SECURITY AGREEMENT
                               ------------------

     This Security Agreement ("Agreement") is made and entered into effective as
of  October  11, 2004 (the "Effective Date") by and between American Residential
Funding,  Inc., a Nevada corporation (the "Company"), on the one hand, and Amres
Holding,  LLC,  a  Nevada limited liability company (the "Holder"), on the other
hand.  The  Company  and  the  Holder shall each be referred to as a "Party" and
collectively  as  the  "Parties."

     A.   Holder  is  making  a loan to Company in the sum of One Hundred Twenty
Five Thousand Dollars ($125,000.00) pursuant to that certain Convertible Secured
Promissory Note, dated as of even date herewith (the "Note").

     B.   Pursuant  to  the terms of the Note, the obligations of the Company to
the Holder under the Note are to be secured by a security interest in all of the
assets  of  Company.

     C.   Accordingly,  Company has agreed to execute and deliver to Holder this
Security  Agreement granting to Holder a security interest in the Collateral (as
hereinafter  defined)  as  security  for  the  repayment  of the Note due to the
Holder.

     NOW  THEREFORE,  in  consideration  of  the  foregoing, the Company and the
Holder  hereby  agree  as  follows:

     1.   CREATION OF SECURITY INTEREST

     Company  hereby  grants  to Holder a security interest in and lien upon the
property  described  in Section 2 of this Agreement (the "Collateral") to secure
performance  and  payment  of  all  of the Company's obligations under the Note.
Concurrently  with  the execution and delivery of this Agreement by the Company,
as  may  be  necessary  and to the extent requested by Holder, the Company shall
execute  and  deliver  to Holder or Holder's Agent financing statements and such
other  documents  requested or required to perfect and establish the priority of
the  liens  granted  to  Holder  hereby.

     2.   COLLATERAL

     As collateral for the Note, the Company hereby assigns and grants to Holder
a  second-priority  lien  (subordinate  to  the  interests  of Wells Fargo Bank,
National  Association)  and  security  interest  in  the collateral described in
Exhibit  A  attached  hereto.
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     3.   COMPANY'S REPRESENTATIONS AND WARRANTIES

     Company hereby represents and warrants to Holder as follows:

          (a)  Corporate  Power.  The  Company  has  all the requisite corporate
     power  to  execute  and deliver this Agreement and to carry out and perform
     its  obligations  under  the  terms  of  this  Agreement.


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          (b)  Authorization.  All  corporate action on the part of the Company,
     its  directors  and  its  stockholders  necessary  for  the  authorization,
     execution,  delivery  and  performance of this Agreement by the Company and
     the  performance  of the Company's obligations hereunder has been obtained.
     This  Agreement,  when  executed  and  delivered  by  the  Company,  shall
     constitute  a  valid  and  binding obligation of the Company enforceable in
     accordance  with its terms, subject to laws of general application relating
     to  bankruptcy,  insolvency,  the  relief  of  debtors and, with respect to
     rights  to  indemnity,  subject  to federal and state securities laws. This
     Agreement will not violate any preemptive rights or rights of first refusal
     granted  by  the  Company.

          (c)  Clear Title To Collateral.   The Company is the sole owner of the
     Collateral, having good and marketable title thereto, free and clear of any
     and  all  liens,  encumbrances,  claims, or rights of others created by any
     acts  or  omissions of Company, except for the security interest granted to
     Holder.

          (d)  Priority  of  Lien.  This  Agreement  constitutes  a  valid  and
     continuing  lien  on  and  security  interest in the Collateral in favor of
     Holder,  prior  to  all  other  liens, encumbrances, security interests and
     rights of others except Wells Fargo Bank, National Association arising from
     any  acts  or  omissions  of Company, and is enforceable as such as against
     creditors  of  and  purchasers  from  Company.

     4.   EVENTS OF DEFAULT

     The following events are Events of Default:

          (a)  Failure to Pay.  The Company does not pay when due any amount due
     under  the Note or the Company otherwise materially breaches the provisions
     thereof.

          (b)  Limitations  Regarding Collateral.  The Company sells, transfers,
     leases  or otherwise disposes of any of the Collateral, or attempts, offers
     or  contracts to do so, or the Company creates, permits or suffers to exist
     any  lien,  security  interest,  encumbrance,  claim  or right in or to the
     Collateral  other  than  those  agreed  to in advance by Holder (the "Other
     Encumbrances").  Company  will,  at  Company's  sole  expense,  defend  the
     Collateral  against  and  take  such other action as is necessary to remove
     such  Other Encumbrances and defend the right, title and interest of Holder
     in  and  to  any  of  Company's rights to the Collateral, including without
     limitation  any  proceeds  and  products  thereof,  against  the claims and
     demands  of  all  persons.

          (c)  Misrepresentation.  Any  representation  or  warranty made by the
     Company  herein  or  in  the  Note that proves to be untrue in any material
     respect, or any representation, statement (including Financial Statements),
     certificate  or  data  furnished  or  made  by the Company (or any officer,
     accountant  or  attorney of the Company) hereunder or under the Note proves
     to have been untrue in any material respect, as of the date as of which the
     facts  therein  set  forth  were  stated  or  certified.


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          (d)  Opportunity  to  Cure.   Any  Event  of Default described in this
     Section 4 that is capable of being cured may be cured by the Company within
     ten  (10)  calendar  days  after  notice by Holder, which notice to Company
     shall  be  in  writing.

     5.   HOLDER'S RIGHTS

          (a)  Rights  of  Holder Upon Default.  If there is an Event of Default
     which  the  Company  fails  to  cure within any applicable cure period, the
     Holder  may, at its option and at any time thereafter do the following: (1)
     declare  the  entire  aggregate amount of the Note then outstanding and the
     interest  and other fees and expenses accrued thereon to be immediately due
     and payable without notice and without presentment, demand, protest, notice
     of  protest,  or  other  notice  of default or dishonor of any kind, all of
     which  are  hereby  expressly waived by the Company; (2) require Company to
     assemble  the Collateral, including any books and records pertaining to the
     Collateral,  and  make  them  available  to Holder at a place designated by
     Holder;  (3)  notify  any  account  of  the  Company,  any  buyers  of  the
     Collateral,  and  any  other  person  who  shares  Holder's interest in the
     Collateral;  (4)  request  confirmation of the status of any account of the
     Company upon which the account Company is obligated; (5) require Company to
     obtain  Holder's  prior  written consent to any sale, agreement to sell, or
     other disposition of any Collateral; or (6) remedy any default or waive any
     default  without waiving the default remedies and without waiving any other
     prior  or  subsequent  default.

          (b)  Rights  Under  Uniform  Commercial Code.  Without limiting any of
     Holder's  rights  and remedies under this Agreement, Holder may enforce the
     security  interests and other liens given hereunder, and under the Note and
     documents  referred  to  herein  or  contemplated  hereby,  pursuant to the
     applicable  Uniform  Commercial Code and any other applicable law including
     all  legal  and  equitable  remedies  available  to  lenders  generally.

          (c)  Payments  of  Taxes  and  Insurance.  If Company fails to pay any
     taxes,  assessments,  insurance  premiums,  or  other  amounts due to third
     parties  as  required  by  Company  on  the  Collateral,  Holder may in its
     discretion, and without prior notice to Company, make any such payment. Any
     payments  made  by  Holder under this paragraph shall not constitute (i) an
     agreement  by  Holder  to  make  similar  payments in the future, or (ii) a
     waiver  by Holder of any Event of Default under this Agreement. Holder need
     not  inquire  as  to,  or  contest  the validity of, any such expense, tax,
     security  interest,  encumbrance or lien, and the receipt of the notice for
     the  payment thereof shall be conclusive evidence that the same was validly
     due  and  owing.

          (d)  Rights  and  Remedies  are  Cumulative.   All rights and remedies
     provided herein are cumulative and may be exercised singly or concurrently,
     and  are not exclusive of any rights or remedies otherwise provided by law.
     Any  single  or  partial exercise of any right or remedy shall not preclude
     the  further exercise thereof or the exercise of any other right or remedy.


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     6.   ADDITIONAL PROVISIONS

          (a)  Notices.  All notices required or permitted hereunder shall be in
     writing  and  shall be deemed effectively given: (a) upon personal delivery
     to  the  Party to be notified, (b) when sent by confirmed facsimile if sent
     during  normal  business  hours  of the recipient, if not, then on the next
     business day, or (c) one (1) day after deposit with a nationally recognized
     overnight  courier, specifying next day delivery, with written verification
     of receipt. All communications shall be sent as follows:

     If to the Company:            American Residential Funding, Inc.
                                   3200 Bristol Street, Suite 700
                                   Costa Mesa, CA  92626
                                   Attn:  President
                                   Facsimile No.:  (714) 424-0389

     If to Holder:                 Amres Holding, Inc.
                                   3200 Bristol Street, Suite 700
                                   Costa Mesa, CA  92626
                                   Attn:  President
                                   Facsimile No.:  (714) 424-0389

          or at such other address as the Company or Holder may designate by ten
     (10) days advance written notice to the other Party hereto.

          (b)  No  Waiver;  Cumulative  Remedies.  Holder  shall not by any act,
     delay,  omission or otherwise be deemed to have waived any of its rights or
     remedies  hereunder, and no waiver shall be valid unless in writing, signed
     by  Holder.  A waiver by Holder of any right or remedy hereunder on any one
     occasion  shall  not  be  construed  as a bar to any right or remedy, which
     Holder  would  otherwise  have  had  on any future occasion. The rights and
     remedies  hereunder  provided are cumulative and may be exercised singly or
     concurrently,  and are not exclusive of any rights and remedies provided by
     law.

          (c)  Successors  and  Assigns.  All  covenants  and  agreements herein
     contained  by  or  on  behalf  of the Company shall bind its successors and
     assigns and shall inure to the benefit of the Holder and its successors and
     assigns.  The  Company  may not assign this Agreement or any instruments or
     documents executed in connection herewith or any of their respective rights
     hereunder  without  the  prior  written  consent  of the Holder. Holder may
     transfer,  pledge,  hypothecate,  or  assign  this  Agreement  in  its sole
     discretion.

          (d)  Governing  Law;  Venue.  This  Agreement shall be governed by and
     construed  under  the  laws  of  the  State  of  California  as  applied to
     agreements  among  California  residents, made and to be performed entirely
     within  the  State of California. The Parties agree that any action brought
     to  enforce  the terms of this Agreement will be brought in the appropriate
     federal  or state court having jurisdiction over Orange County, California.


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          (e)  Severability.  In  the  event  any  one or more of the provisions
     contained  in  this  Agreement,  the  Note,  or  in any other instrument or
     document  referred  to herein or executed in connection with or as security
     for  the  Note,  shall,  for  any reason, be held to be invalid, illegal or
     unenforceable,  such  provision(s)  shall not affect any other provision of
     this  Agreement,  the Note, or any other instrument or document referred to
     herein  or  executed  in  connection  with  or  as  security  for the Note.

          (f)  Defined Terms.  Unless otherwise defined in this Agreement, terms
     used  in  this  Agreement  which  are  defined  in  the  applicable Uniform
     Commercial Code are used with the meanings as therein defined.

          (g)  Entire  Agreement.  This  Agreement,  along  with  the  Note,
     constitutes  the  full  and  entire understanding and agreement between the
     Parties  with regard to the subjects hereof and no Party shall be liable or
     bound  to the other Party in any manner by any representations, warranties,
     covenants  and  agreements  except  as  specifically set forth herein. This
     Agreement  may  not  be  modified or amended except by a written instrument
     duly  executed  by  all  of  the  Parties.

          (h)  Titles  and  Subtitles.  The  titles  and  subtitles used in this
     Agreement  are  used  for  convenience only and are not to be considered in
     construing  or  interpreting  this  Agreement.

          (i)  Expenses and Fees.  The Company agrees to pay or reimburse Holder
     and Holder's Agent for any and all costs and expenses (including attorneys'
     fees  and expenses) that may be incurred by Holder or Holder's Agent in any
     effort  to  enforce  any  of the provisions of this Agreement or any of the
     obligations  of  the  Company in respect of any of the collateral described
     herein  or  in  connection  with  the  preservation  of  the  liens granted
     hereunder,  or  the  rights  of  the  Holder  or Holder's Agent, under this
     Agreement.

     [remainder of page intentionally left blank; signature page to follow]

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     IN WITNESS WHEREOF, the Parties have executed this Security Agreement as of
the  date  first  written  above.


"COMPANY"                               "HOLDERS"

American Residential Funding, Inc.,     Amres Holding, LLC
a Nevada corporation                    a Nevada limited liability company


  /s/  Vincent Rinehart                 /s/  Vincent Rinehart
-----------------------------------     ----------------------------------
By:  Vincent Rinehart                   By:  Vincent Rinehart
Its:  President                         Its:  Managing Member


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                                    EXHIBIT A

                                   Collateral


     Per  Section  2  of  the  Agreement, the Collateral includes (i) all of the
Company's  equipment,  machinery,  vehicles,  furniture,  tools, dies, jigs, and
fixtures, and all attachments, accessions and equipment now or hereafter affixed
thereto  or used in connection therewith, and all substitutions and replacements
thereof,  wherever  located,  whether  now  owned  or  hereafter  acquired  (the
"Equipment"); (ii) all of the Company's raw materials, work in process, finished
goods,  and  all  other inventory (as defined in the Uniform Commercial Code) of
whatsoever kind or nature, and all wrapping, packaging, advertising and shipping
materials, and any documents relating thereto, and all labels and other devices,
names  or  marks  affixed or to be affixed thereto for purposes of selling or of
identifying  the  same  or  the  seller  or  manufacturer thereof and all of the
Company's  right,  title  and  interest  therein  and thereto, wherever located,
whether  now  owned  or  hereafter  acquired (the "Inventory"); (iii) all of the
Company's present and future cash, assets, accounts, account receivables, notes,
contract  rights,  chattel  paper,  checks,  drafts,  documents,  instruments,
trademarks,  trade  names,  service  names  and general intangibles, whether now
owned  or  hereafter  acquired,  the Company's interest in the goods represented
thereby  or  described  in  copies  of  invoices  delivered  to the Company; all
returned,  reclaimed  or  repossessed goods with respect thereto; all rights and
remedies  of  Company  under  or  in  connection  with  such  collateral  (the
"Accounts"); (iv) all of the Company's customers lists, all documents containing
names,  addresses,  telephone  numbers,  and  other  information  regarding  the
Company's  customers  and  subscribers  (the "Customer Accounts") (v) all of the
Company's  books, records and other property and general intangibles at any time
relating  to the Equipment, Inventory, Accounts, and Customer Accounts; and (vi)
all  products  and  proceeds  of  the  foregoing, in any form, including without
limitation,  any  claims  against  third  parties  for  loss  or  damage  to  or
destruction  of  any  or all of the Equipment, Inventory, Accounts, and Customer
Accounts  (the  "Proceeds").


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