2


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                                  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 March 31, 2003

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


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

                         Commission file number 33-83524

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

4551 Cox Road, Suite 300, Glen Allen, Virginia                    23060
   (Address of principal executive offices)                    (Zip Code)

                          (804) 217-5800 (Registrant's
                     telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past ninety days.
         |X| Yes  |_| No

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

As of May 10, 2003, the latest practicable date, there were 1,000 shares of
Merit Securities Corporation common stock outstanding.

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

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                                        i

<PAGE>

                          MERIT SECURITIES CORPORATION
                                    FORM 10-Q
                                      INDEX
<TABLE>
<CAPTION>

                                                                                                     Page Number
<S>                   <C>                                                                               <C>
PART I.           FINANCIAL INFORMATION

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

                      Condensed Consolidated Statements of Operations for the three months ended
                      March 31, 2003 and 2002 (unaudited).................................................2

                      Condensed Consolidated Statements of Cash Flows for the three months ended
                      March 31, 2003 and 2002 (unaudited).................................................3

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

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

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

Item 4.           Controls and Procedures................................................................10


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
                    (amounts in thousands except share data)
<TABLE>
<CAPTION>


                                                          March 31,           December 31,
                                                            2003                  2002
                                                        ----------------    ------------------

<S>                                                            <C>                 <C>
ASSETS:
   Collateral for collateralized bonds:
     Loans                                                $    954,426        $     1,017,446
     Debt securities, available-for-sale                       305,096                323,791
   Other loans                                                   5,786                  6,505
   Asset-backed Securities, held-to-maturity                     1,386                  1,644
   Due from affiliates, net                                     18,233                 11,507
                                                        ----------------    ------------------
                                                          $  1,284,927        $     1,360,893
                                                        ================    ==================

LIABILITIES AND SHAREHOLDER'S EQUITY

LIABILITIES:
   Non-recourse debt - collateralized bonds               $  1,220,231        $     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                          464                   (134)
   Retained earnings                                            (4,452)                (6,770)
                                                        ----------------    ------------------
                                                                64,696                 61,780
                                                        ----------------    ------------------
                                                          $  1,284,927        $     1,360,893
                                                        ================    ==================
</TABLE>
See notes to unaudited condensed financial statements.



                                       1
<PAGE>




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

                                                        Three Months Ended
                                                            March 31,
                                                   -----------------------------
                                                       2003            2002
                                                   -------------   -------------

Interest income:
     Collateral for collateralized bonds           $   22,190      $    26,815
     Other loans                                           38                -
     Asset-backed securities, held-to-maturity             62                -
                                                    ------------     -----------
                                                       22,290           26,815
                                                    ------------     -----------

Interest and related expense:
     Interest expense on collateralized bonds          13,353           16,869
     Other collateralized bond expense                    234              435
                                                   -------------  --------------
                                                       13,587           17,304
                                                   -------------  --------------

Net interest margin before provision for losses         8,703            9,511
Provision for losses                                   (5,003)          (5,877)
                                                   -------------  --------------
Net margin                                              3,700            3,634
Impairment charges                                     (1,382)          (1,961)
                                                   -------------  --------------
Net income                                              2,318            1,673
Other comprehensive income                                464              108
                                                   -------------  --------------
Comprehensive Income                               $     2,782    $      1,781
                                                   =============  ==============

See notes to unaudited condensed financial statements.



                                       2
<PAGE>



MERIT SECURITIES CORPORATION
Condensed Consolidated Statements of Cash Flows, Unaudited
(amounts in thousands)


                                                 -------------------------------
                                                       Three Months Ended
                                                            March 31,
                                                 -------------------------------
                                                      2003                2002
                                                 ------------         ----------

Operating activities:
   Net income                                    $   2,318            $   1,673
   Adjustments to reconcile net income to net
    cash provided by operating activities:
       Impairment charges                            1,382                1,961
       Provision for losses                          5,003                5,877
       Amortization, net                             1,018                2,903
       Other                                           909                1,073
                                                 ------------         ----------
   Net cash provided by operating activities        10,630               13,487
                                                 ------------         ----------

Investing activities:
     Principal payments on collateral               76,070              145,578
                                                 ------------         ----------
       Net cash provided by investing activities    76,070              145,578
                                                 ------------         ----------

Financing activities:
   Principal payments on collateralized bonds      (79,666)            (148,325)
   Payments to affiliates                           (7,034)                 582
   Dividends and capital distributions                   -              (11,322)
                                                 ------------         ----------
     Net cash used in financing activities         (86,700)            (159,065)
                                                 ------------         ----------

Net decrease in cash                                     -                    -
Cash, beginning of period                                -                    -
                                                 ------------         ----------

Cash, end of period                              $       -            $       -
                                                 ------------         ----------
Supplemental disclosure of cash flow information:
   Cash paid for interest                        $  13,181            $  16,256
                                                 ------------         ----------


See notes to unaudited condensed consolidated financial statements.




                                       3
<PAGE>




MERIT SECURITIES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2003
(amounts in thousands except share data)

NOTE 1 -- BASIS OF PRESENTATION

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

Certain amounts for 2002 have been  reclassified to conform to the  presentation
for 2003.


NOTE 2 -- COLLATERAL FOR COLLATERALIZED BONDS

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

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

                                       4
<PAGE>

The following table summarizes the components of collateral for  collateralized
bonds as of March 31, 2003 and December 31, 2002:

--------------------------------- ------------------------ ---------------------
                                        March 31, 2003         December 31, 2002
--------------------------------- ------------------------ ---------------------
   Loans, at amortized cost         $       975,377           $      1,038,146
   Allowance for loan losses                (20,951)                   (20,700)
--------------------------------- ------------------------ ---------------------
                                            954,426                  1,017,446
   Debt Securities, at fair value           305,096                    323,791
--------------------------------- ------------------------ ---------------------
                                    $     1,259,522           $      1,341,237
--------------------------------- ------------------------ ---------------------

The following table summarizes the amortized cost basis,  gross unrealized gains
and losses and estimated fair value of debt securities pledged as collateral for
collateralized bonds as of March 31, 2003 and December 31, 2002:

--------------------------------------- --------------------- ------------------
                                             March 31, 2003    December 31, 2002
--------------------------------------- --------------------- ------------------
   Debt securities, at amortized cost     $       304,482       $       323,728
   Gross unrealized gains                             614                    63
--------------------------------------- --------------------- ------------------
   Estimated fair value                   $       305,096       $       323,791
--------------------------------------- --------------------- ------------------


NOTE 3 -- DUE FROM AFFILIATES, NET

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


NOTE 4 -- FAIR VALUE

Securities  classified  as  available-for-sale  are carried in the  accompanying
financial  statements  at estimated  fair value.  The Company uses  estimates in
establishing fair value for its available-for-sale securities. 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
March 31, 2003 and December 31, 2002.  Prepayment rate  assumptions at March 31,
2003, and December 31, 2002, were generally at a "constant  prepayment rate," or
CPR  ranging  from  30%-45%  for  both  2003  and  2002,   for   collateral  for
collateralized  bonds consisting of securities backed by single-family  mortgage
loans,  and a CPR  equivalent of 8% 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 is based on estimates, actual gains and losses recognized may differ
from those estimates recorded in the consolidated financial statements.


                                       5
<PAGE>

NOTE 5 -- ALLOWANCE FOR LOAN LOSSES

The following table summarizes the activity for the allowance for loan losses on
loans  within  collateral  for  collateralized  bonds for the three months ended
March 31, 2003 and March 31, 2002:

---------------------------------------------------- --------------- -----------
                                                           2003         2002
---------------------------------------------------- --------------- -----------
   Beginning balance ...............................     $ 20,700      $ 15,364
   Provision for losses ............................        5,003         5,877
   Losses charged-off, net of recoveries ...........       (4,752)       (4,882)
----------------------------------------------------     --------      --------
   Ending balance ..................................     $ 20,951      $ 16,359
----------------------------------------------------     --------      --------

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 loan losses is included in loans within collateral
for collateralized bonds in the accompanying balance sheets.


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

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

After  payment  of  the  expenses  of an  offering  and  certain  administrative
expenses,  the net  proceeds  from an offering of Bonds will be used to purchase
Collateral  from IHC or various  third  parties.  IHC can be expected to use the
proceeds  from the  collateral  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

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

Collateral for collateralized bonds .....................$1,259,522   $1,341,237
Other loans .............................................     5,786        6,505
Asset-backed Securities .................................     1,386        1,644
Non-recourse debt collateralized bonds .................. 1,220,231    1,299,113
Shareholder's equity ....................................    64,696       61,780

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

Collateral for collateralized bonds

As of both March 31, 2003 and  December  31,  2002,  the Company had 4 series of
collateralized  bonds  outstanding.  The  collateral  for  collateralized  bonds
decreased  to $1.26  billion  at March 31,  2003  compared  to $1.34  billion at
December 31, 2002. This decrease of $81.7 million is the result of $75.0 million
in paydowns on the  collateral,  $5.0 million of increased  provisions  for loan
losses, and $1.5 million of impairment losses on securities.



                                       6
<PAGE>

Other loans

Other loans  decreased  to $5.8  million at March 31, 2003 from $6.5  million at
December 31, 2002. Other loans is composed of non-performing  loans not included
in the  securitization  completed in April 2002 which were reclassified to Other
loans from  collateral for  collateralized  bonds.  This decrease  resulted from
paydowns on the loans of $0.7 million.

Asset-backed Securities

Asset-backed securities decreased to $1.4 million at March 31, 2003, compared to
$1.6  million at December 31,  2002,  as a result of principal  payments of $0.3
million  during  the  year   partially   offset  by  $0.1  million  in  discount
amortization and accrued interest.

Non-recourse debt - collateralized bonds

Collateralized  bonds  decreased  to $1.22  billion at March 31, 2003 from $1.30
billion at December 31, 2002.  This  decrease of $78.9  million is the result of
$79.7 million in paydowns  offset by $0.9 million of amortization of premium and
discounts during the three months ended March 31, 2003.

Shareholder's Equity

Shareholder's  equity  increased  to $64.7  million at March 31, 2003 from $61.8
million at December 31, 2002.  This  increase  was  primarily  the result of net
income of $2.3  million  during the three  months  ended  March 31,  2003 and an
increase in accumulated other comprehensive income of $0.6 million.


                              RESULTS OF OPERATIONS

------------------------------------------------------ -------------------------
                                                          Three Months Ended
                                                                March 31,
------------------------------------------------------ -------------------------
   (amounts in thousands)                                   2003          2002
------------------------------------------------------ ----------- -------------
   Interest income ...........................           $22,290        $26,815
   Interest expense ..........................            13,587         17,304
   Provision for losses ......................             5,003          5,877
   Net interest margin .......................             3,700          3,634
   Impairment charges ........................             1,382          1,961
   Net income ................................             2,318          1,673
--------------------------------------------------------------------------------

Interest income  decreased to $22.3 million for the three months ended March 31,
2003 from $26.8 million for the same period in 2002. This decrease was primarily
a result of paydowns of interest  earning  assets from $1.5 billion at March 31,
2002 to $1.3  billion at March 31,  2003 and lower  interest  rates  between the
respective periods.

Interest and other expense decreased to $13.6 million for the three months ended
March 31, 2003 from $17.3  million for the three  months  ended March 31,  2002.
This  decrease  resulted  from  the  decline  in  collateralized  bonds  due  to
prepayments on the related assets and normal  scheduled bond paydowns as well as
a decrease in interest rates during the period.

Provision for losses  decreased to $5.0 million for the three months ended March
31,  2003 from $5.9  million for the same  period in 2002 due to lower  expected
losses resulting from lower principal balances.

Net  interest  margin for the three months ended March 31, 2003 was $3.7 million
compared  to $3.6  million for the same period in 2002.  This  increase  for the
three months ended March 31, 2003 was the result of an decrease in provision for


                                       7
<PAGE>

losses coupled with reduced borrowing costs on collateralized bonds outstanding,
offset by a decline in interest earning assets.

Impairment  charges  decreased  to $1.4 million for the three months ended March
31,  2003  from  $2.0  million  for the  same  period  in  2002.  Credit  losses
experienced by one security have decreased due to lower principal balances.

Credit Exposures

With collateralized bond structures, the Company retains credit risk relative to
the  amount  of  overcollateralization  required  in  conjunction  with the bond
issuance.  Losses are generally first applied to the overcollateralized  amount,
or in some instances surplus cash and then the overcollaterialized  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 March
31, 2003, the Company  retained $92.1 million in aggregate  principal  amount of
overcollateralization  compared  to $93.6  million at  December  31,  2002.  The
Company had  reserves,  or otherwise  had provided  coverage on $21.0 million at
March 31, 2003.  During the first three months of 2003, the Company provided for
additional reserves of $5.0 million and incurred credit losses of $4.7 million.

Other  forms of credit  enhancement  that  benefit the  Company,  based upon the
performance of the underlying loans, may provide  additional  protection against
losses. These additional protections include loss reimbursement  guarantees with
a remaining balance of $30.2 and a remaining deductible aggregating $1.3 million
on $72.1 million of securitized  single family  mortgage loans which are subject
to such reimbursement agreements and $241.4 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 53% on
such policies before the Company would incur losses.

Other Matters

At March 31, 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.
Net interest income 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 that generates
stable  income  and cash  flow in a  variety  of  interest  rate and  prepayment
environments.

The Company and IHC monitor the  aggregate  cash flow,  projected  net yield and
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.



                                       8
<PAGE>

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  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 cash flow.

The following  table  summarizes  the  Company's  net interest  margin cash flow
sensitivity analysis as of March 31, 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 March 31, 2003. As of March 31, 2003, one-month LIBOR was 1.30%
and  six-month  LIBOR was 1.23%.  The  analysis  is heavily  dependent  upon the
assumptions  used in the model.  Prepayment rate assumptions used were estimates
and were generally at a "constant  prepayment rate", or CPR, ranging from 30% to
70% for collateral for collateralized bonds consisting of single-family mortgage
loans and securities,  and a CPR equivalent ranging from 7% to 8% for collateral
for   collateralized   bonds  consisting  of  manufactured   housing  loans  and
securities.

The effect of changes in future interest rates,  the shape of the yield curve or
the mix of assets and  liabilities  may cause actual  results to differ from the
modeled results. In addition,  certain financial instruments provide a degree of
"optionality." The most significant option affecting the Company's  portfolio is
the borrower's  option to prepay the loans.  The model applies  prepayment  rate
assumptions  representing  management's  estimate  of  prepayment  activity on a
projected basis for each collateral pool in the investment portfolio.  The model
applies the same prepayment rate assumptions for all five cases indicated below.
Given the current composition and performance of the investment  portfolio,  and
the  limitation to  estimating  twenty-four  months of net interest  margin cash
flows,  variations in  prepayment  rate  assumptions  are not expected to have a
material impact on the net interest margin cash flows.  Projected results assume
no additions or  subtractions to the Company's  portfolio,  and no change to the
Company's liability structure. Historically, there have been significant changes
in the Company's assets and liabilities, and there are likely to be such changes
in the future.


          ------------------------ ---------------------
                Basis Point          % Change in Net
          Increase (Decrease) in     Interest Margin
              Interest Rates          from Base Case
          ------------------------ ---------------------

                   +200                  (18.5)%
                   +100                  (10.4)%
                   Base                     -
                   -100                   12.4%
                   -200                   26.3%
          ------------------------ --------------------

Approximately  $471.6 million of the Company's  investment portfolio as of March
31,  2003,  is  comprised  of loans or  securities  that have coupon rates which
adjust over time  (subject to certain  periodic  and  lifetime  limitations)  in
conjunction with changes in short-term interest rates. Approximately 73% and 14%
of  the  adjustable  rate  mortgage   ("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  Constant  Maturity  Treasury  ("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


                                       9
<PAGE>

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 the
Company has entered into such agreements.

The remaining portion of the Company's collateral for collateralized bonds, as
of March 31, 2003, approximately $822.5 million, is comprised of loans that have
coupon rates that are fixed. The Company has limited its interest rate risk on
such collateral primarily through the issuance of fixed-rate collateralized
bonds. Overall, the Company's interest rate risk is primarily related to the
rate of change in short-term interest rates and to the level of short-term
interest rates.


Item 4.  Controls And Procedures

         (a) Evaluation of disclosure controls and procedures.

                  As required  by  Rule 13a-15 under the Exchange Act, 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.


PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings:

         None


Item 5.  Other Information:

         None




                                       10
<PAGE>

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

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

                  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).



                                       11
<PAGE>

                  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  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).

                  99.12    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).

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

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


(b) Reports on Form 8-K

         None.



                                       12
<PAGE>



                                   SIGNATURES

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

                          MERIT SECURITIES CORPORATION



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



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





                                       13
<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
         annual 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.




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



                                       14
<PAGE>



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

I, Kevin J. Sciuk, certify that:

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

     2.  Based on my knowledge, this quarterely 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.




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



                                       15
<PAGE>



                                                                   Exhibit 99.13


                            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 March 31, 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 14, 2003                          By:      /s/ Stephen J. Benedetti
                                                     ---------------------------
                                                     Stephen J. Benedetti
                                                     Principal Executive Officer



                                       16
<PAGE>



                                                                  Exhibit  99.14



                            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 March 31, 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 14, 2003                          By:      /s/ Kevin J. Sciuk
                                                     ---------------------------
                                                     Kevin J. Sciuk
                                                     Principal Financial Officer


                                       17
<PAGE>