4



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

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

                                    FORM 10-Q

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

                    For the quarter ended September 30, 2002

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

                         Commission file number 33-83524


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


<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
           (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. |_|Yes |X|No

As of October 31, 2002, the latest  practicable date, there were 1,000 shares of
Merit Securities Corporation common stock outstanding.

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


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



<PAGE>

                          MERIT SECURITIES CORPORATION

                                    FORM 10-Q


                                      Index

<TABLE>
  <S>                                <C>                                                                    <C>

                                                                                                            Page

PART I.           FINANCIAL INFORMATION

Item 1.           Financial Statements
                      Condensed Consolidated Balance Sheets at September 30, 2002
                      and December 31, 2001 (unaudited).......................................................1

                      Condensed Consolidated Statements of Operations for the three months and nine months
                      ended September 30, 2002 and 2001(as restated)  (unaudited).............................2

                      Condensed Consolidated Statements of Cash Flows for the nine months ended
                      September 30, 2002 and 2001 (as restated)  (unaudited)..................................3

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

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

Item 3.           Quantitative and Qualitative Disclosures about Market Risk..................................8

PART II.          OTHER INFORMATION

Item 1.           Legal Proceedings..........................................................................10

Item 5.           Other Information..........................................................................10

Item 6.           Exhibits and Reports on Form 8-K...........................................................10

SIGNATURES            .......................................................................................13
</TABLE>
<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,
                                                                           2002                        2001
                                                                   ---------------------     ---------------------
                       <S>                                                  <C>                          <C>
ASSETS:
   Collateral for collateralized bonds                                 $   1,428,614             $   1,634,460
   Loans                                                                       9,656                     4,435
   Due from affiliates, net                                                    6,018                         -
                                                                       $   1,444,288             $   1,638,895

                                                                   =====================     =====================
LIABILITIES AND SHAREHOLDER'S EQUITY

LIABILITIES:
   Non-recourse debt - collateralized bonds                            $   1,373,631             $   1,542,924

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                    92,774
     Accumulated other comprehensive (loss) income                            (2,196)                    3,187
     Retained earnings                                                         4,169                         -
                                                                              70,657                    95,971
                                                                   ---------------------     ---------------------
                                                                       $   1,444,288             $   1,638,895
                                                                   =====================     =====================
</TABLE>

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


MERIT SECURITIES CORPORATION
Condensed CONSOLIDATED STATEMENTS
  OF OPERATIONS (UNAUDITED)
(amounts in thousands)


<TABLE>
<CAPTION>
                                                  Three Months Ended                        Nine Months Ended
                                                     September 30                              September 30
                                         -------------------------------------     -------------------------------------
                                              2002                 2001                 2002                 2001
                                         ----------------     ----------------     ----------------     ----------------
                                                               (As Restated,                             (As Restated,
                                                                See Note 5)                               See Note 5)
                <S>                             <C>                <C>                  <C>                   <C>
Interest income:
   Collateral for collateralized
     bonds                                 $     25,727         $     34,587         $     80,478         $    119,314
   Loans                                             17                    -                   44                    -
                                         ----------------     ----------------     ----------------     ----------------
                                                 25,744               34,587               80,522              119,314
                                         ----------------     ----------------     ----------------     ----------------

Interest and related expense:
   Interest expense on
     collateralized bonds                        15,648               24,336               49,002               88,965
   Other                                            502                  439                1,496                1,317
                                         ----------------     ----------------     ----------------     ----------------
                                                 16,150               24,775               50,498               90,282
                                         ----------------     ----------------     ----------------     ----------------

Net interest margin before
   provision for losses                           9,594                9,812               30,024               29,032
Provision for losses                             (5,486)             (12,213)             (16,643)             (21,323)
                                         ----------------     ----------------     ----------------     ----------------
Net interest margin                               4,108               (2,401)              13,381                7,709

Impairment charges                               (2,429)              (1,783)              (8,832)              (5,349)
Other income (loss)                                   3                    -                   (1)                   -
                                         ----------------     ----------------     ----------------     ----------------
Income (loss) before extraordinary                1,682               (4,184)               4,548                2,360
   items
Extraordinary items - gain (loss)
   on extinguishment of debt                        161               (1,013)                (379)              (1,013)
                                         ----------------     ----------------     ----------------     ----------------
Net income (loss)                          $      1,843         $     (5,197)        $      4,169         $      1,347
                                         ================     ================     ================     ================
</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,
                                                               -----------------------------------------------------
                                                                           2002                       2001
                                                                   ----------------------     ----------------------
                                                                                                  (As Restated,
                                                                                                   See Note 5)
                       <S>                                                   <C>                        <C>
Operating activities:
    Net income                                                         $        4,169             $        1,347
    Adjustments to reconcile net income to net cash provided
      by operating activities:
      Loss on extinguishment of debt                                              379                      1,013
      Impairment charge                                                         8,832                      5,349
      Provision for losses                                                     16,643                     21,323
      Amortization, net                                                         6,760                      4,694
      Net (increase) decrease in accrued interest receivable
        and funds held by trustee                                              (1,951)                     2,774
      Decrease in accrued interest payable                                       (217)                      (756)
      Other                                                                       (17)                        86
                                                                   ----------------------     ----------------------
        Net cash provided by operating activities                              34,598                     35,830
                                                                   ----------------------     ----------------------

Investing activities:
      Purchase of loans                                                      (158,933)                         -
      Proceeds from principal payments on collateral                          324,830                    460,723
      Proceeds from sale of collateralized bonds                              605,272                    507,641
                                                                   ----------------------     ----------------------
        Net cash provided by investing activities                             771,169                    968,364
                                                                   ----------------------     ----------------------

Financing activities:
      Principal payments on collateralized bonds                             (775,649)                  (984,408)
      Increase in due from affiliates                                          (6,018)                         -
      Capital distributions                                                   (24,100)                   (19,796)
                                                                   ----------------------     ----------------------
        Net cash used for financing activities                               (805,767)                (1,004,204)
                                                                   ----------------------     ----------------------

Net change in cash                                                                  -                        (10)
Cash, beginning of period                                                           -                         10
                                                                   ----------------------     ----------------------

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


Supplemental disclosure of cash flow information:
    Cash paid for interest                                             $       46,932             $       62,611
                                                                   ======================     ======================
</TABLE>

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


MERIT SECURITIES CORPORATION
NOTES TO UNAUDITED Condensed CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002
(amounts in thousands except share data)


NOTE 1 -- BASIS OF PRESENTATION

The accompanying  condensed consolidated financial statements have been prepared
in accordance  with the  instructions to Form 10-Q and do not include all of the
information and notes required by accounting  principles  generally  accepted in
the United States of America,  hereinafter  referred to as  "generally  accepted
accounting   principles"  for  complete  financial  statements.   The  financial
statements include the accounts of Merit Securities  Corporation (the "Company")
and its wholly owned subsidiary,  Financial Asset  Securitization,  Inc. (FASI).
The Company is a wholly  owned,  limited-purpose  finance  subsidiary  of Issuer
Holding Corporation  ("IHC"). IHC was formed on September 4, 1996 to acquire all
of the  outstanding  stock of the Company and certain other  affiliates of Dynex
Capital,  Inc.  ("Dynex").  IHC is a wholly owned subsidiary of Dynex. 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 significant adjustments,  consisting of normal
recurring  adjustments,  considered  necessary  for a fair  presentation  of the
condensed  consolidated  financial  statements have been included.  However, the
financial  statements  presented are unaudited.  Operating  results for the nine
months ended  September 30, 2002 are not  necessarily  indicative of the results
that may be expected for the year ending December 31, 2002.

On March 31, 2002, the Company  purchased from Dynex Capital,  Inc., its parent,
10,000 shares of common stock, representing 100% ownership, of FASI.

Certain reclassifications have been made to the financial statements for 2001 to
conform to the presentation for 2002.


NOTE 2 -- COLLATERAL FOR COLLATERALIZED BONDS

Collateral for collateralized bonds consists of loans and debt securities backed
primarily by  adjustable-rate  and  fixed-rate  mortgage  loans secured by first
liens on single family residential housing and manufactured  housing installment
loans  secured  by a UCC  filing.  Loans are  reported  at  amortized  cost with
established  provisions for estimated losses.  Debt securities are available for
sale and are, therefore,  marked to market according to SFAS No. 115 "Accounting
for Certain  Investments  in Debt and Equity  Securities."  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 following table  summarizes the components of collateral for  collateralized
bonds as of September 30, 2002 and December 31, 2001. Debt securities pledged as
collateral for collateralized  bonds are considered  available for sale, and are
therefore recorded at fair value.

<TABLE>
<CAPTION>
------------------------------------------------------ --------------------- ----------------------
                                                          September 30,          December 31,
                                                              2002                   2001
------------------------------------------------------ --------------------- ----------------------

                    <S>                                        <C>                     <C>
   Loans, at amortized cost                              $      1,093,422        $   1,192,109
   Debt securities, at fair value                                 350,119              457,715
                                                                1,443,541            1,649,824

  Reserve for loan losses                                         (14,927)             (15,364)
------------------------------------------------------ --------------------- ----------------------
                                                         $      1,428,614        $   1,634,460
------------------------------------------------------ --------------------- ----------------------
</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, 2002:

<TABLE>
<CAPTION>
        ------------------------- ------------------ ----------------- ----------------- ------------------
                                                          Gross              Gross           Estimated
                                      Amortized         Unrealized         Unrealized          Fair
                                        Cost               Gains             Losses            Value
        ------------------------- ------------------ ----------------- ----------------- ------------------
                   <S>                     <C>                <C>               <C>               <C>
            Debt securities         $   352,225                  -       $    (2,106)      $   350,119
        ------------------------- ------------------ ----------------- ----------------- ------------------
</TABLE>


NOTE 3 -- FAIR VALUE

The  Company  estimates  fair  value for its  financial  instruments,  primarily
collateral for  collateralized  bonds,  by calculating  the present value of the
projected net cash flows of the  instruments  using  estimated  market  discount
rates,  prepayment  rates and credit loss  assumptions.  Discount rates used are
those  management  believes would be used by willing  buyers of these  financial
instruments  at  prevailing   market  rates.  The  discount  rate  used  in  the
determination of fair value of the collateral for  collateralized  bonds at both
September 30, 2002 and December 31, 2001 was 16%. Prepayment rate assumptions at
September  30,  2002,  and  December  31,  2001,  were  generally at a "constant
prepayment  rate,"  or CPR.  The CPR for  collateral  for  collateralized  bonds
consisting of  single-family  mortgage  loans,  ranged from 35%-45% for 2002 and
35%-60% for 2001. The CPR for collateral for collateralized  bonds consisting of
manufactured  housing  loans,  ranged from 11%-12% for 2002 and 9%-10% for 2001.
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.  Credit loss  assumptions vary depending on the
collateral  pledged,  and  are  based  in  part  on  the  actual  credit  losses
experienced for the prior six-month period and in part on management's  estimate
of future credit losses based on the losses  experienced on similar loans in the
marketplace.  The cash flows for the  collateral for  collateralized  bonds were
projected to the estimated date that the security could be called and retired by
the  Company if there is economic  value to the Company in calling and  retiring
the security.

Variations  in  market  discount  rates,   prepayment   rates  and  credit  loss
assumptions  may  materially  impact the resulting  fair values of the Company's
financial  instruments.   Since  the  fair  value  of  the  Company's  financial
instruments is based on estimates, actual gains and losses recognized may differ
from those estimates recorded in the unaudited condensed  consolidated financial
statements.


NOTE 4 - ALLOWANCE FOR LOSSES

The  following  table  summarizes  the activity for the  allowance for losses on
collateral  for  collateralized  bonds  and  loans  for the  nine  months  ended
September 30, 2002.

------------------------------------------------------ -----------------
                                                             2002
------------------------------------------------------ -----------------
Beginning balance                                        $    15,364
Provision for losses                                          16,120
Losses charged-off, net of recoveries                        (16,467)
------------------------------------------------------ -----------------
Ending balance                                           $    15,017
------------------------------------------------------ -----------------

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
"overcollateralization"), excluding price premiums and discounts and hedge gains
and  losses.   The  allowance   for  losses  is  included  in   collateral   for
collateralized bonds in the accompanying balance sheets.


NOTE 5 -- RESTATEMENT OF FINANCIAL STATEMENTS

Subsequent  to the issuance of its financial  statements  for the three and nine
month periods ended  September 30, 2001, the Company  determined that the assets
previously  reported  as debt  securities  subject to the  requirements  of SFAS
No.115,  " Accounting  for Certain  Investments  in Debt and Equity  Securities"
were, in fact, collateralized borrowings,  where the collateral being pledged as
securities were loans that should have been accounted for under the requirements
of SFAS No. 5, "Accounting for  Contingencies"  or SFAS No. 114,  "Accounting by
Creditors for  Impairment of a Loan." As a result,  the  accompanying  condensed
consolidated  financial  statements  for the three and nine month  periods ended
September 30, 2001 have been restated  from the amounts  previously  reported to
correct the accounting for these investments.

A summary of the significant effects of the restatement is as follows:

<TABLE>
<CAPTION>
------------------------- ---------------------------------------- --- ------------------------------------
                                    Three Months Ended                          Nine Months Ended
                                    September 30, 2001                         September 30, 2001
                          ----------------------------------------     ------------------------------------
                            (As Previously                              (As Previously
                              Reported)            (As Restated)          Reported)         (As Restated)
------------------------- -------------------     ----------------     -----------------    ---------------
          <S>                      <C>                   <C>                   <C>                <C>
Provision for losses        $    (13,996)           $  (12,213)            $ (26,672)         $ (21,323)
Net interest margin               (4,184)               (2,401)                2,360              7,709
Impairment charges                     -                (1,783)               (3,566)            (5,349)
------------------------- ------------------- --- ---------------- --- ----------------- -- ---------------
</TABLE>

This  restatement had no effect on income (loss) before  extraordinary  items or
net income (loss).


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

As  discussed  in  Note 5 to the  condensed  consolidated  financial  statements
included in Item 1, the Company has restated its  financial  statements  for the
three and nine month periods ended September 30, 2001. The following  management
discussion and analysis takes into account the effects of the restatement.

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

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

                               FINANCIAL CONDITION

<TABLE>
<CAPTION>
--------------------------------------------------- ------------------ ---- -------------------
                                                      September 30,            December 31,
(amounts in thousands)                                    2002                     2001
--------------------------------------------------- ------------------ ---- -------------------
                  <S>                                      <C>                      <C>
Collateral for collateralized bonds                  $   1,428,614            $   1,634,460
Non-recourse debt - collateralized bonds                 1,373,631                1,542,924
Shareholder's equity                                        64,639                   95,971

Collateralized bond series outstanding                           4                        5
--------------------------------------------------- ------------------ ---- -------------------
</TABLE>

Collateral for collateralized bonds
As of  December  31,  2001,  the Company  had 5 series of  collateralized  bonds
outstanding.   As  of  September   30,  2002,   the  Company  had  4  series  of
collateralized  bonds  outstanding.  The  collateral  for  collateralized  bonds
decreased  to $1.4  billion at  September  30, 2002  compared to $1.6 billion at
December 31, 2001. This decrease of $206 million is primarily the result of $324
million in paydowns on the collateral, impairment losses of $22 million, and $12
million of impaired loans  reclassified to "Loans".  These were partially offset
by $155 million of additional collateral acquired from IHC in April 2002.

Non-recourse debt - collateralized bonds
Collateralized bonds decreased to $1.37 billion at September 30, 2002 from $1.54
billion at December  31, 2001 as a result of $345.5  million in paydowns  during
the nine months ended  September 30, 2002 and the call and  retirement of $430.2
million of bonds.  These were partially offset by the issuance of $605.3 million
in bonds in a securitization completed in April 2002.

Shareholder's Equity
Shareholder's equity decreased to $64.6 million at September 30, 2002 from $96.0
million at December  31, 2001.  This  decrease  was  primarily  the result of an
increase   of   $5.3   million   in   net   unrealized   loss   on   investments
available-for-sale,  a $6.0  receivable  from  affiliates  and a  $24.1  million
capital  distribution  to IHC  during  the  period  for the  nine  months  ended
September 30, 2002, offset by net income of $4.2 million.


                              RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                 Three Months Ended                    Nine Months Ended
                                                    September 30,                        September 30,
                                          ----------------------------------  ------------------------------------
(amounts in thousands)                         2002              2001               2002               2001
----------------------------------------------------------------------------  ------------------------------------

<S>                                                 <C>               <C>               <C>                <C>
Interest income                             $     25,744      $     34,587      $     80,522       $    119,314
Interest expense on collateralized bonds          16,150            24,775            50,498             90,282
Provision for losses                               5,486            12,213            16,643             21,323
Net interest margin                                4,108            (2,401)           13,381              7,709
Net income (loss)                                  1,843            (5,197)            4,169              1,347
------------------------------------------------------------------------------------------------------------------
</TABLE>

Interest  income on the collateral for  collateralized  bonds decreased to $25.7
million from $34.6 million for the three month periods ended  September 30, 2002
and 2001,  respectively.  Interest  income on the collateral for  collateralized
bonds  decreased to $80.5  million for the nine months ended  September 30, 2002
from $119.3 million for the same period in 2001.  These decreases were primarily
a result of  prepayments  and paydowns on  principal  and lower  interest  rates
between the respective periods.

Interest expense on  collateralized  bonds decreased to $16.2 million from $24.8
million  for the  three  month  periods  ended  September  30,  2002  and  2001,
respectively.  Interest  expense  on  collateralized  bonds  decreased  to $50.5
million for the nine months ended  September 30, 2002 from $90.3 million for the
nine months ended September 30, 2001.  These  decreases  resulted almost equally
from the decline in collateralized  bonds due to prepayments and paydowns on the
related collateral for  collateralized  bonds coupled with an overall decline in
the cost of funds on the collateralized bonds.

Provision for losses  decreased to $5.4 million from $12.2 million for the three
month periods ended  September  30, 2002 and 2001,  respectively.  Provision for
losses  decreased to $16.6 million for the nine month period ended September 30,
2002 from  $21.3  million  for the same  period in 2001.  Provision  for  losses
decreased  because,  in 2001,  a large  adjustment  to reserve for losses on the
Company's  manufactured  housing loan portfolio was recorded.  In both years the
provision  is  primarily  to reserve for  probable  losses on various loan pools
pledged as collateral  for  collateralized  bonds where the Company has retained
credit risk,  principally the Company's  investment in manufactured housing loan
pools.

Net  interest  margin  increased  to $4.1  million  from $(2.4)  million for the
three-month  periods  ended  September  30,  2002 and  2001,  respectively.  Net
interest margin  increased to $13.4 million from $7.7 million for the nine-month
periods ended  September 30, 2002 and 2001,  respectively.  These increases were
primarily a result of a decrease in provision  for losses and reduced  borrowing
costs on  collateralized  bonds  outstanding  partially  offset by a decline  in
interest earning assets during these periods.

Credit Exposures
With collateralized bond structures, the Company retains credit risk relative to
the  amount of  over-collateralization  required  in  conjunction  with the bond
issuance. Losses are generally first applied to the over-collateralized  amount,
or in some instances surplus cash and then the over-collateralized  amount, with
any losses in excess of that amount  borne by the bond insurer or the holders of
the  collateralized  bonds.  The Company only incurs credit losses to the extent
that  losses  are  incurred  in the  repossession,  foreclosure  and sale of the
underlying  collateral.  Such losses generally equal the excess of the principal
amount  outstanding,  less any proceeds from mortgage or hazard insurance,  over
the liquidation value of the collateral. To compensate the Company for retaining
this loss  exposure,  the  Company  generally  receives  an excess  yield on the
collateralized  loans  relative  to the yield on the  collateralized  bonds.  At
September 30, 2002,  the Company  retained  $105 million in aggregate  principal
amount of  over-collateralization.  The Company had  reserves,  or otherwise had
provided  coverage for credit losses in the amount of $14.9 million at September
30,  2002.  During the first  nine  months of 2002,  the  Company  provided  for
additional  reserves  of $16.6  million  and  incurred  credit  losses  of $16.8
million.

Other  forms of credit  enhancement  that  benefit the  Company,  based upon the
performance of the underlying loans, may provide  additional  protection against
losses. These additional protections include loss reimbursement  guarantees with
a remaining balance of $30.2 and a remaining deductible aggregating $1.5 million
on $100 million of securitized single family mortgage loans which are subject to
such  reimbursement  agreements and $305.7 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 42% on
such policies before the Company would incur losses.

Other Matters
At September  30,  2002,  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.
Net interest income comprises the primary  component of the Company's  earnings.
As a result,  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 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.

Approximately $555 million of the Company's  collateral for collateralized bonds
as of September 30, 2002, 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 74% and 15% 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.

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, 2002,  approximately $894 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.

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 instantaneous,  parallel,  and sustained interest rate movements in 100 basis
point  increments.  The Company  estimates its net interest margin cash flow for
the next twenty-four  months assuming no changes in interest rates from those at
period end. 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 net interest
income.

The following  table  summarizes  the  Company's  net interest  margin cash flow
sensitivity  analysis  as  of  September  30,  2002.  This  analysis  represents
management's  estimate of the percentage change in net interest margin cash flow
given a parallel  shift in  interest  rates.  The  "Base"  case  represents  the
interest rate  environment  as it existed as of September 30, 2002. 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 borrowers'  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.
The extent to which  borrowers  utilize the ability to exercise their option may
cause actual results to significantly differ from the analysis.

------------------------- --------------------
      Basis Point           % Change in Net
  Increase (Decrease)       Interest Margin
   in Interest Rates        From Base Case
------------------------- --------------------
         +200                  (15.7)%
         +100                   (8.0)%
         Base                     -
         -100                   10.5%
         -200                   23.1%
------------------------ ---------------------


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings:

         None

Item 4.  Controls And Procedures

         (a) Evaluation of disclosure controls and procedures.

             As required by Rule 13a-15 under the Exchange  Act,  within 90
             days prior to the filing  date of this  quarterly  report (the
             "Evaluation  Date"),  the Company carried out an evaluation of
             the effectiveness of the design and operation of the Company's
             disclosure  controls  and  procedures.   This  evaluation  was
             carried out under the supervision  and with the  participation
             of the Company's management.  Based upon that evaluation,  the
             Company's  management  concluded that the Company's disclosure
             controls and procedures are effective. Disclosure controls and
             procedures are controls and other procedures that are designed
             to ensure that  information  required to be  disclosed  in the
             Company's reports filed or submitted under the Exchange Act is
             recorded,  processed,  summarized and reported within the time
             periods  specified  in the SEC's  rules and forms.  Disclosure
             controls and procedures include, without limitation,  controls
             and procedures designed to ensure that information required to
             be disclosed in the Company's reports filed under the Exchange
             Act is accumulated and  communicated to management,  including
             the  Company's  management,  as  appropriate,  to allow timely
             decisions regarding required disclosures.

         (b) Changes in internal controls.

             There were no  significant  changes in the Company's  internal
             controls or in other factors that could  significantly  affect
             the Company's  internal controls  subsequent to the Evaluation
             Date, nor any significant  deficiencies or material weaknesses
             in such internal controls requiring corrective actions.


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

              4.5    Copy of the Series 10 Indenture Supplement,  dated as
                     of  December 1, 1997,  by and between the  Registrant
                     and Texas  Commerce  Bank  National  Association,  as
                     Trustee  (related  schedules  and exhibits  available
                     upon request of the Trustee). (Incorporated herein by
                     reference to Exhibit of  Registrant's  Current Report
                     on Form 8-K, filed January 6, 1998).

              4.6    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).

              4.7    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).

              4.8    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).

              4.9    Copy of the Series 14 Indenture Supplement,  dated as
                     of  November 1, 1999,  by and between the  Registrant
                     and Texas  Commerce  Bank  National  Association,  as
                     Trustee  (related  schedules  and exhibits  available
                     upon request of the Trustee). (Incorporated herein by
                     reference to Exhibit of  Registrant's  Current Report
                     on Form 8-K, filed November 12, 1999).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

              99.17  Copy of  Certification  of  Chief  Financial  Officer
                     Pursuant to Section 906 of the  Sarbanes-Oxley Act of
                     2002 (Incorporated  herein by reference to Exhibit to
                     the  Registrant's  Current  Report on Form 8-K, filed
                     August 28, 2002).

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

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

         (b)  Reports on Form 8-K

              Current  report on Form 8-K as filed  with the  Commission  on
              August 28, 2002,  regarding  Certification  of Chief Financial
              Officer pursuant to Section 906 of the  Sarbanes-Oxley  Act of
              2002 Item 9 Regulation  FD disclosure  for in connection  with
              the Quarterly Report of Merit  Securities  Corporation on Form
              10-Q for the quarter ended June 30, 2002.

              Current  report on Form 8-K as filed  with the  Commission  on
              September 19, 2002, regarding Certification of Chief Financial
              Officer pursuant to Section 906 of the  Sarbanes-Oxley  Act of
              2002 Item 9 Regulation  FD disclosure  for in connection  with
              the  Annual  Report of Merit  Securities  Corporation  on Form
                  10-K/A for the fiscal year ended December 31, 2001.

              Current  report on Form 8-K as filed  with the  Commission  on
              October 4, 2002,  regarding  Certification  of Chief Financial
              Officer pursuant to Section 906 of the  Sarbanes-Oxley  Act of
              2002 Item 9 Regulation  FD disclosure  for in connection  with
              the Quarterly Report of Merit  Securities  Corporation on Form
              10-Q/A for the quarter ended March 31, 2002.
<PAGE>


                                   SIGNATURES

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

                                  MERIT SECURITIES CORPORATION



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



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

Dated:  November 14, 2002
<PAGE>


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

I, Stephen J. Benedetti, certify that:

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

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

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

     4.       The registrant's  other certifying  officers and I are responsible
              for   establishing   and  maintaining   disclosure   controls  and
              procedures  (as defined in Exchange  Act Rules  13a-14 and 15d-14)
              for the registrant and we have:

        (a)   designed such  disclosure  controls and  procedures 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  as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

        (c)   presented  in this  quarterly  report  our  conclusions  about the
              effectiveness  of the disclosure  controls and procedures based on
              our evaluation as of the Evaluation Date;

     5.       The registrant's  other certifying  officers and I have disclosed,
              based on our most recent evaluation,  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  in  the  design  or  operation  of
              internal  controls which could adversely  affect the  registrant's
              ability to record,  process,  summarize and report  financial data
              and have  identified  for the  registrant's  auditors any material
              weaknesses in internal controls; and

        (b)   any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal controls; and

     6.       The registrant's other certifying officers and I have indicated in
              this  quarterly  report  whether  or not  there  were  significant
              changes  in  internal  controls  or in other  factors  that  could
              significantly  affect internal controls  subsequent to the date of
              our most recent evaluation,  including any corrective actions with
              regard to significant deficiencies and material weaknesses.




Date: November 14, 2002                         /s/ Stephen J. Benedetti
                                                -----------------------------
                                                Stephen J. Benedetti
                                                Principal Executive Officer
<PAGE>
                                  CERTIFICATION
                          PURSUANT TO 17 CFR 240.13a-14
                                PROMULGATED UNDER
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen J. Benedetti, certify that:

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

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

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

        4.    The registrant's  other certifying  officers and I are responsible
              for   establishing   and  maintaining   disclosure   controls  and
              procedures  (as defined in Exchange  Act Rules  13a-14 and 15d-14)
              for the registrant and we have:

         (a)  designed such  disclosure  controls and  procedures 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  as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

         (c)  presented  in this  quarterly  report  our  conclusions  about the
              effectiveness  of the disclosure  controls and procedures based on
              our evaluation as of the Evaluation Date;

        5.    The registrant's  other certifying  officers and I have disclosed,
              based on our most recent evaluation,  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  in  the  design  or  operation  of
              internal  controls which could adversely  affect the  registrant's
              ability to record,  process,  summarize and report  financial data
              and have  identified  for the  registrant's  auditors any material
              weaknesses in internal controls; and

          (b) any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal controls; and

        6.    The registrant's other certifying officers and I have indicated in
              this  quarterly  report  whether  or not  there  were  significant
              changes  in  internal  controls  or in other  factors  that  could
              significantly  affect internal controls  subsequent to the date of
              our most recent evaluation,  including any corrective actions with
              regard to significant deficiencies and material weaknesses.

Date: November 14, 2002
                                                /s/ Stephen J. Benedetti
                                                Stephen J. Benedetti
                                                Chief Financial Officer
<PAGE>
                                                                   Exhibit 99.18




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


    In connection with the Quarterly Report of Merit Securities Corporation (the
"Company") on Form 10-Q for the quarter ending September 30, 2002, 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.



                                               /s/ Stephen J. Benedetti
                                              Stephen J. Benedetti
                                              Principal Executive Officer
                                              November 14, 2002
<PAGE>
                                                                   Exhibit 99.19




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


    In connection with the Quarterly Report of Merit Securities Corporation (the
"Company") on Form 10-Q for the quarter ending September 30, 2002, as filed with
the Securities  and Exchange  Commission on the date hereof (the  "Report"),  I,
Stephen J.  Benedetti,  the Chief  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.



                                            /s/ Stephen J. Benedetti
                                           Stephen J. Benedetti
                                           Chief Financial Officer
                                           November 14, 2002