April 24, 2000



Jonathan S. Pettee
Via Hand Delivery

RE:  Retention Bonus

Dear Jon:

In  recognition  of your past and ongoing  contributions  to
AMRESCO, INC. ("AMRESCO"), we are pleased to offer to you  a
Retention   Bonus,  based  upon  the  terms  and  conditions
contained  in  this  letter agreement.   AMRESCO,  like  any
publicly   traded   company,  cannot   guarantee   continued
employment through December 31, 2000.

We  believe that there is an ongoing position for  you  with
AMRESCO, and this letter in no way implies that we intend to
terminate your employment with AMRESCO at some future  date.
Rather,  it  is  to acknowledge your special  value  to  our
organization.

If  your  termination of employment (as hereinafter defined)
occurs  prior to December 31, 2000, you will be paid  a  one
time  cash  bonus  of $750,000.  This amount  will  be  paid
within fifteen (15) days of the date of such termination  in
a  lump  sum, but in no event later than December 31,  2000,
and will be subject to applicable withholding. This bonus is
in  lieu  of  any  other  form  of  incentive  or  severance
compensation for which you are or may become eligible.

If  you  are a full time employee of AMRESCO or one  of  its
affiliates on the earlier of (i) December 31, 2000  or  (ii)
the  date which is thirty (30) days after the closing of the
sale  of  all  of the three (3) business units of  AMRESCO's
Commercial  Finance  Division  (Builders  Group,  ACLC   and
AMRESCO Independence Funding, Inc.) you will be paid on such
date  a  one  time, lump sum cash bonus of $750,000.   These
benefits  are  in  lieu of any other form  of  incentive  or
severance  compensation for which  you  are  or  may  become
eligible,  other  than  the  incentive  bonus  provided  for
herein.

For   purposes   of  the  definition  of  "termination"   or
"termination of employment" means the following:

(a)  actual   involuntary  termination  of  your  employment
     status without Cause (as hereinafter defined), or

(b)  actual voluntary termination of your employment at  any
     time within thirty (30) days of the occurrence of one (1) of
     the following events:

     (i)  the assignment to you of any duties inconsistent with
          your position, duties, responsibilities and status with
          AMRESCO immediately prior to your termination, or a material
          adverse change in your reporting responsibilities, titles or
          offices as in effect immediately prior to your termination;

     (ii) a  reduction  in  your base salary  as  in  effect
          immediately prior to your termination;

     (iii)     requiring you to be based anywhere other than
          either the offices at which you were based immediately prior
          to your termination or offices which are no more than thirty-
          five (35) miles from the location of your home immediately
          prior to your termination, except for required travel on
          your employer's business to an extent substantially
          consistent with your business travel obligations immediately
          prior to such termination;

     (iv) the failure to provide to you benefit or compensation
          plans (including, but not limited to any pension plan, life
          insurance plan, health and accident plan or disability plan)
          which do not materially reduce the benefits from those you
          enjoyed immediately prior to such termination, or the
          failure to provide you with the number of paid vacation days
          to which you are then entitled on the basis of years of
          service with AMRESCO in accordance with AMRESCO's normal
          vacation policy in effect immediately prior to your
          termination; or

     (v)  any failure of AMRESCO to obtain the assumption of, or
          the agreement to perform, this Agreement in its entirety by
          any successor in interest.

If  you voluntarily terminate your employment (other than  a
termination)  or your employment with AMRESCO is  terminated
by AMRESCO for Cause prior to December 31, 2000 you will not
be  entitled  to  any payment hereunder.  "Cause",  as  used
herein,  means (1) gross misconduct or willful,  substantial
violation  of AMRESCO policies and procedures or  (2)  other
material  performance deficiencies, provided that  you  have
been  given a written warning and not less than 15  days  to
correct such performance deficiencies.

As  this particular bonus plan is restricted to certain  key
employees, it is necessary that you keep the terms  of  this
agreement confidential.  You may disclose the existence  and
terms  of  this  agreement only to your spouse,  accountant,
attorney,  the  IRS and to others only if required  by  law.
Failure  to keep the terms and conditions of this  agreement
confidential  will  be considered gross misconduct  and  may
result  in forfeiture of your Retention Bonus or termination
of your employment, or both.  If you have further questions,
please do not hesitate to contact me.


This  letter  agreement may not be assigned  by  you.   This
letter  agreement  will  be binding  upon  AMRESCO  and  any
successor-in-interest   thereto,    whether    by    merger,
consolidation or otherwise.

Sincerely,



Robert H. Lutz, Jr.
President  and Chief Executive Officer

ACCEPTED:




Employee Signature
Date: