Exhibit 10.18.3

                                                               Execution Version



                   AMENDED AND RESTATED CUSTODIAL AGREEMENT



            AMENDED AND RESTATED CUSTODIAL AGREEMENT (this "Custodial
Agreement"), dated as of November 26, 2003, made by and among:

            (i) AMERICAN HOME MORTGAGE CORP., a New York corporation ("AHM"),
AMERICAN HOME MORTGAGE INVESTMENT CORP., a Maryland corporation, AMERICAN HOME
MORTGAGE HOLDINGS, INC., a Delaware corporation, AMERICAN HOME MORTGAGE
ACCEPTANCE, INC., a Maryland corporation, and COLUMBIA NATIONAL, INCORPORATED, a
Maryland corporation ("Columbia"), (each a "Borrower", collectively the
"Borrowers");

            (ii) MORGAN STANLEY BANK (the "Lender Agent"); and

            (iii) DEUTSCHE BANK NATIONAL TRUST COMPANY, as custodian for the
Lender Agent pursuant to this Custodial Agreement (in such capacity, the
"Custodian").


                                    RECITALS

            The Lender Agent, the Custodian, AHM and Columbia are parties to
that certain Custodial Agreement, dated as of August 2, 2003 (as amended,
supplemented or otherwise modified prior to the date hereof, the "Existing
Custodial Agreement").

            The Borrowers and the Lender Agent are parties to that certain
Amended and Restated Master Loan and Security Agreement, dated as of the date
hereof (as amended, restated, supplemented or otherwise modified and in effect
from time to time, the "Loan Agreement"), pursuant to which the Lenders under
the Loan Agreement have agreed, subject to the terms and conditions of the Loan
Agreement, to continue and to make, as applicable, revolving credit loans to the
Borrowers to finance Eligible Mortgage Loans (as defined therein) owned by the
Borrowers.

            It is a condition precedent to the effectiveness of the Loan
Agreement that the Existing Custodial Agreement shall be amended and restated in
its entirety by this Custodial Agreement.

            Accordingly, the Existing Custodial Agreement is hereby amended and
restated in its entirety as set forth in the heading and recitals above and 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:

<PAGE>

            "Affiliate" shall mean (i) with respect to the Lender Agent, 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.


                                      -2-

<PAGE>

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

            "Custodial Delivery Failure" shall have the meaning assigned to such
term in Section 13(c).

            "Custodial Identification Certificate" shall mean the certificate
executed by the Borrowers in connection with the pledge of Eligible Mortgage
Loans to the Lender Agent 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 Agent,
the Electronic Agent and MERS, as the same shall be amended, restated,
supplemented or otherwise modified and in effect 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.


                                      -3-

<PAGE>

            "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 Agent 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 Agent on each
Business Day, reflecting the Mortgage Loans held by the Custodian for the
benefit of the Lender Agent, 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 Agent on any applicable Funding Date as well as the Mortgage Loans
previously pledged to the Lender Agent 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.

            "Pledgee" shall have the meaning specified in Section 25 hereof.

            "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.


                                      -4-

<PAGE>

            "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 Agent 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 Agent 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 Agent 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 Agent (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


                                      -5-
<PAGE>

                  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
                  applicable 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 applicable 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
                  applicable 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)   [intentionally omitted.]

            (h)   The original of any security agreement, chattel mortgage or
                  equivalent document executed in connection with the Mortgage
                  Loan; provided, that


                                      -6-

<PAGE>

                  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 Borrowers 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
applicable Borrowers, 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
applicable Borrower in time to permit their delivery hereunder at the time
required, in lieu of delivering such original documents, such Borrower shall
deliver to the 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


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<PAGE>

for recordation. Each 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 applicable 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 Agent 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 Agent 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 Agent 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 applicable Borrower and the Lender Agent, via electronic
transmission acceptable to the Lender Agent 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 Agent. 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 Agent 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 Agent and/or its designees pursuant to


                                      -8-
<PAGE>

this Custodial Agreement and (iv) each MERS Designated Mortgage Loan is being
held by MERS as the bailee for the Lender Agent 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, each of the Borrowers
and the Lender Agent hereby give the Custodian notice that from and after the
Funding Date, the Lender Agent 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 Agent that the Lender
Agent no longer has a security interest in such Mortgage Loan. In the event that
a Loan is not made to the applicable Borrower prior to 5:00 p.m., New York City
time, on such Funding Date, upon written notice thereof from the applicable
Borrower, acknowledged by the Lender Agent, the Custodian shall hold or release
to such Borrower, pursuant to such Borrower's 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 Agent by the Custodian, via electronic
transmission acceptable to the Lender Agent 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 Agent, 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 Agent 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 Agent shall supersede and cancel the Mortgage Loan Schedule and
Exception Report previously delivered by the Custodian to the Lender Agent
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 Agent therein. Each Mortgage Note (and Assignment of
Mortgage) shall be maintained in fire resistant facilities.


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<PAGE>

            (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 Agent, (ii) hold all documents constituting such
Mortgage File received by it for the exclusive use and benefit of the Lender
Agent, and (iii) make disposition thereof only in accordance with the terms of
this Custodial Agreement or with written instructions furnished by the Lender
Agent; provided, however, that in the event of a conflict between the terms of
this Custodial Agreement and the written instructions of the Lender Agent, the
Lender Agent's written instructions shall control.

            (c) In the event that (i) the Lender Agent, any 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
Agent, 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
Borrowers, jointly and severally.

            (d) The Lender Agent hereby acknowledges that the Custodian shall
not be responsible for the validity and perfection of the Lender Agent'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
Agent.


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<PAGE>

            (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 Agent, which notice shall be given by the Lender Agent
only following the occurrence of an Event of Default, the Custodian shall, upon
receipt of written request of the applicable Borrower and written authorization
of the Lender Agent, to release documentation relating to Mortgage Loans in the
possession of the Custodian to such Borrower, or its designee, for the purpose
of correcting documentary deficiencies relating thereto against a Request for
Release and Receipt executed by the applicable Borrower in the form of Annex 5-A
hereto. The applicable Borrower or its designee shall return to the Custodian
each document previously released from the Custodian's Mortgage File within
forty-five (45) calendar days of receipt thereof. Each Borrower hereby further
represents and warrants to the Lender Agent that any such request by a 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 applicable 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 Agent, which notice shall be given by the Lender Agent
only following the occurrence of an Event of Default, the Custodian shall, upon
written receipt from the applicable 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 Agent, release to such Borrower or its designee the
related Custodian's Mortgage File or the documents set forth in such request and
receipt. The applicable Borrower or its designee shall hold each Mortgage File
delivered to it pursuant to this Section 5(b) as bailee for the Lender Agent.
Such Borrower or its designee shall return to the Custodian each document
previously released from the Custodian's Mortgage File within forty-five (45)
calendar days of receipt thereof. Each Borrower hereby further represents and
warrants to the Lender Agent that any such request by any 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 applicable Borrower in the form of Annex 5-C hereto, with an electronic
copy to the Lender Agent, 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 applicable
Borrower or such Approved Purchaser shall return to the Custodian each document
previously released from the Custodian's Mortgage File within forty-five (45)
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.


                                      -11-
<PAGE>

            (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
      Agent shall notify the Custodian thereof. In connection with any request
      to deliver Mortgage Files pursuant to this Section 5(c), the applicable
      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 Agent, and with the prior written consent of the Lender
Agent, the Borrowers 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 Agent. In connection with any such requested
substitution or release, the applicable Borrower will provide notice to the
Custodian and the Lender Agent 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 Agent 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 Borrowers 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 Agent shall take such steps as they may reasonably be directed from time
to time by the applicable Borrower in writing, which the applicable Borrower
deems necessary and appropriate, to transfer promptly and deliver to the
applicable 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 Borrowers or the applicable Borrower, with
the written consent of the Lender


                                      -12-
<PAGE>

Agent, have notified the Custodian has ceased to be an Eligible Mortgage Loan.
In furtherance of the foregoing, upon receipt of written request from the
applicable Borrower in the form of Annex 5-D hereto, which must be acknowledged
by the Lender Agent, 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 applicable Borrower the requested Mortgage Files.

            (f) Following the Lender Agent'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 Agent.

            (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 Agent via electronic mail which
attaches the appropriate form referenced in clauses (a) and (b) above, and the
Lender Agent'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 American Home Mortgage Corp., the payment of which fees, together
with the Custodian's expenses (including, without, limitation, attorney's fees)
in connection herewith, shall be solely the joint and several obligation of the
Borrowers. The obligations of the Borrowers under this Section 6 shall survive
the termination of this Custodial Agreement and any prior resignation or removal
of the Custodian or prior 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 Borrowers and the Lender Agent. Promptly after receipt of notice
of the Custodian's resignation, the Lender Agent shall appoint, by written
instrument, a successor custodian, subject to written approval by the Borrowers
(which approval shall not be unreasonably withheld). One original counterpart of
such instrument of appointment shall be delivered to each of the Borrowers, the
Custodian and the successor custodian.

            (b) The Lender Agent, with the consent of the Borrowers, upon at
least sixty (60) days' prior written notice to the Custodian and the Lender
Agent, 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


                                      -13-
<PAGE>

of the Custodian, the Lender Agent shall appoint, by written instrument, a
successor custodian, with the consent of the Borrowers. One original counterpart
of such instrument of appointment shall be delivered to each of the Borrowers,
the Lender Agent, 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 Agent. 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 Borrowers. 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 Borrowers. The Borrowers
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
Agent or its designee upon surrender of all outstanding Trust Receipts or (ii)
in the event that the Lender Agent 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 Agent, the Borrowers 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 Agent shall be entitled to
receive a certificate of the respective insurer that such insurance is in full
force and effect.


                                      -14-
<PAGE>

Section 10. Representations and Warranties.

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

            (i) such 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 such party and constitutes a legal, valid and binding
      obligation of such party, 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 each of the Borrowers represents to the Lender
Agent that the Custodian is not an Affiliate of any Borrower.

Section 11. Statements.

            (a) Upon the reasonable written request of the Lender Agent or the
Borrowers, the Custodian shall provide the Lender Agent or the Borrowers, 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 Agent, the
Custodian shall deliver to the Lender Agent and the Borrowers 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,


                                      -15-
<PAGE>

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 Agent or the Borrowers 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 Agent or the Borrowers.

            (b) Each Borrower, jointly and severally, 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 Agent, and provided that
(i) Custodian previously delivered to the Lender Agent 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 a Borrower or the
Lender Agent, 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 Agent 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 applicable Borrower or the Lender
Agent in accordance with the succeeding paragraph of this Section 13 and, (2) at
the Lender Agent'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 & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., obtain and maintain an insurance bond in the name
of the Lender Agent, and its successors in interest and assigns, insuring
against any losses associated with the loss of such


                                      -16-
<PAGE>

document, in an amount equal to the then outstanding principal balance of the
related Mortgage Loan or such lesser amount requested by the Lender Agent in the
Lender Agent's sole discretion.

            (d) The Custodian agrees to indemnify and hold the Lender Agent and
each 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 Agent or a
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 Agent
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 Agent, the Borrowers 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
Agent with respect to a Mortgage File.


                                      -17-
<PAGE>

            (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 Agent of the
termination of the Loan Agreement and payment in full of all amounts owing to
the Lender Agent thereunder and under the Note, the Custodian shall deliver all
documents remaining in the Mortgage Files to the applicable 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 Agent and the
Borrowers 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). \


                                      -18-
<PAGE>

Section 18. Authorized Representatives.

            Each individual designated as an authorized representative of the
Lender Agent or its successors or assigns, the Borrowers 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 Agent, the
Borrowers 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
Agent, the Borrowers 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 Borrowers, the Lender Agent and the Custodian.

Section 20. Cumulative Rights.

            The rights, powers and remedies of the Custodian and the Lender
Agent under this Custodial Agreement shall be in addition to all rights, powers
and remedies given to the Custodian and the Lender Agent 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 Agent's security
interest in the Collateral.

Section 21. Binding Upon Successors.

            All rights of the Custodian and the Lender Agent under this
Custodial Agreement shall inure to the benefit of the Custodian and the Lender
Agent and their successors and permitted assigns, and all obligations of each
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
Agent and the Borrowers. 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 Agent and the Borrower, and this Custodial Agreement contains the entire
Agreement with respect to the rights and obligations of the Custodian.


                                      -19-

<PAGE>

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 Agent.

            In connection with a pledge of the Mortgage Loans as collateral for
an obligation of the Lender Agent, the Lender Agent may pledge its interest in
the Mortgage Files covered held by the Custodian for the benefit of the Lender
Agent from time to time by delivering written notice to the Custodian stating
that the Lender Agent 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 Agent, the Custodian shall mark its records to reflect the pledge of
the Mortgage Loans by the Lender Agent to the Pledgee. The Custodian's records
shall reflect the pledge of the Mortgage Loans by the Lender Agent to the
Pledgee until such time as the Custodian receives written instructions from the
Lender Agent and acknowledged by the Pledgee that the Mortgage Loans are no
longer pledged by the Lender Agent 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 Agent; provided, however that such pledge shall
not affect the right of the Custodian to rely on instructions from the Lender
Agent hereunder.

Section 26. Transmission of Mortgage Files.

            Prior to any shipment of any Mortgage Files hereunder, the
applicable 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. Such 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 such 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, any Borrower, arising out of actions of
the Custodian consistent with the instructions of a 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.


                                      -20-

<PAGE>

Section 27. Submission To Jurisdiction; Waivers.

            Each Borrower, the Lender Agent and the Custodian hereby irrevocably
and unconditionally:

            (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS CUSTODIAL AGREEMENT, THE LOAN AGREEMENT, THE NOTE
AND THE OTHER LOAN DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

            (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

            (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER
AGENT SHALL HAVE BEEN NOTIFIED; AND

            (D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.

Section 28. Waiver of Jury Trial.

            Each Borrower, the Lender Agent and the Custodian hereby waive trial
by jury in any judicial proceeding involving, directly or indirectly, any matter
(whether sounding in tort, contract or otherwise) in any way arising out of,
related to, or connected with this Custodial Agreement or the relationships
established hereunder.

                            [SIGNATURE PAGE FOLLOWS]


                                      -21-
<PAGE>

                                                               Execution Version

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



                                        Borrowers



                                        AMERICAN HOME MORTGAGE CORP.,
                                        as a Borrower


                                        By:  /s/  Michael Strauss
                                             --------------------
                                             Name:   Michael Strauss
                                             Title:  President

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




                                        AMERICAN HOME MORTGAGE INVESTMENT
                                        Corp., as a Borrower


                                        By:  /s/  Michael Strauss
                                             --------------------
                                             Name:   Michael Strauss
                                             Title:  President

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

<PAGE>

                                        AMERICAN HOME MORTGAGE HOLDINGS, INC.,
                                        as a Borrower


                                        By:  /s/  Michael Strauss
                                             --------------------
                                             Name:   Michael Strauss
                                             Title:  President

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




                                        AMERICAN HOME MORTGAGE ACCEPTANCE,
                                        Inc., as a Borrower


                                        By:  /s/  Michael Strauss
                                             --------------------
                                             Name:   Michael Strauss
                                             Title:  President

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




                                        COLUMBIA NATIONAL, INCORPORATED, as a
                                        Borrower


                                        By:  /s/  Michael Strauss
                                             --------------------
                                             Name:   Michael Strauss
                                             Title:  President

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

<PAGE>

                                        Lender Agent




                                        MORGAN STANLEY BANK


                                        By:  /s/ Paul Najarian
                                           -------------------------------
                                            Name:
                                            Title:

                                        Address for Notices:
                                        2500 Lake Park Boulevard
                                        West Valley City, Utah  84120
                                        Attention:  Richard Felix


                                        with a copy to:
                                        1221 Avenue of the Americas, 27th Floor
                                        New York, New York 10020
                                        Attention:  Paul Najarian
                                        Telecopier No.:  (212) 507-4780
                                        Telephone No.:   (212) 762-6397

<PAGE>

                                        Custodian




                                        DEUTSCHE BANK NATIONAL TRUST COMPANY


                                        By:  /s/ Andrew Hays
                                           --------------------------------
                                            Name:  Andrew Hays
                                            Title: Associate


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