Exhibit 10.17.2


                           COLLATERAL AGENCY AGREEMENT



                                  By and Among:



                                 AHM SPV I, LLC,
                                  As Borrower,

                                       and

                          AMERICAN HOME MORTGAGE CORP.,
                                 As the Servicer

                                       and

                        CREDIT LYONNAIS NEW YORK BRANCH,
                            As Administrative Agent,

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                               As Collateral Agent



                           Dated as of August 8, 2003

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I GENERAL TERMS........................................................1

      1.1.  Certain Definitions................................................1

ARTICLE II APPOINTMENT OF COLLATERAL AGENT.....................................1

      2.1.  Appointment........................................................1
      2.2.  Collateral Agency Fees.............................................2

ARTICLE III COLLATERAL PROCEDURES..............................................2

      3.1.  Collateral.........................................................2
      3.2.  Delivery of Collateral to the Collateral Agent.....................3
      3.3.  Power of Attorney..................................................5
      3.4.  Redemption of Mortgage Collateral..................................6
      3.5.  Releases of Mortgage Notes for Servicing...........................9
      3.6.  [RESERVED]........................................................10
      3.7.  Wet Borrowings....................................................10
      3.8.  Collateral Reporting..............................................10
      3.9.  Further Obligations of the Collateral Agent.......................11
      3.10. Segregation of Collateral.........................................11
      3.11. Delivery of Required Documents to the Administrative Agent........12
      3.12. Take-Out Commitment Reporting.....................................12

ARTICLE IV THE COLLATERAL AGENT...............................................13

      4.1. Instructions to the Collateral Agent...............................13
      4.2. Reliance by the Collateral Agent; Responsibility of the
               Collateral Agent...............................................13
      4.3.  Agents and Affiliates.............................................16
      4.4.  Successor Collateral Agent........................................16
      4.5.  Right of Inspection...............................................17
      4.6.  Accounting in Certain Circumstances...............................17

ARTICLE V INDEMNIFICATION.....................................................18

      5.1.  Indemnities by the Servicer.......................................18

ARTICLE VI MISCELLANEOUS......................................................18

      6.1.  Notices...........................................................18
      6.2.  Amendments, Etc...................................................19
      6.3.  Invalidity........................................................19
      6.4.  Survival of Agreements............................................19
      6.5.  Cumulative Rights.................................................19

                                       (i)
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      6.6.  Construction; Governing Law.......................................19
      6.7.  Successors and Assigns............................................20
      6.8.  The Collateral Agent Representations and Warranties...............20
      6.9.  Rights of La Fayette Program Agent................................20
      6.10. Counterparts......................................................20
      6.11. No Proceedings....................................................20
      6.12. Electronic Counterparts...........................................21
      6.13. Waiver of Jury Trial..............................................21
      6.14. Consent to Jurisdiction; Waiver of Immunities.....................21
      6.15. References to Loan Agreement......................................22


                             SCHEDULES AND EXHIBITS

Schedule I      Collateral Review Functions - ss.3.2(e)
Schedule II     Addresses and Notices - ss.6.1
Schedule III    Approved Investors

Exhibit D-1     Definitions - ss.1
Exhibit D-2     Security Agreement - ss.3.1(a)
Exhibit D-3     Form of Collection Account Control Agreement - ss.3.1(b)
Exhibit D-4     Form of Assignment - ss.3.1(c) and ss.3.2(a)
Exhibit D-5     Form of Transfer Request
Exhibit D-5A    Form of Shipping Request
Exhibit D-6(a)  Form of Bailee and Security Agreement Letter for Approved
                Investors - ss.3.4(b)(i)
Exhibit D-6(b)  Form of Bailee and Security Agreement Letter for Pool
                Custodian ss.3.4(b)(i)
Exhibit D-7     Form of Trustee Receipt and Security Agreement for Approved
                Investors - ss.3.5
Exhibit D-8     Form of Collateral Agent Daily Report - ss.3.8(a)
Exhibit D-9     Borrowing Report
Exhibit D-10    UCC Financing Statements - ss.3.1(d)
Exhibit D-11    Collection Account Release Notice - ss. 3.4(a)
Exhibit D-12    Assignment of Trade
Exhibit D-13    Disbursement Account Control Agreement


                                       ii

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                           COLLATERAL AGENCY AGREEMENT

                           Dated as of August 8, 2003


      THIS COLLATERAL AGENCY AGREEMENT (the "Agreement"), among AHM SPV I, LLC,
a Delaware limited liability company (the "Borrower"), AMERICAN HOME MORTGAGE
CORP., a New York corporation, CREDIT LYONNAIS NEW YORK BRANCH ("CL New York"),
in its capacity as the administrative agent for the "Lenders" under and as
defined in the Loan Agreement referred to below (the "Administrative Agent"),
and DEUTSCHE BANK NATIONAL TRUST COMPANY, in its capacity as collateral agent
hereunder (the "Collateral Agent").

      WHEREAS, the Borrower has entered into a Loan Agreement dated as of August
8, 2003 (as the same may be amended, restated, supplemented or modified from
time to time, the "Loan Agreement"), among the Borrower, the Issuer, CL New
York, as the Administrative Agent, the Banks, and American Home Mortgage Corp.
(the "Servicer"), in its capacity as servicer thereunder, pursuant to which the
Lenders may make secured Advances to the Borrower on a revolving basis;

      WHEREAS, the parties now desire to enter into this Agreement to provide
for the holding and monitoring of Collateral to be furnished pursuant to the
Loan Agreement;

      NOW, THEREFORE, the parties agree as follows:


                                   ARTICLE I

                                  GENERAL TERMS

      1.1. Certain Definitions.

      Unless otherwise defined herein or in the Loan Agreement, terms are used
herein as defined in Exhibit D-1 hereto.


                                   ARTICLE II

                         APPOINTMENT OF COLLATERAL AGENT

      2.1. Appointment.

            (a) The Administrative Agent, on behalf of the holders of the
Obligations, hereby appoints Deutsche Bank National Trust Company, as
"Collateral Agent" under this Agreement and authorizes the Collateral Agent to
take such action on the Administrative Agent's behalf and to exercise such
powers and perform such duties as are hereby expressly delegated to the
Collateral Agent by the terms of this Agreement, together with such powers as
are reasonably incidental thereto.

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            (b) The Collateral Agent hereby accepts such appointment and agrees
to hold, maintain, and administer for the exclusive benefit of the holders of
the Obligations all Collateral at any time delivered to it by or on behalf of
the Borrower as herein provided. The Collateral Agent acknowledges and agrees
that it is acting and will act with respect to the Collateral for the exclusive
benefit of the holders of the Obligations and shall not be subject with respect
to the Collateral in any manner or to any extent to the direction or control of
the Borrower except as expressly permitted hereunder. The Collateral Agent (or
its designee) for the benefit of the Administrative Agent and the holders of the
Obligations, agrees to act in accordance with this Agreement and in accordance
with any written instructions of the Administrative Agent as provided in this
Agreement. Under no circumstances shall the Collateral Agent deliver possession
of Collateral to the Borrower except in accordance with the express terms of
this Agreement or otherwise upon the written instruction of the Administrative
Agent as provided in this Agreement. Upon a written request by the Servicer (who
shall not request substitution of Eligible Mortgage Loans if, as reflected in
the most recent Borrowing Report, total Collateral Value of Eligible Mortgage
Collateral, immediately after giving effect to a requested transfer and any
accompanying substitution of Mortgage Loan Collateral, is less than total
Principal Debt) and approval by the Borrower, Collateral Agent is authorized to
permit substitution of Eligible Mortgage Loans (as certified by the Servicer to
be Eligible Mortgage Loans) unless the Collateral Agent shall have received
written notice from the Administrative Agent that a Default or Event of Default
has occurred.

      2.2. Collateral Agency Fees.

      The Servicer agrees to pay such fees and expenses of the Collateral Agent
as shall be agreed to in writing between the Collateral Agent and Servicer. The
obligation of the Servicer to pay the Collateral Agent's fees and expenses for
its services under this Agreement shall survive the termination of this
Agreement and the earlier resignation or removal of the Collateral Agent.


                                   ARTICLE III

                              COLLATERAL PROCEDURES

      3.1. Collateral.

      The Borrower shall execute and deliver to the Administrative Agent:

            (a) a Security Agreement in favor of the Administrative Agent for
the benefit of the holders of the Obligations in substantially the form of
Exhibit D-2 hereto;

            (b) a Collection Account Control Agreement in favor of the
Administrative Agent for the benefit of the holders of the Obligations
substantially in the form of Exhibit D-3 hereto;

            (c) the Assignments provided for in Section 3.2 hereof in the form
of Exhibit D-4 hereto; and

            (d) UCC financing statements in the form of Exhibit D-10 hereto.

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      3.2. Delivery of Collateral to the Collateral Agent.

            (a) Periodically, the Borrower may deliver Mortgage Loan Collateral
to the Collateral Agent to hold as bailee for the Administrative Agent. The
Borrower may deliver from time to time such other documents as shall be
specified in a notice by the Administrative Agent to the Collateral Agent as
documents that are required to be delivered to the Collateral Agent pursuant to
this Agreement in order to meet requirements of the Loan Agreements or
agreements required by the Loan Agreement. Each delivery shall be made in
association with an assignment of a security interest (the "Assignment") to the
Administrative Agent, for the benefit of the holders of the Obligations, in all
Mortgage Loans, Take-Out Commitments and related Collateral delivered with or
described in such Assignment or any schedules thereto. The Borrower shall use
substantially the form illustrated in Exhibit D-4 hereto for each Assignment, or
such other form as may be acceptable to, or required by, the Administrative
Agent, from time to time.

            (b) Each Assignment delivered to the Collateral Agent shall be
accompanied by a completed Schedule II and Schedule III, using the forms of such
schedules as prescribed in Exhibit D-4 hereto, together with a current Borrowing
Report, and with respect to each Mortgage Loan described in Schedule II to each
Assignment the following items (collectively, the "Principal Mortgage
Documents"):

                  (i) the original of each Mortgage Note, endorsed by the
            Servicer in blank (without recourse) and all intervening
            endorsements thereto;

                  (ii) an original executed assignment in blank for each
            Mortgage securing such Mortgage Loan, in recordable form, executed
            by the Originator, in the case of each Mortgage Loan that is not a
            MERS Designated Mortgage Loan; and

                  (iii) a certified copy of the executed Mortgage related to
            such Mortgage Note, certified by the Servicer, escrow agent, title
            company, closing attorney or an Affiliate of the Servicer as a true
            and correct copy.

            (c) The Servicer shall hold in trust for the Administrative Agent
for the benefit of the holders of the Obligations, with respect to each Mortgage
Loan included in the Collateral (the following being referred to, collectively,
as the "Other Mortgage Documents"):

                  (i) the original filed Mortgage relating to such Mortgage
            Loan; provided, however, that until an original Mortgage is received
            from the public official charged with its filing and recordation, a
            copy, certified by the closing agent to be a true and correct copy
            of the filed and recorded original, may be used by the Borrower to
            satisfy this requirement;

                  (ii) other than with respect to a HUD Repossessed Property
            that is sold to a consumer, a mortgagee's policy of title insurance
            (or binding unexpired commitment to issue such insurance if the
            policy has not yet been delivered to the Servicer) insuring that the
            original mortgagee and its successors and assigns have a perfected,
            first-priority Lien created by the Mortgage securing such Mortgage
            Loan (subject to title exceptions that conform to the related
            Take-Out

<PAGE>

            Commitment) in a policy amount not less than the principal amount of
            such Mortgage Loan;

                  (iii) the original hazard insurance policy, appropriately
            indicating that all insurance proceeds will be paid to the original
            mortgagee and its successors and assigns, referred to in Section
            6.6(b) of the Loan Agreement which relate to such Mortgage Loan, or
            other evidence of insurance acceptable to the Administrative Agent;

                  (iv) the form of current appraisal of the Property described
            in the Mortgage, prepared by a state licensed appraiser, that
            complies with all applicable Governmental Requirements, provided,
            however, that no appraisal shall be required for Mortgage Loans (x)
            financing HUD repossessed Property that is sold to a consumer,
            financed with an FHA loan, fully insurable and in accordance with
            FHA guidelines, but for which an appraisal is not required, or (y)
            representing so called VA Rate Reduction or FHA streamline
            refinances, insurable in accordance with VA and FHA guidelines, but
            for which an appraisal is not required; and

                  (v) all other original documents.

Upon three Business Days' prior written notice by the Administrative Agent to
the Collateral Agent, the Collateral Agent will receive from the Servicer all
such items, held in trust. The Collateral Agent shall hold such items as bailee
for the Administrative Agent or such other party as may be designated in such
notice.

            (d) The Servicer shall provide the Collateral Agent and the
Administrative Agent with full access to all Other Mortgage Documents held in
trust for the Administrative Agent at all times.

            (e) With respect to each Assignment, together with the related
electronic transmission, that is received by the Collateral Agent by 11:30 a.m.
(eastern time) on a Business Day, the Collateral Agent shall include the
Mortgage Loans identified thereon on the Collateral Agent Daily Report to be
delivered on such Business Day, even if the Collateral Agent has not completed
its review of the related Principal Mortgage Documents. The Collateral Agent
shall prepare by 1:00 p.m. (eastern time) on such Business Day, the Collateral
Agent Daily Report provided for in Section 3.8 hereof, and furnish it to the
Administrative Agent and the Borrower. The Collateral Agent shall review the
Principal Mortgage Documents for up to 500 Mortgage Loans delivered with any
such Assignment no later than the opening of business of the Collateral Agent on
the Business Day following delivery of such Collateral Agent Daily Report. The
Collateral Agent shall have one (1) additional Business Day to review each
additional set of 500 Mortgage Loans in excess of the initial set of 500
Mortgage Loans; provided, that, if the Collateral Agent does not complete its
review of any such Principal Mortgage Documents within one (1) Business Day
after receiving such Principal Mortgage Documents and including the related
Mortgage Loan on a Collateral Agent Daily Report, the Collateral Agent shall
report the Collateral Value for any and all such Mortgage Loans as zero on the
Collateral Agent Daily Report for the next Business Day. The Collateral Agent's
responsibility to review such Collateral is limited to the review steps
described on Schedule I hereto.

<PAGE>

            (f) The Collateral Agent shall, acting on behalf of the
Administrative Agent for the benefit of the holders of the Obligations, and as
agent and bailee of, and as custodian for, the Administrative Agent for the
benefit of the holders of the Obligations, retain possession and custody of the
documents delivered to the Collateral Agent pursuant hereto, which documents
shall, subject to Section 4.2(k) and 4.4, remain in the state of California for
all purposes (including but not limited to the perfection of the security
interest of the Administrative Agent, for the benefit of the holders of the
Obligations, in such Collateral) until the Collateral is to be released pursuant
to Section 3.4 hereof.

            (g) Notwithstanding the foregoing provisions of Section 3.2, the
Servicer on behalf of Borrower may ship Other Mortgage Documents to Approved
Investors under bailment for review by the Approved Investor prior to purchase
of a Mortgage Note under a Take-Out Commitment.

            (h) The Servicer shall deliver to the Collateral Agent within the
first five (5) Business Day of each calendar month a report (the "Monthly
Payment Status Report"), on a form mutually acceptable to the Servicer and the
Collateral Agent, describing the delinquency status of each Mortgage Loan as of
the last day of the preceding calendar month.

      3.3. Power of Attorney.

            (a) Subject to subsection (b) below, the Borrower hereby irrevocably
appoints the Administrative Agent, for the benefit of the holders of the
Obligations, its attorney in fact, with full power of substitution, for and on
behalf and in the name of the Borrower, to: (i) endorse and deliver to any
Person any check, instrument or other paper coming into the Collateral Agent's,
the Administrative Agent's or any Lender's possession and representing payment
made in respect of any Mortgage Note or Take-Out Commitment Document delivered
hereunder or in respect of any other Collateral; (ii) prepare, complete,
execute, deliver and record any Assignment to be delivered to the Collateral
Agent, the Administrative Agent or to any other Person of any Mortgage relating
to any Mortgage Note delivered hereunder as Mortgage Loan Collateral; (iii)
endorse and deliver any Mortgage Note as Mortgage Loan Collateral arising as
proceeds thereof, and do every other thing necessary or desirable to effect
transfer of all or any part of the Mortgage Loan Collateral to the
Administrative Agent, for the benefit of the holders of the Obligations, or to
any other Person; (iv) take all necessary and appropriate action with respect to
all Obligations and the Mortgage Loan Collateral to be delivered to the
Collateral Agent or the Administrative Agent or held by the Borrower in trust
for the Administrative Agent for the benefit of the holders of the Obligations;
(v) commence, prosecute, settle, discontinue, defend, or otherwise dispose of
any claim relating to any Take-Out Commitment or any other part of the Mortgage
Loan Collateral; and (vi) sign the Borrower's name wherever appropriate to
effect the performance of this Agreement.

            (b) This Section 3.3 shall be liberally, not restrictively,
construed so as to give the greatest latitude to the Administrative Agent's
powers, as the Borrower's attorney-in-fact, to collect, sell, and deliver any of
the Mortgage Loan Collateral and all other documents relating thereto. The
powers and authorities herein conferred on the Administrative Agent may be
exercised by the Administrative Agent through any Person who, at the time of the
execution of a particular instrument, is an authorized officer or agent of the
Administrative Agent. The power

<PAGE>

of attorney conferred by this Section 3.3 shall become effective upon the
occurrence, and remain effective during the continuance, of a Default or an
Event of Default and is granted for a valuable consideration and is coupled with
an interest and irrevocable so long as the Obligations, or any part thereof,
shall remain unpaid or any Bank Commitment is outstanding. All Persons dealing
with the Administrative Agent, any officer thereof, or any substitute attorney,
acting pursuant hereto shall be fully protected in treating the powers and
authorities conferred by this Section 3.3 as existing and continuing in full
force and effect until advised by the Administrative Agent that the Obligations
have been fully and finally paid and satisfied and all Bank Commitments have
been terminated.

      3.4. Redemption of Mortgage Collateral.

            (a) Generally. So long as no Default or Event of Default is
continuing, the Servicer (on behalf of the Borrower) may obtain releases of the
Administrative Agent's security interest in all or any part of the Collateral
(including releases from the Collection Account) at any time, and from time to
time, (i) to the extent that total Collateral Value of all Eligible Mortgage
Collateral (immediately after giving effect to the requested release) equals or
exceeds the Principal Debt, as shown on the most recent Borrowing Report, or
(ii) that either (A) the Borrower has made a principal payment on account of the
Principal Debt in an amount, or (B) the Borrower has delivered to the Collateral
Agent (and the Collateral Agent has received) as bailee for the Administrative
Agent substitute Eligible Mortgage Collateral with a Collateral Value, such that
after giving effect to such payment or delivery, the total Collateral Value of
all Eligible Mortgage Collateral will equal or exceed the Principal Debt. Each
request for a partial release of Collateral from the Collection Account shall be
addressed to the Collateral Agent and the Administrative Agent and shall be
substantially in the form of Exhibit D-11 attached hereto (a "Collection Account
Release Notice"). So long as no Default or Event of Default is continuing, the
Servicer (on behalf of the Borrower) may by written direction to the Collateral
Agent effect a transfer of funds from the Collection Account to the Disbursement
Account; provided, that the Servicer shall not request and the Collateral Agent
shall not permit funds to be released from the Disbursement Account unless the
total Collateral Value of all Eligible Mortgage Collateral (immediately after
giving effect to the requested release) equals or exceeds the Principal Debt, as
shown on the most recent Borrowing Report. Each request for a partial release of
Collateral (excluding releases from either the Collection Account or the
Disbursement Account) shall be addressed to the Collateral Agent and shall be
substantially in the form illustrated in Exhibit D-5 attached hereto (the
"Transfer Request").

            (b) Redemption Pursuant to Sale. So long as no Default or Event of
Default is continuing, any one of the following may occur: (x) the Borrower, or
the Servicer acting for the Borrower, from time to time may sell or pool
Mortgage Loans either to an Approved Investor pursuant to a Take-Out Commitment
or to one of the Originators under the Repurchase Agreement; (y) the Borrower
may provide Mortgage Loans to one of the Originators for sale to an Approved
Investor pursuant to a Take-Out Commitment, provided that payment is directed to
the Collection Account and the security interest in the Mortgage Loan will not
be released and the Borrower will not be deemed to have sold the Mortgage Loans
to any of the Originators until the Purchase Price is received in the Collection
Account; and (z) the Borrower, or the Servicer acting for the Borrower, may
request the Administrative Agent to permit the Borrower to sell Mortgage Loans,
or to pool Mortgage Loans, under such other circumstances as may be

<PAGE>

described in the request. Upon the receipt by the Collateral Agent of a Shipping
Request preliminary to a transaction permitted by this Section 3.4, identifying
Collateral to be delivered to an Approved Investor or through any of the
Originators, and so long as no Default or Event of Default of which a
Responsible Officer of the Collateral Agent shall have received written notice
shall be in existence:

                  (i) The Collateral Agent shall deliver to the Approved
            Investor, or its loan servicing provider or custodian, under the
            Collateral Agent's "Bailee and Security Agreement Letter,"
            substantially in the form of Exhibit D-6(a), or D-6(b) hereto or
            such other form as may be approved by the Administrative Agent as
            appropriate, the items of Mortgage Loan Collateral being sold which
            are held by the Collateral Agent as bailee for the Administrative
            Agent pursuant to Section 3.2 hereof, with the release of the
            security interest in favor of the Administrative Agent for the
            benefit of the holders of the Obligations in such items being
            conditioned upon timely payment to the Collection Account of the
            amount described in Section 3.4(b)(iii);

                  (ii) The Servicer shall, as agent for the Administrative
            Agent, deliver to such Approved Investor, or such Approved
            Investor's loan servicing provider or custodian, under a letter
            agreement or other arrangement approved by the Administrative Agent
            the items held by the Servicer pursuant to Section 3.2(c) that are
            related to the Mortgage Loan Collateral to be transferred on the
            condition that such Approved Investor or its loan servicing provider
            or custodian shall hold or control such Other Mortgage Documents as
            bailee for the Administrative Agent for the benefit of the holders
            of the Obligations until the Approved Investor has paid the full
            purchase price for such Mortgage Loan Collateral to the Collection
            Account pursuant to the terms of the related Take-Out Commitment;

                  (iii) Within forty-five (45) days after the delivery by the
            Collateral Agent to such Approved Investor or its loan servicing
            provider or custodian of the items of Mortgage Loan Collateral
            described in Section 3.4(b) or (ii), the Borrower shall make a
            payment, or shall cause a payment to be made, to the Collection
            Account, for distribution to the Administrative Agent for the
            account of the Lenders in an amount at least equal to the full
            purchase price for such Mortgage Loan Collateral or shall substitute
            Eligible Mortgage Collateral as permitted by this Section 3.4 it
            being understood that the Collateral Agent shall have no
            responsibility to verify the purchase price; and

                  (iv) With respect to each Shipping Request that is received by
            the Collateral Agent by 11:30 a.m. (eastern time) on a Business Day,
            the Collateral Agent shall use due diligence and best efforts to
            review such Shipping Request and prepare the Mortgage Loan files
            identified in each Shipping Request, for shipment prior to the close
            of business on the day the Shipping Request is received by the
            Collateral Agent, and, in any event shall review such Shipping
            Request and prepare the Mortgage Loan files identified in such
            Shipping Request no later than 24 hours after such Shipping Request
            is received by the Collateral Agent.

<PAGE>

            (c) Transfers. So long as no Default or Event of Default is
continuing of which a Responsible Officer of the Collateral Agent has received
written notice, subject to Section 3.4(a) and (b), the Borrower or Servicer on
behalf of the Borrower shall, at any time, be permitted to cause the Collateral
Agent to reflect the transfer of Mortgage Loans to any Permitted Transferees (as
defined below) by means of its daily electronic transmissions to the Collateral
Agent, together with delivery of a Transfer Request delivered to the Collateral
Agent, on or before 11:30 a.m. (eastern time), identifying each Mortgage Loan
being transferred. The Collateral Agent's sole responsibility with respect to
any such transfers shall be to correctly reflect such transfers on its computer
system and books and records and to indicate, on its Collateral Agent's Daily
Report to be delivered on such Business Day, that such transfers have been
effected. "Permitted Transferees" means any of the Originators, in connection
with any sale and transfer thereto effected pursuant to the terms of the
Repurchase Agreement and any Approved Investor approved by the Administrative
Agent as a Permitted Transferee. However, requested transfers will not be made
if (A) as reflected in the most recent Borrowing Report, total Principal Debt
will equal or exceed the total Collateral Value of Eligible Mortgage Collateral
immediately after giving effect to a requested transfer and any accompanying
substitution of Mortgage Collateral, or (B) the Collateral Agent shall have
received written notice from the Administrative Agent that a Default or Event of
Default has occurred.

            (d) Continuation of Lien. Unless released in writing by the
Administrative Agent as herein provided, the security interest in favor of the
Administrative Agent for the benefit of the holders of the Obligations, in all
Mortgage Loan Collateral transmitted pursuant to Section 3.4(b) shall continue
in effect until such time as the Administrative Agent shall have received
payment in full of the amount described in Section 3.4(b)(iii).

            (e) Application of Proceeds; No Duty. Neither the Administrative
Agent, nor the Collateral Agent, nor any Lender shall be under any duty at any
time to credit the Borrower for any amounts due from any Approved Investor in
respect of any purchase of any Mortgage Collateral contemplated under Section
3.4(b) above, until the Administrative Agent has actually received such amount
in the form of immediately available funds, for deposit to the Collection
Account. Neither the Administrative Agent, nor the Collateral Agent, nor any
Lender shall be under any duty at any time to collect any amounts or otherwise
enforce any obligations due from any Approved Investor in respect of any such
purchase.

            (f) Mandatory Redemption of Mortgage Collateral. Notwithstanding any
provision hereof to the contrary, if at any time a Collateral Deficiency exists,
the Borrower shall, immediately upon receipt of notice (which may be by
telephone, promptly confirmed in writing) from the Administrative Agent or the
Collateral Agent, make a deposit to the Collection Account or pledge, assign and
deliver additional or substitute Eligible Mortgage Collateral to the
Administrative Agent for the benefit of the holders of the Obligations, so that,
immediately after giving effect to such payment or pledge and assignment, the
total Collateral Value of Eligible Mortgage Collateral shall be equal to or
greater than the Principal Debt.

            (g) Representation in Connection with Releases, Sales and Transfers.
The Borrower and the Servicer each represents and warrants that each request for
any release or transfer pursuant to Section 3.4(a), Section 3.4(b) or Section
3.4(c) shall automatically constitute a representation and warranty to the
Lenders, the Administrative Agent, and the Collateral Agent

<PAGE>

to the effect that immediately before and after giving effect to such release or
Transfer Request, the Collateral Value of Eligible Mortgage Collateral shall
equal or exceed the Principal Debt. In connection with any request for a release
or a Transfer Request, the Collateral Agent may assume, in the absence of
written notice to the contrary received from the Administrative Agent, that
immediately before and after giving effect to such release of Collateral or
Transfer Request, no Default or Event of Default exists.

            (h) Limitation on Releases. Notwithstanding any provision to the
contrary, the Collateral Agent shall not release any Collateral unless (i)
payment of what purports to be the purchase price by the Approved Investor has
been made in immediately available funds to the Collection Account; or (ii)
immediately before and after giving effect thereto, the total Collateral Value
of Eligible Mortgage Collateral (including any Eligible Mortgage Loans
substituted for those Eligible Mortgage Loans being released) shall equal or
exceed aggregate Principal Debt, as reflected in the most recent Borrowing
Report.

      3.5. Releases of Mortgage Notes for Servicing.

      The Servicer may from time to time request, in writing in the form of
Exhibit D-7 hereto, that the Collateral Agent deliver a Mortgage Note that
constitutes Mortgage Loan Collateral so that (a) such Mortgage Note may be
replaced by a corrected Mortgage Note, or (b) any servicing action may take
place with respect to such Mortgage Note. Upon receipt by the Collateral Agent
of such a request from the Servicer, and so long as the Collateral Agent has not
received written notice that a Default or Event of Default shall be in
existence, the Collateral Agent shall deliver to the Servicer, under the "Trust
Receipt and Security Agreement Letter," substantially in the form of Exhibit
D-7, hereto, or such other form as may be approved by the Administrative Agent,
the Mortgage Note to be corrected or serviced, such delivery to be conditioned
upon the receipt by the Collateral Agent within fourteen (14) calendar days of
either a corrected Mortgage Note, in the case of Mortgage Notes delivered for
correction, or the Mortgage Note originally delivered to the Servicer by the
Collateral Agent, in the case of a Mortgage Note delivered for a servicing
action; provided, that (as certified to the Collateral Agent by the Servicer):

                  (i) at no time shall Mortgage Notes having an aggregate
            Collateral Value in excess of $5,000,000 be so delivered to the
            Servicer pursuant to this Section 3.5 (the Collateral Value assigned
            to each such Mortgage Notes delivered for correction shall be
            determined utilizing as the principal amount of such Mortgage Note
            the lesser of the uncorrected face value of such Mortgage Note and
            the correct face value of such Mortgage Note known to the Borrower
            or the Servicer; provided, however, that if the correct face value
            of such Mortgage Note is not known to the Collateral Agent, the
            Collateral Agent may use the uncorrected face value of such Mortgage
            Note in determining the Collateral Value);

                  (ii) with respect to Mortgage Notes delivered for correction,
            until such time as a corrected Mortgage Note shall have been
            delivered to the Collateral Agent, the Collateral Value attributed
            to each Mortgage Note delivered to the Servicer to be corrected in
            accordance with this Section 3.5 shall be the lesser of the
            uncorrected face value of

<PAGE>

            such Mortgage Note and the corrected face value of such Mortgage
            Note known to the Borrower and communicated in writing by the
            Borrower to the Collateral Agent; provided, however, that if the
            correct face value of such Mortgage Note is not known to the
            Collateral Agent, the Collateral Agent may use the uncorrected face
            value of such Mortgage Note in determining the Collateral Value; and

                  (iii) notwithstanding the preceding clause (ii), unless, (A)
            in the case of Mortgage Notes delivered for correction, the
            corrected Mortgage Note is endorsed in blank (without recourse) and
            re-delivered to the Collateral Agent within 14 calendar days of the
            date of delivery by the Collateral Agent of the Mortgage Note to be
            corrected, or (B) in the case of Mortgage Notes delivered for
            servicing actions, the original Mortgage Note is re-delivered to the
            Collateral Agent within 14 calendar days of the date of delivery by
            the Collateral Agent of the Mortgage Note to be serviced, the
            Collateral Value attributed to either the Mortgage Note to be
            delivered and the corrected Mortgage Note, or the Mortgage Note
            delivered for servicing, shall be zero beginning on the 15th
            calendar day; provided, however, that the Collateral Value
            attributable to the corrected Mortgage Note or the Mortgage Note
            delivered for correction or servicing will be reinstated promptly
            upon the subsequent delivery thereof to the Collateral Agent.

      3.6. [RESERVED].

      3.7. Wet Borrowings.

            (a) Pursuant to the Loan Agreement, the Borrower may from time to
time request that certain Borrowings be funded after delivery to the Collateral
Agent of the related Assignment, but prior to the delivery to the Collateral
Agent of the corresponding Principal Mortgage Documents (individually a "Wet
Borrowing"; collectively "Wet Borrowings"). The Borrower and the Administrative
Agent acknowledge that Advances in respect of Wet Borrowings are subject to
various terms and conditions of the Loan Agreement, including those set forth in
Section 2.3(c) to the Loan Agreement.

            (b) Delivery of Principal Mortgage Documents. Within nine (9)
Business Days after the date that each Assignment is delivered (and inclusion of
the related Wet Loans within the computation of Collateral Value as reported on
the Collateral Agent Daily Report) to the Collateral Agent, the Borrower shall
deliver to the Collateral Agent all of the Principal Mortgage Documents
pertaining to such Wet Loans, or make a mandatory prepayment so that after
giving effect thereto, the Collateral Value of Eligible Mortgage Collateral
(excluding such Wet Loans) shall equal or exceed the Principal Debt.

      3.8. Collateral Reporting.

            (a) At the commencement of each Business Day, and in no event later
than 1:00 p.m. (eastern time), the Collateral Agent shall furnish to the
Borrower, Servicer and the Administrative Agent by facsimile (a hard copy of
which shall not subsequently be mailed, sent or delivered to any such party,
unless so requested in writing by such party) a duly completed report in the
form of Exhibit D-8 hereto, (the "Collateral Agent Daily Report") specifying and

<PAGE>

certifying the then total Collateral Value of the Eligible Mortgage Collateral
and other information, all as more fully provided for therein and as set forth
on Schedule I hereto, noting, except for any Wet Loans and other Mortgage Loans
with respect to which the Collateral Agent has not completed its review of the
Principal Mortgage Documents, any applicable Exceptions on Schedule I thereto.

                  (i) The Collateral Agent may assume the accuracy of all
            information supplied by the Borrower to the Collateral Agent in any
            Assignment, or related electronic transmission, received by the
            Collateral Agent, including but not limited to the acquisition price
            paid for any Mortgage Loan, the unpaid principal balance of any
            Mortgage Loan as of its closing and funding date and the weighted
            average purchase price under Take-Out Commitments used in the
            related Collateral Value calculation and whether the Mortgage Loan
            is a Conforming Loan or a Jumbo Loan; and

                  (ii) The Collateral Agent may assume the accuracy of the
            information supplied by the Borrower to the Collateral Agent,
            whether written or in any other form acceptable to the Collateral
            Agent, with respect to a determination as to whether amounts
            received in the Collection Account represent the purchase price paid
            for a specific Mortgage Loan and, consequently, whether the
            Collateral Value of such Mortgage Loan should be removed from such
            calculation.

            (b) Two Business Days prior to the date on which the Maximum
Facility Amount has changed, the Servicer shall notify the Collateral Agent and
the Borrower (by facsimile) of the new Maximum Facility Amount under the Loan
Agreement. For purposes of paragraph 4 of the Collateral Agent Daily Report, the
Collateral Agent shall assume that the Maximum Facility Amount is $200,000,000
unless it receives written notice to the contrary from the Administrative Agent.

            (c) The Collateral Agent shall monitor and report on the Collateral
Agent Daily Report the amount of Wet Loans and the portion thereof for which the
related Principal Mortgage Documents have been delivered to the Collateral Agent
within the time period permitted under Section 3.7.

      3.9. Further Obligations of the Collateral Agent.

      The Collateral Agent shall promptly notify the Administrative Agent if the
Collateral Agent receives written notice (i) that any Lien (other than for the
Administrative Agent for the benefit of the holders of the Obligations) has been
placed, or attempted to be placed, on any Collateral for the Obligations or that
the Administrative Agent's security interest shall have been challenged or (ii)
that any Approved Investor has rejected any Collateral that is related to a
Mortgage Loan that has been delivered to the Collateral Agent as Collateral for
the Obligations.

      3.10. Segregation of Collateral.

      The Collateral Agent shall keep and maintain the Collateral on its
documents, books and records separate and apart from its other Property and from
any Property securing any liabilities of the Borrower to any other Person.
Without limitation of the foregoing, the Collateral Agent

<PAGE>

shall keep and maintain the Collateral on its documents, books and records
separate and apart from any collateral provided by the Borrower in favor of any
other lender providing financing to the Borrower. This provision does not
require physical separation of the Principal Mortgage Documents or Other
Mortgage Documents from collateral held for other loans, but each Mortgage Loan
must be maintained in a separate file folder from the documents related to any
other mortgage loan.

      3.11. Delivery of Required Documents to the Administrative Agent.

      Upon written request of the Administrative Agent, after the occurrence of
and during the continuation of an Event of Default under the Loan Agreement of
which a Responsible Officer of the Collateral Agent has received written notice,
the Collateral Agent shall deliver within two (2) Business Days (or in
contemplation of removing the Collateral Agent as collateral agent hereunder,
the Collateral Agent shall deliver within five (5) Business Days,) to the
Administrative Agent or its designee any or all documents and other items of
Collateral which are then in the possession or control of the Collateral Agent.
The Administrative Agent shall provide the Borrower with a copy of any such
notice delivered to the Collateral Agent. All special handling and delivery
costs shall be paid by the Borrower. The Administrative Agent shall hold the
interest of La Fayette in the Collateral as agent of the La Fayette Program
Agent and subject to the security interest granted by La Fayette to the La
Fayette Program Agent.

      3.12. Take-Out Commitment Reporting.

            (a) Each Assignment delivered to the Collateral Agent shall indicate
(x) the Approved Investor with respect to the Take-Out Commitment, or (y) that
there is no loan level Take-Out Commitment but that the Mortgage Loan is hedged.

      For each Mortgage Loan that, as of the fourth Business Day after delivery
of the Assignment relating to such Mortgage Loan, is covered by a Take-Out
Commitment in the form of a hedge by forward sale commitment but is not covered
by a loan-specific Take-Out Commitment, the Servicer shall furnish to the
Borrower and the Collateral Agent a duly completed Hedge Report in the form of
Exhibit K to the Loan Agreement, no later than 10:00 a.m. (eastern time) on the
first Business Day of each week. In addition, no later than 10:00 a.m. on the
first Business Day following the delivery of any Assignment that reflected one
or more Mortgage Loans that were covered by a Take-Out Commitment in the form of
a forward sale commitment hedge, but not a loan-specific Take-Out Commitment,
the Servicer shall furnish the Borrower and the Collateral Agent with a list of
Mortgage Loans that subsequently were committed pursuant to the loan-specific
Take-Out Commitment, with an code indicating the Investor related to the
Take-Out Commitment and an indication of the price associated with the Take-Out
Commitment.

            (b) The Borrower shall provide the Administrative Agent with
up-to-date copies of the Take-Out Commitment Master Agreements for each Approved
Investor.

            (c)   Upon request of the Administrative Agent at any time, the
Servicer shall furnish to the Administrative Agent (x) if there are any Mortgage
Loans not subject to a loan level Take-Out Commitment, a duly completed Hedge
Report in the form of Exhibit K, and (y) a

<PAGE>

list of loan-specific Take-Out Commitments, together with copies of any such
loan-specific Take-Out Commitments to the extent not previously delivered to the
Administrative Agent.

                                   ARTICLE IV

                              THE COLLATERAL AGENT

      4.1. Instructions to the Collateral Agent.

      As to any matter not expressly provided for by this Agreement, the
Collateral Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Administrative Agent acting on behalf of the holders of the Obligations;
provided, however, that the Collateral Agent shall not be required to take any
action which may expose the Collateral Agent to any liability that such
Collateral Agent determines to be unreasonable in light of the circumstances or
that is contrary to this Agreement or any Governmental Requirement.

      4.2. Reliance by the Collateral Agent; Responsibility of the Collateral
Agent.

            (a) The Collateral Agent shall perform its duties hereunder in
accordance with the standards followed by the Collateral Agent in dealing with
similar property for its own account. Notwithstanding anything to the contrary
in this Agreement or any other Transaction Document, neither the Collateral
Agent nor any of its respective directors, officers, agents, representatives,
employees, attorneys-in-fact or Affiliates shall be liable for any action taken
or omitted to be taken by it or them (in their capacity as or on behalf of the
Collateral Agent) under or in connection with this Agreement or the other
Transaction Documents, except for its or their own gross negligence or willful
misconduct, for which the Collateral Agent shall be liable. In no event shall
the Collateral Agent, its directors, officers, agents or employees be liable,
directly or indirectly, for any special, indirect, punitive or consequential
damages.

            (b) All Collateral at any time delivered to the Collateral Agent
hereunder shall be held by the Collateral Agent in a fire resistant vault,
drawer or other suitable depositary maintained and controlled solely by the
Collateral Agent, conspicuously marked to show the interest therein of the
Collateral Agent as bailee for the Administrative Agent on behalf of the holders
of the Obligations and not commingled with any other assets or property of, or
held by, the Collateral Agent for any person other than the Borrower or any of
the Originators. The Collateral Agent shall have responsibility only for
documents which have been actually delivered to the Collateral Agent in
connection herewith and which have not been released to the Administrative
Agent, the Borrower, the Servicer, a transferee or their respective agent or
designee in accordance with this Agreement. In the event that a Mortgage Note
has been delivered to the Collateral Agent and, subsequently, the Collateral
Agent cannot locate such Mortgage Note, then the Collateral Agent shall prepare
and execute a lost note affidavit with appropriate indemnification and shall
deliver such lost note affidavit to the party that otherwise would have been
entitled to delivery of the related Mortgage Note in accordance with this
Agreement at the time such Mortgage Note would have been delivered.

<PAGE>

            (c) Under no circumstances shall the Collateral Agent be obligated
to verify the authenticity of any signature on any of the documents received or
examined by it in connection with this Agreement or the authority or capacity of
any person to execute or issue any such document nor shall the Collateral Agent
be responsible for the value, form, substance, validity, perfection (other than
by taking and continuing possession of the Collateral), priority, effectiveness
or enforceability of any of such documents nor shall the Collateral Agent be
under a duty to inspect, review or examine the documents to determine whether
they are appropriate for the represented purpose or that they have been actually
recorded or that they are other than what they purport to be on their face.

            (d) The Collateral Agent may accept but shall not be responsible for
examining, determining the meaning or effect of, or notifying or advising the
Borrower or the Administrative Agent in any way concerning, any item or document
in any file regarding a Mortgage Loan that is not one of the items or documents
listed in Section 3.2(b). The Borrower shall be solely responsible for providing
to the Collateral Agent each and every document listed in Section 3.2(b) and for
completing or correcting any omission, or incomplete or inconsistent document.

            (e) With respect to the calculations in connection with Collateral
Agent Daily Reports, the Collateral Agent shall be entitled to rely upon the
information contained in any Assignment. The Collateral Agent shall (i) except
for Wet Loans for which it has not yet received the Principal Mortgage
Documents, hold all Principal Mortgage Documents relating to each Mortgage Loan
exclusively for the benefit of the holders of the Obligations under the terms of
this Agreement (i.e., is not held by the Collateral Agent for the benefit of any
other Person), and (ii) in the case of Wet Loans, monitor and report the amount
of such Wet Loans and the portion thereof for which the related Principal
Mortgage Documents have been delivered to the Collateral Agent within the time
period permitted under Section 3.7. Except as otherwise expressly provided in
this Agreement, the Collateral Agent shall have no duty to investigate or
conduct any due diligence with respect to such information.

            (f) With respect to the determination of whether a Mortgage Loan
constitutes an Eligible Mortgage Loan, the Collateral Agent shall be responsible
for determining that: (i) such Mortgage Loan meets the requirements of clauses
(a(ii)), (d) (with respect to (d), it being understood and agreed that the
Collateral Agent is not responsible to determine whether the related Mortgage
Note is a legal, valid and binding obligation of the Obligor), (e), (i(iv-vi)),
(j) and (m) of the definition of Eligible Mortgage Loan, (ii) that no more than
45 days have lapsed since the date on which the original Mortgage Note
evidencing such Mortgage was shipped to the related Approved Investor, and (iii)
pursuant to Sections 3.9(i), 3.10 and 4.2(e), to the Collateral Agent's best
knowledge such Mortgage Loan is subject to a perfected first-priority Lien in
favor of the Administrative Agent for the benefit of the holders of the
Obligations, and, to the Collateral Agent's best knowledge, is not subject to
any other Lien; but the Collateral Agent may assume that all of the other
requirements of the definition of Eligible Mortgage Loan have been satisfied.

            (g) The Collateral Agent is an agent and bailee only and is not
intended to be, nor shall it be construed to be a trustee or fiduciary under
this Agreement of or for either or both of the Borrower or the Administrative
Agent.

<PAGE>

            (h) The Collateral Agent shall retain possession and custody of the
Principal Mortgage Documents received from the Borrower and pertaining to each
Mortgage Loan file as agent and bailee of, and as custodian for, the
Administrative Agent for all purposes (including but not limited to the
perfection of the security interest of the Administrative Agent for the benefit
of the holders of the Obligations) until the Collateral is released pursuant to
Section 3.4 or 3.5 hereof.

            (i) Without limitation of the generality of the foregoing, the
Collateral Agent: (i) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by the
Collateral Agent or the Borrower and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (ii) except as provided in this Agreement,
makes no warranty or representation to the Administrative Agent or the holders
of any Obligations and shall not be responsible to the Administrative Agent or
the holders of any Obligations for any statements, warranties or representations
made in or in connection with this Agreement or the other Transaction Documents;
(iii) except as provided in Sections 3.2(e), 3.4(a), (b), (c), (h), 3.8, 3.9 and
this Section 4.2, shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Borrower or to inspect the property (including the
books and records) of the Borrower; (iv) shall not be responsible to the
Administrative Agent or the holders of any Obligations for the due execution,
legality, validity, enforceability of this Agreement or any other instrument or
document furnished pursuant hereto as it relates to any party other than the
Collateral Agent, or for the genuineness, effectiveness, sufficiency, value,
perfection or priority of any Collateral; (v) shall incur no liability under or
in respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telegram, telecopy, cable or telex)
believed in good faith by the Collateral Agent, to be genuine and signed or sent
by the proper Person; (vi) shall be entitled to rely on the terms of this
Agreement and shall be under no obligation to review the terms of the other
Transaction Documents, and in the event of any conflict between this Agreement
and the Transaction Documents, the terms of this Agreement shall control with
respect to the rights and obligations of the Collateral Agent; and (vii) in the
event of any amendment, revision, restatement, waiver or other change to the
Transaction Documents which could have the effect of increasing the level of
effort or changing the scope of work of the Collateral Agent under this
Agreement and which was not consented to in writing by the Collateral Agent,
shall not be given effect so as to modify in quantity or otherwise the
obligations of the Collateral Agent under this Agreement; (as an example only of
the foregoing, and to avoid doubt in interpretation of this subsection (vii), an
increase in the aggregate commitments of the Lenders of the Loan Agreement shall
not, unless the Collateral Agent receives two weeks' advance written notice of
any such amendment, revision, restatement, waiver or other change to the
Transaction Documents, require the Collateral Agent to review Mortgage Loan
Collateral that would relate to such increased commitment).

            (j) The Collateral Agent may execute any of its duties under this
Agreement by or through agents, attorneys, custodians, nominees or
attorneys-in-fact (which agents, attorneys, custodians, nominees or
attorneys-in-fact shall be accorded the same rights and obligations applicable
to the Collateral Agent) and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. The Collateral Agent shall be responsible
for the actions or non-actions of any agent, attorneys, custodians, nominees or
attorneys-in-fact

<PAGE>

selected by it to the extent it would have been liable had it taken such action
itself; provided, however, that nothing contained herein shall affect in any
manner or any extent the rights of the Borrower or the Administrative Agent
against such agents or attorneys-in-fact.

            (k) Merger of Collateral Agent. Any entity into which the Collateral
Agent may be merged or converted or with which may be consolidated, or any
entity resulting from any merger, conversion or consolidation to which the
Collateral Agent shall be a party, or any entity succeeding to the business of
the Collateral Agent, shall be the successor of the Collateral Agent hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

            (l) None of the provisions of this Agreement shall require the
Collateral Agent 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
satisfaction to it against such risk or liability is not assured to it.

            (m) The Collateral Agent may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval or other paper or document believed by it to be genuine and to have
been signed or presented to the proper party or parites.

      4.3. Agents and Affiliates.

      The Collateral Agent and its respective Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrower, any of the Originators, any of the
Originators' Affiliates and any Person who may do business with or own
securities of the Borrower or any such Affiliate, all as if the Collateral Agent
were not the Collateral Agent and without any duty to account therefor to the
Administrative Agent or the holders of any Obligations.

      4.4. Successor Collateral Agent.

      The Collateral Agent may resign at any time by giving written notice
thereof to the Borrower and the Administrative Agent. The Collateral Agent may
be removed at any time with cause, and upon thirty (30) days written notice
without cause, by the Administrative Agent on behalf of the holders of the
Obligations. Upon request of the Borrower, so long as no Default or Event of
Default exists, the Collateral Agent shall be removed by the Administrative
Agent, provided that any removal without cause shall be preceded by thirty (30)
days written notice to the Collateral Agent and the Borrower shall pay
immediately upon demand all costs and expenses incurred by any Lender, the
Administrative Agent or the Collateral Agent in connection therewith. Upon any
such resignation or removal, the Administrative Agent, at the direction of the
Majority Banks, shall have the right to appoint a successor Collateral Agent.
Any successor Collateral Agent appointed by the Administrative Agent, provided
that no Default or Event of Default exists, shall be satisfactory to the
Borrower at the time of appointment. In the case of a retirement or resignation,
if no successor Collateral Agent shall have been so appointed by the
Administrative Agent (and approved by the Borrower, if applicable), and shall
have accepted

<PAGE>

such appointment, within 60 days after the retiring Collateral Agent's giving of
notice of resignation, then the retiring Collateral Agent shall deliver all
Mortgage Loan Collateral in its possession to the Administrative Agent and the
Collateral Agent shall be discharged from its duties and obligations under this
Agreement. After a notice of retirement or resignation has been given by the
Collateral Agent and until a successor Collateral Agent shall have been
appointed, the Administrative Agent shall pay all reasonable fees and out of
pocket expenses owed to the Collateral Agent by the Servicer pursuant to any
written agreement between the Collateral Agent and the Servicer, provided,
however, that the Borrower shall reimburse the Administrative Agent for all such
payments. No such resignation or removal shall be effective until the earlier of
(1) the date on which a successor Collateral Agent shall have been appointed,
and accepted such appointment, in accordance with this Section 4.4 or (2) the
day upon which a period of 60 days has passed after notice of such resignation
or removal. Upon the acceptance of any appointment of the Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations under this Agreement. The
retiring or removed Collateral Agent shall take all steps reasonably necessary
to provide for an orderly transfer of the Collateral and all related
documentation to the successor Collateral Agent at the Servicer's expense. After
any retiring Collateral Agent's resignation or removal hereunder as the
Collateral Agent, the provisions of this Article IV shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was a Collateral
Agent under this Agreement.

      4.5. Right of Inspection.

      The Collateral Agent shall permit any officer, employee or agent of the
Borrower, the Servicer or the Administrative Agent that may so request to visit
and inspect the premises on which the custodial duties of the Collateral Agent
hereunder are performed, examine the books and records of the Collateral Agent
which pertain to such custodial duties, take copies and extracts therefrom, and
discuss the performance of such custodial duties with the officers of the
Collateral Agent that are responsible therefor, at such time, after reasonable
prior written notice to the Collateral Agent, as may be mutually acceptable to
the Collateral Agent and such Borrower, Servicer or Administrative Agent during
the Collateral Agent's normal business hours.

      4.6. Accounting in Certain Circumstances.

      Subject to the provisions of Section 4.2 hereof, in the event that the
Collateral Agent, acting in its capacity as custodian for the Administrative
Agent, shall receive any money in respect of Mortgage Loan Collateral, whether
pursuant to Section 3.4 hereof or Section 5 of the Security Agreement, or
otherwise, the Collateral Agent shall provide an accounting therefor to the
Administrative Agent and the Borrower by the end of the Business Day following
receipt thereof, such accounting to include the amount received and shall
promptly (but in no event later than the next Business Day) deposit such amounts
into the Collection Account and prior to such deposit to be held as Collateral
under the Security Instruments in favor of the Administrative Agent as provided
in Section 3.1; provided, however, that all expenses of the Collateral Agent
reasonably allocable to such accounting shall be added to the Obligations as
expenses of the Collateral Agent. All such funds received after 4:00 p.m.
(eastern time) shall be considered to

<PAGE>

have been received on the following Business Day. All such funds received shall
be held uninvested (and the Collateral Agent shall not be liable for interest
thereon), unless permitted by the applicable Transaction Document and otherwise
instructed by the Servicer, and in such case, funds shall be invested in
Eligible Investments specified by the Servicer in such instructions; provided,
however, that if the Servicer directs that funds be invested in Eligible
Investments, the Servicer shall be required to ensure that all investments must
mature on each Settlement Date (as defined in the Loan Agreement). The
Collateral Agent shall provide such other information in such detail and at such
time or times as the Borrower or the Administrative Agent may reasonably
request.

                                   ARTICLE V

                                 INDEMNIFICATION

      5.1. Indemnities by the Servicer. General Indemnity. Without limiting any
other rights that any such Person may have hereunder or under applicable law,
the Servicer hereby agrees to indemnify the Collateral Agent, its successors,
transferees, participants and assigns and all affiliates, officers, directors,
shareholders, controlling persons, employees and agents of any of the foregoing
(each an "Indemnified Party"), forthwith on demand, from and against any and all
actual damages, losses, claims, liabilities and related costs and expenses,
including attorneys' fees, expenses and disbursements (all of the foregoing
being collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them arising out of or relating to this Agreement, the
Security Agreement, the Collection Account Control Agreement, the Reserve
Account Control Agreement or the Loan Agreement or the exercise or performance
of any of its or their powers or duties hereunder or thereunder, or in respect
of any Mortgage Loans or Take-Out Commitment, or related in any way to their
possession of, or dealings with, the Collateral, excluding, however, Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Indemnified Party. This Section 5.1 shall survive the
termination of this Agreement and the earlier resignation or removal of the
Collateral Agent.

                                   ARTICLE VI

                                  MISCELLANEOUS

      6.1. Notices.

      Any notice, demand or request required or permitted to be given under or
in connection with this Agreement, the Notes or the other Transaction Documents
(except as may otherwise be expressly required therein) shall be in writing and
shall be mailed by first class or express mail, postage prepaid, or sent by
telex, telegram, telecopy or other similar form of rapid transmission, confirmed
by mailing (by first class or express mail, postage prepaid) written
confirmation at substantially the same time as such rapid transmission, or
personally delivered to an officer of the receiving party. With the exception of
certain administrative and collateral reports that may be directed to specific
departments of the Administrative Agent, all such communications shall be
mailed, sent or delivered to the parties hereto at their respective addresses as
set forth in Schedule II hereto, or at such other addresses or to such
officer's, individual's or department's

<PAGE>

attention as any party may have furnished the other parties in writing. Any
communication so addressed and mailed shall be deemed to be given when so
mailed, except with respect to notices and requests given pursuant to Sections
2.3 and 3.3 of the Loan Agreement. Communications related thereto shall not be
effective until actually received by the Collateral Agent, the Administrative
Agent, the Issuer or the Borrower, as the case may be; and any notice so sent by
rapid transmission shall be deemed to be given when receipt of such transmission
is acknowledged, and any communication so delivered in person shall be deemed to
be given when receipted for by, or actually received by, an authorized officer
of the Collateral Agent, the Administrative Agent or the Borrower, as the case
may be.

      6.2. Amendments, Etc.

      This Agreement may not be amended, supplemented or modified without the
written consent of the Borrower, the Collateral Agent and the Administrative
Agent. Any such waiver and any such amendment, supplement or modification shall
be binding upon the Borrower the Collateral Agent, the Administrative Agent and
all holders of the Obligations.

      6.3. Invalidity.

      In the event that any one or more of the provisions contained in this
Agreement or any other Transaction Document shall, for any reason, be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of such document.

      6.4. Survival of Agreements.

      All covenants and agreements herein shall survive until payment in full of
the Obligations and termination of the Bank Commitments under the Loan
Agreement.

      6.5. Cumulative Rights.

      The rights, powers, privileges and remedies of the Collateral Agent and
the Administrative Agent under this Agreement, and any other Transaction
Document shall be cumulative, and the exercise or partial exercise of any such
right, power, privilege or remedy shall not preclude the exercise of any other
right or remedy. The exercise of any right, power, privilege or remedy of the
Collateral Agent or the Administrative Agent under this Agreement or any
Transaction Document, shall not exhaust any such right, power, privilege or
remedy of the Collateral Agent or the Administrative Agent.

      6.6. Construction; Governing Law.

      THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW WHICH SHALL APPLY HERETO).

<PAGE>

      6.7. Successors and Assigns.

      This Agreement is binding upon and inures to the parties to this Agreement
and their respective successors and permitted assigns and shall remain in full
force and effect until such time, after the Termination Date, as all Obligations
shall have been paid in full and all other obligations to be performed hereunder
shall have been performed. The Borrower's obligations in respect of
indemnification and payment provisions shall be continuing and shall survive any
termination of this Agreement, subject to any applicable statute of limitations.
The Collateral Agent may not assign its rights or obligations hereunder, except
pursuant to Section 4.2(k) or 4.4, and any such attempted assignment shall be
null and void.

      6.8. The Collateral Agent Representations and Warranties.

      The Collateral Agent represents and warrants that it: (a) is a national
banking association; (b) has the power and authority to own its properties and
assets and to transact the business in which it is engaged; and (c) has the
power and requisite authority to execute, deliver and perform this Agreement,
and is duly authorized to, and has taken all action necessary to authorize it
to, execute, deliver and perform this Agreement.

      6.9. Rights of La Fayette Program Agent.

      The parties hereto acknowledge that La Fayette has granted to the La
Fayette Program Agent, for the benefit of the holders of certain obligations of
La Fayette from time to time, a security interest in La Fayette's right, title
and interest in and to the Advances, the Transaction Documents and the
Collateral. Each reference herein or in any of the other Transaction Documents
to the Liens in the Collateral granted to Administrative Agent with respect to
the interest of La Fayette under the Transaction Documents shall be deemed to
include a reference to such security interest of the La Fayette Program Agent
and the La Fayette Program Agent shall be deemed to be a holder of Obligations.
By its execution hereof, the La Fayette Program Agent hereby appoints the
Collateral Agent as its agent to hold the Collateral in which it has a security
interest for the purpose of perfecting the La Fayette Program Agent's security
interest in the Collateral, and the Collateral Agent hereby accepts such
appointment.

      6.10. Counterparts.

      This Agreement may be executed in two or more counterparts, and it shall
not be necessary that the signatures of each of the parties hereto be contained
on any one counterpart hereof; each counterpart shall be deemed an original, but
all counterparts together shall constitute one and the same instrument.

      6.11. No Proceedings.

      The Collateral Agent hereby agrees that it will not institute against the
Issuer, or join any other Person in instituting against the Issuer, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and one day after the latest Commercial Paper Note issued by the Issuer
is paid.

<PAGE>

      6.12. Electronic Counterparts.

      Any form or report contemplated by this Agreement may be furnished to the
Collateral Agent electronically and may be formatted in a manner convenient for
electronic transmission so long as the required information is provided in an
equally useable form to the format, if any, provided in this Agreement. It being
understood and agreed that the Collateral Agent shall not be responsible to
verify the identity of the sender of any electronic transmissions received by
it.

      6.13. Waiver of Jury Trial.

      EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, THE NOTES, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT OR DOCUMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING
IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OTHER TRANSACTION DOCUMENT
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.

      6.14. Consent to Jurisdiction; Waiver of Immunities.

      EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:

            (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT.

            (b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN
CONNECTION WITH THIS AGREEMENT.

<PAGE>

      6.15. References to Loan Agreement. Notwithstanding any references herein
to the Loan Agreement, the parties hereto acknowledge that the Collateral Agent
is not a party to the Loan Agreement and has no obligations or rights thereunder
and shall not be obligated to read the Loan Agreement, know the terms and
conditions contained therein or to be on notice of any of its provisions.

                                  * * * * *

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the date first above written.

                                        AHM SPV I, LLC,
                                        as Borrower


                                        By:   /s/  Stephen A. Hozie
                                        Name:  Stephen A. Hozie
                                        Title:  Chief Financial Officer

                                        AMERICAN HOME MORTGAGE CORP.,
                                        as Servicer


                                        By:   /s/  Stephen A. Hozie
                                        Name:  Stephen A. Hozie
                                        Title:  Chief Financial Officer


                                        CREDIT LYONNAIS NEW YORK BRANCH,
                                        as Administrative Agent


                                        By:  /s/  Conrad Meyer
                                        Name:  Conrad Meyer
                                        Title:  Director


                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                        as Collateral Agent


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

<PAGE>

      The following entity executes this Agreement for the sole purpose of
acknowledging its rights under Section 6.9 hereof.

                                        CREDIT LYONNAIS NEW YORK BRANCH,
                                        as La Fayette Program Agent


                                        By:  /s/  Conrad Meyer
                                        Name:  Conrad Meyer
                                        Title:  Director