Exhibit 10.3(2)


AMENDMENT
NO. 2 

TO MASTER REPURCHASE AGREEMENT


                This SECOND AMENDMENT TO MASTER REPURCHASE AGREEMENT (this “Amendment”)
is dated as of June 1, 2005 and is entered into by and among FIELDSTONE
INVESTMENT CORPORATION (“FIC” and a “Seller”), FIELDSTONE
MORTGAGE COMPANY (“FMC” and a “Seller”, and together with FIC,
the “Sellers”) and MERRILL LYNCH BANK USA (the “Buyer”) to that
certain Master Repurchase Agreement dated as of November 12, 2004 as amended by
Amendment No. 1 to Master Repurchase Agreement dated  as of May 10, 2005 (the “Existing
Repurchase Agreement”, as amended by this Amendment, the “Repurchase
Agreement”).  Capitalized terms used
but not otherwise defined herein shall have the meanings given to them in the
Existing Repurchase Agreement.


RECITALS


The Buyer and the
Sellers have agreed, subject to the terms and conditions of this Amendment,
that the Existing Repurchase Agreement be amended to reflect certain agreed
upon revisions to the terms of the Existing Repurchase Agreement.


Accordingly, the Buyer
and the Sellers hereby agree, in consideration of the mutual promises and
mutual obligations set forth herein, that the Existing Repurchase Agreement is
hereby amended as follows:


SECTION 1.           Definitions.  Section 1 of the Existing Repurchase
Agreement is hereby amended by deleting the definitions of “Custodial
Agreement”, “Custodian” and “Settlement Account Control Agreement”
in their entirety and replacing them with the following:


“Custodial Agreement” shall mean that certain
Custodial Agreement dated as of June 1, 2005 among Sellers, the Buyer and
Custodian as the same may be amended from time to time.


“Custodian” shall mean Wells Fargo Bank, N.A.,
or any successor thereto under the Custodial Agreement.


“Settlement Account Control Agreement” shall
mean the Settlement Account Control Agreement entered into among the Buyer, the
Sellers and the Custodian, dated as of June 1, 2005 as the same may be further
amended, supplemented or otherwise modified in accordance with its terms.


SECTION 2.           Conditions
Precedent.  This Amendment shall
become effective on June 1, 2005 (the “Amendment Effective Date”)
subject to the satisfaction of the following conditions precedent:


2.1           Delivered
Documents.  On the Amendment
Effective Date, the Buyer shall have received the following documents, each of
which shall be satisfactory to the Buyer in form and substance:


 





















 


(a)           this
Amendment, executed and delivered and duly authorized officers of the Buyer,
the Sellers and the Guarantor; and


(b)           such
other documents as the Buyer or counsel to the Buyer may reasonably request.


SECTION 3.           Limited
Effect.  Except as expressly amended
and modified by this Amendment, the Existing Repurchase Agreement shall
continue to be, and shall remain, in full force and effect in accordance with
its terms.


SECTION 4.           Fees.  The Seller agrees to pay as and when billed
by the Buyer all of the reasonable fees, disbursements and expenses of counsel
to the Buyer in connection with the development, preparation and execution of,
this Amendment or any other documents prepared in connection herewith and
receipt of payment thereof shall be a condition precedent to the Buyer entering
into any Transaction pursuant hereto.


SECTION 5.           Confidentiality.  The parties hereto acknowledge that this
Amendment, the Existing Repurchase Agreement, and all drafts thereof, documents
relating thereto and transactions contemplated thereby are confidential in
nature and the Seller agree that, unless otherwise directed by a court of
competent jurisdiction or as is necessary to do so in working with governmental
agencies or regulatory bodies in order to comply with any applicable federal or
state laws, they shall limit the distribution of such documents and the
discussion of such transactions to such of its officers, employees, attorneys,
accountants and agents as is required in order to fulfill its obligations under
such documents and with respect to such transactions.


SECTION 6.           GOVERNING LAW.  THIS AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.


SECTION 7.           Counterparts.
 This Amendment may be executed in one or
more counterparts and by different parties hereto on separate counterparts,
each of which, when so executed, shall constitute one and the same agreement.


SECTION 8.           Conflicts.
 The parties hereto agree that in the
event there is any conflict between the terms of this Amendment, and the terms
of the Existing Repurchase Agreement, the provisions of this Amendment shall
control.


[SIGNATURE PAGE FOLLOWS]


 


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IN WITNESS
WHEREOF, the parties have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.


 


	
  Buyer:

  	
  MERRILL LYNCH BANK USA,

  	
   

  
	
   

  	
  as Buyer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
  FIELDSTONE INVESTMENT
  CORPORATION,

  	
   

  
	
   

  	
  as Seller

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
  FIELDSTONE MORTGAGE COMPANY,

  	
   

  
	
   

  	
  as Seller

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: