================================================================================

                                  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 quarterly period ended June 30, 2004

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


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

                         Commission File Number 33-83524

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

 4551 Cox Road, Suite 300, Glen Allen, Virginia              23060-6740
    (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

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). |_| Yes |X| No


As of July 31,  2004,  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

PART I.    FINANCIAL INFORMATION
<S>                             <C>                                                                          <C>
Item 1.       Financial Statements
              Condensed Consolidated Balance Sheets at June 30, 2004

                  and December 31, 2003 (unaudited)...........................................................1

              Condensed Consolidated Statements of Operations and Comprehensive
                  (Loss) Income for the three months and six months ended June 30, 2004
                  and 2003 (unaudited)........................................................................2

              Condensed Consolidated Statements of Cash Flows for the six months
                  ended June 30, 2004 and 2003 (unaudited)....................................................3

              Notes to Unaudited Condensed Consolidated Financial Statements..................................4

Item 2.       Management's Discussion and Analysis of
              Financial Condition and Results of Operations...................................................7

Item 3.       Quantitative and Qualitative Disclosures about Market Risk.....................................12

Item 4.       Controls and Procedures........................................................................13


PART II.   OTHER INFORMATION

Item 1.       Legal Proceedings..............................................................................14

Item 5.       Other Information..............................................................................14

Item 6.       Exhibits and Reports on Form 8-K...............................................................14

SIGNATURES  .................................................................................................15

EXHIBIT INDEX ...............................................................................................16

</TABLE>

                                       i
<PAGE>



PART I.    FINANCIAL INFORMATION

Item 1.  Financial Statements

MERIT SECURITIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(amounts in thousands except share data)


<TABLE>
<CAPTION>
<S>                                                                            <C>                      <C>
                                                                     ---------------------    ---------------------
                                                                        June 30, 2004           December 31, 2003
                                                                     ---------------------    ---------------------

  ASSETS:
       Securitized finance receivables:
         Loans                                                           $     702,088            $     783,881
         Debt securities, available-for-sale                                   227,133                  251,554
       Other loans                                                               1,425                    2,683
       Asset-backed security, held-to-maturity                                     579                      801
       Due from affiliates, net                                                 56,440                   45,837
                                                                     ---------------------    ---------------------
                                                                         $     987,665            $   1,084,756
                                                                     =====================    =====================

  LIABILITIES AND SHAREHOLDER'S EQUITY
  LIABILITIES:
       Non-recourse securitization financing                             $     933,508        $       1,018,899

  SHAREHOLDER'S EQUITY:
       Common stock, no par value, 10,000 shares authorized,
         1,000 shares issued and outstanding                                        10                       10
       Additional paid-in capital                                               68,674                   68,674
       Accumulated other comprehensive income (loss)                             3,174                      (82)
       Accumulated deficit                                                     (17,701)                  (2,745)
                                                                                54,157                   65,857
                                                                     ---------------------    ---------------------
                                                                         $     987,665            $   1,084,756
                                                                     =====================    =====================
</TABLE>

See notes to unaudited condensed consolidated financial statements.




                                       1
<PAGE>




MERIT SECURITIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
     COMPREHENSIVE (LOSS) INCOME (UNAUDITED)
(amounts in thousands)


<TABLE>
<CAPTION>


                                                              -------------------------------    ------------------------------
                                                                    Three Months Ended                 Six Months Ended
                                                                         June 30,                          June 30,
                                                              -------------------------------    ------------------------------
<S>                                                               <C>               <C>              <C>              <C>
                                                                  2004              2003             2004             2003
                                                              -------------     -------------    -------------     ------------

Interest income:
   Securitized finance receivables                              $   15,899        $   20,518      $   32,662        $   42,872
   Other loans                                                          34                38              68                76
   Asset-backed security, held-to-maturity                              40                54              92               115
                                                              -------------     -------------    -------------     ------------
                                                                    15,973            20,610          32,822            43,063
                                                              -------------     -------------    -------------     ------------

Interest and related expense:
   Interest expense on non-recourse securitization
     financing                                                      11,177            12,997          22,893            26,513
   Other non-recourse securitization financing expense                 356               616             756               854
                                                              -------------     -------------    -------------     ------------
                                                                    11,533            13,613          23,649            27,367
                                                              -------------     -------------    -------------     ------------

Net interest margin before provision for loan losses                 4,440             6,997           9,173            15,696
Provision for loan losses                                           (3,985)          (10,030)         (7,610)          (15,033)
                                                              -------------     -------------    -------------     ------------
Net interest margin                                                    455            (3,033)          1,563               663

Impairment charges                                                  (5,461)                -          (6,958)           (1,454)
Other income                                                           401                23             628               100
                                                              -------------     -------------    -------------     ------------
Net loss                                                            (4,605)           (3,010)         (4,767)             (691)
Change in net unrealized gain during period on:
Investments classified as available-for-sale                         3,007             1,847           3,256             2,445
                                                              -------------     -------------    -------------     ------------
Comprehensive (loss) income                                     $   (1,598)       $   (1,163)     $   (1,511)       $    1,754
                                                              =============     =============    =============     ============
</TABLE>

See notes to unaudited condensed consolidated financial statements.




                                       2
<PAGE>



MERIT SECURITIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(amounts in thousands)


<TABLE>
<CAPTION>

                                                                                --------------------------------------
                                                                                          Six Months Ended
                                                                                              June 30,
                                                                                --------------------------------------
<S>                                                                                    <C>                  <C>
                                                                                      2004                 2003
                                                                                -----------------    -----------------

Operating activities:

    Net loss                                                                        $     (4,767)        $      (691)
    Adjustments to reconcile net loss to net cash provided by operating
      activities:
      Impairment charges                                                                   6,958               1,454
      Provision for loan losses                                                            7,610              15,033
      Amortization, net                                                                    2,796               2,549
      Other                                                                                  504                 997
                                                                                -----------------    -----------------
        Net cash provided by operating activities                                         13,101              19,342
                                                                                -----------------    -----------------

Investing activities:
      Principal payments on collateral                                                    93,847             147,400
      Net decrease in other loans                                                          1,258               1,559
      Payments received on securities                                                        344                 725
                                                                                -----------------    -----------------
        Net cash provided by investing activities                                         95,449             149,684
                                                                                -----------------    -----------------

Financing activities:
      Proceeds from issuance of non-recourse securitization financing                      7,008                   -
      Principal payments on non-recourse securitization financing                        (94,766)           (151,727)
      Increase in due from affiliates                                                    (10,603)            (17,299)
      Dividends distribution                                                             (10,189)                  -
                                                                                -----------------    -----------------
        Net cash used for financing activities                                          (108,550)           (169,026)
                                                                                -----------------    -----------------
Net change in cash                                                                             -                   -
Cash, beginning of period                                                                      -                   -
                                                                                -----------------    -----------------

Cash, end of period                                                                 $          -         $         -
                                                                                =================    =================


Supplemental disclosure of cash flow information:
    Cash paid for interest                                                          $     20,971         $    24,835
                                                                                =================    =================
</TABLE>

See notes to unaudited condensed consolidated financial statements.




                                       3
<PAGE>



MERIT SECURITIES CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2004
(amounts in thousands)

NOTE 1 - BASIS OF PRESENTATION

The accompanying  condensed 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 accounting  principles  generally  accepted in
the United States of America,  hereinafter  referred to as  "generally  accepted
accounting   principles"  for  complete  financial  statements.   The  financial
statements include the accounts of Merit Securities  Corporation (the "Company")
and its wholly owned subsidiary, Financial Asset Securitization,  Inc. ("FASI"),
which was purchased from Dynex Capital, Inc. ("Dynex"), its parent, on March 31,
2002.  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.  IHC is a wholly owned  subsidiary  of Dynex.  Dynex has elected to be
treated as a real  estate  investment  trust  ("REIT")  for  federal  income tax
purposes under the Internal  Revenue Code of 1986.  Accordingly,  the Company is
not subject to federal  income tax. The Company was organized to facilitate  the
securitization   of  loans  through  the  issuance  and  sale  of   non-recourse
securitization   financing  (the  "Bonds").   All  inter-company   balances  and
transactions have been eliminated in the consolidation of the Company.

In the opinion of management,  all adjustments  considered  necessary for a fair
presentation  of the  financial  statements  have been  included.  The Condensed
Consolidated Balance Sheet at June 30, 2004 and December 31, 2003, the Condensed
Consolidated  Statements of Operations and  Comprehensive  (Loss) Income for the
three  months  and six  months  ended  June 30,  2004 and  2003,  the  Condensed
Consolidated  Statements of Cash Flows for the three months and six months ended
June  30,  2004 and  2003,  and the  related  notes  to  condensed  consolidated
financial  statements are unaudited.  Operating results for the six months ended
June 30, 2004 are not necessarily indicative of the results that may be expected
for the year ending  December 31, 2004.  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, 2003.

Certain reclassifications have been made to the financial statements for 2003 to
conform  to  the   presentation  for  2004.   Certain  basis   adjustments  were
reclassified from securitized  finance receivables within assets to non-recourse
securitization  financing  within  liabilities  on  the  condensed  consolidated
balance  sheet  and from  interest  income to  interest  expense  on the  income
statement.  These  remaining  unamortized  deferred  hedging  amounts were basis
adjustments  recorded prior to 2001,  which related to financing  hedges and are
more appropriately recorded as part of the related debt.


NOTE 2 - SECURITIZED FINANCE RECEIVABLES

Securitized  finance  receivables  consists of loans and debt securities  backed
primarily by  adjustable-rate  and  fixed-rate  mortgage  loans secured by first
liens on single family residential housing and manufactured  housing installment
loans  secured by a Uniform  Commercial  Code ("UCC")  filing.  All  securitized
finance receivables are pledged to secure repayment of the related  non-recourse
securitization  financing.  All principal and interest  (less  servicing-related
fees) on the collateral is remitted to a trustee and is available for payment on
the non-recourse  securitization  financing.  The Company's  exposure to loss on
securitized finance receivables is generally limited to the amount of collateral
pledged in excess of the related non-recourse  securitization  financing issued,
as the securitization  financing is non-recourse to the Company. The securitized
finance receivables can be sold by the Company,  but only subject to the lien of
the non-recourse securitization financing indenture.

The following table summarizes the components of securitized finance receivables
at June 30, 2004 and December 31, 2003. Debt  securities  pledged as securitized
finance  receivables  are  considered  available-for-sale,   and  are  therefore
recorded at fair value.  Loans pledged as securitized  finance  receivables  are
carried at amortized cost.

                                       4
<PAGE>


---------------------------------- ------------------- -------------------------
                                     June 30, 2004        December 31, 2003
---------------------------------- ------------------- -------------------------
   Loans, at amortized cost          $     725,658       $      804,871
   Allowance for loan losses               (23,570)             (20,990)
---------------------------------- ------------------- -------------------------
                                           702,088              783,881
   Debt securities, at fair value          227,133              251,554
---------------------------------- ------------------- -------------------------
                                     $     929,221       $    1,035,435
---------------------------------- ------------------- -------------------------


The following table summarizes the amortized cost basis,  gross unrealized gains
and losses,  and estimated fair value of debt securities  pledged as securitized
finance receivables as of June 30, 2004 and December 31, 2003:

--------------------------------------- --------------- ------------------------
                                         June 30, 2004    December 31, 2003
--------------------------------------- --------------- ------------------------
   Debt securities, at amortized cost    $     223,959   $    251,554
   Gross unrealized gain                         3,174              -
--------------------------------------- --------------- ------------------------
   Estimated fair value                  $     227,133   $    251,554
--------------------------------------- --------------- ------------------------


The components of securitized  finance receivables at June 30, 2004 and December
31, 2003 are as follows:

<TABLE>
<CAPTION>

------------------------------- ------------------------------------------ ------------------------------------------
                                              June 30, 2004                            December 31, 2003
------------------------------- ------------------------------------------ ------------------------------------------
<S>                                   <C>           <C>           <C>            <C>            <C>         <C>
                                Loans, net       Debt          Total       Loans, net        Debt         Total
                                               Securities                                 Securities
------------------------------- ------------- ------------- -------------- -------------- ----------- ---------------
Collateral:
     Manufactured housing       $    439,705  $   159,421   $    599,126   $    470,319   $  172,847  $     643,166
     Single family                   267,265       62,722        329,987        317,552       76,749        394,301
                                ------------- ------------- -------------- -------------- ----------- ---------------
                                     706,970      222,143        929,113        787,871      249,596      1,037,467
Funds held by trustees                     1            -              1              1            -              1
Accrued interest receivable            4,389        1,434          5,823          4,847        1,565          6,412
Unamortized (discounts) and
    premiums, net                     (9,272)         382         (8,890)        (8,838)         393         (8,445)
Unrealized gain, net                       -        3,174          3,174              -            -              -
------------------------------- ------------- ------------- -------------- -------------- ----------- ---------------
                                 $   702,088   $  227,133    $   929,221   $    783,881    $ 251,554  $   1,035,435
------------------------------- ------------- ------------- -------------- -------------- ----------- ---------------
</TABLE>

Non-recourse  securitization  financing encumbers all of the securitized finance
receivables.


NOTE 3 - ALLOWANCE FOR LOAN LOSSES

The following table summarizes the activity for the allowance for loan losses on
loans within securitized  finance  receivables for the six months ended June 30,
2004 and June 30, 2003:


-------------------------------------- ------------------- ---------------------
                                          June 30, 2004       June 30, 2003
-------------------------------------- ------------------- ---------------------
   Allowance, beginning of the period     $      20,990       $      20,700
   Provision for loan losses                      7,610              15,033

   Credit losses, net of recoveries              (5,030)             (9,695)
-------------------------------------- ------------------- ---------------------
   Allowance, end of the period           $      23,570       $      26,038
-------------------------------------- ------------------- ---------------------


The Company  continues to  experience  unfavorable  results in its  manufactured
housing loan portfolio in terms of elevated  delinquencies  and loss severity on
repossessed  units.  For the six months ended June 30, 2004,  the Company  added
$7,610 in provisions  for loan losses related to the  manufactured  housing loan
portfolio.

                                       5
<PAGE>

The aggregate loss exposure is generally  limited to the amount of collateral in
excess of the related  investment-grade  non-recourse  securitization  financing
issued  (commonly  referred  to as  "over-collateralization"),  excluding  price
premiums and discounts  and hedge basis  adjustments.  Within each  non-recourse
securitization  financing,  a group of loans are held within the  securitization
structure as a credit reserve to provide  additional  cash flow to cover losses.
Once the cumulative  level of losses have surpassed the cash flow available from
the credit reserve and losses have depleted the  over-collateralization,  future
losses are  passed to the  holders  of the  lowest  classes of bonds  within the
structure.  In some cases,  the aggregate  loss exposure may be increased by the
use of  surplus  cash  or cash  reserve  funds  contained  within  the  security
structure to cover losses.  On one of the deal structures of the Company,  total
cumulative losses have surpassed the cash flow available from the credit reserve
and have completely depleted the over-collateralization. During the three months
ended  December 31,  2003,  losses on this  securitization  began to pass to the
subordinate   class   bondholders.   The   reserves  for  loan  losses  on  this
securitization  decreased as these losses began to be borne by the  subordinated
bondholders.

The allowance for loan losses on the  over-collateralization  totaled $23,570 at
June 30,  2004 and $26,038 at June 30,  2003,  and are  included in  securitized
finance receivables in the accompanying  condensed  consolidated balance sheets.
Over-collateralization  at June 30, 2004 and June 30, 2003  totaled  $31,441 and
$48,505 respectively.


NOTE 4 - DUE FROM AFFILIATES, NET

Due from affiliates,  net, includes amounts loaned by the Company to its parent,
or to  affiliates  of its parent.  Interest is charged on amounts due to or from
affiliates at the Federal Funds rate plus 100 basis points.  Interest income was
$312 and $558 for the three and six-months ended June 30, 2004,  respectively on
amounts due from  affiliates.  Interest income was $63 and $67 for the three and
six-months ended June 30, 2003, respectively on amounts due from affiliates.


NOTE 5 - FAIR VALUE

Securities  classified  as  available-for-sale  are carried in the  accompanying
financial statements at estimated fair value. Securities are both fixed-rate and
adjustable-rate.  Estimates  of fair  value for  securities  are based on market
prices provided by certain dealers, when available.  Estimates of fair value for
certain other securities,  including  securities pledged as securitized  finance
receivables,  are determined by  calculating  the present value of the projected
cash flows of the instruments using market based assumptions such as the forward
yield based on the forward  Eurodollar  curve and  estimated  market  spreads to
applicable  indices  for  comparable  securities,  and  using  collateral  based
assumptions such as prepayment  rates and credit loss  assumptions  based on the
most  recent   performance  and   anticipated   performance  of  the  underlying
collateral.


NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS

In March 2004,  the  Emerging  Issues Task Force  ("EITF")  amended and ratified
previous  consensus reached on EITF 03-01, "The Meaning of  Other-Than-Temporary
Impairment",  to  introduce  a  three-step  model to: 1)  determine  whether  an
investment   is   impaired;    2)   evaluate    whether   the    impairment   is
other-than-temporary;  and 3) account for other-than-temporary  impairments.  In
part, this amendment  requires  companies to apply  qualitative and quantitative
measures  to  determine  whether a decline in the fair  value of a  security  is
other-than-temporary.  The  amount  of  other-than-temporary  impairments  to be
recognized,  if any,  will be dependent on market  conditions  and  management's
intentions and ability at the time of evaluation to hold underwater  investments
until forecasted  recovery in the fair value up to and beyond the adjusted cost.
This amendment is effective for financial periods beginning after June 15, 2004.
The Company has reviewed  this  statement but does not believe that its adoption
will have a significant impact on its financial position,  results of operations
or cash flows.


                                       6
<PAGE>

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

The Company was organized to facilitate the  securitization of loans through the
issuance and sale of non-recourse  securitization  financing (the "Bonds").  The
Bonds are secured by  securities  and loans  backed  primarily  by: (i) mortgage
loans secured by first or second liens on residential property, and manufactured
housing  installment  loans  secured by either a UCC  filing or a motor  vehicle
title, (ii) other mortgage pass-through certificates or  mortgage-collateralized
obligations,   and  (iii)  consumer   installment   loans   (collectively,   the
"Collateral").  In the future,  the Company may also  securitize  other types of
loans   or   securities   such  as   Federal   National   Mortgage   Association
Mortgage-Backed   Certificates,   Federal   Home   Loan   Mortgage   Corporation
Mortgage-Backed   Certificates,  or  Government  National  Mortgage  Association
Mortgage-Backed Certificates.

After  payment  of  the  expenses  of an  offering  and  certain  administrative
expenses,  the net  proceeds  from an  offering  of  Bonds  is 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.

The  Company  is a  financial  services  company,  which  invests  in loans  and
securities consisting of or secured by, principally single family mortgage loans
and manufactured  housing  installment  loans. The loans and securities in which
the Company invests have generally been pooled and pledged (i.e. securitized) as
collateral for non-recourse  bonds  ("non-recourse  securitization  financing"),
which  provides  long-term  financing  for such  loans  while  limiting  credit,
interest rate and  liquidity  risk.  The Company  earns the net interest  spread
between  the  interest  income  on the loans and  securities  in its  investment
portfolio and the interest and other expenses  associated with the  non-recourse
securitization financing.

The Company owns the right to call  securitization  financing  previously issued
and sold by the Company once the outstanding  balance of such securities reaches
a call trigger,  generally either 35% or less of the original amount issued or a
specified   date.   Generally   interest  rates  on  the  bonds  issued  in  the
securitization  financing increase by 0.30%-2.00% if the Company does not redeem
the bonds.  The Company  will  evaluate the benefit of calling such bonds at the
time  they  are  redeemable.  On  April  26,  2004,  the  Company  redeemed  the
senior-most bond classes with an aggregate  principal  balance of $154.8 million
in its MERIT Series 12  securitization  and reissued the bonds at a $7.0 million
premium to the  Company.  In  addition,  MERIT  Series 13 reaches  its  optional
redemption  date in  August  2004,  and the  senior-most  bond  classes  in this
securitization   financing   will  have  an  estimated   aggregate   balance  of
approximately   $140.0  million.  The  Company  estimates  the  value  of  these
senior-most  bond  classes  to be  approximately  $4  million in excess of their
purchase price, and is currently  attempting to structure a resecuritization  of
these bonds where the company would retain a subordinate  interest of as much as
$15 million in the new securitization which would have an estimated  unleveraged
yield of approximately 15%. The Company's SASCO 2002-9 securitization  financing
is projected to reach a call  trigger  during the first  quarter of 2005 with an
aggregate  callable  balance of  approximately  $200  million at that time.  The
Company  may or may not  elect  to call all or part of this  securitization,  or
other securitizations, when eligible to call.


                          CRITICAL ACCOUNTING POLICIES

The discussion and analysis of the Company's  financial condition and results of
operations  are based in large part upon its  condensed  consolidated  financial
statements,  which have been prepared in conformity with  accounting  principles
generally  accepted  in  the  United  States  of  America  ("generally  accepted
accounting  principles".) The preparation of the financial  statements  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the  financial  statements  and the reported  amounts of revenue and
expenses  during the reported  period.  Actual  results  could differ from those
estimates.

Critical  accounting  policies  are  defined  as those  that are  reflective  of
significant  judgements  or  uncertainties,  and which may result in  materially
different results under different assumptions and conditions, or the application
of which may have a material impact on the Company's financial  statements.  The
following are the Company's critical accounting policies.

                                       7
<PAGE>

Consolidation of Subsidiaries. The consolidated financial statements include the
accounts of the Company and its wholly  owned  subsidiaries,  after  significant
inter-company transactions have been eliminated.

Impairments.  The Company  evaluates all securities in its investment  portfolio
for  other-than-temporary  impairments.  A security is  generally  defined to be
other-than-temporarily  impaired if, for a maximum  period of three  consecutive
quarters,  the carrying value of such security  exceeds its estimated fair value
and the Company  estimates,  based on projected  future cash flows or other fair
value  determinants,  that the carrying value is not likely to exceed fair value
in the foreseeable future. A security will be considered  other-than-temporarily
impaired  sooner than three  consecutive  quarters if the security is subject to
credit losses, and credit performance of such collateral has deteriorated and is
not  anticipated to  substantially  recover for the  foreseeable  future.  If an
other-than-temporary  impairment  is deemed to exist,  the  Company  records  an
impairment  charge to adjust  the  carrying  value of the  security  down to its
estimated   fair   value.   In   certain   instances,   as  a   result   of  the
other-than-temporary impairment analysis, the recognition or accrual of interest
will be discontinued and the security will be placed on non-accrual status.

The  Company  considers  an  investment  to be impaired if the fair value of the
investment  is  less  than  its  recorded  cost  basis.   Impairments  of  other
investments are considered other-than-temporary when the Company determines that
the collection trends indicate the investment is not recoverable. The impairment
recognized on other investments is the difference  between the book value of the
investment and the expected collections less collection costs.

Fair  Value.  Securities  classified  as  available-for-sale  are carried in the
accompanying  financial statements at estimated fair value.  Securities are both
fixed-rate and adjustable-rate. Estimates of fair value for securities are based
on market prices provided by certain dealers, when available.  Estimates of fair
value for certain other securities,  including securities pledged as securitized
finance  receivables,  are  determined by  calculating  the present value of the
projected cash flows of the instruments  using market based  assumptions such as
the forward yield based on the forward  Eurodollar  curve and  estimated  market
spreads to applicable  indices for comparable  securities,  and using collateral
based  assumptions such as prepayment rates and credit loss assumptions based on
the most  recent  performance  and  anticipated  performance  of the  underlying
collateral.

Allowance  for Loan  Losses.  The Company  has  limited  exposure to credit risk
retained on loans, which it has securitized through the issuance of non-recourse
securitization  financing.  The aggregate loss exposure is generally  limited to
the amount of collateral in excess of the related investment-grade  non-recourse
securitization     financing     issued     (commonly     referred     to     as
"over-collateralization"),  excluding  price  premiums and  discounts  and hedge
basis  adjustments.  The  allowance  for loan losses is included in  securitized
finance receivables in the accompanying condensed consolidated balance sheets.

An allowance for loan losses has been  estimated and  established  for currently
existing probable losses to the extent losses are borne by the Company under the
terms of the securitization  transaction.  Factors considered in establishing an
allowance  include  current  loan   delinquencies,   historical  cure  rates  of
delinquent  loans,  and historical and anticipated loss severity of the loans as
they are  liquidated.  The  allowance  for  losses  is  evaluated  and  adjusted
periodically by management  based on the actual and estimated  timing and amount
of probable  credit losses,  using the above  factors,  as well as industry loss
experience. Where loans are considered homogeneous, the allowance for losses are
established and evaluated on a pool basis.  Otherwise,  the allowance for losses
is  established  and  evaluated on a  loan-specific  basis.  Provisions  made to
increase the allowance are a current period  expense to  operations.  Generally,
the Company  considers  manufactured  housing loans to be impaired when they are
thirty (30) days past due. The Company also  provides an allowance for currently
existing credit losses within  outstanding  manufactured  housing loans that are
current as to payment but which the Company has  determined to be impaired based
on  default  trends,   current  market   conditions  and  empirical   observable
performance data on the loans.  Single-family loans are considered impaired when
they are sixty (60) days past due. The Company's actual credit losses may differ
from those estimates used to establish the allowance.


                                       8
<PAGE>




                               FINANCIAL CONDITION


-------------------------------------------------- ------------ ----------------
                                                      June 30,   December 31,
(amounts in thousands except series outstanding)        2004         2003
-------------------------------------------------- ------------ ----------------

Securitized finance receivables:

    Loans, net                                     $  702,088   $    783,881
    Debt securities, available-for-sale               227,133        251,554
Other loans                                             1,425          2,683
Asset-backed security                                     579            801
Non-recourse securitization financing                 933,508      1,018,899
Shareholder's equity                                   54,157         65,857

Securitization financing bond series outstanding            4              4
-------------------------------------------------- ------------ ----------------



Securitized finance receivables - loans, net

As of both June 30,  2004 and  December  31,  2003,  the Company had 4 series of
securitization   financing  bond  series  outstanding.   The  loans  portion  of
securitized  finance  receivables  decreased to $702.1  million at June 30, 2004
compared to $783.9 million at December 31, 2003.  This decrease of $81.8 million
is primarily  the result of $73.3  million in paydowns on the  collateral,  $7.6
million of  additions  to  allowance  for loan  losses,  and $0.9 million of net
premium amortizations and decrease in accrued interest receivable.


Securitized finance receivables - debt securities


The debt  securities  portion of securitized  finance  receivables  decreased to
$227.1 million at June 30, 2004 compared to $251.6 million at December 31, 2003.
This  decrease  of $24.4  million is  primarily  the result of $20.5  million in
paydowns on the collateral,  $6.9 million of impairment losses, and $0.2 million
of net premium  amortizations and decrease in accrued interest receivable offset
by a $3.2 million increase in unrealized gain on debt securities.



Other loans

Other loans  decreased  to $1.4  million at June 30,  2004 from $2.7  million at
December 31, 2003.  Other loans is composed of single  family loans not included
in the  securitization  completed  in April 2002 and  retained by the Company as
individual  loans.  This decrease  resulted from  pay-downs on the loans of $1.3
million.


Asset-backed security

The asset-backed  security decreased to $0.6 million at June 30, 2004,  compared
to $0.8 million at December 31, 2003, as a result of principal  payments of $0.2
million during the year.


Non-recourse securitization financing

Non-recourse  securitization  financing  decreased to $933.5 million at June 30,
2004 from $1.0 billion at December 31, 2003.  This  decrease of $85.4 million is
the result of $94.8  million in paydowns  offset by $7.0  million of  additional
premium on the call and re-issuance of non-recourse securitization financing and
$2.4  million of  amortization  of premium and  discounts  during the six months
ended June 30, 2004.


Shareholder's equity

Shareholder's  equity  decreased  to $54.2  million at June 30,  2004 from $65.9
million at December 31, 2003. This decrease was the result of a dividend payment
of $10.2  million  to its  parent  company,  IHC and a net loss of $4.7  million


                                       9
<PAGE>

offset  by  a  $3.2  million  unrealized  gain  on  investments   classified  as
available-for-sale during the six months ended June 30, 2004.



                              RESULTS OF OPERATIONS
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------
(amounts in thousands)          Three Months Ended                    Six Months Ended
                                     June 30,                             June 30,
                          ---------------------------------  ------------------------------------
<S>                           <C>               <C>                <C>                <C>
                              2004              2003               2004               2003
-----------------------------------------------------------  ------------------------------------
Interest income            $   15,973        $   20,610        $   32,822         $   43,063
Interest expense               11,533            13,613            23,649             27,367
Provision for loan losses      (3,985)          (10,030)           (7,610)           (15,033)
Net interest margin               455            (3,033)            1,563                663
Impairment charges             (5,461)                -            (6,958)            (1,454)
Net loss                       (4,605)           (3,010)           (4,767)              (691)
-------------------------------------------------------------------------------------------------
</TABLE>

Interest  income  decreased to $16.0  million  from $20.6  million for the three
months ended June 30, 2004 and 2003, respectively.  Interest income decreased to
$32.8  million for the six months ended June 30, 2004 from $43.1 million for the
same period in 2003.  This  decrease  was  primarily  a result of the  continued
impact of  prepayments  on  interest  income,  as  average  securitized  finance
receivables  declined from $1.3 billion to $1.0 billion for the six-months ended
June 30, 2003 and 2004  respectively  and $1.2  billion to $1.0  billion for the
three-months ending June 30, 2003 and 2004, respectively,  offset by an increase
in one-month  London  InterBank  Offered Rate ("LIBOR") during the three and six
months ended June 30, 2004 and 2003.  The one-month  LIBOR rate at June 30, 2004
was 1.37% as compared to 1.12% at June 30, 2003.

Interest  expense  decreased to $11.5  million from $13.6  million for the three
months ended June 30, 2004 and 2003, respectively. Interest expense decreased to
$23.6  million for the six months ended June 30, 2004 from $27.4 million for the
six months ended June 30, 2003. This decrease resulted from a decline in average
non-recourse  securitization  financing due to  prepayments  and paydowns on the
related  securitized  finance  receivables  and normal  scheduled bond paydowns,
offset by an increase in  one-month  LIBOR during the three and six months ended
June 30, 2004 and 2003. The average securitization financing bonds declined from
$1.2  billion to $937.5  million for the six months ended June 30, 2003 and 2004
respectively and from $1.1 billion to $914.8 million for the three months ending
June 30, 2003 and 2004  respectively.  The one-month LIBOR rate at June 30, 2004
was 1.37% as compared to 1.12% at June 30, 2003.

Provision  for loan losses  decreased to $4.0 million from $10.0 million for the
three  months  ended June 30, 2004 and 2003,  respectively.  Provision  for loan
losses  decreased  to $7.6  million for the six months  ended June 30, 2004 from
$15.0  million  for the same  period  in 2003.  Provision  for loan  losses  has
declined  due  largely  to  losses  on one  securitization  being  borne  by the
subordinated  bondholders.  Within each  non-recourse  securitization  financing
series,  a group of loans  are  held  within  the  securitization  structure  as
additional  support for potential  credit losses and to provide  additional cash
flow to cover such credit losses.  Once the cumulative level of losses surpassed
the cash flow  available  from the credit  reserve and losses have  depleted the
over-collateralization,  future  losses are passed to the  holders of the lowest
classes of bonds within the structure. On one of the Company's  securitizations,
total cumulative losses have surpassed the level of the cash flow available from
the credit reserve and have completely depleted the  over-collateralization.  As
the  over-collateralization  has been depleted, the Company's provision for loan
losses correspondingly declined.

Net interest  margin  increased to $0.5 million from a negative $3.0 million for
the three months ended June 30, 2004 and 2003, respectively. This increase was a
result of a decrease of $1.9 million in interest  expense and a decrease of $6.0
million in  provision  for loan losses  offset by a decrease of $4.4  million in
interest  income,  as discussed  above.  Net interest  margin  increased to $1.6
million  from $0.7  million  for the six months  ended  June 30,  2004 and 2003,
respectively.  This  increase  was a result of a  decrease  of $7.4  million  in
provision for loan losses,  as discussed  above,  and a $3.3 million decrease in


                                       10
<PAGE>

interest expense offset by a $9.9 million decrease in interest income during the
respective periods.

Impairment charges increased by $5.5 million for the three months ended June 30,
2004 from the same period last year on debt  securities  pledged as  securitized
finance  receivables  and  comprised  largely  of  manufactured  housing  loans.
Impairment  charges  increased  to $6.9  million  from $1.4  million for the six
months ended June 30, 2004 and 2003, respectively. This increase was primarily a
result of losses on debt securities pledged as securitized  finance  receivables
and comprised  largely of manufactured  housing loans.  Impairment of these debt
securities  is  determined  as the  difference  between  the  fair  value of the
security, as measured by discounting the cash flows of the security certificates
utilizing  prepayment and loan loss rate  assumptions,  at discount rates that a
market  participant would use, and the book value of those securities.  The fair
value of these debt  securities  has declined  during the second quarter 2004 as
the result of an increase in losses during the quarter which is not  anticipated
to  improve  for the  foreseeable  future.  The  Company  believes  that  market
participants  will use the higher loss rate  assumptions  in evaluating the fair
value of these securities.


Credit Exposures

With  non-recourse  securitization  financing  structures,  the Company  retains
credit  risk  relative  to the  amount  of  over-collateralization  required  in
conjunction  with the bond insurance.  Losses are generally first applied to the
over-collateralized  amount,  with any losses in excess of that amount  borne by
the  holders  of the  subordinated  classes of the  non-recourse  securitization
financing.  Generally,  surplus  cash that would  otherwise  be  released to the
Company is  retained  within the  securitization  structure  if losses  exceed a
certain  threshold.  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  non-recourse  securitization
financing.  At June 30, 2004,  the Company  retained  $31.4 million in aggregate
principal amount of over-collateralization compared to $37.9 million at December
31,  2003.  For certain  other  securitizations,  since  cumulative  losses have
depleted  the  required  level  of  over-collateralization  provided  as  credit
enhancement,  surplus  cash in the amount of $1.5  million was retained to cover
losses.  Other forms of credit enhancement that benefit the Company,  based upon
the  performance  of the underlying  loans,  may provide  additional  protection
against  losses.   These  additional   protections  include  loss  reimbursement
guarantees with a remaining balance of $27.5 million and a remaining  deductible
aggregating $0.2 million on $41.0 million of securitized  single family mortgage
loans, which are subject to such reimbursement  agreements.  In addition, $138.6
million of  securitized  single  family  mortgage  loans are  subject to various
mortgage  pool  insurance  policies  whereby  losses  would  need to exceed  the
remaining  stop loss of at least 62% on such  policies  before the Company would
incur losses.


Recent Accounting Pronouncements

In March 2004,  the  Emerging  Issues Task Force  ("EITF")  amended and ratified
previous  consensus reached on EITF 03-01, "The Meaning of  Other-Than-Temporary
Impairment",  to  introduce  a  three-step  model to: 1)  determine  whether  an
investment   is   impaired;    2)   evaluate    whether   the    impairment   is
other-than-temporary;  and 3) account for other-than-temporary  impairments.  In
part, this amendment  requires  companies to apply  qualitative and quantitative
measures  to  determine  whether a decline in the fair  value of a  security  is
other-than-temporary.  The  amount  of  other-than-temporary  impairments  to be
recognized,  if any,  will be dependent on market  conditions  and  management's
intentions and ability at the time of evaluation to hold underwater  investments
until forecasted  recovery in the fair value up to and beyond the adjusted cost.
This amendment is effective for financial periods beginning after June 15, 2004.
The Company has reviewed  this  statement but does not believe that its adoption
will have a significant impact on its financial position,  results of operations
or cash flows.


                                       11
<PAGE>

Other Matters

At June 30, 2004,  the Company had  securities of  approximately  $308.6 million
remaining for issuance under a registration  statement filed with the Securities
and Exchange Commission. The Company anticipates issuing additional Bonds in the
future.


Item 3. - Quantitative and Qualitative Disclosures about Market Risk

Market  risk  generally  represents  the risk of loss that may  result  from the
potential  change in the value of a financial  instrument due to fluctuations in
interest  and in equity and  commodity  prices.  Market risk is inherent to both
derivative and non-derivative financial instruments,  and accordingly, the scope
of the Company's  market risk management  extends beyond  derivatives to include
all  market  risk  sensitive  financial  instruments.  As a  financial  services
company,  net interest margin  comprises the primary  component of the Company's
earnings and cash flows.  The Company is subject to risk resulting from interest
rate  fluctuations  to the extent  that there is a gap between the amount of the
Company's interest-earning assets and the amount of interest-bearing liabilities
that are prepaid,  mature or re-price within  specified  periods.  The Company's
strategy  has been to mitigate  interest  rate risk  through  the  creation of a
diversified investment portfolio that generates stable income and cash flow in a
variety of interest rate and prepayment environments.

The Company and IHC monitor the  aggregate  cash flow,  projected  net yield and
estimated  market value of the  securitized  finance  receivables  under various
interest rate and prepayment assumptions.  While certain investments may perform
poorly  in  an  increasing  or  decreasing  interest  rate  environment,   other
investments may perform well, and others may not be impacted at all.

The Company  focuses on the  sensitivity of its investment  portfolio cash flow,
and measures such sensitivity to changes in interest rates.  Changes in interest
rates are defined as interest  rate  movements  in 100 basis point and 200 basis
point ratable increments,  both up and down, over the ensuing twelve months from
the  measurement  date. The Company  estimates its net interest margin cash flow
for the next  twenty-four  months  assuming that  interest  rates over such time
period  follow the forward LIBOR curve (based on the 90-day  Eurodollar  futures
contract) as of June 30, 2004. Once the base case has been estimated, cash flows
are projected for each of the defined  interest rate  scenarios.  Those scenario
results are then  compared  against  the base case to  determine  the  estimated
change to cash flow.

The following  table  summarizes the Company's net interest margin cash flow and
market value sensitivity  analysis as of June 30, 2004. This analysis represents
management's  estimate of the percentage change in net interest margin cash flow
and value  expressed  as a  percentage  change in  shareholders'  equity given a
parallel shift in interest rates, as discussed above. The "Base" case represents
the interest rate  environment as it existed as of June 30, 2004. As of June 30,
2004,  one-month LIBOR was 1.37% and six-month LIBOR was 1.94%.  The analysis is
heavily  dependent upon the assumptions used in the model. The effect of changes
in future interest rates,  the shape of the yield curve or the mix of assets and
liabilities  may cause  actual  results to differ from the modeled  results.  In
addition,  certain financial  instruments provide a degree of "optionality." The
most  significant  option  affecting the Company's  portfolio is the  borrower's
option to prepay  the  loans.  The model  applies  prepayment  rate  assumptions
representing  management's  estimate of prepayment activity on a projected basis
for each collateral pool in the investment portfolio. The model applies the same
prepayment  rate  assumptions  for all five  cases  indicated  below.  Given the
current  composition  and  performance  of the  investment  portfolio,  and  the
limitation to estimating  twenty-four  months of net interest margin cash flows,
variations in prepayment  rate  assumptions  are not expected to have a material
impact on the net  interest  margin  cash  flows.  Projected  results  assume no
additions  or  subtractions  to the  Company's  portfolio,  and no change to the
Company's liability structure. Historically, there have been significant changes
in the Company's non-recourse  securitization financing,  underlying collateral,
and  asset-backed  securities  held-to-maturity  and there are likely to be such
changes in the future.


                                       12
<PAGE>




                            Projected in Net      Projected Change in Value,
       Basis Point        Interest Margin Cash     expressed as a percentage
 Increase (Decrease) in        Flow From            of Shareholders'
     Interest Rates            Base Case                Equity
------------------------ ---------------------- --------------------------------
          +200                  (18.6)%                 (9.8)%
          +100                   (5.2)%                 (4.7)%
          Base
          -100                   11.9%                   5.0%
          -200                   25.8%                   9.7%

Approximately  $298.5 million of the Company's  investment  portfolio as of June
30, 2004 is comprised of loans or securities that have coupon rates which adjust
over time (subject to certain periodic and lifetime  limitations) in conjunction
with changes in short-term interest rates.  Approximately 71% and 14% of the ARM
loans or securities underlying the Company's securitized finance receivables are
indexed to and reset based upon the level of six-month  LIBOR and one-year  CMT,
respectively.  These ARM assets are financed with  adjustable-rate  non-recourse
securitization financing borrowings.

Generally,  during a period of rising  short-term  interest rates, the Company's
net interest  spread  earned on its  investment  portfolio  will  decrease.  The
decrease of the net  interest  spread  results from (i) the lag in resets of the
ARM loans  underlying  the ARM securities and  securitized  finance  receivables
relative to the rate resets on the associated borrowings and (ii) rate resets on
the ARM loans  which are  generally  limited  to 1% every six months or 2% every
twelve months and subject to lifetime caps, while the associated borrowings have
no such limitation.  As to item (i), the Company has  substantially  limited its
interest  rate risk on such  investments  through (a) the issuance of fixed-rate
non-recourse  securitization  financing which approximated  $439.7 million as of
June 30, 2004, and (b) equity,  which was $54.2 million.  As short-term interest
rates stabilize and the ARM loans reset, the net interest margin may be restored
to its former level as the yields on the ARM loans adjust to market  conditions.
Conversely,  net  interest  margin may increase  following a fall in  short-term
interest  rates.  This  increase may be temporary as the yields on the ARM loans
adjust to the new market conditions after a lag period.  In each case,  however,
the Company expects that the increase or decrease in the net interest spread due
to changes in the short-term  interest  rates to be temporary.  The net interest
spread may also be  increased  or decreased by the proceeds or costs of interest
rate swap, cap or floor  agreements,  to the extent that the Company has entered
into such agreements. The remaining portion of the Company's securitized finance
receivables as of June 30, 2004,  approximately  $670.4 million, is comprised of
loans that have coupon rates that are fixed.


Item 4.  Controls and Procedures

         (a) Evaluation of disclosure controls and procedures.

                  Disclosure  controls  and  procedures  are  controls and other
                  procedures  that  are  designed  to  ensure  that  information
                  required to be disclosed  in the  Company's  reports  filed or
                  submitted  under  the  Exchange  Act is  recorded,  processed,
                  summarized and reported  within the time periods  specified in
                  the SEC's rules and forms.  Disclosure controls and procedures
                  include, without limitation,  controls and procedures designed
                  to ensure that  information  required to be  disclosed  in the
                  Company's  reports filed under the Exchange Act is accumulated
                  and  communicated  to  management,   including  the  Company's
                  management,   as  appropriate,   to  allow  timely   decisions
                  regarding required disclosures.

                  As of the  end of the  period  covered  by  this  report,  the
                  Company carried out an evaluation of the  effectiveness of the
                  design and operation of the Company's  disclosure controls and
                  procedures  pursuant to Rule 13a-15  under the  Exchange  Act.
                  This evaluation was carried out under the supervision and with
                  the participation of the Company's  management,  including the
                  Company's  Principal Executive Officer and Principal Financial
                  Officer. Based upon that evaluation,  the Company's management
                  concluded   that  the   Company's   disclosure   controls  and
                  procedures are effective.

                                       13
<PAGE>

                  In conducting  its review of disclosure  controls,  management
                  concluded that sufficient  disclosure  controls and procedures
                  did exist to ensure that information  required to be disclosed
                  in the Company's reports filed or submitted under the Exchange
                  Act is recorded,  processed,  summarized,  and reported within
                  the time periods specified in the SEC's rules and forms.

         (b) Changes in internal controls.

                  The Company's  management is also responsible for establishing
                  and  maintaining  adequate  internal  control  over  financial
                  reporting.  There were no changes  in the  Company's  internal
                  controls or in other factors that could materially  affect, or
                  are  reasonably  likely to  materially  affect  the  Company's
                  internal  controls  subsequent to the Evaluation Date, nor any
                  significant   deficiencies  or  material  weaknesses  in  such
                  internal controls requiring corrective actions.






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

31.1     Certification of Principal Executive Officer pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002

31.2     Certification of Principal Financial Officer pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002.

32.1     Certification of Principal  Executive Officer and Principal  Financial
         Officer pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002.

         (b)      Reports on Form 8-K

                  None.
                                       14
<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




Dated:  August 20, 2004              By:    /s/ Stephen J. Benedetti
                                            ------------------------------------
                                            Stephen J. Benedetti
                                            President


Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

<S>                                                             <C>                            <C>
             Signature                                        Capacity                       Date


/s/ Stephen J. Benedetti                        Principal Executive Officer/Director         August 20, 2004
--------------------------------------------
Stephen J. Benedetti


/s/ Kevin J. Sciuk                              Principal Financial Officer/Controller       August 20, 2004
--------------------------------------------
Kevin J. Sciuk
</TABLE>

                                       15
<PAGE>


                                  EXHIBIT INDEX


Exhibit


31.1            Certification of Principal Executive Officer pursuant to Section
                302 of the Sarbanes-Oxley Act of 2002.

31.2            Certification of Principal Financial Officer pursuant to Section
                302 of the Sarbanes-Oxley Act of 2002.

32.1            Certification  of Principal  Executive   Officer  and  Principal
                Financial  Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.




                                       16