UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549
                           Form 10-K

[ X ]     ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
       THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1998

[   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
     THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

               Commission File number 333-30759-08

 AMRESCO Residential Securities Corporation Mortgage Loan Trust 1998-3

          New York                           Application Pending
  (State of other jurisdiction                (I.R.S. Employer
              of                              Identification No.)
incorporation or organization)     
                                   
 c/o Norwest Bank Minnesota,       
     National Association                        55479-1026
  Sixth Street and Marquette Avenue              (Zip Code)
       Minneapolis, MN
(Address of principal executive offices)

Registrant's telephone number, including area code:  (612) 667-8058

Securities registered pursuant to Section 12(b) of the Act:

             None                               None
    (Title of each class)            (Name of each exchange on
                                         which registered)
                              None
                        (Title of class)

      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 90 days.  Yes   X   No      .

      Indicate  by check mark if disclosure of delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and will not be contained, to the best of registrant's knowledge,
in  definitive  proxy or information statements  incorporated  by
reference in Part III of this Form 10-K or any amendment to  this
Form 10-K.  Not applicable.

     State the aggregate market value of the voting stock held by
non-affiliates of registrant.  The aggregate market  value  shall
be  computed  by reference to the price at which  the  stock  was
sold,  or the average bid and asked prices of such stock,  as  of
specified  date within 60 days prior to the date of filing.   Not
applicable.

Number  of shares of common stock outstanding as of December  31, 1998.
  Not applicable.

      Documents Incorporated by Reference.  Not applicable.
                                
                                
                             PART I
ITEM 1 - BUSINESS

     Not Applicable.

ITEM 2 - PROPERTIES

     Not Applicable.

ITEM 3 - LEGAL PROCEEDINGS

     AMRESCO Residential Securities Corporation (the "Depositor")
is  not aware of any material pending legal proceedings involving
either  the  AMRESCO Residential Securities Corporation  Mortgage
Loan  Trust  1998-3  (the "Trust") established  pursuant  to  the
Pooling  and Servicing Agreement dated as of September  1,  1998,
among the Depositor, AMRESCO Residential Capital Markets, Inc. in
its  capacity as seller, AMRESCO Residential Mortgage Corporation
as  the  servicer  (the "Servicer"), and Norwest Bank  Minnesota,
National Association in its capacity as trustee.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No  matter  has been submitted to a vote of the holders  of
beneficial  interests in the Trust through  the  solicitation  of
proxies or otherwise.

                            PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

      To  the  best  knowledge  of the  Depositor,  there  is  no
established public trading market for any beneficial interests in
the Trust.

      All  of  the Class A-7 and A-8 Certificates issued  by  the
Trust  are held by the Depository Trust Company ("DTC") which  in
turn maintains records of holders of beneficial interests in such
Certificates.   Based on information obtained  from  DTC,  as  of
January  12,  1999,  there  were 10  holders  of  the  Class  A-7
Certificates and 10 holders of the Class A-8 Certificates.

ITEM 6 - SELECTED FINANCIAL DATA

     Not applicable.

ITEM  7  -  MANAGEMENT'S  DISCUSSION AND  ANALYSIS  OF  FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

     Not applicable.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The  gross servicing compensation paid to the Servicer  for
the year ended December 31, 1998 was $1,553,997.

ITEM  9  -  CHANGES  IN  AND DISAGREEMENTS  WITH  ACCOUNTANTS  ON
ACCOUNTING AND FINANCIAL DISCLOSURE

      There  were  no changes of accountants or disagreements  on
accounting  or financial disclosures between the Issuer  and  its
accountants.

                            PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Not applicable.

ITEM 11 - EXECUTIVE COMPENSATION

     Not applicable.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth (i) the name and address  of
each  entity  owning  more than 5% of the  outstanding  principal
amount  of each Class of Class A Certificates of the Trust;  (ii)
the  principal amount of the Class of Certificates owned by  each
and  (iii) the percent that the principal amount of the Class  of
Certificates  owned by such entity represents of the  outstanding
principal  amount of such Class of Certificates.  The information
set forth in the table for the Class A Certificates is based upon
information  obtained  from  DTC  and  represents  ownership   of
beneficial  interest  in  the  Certificates  held  by  DTC.   The
Depositor is not aware of any Schedules 13D or 13G filed with the
Securities   and   Exchange  Commission   in   respect   of   the
Certificates.

                                                 Amount Owned
           Name and Address                    All Dollar Amounts Are  
                                        Class   in Thousands 

                                                Principal  Percent
                                                            
Bank Of New York (The)                  A-7     35,000,000    8%
925 Patterson Plank Rd.                            
Secaucus, NJ 07094
                                                            
Chase Manhattan Bank                    A-7    151,700,000   35%
4 New York Plaza                                  
13th Floor
New York, NY 10004
                                                            
Citibank, N.A.                          A-7     46,000,000   11%
P.O. Box 30576                                     
Tampa, FL 33630-3576
                                                            
State Street Bank And Trust Company     A-7    168,357,000   39%
Global Corp Action Dept JAB5W                     
P.P. Box 1631
Boston, MA 02105-1631
                                                            
BNY/ITC - Dealers Clearance Special     A-8     11,500,000    8%
C/O N.A. Schapiro & Co. In.                        
One Chase Manhattan Plaza, 58th Floor
New York, NY 10005
                                                            
Chase Manhattan Bank                    A-8     70,975,000   50%
4 New York Plaza                                   
New York, NY 10004
                                                            
Morgan Stanley & Co. Incorporated       A-8     13,500,000    9%
One Pierrepont Plaza, 7th Floor                    
Brooklyn, NY 11201
                                                            
Northern Trust Company (The)            A-8     16,650,000   12%
801 S. Canal C-IN                                  
Chicago, IL 60607
                                                            
State Street Bank And Trust Company     A-8     17,500,000   12%
Global Corp Action Dept JAB5W                      
P.O. Box 1631
Boston, MA 02105-1631
                                                            


ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None

                            PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

      (a)   The  following documents are filed as part of this report:

     1.   Financial Statements:

          Not applicable.

     2.   Financial Statement Schedules:

          Not applicable.

     3.   Exhibits:


           Exhibit No.                      Description
            99.1                Statement of Compliance of the Servicer - 
                                AMRESCO Residential Mortgage Corporation
            99.2                Annual Report of Independent Accountants
                                with respect to the Servicer's overall
                                servicing operations - Deloitte & Touche LLP

(b)  Reports on Form 8-K.

     Reports on Form 8-K have been filed by the Issuer during the
     period covered by this report.

                                   Items Reported/Financial
        Date of Reports on             Statements Filed
             Form 8-K
       October 14, 1998     Acquisition or Disposition of Assets.
                            Underwriting and Pooling and Servicing
                            Agreements. Description of Mortgage
                            Loans.
       November 5, 1998     Trustee's Monthly Report for the
                            September Monthly Period.
       December 7, 1998     Trustee's Monthly Report for the
                            October Monthly Period.
       January 6, 1999      Trustee's Monthly Report for the
                            November Monthly Period.
       February 3, 1999     Trustee's Monthly Report for the
                            December Monthly Period.

                           SIGNATURES

      Pursuant to the requirements of Section 13 and 15(d) 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.

               AMRESCO RESIDENTIAL SECURITIES CORPORATION
               on behalf of AMRESCO Residential Securities Corporation
               Mortgage Loan Trust 1998-3


                    By:  /s/ Ron B. Kirkland
                    Name:  Ron B. Kirkland
                    Title: Vice President and Chief Accounting Officer


Date:  March 16, 1999


                       INDEX TO EXHIBITS
                           Item 14(C)


             Exhibit No.                   Description
               99.1              Statement of Compliance of the
                                 Servicer - AMRESCO Residential
                                 Mortgage Corporation
               99.2              Annual Report of Independent
                                 Accountants with respect to
                                 the Servicer's overall
                                 servicing operations -
                                 Deloitte & Touche LLP