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

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

                                   FORM 10-Q/A

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

                    For the quarter ended September 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

<TABLE>
                             <S>                                                        <C>
                           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)
</TABLE>

                                 (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

Aggregate market value of voting stock held by non-affiliates of the registrant
as of September 30, 2003: None.  As of October 31, 2003, 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/A with the reduced disclosure format.


================================================================================
<PAGE>

                          MERIT SECURITIES CORPORATION
                                   FORM 10-Q/A

                                      INDEX

     This  amendment  on  Form  10-Q/A  reflects  restatement  of the  Company's
financial  statements  as  discussed  in  Note 7 to the  condensed  consolidated
financial statements.

     All of the  information in this Form 10-Q/A is as of November 13, 2003, the
filing  date of the  original  Form 10-Q,  and has not been  updated  for events
subsequent to that date other than for the matter discussed above.


                                                                            Page
PART I.     FINANCIAL INFORMATION

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

              Condensed Consolidated Statements of Operations
              and Comprehensive Income for the three months and
              nine months ended September 30, 2003 (as restated)
              and 2002 (unaudited) ...........................................2

              Condensed Consolidated Statements of Cash Flows
              for the nine months ended September 30, 2003
              (as restated) 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...................7

Item 3.     Quantitative and Qualitative Disclosures
              About Market Risk..............................................10

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
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

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

<TABLE>
<CAPTION>
                                                                      ----------------------------------------------
                                                                         September 30,              December 31,
                                                                              2003                      2002
                                                                      ---------------------    ---------------------
                                                                       (As restated, see
                                                                            Note 7)
ASSETS:
                <S>                                                             <C>                        <C>
     Collateral for collateralized bonds:
       Loans, net                                                         $     836,012            $   1,017,446
       Debt securities, available-for-sale                                      270,287                  323,791
     Other loans                                                                  3,794                    6,505
     Asset-backed Securities, held-to-maturity                                      926                    1,644
     Due from affiliates, net                                                    37,648                   11,507
                                                                      ---------------------    ---------------------
                                                                          $   1,148,667            $   1,360,893
                                                                      =====================    =====================

LIABILITIES AND SHAREHOLDER'S EQUITY

LIABILITIES:
     Collateralized bonds                                                 $   1,081,423            $   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)                                  367                     (134)
     Accumulated deficit                                                         (1,807)                  (6,770)
                                                                      ---------------------    ---------------------
                                                                                 67,244                   61,780
                                                                      ---------------------    ---------------------
                                                                          $   1,148,667            $   1,360,893
                                                                      =====================    =====================
</TABLE>

See notes to unaudited condensed consolidated financial statements.
<PAGE>


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


<TABLE>
<CAPTION>
                                                      ---------------------------------------------------------------------------
                                                              Three Months Ended                      Nine Months Ended
                                                                 September 30,                          September 30,
                                                      ------------------------------------    -----------------------------------
                                                           2003                2002                2003                2002
                                                      ----------------    ----------------    ---------------     ---------------
                                                       (As restated,                          (As restated,
                                                        see Note 7)                            see Note 7)
Interest income:
              <S>                                               <C>                 <C>                 <C>                 <C>
   Collateral for collateralized bonds                  $     19,176        $     25,727        $     61,701        $     80,478
   Other loans                                                    26                  17                 101                  44
   Asset-backed securities, held-to-maturity                     118                   -                 234                   -
                                                      ----------------    ----------------    ---------------     ---------------
                                                              19,320              25,744              62,036              80,522
                                                      ----------------    ----------------    ---------------     ---------------

Interest and related expense:
   Interest expense on collateralized bonds                   11,945              15,648              38,111              49,002
   Other collateralized bond expense                             230                 502               1,017               1,496
                                                      ----------------    ----------------    ---------------     ---------------
                                                              12,175              16,150              39,128              50,498
                                                      ----------------    ----------------    ---------------     ---------------

Net interest margin before provision for
   loan losses                                                 7,145               9,594              22,908              30,024
Provision for loan losses                                     (1,473)             (5,486)            (16,506)            (16,643)
                                                      ----------------    ----------------    ---------------     ---------------
Net interest margin                                            5,672               4,108               6,402              13,381

Impairment charges                                                 -              (2,429)             (1,454)             (8,832)
Other                                                            (17)                164                  15                (380)
                                                      ----------------    ----------------    ---------------     ---------------
Net income                                                     5,655               1,843               4,963               4,169
Change in net unrealized gain (loss) during
   period on:
Investments classified as available-for-sale                   1,943                (216)               (501)              5,383
                                                      ----------------    ----------------    ---------------     ---------------
Comprehensive income                                    $      7,598        $      1,627        $      4,462        $      9,552
                                                      ================    ================    ===============     ===============
</TABLE>

See notes to unaudited condensed consolidated financial statements.
<PAGE>
MERIT SECURITIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
  CASH FLOWS (UNAUDITED)
(amounts in thousands)


<TABLE>
<CAPTION>
                                                                   -------------------------------------------------
                                                                                  Nine Months Ended
                                                                                    September 30,
                                                                   -------------------------------------------------
                                                                           2003                       2002
                                                                   ----------------------     ----------------------
                                                                     (As restated, see
                                                                          Note 7)
Operating activities:
                 <S>                                                          <C>                        <C>
    Net  income                                                        $        4,963             $        4,169
    Adjustments to reconcile net  income to net cash
      provided by operating activities:
      Impairment charges                                                        1,454                      8,832
      Provision for loan losses                                                16,506                     16,643
      Amortization, net                                                         3,602                      6,760
      Other                                                                     1,745                     (1,806)
                                                                   ----------------------     ----------------------
        Net cash provided by operating activities                              28,270                     34,598
                                                                   ----------------------     ----------------------

Investing activities:
      Principal payments on collateral                                        218,276                    324,830
      Purchase of loans                                                             -                   (158,933)
      Proceeds from sale of collateralized bonds                                    -                    605,272
                                                                   ----------------------     ----------------------
                                                                   ----------------------     ----------------------
        Net cash provided by investing activities                             218,276                    771,169
                                                                   ----------------------     ----------------------

Financing activities:
      Principal payments on collateralized bonds                             (220,405)                  (775,649)
      Payments to affiliates                                                  (26,141)                    (6,018)
      Capital distributions                                                         -                    (24,100)
                                                                   ----------------------     ----------------------
        Net cash used for financing activities                               (246,546)                  (805,767)
                                                                   ----------------------     ----------------------
Net change in cash                                                                  -                          -
Cash, beginning of period                                                           -                          -
                                                                   ----------------------     ----------------------

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


Supplemental disclosure of cash flow information:
    Cash paid for interest                                             $       36,124             $       46,932
                                                                   ======================     ======================
</TABLE>

See notes to unaudited condensed consolidated financial statements.
<PAGE>


MERIT SECURITIES CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003
(amounts in thousands)


NOTE 1 -- BASIS OF PRESENTATION

     The  accompanying  condensed  consolidated  financial  statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
of the  information  and  notes  required  by  accounting  principles  generally
accepted in the United States of America,  hereinafter referred to as "generally
accepted accounting principles" for complete financial statements. The financial
statements include the accounts of Merit Securities  Corporation (the "Company")
and its wholly owned subsidiary, Financial Asset Securitization,  Inc. ("FASI"),
which was purchased from Dynex Capital, Inc. ("Dynex"), its parent, on March 31,
2002.  The Company is a wholly  owned,  limited-purpose  finance  subsidiary  of
Issuer  Holding  Corporation  ("IHC").  IHC was formed on  September  4, 1996 to
acquire all of the outstanding stock of the Company and certain other affiliates
of Dynex.  IHC is a wholly owned  subsidiary  of Dynex.  Dynex has elected to be
treated as a real  estate  investment  trust  ("REIT")  for  federal  income tax
purposes under the Internal  Revenue Code of 1986.  Accordingly,  the Company is
not subject to federal  income tax. The Company was organized to facilitate  the
securitization  of loans through the issuance and sale of  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  September  30, 2003 and December 31,
2002,  the Condensed  Consolidated  Statements of Operations  and  Comprehensive
Income for the three months and nine months ended  September  30, 2003 and 2002,
the  Condensed  Consolidated  Statements of Cash Flows for the nine months ended
September  30, 2003 and 2002,  and the related  notes to condensed  consolidated
financial statements are unaudited.  Operating results for the nine months ended
September  30, 2003 are not  necessarily  indicative  of the results that may be
expected for the year ending December 31, 2003. 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, 2002.

     The Company uses  estimates in  establishing  fair value for its  financial
instruments as discussed in Note 4.

     The Company also has credit risk on certain investments in its portfolio as
discussed  in Note 5. An  allowance  for  loan  losses  has been  estimated  and
established  for current  existing losses based on  management's  judgment.  The
allowance for loan losses is evaluated and adjusted  periodically  by management
based on the actual and projected timing and amount of credit losses. Provisions
made to increase the allowance related to credit risk are presented as provision
for  loan  losses  in the  accompanying  condensed  consolidated  statements  of
operations.  The Company's  actual credit losses may differ from those estimates
used to establish the allowance.

     Certain  reclassifications  have been made to the financial  statements for
2002 to conform to the presentation for 2003,  including the reclassification of
the  extraordinary  gain  recorded  in the three and nine  month  periods  ended
September 30, 2002 pursuant to the adoption of SFAS No. 145,  "Recission of FASB
Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections".


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 Unified  Commercial Code 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 September 30,
2003 and December 31, 2002 are reported at fair value, with unrealized gains and
losses  excluded from earnings and reported as a component of accumulated  other
comprehensive  income. Loans included within collateral for collateralized bonds
are reported at amortized cost.

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

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                 September 30, 2003                     December 31, 2002
--------------------------------------------------------------------------------------------------------------------
              <S>                                            <C>                                    <C>
   Loans, at amortized cost                        $       858,974                        $      1,038,146
   Allowance for loan losses                               (22,962)                                (20,700)
--------------------------------------------------------------------------------------------------------------------
                                                           836,012                               1,017,446
   Debt Securities, at fair value                          270,287                                 323,791
--------------------------------------------------------------------------------------------------------------------
                                                   $     1,106,299                        $      1,341,237
--------------------------------------------------------------------------------------------------------------------
</TABLE>

     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 September 30, 2003 and December 31,
2002:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                 September 30, 2003                     December 31, 2002
------------------------------------------------------------------------------------------------------------------
             <S>                                           <C>                                    <C>
   Debt securities, at amortized cost              $       269,822                        $       323,728
   Gross unrealized gains                                      465                                     63
------------------------------------------------------------------------------------------------------------------
   Estimated fair value                            $       270,287                        $       323,791
------------------------------------------------------------------------------------------------------------------
</TABLE>


NOTE 3 -- DUE FROM AFFILIATES, NET

     Due from  affiliates,  net,  include  amounts  loaned by the Company to its
parent, or to affiliates of its parent. Interest is charged on amounts due to or
from  affiliates  at the  Federal  Funds  rate  plus  100  basis  points.  These
inter-company  loans are subject to a maximum  outstanding of $50,000.  Interest
income was $162 and $233 for the three and nine-months ended September 30, 2003,
respectively,  on  amounts  due from  affiliates.  Interest  expense  was $1 and
interest  income was $3 for the three and nine months ended  September 30, 2002,
respectively, on amounts due from affiliates.


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 the Company  believes  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  September  30,  2003 and
December 31, 2002.  Prepayment  rate  assumptions  at  September  30, 2003,  and
December  31,  2002,  were  generally  at a "constant  prepayment  rate," or CPR
ranging from 35%-40% in 2003 and a range of 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.


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 nine months
ended September 30, 2003 and September 30, 2002:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                           2003                                 2002
-------------------------------------------------------------------------------------------------------------------
    <S>                                                      <C>                                  <C>
   Beginning balance                                     $  20,700                            $  15,364
   Provision for loan losses                                16,506                               16,643
   Credit losses, net of recoveries                        (14,244)                             (17,080)
-------------------------------------------------------------------------------------------------------------------
   Ending balance                                        $  22,962                            $  14,927
-------------------------------------------------------------------------------------------------------------------
</TABLE>

     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 condensed consolidated 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 nine months ended  September  30, 2003,  the Company  recorded  $16,506 as a
provision  for loan losses.  Included in this amount is $6,120 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 provided for these loans.  Continued
worsening trends in both the industry as a whole and the Company's  portfolio of
manufactured  housing  loans  prompted the Company to prepare  analysis on these
pools of loans.  The Company has not  originated  any new  manufactured  housing
loans since 1999, and has 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 this provision as a change
in  accounting  estimate  and,  accordingly,  recorded the amount as  additional
provision for loan losses.

     Within each  collateralized  bond series,  a group of loans are held within
the securitization structure as a credit reserve to provide additional cash flow
to cover losses.  Once the  cumulative  level of losses  surpasses the cash flow
available   from   the   credit   reserve   and   losses   have   depleted   the
over-collateralization,  future  losses are passed to the  holders of the lowest
classes of bonds  within the  structure.  On one of the deal  structures  of the
Company, total cumulative losses have surpassed the cash flow available from the
credit  reserve and have  completely  depleted the  over-collateralization.  The
reserves for loan losses on this securitization  decreased as these losses began
to be borne by the subordinated bondholders.

     The allowance for loan losses on the over-collateralization totaled $22,962
and $20,700 at September  30, 2003 and December 31, 2002  respectively,  and are
included in collateral for  collateralized  bonds in the accompanying  condensed
consolidated  balance sheets.  Over-collateralization  at September 30, 2003 and
December 31, 2002 totaled $44,747 and $54,915 respectively.


NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS

     In May 2003,  the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  of Financial  Standards  ("SFAS")  No. 150,  "Accounting  for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." This
statement is effective for financial  instruments entered into or modified after
May 31, 2003;  and  otherwise is effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial instruments of nonpublic entities, which are subject to the provisions
of this Statement for the first fiscal period beginning after December 15, 2003.
This Statement amends SFAS No. 133,  "Accounting for Derivative  Instruments and
Hedging  Activities,"  and SFAS No.  128,  "Earnings  per  Share," to  establish
standards  outlining how to classify and measure certain  financial  instruments
with  characteristics  of both liabilities and equity.  It requires that certain
financial   instruments  that  were  previously  classified  as  equity  now  be
classified as a liability (or, in some circumstances, as an asset). The adoption
of SFAS No.  150 did not have a  material  effect on the  Company's  results  of
operations, cash flows or financial position.

     In January  2003,  the FASB issued FIN No. 46,  "Consolidation  of Variable
Interest   Entities  -  an  interpretation  of  ARB  No.  51",  which  addresses
consolidation of variable interest entities. FIN No. 46 expands the criteria for
consideration  in  determining  whether a  variable  interest  entity  should be
consolidated by a business entity, and requires existing unconsolidated variable
interest  entities  (which  include,  but are not  limited to,  Special  Purpose
Entities,  or SPEs) to be  consolidated  by their primary  beneficiaries  if the
entities  do  not  effectively  disperse  risks  among  parties  involved.  This
interpretation  applies  immediately to variable interest entities created after
January 31,  2003,  and to  variable  interest  entities in which an  enterprise
obtains an  interest  after that date.  It applies in the first  fiscal  year or
interim period beginning after December 31, 2003, to variable  interest entities
in which  an  enterprise  holds a  variable  interest  that it  acquired  before
February 1, 2003.  The adoption of FIN No. 46 did not have a material  effect on
the Company's results of operations, cash flows or financial position.


NOTE 7 -- RESTATEMENT OF FINANCIAL STATEMENTS

     The  Company has  determined  that it  recorded  allowance  for loan losses
during 2003 in excess of its actual  exposure to credit losses for the excess of
collateral for collateralized  bonds pledged over collateralized bonds issued on
one securitization  transaction.  Accordingly,  the Company's exposure to credit
losses was  limited  under the  securitization  structure,  and such credit loss
exposure had been fully depleted or reserved  during the second quarter of 2003.
Under the securitization structure, with limited exception, future credit losses
are to be borne by the holders of the  subordinated  bond  classes.  The Company
continued  to record  provisions  for loan  losses in its  financial  statements
during the third quarter of 2003. At the quarter ended  September 30, 2003,  the
allowance  for  loan  losses   exceeded  the  net   investment   collateral  for
collateralized  bonds  for  this  particular  securitization  transaction.  As a
result,  the Company has restated  its  financial  statements  for the three and
nine-month  periods ended  September  30, 2003 for the excess  allowance for the
loan losses.

     The following tables summarize the significant effects of such restatement:

                   Condensed Consolidated Balance Sheets Data
                   ------------------------------------------

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
(amounts in thousands)                                              (As Previously
                                                                      Reported)                  (As Restated)
-----------------------------------------------------------------------------------------------------------------
                                                                  September 30, 2003          September 30, 2003
                                                                -----------------------     ---------------------
      <S>                                                                 <C>                         <C>
Collateral for collateralized bonds - loans                         $     825,220               $     836,012
Total assets                                                            1,137,875                   1,148,667
Accumulated deficit                                                       (12,599)                     (1,807)
Total shareholder's equity                                                 56,452                      67,244
Total liabilities and shareholder's equity                              1,137,875                   1,148,667
------------------------------------------------------------------------------------------------------------------
</TABLE>

              Condensed Consolidated Statements of Operations Data
              ----------------------------------------------------

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
(amounts in thousands)                        Three Months Ended                        Nine Months Ended
                                              September 30, 2003                        September 30, 2003
                                     -------------------------------------     ----------------------------------
                                          (As                                       (As
                                       Previously                                Previously
                                       Reported)          (As Restated)          Reported)          (As Restated)
-----------------------------------------------------------------------------------------------------------------
    <S>                                    <C>                  <C>                  <C>                  <C>
Provision for loan losses              $   (5,003)          $   (1,473)          $  (27,298)          $  (16,506)
Net interest margin                         2,142                5,672               (4,390)               6,402
Net income (loss)                           2,125                5,655               (5,829)               4,963
Comprehensive income (loss)            $    4,068           $    7,598           $   (6,330)          $    4,462
-----------------------------------------------------------------------------------------------------------------
</TABLE>


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

     As discussed in Note 7, the Company has restated its  financial  statements
for the three and nine month period ended  September  30, 2003.  The  Management
Discussion and Analysis gives effect to this restatement

     The Company was organized to facilitate the securitization of loans through
the issuance and sale of  collateralized  bonds (the  "Bonds").  Generally.  the
Bonds issued are, or have been, 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  are used to  purchase
Collateral from Issuer Holding Corp.  ("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.

                               FINANCIAL CONDITION

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                   September 30,                December 31,
(amounts in thousands except series outstanding)                        2003                        2002
-------------------------------------------------------------------------------------------------------------------

     <S>                                                                 <C>                         <C>
Collateral for collateralized bonds                                 $   1,106,299               $   1,341,237
Other loans                                                                 3,794                       6,505
Asset-backed securities, held-to-maturity                                     926                       1,644
Collateralized bonds                                                    1,081,423                   1,299,113
Shareholder's equity                                                       67,244                      61,780

Collateralized bond series outstanding                                          4                           4
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Collateral for Collateralized Bonds
-----------------------------------

     As of both  September  30, 2003 and December  31,  2002,  the Company had 4
series of collateralized  bonds  outstanding.  The collateral for collateralized
bonds  decreased to $1.1 billion at September  30, 2003 compared to $1.3 billion
at December 31, 2002. This decrease of $234.9 million is primarily the result of
$218.3  million in paydowns on the  collateral,  $16.5  million of  additions to
allowance  for loan  losses,  $1.5 million in loss on  impairment,  $1.9 million
decrease  in  accrued  interest  receivable,  and $0.6  million  of net  premium
amortization  offset by a $0.4 million decrease in unrealized loss on collateral
for collateralized bonds.

Other Loans
-----------

     Other  loans  decreased  to $3.8  million at  September  30, 2003 from $6.5
million at December  31, 2002.  Other loans are 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 $2.7 million.

Asset-backed Securities
-----------------------

     Asset-backed  securities  decreased to $0.9 million at September  30, 2003,
compared to $1.6 million at December 31, 2002, as a result of principal payments
of $1.0  million  during the year  partially  offset by $0.3 million in discount
amortization and accrued interest.

Non-recourse Debt - Collateralized Bonds
----------------------------------------

     Collateralized  bonds  decreased to $1.1 billion at September 30, 2003 from
$1.3 billion at December 31, 2002. This decrease of $217.7 million is the result
of $220.4  million in paydowns and a $0.3 million  decrease in accrued  interest
payable offset by $3.0 million of amortization  of premium and discounts  during
the  nine  months  ended   September   30,  2003.   Additionally,   for  certain
securitizations,  surplus cash in the amount of $3.3 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 increased to $67.2 million at September 30, 2003 from
$61.8  million at December 31, 2002.  This  increase was primarily the result of
net income of $4.9 million and a decrease of $0.5 million in net unrealized loss
on investments available-for-sale.

                              RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                 Three Months Ended                    Nine Months Ended
                                                    September 30,                        September 30,
                                          ----------------------------------  ------------------------------------
(amounts in thousands)                         2003              2002               2003               2002
----------------------------------------------------------------------------  ------------------------------------
     <S>                                         <C>               <C>               <C>                <C>
Interest income - collateral for            $   19,176        $   25,727        $   61,701         $   80,478
  collateralized bonds
Interest expense - collateralized bonds         11,945            15,648            38,111             49,002
Provision for loan losses                        1,473             5,486            16,506             16,643
Net interest margin                              5,672             4,108             6,402             13,381
Impairment charges                                   -            (2,429)           (1,454)            (8,832)
Net income                                       5,655             1,843             4,963              4,169
------------------------------------------------------------------------------------------------------------------
</TABLE>

     Interest  income on the collateral for  collateralized  bonds  decreased to
$19.2 million from $25.7 million for the three-month  period ended September 30,
2003  and  2002,   respectively.   Interest   income  on  the   collateral   for
collateralized  bonds  decreased  to $61.7  million  for the nine  months  ended
September 30, 2003 from $80.5 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 $1.2 billion for the nine-month  period ended  September 30, 2002 and
2003, respectively,  and $1.6 billion to $1.1 billion for the three-month period
ended  September  30,  2002 and 2003,  respectively,  coupled  with the  overall
decline in interest rates during 2003.

     Interest  expense on  collateralized  bonds decreased to $11.9 million from
$15.6  million for the  three-month  period ended  September  30, 2003 and 2002,
respectively.  Interest  expense  on  collateralized  bonds  decreased  to $38.1
million for the nine months ended  September 30, 2003 from $49.0 million for the
nine months ended September 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 the three and nine month period ended
September 30, 2003 and 2002. The one-month  LIBOR rate at September 30, 2003 was
1.12% as compared to 1.81% at September 30, 2002.

     Provision  for loan losses  decreased to $1.5 million from $5.5 million for
the  three-month  period  ended  September  30,  2003  and  2002,  respectively.
Provision for loan losses  decreased to $16.5 million for the nine-month  period
ended  September  30,  2003  from  $16.6  million  for the same  period in 2002.
Included  in  provision  for loan losses is $6.1  million  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 provided for these loans.  Continued  worsening trends in both
the  industry as a whole and the  Company's  portfolio of  manufactured  housing
loans  prompted  the Company to prepare  analysis  on these pools of loans.  The
Company has not  originated any new  manufactured  housing loans since 1999, and
has 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 this provision as a change
in  accounting  estimate  and,  accordingly,  recorded the amount as  additional
provision for loan losses.

     Within each  collateralized  bond series,  a group of loans are held within
the  securitization  structure as additional support for potential credit losses
and to  provide  additional  cash flow to cover  such  credit  losses.  Once the
cumulative  level of losses  surpassed the cash flow  available  from the credit
reserve and losses have depleted the  over-collateralization,  future losses are
passed to the holders of the lowest  classes of bonds within the  structure.  On
one of the  securitization  structures of the Company,  total cumulative  losses
have  surpassed the level of the cash flow available from the credit reserve and
have    completely     depleted    the     over-collateralization.     As    the
over-collateralization  has been  depleted,  the  Company's  provision  for loan
losses correspondingly declined.

     Net  interest  margin  increased  to $5.7 million from $4.1 million for the
three-month  periods  ended  September  30,  2003 and  2002,  respectively.  Net
interest margin  decreased to $6.4 million from $13.4 million for the nine-month
periods ended  September 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.

     No  impairment  charges  were  recorded  in the  three-month  period  ended
September 30, 2003 as compared to $2.4 million in the  three-month  period ended
September  30,  2002.  Impairment  charges  decreased  to $1.4 million from $8.8
million  for  the  nine-month   periods  ended  September  30,  2003  and  2002,
respectively.  These  decreases are primarily a 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  increased to $5.6 million from $1.8 million for the three-month
periods  ended  September  30,  2003 and 2002,  respectively.  This  increase is
primarily  a result of a net  decrease  of $4.0  million in  provision  for loan
losses, a decrease of $3.9 million in interest  expense,  and a decrease of $2.4
million in impairment  charges  partially  offset by a $6.5 million  decrease in
interest  income on collateral  for  collateralized  bonds during the respective
periods.  Net  income  increased  to $4.9  million  from  $4.2  million  for the
nine-month  periods  ended  September  30,  2003 and  2002,  respectively.  This
increase is  primarily a result of a net  decrease of $0.2  million in provision
for  loan  losses,   a  decrease  of  $11.4  million  in  interest   expense  on
collateralized  bonds, a $7.4 million decrease in impairment charges, and a $0.4
million decrease in other expense during the respective periods. These decreases
are  partially  offset  by a  $18.8  million  decrease  in  interest  income  on
collateral for collateralized bonds.

                          Critical Accounting Policies
                          ----------------------------

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

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

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

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

     Fair Value.  Securities classified as available-for-sale are carried in the
accompanying  condensed  consolidated  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 ranging from 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.

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

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

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 September 30, 2003, the Company retained $44.7 million
in  aggregate  principal  amount  of  over-collateralization  compared  to $54.9
million at December  31,  2002.  The  Company had  reserves,  or  otherwise  had
provided  coverage on $23.0 million at September 30, 2003. During the first nine
months of 2003, the Company  provided for  additional  reserves of $16.5 million
and incurred credit losses of $14.2 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 $27.5 million and a remaining deductible aggregating $0.9
million on $57.1 million of securitized  single family  mortgage loans which are
subject  to such  reimbursement  agreements  and $193.5  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 65% on such policies before the Company would incur losses.

Recent Accounting Pronouncements
--------------------------------

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of both Liabilities and Equity." This
statement is effective for financial  instruments entered into or modified after
May 31, 2003 and is otherwise  effective at the  beginning of the first  interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial  instruments of nonpublic entities which are subject to the provisions
of this statement for the first fiscal period beginning after December 15, 2003.
This statement amends SFAS No. 133,  "Accounting for Derivative  Instruments and
Hedging  Activities"  and SFAS No.  128,  "Earnings  per  Share",  to  establish
standards  outlining how to classify and measure certain  financial  instruments
with  characteristics  of both liabilities and equity.  It requires that certain
financial   instruments  that  were  previously  classified  as  equity  now  be
classified as a liability (or, in some circumstances, as an asset). The adoption
of SFAS No.  150 did not have a  material  effect on the  Company's  results  of
operations, cash flows or financial position.

     In January  2003,  the FASB issued FIN No. 46,  "Consolidation  of Variable
Interest   Entities  -  an  interpretation  of  ARB  No.  51,"  which  addresses
consolidation of variable interest entities. FIN No. 46 expands the criteria for
consideration  in  determining  whether a  variable  interest  entity  should be
consolidated by a business entity, and requires existing unconsolidated variable
interest  entities  (which  include,  but are not  limited to,  special  purpose
entities,  or SPEs) to be  consolidated  by their primary  beneficiaries  if the
entities  do  not  effectively  disperse  risks  among  parties  involved.  This
interpretation  applies  immediately to variable interest entities created after
January 31,  2003,  and to  variable  interest  entities in which an  enterprise
obtains an  interest  after that date.  It applies in the first  fiscal  year or
interim period beginning after June 15, 2003, to variable  interest  entities in
which an enterprise  holds a variable  interest that it acquired before February
1,  2003.  The  adoption  of FIN No.  46 did not have a  material  effect on the
Company's results of operations, cash flows or financial position.

Other Matters
-------------

     At September 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.

     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 September 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  September  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 September  30, 2003.  As of September 30, 2003,
one-month LIBOR was 1.12% and six-month LIBOR was 1.18%. 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  collateralized bonds, underlying collateral,  and asset-backed
securities  held-to-maturity  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                                   (19.9)%
                +100                                   (10.4)%
                Base                                      -
                -100                                    11.1%
                -200                                    14.6%
------------------------------------- --- ----------------------------------

     Approximately $390.5 million of the Company's collateral for collateralized
bonds as of September 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.

     The remaining portion of the Company's  collateral for collateralized bonds
as of September 30, 2003,  approximately  $749.6 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.

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

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

              The Company  identified  an internal  control  deficiency  related
              to the  recording of allowance  for loan losses in excess of loss
              obligations.  Management believes that it has performed the
              appropriate  procedures to ensure that the information  included
              herein for the quarter  ended  September  30, 2003 is  materially
              accurate in all  reasonable aspects.  This internal  control
              deficiency did not impact the  consolidated  financial  statements
              of the Company's parent.

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

         (b)  Changes in internal controls.

              The Company's  management is also  responsible  for  establishing
              and  maintaining  adequate  internal  control over financial
              reporting. There were no changes in the Company's internal control
              over financial reporting identified in connection  with the
              evaluation of it that  occurred  during the  Company's last fiscal
              quarter that materially effected, or is reasonably likely to
              materially affect internal control over financial reporting.


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).

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

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

     32.2  Certification  of Chief Financial  Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.

     10.1 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).

     10.2 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).

     10.3 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).

     10.4 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).

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

     99.1 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).

     99.2 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).

     99.3 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).

     99.4 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).

     99.5 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).

     99.6 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).

     (b) Reports on Form 8-K

         None
<PAGE>

                                   SIGNATURE


     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:  May 19, 2004                  By:  /s/ Stephen J. Benedetti
                                           -------------------------------------
                                           Stephen J. Benedetti
                                           President


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


<TABLE>
<CAPTION>
             Signature                                        Capacity                       Date
             ---------                                        --------                       ----



                 <S>                                              <C>                             <C>
/s/ Stephen J. Benedetti                        Principal Executive Officer/Director         May 19, 2004
--------------------------------------------
Stephen J. Benedetti



/s/ Kevin J. Sciuk                              Principal Financial Officer/Controller       May 19, 2004
--------------------------------------------
Kevin J. Sciuk



/s/ J. Thomas O'Brien, Jr.                                    Director                       May 19, 2004
--------------------------------------------
J. Thomas O'Brien, Jr.



/s/ Christopher T. Bennett                                    Director                       May 19, 2004
--------------------------------------------
Christopher T. Bennett
</TABLE>
<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                                                Sequentially
Exhibit                                                                         Numbered Page
-------                                                                         -------------


   <S>                          <C>                                                  <C>
  31.1  Certification of Principal Executive Officer pursuant to
          Section 302 of the Sarbanes-Oxley Act of 2002.                              I

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

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

  32.2  Certification of Chief Financial Officer pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.                              IV
</TABLE>
<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/A of Merit
         Securities Corporation;

     2.  Based on my  knowledge,  this 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 report;

     3.  Based on my knowledge,  the financial  statements,  and other financial
         information included in this 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
         report;

     4.  The registrant's  other certifying  officer 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 we 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 reasonably likely to materially affect,
              the registrant's  internal control of financial reporting.

     5.   The registrant's other certifying  officer 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:  May 19, 2004                         By:     /s/ Stephen J. Benedetti
                                                  ------------------------------
                                                  Stephen J. Benedetti
                                                  Principal Executive Officer


<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/A of Merit Securities
Corporation;

     2) Based on my knowledge, this 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 report;

     3) Based on my knowledge,  the financial  statements,  and other  financial
information included in this 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 report;

     4) The  registrant's  other  certifying  officer 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 we 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 reasonably  likely to materially
               affect, the registrant's internal control of financial reporting.

     5) The registrant's other certifying officer 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:  May 19, 2004                   By:      /s/ Kevin J. Sciuk
                                              ----------------------------------
                                              Kevin J. Sciuk
                                              Principal Financial Officer
<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/A for the quarter  ended  September  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:  May 19, 2004                       By:     /s/ Stephen J. Benedetti
                                                 -------------------------------
                                                 Stephen J. Benedetti
                                                 Principal Executive Officer
<PAGE>




                                                                   Exhibit  32.2



                            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/A for the quarter  ended  September  30, 2003, as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  I, Kevin J. Sciuk, the Principal  Financial  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:  May 19, 2004                      By:      /s/ Kevin J. Sciuk
                                                 -------------------------------
                                                 Kevin J. Sciuk
                                                 Principal Financial Officer