Exhibit 10.9
================================================================================
PSA THE BOND MARKET
    TRADE ASSOCIATION

                                    FORM OF
                          MASTER REPURCHASE AGREEMENT
                             SEPTEMBER 1996 VERSION
================================================================================
                                                      Dated as of March 30, 1998
By and Among:

OCWEN PARTNERSHIP L.P.,
MERRILL LYNCH MORTGAGE CAPITAL INC.

AND

MERRILL LYNCH CREDIT CORPORATION

1.  APPLICABILITY

    From time to time the parties hereto may enter into transactions in which
    one party ("Seller") agrees to transfer to the other ("Buyer") securities or
    other assets ("Securities") against the transfer of funds by Buyer, with a
    simultaneous agreement by Buyer to transfer to Seller such Securities at a
    date certain or on demand, against the transfer of funds by Seller. Each
    such transaction shall be referred to herein as a "Transaction" and, unless
    otherwise agreed in writing, shall be governed by this Agreement, including
    any supplemental terms or conditions contained in Annex I hereto and in any
    other annexes identified herein or therein as applicable hereunder.

2.  DEFINITIONS

    (a)  "Act of Insolvency", with respect to any party, (i) the commencement by
         such party as debtor of any case or proceeding under any bankruptcy,
         insolvency, reorganization, liquidation, moratorium, dissolution,
         delinquency or similar law, or such party seeking the appointment or
         election of a receiver, conservator, trustee, custodian or similar
         official for such party or any substantial part of its property, or the
         convening of any meeting of creditors for purposes of commencing any
         such case or proceeding or seeking such an appointment or election,
         (ii) the commencement of any such case or proceeding against such
         party, or another seeking such an appointment or election, or the
         filing against a party of an application for a protective decree under
         the provisions of the Securities Investor Protection Act of 1970, which
         (A) is consented to or not timely contested by such party, (B) results
         in the entry of an order for relief, such an appointment or election,
         the issuance of such a protective decree or the entry of an order
         having a similar effect, or (C) is not dismissed within 15 days, (iii)
         the making by such party of a general assignment for the benefit of
         creditors, or (iv) the admission in writing by such party of such
         party's inability to pay such party's debts as they become due;

    (b)  "Additional Purchased Securities", Securities provided by Seller to
         Buyer pursuant to Paragraph 4(a) hereof;

    (c)  "Buyer's Margin Amount", with respect to any Transaction as of any
         date, the amount obtained by application of the Buyer's Margin
         Percentage to the Repurchase Price for such Transaction as of such
         date:


<PAGE>


    (d)  "Buyer's Margin Percentage", with respect to any Transaction as of any
         date, a percentage (which may be equal to the Seller's Margin
         Percentage) agreed to by Buyer and Seller or, in the absence of any
         such agreement, the percentage obtained by dividing the Market Value of
         the Purchased Securities on the Purchase Date by the Purchase Price on
         the Purchase Date for such Transaction;

    (e)  "Confirmation", the meaning specified in Paragraph 3(b) hereof;

    (f)  "Income", with respect to any Security at any time, any principal
         thereof and all interest, dividends or other distributions thereon;

    (g)  "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;

    (h)  "Margin Excess", the meaning specified in Paragraph 4(b) hereof;

    (i)  "Margin Notice Deadline", the time agreed to by the parties in the
         relevant Confirmation, Annex I hereto or otherwise as the deadline for
         giving notice requiring same-day satisfaction of margin maintenance
         obligations as provided in Paragraph 4 hereof (or, in the absence of
         any such agreement, the deadline for such purposes established in
         accordance with market practice);

    (j)  "Market Value", with respect to any Securities as of any date, the
         price for such Securities on such date obtained from a generally
         recognized source agreed to by the parties or the most recent closing
         bid quotation from such a source, plus accrued Income to the extent not
         included therein(other than any Income credited or transferred to, or
         applied to the obligations of, Seller pursuant to Paragraph 5 hereof)
         as of such date (unless contrary to market practice for such
         Securities);

    (k)  "Price Differential", with respect to any Transaction as of any date,
         the aggregate amount obtained by daily application of the Pricing Rate
         for such Transaction to the Purchase Price for such Transaction on a
         360-day-per-year basis for the actual number of days during the period
         commencing on (and including) the Purchase Date for such Transaction
         and ending on (but excluding) the date of determination (reduced by any
         amount of such Price Differential previously paid by Seller to Buyer
         with respect to such Transaction);

    (l)  "Pricing Rate", the per annum percentage rate for determination of the
         Price Differential;

    (m)  "Prime Rate", the prime rate of U.S. commercial banks as published in
         THE WALL STREET JOURNAL (or, if more than one such rate is published,
         the average of such rates);

    (n)  "Purchase Date", the date on which Purchased Securities are to be
         transferred by Seller to Buyer;

    (o)  "Purchase Price", (i) on the Purchase Date, the price at which
         Purchased Securities are transferred by Seller to Buyer, and (ii)
         thereafter, except where Buyer and Seller agree otherwise, such price
         increased by the amount of any cash transferred by Buyer to Seller
         pursuant to Paragraph 4(b) hereof and decreased by the amount of any
         cash transferred by Seller and Buyer pursuant to Paragraph 4(a) hereof
         or applied to reduce Seller's obligations under clause (ii) of
         Paragraph 5 hereof;

    (p)  "Purchased Securities", the Securities transferred by Seller to Buyer
         in a Transaction hereunder, and any Securiti4es substituted therefor in
         accordance with Paragraph 9 hereof. The term "Purchased Securities"
         with respect to any Transaction at any time also shall include Addition
         Purchased Securities delivered pursuant to Paragraph 4(a) hereof and
         shall exclude Securities returned pursuant to Paragraph 4(b) hereof;

    (q)  "Repurchase Date", the date on which Seller is to repurchase the
         Purchased Securities from Buyer, including any date determined by
         application of the provisions of Paragraph 3(C) or 11 hereof;

    (r)  "Repurchase Price", the price at which Purchased Securities are to be
         transferred from Buyer to Seller upon termination of a Transaction,
         which will be determined in each case (including Transactions
         terminable upon demand) as the sum of the Purchased Price and the Price
         Differential as of the date of such determination.


                                       2
<PAGE>


    (s)  "Seller's Margin Amount", with respect to any Transaction as of any
         date, the amount obtained by application the Seller's Margin Percentage
         to the Repurchase Price for such Transaction as of such date;

    (t)  "Seller's Margin Percentage", with respect to any Transaction as of any
         date, a percentage (which may be equal to the Buyer's Margin
         Percentage) agreed to by Buyer and Seller or, in the absence of any
         such agreement, the percentage obtained by dividing the Market Value of
         the Purchased Securities on the Purchase Date by the Purchase Price on
         the Purchase Date for such Transaction.

3.  INITIATION; CONFIRMATION; TERMINATION 

    (a) An agreement to enter into a Transaction may be made orally or in
         writing at the initiation of either Buyer or Seller. On the Purchase
         Date for the Transaction, the Purchased Securities shall be transferred
         to Buyer or its agent against the transfer of the Purchase Price to an
         account of Seller.

    (b)  Upon agreeing to enter into a Transaction hereunder, Buyer or Seller(or
         both), as shall be agreed, shall promptly deliver to the other party a
         written confirmation of each Transaction (a "Confirmation"). The
         Confirmation shall describe the Purchased Securities (including CUSIP
         number, if any), identify Buyer and Seller and set forth (i) the
         Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date,
         unless the Transaction is to be terminable on demand, (iv) the Pricing
         Rate or Repurchase Price applicable to the Transaction, and(v) any
         additional terms or conditions of the Transaction not inconsistent with
         this Agreement. The Confirmation, together with the Agreement, shall
         constitute conclusive evidence of the terms agreed between Buyer and
         Seller with respect to the Transaction to which the Confirmation
         relates, unless with respect to the Confirmation specific objection is
         made promptly after receipt thereof. In the event of any conflict
         between the terms of such Confirmation and this Agreement, this
         Agreement shall prevail.

    (c)  In the case of Transactions terminable upon demand, such demand shall
         be made by Buyer or Seller, no later than such time as is customary in
         accordance with market practice, by telephone or otherwise on or prior
         to the business day on which such termination will be effective. On the
         date specified in such demand, or on the date fixed for termination in
         the case of Transactions having a fixed term, termination of the
         Transaction will be effected by transfer to Seller or its agent of the
         Purchased Securities and any Income in respect thereof received by
         Buyer (and not previously credited or transferred to, or applied to the
         obligations of, Seller pursuant to Paragraph 5 hereof) against the
         transfer of the Repurchase Price to an account of Buyer.

4.  MARGIN MAINTENANCE

    (a)  If at any time the aggregate Market Value of all Purchased Securities
         subject to all transactions which a particular party hereto is acting
         as Buyer is less than the aggregate Buyer's margin Amount for all such
         Transactions (a "Margin Deficit"), then Buyer may by notice to Seller
         require Seller in such Transactions, at Seller's option, to transfer to
         Buyer cash or additional Securities reasonably acceptable to Buyer
         ("Additional Purchased Securities"), so that the cash and aggregate
         Market Value of the Purchased Securities, including any such Additional
         Purchased Securities, will thereupon equal or exceed such aggregate
         Buyer's margin Amount (decreased by the amount of any Margin Deficit as
         of such date arising from any Transactions in which such Buyer is
         acting as the Seller).

    (b)  If at any time the aggregate Market Value of all Purchased Securities
         subject to all Transactions in which a particular party hereto is
         acting as Seller exceed the aggregate Seller's margin Amount for all
         such Transactions at such time (a "Margin Excess"), then Seller may be
         notice to Buyer require Buyer in such Transactions, at Buyer's option,
         to transfer cash or Purchased Securities to Seller, so that the
         aggregate Market Value of the Purchased Securities, after deduction of
         any such


                                       3
<PAGE>


         cash or any Purchased Securities so transferred, will thereupon not
         exceed such aggregate Seller's Margin Amount (increased by the amount
         of any Margin Excess as of such date arising from any Transactions in
         which such Seller is acting as Buyer).

    (c)  If any notice is given by Buyer or Seller under subparagraph (a) or (b)
         of this Paragraph at or before the Margin Notice Deadline on any
         business day, the party receiving such notice shall transfer cash or
         Additional Purchased Securities as provided in such subparagraph no
         later than the close of business in the relevant market on such day. If
         any such notice is given after the Margin Notice Deadline, the party
         receiving such notice shall transfer such cash or Securities no later
         than the close of business in the relevant market on the next business
         day following such notice.

    (d)  Any cash transferred pursuant to this Paragraph shall be attributed to
         such Transactions as shall be agreed upon by Buyer and Seller.

    (e)  Seller and Buyer may agree, with respect to any or all Transactions
         hereunder, that the respective rights of Buyer or Seller (or both)
         under subparagraphs (a) and (b) of this Paragraph may be exercised only
         where a Margin Deficit or a Margin Excess, as the case may be, exceeds
         a specified dollar amount or a specified percentage of the Repurchase
         Prices for such Transactions (which amount or percentage shall be
         agreed to by Buyer and Seller prior to entering into any such
         Transactions).

    (f)  Seller and Buyer may agree, with respect to any or all Transactions
         hereunder, that the respective rights of Buyer and Seller under
         subparagraphs (a) and (b) of this Paragraph to require the elimination
         of a Margin Deficit or a Margin Excess, as the case may be, may be
         exercised whenever such a Margin Deficit or a Margin Excess exists with
         respect to any single Transaction hereunder (calculated without regard
         to any other Transaction outstanding under this Agreement).

5.  INCOME PAYMENTS

    Seller shall be entitled to receive an amount equal to all Income paid or
    distributed on or in respect of the Securities that is not otherwise
    received by Seller, to the full extent it would be so entitled if the
    Securities had not been sold to Buyer. Buyer shall, as the parties may agree
    with respect to any Transaction (or, in the absence of any such agreement,
    as Buyer shall reasonably determine in its discretion), on the date such
    Income is paid or distributed either (i) transfer to or credit to the
    account of Seller such Income with respect to any Purchased Securities
    subject to such Transaction or (ii) with respect to Income paid in cash,
    apply the Income payment or payments to reduce the amount, if any, to be
    transferred to Buyer by Seller upon termination of such Transaction. Buyer
    shall not be obligated to take any action pursuant to the preceding sentence
    (A) to the extent that such action would result in the creation of a Margin
    Deficit, unless prior thereto or simultaneously therewith Seller transfers
    to Buyer cash or Additional Purchased Securities sufficient to eliminate
    such Margin Deficit, or (B) if an Event of Default with respect to Seller
    has occurred and is then continuing at the time such Income is paid or
    distributed.

6.  SECURITY INTEREST

    Although the parties intend that all Transactions hereunder by sales and
    purchases and not loans, in the event any such Transactions are deemed to be
    loans, Seller shall be deemed to have pledged to Buyer as security for the
    performance by Seller of its obligations under each such Transaction, and
    shall be deemed to have granted to Buyer a security interest in, all of the
    Purchased Securities with respect to all Transactions hereunder and all
    Income thereon and other proceeds thereof.

7.  PAYMENT AND TRANSFER

    Unless otherwise mutually agreed, all transfers of funds hereunder shall be
    in immediately available funds. All Securities transferred by one party
    hereto to the other party (i) shall be in suitable form for transfer or
    shall be accompanied by duly executed instruments of transfer or assignment
    in blank and


                                       4
<PAGE>


    such other documentation as the party receiving possession may reasonably
    request, (ii) shall be transferred on the book-entry system of a Federal
    Reserve Bank, or (iii) shall be transferred by any other method mutually
    acceptable to Seller and Buyer.

8.  SEGREGATION OF PURCHASED SECURITIES

    To the extent  required by applicable  law, all Purchased  Securities in the
    possession  of Seller  shall be  segregated  from  other  securities  in its
    possession and shall be identified as subject to this Agreement. Segregation
    may be accomplished by appropriate  identification  on the books and records
    of the  holder,  including  a  financial  or  securities  intermediary  or a
    clearing  corporation.  All of Seller's interest in the Purchased Securities
    shall pass to Buyer on the Purchase  Date and,  unless  otherwise  agreed by
    Buyer and  Seller,  nothing  in this  Agreement  shall  preclude  Buyer from
    engaging  in  repurchase  transactions  with  the  Purchased  Securities  or
    otherwise  selling,  transferring,  pledging or hypothecating  the Purchased
    Securities,  but no such transaction  shall relieve Buyer of its obligations
    to transfer Purchased  Securities to Seller pursuant to Paragraph 3, 4 or 11
    hereof, or of Buyer's obligation to credit or pay Income to, or apply Income
    to the obligations of, Seller pursuant to Paragraph 5 hereof.

    ----------------------------------------------------------------------------
      REQUIRED DISCLOSURE FOR TRANSACTIONS IN WHICH THE SELLER RETAINS CUSTODY
      OF THE PURCHASED SECURITIES

        Seller is not permitted to substitute other securities for those
        subjects to this Agreement and therefore must keep Buyer's securities
        segregated at all times, unless in this Agreement Buyer grants Seller
        the right to substitute other securities. If Buyer grants the right to
        substitute, this means that Buyer's securities will likely be commingled
        with Seller's own securities during the trading day. Buyer is advised
        that, during any trading day that Buyer's securities are commingled with
        Seller's securities, the[will]* [may]** be subject to liens granted by
        Seller to [its clearing bank]* [third parties]** and may be used by
        Seller for deliveries on other securities transactions. Whenever the
        securities are commingled, Seller's ability to resegregate substitute
        securities for Buyer will be subject to Seller's ability to satisfy [the
        clearing]* [any]** lien or to obtain substitute securities.
    ----------------------------------------------------------------------------

    *Language to be used under 17 C.F.R. SS403.4(e) if Seller is a government
    securities broker or dealer other than a financial institution.

    **Language to be used under 17 C.F.R. SS403.5(d) if Seller is a financial
    institution.

9.  SUBSTITUTION

    (a)  Seller may, subject to agreement with and acceptance by Buyer,
         substitute other Securities for any Purchased Securities. Such
         substitution shall be made by transfer to Buyer of such other
         Securities and transfer to Seller of such Purchased Securities. After
         substitution, the substituted Securities shall be deemed to be
         Purchased Securities.

    (b)  In Transactions in which Seller retains custody of Purchased
         Securities, the parties expressly agree that Buyer shall be deemed, for
         purposes of subparagraph (a) of this Paragraph, to have agreed to and
         accepted in this Agreement substitution by Seller of other Securities
         for Purchased Securities; PROVIDED, HOWEVER, that such other Securities
         shall have a Market Value at least equal to the Market Value of the
         Purchased Securities for which they are substituted.

10. REPRESENTATIONS

    Each of Buyer and Seller represents and warrants to the other that (i) it is
    duly authorized to execute and deliver this Agreement, to enter into
    Transactions contemplated hereunder and to perform its obligations hereunder
    and has taken all necessary action to authorize such execution, delivery and
    per-


                                       5
<PAGE>


    formance, (ii) it will engage in such Transactions as principal (or, if
    agreed in writing, in the form of an annex hereto or otherwise, in advance
    of any Transaction by the other party hereto, as agent for a disclosed
    principal), (iii) the person signing this Agreement on its behalf is duly
    authorized to do so on its behalf (or on behalf of any such disclosed
    principal), (iv) it has obtained all authorizations of any governmental body
    required in connection with this Agreement and the transactions hereunder
    and such authorizations are in full force and effect and (v) the execution,
    delivery and performance of this Agreement and the Transactions hereunder
    will not violate any law, ordinance, charter, by-law or rule applicable to
    it or any agreement by which it is bound or by which any of its assets are
    affected. On the Purchase Date for any Transaction Buyer and Seller shall
    each be deemed to repeat all the foregoing representations made by it.

11. EVENTS OF DEFAULT

    In the event that (i) Seller fails to transfer or Buyer fails to purchase
    Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to
    repurchase or Buyer fails to transfer Purchased Securities upon the
    applicable Repurchase Date, (iii) Seller or Buyer fails to comply with
    Paragraph 4 hereof, (iv) Buyer fails, after one business day's notice, to
    comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect
    to Seller or Buyer, (vi) any representation made by Seller or Buyer shall
    have been incorrect or untrue in any material respect when made or repeated
    or deemed to have been made or repeated, or (vii) Seller or Buyer shall
    admit to the other its inability to, or its intention not to perform any of
    its obligations hereunder (each an "Event of Default"):

    (a)  The nondefaulting party may, at its option (which option shall be
         deemed to have been exercised immediately upon the occurrence of an Act
         of Insolvency), declare and Event of Default to have occurred hereunder
         and, upon the exercise or deemed exercise of such option, the
         Repurchase Date for each Transaction hereunder shall, if it has not
         already occurred, be deemed immediately to occur (except that, in the
         event that the Purchase Date for any Transaction has not yet occurred
         as of the date of such exercise or deemed exercise, such Transaction
         shall be deemed immediately canceled). The nondefaulting party shall
         (except upon the occurrence of an Act of Insolvency) give notice to the
         defaulting party of the exercise of such option as promptly as
         practicable.

    (b)  In all Transactions in which the defaulting party is acting as Seller,
         if the nondefaulting party exercises or is deemed to have exercised the
         option referred to in subparagraph (a) of this Paragraph, (i) the
         defaulting party's obligations in such Transactions to repurchase all
         Purchased Securities, at the Repurchase Price therefor on the
         Repurchase Date determined in accordance with subparagraph (a) of the
         Paragraph, shall thereupon become immediately due and payable, (ii) all
         Income paid after such exercise or deemed exercise shall be retained by
         the nondefaulting party and applied to the aggregate unpaid Repurchase
         Prices and any other amounts owing by the defaulting party hereunder,
         and (iii) the defaulting party shall immediately deliver to the
         nondefaulting party any Purchased Securities subject to such
         Transactions then in the defaulting party's possession or control.

    (c)  In all Transactions in which the defaulting party is acting as Buyer,
         upon tender by the nondefaulting party of payment of the aggregate
         Repurchase Prices for all such Transactions, all right, title and
         interest in and entitlement to all Purchased Securities subject to such
         Transactions shall be deemed transferred to the nondefaulting party,
         and the defaulting party shall deliver all such Purchased Securities to
         the nondefaulting party.


                                       6
<PAGE>


    (d)  If the nondefaulting party exercises or is deemed to have exercised the
         option referred to in subparagraph (a) of this Paragraph, the
         nondefaulting party, without prior notice to the defaulting party, may:

         (i)  as to Transactions in which the defaulting party is acting as
              Seller, (A) immediately sell, in an recognized market (or
              otherwise in a commercially reasonable manner) at such price or
              prices as the nondefaulting party may reasonably deem
              satisfactory, any or all Purchased Securities subject to such
              Transactions and apply the proceeds thereof to the aggregate
              unpaid Repurchase Prices and any other amounts owing by the
              defaulting party hereunder or (B) in its sole discretion elect, in
              lieu of selling all or a portion of such Purchased Securities, to
              give the defaulting party credit for such Purchased Securities in
              an amount equal to the price therefor on such date, obtained from
              a generally recognized source or the most recent closing bid
              quotation from such a source, against the aggregate unpaid
              Repurchase Prices and any other amounts owing by the defaulting
              party hereunder; and

         (ii) as to Transactions in which the defaulting party is acting as
              Buyer, (A) immediately purchase, in a recognized market (or
              otherwise in a commercially reasonable manner) at such price or
              prices as the nondefaulting party may reasonably deem
              satisfactory, securities ("Replacement Securities") of the same
              class and amount as any Purchased Securities that are not
              delivered by the defaulting party to the nondefaulting party as
              required hereunder or (B) in its sole discretion elect, in lieu of
              purchasing Replacement Securities, to be deemed to have purchased
              Replacement Securities at the price therefor on such date,
              obtained from a generally recognized source or the most recent
              closing offer quotation from such a source.

         Unless otherwise provided in Annex I, the parties acknowledge and agree
         that (1) the Securities subject to any Transaction hereunder are
         instruments traded in a recognized market, (2) in the absence of a
         generally recognized source for prices or bid or offer quotations for
         any Security, the nondefaulting party may establish the source therefor
         in its sole discretion and (3) all prices, bids and offers shall be
         determined together with accrued Income (except to the extent contrary
         to market practice with respect to the relevant Securities).

    (e)  As to Transactions in which the defaulting party is acting as Buyer,
         the defaulting party shall be liable to the nondefaulting party for any
         excess of the price paid (or deemed paid) by the nondefaulting party
         for Replacement Securities over the Repurchase Price for the Purchased
         Securities replaced thereby and for any amounts payable by the
         defaulting party under Paragraph 5 hereof or otherwise hereunder.

    (f)  For purposes of this Paragraph 11, the Repurchase Price for each
         Transaction hereunder in respect of which the defaulting party is
         acting as Buyer shall not increase above the amount of such Repurchase
         Price for such Transaction determined as of the date of the exercise or
         deemed exercise by the nondefaulting party of the option referred to in
         subparagraph (a) of this Paragraph.

    (g)  The defaulting party shall be liable to the nondefaulting party for (i)
         the amount of all reasonable legal or other expenses incurred by the
         nondefaulting party in connection with or as a result of an Event of
         Default, (ii) damages in an amount equal to the cost (including all
         fees, expenses and commissions) of entering into replacement
         transactions and entering into or terminating hedge transactions in
         connection with or as a result of an Event of Default, and (iii) any
         other loss, damage, cost or expense directly arising or resulting from
         the occurrence of an Event of Default in respect of a Transaction.

    (h)  To the extent permitted by applicable law, the defaulting party shall
         be liable to the nondefaulting party for interest on any amounts owing
         by the defaulting party hereunder, from the date the defaulting party
         becomes liable for such amounts hereunder until such amounts are (i)
         paid in full


                                       7
<PAGE>


         by the defaulting party or (ii) satisfied in full by the exercise of
         the nondefaulting party's rights hereunder. Interest on any sum payable
         by the defaulting party to the nondefaulting party under this Paragraph
         11(h) shall be at a rate equal to the greater of the Pricing Rate for
         the relevant Transaction or the Prime Rate.

    (i)  The nondefaulting party shall have, in addition to its rights
         hereunder, any rights otherwise available to it under any other
         agreement or applicable law.

12. SINGLE AGREEMENT

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

13. NOTICES AND OTHER COMMUNICATIONS

    Any and all notices, statements, demands or other communications hereunder
    may be given by a party to the other by mail, facsimile, telegraph,
    messenger or otherwise to the address specified in Annex II hereto, or so
    sent to such party at any other place specified in a notice of change of
    addess hereafter received by the other. All notices, demands and requests
    hereunder may be made orally, to be confirmed promptly in writing, or by
    other communication as specified in the preceding sentence.

14. ENTIRE AGREEMENT; SEVERABILITY

    This Agreement shall supersede any existing agreements between the parties
    containing general terms and conditions for repurchase transactions. Each
    provision and agreement herein shall be treated as separate and independent
    from any other provision or agreement herein and shall be enforceable
    notwithstanding the unenforceability of any such other provision or
    agreement.

15. NON-ASSIGNABILITY; TERMINATION

    (a)  The rights and obligations of the parties under this Agreement and
         under any Transaction shall not be assigned by either party without the
         prior written consent of the other party, and any such assignment
         without the prior written consent of the other party shall be null and
         void. Subject to the foregoing, this Agreement and any Transactions
         shall be binding upon and shall inure to the benefit of the parties and
         their respective successors and assigns. This Agreement may be
         terminated by either party upon giving written notice to the other,
         except that this Agreement shall, notwithstanding such notice, remain
         applicable to any Transactions then outstanding.

    (b)  Subparagraph (a) of this Paragraph 15 shall not preclude a party from
         assigning, charging or otherwise dealing with all or any part of its
         interest in any sum payable to it under Paragraph 11 hereof.

16. GOVERNING LAW

    This Agreement shall be governed by the laws of the State of New York
    without giving effect to the conflict of law principles thereof.


                                       8
<PAGE>


17. NO WAIVERS, ETC.

    No express or implied waiver of any Event of Default by either party shall
    constitute a waiver of any other Event of Default and no exercise of any
    remedy hereunder by any party shall constitute a waiver of its right to
    exercise any other remedy hereunder. No modification or waiver of any
    provision of this Agreement and no consent by any party to a departure
    herefrom shall be effective unless and until such shall be in writing and
    duly executed by both of the parties hereto. Without limitation on any of
    the foregoing, the failure to give a notice pursuant to Paragraph 4(a) or
    4(b) hereof will not constitute a waiver of any right to do so at a later
    date.

18. USE OF EMPLOYEE PLAN ASSETS

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

    (b)  Subject to the last sentence of subparagraph (a) of this Paragraph, any
         such Transaction shall proceed only if Seller furnishes or has
         furnished to Buyer its most recent available audited statement of its
         financial condition and its most recent subsequent unaudited statement
         of its financial condition.

    (c)  By entering into a Transaction pursuant to this Paragraph, Seller shall
         be deemed (i) to represent to Buyer that since the date of Seller's
         latest such financial statements, there has been no material adverse
         change in Seller's financial condition which Seller has not disclosed
         to Buyer, and (ii) to agree to provide Buyer with future audited and
         unaudited statements of its financial condition as they are issued, so
         long as it is a Seller in any outstanding Transaction involving a Plan
         Party.

19. INTENT.

    (a)  The parties recognize that each Transaction is a "repurchase agreement"
         as that term is defined in Section 101 of Title 11 of the United States
         Code, as amended (except insofar as the type of Securities subject to
         such Transaction or the term of such Transaction would render such
         definition inapplicable), and a "securities contract" as that term is
         defined in Section 741 of Title 11 of the United States Code, as
         amended (except insofar as the type of assets subject to such
         Transaction would render such definition inapplicable).

    (b)  It is understood that either party's right to liquidate Securities
         delivered to it in connection with Transactions hereunder or to
         exercise any other remedies pursuant to Paragraph 11 hereof is a
         contractual right to liquidate such Transaction as described in
         Section 555 and 559 of Title 11 of the United States Code, as amended.

    (c)  The parties agree and acknowledge that if a party hereto is an "insured
         depository institution," as such term is defined in the Federal Deposit
         Insurance Act, as amended ("FDIA"), then each Transaction hereunder is
         a "qualified financial contract," as that term is defined in FDIA and
         any rules, orders or policy statements thereunder (except insofar as
         the type of assets subject to such Transaction would render such
         definition inapplicable).

    (d)  It is understood that this Agreement constitutes a "netting contract"
         as defined in and subject to Title IV of the Federal Deposit Insurance
         Corporation Improvement Act of 1991 ("FDICIA") and each payment
         entitlement and payment obligation under any Transaction hereunder
         shall constitute a "covered contractual payment entitlement" or
         "covered contractual payment obligation",


                                       9
<PAGE>


         respectively, as defined in and subject to FCIDIA (except insofar as
         one or both of the parties is not a "financial institution" as that
         term is defined in FDICIA).

20. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
    The parties acknowledge that they have been advised that:

    (a)  in the case of Transactions in which one of the parties is a broker or
         dealer registered with the Securities and Exchange Commission ("SEC")
         under Section 15 of the Securities Exchange Act of 1934 ("1934 Act"),
         the Securities Investor Protection Corporation has taken the position
         that the provisions of the Securities Investor Protection Act of 1970
         ("SIPA") do not protect the other party with respect to any Transaction
         hereunder.

    (b)  in the case of Transactions in which one of the parties is a government
         securities broker or a government securities dealer registered with the
         SEC under Section 15C of the 1934 Act, SIPA will not provide protection
         to the other party with respect to any Transaction hereunder; and

    (c)  in the case of Transactions in which one of the parties is a financial
         institution, funds held by the financial institution pursuant to a
         Transaction hereunder are not a deposit and therefore are not insured
         by the Federal Deposit Insurance Corporation or the National Credit
         Union Share Insurance Fund, as applicable.

OCWEN PARTNERSHIP L.P.                   MERRILL LYNCH MORTGAGE CAPITAL INC.

By: /s/ JOHN BARNES                       By: /s/ JAMES B. CARSON
   -------------------------                -------------------------

Title: Senior Vice President             Title: Vice President
      ----------------------                   ----------------------

Date:  March 30, 1998                    Date:
   -------------------------                  -----------------------

MERRILL LYNCH CREDIT CORPORATION

By: /s/ WILLIAM C. SCHAUB
   -------------------------

Title: Vice President
      ----------------------

Date:
     -----------------------


                                       10
<PAGE>


                                    ANNEX I

                              SUPPLEMENTAL TERMS TO
                          MASTER REPURCHASE AGREEMENT,
                        DATED AS OF MARCH 30, 1998, AMONG
                       MERRILL LYNCH MORTGAGE CAPITAL INC.
                                      AND
                        MERRILL LYNCH CREDIT CORPORATION
                                      AND
                             OCWEN PARTNERSHIP L.P.

1.  APPLICABILITY. These Supplemental Terms (the "Supplemental Terms") to Master
    Repurchase  Agreement  (the  "Repurchase  Agreement")  modify  the terms and
    conditions of the Repurchase Agreement and the terms under which the parties
    hereto  may,  from time to time,  enter into  Transactions  (the  Repurchase
    "Agreement").  This Agreement shall be read,  taken and construed as one and
    the same instrument.  Capitalized terms used in these Supplemental Terms and
    not  otherwise  defined  herein  shall  have the  meanings  set forth in the
    Repurchase Agreement.

2.  ADDITIONAL DEFINITIONS.

    (a)  Notwithstanding  the  definition  set  forth in  Paragraph  2(j) of the
         Repurchase  Agreement,  with respect to any Eligible Asset, the "Market
         Value" shall be the price determined,  as of any date of determination,
         to be the fair  market  value  thereof as  determined  solely by Buyer;
         PROVIDED, HOWEVER, that (i) a Market Value of zero shall be assigned to
         each  Eligible  Asset  that  does  not  at any  time  comply  with  the
         representation and warranty of Seller set forth in Paragraph  6(b)(xii)
         of these  Supplemental  Terms, (ii) the Market Value of Eligible Assets
         shall not in any event exceed the outstanding principal amount thereof,
         (iii) any Eligible  Asset that has been subject to this  Agreement  for
         more than 180  consecutive  calendar days in the aggregate shall have a
         Market Value of zero and (iv) any Eligible  Asset with respect to which
         there is a material breach of a representation  or warranty that is not
         cured  within any  applicable  cure period shall have a market Value of
         zero until  such time as such  breach of  representation  or until such
         time  as such  breach  of  representation  or  warranty  is  cured  and
         thereafter  shall not be subject  to clause  (iv) of this  proviso  for
         determination of Market


<PAGE>


         Value until such time as another breach of  representation  or warranty
         relating thereto occurs.

    (b)  "A Quality  Non-Conforming  Mortgage  Loans"  shall mean single  family
         residential  mortgage  loans  that  qualify  under  the "A  First  Lien
         Standard Program Parameters" set forth in Seller's Guide.

    (c)  "B Quality  Non-Conforming  Mortgage  Loans"  shall mean single  family
         residential  mortgage  loans  that  qualify  under  the "B  First  Lien
         Standard Program Parameters" as set forth in Seller's Guide.

    (d)  "Book Net Worth" shall refer to the equity of Seller as  determined  in
         accordance with GAAP.

    (e)  "Borrower" shall refer to the obligor of any Eligible Asset.

    (f)  "Buyer"  shall mean MLCC,  in the case of  Eligible  Assets  secured by
         second or third liens, and MLMCI in all other cases.


    (g)  "Buyer's  Margin  Percentage"  shall  refer to the  percentage  used to
         calculate Buyer's margin Amount,  which shall, for each Eligible Asset,
         equal 95%.

    (h)  "C Quality  Non-Conforming  Mortgage  Loans"  shall mean single  family
         residential  mortgage  loans  that  qualify  under  the "C  First  Lien
         Standard Program Parameters" as set forth in Seller's Guide.

    (i)  "Code" shall refer to the Internal Revenue Code of 1986, as amended.

    (j)  "Computer  Tape"  shall  have the  meaning  set forth in the  Custodial
         Agreement.

    (k)  "Custodial Agreement" shall refer to the Tri-Party Custodial Agreement,
         dated  as of  March  30,  1998,  by and  among  Seller,  Buyer  and the
         Custodian,  providing  for the custody of records  relating to Eligible
         Assets, as the same may be amended,  supplemented or otherwise modified
         from time to time with the written consent of the parties thereto.

    (l)  "Custodial  Confirmation  Statement"  shall  refer to the  confirmation
         statement  issued  by the party  named as  custodian  in the  Custodial
         Agreement that  evidences  ownership of the Eligible  Assets  indicated
         thereon.


                                       2
<PAGE>


    (m)  "Custodian" shall refer to Texas Commerce Bank National Association and
         its permitted successors as custodian under the Custodial Agreement.

    (n)  "D Quality  Non-Conforming  Mortgage  Loans"  shall mean single  family
         residential  mortgage  loans  that  qualify  under  the "D  First  Lien
         Standard Program Parameters" as set forth in Seller's Guide.

    (o)  "Delivery  Date"  shall  have the  meaning  set forth in the  Custodial
         Agreement.

    (p)  "Eligible  Assets"  shall mean Home Equity  Loans,  Mortgage  Loans and
         Jumbo Mortgage Loans subject to this Agreement.

    (q)  "GAAP" shall mean generally accepted accounting principles consistently
         applied.

    (r)  "Home Equity Loans" shall refer to the mortgage  loans secured by first
         or second liens on single family residential real property  (including,
         without limitation, condominiums and planned unit developments) certain
         documents  relating  to which  have  been  delivered  to the  Custodian
         pursuant to the Custodial Agreement.

    (s)  "Jumbo  Mortgage  Loans" shall refer to any Mortgage  Loan in excess of
         $500,000 and otherwise so designated by Seller and acceptable to Buyer,
         in its sole  discretion,  and which except with respect to the original
         principal  balance thereof,  have been  underwritten in accordance with
         the standards of the Seller.

    (t)  "LIBOR" shall mean the London Interbank  Offered Rate for United States
         Dollar deposits as set forth on page 8695 of  Knight-Ridder  as of 8:00
         a.m., New York City time, on the date of  determination  for the period
         most closely corresponding to the term of the related Transaction.

    (u)  "List of Eligible Assets" shall refer to the List of Home Equity Loans,
         the List of  Mortgage  Loans or the List of Jumbo  Mortgage  Loans,  as
         applicable.

    (v)  "List of Home Equity  Loans"  shall be defined in  Paragraph 3 of these
         Supplemental Terms.

    (w)  "List of Jumbo  Mortgage  Loans"  shall be as defined in Paragraph 3 of
         these Supplemental Terms.

    (x)  "List of Mortgage  Loans"  shall be as defined in  Paragraph 3 of these
         Supplemental Terms.


                                       3
<PAGE>


    (y)  "Margin Notice Deadline" shall mean 10:00 a.m., New York City time.

    (z)  "MLMCI" shall refer to Merrill Lynch Mortgage Capital Inc.

    (aa) "Monthly  Report" shall mean the monthly report,  substantially  in the
         form attached hereto as Exhibit C, submitted by Seller to Buyer.

    (ab) "Mortgage" shall mean the mortgage or other instrument  creating a lien
         on the property securing a Note.

    (ac) "Mortgage Loan" shall mean an A Quality Non-Conforming Mortgage Loan, a
         B Quality  Non-Conforming  Mortgage  Loan,  a C Quality  Non-Conforming
         Mortgage Loan or a D Quality Non-Conforming Mortgage Loan.

    (ad) "Note"  shall  mean the note or other  evidence  of  indebtedness  of a
         Borrower secured by a Mortgage.

    (ae) "Ocwen" shall mean Ocwen Asset Investment Corp., the parent of Seller.

    (af) "Pricing  Rate"  shall  mean  the per  annum  percentage  rate  for the
         determination  of the Price  Differential,  which  rate shall be (i) 90
         basis points in excess of LIBOR for the period from and  including  the
         related  Purchase Date to but  excluding the related  Delivery Date and
         (ii) 65 basis points in excess of LIBOR thereafter.

    (ag) "Qualified  Insurer" shall refer to a pool insurer  customarily used by
         Seller and mutually agreeable to Seller and Buyer.

    (ah) "Securities"   shall  be   deemed   to  mean   Eligible   Assets   and,
         notwithstanding  the  use  of  the  term  "Securities"  in  the  Master
         Repurchase Agreement,  in no event shall such Eligible Assets be deemed
         to be securities for the purposes of any securities or blue sky laws.

    (ai) "Seller" shall refer to Ocwen Partnership L.P.

    (aj) "Seller's  Guide" shall refer to the  underwriting  guide of Seller for
         Mortgage  Loans,   Jumbo  Mortgage  Loans  or  Home  Equity  Loans,  as
         applicable,  as such guide may be amended  from time to time and in the
         form most  recently  accepted  in  writing  by Buyer in its  reasonable
         business judgment.

    (ak) "Tangible Net Worth" shall refer to the sum of equity and  subordinated
         debt of Seller determined in  accordance  with GAAP less the sum of (i)
         intercompany receivables, (ii)


                                       4
<PAGE>


         loans to officers or employees of Seller, (iii) good will and (iv)
         deferred taxes.

    (al) "Transaction"  shall,  in addition to the  definition  set forth in the
         Repurchase Agreement, refer to substitutions pursuant to Paragraph 8 of
         the Repurchase Agreement.

3.  CONFIRMATIONS.  Each  Confirmation  shall be binding upon the parties hereto
    unless  written  notice of objection is given by the objecting  party to the
    other party within two (2) business days after the objecting party's receipt
    of such Confirmation.  In the case of Transactions  involving Jumbo Mortgage
    Loans,  Home Equity  Loans or Mortgage  Loans the  Eligible  Assets shall be
    identified on a detailed  listing to be provided by Seller to Buyer (a "List
    of Jumbo  Mortgage  Loans" for Jumbo  Mortgage  Loan, a "List of Home Equity
    Loans' for Home  Equity  Loans and a "List of Mortgage  Loans" for  Mortgage
    Loans) and may be  identified  in the related  Confirmation  by reference to
    such lists.

4.  MARGIN MAINTENANCE.

    (a)  Paragraphs  4(a)  and  4(b)  of the  Repurchase  Agreement  are  hereby
         modified to provide  that if the notice to be given by Buyer or Seller,
         as the case may be, is given at or prior to the Margin Notice deadline,
         the  transfer of the  Additional  Purchased  Securities  from Seller to
         Buyer  pursuant to Paragraph  4(a) of these  Supplemental  Terms or the
         transfer of cash or Purchased  Securities from Buyer to Seller pursuant
         to Paragraph  4(b) of these  Supplemental  Terms shall be made prior to
         the close of business in New York City on the date of such notice,  and
         if such notice is given after the Margin Notice Deadline,  Seller shall
         transfer the Additional  Eligible Assets prior to the close of business
         in New York City on the business day immediately  following the date of
         such notice. The Custodial  Agreement shall set forth further terms and
         provisions  relating to Buyer's  and  Seller's  rights and  obligations
         under Paragraph 4 of the Repurchase Agreement.

    (b)  Paragraph 4 of the  Repurchase  Agreement is hereby  modified by adding
         the following at the end thereof:

              "(f) In the event that Seller  fails to comply with
              the provisions of this Paragraph 4 and such failure
              is not due to the acts or omissions of Buyer, Buyer
              shall not be obligated to enter into any additional
              Transactions hereunder after the


                                5
<PAGE>


              date of such  failure  unless such failure is cured
              or waived.

5.  INCOME PAYMENTS.  Paragraph 5 of the Repurchase Agreement is hereby modified
    to provide  that,  so long as no Event of Default shall have occurred and be
    continuing,  Seller  shall be entitled  to all  payments  of  principal  and
    interest  and  principal  prepayments  payable to the holder of the Eligible
    Assets. Upon the occurrence of an Event of Default, payment of principal and
    interest and  principal  prepayments  (without  deducting any amount for the
    Servicing Fee) shall be paid directly to Buyer in accordance  with the terms
    of this Agreement.

6.  INTENT OF THE PARTIES; SECURITY INTEREST.

    (a)  In the event, for any reason, any Transaction is construed by any court
         as a secured loan rather than a purchase and sale,  the parties  intend
         that  Seller  shall have  granted to Buyer a perfected  first  priority
         security interest in all of the Eligible Assets.

    (b)  Seller shall pay all fees and expenses  associated with perfecting such
         security interest  including,  without  limitation,  the cost of filing
         financing  statements  under the Uniform  Commercial Code and recording
         assignment of mortgage as and when reasonably requested by Buyer.

    (c)  Notwithstanding   any  election  by  buyer  to  engage  in   repurchase
         transactions  with the Eligible Assets or if Buyer otherwise  elects to
         pledge or hypothecate such Eligible  Assets,  upon demand by Seller and
         upon the  satisfaction  of the conditions  hereunder for the release of
         Eligible Assets,  Buyer shall redeliver to seller those Eligible Assets
         specifically  identified to Buyer by Seller free and clear of any liens
         or encumbrances created by Buyer.

    (d)  Notwithstanding  Paragraph 8(b) of the Repurchase Agreement,  it is the
         intention of the parties that the Custodian,  rather than Seller, shall
         maintain custody of the Purchased  Securities pursuant to the Custodial
         Agreement.

7.  REPRESENTATIONS, WARRANTIES AND COVENANTS.

    (a)  Each party represents and warrants, and shall on and as of the Purchase
         Date of any Transaction be deemed to represent and warrant, as follows:

         (i)    The  execution,  delivery and  performance of this Agreement and
                the performance of each Transaction


                                       6
<PAGE>


                Do not and will not result in or  require  the  creation  of any
                lien,  security  interest or other charge or encumbrance  (other
                than pursuant to this  Agreement) upon or with respect to any of
                its properties: and

         (ii)   This Agreement is, and each  Transaction when entered into under
                this Agreement will be, a legal, valid and binding obligation of
                it enforceable  against it in accordance  with the terms of this
                Agreement,  subject to bankruptcy,  insolvency,  reorganization,
                moratorium or other similar laws affecting creditor's rights and
                to the  general  principles  of equity  (regardless  of  whether
                considered in proceeding in equity or at law).

    (b)  Seller  represents  and  warrants to Buyer,  and shall on and as of the
         Purchase Date of any Transaction be deemed to represent and warrant, as
         follows:

         (i)    The  documents  disclosed  by Seller to Buyer  pursuant  to this
                Agreement  are either  original  documents  or genuine  and true
                copies thereof;

         (ii)   Seller is a separate and  independent  entity from the Custodian
                named  in  the  Custodial  Agreement,  Seller  does  not  own  a
                controlling  interest  in  such  Custodian  either  directly  or
                through  affiliates and no director or officer of Seller is also
                a director or officer of such Custodian.


         (iii)  None of the Purchase Price for any Eligible  Assets will be used
                either  directly or indirectly to acquire any security,  as that
                term is defined in Regulation T of the  Regulations of the Board
                of Governors of the Federal Reserve  System,  and Seller has not
                taken any action that might cause any Transaction to violate any
                regulation of the Federal Reserve Board;

         (iv)   Each Eligible Asset conforms to the  underwriting  standards set
                forth in Seller's  Guide;  all Eligible  Assets will comply with
                the  applicable   representations  and  warranties  attached  as
                Exhibit B hereto;

         (v)    Each  Eligible  Asset was  originated  by Seller or purchased by
                Seller  from  Seller's  list of approved  originators  except as
                disclosed to Buyer in writing;


                                       7
<PAGE>


         (vi)   Each Eligible Asset was underwritten in accordance with Seller's
                Guide  furnished  by Seller to Buyer  and  accepted  by Buyer in
                writing,  and no  change  to  such  underwriting  standards  has
                occurred  since the date of the last  written  revision  to such
                standards  was  furnished  to Buyer by  Seller  or on  behalf of
                Seller and accepted by Buyer in writing;

         (vii)  Since the date of the most recent financial statement of Seller,
                delivered by it pursuant to  Paragraph 10 of these  Supplemental
                Terms,  there  has  been  no  material  adverse  change  in  the
                financial condition or results of operations of Seller;

         (viii) Seller shall be at the time it delivers any Eligible  Assets for
                any Transaction,  and shall continue to be, through the Purchase
                Date relating to each such Transaction, the legal and beneficial
                owner  of  such  Eligible  Assets,  free of any  lien,  security
                interest, option or encumbrance except for the security interest
                created by or  pursuant to this  Agreement  and except for liens
                disclosed in writing to Buyer prior to the Purchase Date for the
                related  Transaction  and with  respect  to which  Buyer has not
                objected;

         (ix)   Seller has taken all action with respect to this Agreement,  the
                Custodial Agreement and the transactions contemplated hereby and
                thereby in order to comply with the provisions of all applicable
                law; and

         (x)    No eligible  Assets are more than thirty (30) days delinquent as
                of the related reporting period.

    (c)  Seller covenants with Buyer, from and after the date of this Agreement,
         as follows:

         (i)    Seller  will take all  actions  necessary  with  respect to this
                Agreement,   the  Custodial   Agreement  and  the   transactions
                contemplated  hereby and thereby in order to maintain compliance
                with the provisions of all applicable law;

         (ii)   Seller shall immediately  notify Buyer in writing if an Event of
                Default  or  an  event  contemplated  by  Paragraph  8 of  these
                Supplemental Terms shall have occurred;

         (iii)  Seller shall  deliver a Computer  Tape relating to the Custodial
                Agreement to Buyer with such


                                       8
<PAGE>


                frequency  as Buyer may require but in no event less  frequently
                than monthly;

         (iv)   No Eligible  Asset shall be subject to this  Agreement  for more
                than 180 consecutive calendar days in aggregate;

         (v)    Seller  shall  deliver  to Buyer a  Monthly  Report on the first
                business day of each month during the term of this Agreement;

         (vi)   Seller shall  comply with the  provisions  of Paragraph  6(b) of
                these Supplemental Terms;

         (vii)  Seller shall promptly notify Buyer upon Seller's  becoming aware
                that any of Seller's credit  facilities  shall terminate or debt
                become due prior to its stated maturity;

         (viii) Unless Seller shall be in compliance  with all credit  covenants
                made  by it  hereunder,  Seller  shall  not  repay  any  of  its
                subordinated debt during the term of this Agreement or while any
                amounts are payable to Buyer hereunder; and

         (ix)   This   Agreement  and  the  terms  hereof  are  intended  to  be
                confidential  and the Seller shall no disclose this Agreement or
                its terms  (including  any public  filings  with any  regulatory
                body) without the express written consent of the Buyer.

8.  EVENTS OF DEFAULT.

    (a)  The term "Event of Default"  shall,  in addition to the  definition set
         forth in the  Repurchase  Agreement and with respect to the  applicable
         party, include the following events:

         (i)    Any  governmental  or   self-regulatory   authority  shall  take
                possession  of Buyer or Seller or their  property or appoint any
                receiver,  conservator  or other  official,  or such party shall
                take any action to  authorize  any of the  actions  set forth in
                this clause (i).

         (ii)   Either Buyer or Seller shall have reasonably determined that the
                other party is or will be unable to meet its  commitments  under
                this  Agreement,  shall have  notified  the other  party of such
                determination  and such  party  shall  not have  responded  with
                appropriate information to the


                                       9
<PAGE>



                contrary to the reasonable  satisfaction  of the inquiring party
                within 36 hours after notice.

         (iii)  This  Agreement  shall for any  reason  cease to create a valid,
                first priority  security  interest in any of the Eligible Assets
                purported to be covered thereby.

         (iv)   A final,  non-appealable  judgment by any competent court in the
                United  States of America  for the payment of money in an amount
                of a least $100,000 is rendered against Buyer or Seller, and the
                same remains  undischarged by the applicable  party for a period
                of sixty (60) days during which  execution  of such  judgment is
                not effectively stayed.

         (v)    Any  representations or warranty made by Buyer or Seller in this
                Agreement or the Custodial  Agreement  shall have been incorrect
                or untrue in any material  respect when made or repeated or when
                deemed  to have  been made or  repeated  and the  non-defaulting
                party shall have been materially and adversely affected thereby.

         (vi)   Any  covenant  made by Buyer or Seller in this  Agreement or the
                Custodial  Agreement  shall have been  breached in any  material
                respect and the non-defaulting  party shall have been materially
                and adversely affected thereby.

         (vii)  Any event of default or any event which with notice, the passage
                of time or both shall constitute an event of default shall occur
                and be  continuing  under  any  repurchase  or  other  financing
                agreement for borrowed  funds or indenture for borrowed funds by
                which  Buyer or Seller is bound or  affected  shall occur and be
                continuing including,  without limitation, any such agreement of
                one party to which the other party is a party.

         (viii) Seller  shall  experience  losses or  changes  in its  financial
                condition  (exclusive of amounts  withdrawn for payment of taxes
                due and payable by the  shareholders  of Seller)  that cause its
                Book Net Worth for any calendar quarter to be less than or equal
                to 80% of its Tangible Net Worth as of six calendar months prior
                to such period.

         (ix)   The ratio of  Seller's  total  assets to Seller's  Tangible  Net
                Worth shall at any time exceed 12:1.


                                       10
<PAGE>


         (x)    Seller's  ratio of total  liabilities to Book Net Worth shall at
                any time exceed 8:1.

    (b)  Upon the occurrence and during the continuance of an Event of Default;

         (i)    All rights of the defaulting  party to receive payments which it
                would otherwise be authorized to receive pursuant to Paragraph 5
                of these  Supplemental  Terms shall be  suspended,  and all such
                rights  shall  thereupon  become  vested  in the  non-defaulting
                party, which shall thereupon have the sole right to receive such
                payments and apply them to the aggregate  unpaid amounts owed to
                the non-defaulting party by the defaulting party.

         (ii)   All payments which are received by the defaulting party contrary
                to the provisions of the preceding  clause (i) shall be received
                in trust for the benefit of the  non-defaulting  party and shall
                be segregated from other funds of the defaulting party.

         (iii)  The  non-defaulting  party may exercise any  self-help  remedies
                permitted by applicable law.

         (iv)   The  non-defaulting  party shall be entitled to the right of set
                off with respect to any amounts owed by the defaulting  party to
                the non-defaulting  party under any contract,  margin account or
                other arrangement.

9.  EVENTS OF TERMINATION.

    (a)  At the option of Buyer,  exercised  by  thirty-six  (36) hours  advance
         written  notice to Seller,  the  Repurchase  Date for each  Transaction
         under this Agreement shall be deemed to immediately  occur in the event
         that:

         (i)    In the  judgment of Buyer a material  adverse  change shall have
                occurred in the business, operations,  properties,  prospects or
                condition (financial or otherwise) of Seller;

         (ii)   Buyer  shall  request  written  assurances  as to the  Financial
                well-being  of  Seller  an such  assurances  shall not have been
                provided within thirty-six (36) hours of such request;

         (iii)  Seller  shall be in  default  with  respect  to any  normal  and
                customary  covenants  under any debt contract or agreement,  any
                servicing agreement or


                                       11
<PAGE>


                any lease to which it is a party, which default could materially
                adversely  affect  the  financial  condition  of  Seller  (which
                covenants include,  but are not limited to, an Act of Insolvency
                of Seller or the  failure  of Seller to make  required  payments
                under such contract or agreement as they become due);

         (iv)   The senior debt  obligations or short-term  debt  obligations of
                Merrill Lynch & Co., Inc.  shall be rated below the four highest
                generic  grades   (without  regard  to  any  pluses  or  minuses
                reflecting   gradations  within  such  generic  grades)  by  any
                nationally recognized statistical rating organization;

         (v)    Any  representation or warranty made by Seller in this Agreement
                or any Custodial Agreement shall have been materially  incorrect
                or untrue when made or repeated or when deemed to have been made
                or  repeated  and such  circumstance  shall not have been  cured
                within twenty-four (24) hours of Seller having received notice;

         (vi)   Seller   shall  fail  to  promptly   notify  Buyer  or  (i)  the
                acceleration  of any debt  obligation or the  termination of any
                credit  facility of Seller;  (ii) the amount and maturity of any
                such debt  assumed  after  the date  hereof;  (iii) any  adverse
                developments  with  respect  to  pending  or  future  litigation
                involving Seller;  and (iv) any other  developments  which might
                materially  and  adversely  affect the  financial  condition  of
                Seller; or

         (vii)  Seller shall have failed to comply in any material  respect with
                its obligations under the Custodial Agreement.

    (b)  The events  specified in  Paragraph  9(a) of these  Supplemental  Terms
         which  may,  at the  option  of  Buyer,  cause an  acceleration  of the
         Repurchase  Date for a  Transaction  shall be in  addition to any other
         rights of Buyer to cause such an acceleration under this Agreement.

10. FINANCIAL STATEMENTS. Seller shall have provided Buyer:

    (a)  as soon as available  and in any event within sixty (60) days after the
         close of each of the first  three (3)  quarters  of each fiscal year of
         Seller,  Seller's  unaudited  balance  sheet and  statement  of income,
         subject to normal recurring year-end audit adjustments, and as


                                       12
<PAGE>


         prepared in accordance with generally  accepted  accounting  principles
         consistently applied;

    (b)  as soon as  available  and in any event  within one  hundred and twenty
         (120) days  after the close of each  fiscal  year of Seller,  a balance
         sheet of Seller,  a statement  of income of Seller and a  statement  of
         changes in  financial  position  of Seller as at the end of and for the
         fiscal year just closed, setting forth the corresponding figures of the
         previous  fiscal year,  if  applicable,  in  comparative  form,  all in
         reasonable  detail and certified in writing (without any  qualification
         or  exception  deemed  material by Buyer) by an  authorized  officer of
         Seller;

    (c)  as soon as available and in any event within  sixty(60)  days after the
         close of each of the first  three (3)  quarters  of each fiscal year of
         Ocwen, the applicable  quarterly Form 10-Q as filed with the Securities
         and Exchange  Commission,  including the  consolidated  statements  for
         Ocwen,  subject to normal recurring year-end audit adjustments,  and as
         prepared in accordance with generally  accepted  accounting  principles
         consistently applied; and

    (d)  as soon as  available  and in any event  within one  hundred and twenty
         (120)  days  after  the  close  of  each  fiscal   year  of  Ocwen,   a
         consolidating  balance  sheet of Ocwen,  a  consolidating  statement of
         income of Ocwen and a  consolidating  statement of changes in financial
         position of Ocwen as at the end of and for the fiscal year just closed,
         setting forth the corresponding figures of the previous fiscal year, if
         applicable, in comparative form, all in reasonable detail and certified
         (without any  qualification  or exception  deemed material by Buyer) by
         independent  public  accountants   selected  by  Ocwen  and  reasonably
         satisfactory  to Buyer (which  requirement  Buyer hereby  agrees may be
         satisfied by Ocwen's audited financial  statement included in an Annual
         Report  on Form  10-K  and  filed  with  the  Securities  and  Exchange
         Commission).

         Each  delivery of  Eligible  Assets by Seller to Buyer  hereunder  will
         constitute a  representation  by Seller that there has been no material
         adverse change in Seller's  financial  condition not disclosed to Buyer
         since the date of Ocwen's most recent financial statement. Seller shall
         provide  Buyer,  from  time to  time at  Seller's  expense,  with  such
         information of a financial or operational  nature  respecting Seller as
         Buyer may  reasonably  request  promptly  upon receipt of such request.
         Buyer shall maintain the  confidentiality of all financial  information
         provided by Seller to Buyer and shall not make such


                                       13
<PAGE>


         information  available  to  any  other  person  or  entity  (except  as
         otherwise  required by a court of competent  jurisdiction)  without the
         prior   written   consent  of  Seller,   which  consent  shall  not  be
         unreasonably withheld.

11. MINIMUM  AND  MAXIMUM  TRANSACTION  AMOUNTS;  MARGIN.  With  respect  to all
    Transactions hereunder:

    (a)  The minimum amount of any  Transaction  under this Agreement shall have
         an aggregate Repurchase Price of $1,000,000;

    (b)  The  aggregate  outstanding  Repurchase  Price for the Eligible  Assets
         subject   to  this   Agreement   at  any  one  time  shall  not  exceed
         $125,000,000;

    (c)  The  amount  of the  outstanding  Repurchase  Price  attributable  to C
         Quality  Non-Conforming  Mortgage  Loans and D  Quality  Non-Conforming
         Mortgage Loans shall not, in the aggregate, exceed $20,000,000;

    (d)  Buyer's  Margin  Percentage  with respect to each  category of Eligible
         Assets  shall be as  stated  in  Paragraph  2(f) of these  Supplemental
         Terms; and

    (e)  The amount of the outstanding  Repurchase  Price  attributable to Jumbo
         Mortgage  Loans,  as of any date of  determination,  shall not,  in the
         aggregate, exceed $20,000,000.

12. REPURCHASE PRICE;  PRICE  DIFFERENTIAL.  The Repurchase Price as of any date
    shall  include that portion of the Price  Differential  that has accrued but
    has not been paid. The Price Differential shall accrue, be calculated and be
    compounded on a daily basis for each Purchased Security (such calculation to
    be made on the  basis  of a  360-day  year  and the  actual  number  of days
    elapsed).  Any provision of this Agreement to the contrary  notwithstanding,
    the Price  Differential  shall be  payable  monthly in arrears to Buyer with
    respect  to  each  Transaction.  Any  provisions  of this  Agreement  to the
    contrary notwithstanding,  the Price Differential for any Transaction shall,
    unless otherwise  agreed by the parties,  be equal to the product of (i) the
    Repurchase Price (which shall be the Purchase Price increased by the accrued
    and unpaid Price  Differential)  and (ii) the Pricing Rate (based upon a 360
    day year and the actual number of days).  Payment of the Price  Differential
    to Buyer shall be made by wire transfer in immediately available funds.


                                       14
<PAGE>


13. ADDITIONAL INFORMATION; CONFIDENTIALITY.

    (a)  At any  reasonable  time,  Seller  shall  permit  Buyer,  its agents or
         attorneys,  to inspect and copy any and all documents and data in their
         possession  pertaining  to each  Security  that is the  subject of such
         Transaction. Such inspection shall occur upon the request of Buyer at a
         mutually agreeable location during regular business hours and on a date
         not more than two (2) business days after the date of such request.

    (b)  Seller agrees to provide Buyer from time to time with such  information
         concerning  Seller of a financial  or  operational  nature as Buyer may
         reasonably request.

    (c)  Each of the parties  acknowledges  and agrees that this Agreement,  the
         Custodial  Agreement  and all  information  provided  by one  party  to
         another  in  connection  with  said  agreements  and  the  Transactions
         contemplated  thereby are  confidential in nature and each party agrees
         that it shall limit the  distribution of such documents and information
         to its  officers,  employees,  attorneys,  accountants  and  agents  as
         required  in order to  conduct  its  business  with  the  other  party;
         PROVIDED,  HOWEVER, that the restriction set forth in this subparagraph
         (c) shall not apply to documents and  information  that (i) a party has
         been  directed  to  disclose  by a court  or  regulatory  authority  of
         competent  jurisdiction,  (ii) are required to be disclosed pursuant to
         applicable  federal  or state law  (including  the  regulations  of the
         Securities  and  Exchange  Commission),  (iii) has  entered  the public
         domain  through means other than a breach of the foregoing  covenant by
         the party seeking to distribute  such documents and  information,  (iv)
         was known by the receiving  party prior to its receipt thereof from the
         other  part and (v) the other  party has given  written  permission  to
         disclose.

14. UNCOMMITTED  FACILITY.  The  entering  into  any  Transaction  hereunder  is
    discretionary  on the part of both parties and each  Eligible  Asset must be
    acceptable to Buyer for Purchaser  hereunder,  which  determination shall be
    made by Buyer in its sole discretion.

    Buy may, in its sole  discretion,  reject any Security  from  inclusion in a
    Transaction hereunder for any reason.

15. TRANSACTION PROCEDURES.

    Unless mutually agreed to the contrary by Buyer and Seller, no Purchase Date
    or Repurchase Date shall occur on a date other


                                       15
<PAGE>


    than a Friday (or the next preceding business day in the event Friday is not
    a business day).

16. OPINION  OF  COUNSEL.  Seller  shall,  on the date of the first  Transaction
    hereunder  and, upon the  reasonable  request of Buyer based on Buyer's good
    faith belief that there may have been a material  change in law or fact,  on
    the date of any subsequent Transaction, cause to be delivered to Buyer, with
    reliance  thereon  permitted as to any person or entity that  purchases  the
    Eligible Assets from Buyer in a repurchase transaction,  a favorable opinion
    of counsel to Seller  with  respect to the  matters set forth in Exhibit A-1
    and Exhibit A-2  hereto,  in form and  substance  reasonably  acceptable  to
    Buyer.

17. ADDITIONAL CONDITIONS.  Prior to entering into the initial Transaction under
    this  Agreement,  Seller  shall cause each of the  following  conditions  to
    occur:


    (a)  A Custodial  Agreement in a form  satisfactory to Buyer shall have been
         executed and delivered by the parties thereto;

    (b)  Seller  shall have  disclosed  information  satisfactory  to Buyer with
         respect  to  the  scheduled   maturities  of  all  outstanding   credit
         facilities and debt of Seller;

    (c)  Seller shall make  available to Buyer and its agents all  printouts and
         all computer  software  pertaining to the Eligible  Assets as Buyer may
         reasonably request;

    (d)  The Custodian  shall have  delivered to Buyer a Custodial  Confirmation
         Statement  relating to the Eligible Assets subject to the  Transaction;
         and

    (e)  Seller shall have delivered a balance sheet and income statement
         (prepared in accordance with GAAP) to Buyer with an officer's
         certificate certifying the truth and accuracy of the information
         therein.

18. REPURCHASE TRANSACTIONS. Buyer may in its sole election engage in repurchase
    transactions with the Eligible Assets or otherwise pledge or hypothecate the
    Eligible Assets with a counterparty of Buyer's  choice;  PROVIDED,  HOWEVER,
    that no such  transaction by Buyer shall relieve Buyer of its obligations to
    Seller in connection with the repurchase by Seller of any Eligible Assets in
    accordance with the terms of this Agreement and that, upon demand by Seller,
    Buyer shall  redeliver  to Seller such  repurchased  Eligible  Assets as are
    specifically   identified   by  Seller  free  and  clear  of  any  liens  or
    encumbrances created by Buyer.


                                       16
<PAGE>


19. NEW YORK  JURISDICTION;  WAIVER OF JURY  TRIAL.  Seller  agrees to submit to
    personal  jurisdiction  in the State of New York in any action or proceeding
    arising out of this Agreement. Buyer and Seller each hereby waives the right
    of trial by jury in any litigation arising hereunder.

20. SERVICING ARRANGEMENTS.

    (a)  The parties  hereto agree and  acknowledge  that,  notwithstanding  the
         purchase and sale of the Eligible Assets  contemplated  hereby,  Seller
         shall cause the  Eligible  Assets to  continue  to be serviced  for the
         benefit of Buyer and,  if Buyer  shall  exercise  its right to sell the
         Eligible  Assets  pursuant  to  this  Agreement  prior  to the  related
         Repurchase Date, Buyer's assigns;  PROVIDED,  HOWEVER, that, so long as
         an Event of Default shall not have occurred and be  continuing,  Seller
         shall be entitle to receive the  Servicing Fee relating to the Eligible
         Assets  serviced  by it until  such time as Buyer  elects to  terminate
         Seller  as  servicer  of  the  Eligible   Assets  as   contemplated  by
         subparagraph (d) below: PROVIDED, FURTHER, HOWEVER, that if an Event of
         Default  shall have  occurred  and be  continuing,  Seller shall not be
         entitled to receive the  Servicing  Fee during the  occurrence  of such
         Event of  Default  and after the  expiration  of such  thirty  (30) day
         period shall be entitled to receive the Servicing  Fee until  servicing
         is terminated as herein provided; and PROVIDED,  FURTHER, HOWEVER, that
         the  obligation of Seller to cause  Eligible  Assets to be serviced for
         the benefit of Buyer as aforesaid shall cease upon the payment to Buyer
         of the Repurchase Price therefor.

    (b)  Seller  shall cause the  Eligible  Assets to be serviced in  accordance
         with the servicing  standards for similar assets generally  employed by
         prudent  servicers in the Mortgage  Loan,  Jumbo  Mortgage  Loan,  Home
         Equity Loan and manufactured housing industry.

    (c)  Seller  shall cause the  servicer to enforce the rights of the owner of
         the  Eligible  Assets in  accordance  with the  standards  of a prudent
         lender in the manufactured housing,  Mortgage Loan, Jumbo Mortgage Loan
         and Home Equity Loan industry.

    (d)  Buyer may, in its sole  discretion  is any Event of Default  shall have
         occurred and be continuing,  without  payment of any  termination  fee,
         Servicing Fee (except as otherwise  provided in subparagraph (a) above)
         or any other  amount to Seller or any  servicer,  (i) sell its right to
         the Eligible Assets on a servicing released basis or (ii)


                                       17
<PAGE>


         terminate the servicer of the Eligible Assets with or without cause.

    (e)  Each servicer of Eligible Assets must be approved by Buyer.

21. FURTHER ASSURANCES. Seller shall promptly provide such further assurances or
    agreements  as Buyer may  request  in order to effect the  purposes  of this
    Agreement.

22. BUYER AS  ATTORNEY-IN-FACT.  Buyer is  hereby  appointed  to act  after  the
    occurrence  and  during  the  continuation  of an  Event of  Default  as the
    attorney-in-fact of Seller for the purpose of carrying out the provisions of
    this  Agreement  and taking any action and executing  any  instruments  that
    Buyer may deem  necessary or advisable to  accomplish  the purposes  hereof,
    which  appointment as  attorney-in-fact  is irrevocable  and coupled with an
    interest. Without limiting the generality of the foregoing, Buyer shall have
    the right and power after the occurrence and during the  continuation of any
    Event of Default to receive,  endorse and collect all checks made payable to
    the order of Seller  representing any payment on account of the principal of
    or interest on any of the Purchased  Securities  and to give full  discharge
    for the same.

23. TERMINATION.  Notwithstanding  any  provisions of Paragraph 15 of the Master
    Repurchase  Agreement to the contrary,  this Agreement and all  Transactions
    outstanding hereunder shall terminate  automatically without any requirement
    for notice on the date occurring eleven calendar months and twenty-nine days
    after  the  date as of which  this  Agreement  is  entered  into;  PROVIDED,
    HOWEVER,  that this Agreement and any Transaction  outstanding hereunder may
    be extended by written agreement of Buyer and Seller; and PROVIDED, FURTHER,
    HOWEVER,  that  no  such  party  shall  be  obligated  to  agree  to such an
    extension.

24. APPOINTMENT OF AGENT.  MLCC hereby  appoints MLMCI as its agent for purposes
    of reviewing and executing Confirmation/Funding Requests, determining Market
    Value,  exercising  any  termination  option  provided for in Paragraph 9 of
    these  Supplemental   Terms,   exercising  MLCC"  rights  under  any  margin
    maintenance  provision of this Agreement,  exercising MLCC" rights under the
    default  provisions of this  Agreement  and such other  purposes as MLCC may
    direct.  The  appointment  of  such  agent  shall  not  relieve  MLCC of its
    obligations as Buyer hereunder.

25. BINDING TERMS. All of the covenants,  stipulations,  promises and agreements
    in this  Agreement  shall bind the  successors  and  assigns of the  parties
    hereto, whether expressed or not.

26. NOTICES AND OTHER  COMMUNICATIONS.  Any  provision  of  Paragraph  13 of the
    Repurchase Agreement to the contrary


                                       18
<PAGE>


    notwithstanding, any notice required or permitted by this Agreement shall be
    in writing  (including  telegraphic,  facsimile or telex  communication) and
    shall be effective and deemed  delivered  only when received by the party to
    which it is sent. Any such notice shall be sent to a party at the address or
    facsimile transmission number set forth in Annex II attached hereto.

27. INCORPORATION  OF TERMS.  The Repurchase  Agreement as  supplemented  hereby
    shall be read, taken and construed as one and the same instrument.

28. EXPENSES. Seller shall pay its own expenses and all reasonable out-of-pocket
    costs and expenses  (including fees and  disbursements  of counsel):  (1) of
    Buyer incident to the preparation  and  negotiation of this  Agreement,  the
    Custodial  Agreement,  any  documents  relating  thereto,  any  amendment or
    waivers  thereto,  and the protection of the rights of Buyer  thereunder and
    (2) of Buyer  incident  to the  enforcement  of payment of amounts due under
    this Agreement or the Custodial  Agreement,  whether by judicial proceedings
    or otherwise,  including, without limitation, in connection with bankruptcy,
    insolvency,  liquidation,   reorganization,   moratorium  or  other  similar
    proceedings  involving  Seller.  Buyer shall not, from and after the date of
    this  Agreement  and so long as an Event of Default  shall not have occurred
    and be continuing, expend amounts reimbursable by Seller in excess oF $5,000
    without having notified Seller.  Notwithstanding any provision hereof to the
    contrary,  the  obligations  of  Seller  under  this  Paragraph  27 shall be
    effective and enforceable whether or not any Transaction remains outstanding
    and shall survive payment of all other obligations owed by Seller to Buyer.

29. COUNTERPARTS.  This Agreement may be executed in any number of counterparts,
    each of which  counterparts,  shall be  deemed to be an  original,  and such
    counterparts shall constitute but one and the same instrument.

The  following  exhibits have been omitted  herefrom and are available  upon the
request of the Commission:

    A-1 Opinion of Internal Counsel to Seller
    A-2 Opinion of Independent Counsel to Seller
    C   Monthly Activity Report
    Annex II


                                       19
<PAGE>


                                                                       EXHIBIT B

                         REPRESENTATIONS AND WARRANTIES

                             PART I. ELIGIBLE ASSET

    As to each  Eligible  Asset on a Purchase  Date (and the  related  Mortgage,
mortgage Note, assignment of Mortgage and mortgaged property),  the Seller shall
be deemed to make the following  representations  and warranties to the Buyer as
of such date and as of each date Market Value is determined. With respect to any
representations  and warranties made to the best of the Seller's  knowledge,  in
the event  that it is  discovered  that the  circumstances  with  respect to the
related Mortgage Loan are not accurately  reflected in such  representation  and
warranty notwithstanding the knowledge or lack of knowledge of the Seller, then,
notwithstanding that such representation and warranty is made to the best of the
Seller's  knowledge,  such Mortgage Loan shall be assigned a Collateral Value of
zero.

    The  Seller  has good  title  to and is the sole  owner  and  holder  of the
Mortgage Loan;

    1.   Immediately  prior to the pledge and grant of security  interest to the
Buyer,  the Note and the  Mortgage  Loan were not  subject to an  assignment  or
pledge,  and the Seller has full  right and  authority  to pledge and assign the
Mortgage Loan to the Buyer.

    2.   The Seller is  transferring  such  Mortgage  Loan to the Buyer free and
clear of any and all liens, pledges, charges or security interests of any nature
encumbering the Mortgage Loans.

    3.   The  information  set forth on the List of Eligible  Assets is true and
correct in all material respects.

    4.   Seller has acquired,  serviced, collected and otherwise dealt with each
Mortgage Loan in compliance  with all applicable  federal,  state and local laws
and regulations and the terms of the related Note and Mortgage.

    5.   The related Note and Mortgage are genuine and each is the legal,  valid
and binding obligation of the maker thereof,  enforceable in accordance with its
terms  except as such  enforcement  may be  limited by  bankruptcy,  insolvency,
reorganization  or other similar laws  affecting the  enforcement  of creditors'
rights generally and be generally equity principles  (regardless of whether such
enforcement is considered in a proceeding in equity or at law).

    6.   The related  Mortgage is a valid and  enforceable  first lien or second
lien on the related mortgaged property, which


                                      B-1
<PAGE>


mortgaged  property is free and clear of all  encumbrances  and liens (including
mechanics liens) having priority over the first lien of the Mortgage except for:
(i) liens for real estate taxes and  assessments  not yet due and payable;  (ii)
covenants,  conditions  and  restrictions,  rights of way,  easements  and other
matters of public  record as of the date of  recording  of such  Mortgage,  such
exceptions appearing of record being acceptable to mortgage lending institutions
generally  or  specifically  reflected  or  considered  in  the  lender's  title
insurance  policy delivered to the origination of the Mortgage Loan and referred
to in the  appraisal  made in  connection  with the  origination  of the related
Mortgage  Loan and (iii) other  matters to which like  properties  are  commonly
subject  which do not  materially  interfere  with the  benefits of the security
intended to be provided by such Mortgage.

    7.   Any security agreement, chattel mortgage or equivalent document related
to such Mortgage Loan  establishes and creates a valid and  enforceable  lien on
the property described.

    8.   The Seller has not advanced funds,  or induced,  solicited or knowingly
received  any advance of funds by a party other than the  Borrower,  directly or
indirectly, for the payment of any amount required under the Mortgage Loan under
the Mortgage Loan.

    9.   Except as otherwise  disclosed by written  instruments  included in the
related documents required to be held by the Custodian pursuant to the Custodial
Agreement with respect to such Mortgage Loan (the "Mortgage  File"),  Seller has
not impaired,  waived,  altered or modified the related  Mortgage or Note in any
material  respect,  or  satisfied,  canceled,  rescinded  or  subordinated  such
Mortgage or Note in whole or in part or released all or any material  portion of
the mortgaged property from the lien of the Mortgage, or executed any instrument
of release, cancellation, rescission or satisfaction of the Note or Mortgage.

    10.  The  Mortgage  has not been  satisfied,  canceled or  subordinated,  in
whole, or rescinded,  and the mortgaged  property has not been released from the
lien of the  Mortgage,  in whole or in part  (except for a release that does not
materially  impair the security of the Mortgage  Loan or a release the effect of
which is reflected  in the  loan-to-value  ration for the  Mortgage  Loan as set
forth in the List of Eligible Assets,  nor to the best of the Seller's knowledge
has  any   instrument   been  executed  that  would  effect  any  such  release,
cancellation, subordination or rescission;

    11.  No condition  exists which could give rise to any right of  rescission,
set off, counterclaim , or defense including, without limitation, the defense of
usury, and no such right has been asserted.


                                      B-2
<PAGE>


    12.  There is no  proceeding  pending for the total or partial  condemnation
and no eminent domain proceedings pending affecting any mortgaged property.

    13.  Each Mortgage loan is covered by either (i) a mortgage title  insurance
policy or other generally  acceptable form of insurance  policy customary in the
jurisdiction  where the  mortgaged  property  is  located  or (ii) if  generally
acceptable  in the  jurisdiction  where the  mortgaged  property is located,  an
attorney's opinion of title given by an attorney licensed to practice law in the
jurisdiction  where the mortgaged  property is located.  All of Seller's  rights
under  such  policies,  opinions  or other  instruments  shall be  deemed  to be
transferred and assigned to Buyer upon transfer and pledge of the Mortgage Loans
hereunder. The tile insurance policy has been issued by a title insurer licensed
to do  business in the  jurisdiction  where the  mortgaged  property is located,
insuring the original  lender,  its  successor  and assigns,  as to the first or
second priority lien, as applicable,  of the Mortgage in the original  principal
amount of the Mortgage Loan, subject to the exceptions contained in such policy.
Seller is the sole insured of such mortgagee  title insurance  policy,  and such
mortgagee  title  insurance  policy is in full  force and  effect and will be in
force and effect upon the consummation of the transactions  contemplated by this
Agreement.  Seller has not made and has no  knowledge  of any claims  made under
such mortgagee  title insurance  policy.  Seller is not aware of any action by a
prior holder and Seller has not done, by act or omission,  anything  which could
impair the coverage or  enforceability  of such mortgagee title insurance policy
or the accuracy of such attorney's opinion of title.

    14.  Except  for  delinquent  monthly  payments,  there  exists no  material
default,  breach,  violation or event of acceleration existing under the related
Mortgage or the  related  Note and no event  which,  with the passage of time or
with notice and the expiration of any grace or cure period,  would  constitute a
material default, breach, violation or event of acceleration. The Seller has not
waived any default, breach, violation or event of acceleration.

    15.  With respect to any  Mortgage  Loan which  provides  for an  adjustable
interest  rate,  all rate  adjustments  made by Seller  have been  performed  in
accordance  with the terms of the related Note or subsequent  modifications,  if
any.

    16.  As of the time of origination,  there are no delinquent  taxes,  ground
rents, water charges, sewer rents,  assessments,  insurance premiums,  leasehold
payments,   including  assessments  payable  in  future  installments  or  other
outstanding charges, affecting the related mortgaged property.


                                      B-3
<PAGE>


    17.  (i) No  foreclosure  proceedings  are  pending  against  the  mortgaged
property,  and to the Seller's best  knowledge,  (ii) no material  litigation or
lawsuit  relating to the Mortgage Loan is pending and (iii) the Mortgage Loan is
not subject to any pending bankruptcy or insolvency proceeding.

    18.  The  Mortgage  Loan  obligates  the Borrower  thereunder  to maintain a
hazard insurance policy ("Hazard  Insurance") in an amount at least equal to the
lesser of (i) the amount necessary to fully compensate for any damage or loss to
the  improvements  which are part of such  mortgaged  property on a  replacement
costs basis and (ii) the outstanding  principal balance of the Mortgage Loan, in
either  case  in  an  amount   sufficient  to  avoid  the   application  of  any
"co-insurance  provisions",  and,  if it  was in  place  at  origination  of the
Mortgage  Loan,  flood  insurance,  at the Borrower's  cost and expense.  If the
mortgaged  property  is in an area  identified  in the  Federal  Register by the
Federal Emergency  Management Agency ("FEMA") as having special flood hazards, a
flood  insurance  policy is in effect which met the  requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Borrower's failure to do
so,  authorizes the holder of the Mortgage to obtain and maintain such insurance
at the Borrower's cost and expense, and to seek reimbursement  therefor form the
Borrower. The mortgaged property is covered by Hazard Insurance.

    19.  The Note is not and has not been secured by any  collateral  except the
lien on the  corresponding  Mortgage and the security interest of any applicable
security agreement or chattel mortgage.

    20.  Subject to any applicable  laws,  the Mortgage  contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance of
the  Mortgage  Loan  in the  event  that  the  mortgaged  property  is  sold  or
transferred without the prior written consent of the Mortgagee  thereunder.  The
Mortgage  contains  customary and  enforceable  provisions such as to render the
rights and remedies of the holder thereof  adequate for the realization  against
the  mortgaged  property  of the  benefits  of the  security  provided  thereby,
including  (i) in the  case of a  Mortgage  designated  as a deed of  trust,  by
trustee's  sale  or  judicial   foreclosure   and  (ii)  otherwise  by  judicial
foreclosure. To the best of Seller's knowledge, since the date of origination of
the Mortgage Loan, the mortgaged property has not been subject to any bankruptcy
proceeding  or  foreclosure  proceeding  and  the  Borrower  has not  filed  for
protection  under  applicable  bankruptcy  laws.  There is no homestead or other
exemption  available to the Borrower that would interfere with the right to sell
the  mortgaged  property  at a  trustee's  sale or the  right to  foreclose  the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly


                                      B-4
<PAGE>


designated and currently so serves and is named in the Mortgage,  and no fees or
expenses  are or will become  payable by Buyer to the trustee  under the deed of
trust,  except in connection  with a trustee's sale after default by the related
Borrower.  The  Borrower  has not  notified  the  Seller  and the  Seller has no
knowledge of any relief  requested or allowed to the Borrower under the Soldiers
and Sailors Civil Relief Act of 1940.

    21.  Except as set forth in the  appraisal  which  forms part of the related
Mortgage  File,  the  mortgaged  property,  normal  wear and tear  excepted,  is
undamaged  by waste,  fire,  earthquake  or earth  movement,  windstorm,  flood,
tornado or other casualty so as to affect  materially and adversely the value of
the  mortgaged  property as security for the Mortgage  Loan or the use for which
the premises  were  intended  and the Seller has no knowledge of any  proceeding
pending for the total or partial condemnation of such Mortgage Property.

    22.  There was no fraud involved in the  origination of the Mortgage Loan by
the mortgagee or, to the Seller's knowledge,  by the Borrower,  any appraiser or
any other party involved in the origination of the Mortgage Loan.

    23.  Each  Mortgage  File  contains an appraisal of the  mortgaged  property
indicating an appraised value equal to the appraised  value  identified for such
mortgaged  property  on the List of Eligible  Assets.  Each  appraisal  has been
performed  in  accordance  with the  provisions  of the  Financial  Institutions
Reform, Recovery and Enforcement Act of 1989.

    24.  All parties which have had any interest in the Mortgage  Loan,  whether
as mortagee,  assignee,  pledgee or  othwerwise,  are (or,  during the period in
which they held and disposed of such interest,  were) in compliance with any and
all applicable  "doing  business" and licensing  requirements of the laws of the
state wherein the mortaged property is located.

    25.  No improvements on the related mortgaged property encroach on adjoining
properties (and in the case of a condominium  unit, such improvements are within
the  project  with  respect to that  unit),  and no  improvements  on  adjoining
properties  encroach  upon the  mortgaged  property  unless  there exists in the
Mortgage  File a title  policy with  endorsements  which insure  against  losses
sustained by the insured as a result of such encroachments.

    26.  Principal  payments on the Mortgage  Loan  commenced no more than sixty
days after the  proceeds of the  Mortgage  Loan were  disbursed  and the Note is
payable on the first day of each month.

    27.  The Mortgage Loan bears interest at the mortgage  interest rate and the
Note does not permit negative amortization.


                                      B-5
<PAGE>


    28.  With respect to escrow  deposits,  if any, all such payments are in the
possession  of,  or  under  the  control  of,  the  Seller  and  there  exist no
deficiencies  in  connection  therewith  for which  customary  arrangements  for
repayment  thereof have not been made. No escrow  deposits or escrow advances or
other  charges  or  payments  due the  Seller  have been  capitalized  under any
Mortgage or the related Noted.

    29.  No Mortgage Loan contains provisions pursuant to which monthly payments
are: (i) paid or  partially  paid with fund  deposited  in any separate  account
established  by the Seller,  the Borrower,  or anyone on behalf of the Borrower;
(ii) paid by any source  other than the  Borrower  or (iii)  contains  any other
similar provisions which may constitute a "buydown" provision. The Mortgage Loan
is not a graduated  payment  mortgage loan and the Mortgage Loan does not have a
shared appreciation or other contingent interest feature.

    30.  To the Seller's  best  knowledge,  the  mortgaged  property is lawfully
occupied under applicable law.

    31.  Each  Mortgage  Loan  has  been  underwritten  in  accordance  with the
underwriting  guidelines  applicable  to such Mortgage Loan (on the basis of its
classification  of  an  A  Quality  Non-Conforming   Mortgage  Loan,  B  Quality
Non-Conforming  Mortgage  Loan,  C  Quality  Non-Conforming  Mortgage  Loan,  as
applicable) of the Seller in effect at the time the Mortgage Loan was originated
or purchased by the Seller.

    32.  No law relating to servicing,  collection or notification practices and
no law relating to origination  practices,  has been violated in connection with
any  Mortgage  Loan  transferred  to  the  Buyer  pursuant  to  this  Agreement,
including,  without limitation,  usury, truth in lending, real estate settlement
procedures,  consumer credit protection,  equal credit opportunity or disclosure
laws.  The  Mortgage  Loan has been  serviced by the Seller and any  predecessor
servicer in accordance with the terms of the Note.

    33.  No Mortgage Loan was made in connection  with (a) the  construction  or
rehabilitation  of a mortgaged  property  or (b)  facilitating  the  trade-in or
exchange of a mortgage property.

    34.  The  Seller  hereby  covenants  that it will no  directly  solicit  any
Borrower hereunder to refinance the related Mortgage Loan.

    35.  The proceeds of the Mortgage  Loan have been fully  disbursed to or for
the account of the  Borrower  and there is no  obligation  for the  Mortgagee to
advance  additional  funds  thereunder,  and  any  and  all  requirements  as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been compiled with. All costs, fees and


                                      B-6
<PAGE>


expenses  incurred in making or closing the Mortgage  Loan and the  recording of
the Mortgage  have been paid,  and the Borrower is not entitled to any refund of
any amounts paid or due to the Mortgagee pursuant to the Note or Mortgage.

    36.  There are no mechanics' or similar liens or claims that have been filed
for work,  labor or material (and no rights are outstanding that under law could
give rise to such lien) affecting the related mortgaged property that are or may
be liens prior to or equal or coordinate with, the lien of the related Mortgage.

    37.  As to each fixed rate Mortgage Loan, interest is calculated on the Note
on the  basis of  twelve  30 day  months  and a 360 day  year,  and,  as to each
adjustable  rate Mortgage Loan,  interest is calculated on the Note on the basis
of the number of days in the related interest accrual period.

    38.  The mortgaged  property  consists of either (i) a single parcel of real
property or (ii) more than one parcel of real  property (as  determined  for tax
purposes  only) which parcels are contiguous and are subject to a single deed or
title, in each case with a detached single family residence erected thereon,  or
a two-to four-family dwelling,  or an individual  condominium unit in a low-rise
or high-rise  condominium  project,  or a  manufactured  dwelling  attached to a
permanent  foundation,  or an individual unit in a planned unit development or a
townhouse.  No  residence  or dwelling  is a mobile  home.  No Mortgage  Loan is
secured by a leasehold estate.

                                      B-7