<PAGE>
                                                                   EXHIBIT 10.40

                        FIRST AMENDMENT TO LOAN DOCUMENTS

      THIS FIRST AMENDMENT TO LOAN DOCUMENTS (the "First Amendment") made and
entered into the _________ day of April, 2002, by and between THE NEW YORK
MORTGAGE COMPANY, LLC (hereinafter referred to as the "Borrower"), a New York
limited liability company with its principal place of business located at 304
Park Avenue, South, 7th Floor, New York, New York 10010 and STEVEN B. SCHNALL
AND JOSEPH V. FIERRO, as Guarantors and NATIONAL CITY BANK OF KENTUCKY, a
national banking association with a place of business located at 101 South Fifth
Street, Louisville, Kentucky 40202 (the "Lender").

WITNESSTH:

      Borrower, Guarantors and the Lender recite and agree as follows, which
recitations and agreements constitute a part of this Agreement.

      A. All capitalized terms not otherwise defined herein shall have the
meaning ascribed to such terms in the Warehouse Credit Agreement between the
Borrower, the Guarantors and the Lender dated as of January 25, 2002 (the
"Credit Agreement"). The Credit Agreement sets forth the terms and conditions
relative to a $15,000,000.00 Warehouse Credit Facility (the "Warehouse Credit
Facility") and certain subfacilities of the Warehouse Credit Facility made
available by the Lender to the Borrower.

      B. The Borrower requests that the Lender temporarily increase the
Warehouse Credit Facility by $5,000,000.00 to a total of $20,000,000.00 from and
after the date of this Agreement through and until June 2, 2002, and the Lender
has agreed to do so, upon the terms and conditions set forth in this Agreement.

      NOW, THEREFORE, the Borrower, the Guarantors and the Lenders agree as
follows:

      A. Amendments to the Credit Agreement.The Credit Agreement is hereby
amended, modified and restated as follows:

            1.1 Definitions. The following sentence is added after the
definition of "Warehouse Note":

            "Notwithstanding the foregoing, the Warehouse Promissory Note shall
            be increased to Twenty Million Dollars ($20,000,000) from and after
            April 18, 2002 through June 2, 2002, at which time the maximum
            principal amount of the Warehouse Note shall be decreased back to
            Fifteen Million Dollars ($15,000,000)."

            2.1 Warehouse Advances. The following sentence is added after the
last paragraph of Section 2.1:
<PAGE>
            "Notwithstanding the foregoing, the Warehouse Advance shall be
            increased to Twenty Million Dollars ($20,000,000) from and after
            April 18, 2002 through June 2, 2002, at which time the maximum
            principal amount of the Warehouse Note shall be decreased back to
            Fifteen Million Dollars ($15,000,000)."

            2.2 Note. The following sentence is added in Section 2.2

            "Notwithstanding the foregoing, the Warehouse Promissory Note shall
            be increased to Twenty Million Dollars ($20,000,000) from and after
            April 18, 2002 through June 2, 2002, at which time the maximum
            principal amount of the Warehouse Note shall be decreased back to
            Fifteen Million Dollars ($15,000,000)."

      B. Ratification. Except as specifically amended by the provisions
hereinabove, the Credit Agreement remains in full force and effect. The Borrower
hereby reaffirms and ratifies all of its obligations under the Credit Agreement,
as amended and modified hereby.

      C. Amendments to Warehouse Promissory Note. The Warehouse Promissory Note
is hereby amended by adding the following sentence at the end of the first
paragraph on page 1 of the Warehouse Promissory Note:

            "Notwithstanding the foregoing, the Warehouse Promissory Note shall
            be increased to Twenty Million Dollars ($20,000,000) from and after
            April 18, 2002 through June 2, 2002, at which time the maximum
            principal amount of the Warehouse Note shall be decreased back to
            Fifteen Million Dollars ($15,000,000)."

The Warehouse Promissory Note is hereby further amended by adding the following
sentence at the end of the second paragraph on page 1 of the Warehouse
Promissory Note:

            "Notwithstanding the foregoing, the Warehouse Advance shall be
            increased to Twenty Million Dollars ($20,000,000) from and after
            April 18, 2002 through June 2, 2002, at which time the maximum
            principal amount of the Warehouse Note shall be decreased back to
            Fifteen Million Dollars ($15,000,000)."
<PAGE>
      D. Ratification. Except as specifically amended by the provisions
hereinabove, the Warehouse Promissory Note remains in full force and effect. The
Borrower hereby reaffirms and ratifies all of its obligations under the
Warehouse Promissory Note, as amended and modified hereby.

      E. Ratification of Pledge and Security Agreement. The Borrower hereby
reaffirms and ratifies all of its obligations under the Pledge and Security
Agreement, as amended and modified hereby dated January 25, 2002 between the
Lender and the Borrower.

      F. Conditions Precedent. The Lender's obligations under this Agreement are
expressly conditioned upon, and subject to the following:

            1. the execution and delivery by the Borrower and the Guarantors of
this Agreement;

            2. any and all other documents which the Lender may require from the
Borrower.

      G. Representations, Warranties and Covenants of the Borrower. To induce
the Lender to enter into this Agreement, the Borrower represents and warrants to
Bank as follows

            1. The Borrower has full power, authority, and capacity to enter
into this Agreement, and this Agreement constitutes the legal, valid and binding
obligations of the Borrower, enforceable against it in accordance with its
terms.

            2. No Event of Default under the Note or any of the other Loan
Documents has occurred which continues unwaived by the Bank, and no event which
with the passage of time, the giving of notice or both would constitute an Event
of Default, exists as of the date hereof.

            3. The person executing this Agreement on behalf of the Borrower is
duly authorized to do so.

            4. The representations and warranties made by the Borrower in any of
the Loan Documents are hereby remade and restated as of the date hereof.

            5. There are no material actions, suits, legal, equitable,
arbitration or administrative proceedings pending or threatened against the
Borrower, the adverse determination of which could have a material adverse
effect on the Loan Documents, the business operations or financial condition of
the Borrower or the ability of the Borrower to fulfill its obligations under the
Loan Documents.
<PAGE>
      H. Affirmation. The Borrower affirms and confirms in all respects its
obligations under the Note and the other Loan Documents (as that term is defined
in the Credit Agreement) and acknowledges that all of the Loan Documents remain
in full force and effect and unchanged except as expressly amended hereby.

      I. Miscellaneous.

            1. Time shall be of the essence in the performance of the Borrower's
obligations under the Loan Documents.

            2. To the extent that assignment is permitted under this Agreement,
the provisions of this Agreement shall bind and benefit the Borrower and the
Bank and their respective heirs, personal representatives, successors and
assigns, including each subsequent holder, if any, of the Note.

            3. This Agreement, the other Loan Documents and the related writings
and the respective rights and obligations of the parties hereto shall be
construed in accordance with and governed by the laws (including, without
limitation, the conflicts of laws rules) of the Commonwealth of Kentucky.

            4. The Borrower may not assign its rights under this Agreement to
any other party. This Agreement may be modified only in writing executed by the
Bank and the Borrower.

            5. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability or any one or more of
the other provisions hereof. The Borrower and the Bank agree that this Agreement
shall be so interpreted as to give effect and validity to all the provisions
hereof to the fullest extent permitted by law.

            6. The Borrower shall sign such financing statements or other
documents or instruments as the Bank may reasonably request from time to time to
more fully create, perfect, continue, maintain or terminate the rights and
security interests intended to be granted or created pursuant to this Agreement
or the other Loan Documents.

            7. The headings used in this Agreement are included for ease of
reference only and shall not be considered in the interpretation or construction
of this Agreement.

            8. This Agreement may be signed by each party upon a separate copy,
and in such case one counterpart of this Agreement shall consist of enough of
such copies to reflect the signature of each party. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
and it shall not be necessary in making proof of this Agreement or the terms
thereof to produce or account for more than one of such counterparts.
<PAGE>
                                     * * * *
<PAGE>
      IN WITNESS WHEREOF, this Agreement has been executed by the parties on the
dates set forth next to their names. This Agreement shall be effective (except
as otherwise provided to the contrary herein) and shall be dated as of the date
first above written.

                                     BORROWER:

                                     THE NEW YORK MORTGAGE COMPANY, LLC



                                     By   /s/ Steven B. Schnall
                                        ----------------------------------

                                     Title:   President
                                             -----------------------------



                                     GUARANTORS:


                                          /s/ STEVEN B. SCHNALL
                                     -------------------------------------
                                              Steven B. Schnall

                                          /s/ JOSEPH V. FIERRO
                                     -------------------------------------
                                              Joseph V. Fierro

                                     NATIONAL CITY BANK

                                     OF KENTUCKY

                                     By   /s/ Michael A. Johnson
                                        ----------------------------------

                                     Title:   Vice President
                                             -----------------------------


LOUIMDMS/151321.1