of a superseding annex.

SECTION 19. AMENDMENT.

                  This Custodial Agreement may be amended from time to time by
written agreement signed by the Borrower, the Lender and the Custodian.

SECTION 20. CUMULATIVE RIGHTS.

            The rights, powers and remedies of the Custodian and the Lender
under this Custodial Agreement shall be in addition to all rights, powers and
remedies given to the Custodian and the Lender by virtue of any statute or rule
of law, the Loan Agreement or any other agreement, all of which rights, powers
and remedies shall be cumulative and may be exercised successively or
concurrently without impairing the Lender's security interest in the Collateral.

SECTION 21. BINDING UPON SUCCESSORS.

            All rights of the Custodian and the Lender under this Custodial
Agreement shall inure to the benefit of the Custodian and the Lender and their
successors and permitted assigns, and all obligations of the Borrower shall bind
its successors and assigns.

SECTION 22. ENTIRE AGREEMENT; SEVERABILITY.

            This Custodial Agreement and the other Loan Documents contain the
entire agreement with respect to the Collateral among the Custodian, the Lender
and the Borrower. If any of the provisions of this Custodial Agreement shall be
held invalid or unenforceable, this Custodial Agreement shall be construed as if
not containing such provisions, and the rights and obligations of the parties
hereto shall be construed and enforced accordingly between the Lender and the
Borrower, and this Custodial Agreement contains the entire Agreement with
respect to the rights and obligations of the Custodian.

SECTION 23. EXECUTION IN COUNTERPARTS.

                  This Custodial Agreement may be executed in counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.

SECTION 24. TAX REPORTS.

            The Custodian shall not be responsible for the preparation or filing
of any reports or returns relating to federal, state or local income taxes with
respect to this Custodial Agreement, other than in respect of the Custodian's
compensation or for reimbursement of expenses.

SECTION 25. PLEDGING OF THE MORTGAGE LOANS BY THE LENDER.

            In connection with a pledge of the Mortgage Loans as collateral for
an obligation of the Lender, the Lender may pledge its interest in the Mortgage
Files covered held by the Custodian for the benefit of the Lender from time to
time by delivering written notice to the Custodian stating that the Lender has
pledged its interest in the identified Mortgage Loans and Mortgage Files, and
the identity of the party to whom the Mortgage Loans have been pledged (such
party, the "Pledgee"). Upon receipt of such notice from the Lender, the
Custodian shall mark its records to reflect the pledge of the Mortgage Loans by
the Lender to the Pledgee. The Custodian's records shall reflect the pledge of
the Mortgage Loans by the Lender to the Pledgee until such time as the Custodian
receives written instructions from the Lender and acknowledged by the Pledgee
that the Mortgage Loans are no longer pledged by the Lender to the Pledgee, at
which time the Custodian shall change its records to reflect the release of the
pledge of the Mortgage Loans and that the Custodian is holding the Mortgage
Loans as custodian for, and for the benefit of, the Lender; provided, however
that such pledge shall not affect the right of the Custodian to rely on
instructions from the Lender hereunder.

SECTION 26. TRANSMISSION OF MORTGAGE FILES.

                  Prior to any shipment of any Mortgage Files hereunder, the
Borrower shall deliver to the Custodian written instructions as to the method of
shipment and the shipper that the Custodian is to utilize in connection with the
transmission of such Mortgage Files or other loan documents in the performance
of the Custodian's duties hereunder. The Borrower shall arrange for the
provision of such services at its sole cost and expense (or, at the Custodian's
option, reimburse the Custodian for all costs and expenses incurred by the
Custodian consistent with such instructions) and will maintain such insurance
against loss or damage to the Mortgage Files or other loan documents as the
Borrower may deem appropriate. It is expressly agreed that in no event shall the
Custodian have any liability for any losses or damages to any person, including
without limitation, the Borrower, arising out of actions of the Custodian
consistent with the instructions of the Borrower. In the event that the
Custodian does not receive such written instructions, the Custodian shall be
authorized and shall be indemnified as provided herein to utilize a nationally
recognized courier service.


                            [SIGNATURE PAGE FOLLOWS]
<PAGE>


            IN WITNESS WHEREOF, this Custodial Agreement was duly executed by
the parties hereto as of the day and year first above written.


                                       AMERICAN HOME MORTGAGE CORP.


                                       By /s/ Richard Silver
                                          --------------------------------------
                                          Name:  Richard Silver
                                          Title: Controller


                                       Address for Notices:


                                          520 Broadhollow Road
                                          Melville, New York  11747
                                          Attention:  Michael Strauss
                                          Telecopier No.: (631) 777-3253
                                          Telephone No.: (516) 396-7700
<PAGE>


                                       DEUTSCHE BANK NATIONAL TRUST COMPANY,



                                       By: /s/ Jerome W. Harney
                                           -------------------------------------
                                           Name:  Jerome W. Harney
                                           Title: Vice President



                                       By: /s/ Aimee Kemmeter
                                           -------------------------------------
                                           Name:  Aimee Kemmeter
                                           Title: Assistant Vice President


                                       Address for Notices:


                                           1761 East St. Andrew Place
                                           Santa Ana, California  92705
                                           Attention:  Mortgage Custody - AH022C
                                           Telecopier No.:  714-247-6035
                                           Telephone No.:  714-247-6000
<PAGE>


                                       MORGAN STANLEY BANK



                                       By: /s/ Andrew B. Neuberger
                                           -------------------------------------
                                           Name:  Andrew B. Neuberger
                                           Title: Vice President


                                       Address for Notices:


                                           2500 Lake Park Boulevard
                                           West Valley City, Utah  84120
                                           Attention:
                                           Telecopier No.:
                                           Telephone No.:

                                           with a copy to:

                                           1585 Broadway
                                           New York, New York  10036
                                           Attention:  Mr. Andrew Neuberger
                                           Telecopier No.: 212 761 0093
                                           Telephone No.: 212 761 4242