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 September 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                 (I.R.S. Employer
             of incorporation)                     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 October 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>                                  <C>

       Item 1.  Financial Statements
                Balance Sheets at September 30, 1997 and
                December 31, 1996..................................3

                Statements of Operations for the three and 
                nine months ended September 30, 1997 and 1996......4

                Statement of Shareholder's Equity for the nine
                months ended September 30, 1997....................5

                Statements of Cash Flows for the nine months ended
                September 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>
                                             September 30,    December 31,
                                                 1997             1996
                                             ------------     ------------
ASSETS:
<S>                                              <C>             <C>
   Collateral for collateralized bonds       $ 2,849,080      $ 2,463,842
   Prepaid shelf registration fees                   536              849
   Cash                                               10               10
                                             -----------      -----------
                                             $ 2,849,626      $ 2,464,701
                                             ============     ===========

LIABILITIES AND SHAREHOLDER'S EQUITY

LIABILITIES:
   Collateralized bonds                     $ 2,669,580       $ 2,301,598
   Due to affiliates                             42,941            41,973
                                           ------------       -----------
                                              2,712,521         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            52,825            60,304
available-for-sale
   Retained deficit                             (20,509)          (21,320)
                                           ------------        ----------
                                                137,105           121,130
                                           ============      ============
                                           $  2,849,626      $  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         Nine Months Ended
                                     September 30,             September 30,
                                 ----------------------    -----------------------
                                   1997         1996         1997         1996
                                 ----------   ---------    ----------   ----------
<S>                                 <C>          <C>           <C>          <C>
Interest Income:
    Collateral for               $ 51,097     $ 33,599    $  133,260   $  76,381
collateralized bonds
                                 --------     --------    ----------   ---------

Interest and related expense:
    Interest expense on            49,577       29,377       126,161      69,308
collateralized bonds
    Other collateralized bond         777          717         2,414       1,871
expense
    Provision for losses              600          900         1,800       1,700
                                 --------     --------    ----------   ---------
                                   50,954       30,994       130,375      72,879
                                 --------     --------    ----------   ---------

Net interest margin                   143        2,605         2,885       3,502

Provision for loss on Dynex's           -       (1,300)            -     (29,434)
sale of affiliates
Interest on due to affiliate         (780)        (602)       (2,074)    ( 1,182)
                                 --------     --------    ----------   ---------
Net income (loss)                $   (637)    $    703    $      811  $  (27,114)
                                 ========     ========    ==========  ==========

<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                  -             -               (7,479)             -      (7,479)

Net income                          -             -                    -            811         811
                              -------      --------     ----------------       --------    --------

Balance at September 30, 1997  $   10     $ 104,779          $    52,825       $(20,509)   $137,105
                             ========     =========     ================       ========    ========


<FN>

See notes to unaudited financial statements.
</FN>

</TABLE>
<PAGE>

MERIT SECURITIES CORPORATION
Statements of Cash Flows
(amounts in thousands)
<TABLE>
<CAPTION>
                                                  Nine Months Ended
                                                    September 30,
                                                 1997             1996
                                             ------------     ------------
<S>                                                 <C>             <C>
Operating activities:
  Net income                                 $       811      $   (27,114)
  Adjustments to reconcile net 
    income to net cash provided
    by operating activities:
      Amortization, net                           14,487            5,323
      Provision for losses                         1,800            1,700
      Provision for loss on Dynex's 
        sale of affiliates                             -           29,434
      Net change in accrued interest              (4,183)          (5,986)
      Decrease in prepaid shelf 
        registration fees                            313              509
                                             ------------     ------------
        Net cash provided by 
           operating activities                   13,228            3,866
                                             ------------     ------------


Investing activities:
  Collateral for collateralized bonds:
    Purchase of loans subsequently             
      securitized                             (1,024,444)       (2,135,510)
    Principal payments on collateral             619,061           271,170
    Net change in funds held by trustee              251              (198)
                                             ------------     -------------
      Net cash used for investing activities    (405,132)       (1,864,538)
                                             ------------     -------------

Financing activities:
  Collateralized bonds:
    Proceeds from issuance of 
      collateralized bonds                       989,797        2,071,285
    Principal payments on 
      collateralized bonds                      (621,504)        (270,707)

  Increase in due to affiliate                       968           13,180
  Proceeds from capital contributions             22,643           46,914
                                             ------------     ------------
    Net cash provided by financing activities    391,904        1,860,672
                                             ------------     ------------
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                   $   126,473      $    63,507
                                             ============     ============



<FN>

See notes to unaudited financial statements.
</FN>

</TABLE>
<PAGE>


MERIT SECURITIES CORPORATION
Notes to Unaudited Financial Statements September 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 September 30,
1997, the Statements of Operations for the three and nine months ended September
30, 1997 and 1996,  the  Statement of  Shareholder's  Equity for the nine months
ended September 30, 1997, the Statements of Cash Flows for the nine months ended
September 30, 1997 and 1996,  and the related notes to financial  statements are
unaudited.  Operating  results for the nine months ended  September 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 September 30,
1997 and December 31, 1996,  and the related  average  effective  interest rates
(calculated  for the month ended  September 30, 1997 and December 31, 1996,  and
excluding unrealized gains and losses):

--------------------------------------------------------------------------------
                                  September 30, 1997           December 31, 1996
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                           Effective                   Effective
                                           Interest                    Interest
                            Fair Value       Rate        Fair Value      Rate
--------------------------------------------------------------------------------
<S>                             <C>           <C>           <C>          <C>
Collateral for
collateralized bonds:
   Amortized cost          $ 2,823,217       7.1%       $ 2,435,270      7.5%
   Allowance for losses        (26,962)                     (31,732)
--------------------------------------------------------------------------------
      Amortized cost, net    2,796,255                    2,403,538
   Gross unrealized gains       63,135                       68,557
   Gross unrealized losses     (10,310)                      (8,253)
--------------------------------------------------------------------------------
                           $ 2,849,080                  $ 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.

The Company did not issue any Bonds  during the three  months  ended  September,
1997.  As  of  September  30,  1997,   the  Company  had  seven  (7)  series  of
collateralized bonds outstanding totaling  approximately $2.7 billion,  compared
to $2.3 billion at December 31,  1996,  and $2.5 billion at September  30, 1996.
Interest income on the Collateral  increased $56.9 million to $133.3 million for
the nine months ended  September 30, 1997 compared to $76.4 million for the nine
months ended September 30, 1996,  primarily as a result of the increased  number
of series  outstanding.  Interest  expense on Bonds increased $56.9 million from
$69.3 million for the nine months ended September 30, 1996 to $126.2 million for
the nine months ended September 30, 1997, primarily due to the additional series
outstanding.

Net interest  margin for the nine months ended  September 30, 1997  decreased to
$2.9 million,  or 17%,  over the $3.5 million for the same period for 1996.  Net
interest  margin for the three months ended September 30, 1997 decreased to $0.1
million,  or 96%, over $2.6 million for the same period in 1996. These decreases
were  primarily  the result of the  securitization  of lower coupon  collateral,
principally  A+ quality  single-family  ARM loans  during 1997  coupled with the
prepayments of higher coupon collateral during 1997. In addition,  the spread on
the net  investment in  collateralized  bonds  decreased  due to higher  premium
amortization caused by higher prepayments during the three and nine months ended
September 30, 1997 than during the same period in 1996.

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 September 30, 1997, the Company retained $105.5 million
in aggregate  principal amount of  overcollateralization,  and had reserves,  or
otherwise had provided  coverage on $57.3 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 September 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

            None

<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:  November 14, 1997