FIRST MODIFICATION OF
             AMENDED AND RESTATED CREDIT AGREEMENT


     THIS  FIRST  MODIFICATION  OF AMENDED  AND  RESTATED  CREDIT
AGREEMENT (this "Modification Agreement") is entered into  as  of
February  25,  2000,  by  and  among AMRESCO,  INC.,  a  Delaware
corporation  ("AMRESCO"), the Subsidiaries of AMRESCO  listed  as
Borrowers  on the signature pages hereof (together with  AMRESCO,
collectively referred to herein as the "Borrowers", and each such
entity  referred to herein as a "Borrower"), and BANK OF AMERICA,
N.A.,   formerly  NationsBank,  N.A.,  as  Administrative   Agent
("Administrative  Agent"), for and on  behalf  of  the  Lenders
(defined below).

                      W I T N E S S E T H:

     WHEREAS,  reference  is made to the credit  facilities  made
pursuant  to  and governed by that certain Amended  and  Restated
Credit Agreement (as amended, the "Credit Agreement") dated as of
January   18,   2000,  executed  by  and  among  the   Borrowers,
Administrative Agent, and the financial institutions,  funds  and
other  entities from time to time designated as "Lenders" therein
(the "Lenders");

     WHEREAS, the Credit Agreement was executed in amendment  and
restatement  of  that  certain  Credit  Agreement  dated  as   of
August 12, 1998, among AMRESCO, as borrower, certain of the other
Borrowers, as guarantors, Administrative Agent, and the  Lenders,
as amended and supplemented;

     WHEREAS,  the Borrowers have requested certain modifications
to the Credit Agreement; and

     WHEREAS,  the  Lenders, acting through Administrative  Agent
pursuant  to  the Credit Agreement, have agreed to the  requested
modifications,  subject  to and upon  the  terms  and  conditions
contained herein.

     NOW,  THEREFORE, KNOW ALL MEN BY THESE PRESENTS,  that,  for
and  in  consideration  of the terms, conditions  and  agreements
contained  herein, and for other good and valuable consideration,
the  receipt  and  sufficiency of which is  hereby  acknowledged,
Administrative  Agent,  for and on behalf  of  the  Lenders,  and
Borrowers hereby agree as follows:

     1.    Definitions.   (a) The following definition  shall  be
inserted  in  alphabetical order in Section  1.1  of  the  Credit
Agreement:

          (i)   "Lend Lease Consent Holdbacks" means amounts
     held back from the gross cash purchase price to be paid
     to  the sellers under the Lend Lease Agreement for  the
     following  items  up to the maximum indicated  amounts:
     (a)  Holdback of $5,000,000 pending receipt of  consent
     from  the Japanese Ministry of Justice for the transfer
     of  AMRESCO's ownership in AMRESCO Japan, Inc.  to  the
     purchasers   under  the  Lend  Lease   Agreement;   and
     (b)  Holdback  of up to $6,400,000 pending  receipt  of
     consent to the assignment of various agreements between
     AMRESCO  Capital,. L.P. ("ACLP") and Teachers Insurance
     and  Annuity Association related to certain  commercial
     mortgage  loans  originated by ACLP to  the  purchasers
     under the Lend Lease Agreement.

          (b)  The definition of "Transition Date" in Section 1.1
of  the  Credit Agreement is amended in its entirety to  read  as
follows:

          "Transition  Date" means the earlier  of  (i)  the
     Lend Lease Closing Date and (ii) the date on which  the
     Borrowers are obligated to make a principal payment  on
     the Term Loans pursuant to Section 2.2.1(a)."

     2.    Extended  Date for Lend Lease Required  Payment.   The
outside  date for the payment of the Lend Lease Required  Payment
is   extended  to  April  6,  2000.   Accordingly,  the  date  of
"February   29,  2000"  set  forth  in  the  first  sentence   of
Section  2.2.1(a)  of  the  Credit Agreement  is  amended  to  be
"April 6, 2000."

     3.    Lend  Lease Consent Holdbacks.  If and to  the  extent
that  the  cash proceeds received by the sellers under  the  Lend
Lease Agreement upon closing thereof is reduced by virtue of  any
Lend  Lease  Consent  Holdbacks, then 95%  of  any  such  amounts
subsequently  paid to the sellers shall be paid to Administrative
Agent  for  application  to  the Term Loans  in  accordance  with
Section  2.2.1  of  the Credit Agreement,  and,  as  provided  in
Section 2.7(b) of the Credit Agreement, if Term Loan B is paid in
full,   then  any  such  amounts  shall  be  applied  to  amounts
outstanding  under  the  Revolving  Credit  Facility,   and   the
Revolving  Commitment shall be reduced by the amount so  applied.
Accordingly, Section 2.2.1(d) of the Credit Agreement is  amended
to read as follows:

          "(d)  On any day that a principal payment is  made
     on  the Lend Lease Holdback Note or any portion of  the
     Lend Lease Consent Holdbacks is paid to AMRESCO or  any
     other  seller under the Lend Lease Agreement, an amount
     equal to 95% of such payment (or 85% of such payment if
     neither  the SREP Sale Date nor Structured Real  Estate
     Asset Sales for all or substantially all [as defined in
     Section  2.2.1(b)]  of the SREP Assets  have  occurred,
     with  such  10% difference being included in  the  Lend
     Lease Deferral)."

     4.   Transition Date Borrowing Base Certificate.  To be able
to  determine compliance with the Borrowing Base requirements  of
Section  7.24.4  of the Credit Agreement and the  amount  of  any
payment(s)  on  the  Credit Facilities due to  a  Borrowing  Base
deficiency after the Transition Date pursuant to Section 2.2.4 of
the   Credit  Agreement,  AMRESCO,  for  itself  and  the   other
Borrowers, shall furnish to Administrative Agent within five  (5)
Business  Days  after the Transition Date a pro  forma  Borrowing
Base Certificate calculating the Borrowing Base for the Revolving
Credit  Facility and the Term Loan Facilities, in form acceptable
to  Administrative Agent.  Accordingly, Section  7.1(ix)  of  the
Credit Agreement is amended to add the following sentence at  the
end of that Section:

          "In addition, AMRESCO shall prepare and deliver to
     Administrative  Agent  within five  (5)  Business  Days
     after  the Transition Date, a pro forma Borrowing  Base
     Certificate,  in  form  and methodology  acceptable  to
     Administrative  Agent, calculating the  Borrowing  Base
     for  the Revolving Credit Facility (calculated pursuant
     to  Schedule  11) and the Borrowing Base for  the  Term
     Loan Facilities (calculated pursuant to Schedule 12) as
     of  the  first (1st) Business Day after the  Transition
     Date,  and such Borrowing Base Certificate shall  be  a
     Borrowing  Base Certificate for all purposes hereunder,
     including   without   limitation   for   purposes    of
     Section  2.2.4  and  for  calculating  compliance  with
     Section  7.24.4 from and after the date  following  the
     Transition Date."

     5.   Covenant Amendments.  The following amendments are made
to the referenced covenants contained in the Credit Agreement:

          (a)   Minimum  Consolidated Tangible  Net  Worth:   The
outside  date for the Change Date (as defined in Section 7.24  of
the   Credit  Agreement)  is  extended  until  April   6,   2000.
Accordingly, the date of "March 1, 2000" set forth in clause  (a)
of  Section  7.24.1  of the Credit Agreement  is  amended  to  be
"April 6, 2000."

          (b)   Leverage  Ratio:   The  term  "Change  Date"   in
Section 7.24.2 of the Credit Agreement is expressly understood to
refer  to the amended definition of Change Date set forth in  the
preceding Section 4(a) hereof.

           (c)   Interest/Dividend Coverage Ratio: Section 7.24.3
of  the  Credit  Agreement is hereby  amended  to  read  in   its
entirety as follows:

          "Section 7.24.3. Interest/Dividend Coverage Ratio.
     Borrowers   shall   not  permit  the  Interest/Dividend
     Coverage  Ratio  to be less than (a)  on  December  31,
     1999,  .80  to  1.00, (b) from January 1,  2000  though
     March  31,  2000, .85 to 1.00, and (c) from  and  after
     April 1, 2000, 1.35 to 1.00."

          (d)  Borrowing Base Requirement.  Section 7.24.4 of the
Credit  Agreement is hereby amended to read in  its  entirety  as
follows:

          "Section   7.24.4.   Borrowing  Base  Requirement.
     Borrowers shall not permit the Borrowing Base  Coverage
     Ratio  (as  indicated on Schedules 10, 11  and  12,  as
     applicable) to be less than (a) 1.05 to 1.00  prior  to
     and   on   the  Transition  Date  for  all  the  Credit
     Facilities  as  calculated  pursuant  to  Schedule  10,
     (b)  1.25  to  1.00 after the Transition Date  for  the
     Revolving  Credit  Facility as calculated  pursuant  to
     Schedule 11, (c) if the Transition Date has occurred by
     March 30, 2000, 2.00 to 1.00 after the Transition  Date
     through March 30, 2000, for the Term Loan Facilities as
     calculated pursuant to Schedule 12, or (d) 4.00 to 1.00
     from  and  after  the later to occur of the  Transition
     Date or March 31, 2000, for the Term Loan Facilities as
     calculated  pursuant to Schedule 12.   Compliance  with
     this  Section 7.24.4 from and after the Transition Date
     until  the  date  for  delivery of the  next  month-end
     Borrowing Base Certificate shall be determined from the
     pro  forma  Borrowing Base Certificate to be  delivered
     pursuant to the last sentence of Section 7.1(ix)."

     6.    SREP  Sale Date.  Borrowers and Administrative  Agent,
for and on behalf of the Lenders, acknowledge and agree that with
the  closing of the SREP-Ocwen Sale on January 18, 2000, the SREP
Sale  Date  has  occurred  for  all  purposes  under  the  Credit
Agreement.

     7.    Definition of Loan Documents.  The definition of "Loan
Documents", as defined in the Credit Agreement and as used in the
Credit Agreement, the other Loan Documents and herein, shall  be,
and  is  hereby, modified to include this Modification  Agreement
and any and all documents executed in connection herewith.

     8.    Conditions  Precedent to this Modification  Agreement.
As  conditions precedent to this Modification Agreement  and  the
modifications  to the Credit Agreement pursuant  hereto  and  the
consents granted hereunder, all of the following shall have  been
satisfied:

          (a)   The  Borrowers and Guarantors shall have executed
and   delivered   to   Administrative  Agent  this   Modification
Agreement;

          (b)    The   Borrowers   shall   have   delivered    to
Administrative Agent all corporate resolutions, consents,  powers
of  attorney,  certificates or documents as Administrative  Agent
may  request  relating  to (i) the existence  of  Borrowers,  and
(ii)  the  corporate and partnership authority for the  execution
and  validity of this Modification Agreement, together  with  all
other documents, instruments and agreements and any other matters
relevant  hereto or thereto, all in form and content satisfactory
to Administrative Agent;

          (c)   The  Borrowers  shall have  paid  all  applicable
amendment,  administration and other fees as agreed in connection
with this Modification Agreement; and

          (d)   If applicable, Borrowers shall have caused to  be
executed  and  delivered to Administrative Agent a Supplement  to
the  Loan Documents to add any additional Subsidiaries of AMRESCO
required  pursuant  to Section 5.13 of the  Credit  Agreement  as
Borrowers or Guarantors, as the case may be, and as assigning  or
pledging  parties under the Collateral Assignment,  the  Security
Agreement  and  the  Pledge Agreement, and  Administrative  Agent
shall  have  received all such corporate existence and  authority
documentation,   resolutions   and   other   agreements,    stock
certificates  and  other  equity  ownership  certificates,  stock
powers,  financing  statements, instruments and  certificates  as
Administrative  Agent shall reasonably require  with  respect  to
such  additional  Borrowers and/or Guarantors.   Borrowers  shall
also   have   caused   to   be  executed  and/or   delivered   to
Administrative  Agent  such modifications  to  the  Stock  Pledge
Agreement  and such stock certificates of, or other evidences  of
equity interests in, the Excluded Subsidiaries (with stock powers
as  applicable) to effectively evidence and perfect the  Lenders'
security interests therein.

     9.     Reaffirmation  of  Debt  and  Liens.   Each  Borrower
acknowledges and agrees that it is well and truly indebted to the
Lenders  pursuant to the terms of the Notes, the Credit Agreement
and  the  other Loan Documents, as modified hereby, and that  all
liens  and  security interests securing the Obligations  are  and
remain in full force and effect.

     10.   No  Implied  Waivers.   None  of  the  amendments   or
modifications provided for herein shall be deemed a consent to or
waiver of any breach of the same or any other covenant, condition
or  duty.   The  Borrowers  and  the Guarantors  acknowledge  and
understand  that  Administrative Agent and the  Lenders  have  no
obligation  to further amend or modify the Credit Agreement,  any
of  the  other Loan Documents or any of the terms, provisions  or
covenants thereof, and that Administrative Agent and the  Lenders
have  made  no  representations regarding any such amendments  or
modifications.  No failure or delay on the part of Administrative
Agent or any Lender in exercising, and no course of dealing  with
respect to, any right, power or privilege under this Modification
Agreement, the Credit Agreement or any other Loan Document  shall
operate  as  a  waiver thereof or of the exercise  of  any  other
right, power or privilege.

     11.   Representations and Warranties.  Each of the Borrowers
and  Guarantors  hereby represent and warrant  to  Administrative
Agent  and  the  Lenders  that (a) the execution,  delivery,  and
performance  by  the  Borrowers  and  the  Guarantors   of   this
Modification  Agreement  and  compliance  with  the   terms   and
provisions hereof (i) have been duly authorized by all  requisite
action on the part of each such Person and (ii) do not, and  will
not,  violate  or  conflict with, or result in a  breach  of,  or
require  any  consent  under (A) the articles  of  incorporation,
certificate  of incorporation, bylaws, partnership  agreement  or
other  organizational  documents of  any  such  Person,  (B)  any
applicable   law,  rule,  or  regulation  or  any  order,   writ,
injunction,   or   decree  of  any  Governmental   Authority   or
arbitrator, or (C) any material agreement or instrument to  which
any  such  Person is a party or by which any of them  or  any  of
their  property is bound or subject, (b) the representations  and
warranties contained in the Agreement, as amended hereby, and any
other Loan Document are true and correct in all material respects
on and as of the date hereof as though made on and as of the date
hereof, and (c) no Default has occurred and is continuing.

     12.   Release  of  Claims.  Each of the  Borrowers  and  the
Guarantors  hereby acknowledge and agree that none  of  them  has
any,  and there are no, claims or offsets against or defenses  or
counterclaims  to the terms and provisions of or the  obligations
of  any  Borrower,  any  Guarantor or any Subsidiary  created  or
evidenced  by  the  Credit Agreement or any  of  the  other  Loan
Documents,  and to the extent any such claims, offsets,  defenses
or  counterclaims exist, each Borrower and each Guarantor  hereby
waives  (to the fullest extent permitted by applicable law),  and
hereby  releases  each of Administrative Agent and  each  of  the
Lenders   from,  any  and  all  claims,  offsets,  defenses   and
counterclaims, whether known or unknown, such waiver and  release
being  with full knowledge and understanding of the circumstances
and effects of such waiver and release and after having consulted
legal counsel with respect thereto.

     13.   Ratification.  Except as otherwise expressly  modified
by  this Modification Agreement, all terms and provisions of  the
Credit  Agreement, the Notes, and the other Loan Documents  shall
remain unchanged and hereby are ratified and confirmed and  shall
be  and  shall  remain in full force and effect,  enforceable  in
accordance with their terms.

     14.    Payment   of  Expenses.   Borrowers  shall   pay   to
Administrative  Agent, for and on behalf  of  the  Lenders,  upon
demand,   the   reasonable  attorneys'  fees  and   expenses   of
Administrative Agent's counsel and all filing and recording  fees
and other reasonable expenses incurred by Administrative Agent in
connection with this Modification Agreement.

     15.     Current    Borrowers,   Guarantors   and    Excluded
Subsidiaries.   Borrowers  represent  that  the  Subsidiaries  of
AMRESCO  that  are required to be a "Borrower" or a "Guarantor",
respectively,  under  the  Credit  Agreement  and  related   Loan
Documents as of the date hereof, are and remain only the  initial
Borrowers and Guarantors that executed the Credit Agreement,  and
there are no additional Borrowers or Guarantors to be added by  a
Supplement to the Loan Documents, and that BEI Sanjac,  Inc.  has
merged  into  AMRESCO Consolidated Corp. and  is,  therefore,  no
longer a Borrower.

     16.   Further  Assurances.  AMRESCO and the other  Borrowers
shall  execute  and deliver to Administrative  Agent  such  other
documents  as  may  be necessary or as may be  required,  in  the
opinion  of Administrative Agent and/or counsel to Administrative
Agent,  to  effect the transactions contemplated  hereby  and  to
create,  evidence,  perfect and protect the  Lenders'  Liens  and
security interests, and the rights and remedies of Administrative
Agent and/or the Lenders under the Loan Documents.

     17.   Binding Agreement.  This Modification Agreement  shall
be  binding upon, and shall inure to the benefit of, the  parties
hereto,   and   the   Lenders,   and   their   respective   legal
representatives, successors and assigns.

     18.   Enforceability.   In the event the  enforceability  or
validity  of  any  portion  of this Modification  Agreement,  the
Credit  Agreement, the Notes, or any of the other Loan  Documents
is challenged or questioned, such provision shall be construed in
accordance  with, and shall be governed by, whichever  applicable
federal  or  Texas  law  would  uphold  or  would  enforce   such
challenged or questioned provision.

     19.   Choice  of Law.  THIS MODIFICATION AGREEMENT  AND  THE
OTHER  LOAN  DOCUMENTS  SHALL BE GOVERNED BY,  AND  CONSTRUED  IN
ACCORDANCE  WITH, THE LAWS OF THE STATE OF TEXAS, EXCEPT  TO  THE
EXTENT FEDERAL LAWS PREEMPT THE LAWS OF THE STATE OF TEXAS.

     20.   Counterparts.   This  Modification  Agreement  may  be
executed  in  multiple counterparts, all of which are  identical,
each  of  which  shall be deemed an original, and  all  of  which
counterparts   together  shall  constitute  one  and   the   same
instrument.

     21.   Entire  Agreement.  This Modification  Agreement,  the
Credit  Agreement  and the Notes, together with  the  other  Loan
Documents,  contain  the entire agreements  between  the  parties
relating  to the subject matter hereof and thereof and all  prior
agreements  relative  thereto which are not contained  herein  or
therein are terminated.

     THIS   MODIFICATION   AGREEMENT  AND   THE   OTHER   WRITTEN
INSTRUMENTS, AGREEMENTS AND DOCUMENTS EXECUTED IN CONNECTION WITH
THIS MODIFICATION AGREEMENT, AND THE CREDIT AGREEMENT, THE NOTES,
AND  THE  OTHER  LOAN  DOCUMENTS, REPRESENT THE  FINAL  AGREEMENT
BETWEEN  THE  PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE  OF
PRIOR,  CONTEMPORANEOUS  OR SUBSEQUENT  ORAL  AGREEMENTS  OF  THE
PARTIES.   THERE  ARE  NO UNWRITTEN ORAL AGREEMENTS  BETWEEN  THE
PARTIES.

     IN  WITNESS WHEREOF, this Modification Agreement is executed
effective as of the date first written above.

                         BORROWERS:

                         AMRESCO, INC., a Delaware corporation


                         By:
                         Name:
                              __________________________________________
                         Title:
                              __________________________________________


                         AFC EQUITIES INVESTORS, INC.
                         AFC EQUITIES, L.P.
                         AFC EQUITIES MANAGEMENT, INC.
                         AMREIT HOLDINGS, INC.
                         AMREIT MANAGERS G.P., INC.
                         AMREIT MANAGERS, L.P.
                         AMRESCO 1994-N2, INC.
                         AMRESCO ATLANTA INDUSTRIAL, INC.
                         AMRESCO BUILDERS GROUP, INC.
                         AMRESCO CAPITAL CONDUIT CORPORATION
                         AMRESCO CAPITAL LIMITED, INC.
                         AMRESCO CAPITAL, L.P.
                         AMRESCO CMF, INC.
                         AMRESCO COMMERCIAL FINANCE, INC.
                         AMRESCO CONSOLIDATION CORP.
                         AMRESCO CONSUMER ACQUISITIONS CORP.
                         AMRESCO CONSUMER INVESTMENTS, L.P.
                         AMRESCO CONSUMER RECEIVABLES CORPORATION
                         AMRESCO EQUITY INVESTMENTS, INC.
                         AMRESCO EQUITY INVESTMENTS II, INC.
                         AMRESCO FINANCE AMERICA CORPORATION
                         AMRESCO FINANCIAL I, INC.
                         AMRESCO FINANCIAL I, L.P.
                         AMRESCO FUNDING CORPORATION
                         AMRESCO-INSTITUTIONAL, INC.
                         AMRESCO INSURANCE SERVICES, INC.
                         AMRESCO INVESTMENTS, INC.
                         AMRESCO MANAGEMENT, INC.
                         AMRESCO-MBS I, INC.
                         AMRESCO MBS-II, INC.
                         AMRESCO MORTGAGE CAPITAL, INC.
                         AMRESCO MORTGAGE CAPITAL LIMITED-I, INC.
                         AMRESCO MORTGAGE SERVICES LIMITED, INC.
                         AMRESCO NEW ENGLAND, INC.
                         AMRESCO NEW ENGLAND II, INC.
                         AMRESCO NEW ENGLAND, L.P.
                         AMRESCO NEW ENGLAND II, L.P.
                         AMRESCO NEW HAMPSHIRE, INC.
                         AMRESCO NEW HAMPSHIRE, L.P.
                         AMRESCO OVERSEAS, INC.
                         AMRESCO PORTFOLIO INVESTMENTS, INC.
                         AMRESCO PRINCIPAL MANAGERS I, INC.
                         AMRESCO PRINCIPAL MANAGERS II, INC.
                         AMRESCO RECEIVABLES MANAGEMENT CORP.
                         AMRESCO RESIDENTIAL CAPITAL MARKETS, INC.
                         AMRESCO RESIDENTIAL CREDIT CORPORATION
                         AMRESCO RESIDENTIAL MORTGAGE CORPORATION
                         AMRESCO RESIDENTIAL PROPERTIES, INC.
                         AMRESCO SERVICES, L.P.
                         AMRESCO VENTURES, INC.
                         ASSET MANAGEMENT RESOLUTION COMPANY
                         BEI 1992 - N1, INC.
                         BEI 1993 - N3, INC.
                         BEI 1994 - N1, INC.
                         BEI MULTI-POOL, INC.
                         BEI PORTFOLIO INVESTMENTS, INC.
                         BEI PORTFOLIO MANAGERS, INC.
                         BEI REAL ESTATE SERVICES, INC.
                         COMMONWEALTH TRUST DEED SERVICES, INC.
                         ENT MIDWEST, INC.
                         ENT NEW JERSEY, INC.
                         ENT SOUTHERN CALIFORNIA, INC.
                         EXPRESS FUNDING, INC.
                         FINANCE AMERICA CORPORATION
                         GRANITE EQUITIES, INC.
                         HF ACQUISITION SUB, INC.
                         HOLLIDAY FENOGLIO FOWLER, L.P.
                         LIFETIME HOMES, INC.
                         MORTGAGE INVESTORS CORPORATION
                         MSPI, INC.
                         OAK CLIFF FINANCIAL, INC.
                         PRESTON HOLLOW ASSET HOLDINGS, INC.
                         QUALITY FUNDING, INC.

                         By:  AMRESCO, INC., a Delaware corporation,
                              as agent and attorney-in-fact

                         By:
                         Name:
                         Title:


                         ACKNOWLEDGED AND AGREED TO as of the
                         25th day of February, 2000, by:


                         GUARANTORS:

                         AMRESCO INDEPENDENCE FUNDING, INC.

                         By:  AMRESCO, INC., a Delaware corporation,
                              as agent and attorney-in-fact


                         By:
                         Name:
                         Title:


                         AMRESCO UK HOLDINGS LIMITED


                         By:
                         Name:
                         Title:


                         By:
                         Name:
                         Title:


                         AMRESCO JERSEY VENTURES LIMITED


                         By:
                         Name:
                         Title:


                         AMRESCO CANADA INC.


                         By:
                         Name:
                         Title:


                         AMRESCO EQUITIES CANADA INC.


                         By:
                         Name:
                         Title:


                         AMRESCO FUNDING CANADA INC.


                         By:
                         Name:
                         Title:



                         ADMINISTRATIVE AGENT:

                         BANK OF AMERICA, N.A., a national banking
                         association, as  Administrative Agent for and on
                         behalf of the Lenders


                         By:
                                   Elizabeth Kurilecz
                                   Managing Director