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

                                    FORM 10-Q

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

                       For the quarter ended June 30, 2003

  |_|      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, 2003,  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


                                                                     Page Number

PART I.   FINANCIAL INFORMATION

Item 1. Financial Statements
          Condensed Consolidated Balance Sheets at June 30, 2003
          and December 31, 2002 (unaudited)....................................1

          Condensed Consolidated Statements of Operations for the three months
          and six months ended June 30, 2003 and 2002 (unaudited)..............2

          Condensed Consolidated Statements of Cash Flows for the six months
          ended June 30, 2003 and 2002 (unaudited).............................3

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

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations..........................6

Item 3. Quantitative and Qualitative Disclosures about Market Risk.............9

Item 4. Controls and Procedures...............................................11

PART II.OTHER INFORMATION

Item 1. Legal Proceedings.....................................................12

Item 5. Other Information.....................................................12

Item 6. Exhibits and Reports on Form 8-K......................................12

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



                                      i

<PAGE>


PART I.    FINANCIAL INFORMATION


Item 1.  Financial Statements



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



                                                         ---------- ------------
                                                          June 30,  December 31,
                                                           2003        2002
                                                         ---------- ------------
ASSETS:
     Collateral for collateralized bonds:
       Loans, net ......................................$   881,228 $ 1,017,446
       Debt securities, available-for-sale .............    289,724     323,791
    Other loans ........................................      4,920       6,505
     Asset-backed Securities, held-to-maturity .........      1,111       1,644
     Due from affiliates, net ..........................     28,495      11,507
                                                        ----------- -----------
                                                        $ 1,205,478 $ 1,360,893
                                                        =========== ===========

LIABILITIES AND SHAREHOLDER'S EQUITY
LIABILITIES:
     Non-recourse debt - collateralized bonds ..........$ 1,149,207 $ 1,299,113

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) .....      2,311        (134)
     Retained earnings .................................    (14,724)     (6,770)
                                                        ----------- -----------
                                                             56,271      61,780
                                                        ----------- -----------
                                                        $ 1,205,478 $ 1,360,893
                                                        =========== ===========

See notes to unaudited condensed consolidated financial statements.



                                       1
<PAGE>


<TABLE>
<CAPTION>

MERIT SECURITIES CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
(amounts in thousands)


                                                    -----------------------------------     -----------------------------------
                                                            Three Months Ended                       Six Months Ended
                                                                 June 30                                 June 30
                                                    -----------------------------------     -----------------------------------
                                                         2003                2002                2003               2002
                                                    ----------------    ---------------     ---------------    ----------------

Interest income:
<S>                                                   <C>                 <C>                 <C>                <C>
   Collateral for collateralized bonds                $     20,335        $     27,936        $     42,525       $     54,750
   Other loans                                                  38                  27                  76                 27
   Asset-backed securities, held-to-maturity                    54                   -                 115                  -
                                                    ----------------    ---------------     ---------------    ----------------
                                                            20,427              27,963              42,716             54,777
                                                    ----------------    ---------------     ---------------    ----------------

Interest and related expense:
   Interest expense on collateralized bonds                 12,814              16,485              26,166             33,354
   Other collateralized bond expense                           553                 559                 787                994
                                                    ----------------    ---------------     ---------------    ----------------
                                                            13,367              17,044              26,953             34,348
                                                    ----------------    ---------------     ---------------    ----------------

Net interest margin before provision for loan
   losses                                                    7,060              10,919              15,763             20,429
Provision for loan losses                                  (17,292)             (5,279)            (22,295)           (11,156)
                                                    ----------------    ---------------     ---------------    ----------------
Net interest margin                                        (10,232)              5,640              (6,532)             9,273

Impairment charges                                             (40)             (4,442)             (1,421)            (6,403)
Loss on extinguishment of debt                                   -                (544)                  -               (544)
                                                    ----------------    ---------------     ---------------    ----------------
Net (loss) income                                          (10,272)                654              (7,953)             2,326
Change in net unrealized loss during period on:
Investments classified as available-for-sale                 1,847              (5,578)              2,445             (2,499)
                                                    ----------------    ---------------     ---------------    ----------------
Comprehensive loss                                    $     (8,425)       $     (4,924)       $     (5,508)      $       (173)
                                                    ================    ===============     ===============    ================
</TABLE>


See notes to unaudited condensed consolidated financial statements.



                                       2
<PAGE>




<TABLE>
<CAPTION>
MERIT SECURITIES CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(amounts in thousands)


                                                                   -------------------------------------------------
                                                                                   Six Months Ended
                                                                                       June 30,
                                                                   -------------------------------------------------
                                                                           2003                       2002
                                                                   ----------------------     ----------------------
Operating activities:
<S>                                                                             <C>                        <C>
    Net (loss) income                                                  $       (7,953)            $        2,326
    Adjustments to reconcile net (loss) income to net cash
      provided by operating activities:
      Impairment charges                                                        1,421                      6,403
      Provision for loan losses                                                22,295                     11,156
      Amortization, net                                                         2,549                      4,692
      Other                                                                     1,030                     (1,692)
                                                                   ----------------------     ----------------------
        Net cash provided by operating activities                              19,342                     22,885
                                                                   ----------------------     ----------------------

Investing activities:
      Principal payments on collateral                                        149,684                    242,160
      Purchase of loans                                                             -                   (158,933)
      Proceeds from sale of collateralized bonds                                    -                    605,272
                                                                   ----------------------     ----------------------
        Net cash provided by investing activities                             149,684                    688,499
                                                                   ----------------------     ----------------------

Financing activities:
      Principal payments on collateralized bonds                             (151,727)                  (687,774)
      Payments (to) from affiliates                                           (17,299)                     2,244
      Dividends and capital distributions                                           -                    (25,854)
                                                                   ----------------------     ----------------------
        Net cash used for financing activities                               (169,026)                  (711,384)
                                                                   ----------------------     ----------------------
Net change in cash                                                                  -                          -
Cash, beginning of period                                                           -                          -
                                                                   ----------------------     ----------------------

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


Supplemental disclosure of cash flow information:
    Cash paid for interest                                             $       24,835             $       31,926
                                                                   ======================     ======================
</TABLE>

See notes to unaudited condensed consolidated financial statements.



                                       3
<PAGE>



MERIT SECURITIES CORPORATION
NOTES TO UNAUDITED Condensed CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
(amounts in thousands except share data)



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  collateralized  bonds
(the "Bonds"). All significant inter-company balances and transactions have been
eliminated in the consolidation of the Company.

In the opinion of  management,  all material  adjustments,  consisting of normal
recurring  adjustments,  considered  necessary  for a fair  presentation  of the
condensed  consolidated  financial statements have been included.  The Condensed
Consolidated Balance Sheet at June 30, 2003 and December 31, 2002, the Condensed
Consolidated  Statements of Operations for the three months and six months ended
June 30, 2003 and 2002, the Condensed Consolidated  Statements of Cash Flows for
the six months ended June 30, 2003 and 2002,  and the related notes to condensed
consolidated  financial statements are unaudited.  Operating results for the six
months ended June 30, 2003 are not  necessarily  indicative  of the results that
may be expected for the year ending December 31, 2003.

Certain reclassifications have been made to the financial statements for 2002 to
conform to the presentation for 2003.


NOTE 2 -- COLLATERAL FOR COLLATERALIZED BONDS

Collateral for collateralized bonds 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 UCC  filing.  All  collateral  for  collateralized  bonds is
pledged to secure repayment of the related  collateralized  bonds. All principal
and interest  (less  servicing-related  fees) on the collateral is remitted to a
trustee and is available for payment on the collateralized  bonds. The Company's
exposure to loss on collateral for collateralized  bonds is generally limited to
the amount of collateral pledged in excess of the related  collateralized  bonds
issued, as the collateralized  bonds issued are non-recourse to the Company. The
collateral for collateralized bonds can be sold by the Company, but only subject
to the lien of the collateralized bond indenture.

The Company has classified all of its debt securities included within collateral
for  collateralized  bonds  as  available-for-sale.  As  such,  debt  securities
included  within  collateral  for  collateralized  bonds  at June  30,  2003 and
December 31, 2002 are reported at fair value,  with unrealized  gains and losses
excluded from earnings and reported as accumulated other  comprehensive  income.
Loans  included  within  collateral  for  collateralized  bonds are  reported at
amortized cost.


                                       4
<PAGE>


The following table summarizes the types of collateral for collateralized  bonds
as of June 30, 2003 and December 31, 2002:


--------------------------------------------   -----------     -----------
                                              June 30, 2003  December 31, 2002
--------------------------------------------   -----------     -----------
   Loans, at amortized cost ................   $   914,528     $ 1,038,146
   Allowance for loan losses ...............       (33,300)        (20,700)
--------------------------------------------   -----------     -----------
                                                   881,228       1,017,446
   Debt Securities, at fair value ..........       289,724         323,791
--------------------------------------------   -----------     -----------
                                               $ 1,170,952     $ 1,341,237
--------------------------------------------   -----------     -----------


The following table summarizes the amortized cost basis,  gross unrealized gains
and losses,  and estimated fair value of debt  securities  pledged as collateral
for collateralized bonds as of June 30, 2003 and December 31, 2002:
--------------------------------------- --------------------- ------------------
                                           June 30, 2003       December 31, 2002
--------------------------------------- --------------------- ------------------
   Debt securities, at amortized cost     $       287,293        $       323,728
   Gross unrealized gains                           2,431                     63
--------------------------------------- --------------------- ------------------
   Estimated fair value                   $       289,724        $       323,791
--------------------------------------- --------------------- ------------------


NOTE 3 -- DUE FROM AFFILIATES, NET

Cash flows  generated by operations  are loaned by the Company to its parent and
interest is charged to the parent at the Prime rate.


NOTE 4 -- FAIR VALUE

Securities  classified  as  available-for-sale  are carried in the  accompanying
financial  statements  at  estimated  fair  value.  Estimates  of fair value for
securities may be based on market prices provided by certain dealers.  Estimates
of fair value for certain other  securities are  determined by  calculating  the
present value of the projected cash flows of the instruments using  market-based
discount rates,  prepayment rates and credit loss  assumptions.  The estimate of
fair value for  securities  pledged as collateral  for  collateralized  bonds is
determined by  calculating  the present value of the projected cash flows of the
instruments  using prepayment rate assumptions and credit loss assumptions based
on historical experience and estimated future activity, and using discount rates
commensurate  with those believed would be used by third parties.  Such discount
rate used in the determination of fair value of securities pledged as collateral
for  collateralized  bonds  was 16% at June 30,  2003  and  December  31,  2002.
Prepayment  rate  assumptions  at June 30, 2003,  and  December  31, 2002,  were
generally at a "constant  prepayment  rate," or CPR ranging from 35%-40% in 2003
and 30%-45% in 2002,  for  collateral  for  collateralized  bonds  consisting of
securities  backed by single-family  mortgage loans, and a CPR equivalent of 10%
for 2003 and 11% for 2002 for collateral for collateralized  bonds consisting of
securities  backed by manufactured  housing loans. CPR assumptions for each year
are  based in part on the  actual  prepayment  rates  experienced  for the prior
six-month  period  and in part on  management's  estimate  of future  prepayment
activity.  The  loss  assumptions  utilized  vary  depending  on the  collateral
pledged.

Estimates of fair value for other  financial  instruments are based primarily on
management's  judgment.   Since  the  fair  value  of  the  Company's  financial
instruments  are based on  estimates,  actual  gains and losses  recognized  may
differ from those  estimates  recorded in the condensed  consolidated  financial
statements.

                                       5
<PAGE>


NOTE 5 -- ALLOWANCE FOR LOAN LOSSES

The following table summarizes the activity for the allowance for loan losses on
loans within collateral for  collateralized  bonds for the six months ended June
30, 2003 and June 30, 2002:


------------------------------------------- --------------- --------------------
                                                 2003             2002
------------------------------------------- --------------- --------------------
   Beginning balance                           $  20,700        $  15,364
   Provision for loan losses                      22,295           11,156
   Credit losses, net of recoveries               (9,695)         (11,139)
------------------------------------------- --------------- --------------------
   Ending balance                              $  33,300        $  15,381
------------------------------------------- --------------- --------------------

The Company has limited exposure to credit risk retained on loans,  which it has
securitized  through the issuance of  collateralized  bonds.  The aggregate loss
exposure  is  generally  limited  to the amount of  collateral  in excess of the
related  investment-grade  collateralized  bonds issued (commonly referred to as
"over-collateralization"),  excluding  price  premiums and  discounts  and hedge
gains and losses.  The allowance  for loan losses is included in collateral  for
collateralized bonds in the accompanying balance sheets.

The Company  continues to  experience  unfavorable  results in its  manufactured
housing loan portfolio in terms of elevated delinquencies and loss severity. For
the six months ended June 30, 2003,  the Company  added $22,295 to provision for
loan  losses.  Included in this amount is $14,400 in  provision  for loan losses
recorded in June 2003  specifically 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.  Previously,  the Company had not
considered  current loans to be impaired  under  generally  accepted  accounting
principles and therefore had not previously  provide for these loans.  Continued
worsening  trends in both the  industry  as a whole and the  Company's  pools of
manufactured housing loans prompted the Company to prepare extensive analysis on
these  pools of loans.  The  Company  has not  originated  any new  manufactured
housing loans since 1999,  and has extensive  empirical  data on the  historical
performance of this static pool of loans. The Company  analyzed  performance and
default  activity for loans that were current at various points in time over the
last 36 months,  and based on that analysis,  identified default trends on these
loans. The Company also considered  current market  conditions in this analysis,
with the  expectation  that  these  market  conditions  would  continue  for the
foreseeable future. Given this new observable data, the Company now believes the
inclusion  of  amounts in the  provision  for loan  losses  for loans  which are
current  as to  payment  is an  appropriate  application  of the  definition  of
impairment within generally accepted  accounting  principles,  and has accounted
for the amount as a change in accounting  estimate and accordingly  recorded the
amount as additional provision for loan losses.

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  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)    other    mortgage    pass-through    certificates    or
mortgage-collateralized  obligations.  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.



                                       6
<PAGE>




                               FINANCIAL CONDITION

------------------------------------------------ --------------- ---------------
                                                   June 30,        December 31,
(amounts in thousands except series outstanding)     2003              2002
------------------------------------------------ --------------- ---------------


Collateral for collateralized bonds              $   1,170,952     $   1,341,237
Other loans                                              4,920             6,505
Asset-backed Securities, held-to-maturity                1,111             1,644
Non-recourse debt collateralized bonds               1,149,207         1,299,113
Shareholder's equity                                    56,271            61,780


Collateralized bond series outstanding                       4                 4
------------------------------------------------ --------------- ---------------

Collateral for collateralized bonds

As of both June 30,  2003 and  December  31,  2002,  the Company had 4 series of
collateralized  bonds  outstanding.  The  collateral  for  collateralized  bonds
decreased to $1.2 billion at June 30, 2003  compared to $1.3 billion at December
31, 2002.  This  decrease of $170.3  million is  primarily  the result of $147.4
million in paydowns on the  collateral,  $22.3 million of additions to allowance
for loan losses, and $0.6 million of net premium amortization.

Other loans

Other loans  decreased  to $4.9  million at June 30,  2003 from $6.5  million at
December 31, 2002.  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 $1.6
million.

Asset-backed Securities

Asset-backed  securities decreased to $1.1 million at June 30, 2003, compared to
$1.6  million at December 31,  2002,  as a result of principal  payments of $0.7
million  during  the  year   partially   offset  by  $0.2  million  in  discount
amortization and accrued interest.

Non-recourse debt - collateralized bonds

Collateralized  bonds  decreased  to $1.1  billion  at June 30,  2003  from $1.3
billion at December 31, 2002.  This decrease of $149.9  million is the result of
$151.7  million in paydowns  and a $0.2  million  decrease  in accrued  interest
payable offset by $2.0 million of amortization  of premium and discounts  during
the six months ended June 30, 2003.  Additionally,  for certain securitizations,
surplus  cash in the amount of $4.5  million was  retained  within the  security
structure and used to repay collateralized  bonds outstanding,  instead of being
released to the Company,  as certain  performance  triggers were not met in such
securitizations.

Shareholder's Equity

Shareholder's  equity  decreased  to $56.3  million at June 30,  2003 from $61.8
million at December 31, 2002.  This  decrease was  primarily the result of a net
loss of $8.0 million offset by a decrease of $2.5 million in net unrealized loss
on investments available-for-sale.



                                       7
<PAGE>


                              RESULTS OF OPERATIONS
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------
                                          Three Months Ended       Six Months Ended
                                               June 30,               June 30,
                                       -----------------------  ------------------------
(amounts in thousands)                    2003        2002          2003         2002
--------------------------------------------------------------  ------------------------


<S>                                        <C>         <C>          <C>          <C>
Interest income - collateral for       $   20,335  $   27,936   $   42,525   $   54,750
    collateralized bonds
Interest expense - collateralized bonds    12,814      16,485       26,166       33,354
Provision for loan losses                  17,292       5,279       22,295       11,156
Net interest margin                       (10,232)      5,640       (6,532)       9,273
Impairment charges                            (40)     (4,442)      (1,421)      (6,403)
Net (loss) income                         (10,272)        654       (7,953)       2,326
----------------------------------------------------------------------------------------
</TABLE>
Interest  income on the collateral for  collateralized  bonds decreased to $20.3
million from $27.9 million for the  three-month  periods ended June 30, 2003 and
2002,  respectively.  Interest income on the collateral for collateralized bonds
decreased  to $42.5  million  for the six months  ended June 30, 2003 from $54.8
million for the same period in 2002. This decrease was primarily a result of the
continued  impact of prepayments on interest income,  as average  collateral for
collateralized  bonds  declined  from  $1.5  billion  to  $1.3  billion  for the
six-month  period ended June 30, 2002 and 2003  respectively and $1.6 billion to
$1.2  billion  for the  three-month  period  ending  June  30,  2002  and  2003,
respectively, coupled with the overall decline in interest rates during 2003.

Interest expense on  collateralized  bonds decreased to $12.8 million from $16.5
million for the three-month periods ended June 30, 2003 and 2002,  respectively.
Interest expense on collateralized  bonds decreased to $26.2 million for the six
months ended June 30, 2003 from $33.4  million for the six months ended June 30,
2002.  This decrease  resulted from the decline in  collateralized  bonds due to
prepayments  and  paydowns  on the  related  assets  and normal  scheduled  bond
paydowns,  as well as a decrease in  one-month  London  InterBank  Offered  Rate
("LIBOR")  during three and six month periods ended June 30, 2003 and 2002.  The
one-month LIBOR rate at June 30, 2003 was 1.12% as compared to 1.84% at June 30,
2002.

Provision  for loan losses  increased to $17.3 million from $5.3 million for the
three-month  periods ended June 30, 2003 and 2002,  respectively.  Provision for
loan losses  increased to $22.3 million for the six-month  period ended June 30,
2003 from $11.2  million for the same period in 2002.  Included in provision for
loan losses is $14,400 recorded in June 2003 specifically 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.  Previously, the
Company had not considered current loans to be impaired under generally accepted
accounting  principles and therefore had not previously provide for these loans.
Continued  worsening  trends in both the  industry as a whole and the  Company's
pools of  manufactured  housing loans prompted the Company to prepare  extensive
analysis  on these  pools of  loans.  The  Company  has not  originated  any new
manufactured  housing loans since 1999, and has extensive  empirical data on the
historical  performance  of this  static  pool of loans.  The  Company  analyzed
performance  and default  activity for loans that were current at various points
in time over the last 36 months, and based on that analysis,  identified default
trends on these loans. The Company also considered  current market conditions in
this analysis,  with the expectation that these market conditions would continue
for the  foreseeable  future.  Given this new  observable  data, the Company now
believes  the  inclusion of amounts in the  provision  for loan losses for loans
which are current as to payment is an appropriate  application of the definition
of impairment within generally accepted accounting principles, and has accounted
for the amount as a change in accounting  estimate and accordingly  recorded the
amount as additional provision for loan losses.

Net  interest  margin  decreased  to $(10.2)  million  from $5.6 million for the
three-month  periods  ended June 30, 2003 and 2002,  respectively.  Net interest
margin  decreased to $(6.5) million from $9.3 million for the six-month  periods
ended June 30, 2003 and 2002,  respectively.  These  decreases  were primarily a
result of an increase in provision for loan losses,  as discussed  above,  and a
decline in interest earning assets  partially offset by reduced  borrowing costs
on collateralized bonds outstanding during these periods.

Impairment  charges  decreased  to  $0.04  million  from  $4.4  million  for the
three-month  periods  ended  June 30,  2003 and 2002,  respectively.  Impairment
charges  decreased to $1.4 million from $6.4 million for the  six-month  periods
ended June 30, 2003 and 2002,  respectively.  These  decreases  are  primarily a


                                       8
<PAGE>

result of a  decrease  in  realized  losses on the debt  securities  portion  of
collateral for  collateralized  bonds and an other than temporary  impairment in
2002  on  a  group  of  loans  retained  by  the  Company  during  the  SASCO  9
securitization in 2002.

Net  income  decreased  to a net loss of $10.3  million  from net income of $0.6
million for the three-month periods ended June 30, 2003 and 2002,  respectively.
This  decrease  is  primarily  a result of a net  increase  of $12.0  million in
provision  for loan  losses  and a $7.6  million  decrease  in  interest  income
partially  offset by a  decrease  of $3.7  million  in  interest  expense  and a
decrease of $4.4 million in impairment  charges during the  respective  periods.
Net  income  decreased  to a net loss of $8.0  million  from net  income of $2.3
million for the six-month  periods  ended June 30, 2003 and 2002,  respectively.
This  decrease  is  primarily  a result of a net  increase  of $11.1  million in
provision  for loan losses and a $12.2  million  decrease in interest  income on
collateral  for  collateralized  bonds  partially  offset by a decrease  of $7.2
million in interest expense on collateralized  bonds and a $6.4 million decrease
in impairment charges during the respective periods.

Credit Exposures

With collateralized bond structures, the Company retains credit risk relative to
the  amount of  over-collateralization  required  in  conjunction  with the bond
issuance. Losses are generally first applied to the over-collateralized  amount,
or, in some  instances,  surplus cash and then the  over-collateralized  amount,
with any  losses in  excess  of that  amount  borne by the bond  insurer  or the
holders of the  collateralized  bonds.  The Company only incurs credit losses to
the extent that losses are incurred in the repossession, foreclosure and sale of
the  underlying  collateral.  Such  losses  generally  equal  the  excess of the
principal  amount  outstanding,  less  any  proceeds  from  mortgage  or  hazard
insurance,  over the  liquidation  value of the  collateral.  To compensate  the
Company for retaining  this loss  exposure,  the Company  generally  receives an
excess  yield  on  the  collateralized  loans  relative  to  the  yield  on  the
collateralized  bonds.  At June 30, 2003, the Company  retained $87.2 million in
aggregate principal amount of  over-collateralization  compared to $93.6 million
at December  31,  2002.  The Company had  reserves,  or  otherwise  had provided
coverage on $33.3 million at June 30, 2003. During the first six months of 2003,
the Company  provided  for  additional  reserves of $22.3  million and  incurred
credit losses of $9.7 million.

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 $30.2 million and a remaining deductible aggregating $0.8
million on $65.3 million of securitized  single family  mortgage loans which are
subject  to such  reimbursement  agreements  and $208.3  million of  securitized
single  family  mortgage  loans  which are  subject  to  various  mortgage  pool
insurance  policies  whereby losses would need to exceed the remaining stop loss
of at least 61% on such policies before the Company would incur losses.

Other Matters

At June 30, 2003,  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 foreign exchange rates 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. Additionally, cash flow from the investment
portfolio  represents the primary component of the Company's incoming cash flow.
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 of high quality assets that, in the aggregate, preserves the Company's
capital  base  while  generating  stable  income  and cash flow in a variety  of
interest rate and prepayment environments.

                                       9
<PAGE>

The Company and IHC monitor the  aggregate  cash flow,  projected  net yield and
market value of the collateral for  collateralized  bonds 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 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,  2003.  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
sensitivity analysis as of June 30, 2003. This analysis represents  management's
estimate of the percentage change in net interest margin cash flow given a shift
in interest rates.  The "Base" case represents the interest rate  environment as
it  existed  as of June 30,  2003.  As of June 30,  2003,  one-month  LIBOR  and
six-month  LIBOR  were  1.12%.  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 assets and
liabilities, and there are likely to be such changes in the future.

------------------------------------- --- ----------------------------------
            Basis Point                            % Change in Net
        Increase (Decrease)                        Interest Margin
         in Interest Rates                         From Base Case
                +200                                   (11.7)%
                +100                                   (6.6)%
                Base                                      -
                -100                                    8.6%
                -200                                    10.6%
------------------------------------- --- ----------------------------------

Approximately $426 million of the Company's  collateral for collateralized bonds
as of June 30, 2003, are 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 73% and 14%
of these ARM loans underlying the Company's  collateral for collateralized bonds
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
collateralized bond borrowings.

Generally,  during a period of rising  short-term  interest rates, the Company's
net  interest  spread  earned on its  collateralized  bonds will  decrease.  The
decrease of the net  interest  spread  results from (i) the lag in resets of the
ARM loans  underlying the collateral  for  collateralized  bonds relative to the
rate  resets on the  collateralized  bonds 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 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 and cap  agreements,  to the extent that
the Company has entered into such agreements.

                                       10
<PAGE>

The remaining portion of the Company's collateral for collateralized bonds as of
June 30,  2003,  approximately  $787  million,  is  comprised of loans that have
coupon rates that are fixed.  The Company has limited its interest  rate risk on
such  collateral  primarily  through the issuance of  fixed-rate  collateralized
bonds.  Overall,  the Company's  interest rate risk is primarily  related to the
rate of  change in  short-term  interest  rates  and to the level of  short-term
interest rates.


Item 4.  Controls and Procedures

         (a) Evaluation of disclosure controls and procedures.

         As required by Rule 13a-15 under the Exchange Act, as of the end of the
period covered by this quarterly  report (the  "Evaluation  Date"),  the Company
carried out an  evaluation of the  effectiveness  of the design and operation of
the Company's  disclosure  controls and procedures.  This evaluation was carried
out  under  the  supervision  and  with  the   participation  of  the  Company's
management.  Based upon that evaluation, the Company's management concluded that
the Company's  disclosure  controls and  procedures  are  effective.  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.



          (b) Changes in internal controls.

                  There were no  significant  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.

                                       11
<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 11 Indenture Supplement,  dated as
                           of March 1, 1998, 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 of  Registrant's  Current Report
                           on Form 8-K, filed June 12, 1998).

                  4.5      Copy of the Series 12 Indenture Supplement,  dated as
                           of March 1, 1999, 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 of  Registrant's  Current Report
                           on Form 8-K, filed April 12, 1999).

                  4.6      Copy of the Series 13 Indenture Supplement,  dated as
                           of August 1, 1999, 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 of  Registrant's  Current Report
                           on Form 8-K, filed September 13, 1999).

                                       12
<PAGE>

                  4.7      Copy of the Series 14 Indenture Supplement,  dated as
                           of  November 1, 1999,  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 of  Registrant's  Current Report
                           on Form 8-K, filed November 12, 1999).

                  4.8      Copy   of   the   Structure   Asset    Securitization
                           Corporation Series 2002-9 Indenture Supplement, dated
                           as of April 1, 2002, by and between  Structured Asset
                           Securitization Corporation and J. P. Morgan Chase, as
                           Trustee  (related  schedules  and exhibits  available
                           upon request of the Trustee). (Incorporated herein by
                           reference    to   Exhibit   of    Structured    Asset
                           Securitization  Corporation's  Current Report on Form
                           8-K, filed April 25, 2002).

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

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

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

                  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).

                                       13
<PAGE>

                  99.10    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).

                  99.11    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).

                  (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 14, 2003             By:    /s/ Stephen J. Benedetti
                                           -------------------------------------
                                           Stephen J. Benedetti
                                           President
                                           (Principal Executive Officer,
                                           Principal Financial Officer)



                                           /s/ Kevin J. Sciuk
                                           -------------------------------------
                                           Kevin J. Sciuk
                                           Controller
                                           (Principal Accounting Officer)





                                       15
<PAGE>


                                                                    Exhibit 31.1
                                  CERTIFICATION
                          PURSUANT TO 17 CFR 240.13a-14
                                PROMULGATED UNDER
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen J. Benedetti, certify that:

     1.  I have reviewed this quarterly  report on Form 10-Q of Merit Securities
         Corporation;

     2.  Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

     3.  Based on my knowledge,  the financial  statements,  and other financial
         information  included in this quarterly  report,  fairly present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report;

     4.  The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the
         registrant and have:

         (a)  Designed such  disclosure  controls and  procedures or caused such
              disclosure  controls  and  procedures  to be  designed  under  our
              supervision,  to ensure that material  information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others  within those  entities,  particularly  during the
              period in which this quarterly report is being prepared;

         (b)  Evaluated  the   effectiveness  of  the  registrant's   disclosure
              controls  and   procedures   and  presented  in  this  report  our
              conclusions about the effectiveness of the disclosure controls and
              procedures,  as of the end of the period  covered  by this  report
              based on such evaluation; and

         (c)  Disclosed in this report any change in the  registrant's  internal
              control  over  financial   reporting  that  occurred   during  the
              registrant's most recent fiscal quarter (the  registrant's  fourth
              fiscal  quarter  in  the  case  of  an  annual  report)  that  has
              materially affected, or is reasonable likely to materially affect,
              the registrant's internal control over financial reporting; and

     5.  The registrant's other certifying officers and I have disclosed,  based
         on our most  recent  evaluation  of  internal  control  over  financial
         reporting,  to the  registrant's  auditors  and the audit  committee of
         registrant's  board of directors (or persons  performing the equivalent
         function):

         (a)  All significant deficiencies and material weaknesses in the design
              or operation of internal  control over financial  reporting  which
              are reasonably likely to adversely affect the registrant's ability
              to record,  process,  summarize and report financial  information;
              and

         (b)  Any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal control over financial reporting.



Dated: August 14, 2003                 By:  /s/ Stephen J. Benedetti
                                            ------------------------------------
                                           Stephen J. Benedetti
                                           Principal Executive Officer



                                       16
<PAGE>


                                                                    Exhibit 31.2
                                  CERTIFICATION
                          PURSUANT TO 17 CFR 240.13a-14
                                PROMULGATED UNDER
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kevin J. Sciuk, certify that:

     1.  I have reviewed this quarterly  report on Form 10-Q of Merit Securities
         Corporation;

     2.  Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

     3.  Based on my knowledge,  the financial  statements,  and other financial
         information  included in this quarterly  report,  fairly present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report;

     4.  The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the
         registrant and have:

         (a)  Designed such  disclosure  controls and  procedures or caused such
              disclosure  controls  and  procedures  to be  designed  under  our
              supervision,  to ensure that material  information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others  within those  entities,  particularly  during the
              period in which this quarterly report is being prepared;

         (b)  Evaluated  the   effectiveness  of  the  registrant's   disclosure
              controls  and   procedures   and  presented  in  this  report  our
              conclusions about the effectiveness of the disclosure controls and
              procedures,  as of the end of the period  covered  by this  report
              based on such evaluation; and

         (c)  Disclosed in this report any change in the  registrant's  internal
              control  over  financial   reporting  that  occurred   during  the
              registrant's most recent fiscal quarter (the  registrant's  fourth
              fiscal  quarter  in  the  case  of  an  annual  report)  that  has
              materially affected, or is reasonable likely to materially affect,
              the registrant's internal control over financial reporting; and

     5.  The registrant's other certifying officers and I have disclosed,  based
         on our most  recent  evaluation  of  internal  control  over  financial
         reporting,  to the  registrant's  auditors  and the audit  committee of
         registrant's  board of directors (or persons  performing the equivalent
         function):

         (a)  All significant deficiencies and material weaknesses in the design
              or operation of internal  control over financial  reporting  which
              are reasonably likely to adversely affect the registrant's ability
              to record,  process,  summarize and report financial  information;
              and

         (b)  Any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal control over financial reporting.


Dated:  August 14, 2003                   By:    /s/ Kevin J. Sciuk
                                                 -------------------------------
                                                 Kevin J. Sciuk
                                                 Principal Financial Officer



                                       17
<PAGE>



                                                                    Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly  Report of Merit  Securities  Corporation  (the
"Company") on Form 10-Q for the quarter  ending June 30, 2003, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Stephen
J. Benedetti, the Principal Executive Officer of the Company,  certify, pursuant
to and for purposes of 18 U.S.C.  Section 1350,  as adopted  pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

         (1)      The Report fully complies with the requirements of Section 13
                  (a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information  contained in the Report fairly  presents,  in
                  all material respects,  the financial condition and results of
                  operations of the Company.



Dated:  August 14, 2003               By:      /s/ Stephen J. Benedetti
                                             -----------------------------------
                                             Stephen J. Benedetti
                                             Principal Executive Officer



                                      By:      /s/ Kevin J. Sciuk
                                             -----------------------------------
                                             Kevin J. Sciuk
                                             Principal Financial Officer



                                       18