AMENDED AND RESTATED PLEDGE AND SECURITY  AGREEMENT dated August 31,
1999 (this "Agreement"),  made by CONTIFINANCIAL CORPORATION (the "Grantor"), in
favor of GREENWICH CAPITAL FINANCIAL PRODUCTS, INC. ("GCFP"),  GREENWICH CAPITAL
MARKETS,  INC.  ("GCM") and each affiliate of GCFP and GCM which is party to any
agreement or document  entered into in connection with any of the Facilities (as
defined  below) (such  affiliates  together with GCFP and GCM are  collectively,
"Greenwich"),  amending and restating that certain Pledge and Security Agreement
dated  August 9, 1999 (the  "Original  Pledge and Security  Agreement")  made by
Grantor in favor of Greenwich.

                              W I T N E S S E T H:

            WHEREAS, CFC, ContiMortgage Corporation ("CMC") and GCFP are parties
to a Master Mortgage Loan Purchase Facility dated as of August 9, 1999 (such
Agreement, as amended or otherwise modified from time to time, being hereinafter
referred to as the "Purchase Facility");

            WHEREAS, CFC and GCFP are parties to a Master Repurchase Agreement
Governing Purchases and Sales of Eligible Assets dated as of December 21, 1998
(such Agreement, as amended or otherwise modified from time to time, together
with any successor purchase facility, being hereinafter referred to as the
"Existing Repurchase Facility");

            WHEREAS, CFC, CMC and GCFP are parties to a Master Repurchase
Agreement Governing Purchases and Sales of Assets dated as of August 9, 1999
(such Agreement, as amended or otherwise modified from time to time, being
hereinafter referred to as the "New Repurchase Facility" and together with the
Existing Repurchase Facility, each a "Repurchase Facility" and collectively, the
"Repurchase Facilities");

            WHEREAS, pursuant to an engagement letter dated as of August 9, 1999
(such letter, as amended or otherwise modified from time to time, being
hereinafter referred to as the "Engagement Letter"), CFC, CMC, ContiSecurities
Asset Funding Corp. III and ContiSecurities Asset Funding Corp. IV
(collectively, the "Conti Affiliates") have requested GCM, and GCM has agreed,
to act as the sole and exclusive securitization agent and underwriter in
connection with a securitization and/or selling agent in connection with a whole
loan sale of certain mortgage loans;

            WHEREAS, in connection with the Purchase Facility, the New
Repurchase Facility and the Engagement Letter, the Conti Affiliates and
Greenwich have entered into a Master Facilities Agreement dated as of August 9,
1999 (such Agreement, as amended or otherwise modified from time to time, being
hereinafter referred to as the "Master Facilities Agreement" and together with
the Purchase Facility, the New Repurchase Facility and the Engagement Letter,
the "New Facilities") pursuant to which the Conti Affiliates have agreed to pay
to Greenwich certain fees and expenses in connection with the New Facilities;
and

            WHEREAS, it is a condition precedent to Greenwich maintaining the
New Facilities and the Existing Repurchase Facility (collectively, the
"Facilities") that the Grantor

<PAGE>

shall have executed and delivered to Greenwich this Agreement which amends and
restates the Original Pledge and Security Agreement and provides for the grant
to Greenwich of a security interest in certain personal property of the Grantor;

            NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce Greenwich to maintain the Facilities, the Grantor
hereby agrees with Greenwich as follows:

            SECTION 1. Definitions. Reference is hereby made to the Facilities
for a statement of the terms thereof. All terms used in this Agreement that are
defined in the Facilities or in Article 8 or Article 9 of the Uniform Commercial
Code (the "Code") currently in effect in the State of New York and that are not
otherwise defined herein shall have the same meanings herein as set forth
therein, and the following terms shall have the following meanings:

            "Distributions" has the meaning specified therefor in Section 5(b)
of this Agreement.

            "Final Reserve Period" means the period from and after the first day
of the 61st month following the date of this Agreement.

            "Initial Reserve Period" means the period beginning on the date of
this Agreement and ending on the last day of the 12th month thereafter.

            "Maximum Cumulative Reserve Fund Deposit" means, with respect to the
aggregate amount of Distributions deposited in the Reserve Fund, $25,000,000,
provided that, upon the occurrence of a Trigger Event, the amount shall be
automatically increased to $45,000,000.

            "Obligation Payment Event" means (a) the failure to pay an
Obligation when due, (b) the receipt by Greenwich of a claim for repurchase of a
mortgage loan due to a breach of a representation or warranty by any Conti
Affiliate, (c) the receipt by Greenwich of any claim from any third party
servicer or the applicable Monoline Insurance Company to reimburse any such
Person for losses (other than losses resulting solely and directly from (i)
information provided by and related to Greenwich or any of its Affiliates or
(ii) Greenwich's gross negligence or willful misconduct) pursuant to
indemnification or guaranty obligations of Greenwich arising from, related to,
or in connection with any of the Facilities, or (d) the receipt by Greenwich of
a request by the Custodian to pay the Custodian's fees and expenses under the
respective Custodial Agreements.

            "Reserve Fund" means the account maintained by Greenwich with the
Custodian for the deposit of Distributions (a) which account and all amounts on
deposit therein shall, pursuant to the terms of a custody agreement between
Greenwich and the Custodian (in form and substance satisfactory to Greenwich),
be held as Collateral for the Obligations and be subject to (i) the sole and
exclusive dominion and control of Greenwich and (ii) the sole right of
withdrawal by Greenwich, and (b) which amounts shall be invested by Greenwich in
investments mutually agreed upon by Greenwich and Grantor, and all investment
earnings relating to such investments


                                      -2-
<PAGE>

shall be treated as "Distributions" and retained in the Reserve Fund until the
amount on deposit therein is equal to the Reserve Fund Required Amount.

            "Reserve Fund Required Amount" means the aggregate amount of
Distributions, not exceeding the Maximum Cumulative Reserve Fund Deposit, to be
deposited in the Reserve Fund equal to:

            (a) during the Initial Reserve Period (i) if no Obligation Payment
Event has occurred since the date of this Agreement, $5,000,000 or (ii) if an
Obligation Payment Event has occurred since the date of this Agreement (whether
or not such Obligation Payment Event ceases to exist), $15,000,000, provided
that (A) upon the occurrence of a Trigger Event (other than as a result of
clause (iv) of the definition of Trigger Event), each of the amounts set forth
in clauses (i) and (ii) of this subparagraph shall be automatically increased by
$5,000,000, and (B) upon the occurrence of a Trigger Event as a result of clause
(iv) of the definition of Trigger Event, the amounts set forth in clauses (i)
and (ii) of this subparagraph shall be automatically increased by $15,000,000
and $5,000,000, respectively,

            (b) during the Second Reserve Period (i) if no Obligation Payment
Event has occurred since the date of this Agreement, $10,000,000, or (ii) if an
Obligation Payment Event has occurred since the date of this Agreement (whether
or not such Obligation Payment Event ceases to exist), $15,000,000, provided
that (A) upon the occurrence of a Trigger Event (other than as a result of
clause (iv) of the definition of Trigger Event), each of the amounts set forth
in clauses (i) and (ii) of this subparagraph shall be automatically increased by
$5,000,000, and (B) upon the occurrence of a Trigger Event as a result of clause
(iv) of the definition of Trigger Event, amounts set forth in clauses (i) and
(ii) of this subparagraph shall be automatically increased by $10,000,000 and
$5,000,000, respectively, and

            (c) during the Final Reserve Period (i) if no Obligation Payment
Event has occurred since the date of this Agreement, $5,000,000, (ii) if an
Obligation Payment Event has occurred but no longer exists, $7,500,000, or (iii)
if an Obligation Payment Event has occurred and continues to exist, $15,000,000,
provided that (A) in the case of clause (iii) of this subparagraph, if such
Obligation Payment Event ceases to exist then the Reserve Fund Required Amount
shall be reduced to $7,500,000, (B) upon the occurrence of a Trigger Event
(other than as a result of clause (iv) of the definition of Trigger Event), each
of the amounts set forth in clauses (i), (ii) and (iii) of this subparagraph
shall be automatically increased by $5,000,000, and (C) upon the occurrence of a
Trigger Event as a result of clause (iv) of the definition of Trigger Event, the
amounts set forth in clauses (i), (ii) and (iii) of this subparagraph shall be
automatically increased by $15,000,000, $5,000,000 and $5,000,000, respectively.

            "Second Reserve Period" means the period beginning on the first day
of the 13th month following the date of this Agreement and ending on the last
day of the 60th month thereafter.

            "Trigger Event" means the occurrence of any of the following: (i)
the filing in a court of competent jurisdiction of a motion, pursuant to Rule 23
of the Federal Rules of Civil Procedure or any other comparable state or local
rule of civil procedure relating to the


                                      -3-
<PAGE>

maintenance of class actions, seeking authority for a civil action brought by a
representative plaintiff or plaintiffs to be maintained as a class action on
behalf of a class of similarly situated plaintiffs claiming that a Person
improperly excluded certain settlement agent fees (or other similar fees) in the
calculation of the mortgage loan annual percentage rate or closing fees in
connection with the origination of mortgage loans by such Person; (ii) the
rendering by a court of competent jurisdiction of a decision or the entry of an
order approving a settlement agreement, in which a Person is found liable for,
or agrees to pay, monetary damages arising out of claims which include an
allegation that such Person failed to include certain settlement agent fees (or
other similar fees) in the calculation of the mortgage loan annual percentage
rate or closing fees in connection with the origination of mortgage loans by
such Person; (iii) any Governmental Authority issues new regulations, rules,
commentary or interpretations, or amends, supplements or modifies existing
regulations, rules, commentary or interpretations, the effect of which is, among
other things, to require certain settlement agent fees (or other similar fees)
to be included in the calculation of the mortgage loan annual percentage rate or
closing fees in connection with the origination of mortgage loans; or (iv) the
failure by the Grantor to repurchase any mortgage loan required to be
repurchased due to a breach of a representation or warranty by the Grantor as a
result of the failure to include certain settlement agent fees (or other similar
fees) in the calculation of the mortgage loan annual percentage rate or closing
fees in connection with the origination of such mortgage loans.

            SECTION 2. Grant of Security Interest. As collateral security for
all of the Obligations (as defined in Section 3 hereof), the Grantor hereby
pledges and collaterally assigns to Greenwich, and grants to Greenwich a
continuing security interest in, all of such Grantor's right, title and interest
in and to the following (the "Collateral"):

            (a) all of the Grantor's rights in and to any Deferred Purchase
Price and Purchase Price Adjustment under the terms of the Purchase Facility,
whether now or hereafter existing, including, without limitation, all contract
rights and general intangibles arising from or relating thereto and all proceeds
arising therefrom;

            (b) with respect to any Purchased Assets subject to Transactions
under the Repurchase Facilities, all of the Grantor's rights to (i) any such
Purchased Assets, including, without limitation, all contract rights and general
intangibles arising from or related thereto, (ii) all commitments issued by
third parties (other than American General) to purchase such Purchased Assets
from the Grantor and all rights of the Grantor with respect thereto, (iii) all
cash from time to time deposited into any deposit account of the Grantor with
the Custodian in connection with any Repurchase Facilities, and (iv) all other
rights of the Grantor now or hereafter existing in and to all agreements,
documents and instruments securing or otherwise relating to any Repurchase
Facilities;

            (c) (i) (A) the Excess Spread Receivable described in Schedule III
hereto (the "Designated ESR"), (B) all Excess Spread Receivables issued by any
securitization trust or other Person formed to securitize mortgage loans in
accordance with the Engagement Letter (the "Engagement ESRs"), and (C) all
Excess Spread Receivables arising from, related to or comprising the Grantor's
Deferred Purchase Price (other than the Excess Spread Receivables described in
the provisos to Subsection 4.02(b)(i)(C) and (D) and Subsection 4.02(b)(ii)(C)
and


                                      -4-
<PAGE>

(D) of the Purchase Facility under which the Grantor and Greenwich each have a
parri passu interest in 50% of such Excess Spread Receivables) issued by any
securitization trust or other Person formed to securitize mortgage loans
purchased by Greenwich under the Purchase Facility (the "Deferred Purchase Price
ESRs" and together with the Engagement ESRs and the Designated ESR, the "Pledged
Residuals"), and the instruments or certificates representing such Pledged
Residuals, and (ii) the security (if any) evidencing the amount of all
prepayment penalties relative to the securitization of mortgage loans described
in the Engagement Letter to the extent such prepayment penalties are not
required to reduce the overcollateralization requirements of the applicable
Monoline Insurance Company (the "Prepayment Bond") (the Pledged Residuals and
the Prepayment Bond are collectively referred to herein as, the "Pledged
Assets");

            (d) all Investment Property of the Grantor arising from or related
to the foregoing, including without limitation, the Pledged Assets that have
been, or will be, delivered, transferred or assigned to, or deposited or
credited to an account with, or otherwise is in the possession or under the
control or recorded on the books of, Greenwich;

            (e) all distributions, cash, Investment Property, instruments,
Financial Assets and other property from time to time received, receivable or
otherwise distributed in respect of, or in exchange for, the Grantor's interest
in the Pledged Assets and delivered or transferred to Greenwich or the Grantor;
and

            (f) all proceeds of any and all of the foregoing Collateral
(including, without limitation, all payments under insurance (whether or not
Greenwich is the loss payee thereof), any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral);

in each case howsoever such Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise); provided that,
nothing hereunder constitutes or shall be deemed to constitute the grant of a
security interest in favor of Greenwich in the Grantor's interest in the
Collateral described in paragraph (b) above (hereinafter referred to as
"Excluded Property"), if the granting of a security interest therein by the
Grantor with respect to such Excluded Property to Greenwich is prohibited by the
terms and provisions of, or would constitute a breach or default under, the
Indenture or any other indenture or credit agreement listed on Schedule 3 to the
New Repurchase Facility; provided, however, that if and when the prohibition
which prevents the granting by a Grantor to Greenwich of a security interest in
any Excluded Property is removed or otherwise terminated, Greenwich will be
deemed to have, and at all times to have had, a security interest in such
Excluded Property. Notwithstanding anything set forth herein to the contrary,
Greenwich will be deemed to have, and at all times to have had, a security
interest in the proceeds of such Excluded Property.

            SECTION 3. Security for Obligations. The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred (the
"Obligations"):


                                      -5-
<PAGE>

            (a) the obligation of the Grantor to cure or repurchase Mortgage
Loans and to substitute Qualified Substitute Mortgage Loans in respect of
Mortgage Loans, in each case in accordance with the terms and conditions set
forth in the Purchase Facility, all obligations of CMC as Interim Servicer under
the Purchase Facility, all indemnification obligations of Grantor under the
Purchase Facility and the Custodial Agreement relating to the Purchase Facility,
and all other obligations of Grantor under the Purchase Facility with respect to
the payment of fees, expense reimbursements, indemnifications and all other
amounts due or to become due under the Purchase Facility;

            (b) the prompt payment by Grantor, as and when due and payable, of
all amounts from time to time owing by it in respect of the Repurchase
Facilities, including, without limitation, the payment when due of the
Repurchase Price for all Transactions outstanding under the Repurchase
Facilities (including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Grantor, whether or not a claim for
post-filing interest is allowed in such proceeding), and the payment of all
Additional Costs and Periodic Payments, the performance of Grantor's obligation
to transfer Additional Eligible Assets to Greenwich under the Repurchase
Facilities, all obligations of CMC as Interim Servicer under the Repurchase
Facilities, all indemnification obligations of Grantor under the Repurchase
Facilities and the Custodial Agreement relating to the Repurchase Facilities,
and all obligations of the Grantor under the Repurchase Facilities with respect
to the payment of fees, expense reimbursements, indemnifications and all other
amounts due or to become due under the Repurchase Facilities;

            (c) the payment when due of all fees and other amounts payable by
Grantor and its Affiliates under the Master Facilities Agreement;

            (d) the due performance and observance by the Grantor and its
Affiliates of all covenants, agreements, obligations and liabilities under the
Facilities, including without limitation, the obligation to securitize and/or
sell mortgage loans in accordance with the terms of the Engagement Letter and
any repurchase obligations of the Grantor (including any reimbursement or
indemnification obligation of the Grantor in favor of Greenwich in connection
with Greenwich incurring such Obligations on behalf of the Grantor or
backstopping any such obligation of the Grantor arising from or in connection
with any securitization and/or whole loan sale of any mortgage loans); and

            (e) the due performance and observance by the Grantor and its
Affiliates of all of their other obligations from time to time existing in
respect of the Facilities and the agreements and documents entered into by the
Grantor and/or its Affiliates or Greenwich in connection with any of the
Facilities, including, without limitation, the obligation of the Grantor to
reimburse Greenwich for any amounts paid by it to any third party servicer or
the applicable Monoline Insurance Company pursuant to any indemnification or
guaranty obligations of Greenwich arising from, related to, or in connection
with any of the Facilities.


                                      -6-
<PAGE>

            SECTION 4. Representations and Warranties. The Grantor represents
and warrants as follows:

            (a) There is no pending or, to its knowledge, threatened action,
suit, proceeding or claim before any court or other Governmental Authority or
any arbitrator, or any order, judgment or award by any court or other
Governmental Authority or arbitrator, that may adversely affect the grant by
such Grantor, or the perfection, of the security interest purported to be
created hereby in the Collateral, or the exercise by Greenwich of any of its
rights or remedies hereunder.

            (b) All taxes, assessments and other governmental charges imposed
upon such Grantor or any property of such Grantor (including, without
limitation, all federal income and social security taxes on employees' wages)
and that have become due and payable on or prior to the date hereof have been
paid, except to the extent contested in good faith by proper proceedings that
stay the imposition of any penalty, fine and Lien resulting from the non-payment
thereof and with respect to which adequate reserves in accordance with generally
accepted accounting principles have been established for the payment thereof.

            (c) The Grantor's chief place of business and chief executive
office, the place where the Grantor keeps its records concerning the Collateral
are located at the addresses specified therefor in Schedule I hereto, as such
Schedule may be modified in accordance with Section 5(f) hereof.

            (d) The Grantor is not prohibited from pledging to Greenwich any
Engagement ESRs, provided that the securitization contemplated by the Engagement
Letter closes by September 30, 1999.

            (e) The Grantor is and will be at all times the sole and exclusive
owner of the Collateral free and clear of any Lien, security interest or other
charge or encumbrance except (i) for the security interest created by this
Agreement, and (ii) junior and subordinate Liens on the Collateral consented to
by Greenwich in writing, which Liens shall be subject to a subordination
agreement, in form and substance satisfactory to the Greenwich (the
"Subordination Agreement"). No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
recording or filing office except such as may have been filed in favor of
Greenwich relating to this Agreement.

            (f) The terms and provisions of this Agreement, including, without
limitation, the rights and remedies available to Greenwich hereunder, will not
contravene any law or any contractual restriction binding on or otherwise
affecting the Grantor or any of such Grantor's properties and will not result in
or require the creation of any Lien, security interest or other charge or
encumbrance upon or with respect to any of such Grantor's properties other than
any Liens in favor of Greenwich.

            (g) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority or other regulatory body, or any
other Person, is required for (i) the grant by the Grantor, or the perfection,
of the security interest purported to be created


                                      -7-
<PAGE>

hereby in the Collateral or (ii) the exercise by Greenwich of any of its rights
and remedies hereunder, except the filing under the Uniform Commercial Code as
in effect in the applicable jurisdiction of the financing statements described
in Schedule II hereto, all of which financing statements have been duly filed
and are in full force and effect.

            (h) This Agreement creates valid security interests in favor of
Greenwich in the Collateral, as security for the Obligations. Greenwich's having
possession of all instruments and cash constituting Collateral from time to
time, and the filing of the financing statements described in Schedule II
hereto, result in the perfection of such security interests to the extent that a
security interest in the Collateral can be perfected under the Code by taking
possession thereof or filing a financing statement with respect thereto. Such
security interests are, or in the case of Collateral in which the Grantor
obtains rights after the date hereof, will be, perfected, first priority
security interests. Such recordings and filings and all other action necessary
or desirable to perfect and protect such security interest have been duly taken,
except for Greenwich's having possession of instruments and cash constituting
Collateral after the date hereof and the other filings and recordations
described in Schedule II hereto.

            SECTION 5. Covenants as to the Collateral. So long as any of the
Obligations shall remain outstanding, unless Greenwich shall otherwise consent
in writing:

            (a) Further Assurances. The Grantor shall at its expense, at any
time and from time to time, promptly execute and deliver all further instruments
and documents and take all further action that may be reasonably necessary or
desirable or that Greenwich may request in order (i) to perfect and protect the
security interest purported to be created hereby; (ii) to enable Greenwich to
exercise and enforce its rights and remedies hereunder in respect of the
Collateral; or (iii) otherwise to effect the purposes of this Agreement,
including, without limitation: (A) marking conspicuously, at the request of
Greenwich, each of its records pertaining to the Collateral with a legend, in
form and substance satisfactory to Greenwich, indicating that such Collateral is
subject to the security interest created hereby, (B) if any Collateral shall be
evidenced by a promissory note or a certificate, immediately delivering and
pledging to Greenwich hereunder such note or certificate duly endorsed and
accompanied by executed instruments of transfer or assignment, all in form and
substance satisfactory to Greenwich, and (C) executing and filing such financing
or continuation statements, or amendments thereto, as may be necessary or
desirable or that Greenwich may request in order to perfect and preserve the
security interest purported to be created hereby.

            (b) Distributions in Respect of the Pledged Assets. Unless and until
an Event of Default shall have occurred and be continuing, all dividends,
interest and other payments or distributions (collectively, the "Distributions")
payable in respect of the Pledged Assets shall be paid and applied as follows in
accordance with the following priorities:

                  (i) with respect to the Designated ESR,

                        (A) first, all Distributions shall be deposited in the
                  Reserve Fund until the amount on deposit therein equals the
                  applicable Reserve Fund Required Amount,


                                      -8-
<PAGE>

                        (B) second, in the event the aggregate amount of
                  Distributions deposited in the Reserve Fund equal the Maximum
                  Cumulative Reserve Fund Deposit, all Distributions shall be
                  applied to pay all Obligations then due and payable,
                  including, without limitation, all Obligations of the Grantor
                  arising from or related to any repurchases by Greenwich of
                  Mortgage Loans resulting from a breach of a representation or
                  warranty by the Grantor or Greenwich (or any Affiliate of such
                  Person) under the Facilities, including all Obligations which
                  are not then due and payable but are reasonably estimated by
                  Greenwich to be incurred as a result of such repurchases, and

                        (C) second, to the Grantor hereof or to such other
                  Person as may be lawfully entitled to receive such
                  Distributions,

                  (ii) with respect to the Engagement ESRs and the Prepayment
            Bond (if any):

                        (A) first, to all Obligations then due and payable,
                  including, without limitation, all Obligations of the Grantor
                  arising from or related to any repurchases by Greenwich of
                  Mortgage Loans resulting from a breach of a representation or
                  warranty by the Grantor or Greenwich (or any Affiliate of such
                  Person) under the Facilities, including all Obligations which
                  are not then due and payable but are reasonably estimated by
                  Greenwich to be incurred as a result of such repurchases,

                        (B) second, after all Distributions have been deposited
                  in the Reserve Fund pursuant to Section 5(b)(i)(A) above, all
                  Distributions shall be deposited in the Reserve Fund until the
                  amount on deposit therein equals the Reserve Fund Required
                  Amount, and

                        (C) third, to the Grantor or to such other Person as may
                  be lawfully entitled to receive such Distributions.

                  (iii) with respect to the Deferred Purchase Price ESRs,

                        (A) first, to all Obligations then due and payable
                  including without limitation, all Obligations of the Grantor
                  arising from or related to any repurchases by Greenwich of
                  Mortgage Loans resulting from a breach of a representation or
                  warranty by the Grantor or Greenwich (or any Affiliate of such
                  Person) under the Facilities, including all Obligations which
                  are not then due and payable but are reasonably estimated by
                  Greenwich to be incurred as a result of such repurchases,

                        (B) second, after all Distributions have been deposited
                  in the Reserve Fund pursuant to Section 5(b)(i)(A) and Section
                  5(b)(ii)(B) above, all Distributions shall be deposited in the
                  Reserve Fund until the amount on deposit therein equals the
                  Reserve Fund Required Amount, and


                                      -9-
<PAGE>

                        (C) third,  to the  Grantor or to such other  Person as
                  may be lawfully entitled to receive such Distributions.

                  Notwithstanding anything to the contrary, no Distributions in
respect of any Pledged Assets shall be paid to the Grantor pursuant to clauses
(ii) or (iii) above to the extent any claim is pending for which Greenwich in
good faith reasonably determines that it may realize a loss as a result of any
repurchase by Greenwich of Mortgage Loans resulting from a breach of a
representation or warranty by the Grantor under the Facilities. Greenwich may
apply any Distributions deposited in the Reserve Fund pursuant to Section
5(b)(i) or paid to it pursuant to Sections 5(b)(ii) and (iii) to satisfy any
Obligations then due and payable by the Grantor, in such order as Greenwich
shall determine in its sole discretion. After applying any amounts on deposit in
the Reserve Fund to pay outstanding Obligations, Distributions (not exceeding
the Maximum Cumulative Reserve Fund Deposit) shall be deposited in the Reserve
Fund to replenish the applicable Reserve Fund Required Amount in accordance with
clauses (i), (ii) and (iii) above. During the Final Reserve Period, Greenwich
shall cause all funds on deposit in the Reserve Fund in excess of the applicable
Reserve Fund Required Amount to be remitted to the Grantor or to such other
Person as may be lawfully entitled to receive such excess funds.

                  All Distributions which are received by the Grantor contrary
to the provisions of Section 5(b) shall be received in trust for the benefit of
Greenwich, shall be segregated from other property or funds of such Grantor and
shall be forthwith paid over to Greenwich as Collateral in the same form as so
received (with any necessary endorsement).

                  (d) Taxes, Etc. The Grantor shall pay promptly when due all
property and other taxes, assessments and governmental charges or levies imposed
upon, and all claims (including claims for labor, materials and supplies)
against, any Collateral, except to the extent the validity thereof is being
contested in good faith by proper proceedings that stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof.

                  (e) Excess Spread Receivables.

                        (i) Grantor shall directly own each Pledged Residual and
shall cause all Pledged Residuals to be pledged to Greenwich free of any
assignment, transfer or registration restrictions other than transfer
requirements consistent with industry custom.

                        (ii) In the event that the Grantor shall be prohibited
under the terms of any of the documents listed on Schedule 3 to the New
Repurchase Facility from pledging to Greenwich any Engagement ESRs or Deferred
Purchase Price ESRs, Greenwich will execute and deliver to the Grantor such
documents as Grantor shall reasonably request to evidence the release of
Greenwich's Lien on such Engagement ESRs or Deferred Purchase Price ESRs, as the
case may be, provided that the Grantor shall provide Greenwich, and Greenwich
shall accept, an alternative securitization structure or other collateral which
provides Greenwich with substantially equivalent value and is otherwise
reasonably acceptable to Greenwich.


                                      -10-
<PAGE>

                  (f) Place of Business. The Grantor shall (i) give Greenwich at
least 30 days' prior written notice of any change in such Grantor's name,
identity or organizational structure, and (ii) keep its chief place of business
and chief executive office at the location(s) specified therefor in Schedule I
hereof.

                  (g) Transfers and Other Liens.

                        (i) No Grantor shall sell, assign (by operation of law
or otherwise), lease, exchange or otherwise transfer or dispose of any of the
Collateral.

                        (ii) No Grantor shall create or suffer to exist any
Lien, security interest or other charge or encumbrance upon or with respect to
any Collateral except (A) for the security interests created hereby and (B) any
Lien granted by such Grantor to any Subordinate Lender on such Grantor's
Collateral, subject to the execution and delivery of a Subordination Agreement
described in Section 4(e) hereof.

                  (h) Inspection and Reporting. The Grantor shall permit
representatives of Greenwich, upon reasonable notice and at any time during
normal business hours, to inspect and make abstracts from its books and records
pertaining to the Collateral, and permit representatives of Greenwich to be
present at such Grantor's place of business to receive copies of all
communications and remittances relating to the Collateral, and to forward copies
of any notices or communications received or made by such Grantor with respect
to the Collateral, all in such manner as Greenwich may require.

                  SECTION 6. Additional Provisions Concerning the Collateral.

                  (a) The Grantor hereby authorizes Greenwich to file, without
the signature of such Grantor where permitted by law, one or more financing or
continuation statements, and amendments thereto, relating to the Collateral. A
photocopy or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.

                  (b) The Grantor hereby irrevocably appoints Greenwich the
Grantor's attorney-in-fact and proxy, with full authority in the place and stead
of the Grantor and in the name of the Grantor or otherwise, from time to time in
Greenwich's discretion, to take any action and to execute any instrument which
Greenwich may reasonably deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation, (i) to receive, endorse and
collect all instruments made payable to the Grantor representing any dividend or
other distribution in respect of any Collateral and to give full discharge for
the same, (ii) to execute and file such financing or continuation statements, or
amendments thereto, as may be reasonably necessary or desirable or that
Greenwich may reasonably request in order to perfect and preserve the security
interest purported to be created hereby, and (iii) to affix to any certificates
and documents representing the Collateral, the stock or bond powers delivered
with respect thereto, and to transfer or re-register or cause the transfer or
re-registration of the Collateral, or any part thereof, on the books of the
entity issuing such Collateral, to the name of Greenwich or any nominee, and
thereafter to exercise with respect to such Collateral, all the rights, powers
and


                                      -11-
<PAGE>

remedies of an owner. The power of attorney granted pursuant to this Agreement
and all authority hereby conferred are granted and conferred solely to protect
Greenwich's interest in the Collateral and shall not impose any duty upon
Greenwich to exercise any power. This power of attorney shall be irrevocable as
one coupled with an interest until the payment in full in cash of the
Obligations and the termination of all Facilities.

                  (c) If the Grantor fails to perform any agreement contained
herein, Greenwich may itself perform, or cause performance of, such agreement or
obligation, in the name of such Grantor or Greenwich, and the expenses of
Greenwich incurred in connection therewith shall be payable by such Grantor
pursuant to Section 8 hereof.

                  (d) Other than the exercise of reasonable care to assure the
safe custody of the Collateral while held hereunder, Greenwich (and the
designated custodians and nominees of Greenwich) shall have no duty or liability
to preserve rights pertaining thereto and shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering surrender of
it to the applicable Grantor. Greenwich (and the designated custodians and
nominees of Greenwich) shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which such Person accords its
own property, it being understood that neither Greenwich nor any of its
custodians or nominees shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Collateral, whether or not such Person has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.

                  (e) Greenwich may at any time in its discretion (i) without
notice to the Grantor, transfer or register in the name of Greenwich or any of
its nominees any or all of the Collateral, and (ii) exchange certificates or
instruments constituting Collateral for certificates or instruments of smaller
or larger denominations.

                  SECTION 7. Remedies Upon Default. If any Event of Default
shall have occurred and be continuing:

                  (a) Greenwich may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all of the rights and remedies of a secured party on default under the
Code (whether or not the Code applies to the affected Collateral), and also may
(i) require the Grantor to, and the Grantor hereby agrees that it shall at its
expense and upon request of Greenwich forthwith, assemble all or part of the
Collateral as directed by Greenwich and make it available to Greenwich at a
place or places to be designated by Greenwich that is reasonably convenient to
both parties and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Greenwich's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as Greenwich may
deem commercially reasonable. The Grantor agrees that, to the extent notice of
sale shall be required by law, at least 10 days' notice to such Grantor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. Greenwich shall not be


                                      -12-
<PAGE>

obligated to make any sale of Collateral regardless of notice of sale having
been given. Greenwich may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Grantor hereby waives any claims against Greenwich arising by reason of the fact
that the price at which the Collateral may have been sold at a private sale was
less than the price that might have been obtained at a public sale or was less
than the aggregate amount of the Obligations, even if Greenwich accepts the
first offer received and does not offer the Collateral to more than one offeree,
and waives all rights that such Grantor may have to require that all or any part
of the Collateral be marshaled upon any sale (public or private) thereof.

                  (b) Any cash held by Greenwich as Collateral and all proceeds
received by Greenwich in respect of any sale or collection from, or other
realization upon, all or any part the Collateral may, in the discretion of
Greenwich, be held by Greenwich as collateral for, and/or then or at any time
thereafter applied in whole or in part by Greenwich against, all or any part of
the Obligations as follows:

                        (i) first, to the payment of the costs and expenses of
such sale, collection or other realization, including the out-of-pocket costs
and expenses of Greenwich and the reasonable fees, costs, expenses and other
client charges of counsel employed in connection therewith, to the payment of
all advances made by Greenwich for the account of the Grantor hereunder and to
the payment of all costs and expenses incurred by Greenwich in connection with
the administration and enforcement of this Agreement;

                        (ii) second, at the option of Greenwich, to the payment
or other satisfaction of any Liens and other encumbrances upon any of the
Collateral;

                        (iii) third, to the payment of all other Obligations
then due and payable;

                        (iv) fourth, to the payment of any other amounts
required by applicable law (including, without limitation, Section 9-504(1)(c)
of the Code or any successor or similar, applicable statutory provision); and

                        (v) fifth, to any such Grantor that shall be, or to
whomsoever shall be, lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct.

                  (c) In the event that the proceeds of any such sale,
collection or realization are insufficient to pay all amounts to which Greenwich
are legally entitled, the Grantor shall be liable for the deficiency, together
with interest thereon at the highest rate specified in any applicable Loan
Document for interest on overdue principal thereof or such other rate as shall
be fixed by applicable law, together with the costs of collection and the
reasonable fees, costs, expenses and other client charges of any attorneys
employed by Greenwich to collect such deficiency.

                  (d) Notwithstanding anything to the contrary, the maximum
aggregate amount of Distributions deposited in the Reserve Fund shall be limited
to the Maximum Cumulative


                                      -13-
<PAGE>

Reserve Fund Deposit, provided that the foregoing limitation shall not apply to
the costs and expenses (including reasonable fees, costs and expenses of counsel
to Greenwich) incurred by Greenwich in connection with any sale of, or
collection from, or other realization upon, the Pledged Assets.

                  SECTION 8. Indemnity and Expenses.

                  (a) The Grantor agrees to indemnify and hold Greenwich
harmless from and against any and all claims, damages, losses, liabilities,
obligations, penalties, costs or expenses (including, without limitation, legal
fees, costs, expenses and other client charges) to the extent that they arise
out of or otherwise result from (i) this Agreement (including, without
limitation, enforcement of this Agreement), or (ii) any claim from any third
party servicer or the applicable Monoline Insurance Company to reimburse any
such Person for losses pursuant to indemnification or guaranty obligations of
Greenwich arising from, related to, or in connection with any of the Facilities,
except, in the case of clauses (i) and (ii) above, claims, losses or liabilities
resulting solely and directly from (x) information provided by and related to
Greenwich or any of its Affiliates or (y) Greenwich's gross negligence or
willful misconduct. With respect to any indemnification or guaranty obligations
of Greenwich described in clause (ii) of this Section 8(a), the Grantor shall
have the right to review such obligations prior to definitive documentation of
such obligations being negotiated by Greenwich and the applicable third party
servicer or Monoline Insurance Company, as the case may be, and shall provide
its written consent to such obligations, which consent may be withheld by the
Grantor in its sole discretion.

                  (b) The Grantor shall upon demand pay to Greenwich (i) the
amount of any and all costs and expenses, including the reasonable fees, costs,
expenses and other client charges of counsel for Greenwich and of any experts
and agents (including, without limitation, any collateral trustee that may act
as agent of Greenwich), that Greenwich may incur in connection with (A) the
preparation, negotiation, execution, delivery, recordation, administration,
amendment, waiver or other modification or termination of this Agreement, or (B)
the custody, preservation, use or operation of, the Collateral and (ii) the
amount of any and all costs and expenses, including the reasonable fees, costs,
expenses and other client charges of counsel for Greenwich and of any experts
and agents (including, without limitation, any collateral trustee that may act
as agent of Greenwich), that Greenwich may incur in connection with (A) the sale
of, collection from, or other realization upon, any Collateral, (B) the exercise
or enforcement of any of the rights of Greenwich hereunder, or (C) the failure
by the Grantor to perform or observe any of the provisions hereof.

                  SECTION 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied or delivered to
the Grantor, at its address set forth in the Purchase Facility; if to Greenwich,
to it at its address set forth in the Purchase Facility; or as to any such
Person, at such other address as shall be designated by such Person in a written
notice to such other Person complying as to delivery with the terms of this
Section 9. All such notices and other communications shall be effective (i) if
mailed, three days after being deposited in the mails, (ii) if telecopied, when
received and (iii) if delivered, upon delivery.


                                      -14-
<PAGE>

                  SECTION 10. Security Interest Absolute. All rights of
Greenwich, all security interests and all obligations of the Grantor hereunder
shall be absolute and unconditional irrespective of: (i) any lack of validity or
enforceability of any of the Facilities or the Engagement Letter or any other
agreement or instrument relating thereto, (ii) any change in the time, manner or
place of payment of, or in any other term in respect of, all or any of the
Obligations, or any other amendment or waiver of or consent to any departure
from any of the Facilities or the Engagement Letter or any other agreement or
instrument relating thereto, (iii) any exchange or release of, or non-perfection
of any Lien on any Collateral, or any release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Obligations, or
(iv) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, the Grantor in respect of the Obligations.

                  SECTION 11. [Intentionally Omitted]

                  SECTION 12. Miscellaneous.

                  (a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Grantor and Greenwich, and
no waiver of any provision of this Agreement, and no consent to any departure by
the Grantor therefrom, shall be effective unless it is in writing and signed by
Greenwich, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

                  (b) No failure on the part of Greenwich to exercise, and no
delay in exercising, any right hereunder or under any of the Facilities or the
Engagement Letter shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The rights and remedies of Greenwich
provided herein and in the Facilities and the Engagement Letter are cumulative
and are in addition to, and not exclusive of, any rights or remedies provided by
law. The rights of Greenwich under any of the Facilities or the Engagement
Letter against any party thereto are not conditional or contingent on any
attempt by Greenwich to exercise any of its rights under any of the Facilities
or the Engagement Letter against such party or against any other Person.

                  (c) Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.

                  (d) This Agreement shall create a continuing security interest
in the Collateral and shall (i) remain in full force and effect until the
payment in full or release of the Obligations, and (ii) be binding on the
Grantor and its successors and assigns and shall inure, together with all rights
and remedies of Greenwich hereunder, to the benefit of Greenwich and its
respective permitted successors, transferees and assigns. Without limiting the
generality of clause (ii) of the immediately preceding sentence, without notice
to the Grantor, Greenwich may assign or otherwise transfer its rights under any
of the Facilities to any other Person, and such other Person shall thereupon
become vested with all of the benefits in respect thereof granted to Greenwich
herein or otherwise. None of the rights or obligations of the Grantor hereunder
may be assigned


                                      -15-
<PAGE>

or otherwise transferred without the prior written consent of Greenwich, and any
such assignment or transfer shall be null and void.

                  (e) Upon the termination of the Facilities and the
satisfaction in full of the Obligations, (i) this Agreement and the security
interests created hereby shall terminate and all rights to the Collateral shall
revert to the Grantor and (ii) Greenwich shall, upon the Grantor's request and
at such Grantor's expense, (A) return to such Grantor such of the Collateral as
shall not have been sold or otherwise disposed of or applied pursuant to the
terms hereof and (B) execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination, all without any
representation, warranty or recourse whatsoever.

                  (f) This Agreement shall be governed by and construed in
accordance with the law of the State of New York, except as required by
mandatory provisions of law and except to the extent that the validity and
perfection or the perfection and the effect of perfection or non-perfection of
the security interest created hereby, or remedies hereunder, in respect of any
particular Collateral are governed by the law of a jurisdiction other than the
State of New York.

                  (g) Any legal action or proceeding with respect to this
Agreement or any document related thereto may be brought in the courts of the
State of New York or the United States of America for the Southern District of
New York, and, by execution and delivery of this Agreement, the Grantor hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Grantor hereby
irrevocably waives any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of forum non conveniens, that it
may now or hereafter have to the bringing of any such action or proceeding in
such respective jurisdictions and consents to the granting of such legal or
equitable relief as is deemed appropriate by the court.

                  (h) The Grantor irrevocably consents to the service of process
of any of the aforesaid courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to such
Grantor at its address provided herein, such service to become effective 30 days
after such mailing.

                  (i) Nothing contained herein shall affect the right of
Greenwich to serve process in any other manner permitted by law or commence
legal proceedings or otherwise proceed against the Grantor or any of such
Grantor's property in any other jurisdiction.

                  (j) THE GRANTOR AND (BY ITS ACCEPTANCE OF THIS AGREEMENT)
GREENWICH HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL
OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      -16-
<PAGE>

                  IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be executed and delivered by its officer thereunto duly authorized as of the
date first above written.

                                      CONTIFINANCIAL CORPORATION



                                      By:  ________________________________
                                           Name:
                                           Title:


                                      By:  ________________________________
                                           Name:
                                           Title:


                                      -17-
<PAGE>

                                   Schedule I

                              ADDRESSES OF GRANTOR

                    Chief Place of Business, Chief Executive
                         Office and Location of Records


                                 277 Park Avenue
                                   38th Floor
                            New York, New York 10172


                                      -18-
<PAGE>

                                   Schedule II

                           UCC-1 FINANCING STATEMENTS



                   Secretary of State of the State of New York

             Registrar's Office of the County of New York, New York

<PAGE>


                                  Schedule III

                            EXCESS SPREAD RECEIVABLE

ContiMortgage Home Equity Loan Trust 1998-4 Home Equity Pass-Through
Certificate, Class R, No. R-2, dated December 7, 1998