[Letterhead of Deloitte & Touche LLP]


Independent Accountants' Report on Applying Agreed-Upon Procedures

December 4, 1996

To the Management of Merrill Lynch Municipal ABS, Inc.
World Financial Center
North Tower, 9th Floor
New York, New York 10281

Dear Sirs:

We have performed the procedures requested by you, as described below, with
respect to the Merrill Lynch Municipal ABS, Inc. ("the Company") annual report
on Form 10-K for the fiscal year ended March 31, 1996 ("Form 10-K"). This
engagement to apply agreed-upon procedures was performed in accordance with
standards established by the American Institute of Certified Public Accountants.
The sufficiency of the procedures is solely the responsibility of management of
the Company. Consequently, we make no representation regarding the sufficiency
of the procedures described below either for the purpose for which this report
has been requested or for any other purpose. The procedures that we performed
and our findings are summarized as follows:

1.   We inquired of the Company that the Trustee prepared and delivered the
     Amended Statements to Holders of Merrill Lynch Municipal ABS, Inc.
     Prerefunded Municipal Certificates, Series 1, Series 2, and Series 3
     Relating to the Distribution Date of October 1, 1995, statements (see
     Exhibit 3) setting forth, relating to that distribution date, on a class by
     class basis the following information:

     (i)   The amount of interest, principal and premium received in connection
           with that distribution date.

     (ii)  The amount of interest, principal and premium distributed to holders
           of each class of certificates.

     (iii) The amount of any Trustee's fee payable on that distribution date.
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     (iv) If the interest payments received by the Trustee with respect to the
          Prefunded Bonds of an issue are insufficient to make the required
          interest distributions with respect to the certificates related
          thereto, the aggregate amount of all interest shortfalls on the
          distribution date and the amount of interest shortfall allocated to
          each certificate class.

     (v)  If any loss is incurred with respect to the Prefunded Bonds, the
          aggregate amount of all losses on distribution date and the allocation
          of the losses to each certificate class.

     (vi) The aggregate amount of accrued interest remaining unpaid, if any, for
          each class of certificates and after giving the effect to the
          distribution made to each class on the distribution date.

    (vii) The aggregate certificate amount of each class of certificates after
          giving effect to the distribution made on such distribution date and
          to losses allocated on such distribution date.

     We found no exceptions as a result of these procedures.

2.   We proved the arithmetic accuracy of the collection and distribution of
     payments received on the Prefunded Bonds in the related Trust during the
     preceding year and found no exceptions.

3.   We compared the Amended Statements to Holders of Merrill Lynch Municipal
     ABS, Inc. delivered to holders of Certificates during the preceding year to
     the requirements in the Agreement between the Company and Certificate
     Holders and found no exceptions.

4.   We proved the arithmetic accuracy of the dollar amounts, shown in the
     Amended Statements to Holders of Merrill Lynch Municipal ABS, Inc. in the
     Form 10-K and found no exceptions.

5.   We inquired of the Secretary whether there were any other significant
     events or actions taken during or subsequent to March 31, 1996 not
     reflected in the Form 10-K or the minutes and the agendas of the Company's
     Board of Directors and committees thereof. We were informed that no such
     events or actions had occurred.

We were not engaged to, and did not, perform an audit, the objective of which
would be the expression of an opinion on the specified amounts included in Form
10-K. Accordingly, we do not express such an opinion. Had we performed
additional procedures, other matters might have come to our attention that would
have been reported to you.
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This report is intended solely for the use of management and should not be used
by those who have not agreed to the procedures and taken responsibility for the
sufficiency of the procedures for their purposes. We are aware that this report
is to be filed with The Securities and Exchange Commission as part of the Form
10-K of Merrill Lynch Municipal ABS, Inc. for the fiscal year ended March 31,
1996 and therefore is a matter of public record.


Yours truly,

/s/ Deloitte & Touche LLP