UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

      |X|   Quarterly Report Pursuant to Section 13 or 15(d) of
            the Securities Exchange Act of 1934

                       For the quarter ended June 30, 1997

      |_|   Transition Report Pursuant to Section 13 or 15(d) of
            the Securities Exchange Act of 1934

                         Commission file number 33-83524


                          MERIT SECURITIES CORPORATION
             (Exact name of registrant as specified in its charter)

            Virginia                               54-1736551
(State or other jurisdiction of  incorporation) (I.R.S. Employer
Identification No.)

   10900 Nuckols Road, 3rd Floor, Glen Allen, Virginia    23060
   (Address of principal executive offices)              (Zip Code)

                                (804) 217-5800
             (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past ninety days. |X| Yes |_| No

As of July 31, 1997,  the latest  practicable  date,  there were 1,000 shares of
Merit Securities Corporation common stock outstanding.

The registrant  meets the conditions set forth in General  Instructions  H(1)(a)
and (b) of Form 10-Q and is  therefore  filing  this Form 10-Q with the  reduced
disclosure format.


<PAGE>



                          MERIT SECURITIES CORPORATION
                                    FORM 10-Q
                                      INDEX


<TABLE>
<CAPTION>

                                                              Page Number
PART I.     FINANCIAL INFORMATION
<S>             <C>                                                 <C>
Item 1.     Financial Statements
               Balance Sheets at June 30, 1997 and
               December 31, 1996                                       3

               Statements of Operations for the three and six months
               ended June 30, 1997 and 1996                            4

               Statement of Shareholder's Equity for the six months
               ended June 30, 1997                                     5

               Statements of Cash Flows for the six months ended
               June 30, 1997 and 1996                                  6

               Notes to Unaudited Financial Statements                 7

Item 2.     Management's Discussion and Analysis of
               Financial Condition and Results of Operations           8

PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings                                          9

Item 5.     Other Information                                          9

Item 6.     Exhibits and Reports on Form 8-K                           9

SIGNATURES                                                            12
</TABLE>

<PAGE>



PART I.     FINANCIAL INFORMATION
Item 1.     Financial Statements

MERIT SECURITIES CORPORATION
Balance Sheets
(amounts in thousands except share data)

 <TABLE>
<CAPTION>                                                            

                                                                     June 30,            December 31,
                                                                      1997                   1996
                                                                ------------------     ------------------

<S>                                                                       <C>                     <C>
ASSETS:
   Collateral for collateralized bonds                           $      3,111,107       $      2,463,842
   Prepaid shelf registration fees                                            603                    849
   Cash                                                                        10                     10
                                                                ==================     ==================
                                                                 $      3,111,720       $      2,464,701
                                                                ==================     ==================

LIABILITIES AND SHAREHOLDER'S EQUITY

LIABILITIES:
   Collateralized bonds                                          $      2,904,648       $      2,301,598
   Due to affiliates                                                       58,525                 41,973
                                                                ------------------     ------------------
                                                                        2,963,173              2,343,571
                                                                ------------------     ------------------

SHAREHOLDER'S EQUITY:
   Common stock, no par value,
      10,000 shares authorized,
      1,000 shares issued and outstanding                                      10                     10
   Additional paid-in capital                                             104,779                 82,136
   Net unrealized gain on investments available-for-sale                   63,630                 60,304
   Retained deficit                                                       (19,872)              (21,320)
                                                                  ------------------    ---------------
                                                                          148,547                121,130
                                                                 ==================     ==================
                                                                 $      3,111,720       $      2,464,701
                                                                 ==================     ==================

<FN>
See notes to unaudited financial statements.
</FN>
</TABLE>

<PAGE>



MERIT SECURITIES CORPORATION
Statements of Operations
(amounts in thousands except share data)
<TABLE>
<CAPTION>

                                                       Three Months Ended                     Six Months Ended
                                                            June 30,                              June 30,
                                                ---------------------------------     ---------------------------------
                                                    1997               1996               1997               1996
                                                --------------     --------------     --------------     --------------
<S>                                                    <C>                 <C>              <C>                    <C>

Interest Income:
    Collateral for collateralized bonds         $     39,614        $    25,515       $     82,163       $     42,782
                                               ---------------    ---------------    ---------------    ---------------
Interest and related expense:
    Interest expense on collateralized bonds          37,610              24,328            76,584             39,930
    Other collateralized bond expense                    802                 677             1,637              1,155
    Provision for losses                                 600                 400             1,200                800
                                               ---------------    ---------------    ---------------    ---------------
                                                      39,012              25,405            79,421             41,885
                                               ---------------    ---------------    ---------------    ---------------

Net interest margin                                      602                 110             2,742                897

Provision for loss on Dynex's sale of                      -             (28,134)                -            (28,134)
affiliates
Interest on due to affiliate                            (648)              (266)            (1,294)             (580)
                                               ---------------    ---------------    ---------------    ---------------

Net income (deficit)                            $        (46)     $     (28,290)     $       1,448       $    (27,817)
                                               ===============    ===============    ===============    ===============



<FN>
See notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>


MERIT SECURITIES CORPORATION
Statement of Shareholder's Equity
(amounts in thousands except share data)
<TABLE>
<CAPTION>
                                                                        Net
                                                                    unrealized
                                                   Additional         gain on          Retained
                                   Common            paid-in        investments        earnings
                                    stock            capital    available-for-sale     (deficit)        Total
                                --------------  ---------------------------------- -------------- --------------
<S>                                      <C>            <C>             <C>               <C>         <C>    

Balance at December 31, 1996       $     10     $    82,136    $         60,304     $  (21,320)       121,130                  

Contributed capital                       -          22,643                   -               -        22,643

Change in net unrealized gain on    
   investments available-for-sale         -               -               3,326               -         3,326
   

Net income                                -               -                   -           1,448         1,448
                                     ---------     -----------    ----------------    -----------   ------------

Balance at June 30, 1997           $      10       $104,779    $         63,630     $   (19,872)    $ 148,547
                                  ============   ============= ===================  ==============  ==============

<FN>
See notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>

MERIT SECURITIES CORPORATION
Statements of Cash Flows
(amounts in thousands)

<TABLE>
<CAPTION>
                                                                  Six Months Ended        Six Months Ended
                                                                   June 30, 1997           June 30, 1996
                                                                 -------------------     -------------------
<S>                                                                        <C>                     <C>
Operating activities:
  Net income                                                     $         1,448        $      (27,817)
  Adjustments to reconcile net income to net cash
   provided by (used for) operating activities:
    Amortization, net                                                      9,038                 3,767
    Provision for losses                                                   1,200                   800
    Provision for loss on Dynex's sale of affiliates                           -                28,134
    Net change in accrued interest                                        (5,366)               (2,777)
    Decrease in prepaid shelf registration fees                              246                   273
                                                                 -------------------     -------------------
      Net cash provided by operating activities                            6,566                 2,380
                                                                 -------------------     -------------------


Investing activities:
  Collateral for collateralized bonds:
    Purchase of loans subsequently securitized                        (1,024,357)           (1,176,393)
    Principal payments on collateral                                     375,912               185,908
    Net change in funds held by trustee                                      126                     -
                                                                 -------------------     -------------------
      Net cash used for investing activities                            (648,319)             (990,485)
                                                                 -------------------     -------------------

Financing activities:
  Collateralized bonds:
    Proceeds from issuance of collateralized bonds                       979,758             1,123,094
    Principal payments on collateralized bonds                          (377,200)             (185,494)

  Increase in due to affiliate                                            16,552                 8,327
  Proceeds from capital contributions                                     22,643                42,178
                                                                 -------------------     -------------------
    Net cash provided by financing activities                            641,753               988,105
                                                                 -------------------     -------------------

Net decrease in cash                                                           -                     -
Cash at beginning of period                                                   10                    10
                                                                    ----------------       -----------------
 
Cash at end of period                                            $            10          $         10
                                                                 ===================      ===================

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $        76,093          $     37,971
                                                                 ===================     ===================


<FN>
See notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>


MERIT SECURITIES CORPORATION
Notes to  Unaudited  Financial  Statements  June 30, 1997  (amounts in thousands
except share data)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance  with the  instructions  to Form 10-Q and do not  include  all of the
information and notes required by generally accepted  accounting  principles for
complete financial statements.  The financial statements include the accounts of
Merit  Securities  Corporation  (the  Company).  The Company is a  wholly-owned,
limited-purpose  finance subsidiary of Issuer Holding Corporation (IHC). IHC was
formed on  September  4, 1996 to  acquire  all of the  outstanding  stock of the
Company and certain other affiliates of Dynex Capital,  Inc.  (Dynex).  IHC is a
wholly-owned  subsidiary of Dynex.  The Company was organized to facilitate  the
securitization  of loans through the issuance and sale of  collateralized  bonds
(the Bonds).

In the opinion of  management,  all material  adjustments,  consisting of normal
recurring  adjustments,  considered  necessary  for a fair  presentation  of the
financial statements have been included. The Balance Sheet at June 30, 1997, the
Statements  of  Operations  for the three and six months ended June 30, 1997 and
1996,  the Statement of  Shareholder's  Equity for the six months ended June 30,
1997,  the  Statements  of Cash Flows for the six months ended June 30, 1997 and
1996, and the related notes to financial  statements  are  unaudited.  Operating
results for the six months ended June 30, 1997 are not necessarily indicative of
the results  that may be expected for the year ending  December  31,  1997.  For
further  information,  refer to the audited  financial  statements and footnotes
included in the Company's Form 10-K for the year ended December 31, 1996.

Certain amounts for 1996 have been reclassified to conform with the presentation
for 1997.

NOTE 2--COLLATERAL FOR COLLATERALIZED BONDS

In accordance with the provisions of Statement of Financial Accounting Standards
No. 115, Accounting for Certain  Investments in Debt and Equity Securities,  the
Company   has    classified    collateral    for    collateralized    bonds   as
available-for-sale.  The following table summarizes the Company's amortized cost
basis and fair value of collateral for collateralized bonds at June 30, 1997 and
December 31, 1996, and the related average effective  interest rates (calculated
for the  month  ended  June 30,  1997  and  December  31,  1996,  and  excluding
unrealized gains and losses):

<TABLE>
<CAPTION>

                                   June 30, 1997          December 31, 1996
-------------------------------------------------------------------------------
                                           Effective                Effective
                              Fair Value   Interest     Fair        Interest
                                              Rate        Value       Rate
-------------------------------------------------------------------------------
<S>                                <C>        <C>           <C>         <C>
Collateral for
collateralized bonds:
   Amortized cost           $   3,077,488     7.3%    $ 2,435,270     7.5%
   Allowance for losses           (30,011)                (31,732)
-------------------------------------------------------------------------------
      Amortized cost, net       3,047,477               2,403,538
   Gross unrealized gains          74,285                  68,557
   Gross unrealized losses        (10,655)                 (8,253)
-------------------------------------------------------------------------------
                            $   3,111,107             $ 2,463,842
-------------------------------------------------------------------------------
</TABLE>





<PAGE>


Item 2.  Management's  Discussion  and  Analysis  of  Financial  Condition  and
Results of Operations

Merit  Securities  Corporation  (the  Company) was  incorporated  in Virginia on
August 19, 1994 as a wholly-owned,  limited-purpose  finance subsidiary of Dynex
Capital,  Inc. (Dynex),  formerly known as Resource  Mortgage  Capital,  Inc. On
September 4, 1996,  Issuer  Holding  Corporation,  Inc.  (IHC),  a  wholly-owned
subsidiary of Dynex,  acquired all of the  outstanding  stock of the Company and
certain other affiliates of Dynex.

The Company was organized to facilitate the  securitization of loans through the
issuance and sale of collateralized bonds (the Bonds). The Bonds will be secured
primarily by: (i) mortgage loans secured by first or second liens on residential
property,   (ii)   Federal   National   Mortgage   Association   Mortgage-Backed
Certificates,  (iii)  Federal  Home Loan  Mortgage  Corporation  Mortgage-Backed
Certificates,  (iv) Government  National  Mortgage  Association  Mortgage-Backed
Certificates,    (v)   any   other   mortgage   pass-through   certificates   or
mortgage-collateralized   obligations  and  (vi)  consumer   installment   loans
(collectively,  the Collateral).  In the future, the Company may also securitize
other types of loans.

After  payment  of  the  expenses  of an  offering  and  certain  administrative
expenses,  the net  proceeds  from an offering of Bonds will be used to purchase
Collateral  from IHC or various  third  parties.  IHC can be expected to use the
proceeds  to reduce  indebtedness  incurred  to obtain  such loans or to acquire
additional Collateral.  After the issuance of a series of Bonds, the Company may
sell the  Collateral  securing that series of Bonds,  subject to the lien of the
Bonds.

During the three months ended June 30, 1997,  the Company  issued one (1) series
of Bonds totaling  approximately $984 million aggregate  principal amount. As of
June 30,  1997,  the  Company  had seven  (7)  series  of  collateralized  bonds
outstanding  totaling  approximately  $2.9 billion,  compared to $2.3 billion at
December 31, 1996,  and $1.6  billion at June 30, 1996.  Interest  income on the
Collateral  increased  $39.4  million to $82.2  million for the six months ended
June 30, 1997  compared to $42.8 million for the six months ended June 30, 1996,
primarily as a result of the increased  number of series  outstanding.  Interest
expense on Bonds  increased  $36.7 million from $39.9 million for the six months
ended June 30,  1996 to $76.6  million for the six months  ended June 30,  1997,
primarily due to the additional series outstanding.

With collateralized bond structures, the Company retains credit risk relative to
the  amount  of  overcollateralization  required  in  conjunction  with the bond
insurance.  Losses are generally first applied to the overcollateralized amount,
with any  losses in  excess  of that  amount  borne by the bond  insurer  or the
holders of the  collateralized  bonds.  The Company only incurs credit losses to
the extent that losses are incurred in the repossession, foreclosure and sale of
the  underlying  collateral.  Such  losses  generally  equal  the  excess of the
principal  amount  outstanding,  less  any  proceeds  from  mortgage  or  hazard
insurance,  over the  liquidation  value of the  collateral.  To compensate  the
Company for retaining  this loss  exposure,  the Company  generally  receives an
excess  yield  on  the  collateralized  loans  relative  to  the  yield  on  the
collateralized  bonds. At June 30, 1997, the Company  retained $108.5 million in
aggregate  principal  amount  of  overcollateralization,  and had  reserves,  or
otherwise had provided  coverage on $60.3 million of this potential  credit loss
exposure.  $30.3  million  of  this  reserve  amount  is in the  form  of a loss
reimbursement guarantee from a third-party rated A by Standards & Poors Ratings
Services, Inc.

At June 30,  1997,  the Company had  securities  of  approximately  $1.2 billion
remaining for issuance under a registration  statement filed with the Securities
and Exchange Commission. The Company anticipates issuing additional Bonds in the
future.

The  Company  competes  in a national  market with other  private  conduits  and
various financial firms. Economic conditions, interest rates, regulatory changes
and market dynamics all influence the mortgage securities market.



<PAGE>


PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings:

            None

Item 5.     Other Information:

            None

Item 6.     Exhibits and Reports on Form 8-K:

(a)         Exhibits


3.1   Articles  of  Incorporation  of the  Registrant  (Incorporated  herein  by
      reference to the Exhibits to Registrant's Registration Statement No.
      33-83524 on Form S-3 filed August 31, 1994).

3.2   Bylaws  of  the  Registrant  (Incorporated  herein  by  reference  to the
      Exhibits to  Registrant's  Registration  Statement  No.  33-83524 on Form
      S-3 filed August 31, 1994).

3.3   Amended  and  Restated   Articles  of  Incorporation  of  the  Registrant,
      effective April 19, 1995  (Incorporated  herein by reference to Exhibit to
      the Registrant's Current Report on Form 8-K, filed April 21, 1995).

4.1   Indenture  between  Registrant  and  Trustee,  dated as of  August 1, 1994
      (Incorporated   herein  by  reference  to  the  Exhibits  to  Registrant's
      Registration Statement No. 33-83524 on Form S-3 filed August 31, 1994).

4.2   Form   of   Supplement   Indenture   between   Registrant   and   Trustee
      (Incorporated  herein  by  reference  to  the  Exhibits  to  Registrant's
      Registration Statement No. 33-83524 on Form S-3 filed August 31, 1994).

4.3   Copy of the  Indenture,  dated as of November 1, 1994,  by and between the
      Registrant  and Texas  Commerce  Bank  National  Association,  as  Trustee
      (Incorporated  herein by reference to Exhibit to the Registrant's  Current
      Report on Form 8-K, filed December 19, 1994).

4.4   Copy of the Series 1 Indenture  Supplement,  dated as of November 1, 1994,
      by  and  between  the   Registrant   and  Texas   Commerce  Bank  National
      Association,  as Trustee (including schedules and exhibits)  (Incorporated
      herein by reference to Exhibit to the Registrant's  Current Report on Form
      8-K, filed December 19, 1994).

4.5   Copy of the Series 2 Indenture  Supplement,  dated as of February 1, 1995,
      by  and  between  the   Registrant   and  Texas   Commerce  Bank  National
      Association,  as Trustee (including schedules and exhibits)  (Incorporated
      herein by reference to Exhibit to the Registrant's  Current Report on Form
      8-K, filed March 8, 1995).

4.6   Copy of the Series 3 Indenture  Supplement,  dated as of March 1, 1995, by
      and between the Registrant  and Texas Commerce Bank National  Association,
      as Trustee  (including  schedules  and exhibits)  (Incorporated  herein by
      reference to Exhibit to the Registrant's Current Report on Form 8-K, filed
      April 21, 1995).

4.7   Copy of the Series 4 Indenture  Supplement,  dated as of June 1, 1995,  by
      and between the Registrant  and Texas Commerce Bank National  Association,
      as Trustee  (including  schedules  and exhibits)  (Incorporated  herein by
      reference to Exhibit to the Registrant's Current Report on Form 8-K, filed
      July 10, 1995).

4.8   Copy of the Series 5 Indenture Supplement, dated as of October 1, 1995, to
      Indenture, dated as of November 1, 1994, by and between the Registrant and
      Texas Commerce Bank National  Association,  as Trustee  (related  exhibits
      available upon request to the Trustee).  (Incorporated herein by reference
      to Exhibit to the Registrant's  Current Report on Form 8-K, filed November
      15, 1995).

4.9   Copy of the Series 6 Indenture  Supplement,  dated as of March 1, 1996, by
      and between the Registrant  and Texas Commerce Bank National  Association,
      as Trustee  (including  schedules  and exhibits)  (Incorporated  herein by
      reference to Exhibit to the Registrant's Current Report on Form 8-K, filed
      March 21, 1996).

4.10  Copy of the Series 7 Indenture Supplement, dated as of May 1, 1996, by and
      between the Registrant and Texas  Commerce Bank National  Association,  as
      Trustee  (related  schedules  and exhibits  available  upon request of the
      Trustee).  (Incorporated  herein by reference  to Exhibit to  Registrant's
      Current Report on Form 8-K, filed June 19, 1996).

4.11  Copy of the Series 8 Indenture Supplement,  dated as of September 1, 1996,
      by  and  between  the   Registrant   and  Texas   Commerce  Bank  National
      Association,  as Trustee  (related  schedules and exhibits  available upon
      request of the Trustee).  (Incorporates  herein by reference to Exhibit of
      Registrant's Current Report on Form 8-K, filed October 9, 1996).

4.12  Copy of the Series 9 Indenture  Supplement,  dated as of June 1, 1997,  by
      and between the Registrant  and Texas Commerce Bank National  Association,
      as Trustee (related  schedules and exhibits  available upon request of the
      Trustee).  (Incorporates  herein by reference  to Exhibit of  Registrant's
      Current Report on Form 8-K, filed July 11, 1997).

99.1  Standard  Provisions  to  Servicing  Agreement  (Incorporated  herein  by
      reference  to the Exhibits to  Registrant's  Registration  Statement  No.
      33-83524 on Form S-3 filed August 31, 1994).

99.2  Form of  Servicing  Agreement  (Incorporated  herein by  reference to the
      Exhibits to  Registrant's  Registration  Statement  No.  33-83524 on Form
      S-3 filed August 31, 1994).

99.3  Standard  Terms to Master  Servicing  Agreement  (Incorporated  herein by
      reference  to the Exhibits to  Registrant's  Registration  Statement  No.
      33-83524 on Form S-3 filed August 31, 1994).

99.4  Form of Master Servicing Agreement  (Incorporated  herein by reference to
      the  Exhibits to  Registrant's  Registration  Statement  No.  33-83524 on
      Form S-3 filed August 31, 1994).

99.5  Form  of  Prospectus  Supplement  of  Bonds  secured  by  adjustable-rate
      mortgage  loans   (Incorporated   herein  by  reference  to  Exhibits  to
      Registrant's  Pre-Effective  Amendment  No. 4 to  Registration  Statement
      No. 33-83524 on Form S-3 filed December 5, 1994).

99.6  Form of  Financial  Guaranty  Assurance  Policy  (Incorporated  herein by
      reference  to the Exhibits to  Registrant's  Registration  Statement  No.
      33-83524 on Form S-3 filed August 31, 1994).

99.7  Form of GEMICO  Mortgage Pool Insurance  Policy  (Incorporated  herein by
      reference  to the Exhibits to  Registrant's  Registration  Statement  No.
      33-83524 on Form S-3 filed August 31, 1994).

99.8  Form of PMI Mortgage  Insurance Co. Pool Insurance  Policy  (Incorporated
      herein  by  reference  to  the  Exhibits  to  Registrant's   Registration
      Statement No. 33-83524 on Form S-3 filed August 31, 1994).

99.9  Form of Prospectus  Supplement  of Bonds  secured by fixed-rate  mortgage
      loans  (Incorporated  herein by  reference  to Exhibits  to  Registrant's
      Pre-Effective  Amendment No. 4 to Registration  Statement No. 33-83524 on
      Form S-3 filed December 5, 1994).

99.10 Copy  of  Financial  Guaranty  Insurance  Policy  No.  50331-N  issued  by
      Financial Security Assurance Inc., dated December 7, 1994, with respect to
      the Series 1 Bonds  (Incorporated  herein by  reference  to the Exhibit to
      Registrant's 1994 Form 10-K, dated and filed March 31, 1995).

99.11 Copy of  Financial  Guaranty  Insurance  Policy  No.  95010074  issued  by
      Financial  Guaranty  Insurance  Company,  dated  February 23,  1995,  with
      respect to the Series 2 Bonds (Incorporated herein by reference to Exhibit
      to the Registrant's Current Report on Form 8-K, filed March 8, 1995).

99.12 Copy of the Saxon Mortgage Funding Corporation  Servicing Guide for Credit
      Sensitive  Loans,   February  1,  1995  Edition  (Incorporated  herein  by
      reference to Exhibit to the Registrant's Current Report on Form 8-K, filed
      March 8, 1995).

99.13 Copy  of  Financial  Guaranty  Insurance  Policy  No.  50364-N  issued  by
      Financial  Guaranty  Assurance Inc.,  dated April 7, 1995, with respect to
      the Series 3 Bonds  (Incorporated  herein by  reference  to Exhibit to the
      Registrant's Current Report on Form 8-K, filed April 21, 1995).

99.14 Copy  of  Financial  Guaranty  Insurance  Policy  No.  50382-N  issued  by
      Financial  Guaranty  Assurance Inc.,  dated June 29, 1995, with respect to
      the Series 4 Bonds  (Incorporated  herein by  reference  to Exhibit to the
      Registrant's Current Report on Form 8-K, filed July 10, 1995).

99.15 Copy of the Standard  Terms to Master  Servicing  Agreement,  June 1, 1995
      Edition  (incorporated  herein by reference to Exhibit to the Registrant's
      Current Report on Form 8-K, filed July 10, 1995).

99.16 Copy of  Financial  Guaranty  Insurance  Policy No.  19804 issued by MBIA
      Insurance  Corporation  (Incorporated  herein by  reference to Exhibit to
      the Registrant's Current Report on Form 8-K, filed November 15, 1995).

99.17 Copy of  Financial  Guaranty  Insurance  Policy No.  20596 issued by MBIA
      Insurance  Corporation  (Incorporated  herein by  reference to Exhibit to
      the Registrant's Current Report on Form 8-K, filed March 21, 1996).

99.18 Copy of  Financial  Guaranty  Insurance  Policy No.  21296 issued by MBIA
      Insurance  Corporation  (Incorporated  herein by  reference to Exhibit to
      the Registrant's Current Report on Form 8-K, filed June 19, 1996).


(b)   Reports on Form 8-K

      Current  Report on Form 8-K as filed with the Commission on June 26, 1997,
      relating to the Registrant's Series 9 Bonds.

      Current  Report on Form 8-K as filed with the Commission on July 11, 1997,
      relating to the Registrant's Series 9 Bonds.




<PAGE>













                                        SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                             MERIT SECURITIES CORPORATION


                                             By: /s/ Lynn K. Geurin
                                                ------------------------------
                                                Lynn K. Geurin
                                                (Principal Executive Officer)





                                                /s/ Stephen J. Benedetti
                                                ------------------------------
                                                Stephen J. Benedetti
                                                (Principal Financial &
                                                  Accounting Officer)






Dated:  August 14, 1997