EXHIBIT 99.3





INDEPENDENT AUDITOR'S ANNUAL SERVICER COMPLIANCE CERTIFICATE
TO THE DIRECTORS OF CRUSADE MANAGEMENT LIMITED (TRUST MANAGER)

SCOPE

We have reviewed St.George Bank Limited's (the "Servicer's")  activities for the
purpose of determining its compliance with the servicing  standards contained in
the Master  Trust Deed dated 14 March  1998,  the Crusade  Euro Trust  Servicing
Agreement dated 19 March 1998, and the Supplementary Terms Notice  (collectively
the  "Documents"),  attached as  Appendix  1, in relation to the Crusade  Global
Trust  No.1 of 1999 (the  "Trust")  for the year  ended 30  September  2003,  in
accordance  with the  statement  by the Division of  Corporation  Finance of the
Securities  and Exchange  Commission  dated 21 February 2003, and our engagement
letter dated 15 March 2004.

We have reviewed the servicing standards contained in the Documents to enable us
to report on whether those servicing standards are similar to those contained in
the Uniform Single Attestation  Program for Mortgage Bankers ("USAP"),  attached
as Appendix 2, which  establishes  a minimum  servicing  standard  for the asset
backed securities  market in the United States of America.  No equivalent of the
USAP exists in Australia.

The  management  of the Servicer is  responsible  for  maintaining  an effective
internal control  structure  including  internal control policies and procedures
relating to the servicing of mortgage  loans.  We have  conducted an independent
review of the servicing  standards included in Appendix 1, in order to express a
statement on the Servicer's compliance with them to Crusade Management Limited.

Our review of the  servicing  standards has been  conducted in  accordance  with
Australian  Auditing Standards  applicable to performance audits and accordingly
included  such  tests  and   procedures  as  we  considered   necessary  in  the
circumstances.  In conducting our review we have also had regard to the guidance
contained in the USAP.  These  procedures  have been  undertaken to enable us to
report on whether  anything has come to our attention to indicate that there has
been  significant  deficiencies in the Servicer's  compliance with the servicing
standards contained in the Documents for the year ended 30 September 2003.

Our review did not  include  an  assessment  of the  adequacy  of the  servicing
standards themselves.

This statement has been prepared for the use of Crusade Management Limited as at
30 September 2003 in accordance  with the  requirements  of the statement by the
Division of Corporation  Finance of the Securities and Exchange Commission dated
21 February 2003, and the engagement letter dated 15 March 2004. We disclaim any
assumption of responsibility  for any reliance on this review statement,  to any
person other than Crusade Management Limited.



<PAGE>


STATEMENT

Based on our review;

o    nothing  has come to our  attention  to  indicate  that there have been any
     significant  deficiencies  in St.George Bank Limited's  compliance with the
     servicing standards contained in the Master Trust Deed dated 14 March 1998,
     the Crusade Euro Trust  Servicing  Agreement  dated 19 March 1998,  and the
     Supplementary  Terms  Notice,  attached  as  Appendix  1, in respect of the
     Crusade  Global  Trust  No.1 of 1999 (the  "Trust")  for the year  ended 30
     September 2003;

o    the servicing  standards  contained in the Master Trust Deed dated 14 March
     1998, the Crusade Euro Trust  Servicing  Agreement dated 19 March 1998, and
     the  Supplementary  Terms  Notice  are  similar  to the  minimum  servicing
     standards  contained in the Uniform Single Attestation Program for Mortgage
     Bankers ("USAP"), except for the following:

     -   Sections I (4), V (3) and V (4) set out the minimum servicing standards
         for escrow accounts. However, in Australia the mortgagee or Servicer is
         not responsible  for taxes,  insurance,  and other payments  associated
         with the home ownership. Hence there are no escrow accounts held by the
         Servicer.

     -   Section  I (2) of USAP  requires  funds of the  servicing  entity to be
         advanced in cases where there is an  overdraft  in an  investor's  or a
         mortgagor's  account.  The  Documents  do  not  contain  an  equivalent
         standard to this USAP standard.  The loans serviced under the Servicing
         Deed do not include overdraft accounts.

-        Section  III of USAP sets  minimum  servicing  standards  in respect of
         Disbursements.   In  respect  of  the  Trust,   this  function  is  the
         responsibility of the Trust Manager.





KPMG

/s/  Andrew Yates

Andrew Yates
Partner

Place:  Sydney, Australia

Date:   24 March 2004



<PAGE>
                                                                      APPENDIX 1


ST.GEORGE BANK LIMITED (THE "SERVICER") SERVICING STANDARDS

The following  servicing  standards are contained in the Master Trust Deed dated
14 March 1998, the Crusade Euro Trust  Servicing  Agreement dated 19 March 1998,
and the Supplementary Terms Notice.


1      GENERAL UNDERTAKINGS

1      The Servicer  must  maintain all  qualifications,  licenses,  filings and
       registrations  as may be required  under any  applicable  law in order to
       properly service the Receivables.

2      The Servicer must comply with all Laws in connection  with  servicing the
       Receivables  and  Receivable  Rights where  failure to do so would have a
       material adverse effect.

3      The  Servicer  must  comply  with  the  Consumer  Credit  Legislation  in
       connection with servicing the Receivables and Receivable Rights.

4      The Servicer must promptly deliver Relevant Documents to the Custodian in
       accordance with the Custodian Agreement.

5      If a material default occurs the Servicer is required to take such action
       in accordance with the Servicer's normal enforcement procedures.

6      The Servicer shall set the interest rate on the Receivables in accordance
       with the requirements of the Supplementary Terms Notice.

7      The  Servicer  must  notify the Trustee and Manager of any event which it
       reasonably  believes is likely to have a material adverse effect promptly
       after  becoming  aware of such event;  and the  Manager of anything  else
       which the Manager  reasonably  requires regarding any modification to any
       Receivable or Receivable Security and the Services.

8      The Servicer must provide information reasonably requested by the Trustee
       or Manager.

9      The Servicer must comply  with  all its obligations under any transaction
       document to which it is a party.

10     Subject to being reimbursed by the relevant Obligor or being  indemnified
       by the  Trustee,  the  Servicer  shall pay all taxes  that  relate to the
       Services.

11     The Servicer shall not claim any Security Interest over any Asset.




<PAGE>

                                                              APPENDIX 1 (CONT.)


2      VARIATIONS

1      The  Servicer  must not  consent  to the  creation  or  existence  of any
       Security interest in favour of a third party in relation to any Mortgaged
       Property in connection with a Receivable and the Receivable Rights unless
       the third party  acknowledges  that the Receivable and Receivable  Rights
       ranks ahead in priority  to the third  party  Security  Interest or which
       would  rank  before  or pari  passu  with  the  relevant  Receivable  and
       Receivable Rights.

2      Except as required by law the Servicer shall not release an Obligor  from
       any amount owing in respect of a  Receivable.

3      The Servicer must attend to the stamping and registration of all relevant
       documents for each Relevant Trust following any amendment,  consolidation
       or other action.  In relation to any Mortgage  that is not  registered at
       the relevant  closing date,  the Servicer  shall ensure that it is lodged
       for registration not later than 120 days after the closing date.

4      The Servicer must not allow the interest rate on a Receivable  which is a
       fixed  rate loan to be  re-fixed  at the end of its fixed term if it will
       result in a down grade or withdrawal of any Notes.

5      The  Servicer  must not allow a  Receivable  to convert from a fixed rate
       loan to a floating rate loan,  or vice versa,  if that  conversion  would
       result in a downgrade or withdrawal of any Notes.

6      The Servicer  shall ensure that if the use of a mortgaged  property  that
       relates to a Receivable  changes from owner  occupied to  investment,  or
       vice  versa,  that the  relevant  Receivable  continues  to  satisfy  the
       eligibility criteria.

7      The  Servicer  shall not provide to any Obligor  features in respect of a
       Receivable  which are  additional  to those  applied on the closing  date
       unless those additional  features would not affect any mortgage insurance
       policy  relating  to  the  Receivables  or  result  in the  downgrade  or
       withdrawal of the rating of any Notes.


3      MORTGAGE COLLECTIONS AND PAYMENTS

1      The  Servicer  shall on the behalf of the Trustee  collect  the  mortgage
       payments.  In  discharging  this duty the Servicer will act in accordance
       with the Procedures  Manual,  exercising the degree of diligence and care
       expected of an appropriately qualified lender.

<PAGE>


                                                              APPENDIX 1 (CONT.)


2      Mortgage payments shall be remitted  into the relevant collection account
       within 5 days of receipt.

3      If a collection account is not maintained with the Servicer, the Servicer
       shall deposit all mortgage payments into the collection  account no later
       than 2 business days following their receipt.  If the collection  account
       is with the  Servicer  then  payments  are  required  to be paid into the
       collection  account on the remittance date for that collection  period if
       the Servicer has a short term rating of A-1+ from S&P and interest on the
       collections  calculated from the fifth day forward.  If the Servicer does
       not have a short term  rating of A-1+  collections  must be paid into the
       collections  account  no later than two  business  days  following  their
       receipt.

4      The  Servicer  shall pay to the  relevant  collection  account  all funds
       required  to be paid to the  Trustee  by wire  transfer  or as  otherwise
       instructed by the Trustee.

5      If the  Servicer  pays funds to the  Trustee,  and the  related  Obligors
       payment is then dishonoured,  the Servicer is entitled to have this money
       returned from the Trustee.

6      All  payments to the Trustee shall be paid under a  transaction  document
       no later than 4pm on the day when due.

7      The Servicer will not have a right to set off any funds held in the Trust
       account  for any amount owed to the Servicer.


4      DELINQUENCIES

1      At 1 day delinquent, housing  loans  must  be  identified in the mortgage
       service system.

2      At 14 days  delinquent,  the  housing  loan  must be  transferred  to the
       collection  system.  The  collection  system  provides  detailed lists of
       accounts  that are overdue and the follow up  procedures  that need to be
       taken.

3      The Servicer is required to issue legal  notices and  institute  recovery
       action by enforcing the mortgage  security if  satisfactory  arrangements
       can not be made to rectify a delinquent housing loan.

4      The Servicer  shall  report all actions that it takes on overdue  housing
       loans  to the  mortgage  insurer  in  accordance  with  the  terms of the
       mortgage insurance policies.


<PAGE>

                                                              APPENDIX 1 (CONT.)


5      INVESTOR ACCOUNTING AND REPORTING

1      The Servicer shall maintain a database as a master record of all mortgage
       loans in relation to each Trust.

2      The Servicer shall update the Receivables Register within 3 months of the
       closing date for each  Relevant  Trust;  on the last business day of each
       calendar  year,  (if the  holding  company  has a rating of not less than
       A-1+),  or (if the holding  company does not have such a rating),  on the
       last  business  day of each  calendar  quarter;  or  within  30 days of a
       written request by the Trustee.

3      The Servicer  shall notify the Manager  immediately of each request by an
       Obligor to switch its Receivables to another product.

4      Each  Receivable is to be  electronically  tagged  so  that  all  related
       collections for that mortgage can be readily identified.

5      On or before each  determination  date for each Trust, the Servicer shall
       prepare and submit to the Manager and Trustee a report on collections.

6      At the end of the financial year the Servicer is to produce a certificate
       for the  Trustee  and the Manager  containing  a schedule of  information
       agreed with the Trustee and the Manager.


6      INSURANCE POLICIES

1      The  Servicer  shall act in  accordance  with the  terms of any  Mortgage
       Insurance Policy.

2      The Servicer shall not do or omit to do anything  which,  or the omission
       of which, would prejudicially affect the rights of the Trustee in respect
       of a mortgage insurance policy.

3      The Servicer  shall  promptly  make a claim under any mortgage  insurance
       policy  in  accordance  with  the  Procedures   Manual,  the  transaction
       documents and the terms of the mortgage insurance policy.

4      The Servicer shall notify the Manager when any circumstances  have arisen
       under which the Servicer intends to make a claim.

5      The Servicer shall use  reasonable  endeavours by reference to Australian
       market  practice to ensure that a current policy of general  insurance is
       maintained in respect of each mortgaged Property.

<PAGE>

                                                                      APPENDIX 2






                     THE UNIFORM SINGLE ATTESTATION PROGRAM


<PAGE>
                                TABLE OF CONTENTS

                                                                           Page

ACKNOWLEDGEMENTS............................................................ii

PREFACE  iii

INTRODUCTION.................................................................1

MINIMUM SERVICING STANDARDS..................................................4

         I.       CUSTODIAL BANK ACCOUNTS....................................4

         II.      MORTGAGE PAYMENTS..........................................4

         III.     DISBURSEMENTS..............................................4

         IV.      INVESTOR ACCOUNTING AND REPORTING..........................5

         V.       MORTGAGOR LOAN ACCOUNTING..................................5

         VI.      DELINQUENCIES..............................................5

         VII.     INSURANCE POLICIES.........................................6

EXHIBIT I.........EXAMPLE MANAGEMENT ASSERTION

EXHIBIT II........EXAMPLE MANAGEMENT REPRESENTATION LETTER

EXHIBIT III.......EXAMPLE CPA REPORT

APPENDIX A........GLOSSARY


                                       i

<PAGE>

                                ACKNOWLEDGEMENTS


         Several  years ago,  members of the  Mortgage  Bankers  Association  of
America's (MBA's) Audit & Internal Controls Subcommittee  undertook a project to
revise MBA's Uniform Single Audit Program for Mortgage  Bankers (USAP).  A "USAP
Working Group" was formed under the  leadership of then - Subcommittee  Chairman
Geoffrey A.  Oliver,  KPMG Peat Marwick LLP, to work with the staff of the AICPA
to produce a cost-effective  document that meets the needs of potential users of
the USAP Report.  The project was delayed  due, is part,  to the issuance of the
AICPA's  Statements on Standards for Attestation  Engagements  subsequent to the
publication of the last USAP in 1983. The USAP now complies with these standards
and had been  renamed  the  Uniform  Single  Attestation  Program  for  Mortgage
Bankers.

         In the years since the first USAP  Working  Group was formed,  numerous
individuals from industry and the accounting  profession have contributed  their
time and  expertise to reviewing and  commenting on various  drafts of the USAP.
Those  individuals have included mortgage company  presidents,  members of MBA's
Audit & Internal  Controls  Subcommittee,  leaders of MBA's Loan  Administrative
Committee,  members of the Affiliation of Mortgage  Banking  Auditors,  auditors
with the "Big Six" and other accounting firms,  representatives of the secondary
market agencies, and the staff of the AICPA. The MBA and the industry owes those
individuals a debt of gratitude.

         As Chairman  of the USAP  Working  Group  since  1992,  I would like to
express my  personal  appreciation  to J. Mark  Hanson,  Fleet  Mortgage  Corp.;
William Glasgow, Jr., CMB, BancBoston Mortgage Corp.; John J. duHadway, Deloitte
& Touche LLP;  Nicholas R.  Bottini,  Cortland L. Brovitz & Co. P.C.;  Robert G.
Arnall,  Arthur  Anderson  LLP;  Robert W. Swegle,  Ernst & Young LLP;  Laura A.
Pepthens,  Coopers & Lybrand  LLP;  Arlene K.  Spencer  and Steven F.  Eckstein,
Source One Mortgage  Services  Corp.;  Peter M. Hill,  North  American  Mortgage
Company,  Lawrence G. Roder, Fleet Mortgage Group, Inc.; Edward D. Hughes,  GMAC
Mortgage  Corporation;  James P. Gross,  J.I. Kislak  Mortgage Corp.;  Robert B.
Kenyon,  First Union Mortgage Corp.; Eugene T. Ichner, Chase Manhattan Bank, and
Paul  Fender,  Kenneth  Leventhal  &  Co.  for  their  thoughtful  comments  and
suggestions.  In addition, I would like to express special thanks to Geoffrey A.
Oliver; Alison B. Utermehlen, Mortgage Bankers Association of America; and James
F. Green,  AICPA,  for the  countless  hours they spent working on all phases of
this latest USAP revision.



                                       Dean F. Fox, Chairman, Audit & Internal
                                       Controls Subcommittee (1992 - 1994) and
                                       USAP Working Group (1992-1995),
                                       Financial Management Committee,
                                       Mortgage Bankers Association of America


                                       ii
<PAGE>

                                     PREFACE


         The Uniform Single Audit Program for Mortgage Bankers was introduced in
1965 by the  Mortgage  Bankers  Association  of America  (MBA) and  subsequently
revised in 1975 and 1983. The program has been revised again to reflect  changes
in the  mortgage  banking  industry and in  servicing  technology,  and has been
renamed the Uniform  Single  Attestation  Program for  Mortgage  Bankers  (USAP)
because it now involves an examination  engagement  performed in accordance with
Statements on Standards for Attestation Engagements (SSAE),  specifically,  SSAE
No. 3, Compliance Attestation (AICPA,  Professional  Standards,  vo1. 1, AT sec.
500).  The USAP was  rewritten in  cooperation  with the  American  Institute of
Certified Public Accountants (AICPA).

         The  purpose  of  the  revised  approach  is to  provide  investors  in
residential  mortgage  loans with  assurance  relating to  management's  written
assertion  about a SERVICING  ENTITY'S1  compliance  with the minimum  servicing
standards  set  forth  in the  USAP by the  MBA.  These  standards,  which  were
identified by members of MBA's Audit and Internal Controls Subcommittee with the
assistance of  representatives  from the secondary market agencies,  independent
CPAs, and industry  leaders,  establish the compliance  criteria against which a
servicing  entity's  management and the independent  certified public accountant
(CPA) will report.  Each standard represents a specific minimum requirement with
which a servicing entity is expected to be in MATERIAL COMPLIANCE.  The type and
extent  of  procedures  to be  performed  by the CPA to  examine  and  report on
management's  written assertion about a servicing entity's compliance with these
standards is the responsibility of the CPA.

         Potential users of the USAP REPORT include all parties with an interest
in management's assertion about a servicing entity's compliance with the minimum
servicing  standards and,  specifically,  those to whom the mortgage servicer is
obligated,  through  contractual  agreement,  to  furnish a copy of the  Report.
Reporting  under the USAP,  therefore,  is  mandated by the terms of a servicing
entity's agreements  including its investor servicing  agreements and, possibly,
agreements  with  creditors,  regulators  and  potential  acquirers  of mortgage
servicing rights.  However,  because these parties may have different  interests
and  concerns  about a servicing  entity's  operations,  the USAP was written to
address compliance criteria related to residential mortgage loan servicing.

         Because the minimum  servicing  standards in the USAP include many, but
not all, of the servicing requirements generally required by investors,  it does
not  purport  to  address  all  aspects  of an  entity's  servicing  operations.
Management  and CPA  reports  under the USAP,  therefore,  provide no  assurance
regarding a servicing  entity's  compliance  with any standards,  controls,  and
requirements that are not identified to the minimum servicing standards. Certain
investor and governmental requirements may either be more restrictive or involve
more areas of compliance


________

1   Terms defined in the glossary (Appendix A) are in boldface type the first
    time they appear in the Program.



                                      iii
<PAGE>


than the minimum servicing  standards.  However, the USAP standards are intended
to represent commonly required minimum servicing standards that: (1) satisfy the
primary  need of the user to  obtain a  minimum  level of  assurance  concerning
compliance  by a  servicing  entity with those  standards,  and (2) can serve as
criteria  for a management  assertion  that can be examined and reported on by a
CPA on a cost-effective basis.

         The  USAP  Report  differs  from a report  issued  under  Statement  on
Auditing  Standards  (SAS) No. 70, Reports on the Processing of  Transactions by
Service Organizations (AICPA,  Professional Standards, vol. 1, AU sec. 324), and
is not a  substitute  for such a report.  SAS No. 70  reports  are  intended  to
provide  CPAs of  investor  organizations  with  information  about a  servicing
entity's control structure policies and procedures that might affect an investor
organization's  financial  statements.  They provide  assurance that a servicing
entity's  description of its control structure policies and procedures is fairly
presented,  that the policies and procedures have been placed in operation as of
a specified date, and that the policies and procedures are suitably  designed to
achieve  specified  control  objectives.  Such  information  enables an investor
organization  CPA to obtain a sufficient  understanding  of the internal control
structure  of the  investor  organization  to plan the  audit.  Some SAS No.  70
reports  include a  description  of tests of the  operating  effectiveness  of a
servicing entity's control structure policies and procedures. When such policies
and procedures are operating  effectively,  the investor organization CPA may be
able to reduce his or her  assessment  of  control  risk for  certain  financial
statement  assertions.  In  contract,  USAP  Reports  are  intended  to  provide
investors  in loans  with  assurance  about  compliance  with  specific  minimum
residential loan servicing standards.


                                       iv
<PAGE>

                                  INTRODUCTION


1.       CONCEPT OF A UNIFORM SINGLE ATTESTATION PROGRAM

         The  concept  of a uniform  single  attestation  program  involves  the
acceptance  by different  users of a single CPA report on  management's  written
assertion  about a servicing  entity's  compliance  with the  minimum  servicing
standards  in the  USAP.  A  single  program  precludes  the  need  for  several
compliance reporting programs to be developed by a number of different users.

2.       MANAGEMENT'S REPRESENTATIONS

         SSAE No. 3 requires that the CPA obtain a written  assertion and letter
of  representation  from  management.  Management's  written  assertion  about a
servicing entity's  compliance with the minimum servicing  standards in the USAP
is the basis for testing and,  therefore,  is integral to the performance of the
engagement  and  the  CPA's  rendering  of an  opinion.  See  Exhibit  I for  an
illustrative  management assertion and Exhibit II for an illustrative management
representation letter.

3.       QUALIFICATIONS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

         To be acceptable, the USAP must be performed by a CPA who complies with
the  applicable  provisions  of the  public  accountancy  law and  rules  of the
jurisdiction  in  which  the CPA is  licensed.  The  CPA  must  meet  applicable
continuing  professional  education  requirements and quality control standards,
must participate in a practice monitoring program comparable to those prescribed
by the AICPA,  and must be  independent  of the servicing  entity as defined and
interpreted under the Code of Professional Ethics of the AICPA.

4.       STANDARDS FOR ACCEPTABILITY

         The USAP must be performed by a CPA in  accordance  with SSAE No. 3. In
accepting the USAP Report,  each user  recognizes that it relates to a servicing
entity's  compliance with the minimum servicing standards in the USAP and not to
compliance  with  specific  servicing   agreements.   See  Exhibit  III  for  an
illustrative CPA report.

5.       REPORT TO USERS

         A  servicing  entity  shall send to each user a copy of the USAP Report
resulting  from the  performance  of the USAP.  The Report shall be submitted to
users within  ninety (90) days of the end of the  servicing  entity's  reporting
period.

         SSAE  No.  3  addresses  circumstances  in  which  noncompliance  by  a
servicing   entity  would  require   modification   of  the  CPA's  report  (see
PARAGRAPHS 61 et. seq.).



                                       1
<PAGE>

6.       REPORTING EXCEPTIONS

         The CPA's report  pursuant to an examination  under SSAE No. 3 includes
an opinion on management's  assertion  regarding a servicing entity's compliance
with the  minimum  servicing  standards  in the  USAP.  Consequently,  unlike an
agreed-upon  procedures  engagement  under  SSAE No. 3,  specific  findings  (or
"exceptions")  are not  reported  under the USAP unless the CPA  concludes  that
management's assertion is not fairly stated in all material respects.

7.       SAMPLING

         In accordance  with SSAE No. 3, the CPA determines the procedures to be
performed  and  evaluates  the  sufficiency  of  the  evidence   obtained  using
professional  judgment.  When exercising such judgment, the CPA may consider the
guidance of SSAE No. 1 (AICPA,  Professional Standards,  vol. 1 AT sec. 100) and
SAS No. 39, Audit Sampling (AICPA, Professional Standards, vol. 1, AU sec. 350).

8.       TIMING

         Although  it is  intended  that the USAP Report will relate to a period
covering  twelve  months,  there may be  circumstances  in which a  twelve-month
period is not covered. The USAP Report could, for example,  relate to compliance
during an interim period between a servicing  entity's fiscal year-end and a new
USAP  reporting-period end in the year such a change is made. The period covered
by the USAP shall be stated in both management's assertion and the CPA's report.

9.       ROLE OF INTERNAL AUDITOR'S WORK

         The CPA's  examination  of  management's  assertion  under the USAP may
consider  evidence  produced  by the  internal  audit  function  to  the  extent
permitted  by SAS No. 65, The  Auditor's  Consideration  of the  Internal  Audit
Function in an Audit of Financial  Statements  (AICPA,  Professional  Standards,
vol. 1 AU sec. 322).

10.      PLANNING CONSIDERATIONS

         SSAE No. 1 (AICPA,  Professional Standards,  vol. 1, AT sec. 100.28-32)
provides  guidance  on  planning  attestation  engagements.  The CPA may wish to
consider the following matters when planning the engagement:

         o        Certain  populations  of  transactions  may be subject to more
                  than one minimum servicing  standard.  Accordingly,  it may be
                  more  efficient to apply related  procedures to the attributes
                  of a common sample of transactions.  For example,  selecting a
                  sample of mortgage  payments subject to the deposit,  posting,
                  allocation,  and  investor  remittance  process  might be more
                  efficient than selecting separate samples for each attribute.


                                       2
<PAGE>


         o        Efficiency  might be gained by performing  some portion of the
                  work at an interim date.  For example,  tests might be applied
                  to applicable  populations  of  transactions  as of an interim
                  test  date  with  additional  testing  through  the end of the
                  period covered by management's assertion.

11.      EFFECTIVE DATE

         The  effective  date  for  application  of the  USAP is for  management
assertions made about entities'  compliance with the minimum servicing standards
for  fiscal  periods  ending  on  or  after  December  15,  1995,  with  earlier
application encouraged.


                                       3
<PAGE>


                           MINIMUM SERVICING STANDARDS

I.       CUSTODIAL BANK ACCOUNTS

         1.       Reconciliations  shall be prepared on a monthly  basis for all
                  custodial  bank accounts and related bank  clearing  accounts.
                  These reconciliation's shall:

                  o    be mathematically accurate;

                  o    be prepared within forty-five (45) calendar days after
                       the CUTOFF DATE;

                  o    be reviewed and approved by someone other than the person
                       who prepared the reconciliation; and

                  o    document explanations for reconciling items.  These
                       reconciling items shall be resolved within ninety
                       (90) calendar days of their original identification.

         2.       Funds of the servicing entity shall be advanced in cases where
                  there  is an  overdraft  in  an  investor's  or a  mortgagor's
                  account.

         3.       Each  custodial  account  shall be  maintained  at a federally
                  insured  depository  institution  in trust for the  applicable
                  investor.

         4.       Escrow  funds held in trust for a mortgagor  shall be returned
                  to the mortgagor within thirty (30) calendar days of payoff of
                  the mortgage loan.


II.      MORTGAGE PAYMENTS

         1.       Mortgage  payments  shall be deposited into the custodial bank
                  accounts  and  related  bank  clearing   accounts  within  two
                  business days of receipt.

         2.       Mortgage payments made in accordance with the mortgagor's loan
                  documents shall be posted to the applicable  mortgagor records
                  within two business days of receipt.

         3.       Mortgage  payments shall be allocated to principal,  interest,
                  insurance,  taxes or other escrow items in accordance with the
                  mortgagor's loan documents.

4.                Mortgage   payments   identified  as  loan  payoffs  shall  be
                  allocated in accordance with the mortgagor's loan documents.

III.     DISBURSEMENTS

         1.       Disbursements  made via wire transfer on behalf of a mortgagor
                  or investor shall be made only by authorized personnel.


                                       4
<PAGE>


         2.       Disbursements  made on behalf of a mortgagor or investor shall
                  be posted  within  two  business  days to the  mortgagor's  or
                  investor's records maintained by the servicing entity.

         3.       Tax and  insurance  payments  shall be made on or  before  the
                  penalty or insurance policy  expiration dates, as indicated on
                  tax  bills  and  insurance   premium  notices,   respectively,
                  provided  that such support has been received by the servicing
                  entity  at least  thirty  (30)  calendar  days  prior to these
                  dates.

         4.       Any  late  payment  penalties  paid in  conjunction  with  the
                  payment of any tax bill or insurance  premium  notice shall be
                  paid from the servicing  entity's funds and not charged to the
                  mortgagor,  unless the late payment was due to the mortgagor's
                  error or omission.

         5.       Amounts  remitted to  investors  per the  servicer's  investor
                  reports shall agree with  cancelled  checks,  or other form of
                  payment, or custodial bank statements.

         6.       Unissued   checks  shall  be  safeguarded  so  as  to  prevent
                  unauthorized access.

IV.      INVESTOR ACCOUNTING AND REPORTING

         1.       The servicing  entity's  investor reports shall agree with, or
                  reconcile to, investors'  records on a monthly basis as to the
                  total unpaid principal balance and number of loans serviced by
                  the servicing entity.

V.       MORTGAGOR LOAN ACCOUNTING

         1.       The servicing entity's mortgage loan records shall agree with,
                  or reconcile to, the records of mortgagors with respect to the
                  unpaid principal balance on a monthly basis.

         2.       Adjustments  on ARM  loans  shall  be  computed  based  on the
                  related mortgage note and any ARM rider.

         3.       Escrow  accounts  shall be analyzed,  in  accordance  with the
                  mortgagor's loan documents, on at least an annual basis.

         4.       Interest on escrow  accounts  shall be paid,  or credited,  to
                  mortgagors in accordance  with the  applicable  state laws. (A
                  compilation  of state laws relating to the payment of interest
                  on escrow  accounts  may be obtained  through the MBA's FAX ON
                  DEMAND service. For more information, contact MBA.)


                                       5
<PAGE>

VI.      DELINQUENCIES

         1.       Records  documenting  collection  efforts  shall be maintained
                  during the period a loan is in default and shall be updated at
                  least  monthly.  Such  records  shall  describe  the  entity's
                  activities  in  monitoring  delinquent  loans  including,  for
                  example,   phone   calls,   letters   and   mortgage   payment
                  rescheduling  plans in cases where the  delinquency  is deemed
                  temporary (e.g., illness or unemployment).

VII.     INSURANCE POLICIES

         1.       A  fidelity-bond  and errors and omissions  policy shall be in
                  effect on the servicing entity throughout the reporting period
                  in  the  amount  of  coverage   represented  to  investors  in
                  management's assertion.



                                       6
<PAGE>

                                                                       EXHIBIT I

EXAMPLE MANAGEMENT ASSERTION (FN1)

                      [Letterhead of XYZ Mortgage Company]

As of and for the [period] ended [date],  XYZ Mortgage Company has complied(FN2)
in all material respects with the minimum  servicing  standards set forth in the
Mortgage Bankers Association of America's Uniform Single Attestation Program for
Mortgage  Bankers.  As of and for this same period,  XYZ Mortgage Company had in
effect a fidelity bond and errors and omissions policy in the amount of [specify
amount].



                                            ------------------------------------
                                            Name and Title(FN3)


                                            ------------------------------------
                                            Date


_____________

(FN1)    As  specified  in  PARAGRAPH  11a of SSAE No. 3, if the CPA's report is
         intended  for  general use  (including  "all  investors  in loans being
         serviced by a servicing entity"), management's assertion should be both
         in a  representation  letter to the CPA  (Exhibit II) and in a separate
         report (i.e.,  management's  assertion,  Exhibit I) that will accompany
         the CPA's  report.  Management's  assertion  can set forth the specific
         minimum   servicing   standards  or  make  reference  to  the  document
         containing the minimum servicing standards (that is, the MBA's USAP).

(FN2)    Management  should  appropriately  modify its  assertion for matters of
         material   non-compliance   and   include   a   description   of   such
         non-compliance.

(FN3)    The  assertion  should be  signed  by  members  of  management  who are
         responsible  for and  knowledgeable,  directly or through others in the
         organization, about the matters covered by the assertion. Normally, the
         chief executive officer, the chief financial officer,  and/or the chief
         servicing officer should sign the assertion.


<PAGE>

                                                                      EXHIBIT II

                    EXAMPLE MANAGEMENT REPRESENTATION LETTER

                      [Letterhead of XYZ Mortgage Company]

[Addressed to CPA]

In connection with your  examination of our assertion that XYZ Mortgage  Company
complied  with  the  minimum   servicing   standards  in  the  Mortgage  Bankers
Association of America's Uniform Single Attestation Program for Mortgage Bankers
(USAP) as of and for the [period]  ended  [date],  we recognize  that  obtaining
representations from us concerning the information contained in this letter is a
significant  procedure  in  enabling  you to express an opinion on  management's
assertion about compliance with the minimum servicing standards. Accordingly, we
make the following representations,  which are true to the best of our knowledge
and belief in all material respects:

1.       We are responsible for complying with the minimum  servicing  standards
         in the USAP.

2.       We are responsible for  establishing and maintaining an effect internal
         control structure over compliance with the minimum servicing standards.

3.       We have  performed an evaluation of XYZ Mortgage  Company's  compliance
         with the minimum servicing standards.

4.       As of and for the  [period]  ended  [date],  XYZ  Mortgage  Company has
         complied with the minimum servicing  standards.  [This assertion should
         be modified as necessary to identify any noncompliance.(FN1)

5.       We have  disclosed  to you all  known  noncompliance  with the  minimum
         servicing standards.

6.       We have made available to you all  documentation  related to compliance
         with the minimum servicing standards.

7.       We have made the  following  interpretation  of the  minimum  servicing
         standard  related  to...  [This  assertion  should  state  management's
         interpretation of any compliance requirements that have varying
         interpretations.]

8.       We have disclosed any communications from regulator agencies,  internal
         auditors,  and other practitioners  concerning  possible  noncompliance
         with the minimum servicing standards, including communications received
         between  [specify  the  end of the  period  addressed  in  management's
         assertion and the date of the CPA's report].


_____________
(FN1)    Any instances of material  noncompliance should be explained here or in
         a separate addendum to this letter.


<PAGE>


9.       We have disclosed to you any known noncompliance  occurring  subsequent
         to [specify period covered by management's assertion].





                                            ------------------------------------
                                            Name and Title(FN2)


                                            ------------------------------------
                                            Date


______________
(FN2)    As  specified  in  PARAGRAPH  9 of SAS No. 19,  Client  Representations
         (AICPA,   Professional   Standards,   vol.   1,  AU  sec.   333),   the
         representation  letter should be signed by members of  management  whom
         the CPA believes are  responsible  for and  knowledgeable,  directly or
         through others in the  organization,  about the matters  covered by the
         representations.  Normally,  the  chief  executive  officer,  the chief
         financial  officer,  and/or the chief servicing officer should sign the
         representation letter.

<PAGE>

                                                                     EXHIBIT III

                             EXAMPLE CPA REPORT(FN1)

                         Independent Accountant's Report


To XYZ Mortgage Company:

We have examined management's  assertion about XYZ Mortgage Company's compliance
with  the  minimum  servicing  standards  identified  in  the  Mortgage  Bankers
Association of America's UNIFORM SINGLE ATTESTATION PROGRAM FOR MORTGAGE BANKERS
(USAP) as of and for the  [period]  ended  [date]  included in the  accompanying
management  assertion.  Management  is  responsible  for XYZ Mortgage  Company's
compliance with those minimum  servicing  standards.  Our  responsibility  is to
express an opinion on management's assertion about the entity's compliance based
on our examination.

Our  examination  was  made in  accordance  with  standards  established  by the
American  Institute of Certified Public Accountants and,  accordingly,  included
examining,  on a test basis,  evidence about XYZ Mortgage  Company's  compliance
with the minimum servicing  standards and performing such other procedures as we
considered  necessary  in the  circumstances.  We believe  that our  examination
provides a reasonable basis for our opinion.  Our examination does not provide a
legal  determination  on XYZ  Mortgage  Company's  compliance  with the  minimum
servicing standards.

In our opinion,  management's  assertion that XYZ Mortgage Company complied with
the aforementioned  minimum servicing standards as of and for the [period] ended
[date] is fairly stated, in all material respects.


______________
(FN1)    PARAGRAPHS 61 et seq. of SSAE No. 3 address  circumstances in which the
         CPA should modify the standard report.


<PAGE>

                                                                      APPENDIX A

                                    GLOSSARY

CUTOFF DATE

         The date as of which a bank account is reconciled  every month. It may,
         or may not,  coincide  with a prescribed  investor  reporting  date but
         shall be consistent from period to period.

MATERIAL COMPLIANCE

         Paragraphs 35 and 36 of SSAE No. 3 provide  guidance on the factors the
         CPA should take into  account when making  judgments  about an entity's
         compliance with the minimum servicing standards in the USAP.

SERVICING ENTITY

         An entity  that is engaged in  servicing  residential  mortgage  loans.
         Residential  mortgage loan servicing  involves  performing certain loan
         administration  functions,   including  collecting  mortgage  payments,
         disbursing  principal and interest  payments to investors,  maintaining
         tax and insurance  escrow accounts,  and managing  delinquent loans and
         foreclosed properties. The entity performs these functions for a fee on
         behalf  of  investors  in loans,  pursuant  to its  investor  servicing
         agreements.

USAP REPORT

         The report that shall be furnished to investors upon  completion of the
         USAP engagement and is comprised of management's assertion (see Exhibit
         I) and the CPA's report (see Exhibit III).