MORTGAGE LOAN WAREHOUSING AGREEMENT
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         THIS MORTGAGE LOAN WAREHOUSING AGREEMENT (the "Agreement") is made as
of the _____ day of ___________, 1998, by and between WESTMARK MORTGAGE
CORPORATION, a California corporation (the "Company") and FIRST UNION NATIONAL
BANK, a national banking corporation (the "Lender").

                              STATEMENT OF PURPOSE
                              --------------------

         The Company has requested the Lender to extend to the Company a
mortgage warehousing line of credit, and the Lender has agreed to do so on the
terms and subject to the conditions set forth herein. All capitalized terms not
otherwise defined herein are defined in Paragraph 10 hereof.

         Now, therefore, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

                                    AGREEMENT
                                    ---------

         1.       Credit Facility.

                  1(a) Lending Limit. Subject to the conditions set forth
herein, the Lender agrees that it shall from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance loans (the
"Loans" or a "Loan") to the Company in amounts not to exceed, in the aggregate
at any one time outstanding (determined after giving effect to the other
transactions contemplated by the Loan Request pursuant to which said Loan was
requested), the lesser of:

                           (1)      The Credit Limit; and

                           (2)      The Collateral Value of the Borrowing Base.

                  1(b)     Interest Rate.  All Loans shall bear interest at the 
Applicable Interest Rate.

                  1(c) Payment of Interest. The Company shall pay to the Lender
interest on Loans outstanding hereunder from the date disbursed to but not
including the date of payment. Interest on Loans shall be payable monthly, in
arrears, as provided in Paragraph 2(d) below.

                  1(d) Inability to Determine Rate. If the Lender determines
(which determination shall be conclusive and binding upon the Company) that by
reason of circumstances affecting the London interbank eurodollar market
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
at any time, the Lender shall forthwith give facsimile notice of such
determination, confirmed in writing, to the Company. If such notice is given:
(1) no Loan may be funded as a Eurodollar Loan and (2) any outstanding
Eurodollar Loan shall be converted at such time to a Corporate Base Rate Loan.
Until such notice has been 


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withdrawn by the Lender, the Company shall not have the right to fund any Loan
as a Eurodollar Loan or to continue a Eurodollar Loan as such. The Lender shall
withdraw such notice in the event that the circumstances giving rise thereto no
longer obtain and that adequate and reasonable means exist for ascertaining the
Eurodollar Rate, and following withdrawal of such notice by the Lender, the
Company shall have the right to fund any Loan as a Eurodollar Loan or to
continue a Eurodollar Loan in accordance with the terms and conditions of this
Agreement.

                  1(e) Illegality. Notwithstanding any other provisions herein,
if any law, regulation, treaty or directive or any change therein or in the
interpretation or application thereof, shall make it unlawful for the Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement: (1) the
commitment of the Lender hereunder to continue Eurodollar Loans shall forthwith
be canceled and (2) all Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to Corporate Base Rate Loans at such time.

                  1(f) Requirements of Law; Increased Costs. In the event that
any change subsequent to the date hereof in any applicable law, order,
regulation, treaty or directive issued by any central bank or other Governmental
Authority, or in the governmental or judicial interpretation or application
thereof, or compliance by the Lender with any request or directive (whether or
not having the force of law) by any central bank or other Governmental
Authority:

                           (1) subjects the Lender to any tax of any kind
         whatsoever with respect to this Agreement or any Loans made hereunder,
         or changes the basis of taxation of payments to the Lender of
         principal, fee, interest or any other amount payable hereunder (except
         for changes in the rate of tax on the overall net income of the
         Lender);

                           (2) imposes, modifies or holds applicable any
         reserve, capital requirement, special deposit, compulsory loan or
         similar requirements against assets held by, or deposits or other
         liabilities in or for the account of, advances or loans by, or other
         credit extended by, or any other acquisition of funds by, any office of
         the Lender which are not otherwise included in the determination of the
         Applicable Interest Rate or any component thereof; or

                           (3) imposes on the Lender any other condition;

and the result of any of the foregoing is to increase the cost to the Lender of
making, renewing or maintaining any Loan or to reduce any amount receivable in
respect thereof or to reduce the rate of return on the capital of the Lender or
any Person controlling the Lender, then, in any such case, the Company shall
promptly pay to the Lender, upon its written demand, any additional amounts
necessary to compensate the Lender for such additional cost or reduced amounts
receivable or rate of return as determined by the Lender with respect to this
Agreement or Loans made hereunder. If the Lender becomes entitled to claim any
additional amounts pursuant to this Paragraph 1(f), it shall promptly notify the
Company of the event by reason of which it has become so entitled. A certificate
as to any additional amounts payable pursuant to the foregoing sentence
containing the calculation thereof in reasonable detail submitted by the Lender
to the Company shall be conclusive in the absence of manifest error. The
provisions hereof shall 

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survive the termination of this Agreement and payment of the outstanding Loans
and all other amounts payable hereunder.

                  1(g) Funding. The Lender shall be entitled to fund all or any
portion of the Loans in any manner it may determine in its sole discretion, but
all calculations and transactions hereunder shall be conducted as though the
Lender actually funds all Eurodollar Loans through the purchase in London of
offshore dollar deposits in the amount of the relevant Eurodollar Loan in
maturities of one month.

         2.       Miscellaneous Lending Provisions.

                  2(a) Use of Proceeds. The proceeds of all Loans shall be used
by the Company solely for the purpose of originating and acquiring Mortgage
Loans.

                  2(b) Request For Loans; Making of Loans. If the Company
desires to borrow a Loan hereunder, the Company shall make a Loan Request to the
Lender no later than 2:00 p.m. (Charlotte, North Carolina time) on the proposed
funding date and shall specify that rate per annum (i.e. the Corporate Base Rate
or the Eurodollar Rate) on which the Company elects to base the Applicable
Interest Rate. The Lender shall make available the proposed Loan by crediting
the amount thereof in immediately available same day funds to the Funding
Account no later than 3:30 p.m. (Charlotte, North Carolina time) on such date.

                  2(c) Notes. The obligation of the Company to repay the Loans
shall be evidenced by a note payable to the order of the Lender in the form
attached hereto as Exhibit A (the "Note").

                  2(d) Interest and Fee Billing and Payment. The Lender shall,
on or before the fifth Business Day of each month, deliver to the Company an
interest and fee billing for the immediately preceding month, which billing
shall set forth interest accrued and payable on Loans and fees payable hereunder
for such month and which billing shall be payable no later than the second
Business Day following receipt thereof by the Company.

                  2(e) Repayment of Principal. Subject to the prepayment
requirements of Paragraph 2(j) below and the required application of proceeds
from the sale or other disposition of Mortgage Loans as provided in the Security
Agreement, the Company shall pay the principal amount of all Loans on the
Maturity Date.

                  2(f)     Borrowing Base Conformity.

                           (1) The Company shall cause to be maintained with the
         Lender a Borrowing Base such that the Collateral Value of the Borrowing
         Base is not less than, at any date, the sum of the aggregate dollar
         amount of outstanding Loans.

                           (2) The Company shall prepay Loans to the Lender,
         upon telephonic or facsimile demand by the Lender, on any day in the
         amount by which the aggregate principal amount of outstanding Loans
         exceeds the Collateral Value of the Borrowing 

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         Base, said prepayment to be made on the date on which demand is made by
         the Lender if made prior to 4:00 p.m. (Charlotte, North Carolina time)
         or, if made later than 4:00 p.m. (Charlotte, North Carolina time),
         before 9:00 a.m. (Charlotte, North Carolina time) on the next Business
         Day.

                           (3) If at such time as the Company shall be required
         to prepay Loans under this Paragraph 2(f) there shall not have occurred
         and be continuing an Event of Default or Potential Default hereunder,
         in lieu of prepaying the Loans as required, the Company may deliver to
         the Lender additional Eligible Mortgage Loans such that the Collateral
         Value of the Borrowing Base, after giving effect to the inclusion of
         such Eligible Mortgage Loans in the Borrowing Base, shall be in
         compliance with the requirements of subparagraphs (1) and (2) above.

                  2(g) Nature and Place of Payments. All payments made on
account of the Obligations shall be made to the Lender and the Lender is hereby
irrevocably authorized to debit the Settlement Account on account thereof. All
payments made on account of the Obligations shall be made without setoff or
counterclaim in lawful money of the United States of America in immediately
available same day funds, free and clear of and without deduction for any taxes,
fees or other charges of any nature whatsoever imposed by any taxing authority
and if received by the Lender by 4:00 p.m. (Charlotte, North Carolina time) such
payment will be credited on the Business Day received. If a payment is received
after 4:00 p.m. (Charlotte, North Carolina time) by the Lender, such payment
will be credited on the next succeeding Business Day and interest thereon shall
be payable at the then applicable rate until credited. If any payment required
to be made by the Company hereunder becomes due and payable on a day other than
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall be payable at the then applicable rate
during such extension.

                  2(h) Post-Maturity Interest. Any Obligations not paid when due
(whether at stated maturity, upon acceleration or otherwise) shall bear interest
from the date due until paid in full at a per annum rate equal to four percent
(4%) above the interest rate otherwise applicable thereto, or, if such
Obligations do not otherwise bear interest, four percent (4%) above the Prime
Rate.

                  2(i) Computations. All computations of interest and fees
payable hereunder shall be based upon a year of 360 days for the actual number
of days elapsed.

                  2(j)     Prepayments.

                           (1) The Company may voluntarily prepay Loans 
         hereunder in whole or in part at any time.

                           (2) Loans hereunder are subject to mandatory
         prepayment pursuant to Paragraph 2(f) above and, in addition, by
         application of proceeds of the sale or other disposition of Collateral
         as provided in the Security Agreement.


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<PAGE>

                           (3) The Company shall pay in connection with any
         prepayment hereunder all interest accrued but unpaid on Loans to which
         such prepayment is applied concurrently with payment to the Lender of
         any principal amounts.

                  2(k)     Allocation of Payments Received.

                           (1) Prior to the occurrence of an Event of Default
         and acceleration of all Loans outstanding hereunder or termination of
         the commitment of the Lender to advance Loans hereunder, all amounts
         received by the Lender shall be applied against the outstanding
         Obligations.

                           (2) Following the occurrence of an Event of Default
         and acceleration of all Loans outstanding hereunder or termination of
         the commitments of the Lender to advance Loans hereunder, all amounts
         received by the Lender on account of the Obligations shall be applied
         by the Lender as follows:

                           (i) First, to the payment of reasonable costs and
                  expenses incurred by the Lender in the enforcement of its
                  rights under the Credit Documents, including, without
                  limitation, all costs and expenses of collection, attorneys'
                  fees, court costs and foreclosure expenses;

                           (ii) Second, to the Lender to be applied against the
                  Obligations until the Obligations shall have been paid in
                  full; and

                           (iii) Third, to such Persons as may be legally
                  entitled thereto.

                  2(l)     Fees. The Company shall pay the following fees to the
                  Lender:

                           (1) A collateral handling fee of $50.00 with respect
to each Mortgage Loan (and related Required Documents) submitted to the Lender
for inclusion in the Borrowing Base, such fee to be payable monthly in arrears
on the applicable date specified in Paragraph 2(d) hereof.

         3.       Security Agreement; Guaranty; Additional Documents.

                  3(a) Security Agreement and Financing Statements. On or before
the date hereof, the Company shall execute and deliver to the Lender: (1) a
security agreement in the form of that attached hereto as Exhibit B (the
"Security Agreement"), pursuant to which the Company shall pledge, assign and
grant to the Lender a perfected, first priority security interest in and lien
upon the Collateral, and (2) such UCC financing statements as the Lender may
request.

                  3(b) Guaranty. On or before the date hereof, the Company shall
cause to be executed and delivered to the Lender by the Guarantor a continuing
guaranty substantially in the form of that attached hereto as Exhibit C (the
"Guaranty").

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<PAGE>

                  3(c) Further Documents. The Company agrees to execute and
deliver and to cause to be executed and delivered to the Lender from time to
time such confirmatory and supplementary security agreements, financing
statements and other documents, instruments and agreements as the Lender may
reasonably request, which are in the Lender's judgment necessary or desirable to
obtain for the Lender the benefit of the Credit Documents and the Collateral.

         4.       Conditions to Making of Loans.

                  4(a) First Loan. As conditions precedent to the Lender's
obligation to make the first Loan hereunder:

                           (1) The Company shall have delivered to the Lender,
         in form and substance satisfactory to the Lender and its counsel, each
         of the following:

                           (i)  A duly executed copy of this Agreement;

                           (ii) A duly executed copy of each of the Security
                           Agreement and the Guaranty;

                           (iii) A duly executed copy of the Note;

                           (iv) Duly executed copies of all financing statements
                  and other documents, instruments and agreements, properly
                  executed, deemed necessary or appropriate by the Lender, in
                  its reasonable discretion, to obtain for the Lender a
                  perfected, first priority security interest in and lien upon
                  the Collateral;

                           (v) Such credit applications, financial statements,
                  authorizations and such information concerning the Company and
                  the Guarantor and their respective businesses, operations and
                  conditions (financial and otherwise) as the Lender may
                  reasonably request;

                           (vi) Certified copies of resolutions of the Board of
                  Directors of each of the Company and the Guarantor approving
                  the execution and delivery of the Credit Documents to which
                  the Company or the Guarantor, respectively, is a party, the
                  performance of the Obligations thereunder and the consummation
                  of the transactions contemplated thereby;

                           (vii) A certificate of the Secretary or an Assistant
                  Secretary of each of the Company and the Guarantor certifying
                  the names and true signatures of the officers of the Company
                  or the Guarantor authorized to execute and deliver the Credit
                  Documents to which the Company or the Guarantor, respectively,
                  is a party;

                           (viii) A copy of the Articles of Incorporation of
                  each of the Company and the Guarantor, certified by the
                  respective Secretary or an Assistant Secretary
 
                                        6

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                  of the Company or the Guarantor, respectively, as of the date
                  of this Agreement as being accurate and complete;

                           (ix) A copy of the Bylaws of each of the Company and
                  the Guarantor, certified by the respective Secretary or an
                  Assistant Secretary of the Company or the Guarantor,
                  respectively, as of the date of this Agreement as being
                  accurate and complete;

                           (x) (A) A certificate of the Secretary of State of
                  the State of California, certifying as of a recent date that
                  the Company is in good standing, (B) a certificate of the
                  Secretary of State of the State of Florida, certifying as of a
                  recent date that the Company is qualified as a foreign
                  corporation in the State of Florida; (C) a certificate of the
                  Secretary of State of the State of Delaware, certifying as of
                  a recent date that the Guarantor is in good standing, and (D)
                  a certificate of the Secretary of State of the State of
                  Florida, certifying as of a recent date that the Company is
                  qualified as a foreign corporation in the State of Florida;

                           (xi) An opinion of counsel for the Company and the
                  Guarantor substantially in the form of Exhibit D attached
                  hereto and covering such other matters as the Lender may
                  reasonably request;

                           (xii) Evidence satisfactory to the Lender that each
                  of the Funding Account and the Settlement Account has been
                  opened;

                           (xiii) A schedule of the initial Approved Investors
                  duly approved by the Lender;

                           (xiv) A Covenant Compliance Certificate demonstrating
                  in detail satisfactory to the Lender compliance with the
                  covenants set forth in Paragraphs 7(i), 7(j) and 7(k) below;

                           (xv) A copy of each Buy/Sell Agreement in effect as
                  of the date hereof;

                           (xvi) Such financial information as the Lender may
                  reasonably request with respect to any Approved Investor; and

                           (xvii) A duly completed Borrowing Base Schedule
                  certified by the Company.

                           (2) All acts and conditions (including, without
         limitation, the obtaining of any necessary regulatory approvals and the
         making of any required filings, recordings or registrations) required
         to be done and performed and to have happened precedent to the
         execution, delivery and performance of the Credit Documents and to
         constitute the same legal, valid and binding obligations, enforceable
         in accordance with their respective terms, shall have been done and
         performed and shall have happened in material compliance with all
         applicable laws.


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<PAGE>

                           (3) All documentation, including, without limitation,
         documentation for corporate and legal proceedings in connection with
         the transactions contemplated by the Credit Documents shall be
         satisfactory in form and substance to the Lender and its counsel.

                           (4) All fees required to be paid on or before the
         date hereof pursuant to Paragraph 2(l) above shall have been paid prior
         to (or will be paid concurrently with) the making of the first Loan
         hereunder.

                  4(b) Ongoing Loans. As conditions precedent to the Lender's
obligation to make any Loan hereunder, including the first Loan, at and as of
the date of advance thereof;

                           (1) There shall have been delivered to the Lender a 
         Loan Request therefor;

                           (2) The representations and warranties of the Company
         contained in the Credit Documents shall be accurate and complete in all
         material respects as if made on and as of the date of such advance,
         conversion or continuance (unless such representation specifically
         relates to an earlier date, in which case such representation shall
         have been true and correct as of such earlier date);

                           (3) There shall not have occurred an Event of Default
         or Potential Default;

                           (4) Following the funding of the requested Loan, the
         aggregate principal amount of Loans outstanding will not exceed the
         lesser of: (i) the Credit Limit and (ii) the Collateral Value of the
         Borrowing Base;

                           (5) There shall not have occurred any material
         adverse change in the financial condition, assets, nature of assets,
         operations or prospects of the Company from that represented in this
         Agreement, the other Credit Documents, or the documents or information
         furnished to the Lender in connection herewith or therewith; and

                           (6) The Required Documents for the Mortgage Loan(s)
         contained in the Borrowing Base shall have been received by the Lender
         (except as otherwise provided in subparagraph (o) of the definition of
         "Eligible Mortgage Loan").

By making a Loan Request to the Lender hereunder, the Company shall be deemed to
have represented and warranted the accuracy and completeness of the statements
set forth in subparagraphs (b)(2) through (b)(6) above.

         5. Representations and Warranties of the Company.

         The Company represents and warrants to the Lender that:

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<PAGE>

                  5(a) Financial Condition. The financial statements dated the
Statement Date, copies of which have been furnished to the Lender, are complete
and correct to the best knowledge of the Company and have, to the best knowledge
of the Company, been prepared to present fairly and consistently, in accordance
with GAAP, the financial condition of the Guarantor and its consolidated
Subsidiaries (including without limitation the Company) at such date and the
results of its operations and cash flows for the fiscal period then ended.

                  5(b) No Change. As of the date hereof, to the best knowledge
of the Company, there has been no material adverse change in the business,
operations, assets or financial or other condition of the Company or the
Guarantor from that shown on the financial statements dated as of the Statement
Date referred to in Paragraph 5(a) above.

                  5(c) Corporate Existence; Compliance with Law. The Company:
(1) is duly organized, validly existing and in good standing as a corporation
under the laws of the State of California and is qualified to do business in
Florida and in each other jurisdiction where its ownership of property or
conduct of business requires such qualification and where failure to qualify
could have a material adverse effect on the Company or its property or business
or on the ability of the Company to pay or perform the Obligations, (2) has the
corporate power and authority and the legal right to own and operate its
property and to conduct business in the manner in which it does and proposes so
to do, and (3) is in compliance with all Requirements of Law and Contractual
Obligation, the failure to comply with which could have a material adverse
effect on the business, operations, assets or financial or other condition of
the Company or on the Collateral or the Collateral Value of the Borrowing Base.

                  5(d) Corporate Power; Authorization; Enforceable Obligations.
The Company has the corporate power and authority and the legal right to
execute, deliver and perform the Credit Documents and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Credit Documents. The Credit Documents have been duly executed and delivered on
behalf of the Company and constitute legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, subject to the effect of applicable bankruptcy and other similar laws
affecting the rights of creditors generally and the effect of equitable
principles whether applied in an action at law or a suit in equity.

                  5(e) No Legal Bar. The execution, delivery and performance of
the Credit Documents, the borrowing hereunder and the use of the proceeds
thereof, will not violate any Requirements of Law or any Contractual Obligations
of the Company the violation of which could have a material adverse effect on
the business, operations, assets or financial or other condition of the Company
or on the Collateral or the Collateral Value of the Borrowing Base or create or
result in the creation of any Lien (except the Lien created by the Security
Agreement) on any assets of the Company.

                  5(f) No Material Litigation. Except as disclosed on Exhibit E
hereto, no litigation, investigation or proceeding of or before any court,
arbitrator or Governmental Authority is pending or, to the knowledge of the
Company, threatened by or against the Company or against any of its properties
or revenues which is likely to be adversely determined 

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<PAGE>

and which, if adversely determined, is likely to have a material adverse effect
on the business, operations, property or financial or other condition of the
Company or on the Collateral or the Collateral Value of the Borrowing Base.

                  5(g) Taxes. All tax returns that are required to be filed by
or on behalf of the Company have been filed and all taxes shown to be due and
payable on said returns or on any assessments made against the Company or any of
its property have been paid (other than taxes which are being contested in good
faith by appropriate proceedings and as to which the Company has established
adequate reserves in conformity with GAAP).

                  5(h) Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.

                  5(i) Federal Reserve Board Regulations. The Company is not
engaged and will not engage, principally or as one of its important activities,
in the business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" within the respective meanings of such terms under
Regulation U. No part of the proceeds of any Loan issued hereunder will be used,
directly or indirectly, for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of the Board of Governors of the Federal
Reserve System.

                  5(j) ERISA. The Company and each of its ERISA Affiliates are
in compliance in all material respects with the requirements of ERISA and no
Reportable Event has occurred under any Plan maintained by the Company or any of
its ERISA Affiliates which is likely to result in the termination of such Plan
for purposes of Title IV of ERISA.

                  5(k) Assets. The Company has good and marketable title to all
property and assets reflected in the financial statements referred to in
Paragraph 5(a) above (as such financial statements may be supplanted by those
financial statements delivered from time to time pursuant to Paragraph 6(a)),
except property and assets sold or otherwise disposed of in the ordinary course
of business subsequent to the respective dates thereof. The Company has no
outstanding Liens on any of its properties or assets and there are no security
agreements to which the Company is a party, nor any title retention agreements,
whether in the form of leases or otherwise, of any personal property except as
permitted under Paragraph 7(a) below.

                  5(l) Securities Acts. The Company has not issued any
unregistered securities in violation of the registration requirements of
Paragraph 5 of the Securities Act of 1933, as amended, or any other law, and is
not violating any rule, regulation or requirement under the Securities Act of
1933, as amended, or the Securities and Exchange Act of 1934, as amended. The
Company is not required to qualify an indenture under the Trust Indenture Act of
1939, as amended, in connection with its execution and delivery of the Note.

                  5(m) Consents, etc. No consent, approval, authorization of, or
registration, declaration or filing with, any Governmental Authority is required
on the part of the Company in connection with the execution and delivery of the
Credit Documents (other than filings to create, 

                                       10
<PAGE>

perfect or continue the perfection of the security interests granted by it and
routine corporate filings to maintain good standing) or the performance of or
compliance with the terms, provisions and conditions hereof or thereof.

                  5(n) Ownership and Subsidiaries. Schedule II attached hereto
and incorporated herein by reference lists all of the shareholders of the
Company as of the effective date of this Agreement. As of the effective date of
this Agreement, the Company has no Subsidiaries.

         6. Affirmative Covenants. The Company hereby covenants and agrees with
the Lender that, as long as any Obligations remain unpaid or the Lender has any
obligation to make Loans hereunder, the Company shall:

                  6(a)     Financial Statements.  Furnish or cause to be 
furnished to the Lender:

                           (1) Within one hundred twenty (120) days after the
         last day of each fiscal year of the Guarantor, consolidated and
         consolidating statements of income and cash flows for such year and
         consolidated and consolidating balance sheets as of the end of such
         year of the Guarantor and its consolidated Subsidiaries (including,
         without limitation, the Company), presented fairly in accordance with
         GAAP and accompanied by an unqualified report of a firm of independent
         certified public accountants acceptable to the Lender and including
         therewith a copy of any management letter from such certified public
         accountants;

                           (2) Within forty-five (45) days after the last day of
         each calendar month, consolidated and consolidating statements of
         income for such month and consolidated and consolidating balance sheets
         as of the end of such month of the Guarantor and its consolidated
         Subsidiaries (including, without limitation, the Company), accompanied
         in each case by a Covenant Compliance Certificate executed by the Chief
         Executive Officer of the Guarantor, stating that such financial
         statements are prepared fairly and consistently in accordance with GAAP
         and demonstrating in detail satisfactory to the Lender compliance with
         the financial covenants set forth in Paragraphs 7(i), 7(j) and 7(k)
         below as of and at the end of such month.

                  6(b)     Certificates; Reports; Other Information. Furnish or
cause to be furnished to the Lender:

                           (1) Promptly, such additional financial and other
         information, including, without limitation, financial statements of the
         Company or the Guarantor or any Approved Investor, and information
         regarding the Collateral, as the Lender may from time to time
         reasonably request;

                           (2) Promptly, copies of any and all forms, reports,
         supplements or other documents of any kind, if any, filed by the
         Company or the Guarantor with the Securities and Exchange Commission or
         with any state securities commission.

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<PAGE>

                           (3) Upon request by Lender, the Additional Required
         Documents with respect to any Mortgage Loan.

                           (4) Upon request by Lender, copies of any Buy/Sell
         Agreements to which the Company is a party.

                           (5) Within seven (7) Business Days following any
         proposed material change, a copy of any proposed material change to any
         of the High LTV Investor Guidelines (which change shall be subject to
         Lender's approval in its sole discretion).

                  6(c) Payment of Indebtedness. Pay or otherwise satisfy at or
before maturity or before it becomes delinquent or accelerated, as the case may
be, all its Indebtedness (including taxes), except Indebtedness being contested
in good faith by appropriate proceedings and for which provision is made to the
satisfaction of the Lender for the payment thereof in the event the Company is
found to be obligated to pay such Indebtedness and which Indebtedness is
thereupon promptly paid by the Company.

                  6(d) Maintenance of Existence and Properties. Maintain its
corporate existence and obtain and maintain all rights, privileges, licenses,
approvals, franchises, properties and assets necessary or desirable in the
normal conduct of its business, and comply with all Contractual Obligations and
Requirements of Law (including, without limitation, any Requirements of Law
under or in connection with ERISA), except where the failure to so comply is not
likely to have a material adverse effect on the business, operations, assets or
financial or other condition of the Company or on the Collateral or the
Collateral Value of the Borrowing Base.

                  6(e)     Inspection of Property; Books and Records; Audits.

                           (1) Keep proper books of record and account in which
         full, true and correct entries in conformity with GAAP and all
         Requirements of Law shall be made of all dealings and transactions in
         relation to its business and activities; and

                           (2) Permit: (i) representatives of the Lender to (A)
         visit and inspect any of its properties and examine and make abstracts
         from any of its books and records at any reasonable time and as often
         as may reasonably be desired by the Lender (but, prior to the
         occurrence of an Event of Default, only upon not less than two Business
         Days' prior notice), and (B) discuss the business, operations,
         properties and financial and other condition of the Company with
         officers and employees of the Company, and with its independent
         certified public accountants, and (ii) representatives of the Lender to
         conduct periodic operational audits of the Company's business and
         operations.

                  6(f)     Notices.  Promptly give written notice to the Lender 
of:

                           (1) The occurrence of any Potential Default or Event
         of Default known to responsible management personnel of the Company and
         the proposed method of cure thereof;

                                       12
<PAGE>

                           (2) Any litigation or proceeding affecting the
         Company, the Guarantor or the Collateral which could have a material
         adverse effect on the Collateral, the Collateral Value of the Borrowing
         Base or the business, operations, property, or financial or other
         condition of the Company or the Guarantor;

                           (3) A material adverse change known to responsible
         management personnel of the Company in the business, operations,
         property or financial or other condition of the Company or the
         Guarantor;

                           (4) Any changes in the following senior management
         positions of the Company: President, Chief Financial Officer or
         Operations Manager;

                           (5) Any acquisition, purchase, redemption,
         retirement, transfer or issuance of any shares of the Company's capital
         stock (including without limitation any options or warrants relating
         thereto); and

                           (6) Any prepayment of any Mortgage Loan included in
         the Collateral value of the Borrowing Base in an amount greater than
         ten percent (10%) of the original principal balance of said Mortgage
         Loan (either by itself or in aggregate with other previous prepayments
         of said Mortgage Loan).

                           6(g) Expenses. Pay all reasonable out-of-pocket costs
and expenses (including fees and disbursements of legal counsel) of the Lender:
(1) incident to the preparation, negotiation and administration of the Credit
Documents, including with respect to or in connection with any waiver or
amendment thereof or thereto (provided that the Company's responsibility to pay
fees and disbursements of the Lender's counsel in connection with the initial
preparation, negotiation, and execution of the Credit Documents shall be limited
to $5000 in fees, plus reasonable expenses), (2) associated with any periodic
audits conducted pursuant to Paragraph 6(e)(2)(ii) above, and (3) incident to
the enforcement of payment of the Obligations, whether by judicial proceedings
or otherwise, including, without limitation, in connection with bankruptcy,
insolvency, liquidations, reorganization, moratorium or other similar
proceedings involving the Company or a "workout" of the Obligations. The
obligations of the Company under this Paragraph 6(g) shall be effective and
enforceable whether or not any Loan is advanced by the Lender hereunder and
shall survive payment of all other Obligations.

                           6(h) Credit Documents. Comply with and observe all
terms and conditions of the Credit Documents.

                  6(i) Insurance. Obtain and maintain insurance with responsible
companies in such amounts and against such risks as are usually carried by
corporations engaged in similar businesses similarly situated, including,
without limitation, surety bonds, and furnish the Lender on request full
information as to all such insurance.

                  6(j) Wet Funding Mortgage Loan Transmittal Form. Furnish or
cause to be furnished to the Lender, with each Eligible Mortgage Loan shipped or
delivered which is of the 

                                       13

<PAGE>

type described in the proviso contained in subsection (o) of the definition of
Eligible Mortgage Loan, a Wet Funding Mortgage Loan Transmittal Form
substantially in the form attached as Exhibit J hereto.

         7. Negative Covenants. The Company hereby agrees that, as long as any
Obligations remain unpaid or the Lender has any obligation to make Loans
hereunder, the Company shall not at any time, directly or indirectly:

                  7(a) Liens. Create, incur, assume or suffer to exist, any Lien
upon the Collateral except as contemplated by the Security Agreement, or create,
incur, assume or suffer to exist any Lien upon any of its other property and
assets (including servicing rights) except:

                           (1) Liens for current taxes, assessments or other
         governmental charges which are not delinquent or which remain payable
         without penalty, or the validity of which are contested in good faith
         by appropriate proceedings upon stay of execution of the enforcement
         thereof, provided the Company shall have set aside on its books and
         shall maintain adequate reserves for the payment of same in conformity
         with GAAP;

                           (2) Liens, deposits or pledges made to secure
         statutory obligations, surety or appeal bonds, or bonds for the release
         of attachments or for stay of execution, or to secure the performance
         of bids, tenders, contracts (other than for the payment of borrowed
         money), leases or for purposes of like general nature in the ordinary
         course of the Company's business;

                           (3) Purchase money security interests for property
         (except Mortgage Loans) hereafter acquired, conditional sale
         agreements, or other title retention agreements, with respect to
         property hereafter acquired; provided, however, that no such security
         interest or agreement shall affect any servicing rights or extend to
         any property other than the property acquired; and

                           (4) Liens securing Permitted Secured Debt.

                  7(b) Indebtedness. Create, incur, assume or suffer to exist,
or otherwise become or be liable in respect of any Indebtedness except:

                           (1)      The Obligations;

                           (2) Indebtedness reflected in the financial
         statements referred to in Paragraph 5(a) above;

                           (3) Trade debt incurred in the ordinary course of
         business, paid as the same may become due and payable according to the
         terms thereof or which is being contested in good faith, provided
         provision is made to the satisfaction of the Lender for the eventual
         payment thereof in the event it is found that such contested trade debt
         is payable by the Company;

                                       14
<PAGE>

                           (4) Indebtedness secured by Liens permitted under
Paragraph 7(a) above; and

                           (5)      Permitted Unsecured Debt.

                  7(c) Consolidation and Merger; Change of Business. (i)
Liquidate or dissolve, or (ii) enter into any consolidation, merger,
partnership, joint venture, syndicate or other combination, or (iii) make any
change in the nature of its business as a mortgage banker as presently conducted
(except, in the case of activities covered under (ii) or (iii) above, with the
prior consent of the Lender, which consent shall not be unreasonably withheld).

                  7(d) Acquisitions. Without the prior consent of the Lender
(which consent shall not be unreasonably withheld), purchase or acquire or incur
liability for the purchase or acquisition of any or all of the assets or
business of any Person, other than in the normal course of business as currently
conducted (it being expressly agreed and understood that the acquisition of
non-recourse servicing is a normal course of business activity and that the
acquisition of recourse servicing is not a normal course of business activity).

                  7(e) Transfer of Stock. Permit the acquisition, purchase,
redemption, retirement, transfer or issuance of any shares of its capital stock
now or hereafter outstanding (or any warrants or options relating thereto) if as
a result thereof the Guarantor would be the owner of less than one hundred
percent (100%) of the shares of the capital stock outstanding at such time
(including without limitation any options or warrants relating thereto).

                  7(f) Subsidiaries. Organize any Subsidiary without prior
written notice to the Lender.

                  7(g) Investments; Advances; Guaranties. Without the prior
consent of the Lender (which consent shall not be unreasonably withheld), make
or commit to make any advance, loan or extension of credit (other than (i)
advances of salary or earned commissions to officers or employees of the
Company, (ii) Mortgage Loans made or purchased in the ordinary course of the
Company's business, and (iii) advances, loans or extensions of credit to
officers, directors, shareholders or employees) to, or make or commit to make
any capital contribution to, or purchase any stocks, bonds, notes, debentures or
other securities (other than Cash and Cash Equivalents) of, or make any other
investment (other than the maintenance of operating bank accounts in the
ordinary course of the Company's business) in, or guaranty the indebtedness or
other obligations of, any Person, which such advances, loans, extensions of
credit, capital contributions, purchases, investments, or guaranties exceed
$100,000 in the aggregate.

                  7(h) Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of any of its assets (other than obsolete or worn out
property), whether now owned or hereafter acquired, other than in the ordinary
course of business as currently conducted and at fair market value (it being
expressly agreed and understood that the sale or other disposition of
Mortgage-Backed Securities and Mortgage Loans with or without servicing released
and of mortgage servicing rights is in the ordinary course of business).

                                       15
<PAGE>

                  7(i) Leverage Ratio. Permit the ratio at any date of Total
Liabilities to Adjusted Tangible Net Worth to be more than (i) during the period
from March 31, 1998 through and including September 29, 1998, 40.0:1.0, and (ii)
at all times thereafter, 15.0:1.0.

                  7(j) Minimum Book Net Worth. Permit Book Net Worth to be less
than (i) during the period from March 31, 1998 through and including September
29, 1998, $500,000, and (ii) at all times thereafter, $1,000,000.

                  7(k) Current Ratio. Permit the ratio at any date of total
current assets of the Guarantor and its consolidated Subsidiaries (including
without limitation the Company) to total current liabilities of the Guarantor
and its consolidated Subsidiaries (including without limitation the Company),
each as determined in accordance with GAAP, to be less than (i) during the
period from March 31, 1998 through and including September 29, 1998, 0.70:1.0,
and (ii) at all times thereafter, 0.85:1.0.

                  7(l) Dividends. During any fiscal year, declare and pay any
dividends, or return any capital, to its shareholders or authorize or make any
other distribution, payment or delivery of property or cash to its shareholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital stock
now or hereafter outstanding (or any option or warrants issued by it for or with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, in an aggregate amount in excess of fifty percent (50%) of the income
of the Company available to shareholders for such fiscal year as determined in
accordance with GAAP.

                  7(m) Change of Control. Permit to occur a material change in
the composition of the directors or the officers of the Company as constituted
on the date hereof unless such director or officer is replaced by a person or
persons reasonably acceptable to the Lender.

         8. Events of Default. Upon the occurrence of any of the following
events (an "Event of Default"):

                  8(a)The Company shall fail to pay principal or interest on any
Loan or any fee payable pursuant to Paragraph 2(l) above, or any amount payable
pursuant to Paragraph 2(f) or 2(j) above, when due; or

                  8(b) Any representation or warranty made or deemed made by the
Company or the Guarantor in any Credit Document or in connection with any Credit
Document shall be inaccurate or incomplete in any respect on or as of the date
made or deemed made; or

                  8(c) The Company shall fail to maintain its corporate
existence or shall default in the observance or performance of any covenant or
agreement contained in Paragraph 7 above or in the Security Agreement; or

                  8(d) The Company shall fail to observe or perform any other
term or provision contained in the Credit Documents and such failure shall
continue for thirty (30) days; or

                                       16
<PAGE>

                  8(e) The Company shall default in any payment of principal of
or interest on any Indebtedness in the aggregate principal amount of $100,000 or
more (and without regard for the dollar amount of the defaulted payment), or any
other event shall occur, the effect of which is to permit such Indebtedness to
be declared or otherwise to become due prior to its stated maturity; or

                  8(f) (1) The Company or the Guarantor shall commence any case,
proceeding or other action (i) relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to the Company or the Guarantor, or seeking to adjudicate the
Company or the Guarantor a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to the Company or the Guarantor or the debts of either
of them, or (ii) seeking appointment of a receiver, trustee, custodian or other
similar official for the Company or for all or any substantial part of the
Company's assets, or the Company or the Guarantor shall make a general
assignment for the benefit of its, his or their creditors; or (2) there shall be
commenced against the Company or the Guarantor any case, proceeding or other
action of a nature referred to in clause (1) above which (i) results in the
entry of an order for relief or any such adjudication or appointment, or (ii)
remains undismissed, undischarged or unbonded for a period of sixty (60) days;
or (3) there shall be commenced against the Company or the Guarantor any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or substantially all of the
assets of any of them which results in the entry of an order for any such relief
which shall not have been vacated, discharged, stayed, satisfied or bonded
pending appeal within sixty (60) days from the entry thereof; or (4) the Company
or the Guarantor shall take any action in furtherance of, or indicating its, his
or their consent to, approval of, or acquiescence in (other than in connection
with a final settlement), any of the acts set forth in clauses (1), (2) or (3)
above; or (5) the Company or the Guarantor shall generally not, or shall be
unable to, or shall admit in writing its, his or their inability to pay its, his
or their debts as they become due; or

                  8(g) (1) The Company or any of its ERISA Affiliates shall
engage in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (2) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan, (3) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or institution of proceedings is, in the reasonable
opinion of the Lender, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, and, in the case of a Reportable Event, the
continuance of such Reportable Event unremedied for ten days after notice of
such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given
or the continuance of such proceedings for ten days after commencement thereof,
as the case may be, (4) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (5) any withdrawal liability to a Multiemployer Plan shall be
incurred by the Company or any of its ERISA Affiliates or (6) any other event or
condition shall occur or exist; and in each case in clauses (1) through (6)
above, such event or condition, together with all other such events or
conditions, if any, is likely to subject the Company or any of its respective
ERISA Affiliates to any tax, penalty or other 

                                       17
<PAGE>

liabilities, which in the aggregate are material in relation to the business,
operations, property or financial or other condition of the Company or any of
its ERISA Affiliates; or

                  8(h) One or more judgments or decrees in an aggregate amount
in excess of $100,000 shall be entered against the Company after the date hereof
and all such judgments or decrees shall not have been vacated, discharged,
stayed, satisfied or bonded pending appeal within sixty (60) days from the entry
thereof; or

                  8(i) The Guarantor shall fail to observe or perform any term
or provision of the Guaranty or shall attempt to rescind or revoke the Guaranty,
with respect to future transactions or otherwise;

                                      THEN:

                           (1)      Automatically upon the occurrence of an 
Event of Default under Paragraph 8(f) above; and

                           (2)      In all other cases, at the option of the
Lender,

the Lender's obligation to make Loans hereunder shall terminate and the
principal balance of outstanding Loans and interest accrued but unpaid thereon
shall become immediately due and payable, without demand upon or presentment to
the Company, which are expressly waived by the Company.

                  Notwithstanding anything to the contrary contained in this
Paragraph 8, the parties hereto acknowledge that it is their intention that the
violation or breach of any covenants made in respect of any Mortgage Loan
regarding the qualification of such Mortgage Loan as an "Eligible Mortgage Loan"
under this Agreement shall not constitute an Event of Default provided that the
Company is in compliance with the provisions of Paragraph 2(f) hereof.

         9.       Miscellaneous Provisions.

                  9(a) Assignment. The Company may not assign its rights or
obligations under this Agreement without the prior written consent of the
Lender. The Lender shall not assign its rights and obligations under this
Agreement to any other party not a party to this Agreement as of the date
hereof; provided, however, that the Lender may at any time pledge or assign all
or any portion of the Lender's rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank. Subject to the foregoing, all provisions
contained in this Agreement or any document or agreement referred to herein or
relating hereto shall inure to the benefit of the Lender, its successors and
assigns, and shall be binding upon the Company, its successors and assigns.

                  9(b) Amendment. Neither this Agreement nor any of the other
Credit Documents may be amended or terms or provisions hereof or thereof waived
unless such amendment or waiver is in writing and signed by the Lender and the
Company. It is expressly agreed and understood that the failure by the Lender to
elect to accelerate amounts outstanding 

                                       18

<PAGE>

hereunder or to terminate the obligation of the Lender to make Loans hereunder
shall not constitute an amendment or waiver of any term or provision of this
Agreement.

                  9(c) Cumulative Rights; No Waiver. The rights, powers and
remedies of the Lender under the Credit Documents are cumulative and in addition
to all rights, powers and remedies provided under any and all agreements among
the Company and the Lender relating hereto, at law, in equity or otherwise. Any
delay or failure by the Lender to exercise any right, power or remedy shall not
constitute a waiver thereof by the Lender, and no single or partial exercise by
the Lender of any right, power or remedy shall preclude other or further
exercise thereof or any exercise of any other rights, powers or remedies.

                  9(d) Entire Agreement. This Agreement and the documents and
agreements referred to herein embody the entire agreement and understanding
between the parties hereto and supersede all prior agreements and understandings
relating to the subject matter hereof and thereof.

                  9(e) Survival. All representations, warranties, covenants and
agreements on the part of the Company and the Guarantor contained in the Credit
Documents shall survive the termination of this Agreement and shall be effective
until the Obligations are paid and performed in full or longer as expressly
provided herein.

                  9(f) Notices. All notices given by any party to the others
under the Credit Documents shall be in writing unless otherwise provided for
herein, delivered personally or by depositing the same in the United States
mail, registered, with postage prepaid, addressed to the party at the address
set forth on Schedule I attached hereto. Any party may change the address to
which notices are to be sent by notice of such change to each other party given
as provided herein. Such notices shall be effective on the date received or, if
mailed, on the third Business Day following the date mailed.

                  9(g) Governing Law/Waiver of Jury Trial. This Agreement shall
be governed by and construed in accordance with the laws of the State of North
Carolina. TO THE EXTENT PERMITTED BY LAW, THE COMPANY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE CREDIT DOCUMENTS. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE LENDER ENTERING INTO THE CREDIT DOCUMENTS.

                  9(h) Sub-Participation by Lender. The Lender may at any time
sell to one or more financial institutions (each of such financial institutions
being herein called a "Participant") participating interests in any of the
Obligations held by the Lender and its commitments hereunder; provided, however,
that: (1) no participation contemplated by this Paragraph 9(h) shall relieve the
Lender from its obligations hereunder or under any other Credit Document; (2)
the Lender shall remain solely responsible for the performance of such
obligations; and (3) the Company shall continue to deal solely and directly with
the Lender in connection with the Lender's rights and obligations under the
Credit Documents.

                                       19
<PAGE>

                  9(i) Counterparts. This Agreement and the other Credit
Documents may be executed in any number of counterparts, all of which together
shall constitute one agreement.

                  9(j) Exculpatory Provisions. Neither the Lender nor any of its
officers, directors, employees, agents, counsel, attorneys-in-fact or Affiliates
shall be liable to the Company for any action taken or omitted to be taken by it
or such Person under or in connection with the Credit Documents or with respect
to the Collateral (except for its or such Person's own gross negligence or
willful misconduct).

                  9(k) Indemnification. The Company agrees to indemnify, defend
and hold harmless the Lender from and against any and all claims, obligations,
penalties, actions, suits, judgments, costs, disbursements, losses, liabilities
and damages (including, without limitation, attorneys' fees) of any kind
whatsoever which may at any time be imposed on, assessed against or incurred by
the Lender in any way (1) relating to or arising out of the Credit Documents or
any documents contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted to be taken by the Lender in
connection with the foregoing; provided, the Company shall not be liable for any
portion of any such claims, obligations, etc., arising out of or resulting from
the gross negligence or willful misconduct of the Lender. The indemnification
obligations of the Company under this Paragraph 9(k) shall survive termination
of this Agreement and payment in full of the Obligations.

                  9(l) Binding Arbitration. Upon demand of any party hereto,
whether made before or after institution of any judicial proceeding, any
dispute, claim or controversy arising out of, connected with or relating to the
Note or any other Credit Document ("Disputes"), between or among parties to the
Note or any other Credit Document shall be resolved by binding arbitration as
provided herein. Institution of a judicial proceeding by a party does not waive
the right of that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaim, claims brought as class actions,
claims arising from Credit Documents executed in the future, or claims
concerning any aspect of the past, present or future relationships arising out
of or connected with the Credit Documents. Arbitration shall be conducted under
and governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association and Title 9 of the
U.S. Code. All arbitration hearings shall be conducted in Charlotte, North
Carolina. The expedited procedures set forth in Rule 51, et seq. of the
Arbitration Rules shall be applicable to claims of less than $1,000,000. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. The panel from which
all arbitrators are selected shall be comprised of licensed attorneys. The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted. Notwithstanding the foregoing, this paragraph
shall not apply to any hedging arrangement that is a Credit Document.

                  9(m) Confidentiality. The Lender and its directors, officers,
employees and affiliates shall use good faith efforts not to make public
disclosure of any information related to the Company and designated by the
Company or its affiliates in writing as confidential, including financial terms
and financial and organizational information contained in the Credit 

                                       20
<PAGE>

Documents or in any other documents, statements, certificates, materials or
information furnished by the Company or its affiliates in connection with the
Credit Documents; provided, that the foregoing shall not be construed to, now or
in the future, apply to any information reflected in any recorded document,
information obtained from sources other than the Company or its affiliates or
otherwise in the public domain nor shall it be construed to prevent the Lender
from (i) making any disclosure of any information (A) if required to do so by
any applicable law or regulation or accepted banking practice, (B) to any
governmental agency or regulatory body having or claiming authority to regulate
or oversee any aspect of the Lender's business or any of its subsidiaries or
affiliates in connection with the exercise of such authority or claimed
authority, (C) pursuant to subpoena, (D) to the extent the Lender or its counsel
deems necessary or appropriate to do so to effect or preserve its security for
the transaction contemplated by the Credit Documents or to enforce any remedy
provided for in the Credit Documents otherwise available by law, (ii) making
such disclosures as the Lender reasonably deems necessary or appropriate to any
bank or financial institution, and/or counsel thereto, which bank or financial
institution has been approved by the Company as a prospective lender under the
transaction contemplated by the Credit Documents or to which the Lender in good
faith desires to sell an interest in the extensions of credit made thereunder,
or (iii) making, on a confidential basis, such disclosures as the Lender deems
necessary or appropriate to the Lender's legal counsel (in-house or outside) or
accountants (including outside auditors).

         10. Definitions. For purposes of this Agreement, the terms set forth
below shall have the following meanings:

         "Additional Required Documents" shall mean for any Mortgage Loan those
items described on Exhibit F attached hereto.

         "Adjusted Tangible Net Worth" shall mean, as to the Guarantor and its
consolidated Subsidiaries, at any date:

                  (a) Book Net Worth, minus

                  (b) The sum of (1) all assets which would be classified as
intangible assets under GAAP, including, without limitation, purchased and
capitalized value of servicing rights, goodwill (whether representing the excess
cost over book value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs and
research and product development costs) plus (2) all receivables from directors,
officers and shareholders of the Guarantor or any of its consolidated
Subsidiaries (including, without limitation, receivables arising from or related
to loans made by the Guarantor or any of its consolidated Subsidiaries to such
directors, officers or shareholders).

         "Affiliate" shall mean, as to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with, such Person. "Control" as used herein means the power to direct the
management and policies of such Person.

                                       21

<PAGE>

         "Agreement" shall mean this Agreement, as the same may be amended,
extended or replaced from time to time.

         "Applicable Eurodollar Rate" shall mean, with respect to any Eurodollar
Loan, the rate per annum (rounded upward, if necessary, to the next higher 1/32
of one percent (.03125%)) calculated in accordance with the following formula:

                                              ER    + 1.125
                                             -----
         Applicable Eurodollar Rate  =       1-ERP

where

         ER       =        Eurodollar Rate
         ERP      =        Eurodollar Reserve Percentage

         "Applicable Interest Rate" shall mean, at any time, at the Company's
sole option, either (i) the Corporate Base Rate at such time plus one and
one-quarter percent (1.25%) per annum, or (ii) the Applicable Eurodollar Rate at
such time.

         "Approved Investor" shall mean any Person pre-approved in writing
(which pre-approval may be limited in dollar amounts by type and otherwise) by
the Lender (including those shown on Schedule III) and which approval has not
been revoked by the Lender in its sole discretion (such revocation to be
effective on the tenth Business Day following notice thereof given to the
Company in writing).

         "Book Net Worth" shall mean the excess of total assets of the Guarantor
and its consolidated Subsidiaries over Total Liabilities of the Guarantor and
its consolidated Subsidiaries, each determined in accordance with GAAP.

         "Borrowing Base" shall mean at any date all Eligible Mortgage Loans
delivered to and held by the Lender or otherwise identified as Collateral under
the Security Agreement as collateral security for the Obligations.

         "Borrowing Base Schedule" shall mean a schedule prepared by the Lender
and certified to by the Company in the form of that attached hereto as Exhibit
L.

         "Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banks in Florida or Charlotte, North Carolina are authorized or
obligated to close their regular banking business.

         "Buy/Sell Agreement" shall mean a bona fide current and unexpired
agreement between the Company and an Approved Investor under which said Approved
Investor agrees, prior to the expiration thereof, to purchase certain types of
Mortgage Loans or related Mortgage-Backed Securities at a Take-Out Price, which
Buy/Sell Agreement shall be in form and content reasonably satisfactory to the
Lender.

                                       22
<PAGE>

         "Capitalized Lease Obligations" of any Person shall mean the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.

         "Cash and Cash Equivalents" as to any Person shall mean those liquid
assets, including without limitation securities and other investments, which are
classified as "cash and cash equivalents" on a balance sheet of such Person
under GAAP.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Collateral" shall have the meaning given such term in the Security 
Agreement.

         "Collateral Value of the Borrowing Base" shall mean at any date the sum
of the Unit Collateral Values of all Eligible Mortgage Loans included in the
Borrowing Base at such date (including Eligible Mortgage Loans shipped into
pools supporting Warehouse Related MBSs pending sale of such Warehouse Related
MBSs and delivery of the sale proceeds thereof to the Settlement Account).

         "Commonly Controlled Entity" of a Person shall mean a Person, whether
or not incorporated, which is under common control with such Person within the
meaning of Section 414(c) of the Internal Revenue Code.

         "Company" shall have the meaning given such term in the introductory
paragraph hereof.

         "Contact Office" shall mean the office of the Lender at One First Union
Center, 301 South College Street, Charlotte, North Carolina 28288.

         "Contractual Obligation" as to any Person shall mean any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "Corporate Base Rate" shall mean for any day a fluctuating interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System averaged by
Federal funds brokers for such day as reported by the Federal Reserve Bank of
New York, or if no longer so reported then as published in Statistical Release
H.15 of the Federal Reserve System, or if such rate is not so published for any
day, the average of the quotations for such day of such transactions received by
the Lender from three (3) Federal funds brokers of recognized standing selected
by the Lender.

         "Corporate Base Rate Loans" shall mean Loans at such time as they are
bearing interest at an interest rate based on the Corporate Base Rate.

                                       23

<PAGE>

         "Covenant Compliance Certificate" shall mean a certificate in the form
of Exhibit G attached hereto.

         "Credit Documents" shall mean this Agreement, the Security Agreement,
the Guaranty, the Note and each other document, instrument and agreement
executed by the Company or the Guarantor in connection herewith, as any of the
same may be amended, extended or replaced from time to time.

         "Credit Limit" shall mean $20,000,000.00.

         "Eligible High-LTV Mortgage Loan" shall have the meaning set forth in
subparagraph (m) of the definition of "Eligible Mortgage Loan."

         "Eligible Mortgage Loan" shall mean a Mortgage Loan with respect to
which each of the following statements shall be accurate and complete (and the
Company by confirming the inclusion of such Mortgage Loan in any computation of
the Collateral Value of the Borrowing Base shall be deemed to so represent and
warrant to the Lender at and as of the date of such computation):

                  (a) Said Mortgage Loan is a binding and valid obligation of
the Obligor thereon, in full force and effect and enforceable in accordance with
its terms.

                  (b) Said Mortgage Loan is genuine in all respects as appearing
on its face and as represented in the books and records of the Company and all
information set forth therein is true and correct.

                  (c) Said Mortgage Loan is free of any default of any party
thereto (including the Company), other than as expressly permitted pursuant to
subparagraph (d) below, counterclaims, offsets and defenses and from any
rescission, cancellation or avoidance, whether by operation of law or otherwise.

                  (d) No payment under said Mortgage Loan is more than thirty
(30) days past due the payment due date set forth in the underlying promissory
note and deed of trust (or mortgage).

                  (e) Said Mortgage Loan contains the entire agreement of the
parties thereto with respect to the subject matter thereof, has not been
modified or amended in any respect and is free of concessions or understandings
with the Obligor thereon of any kind not expressed in writing therein.

                  (f) Said Mortgage Loan is in all respects as required by and
in accordance with all applicable laws and regulations governing the same,
including, without limitation, the federal Consumer Credit Protection Act, the
federal Truth-in-Lending Act, and the federal Equal Credit Opportunity Act, and
the regulations promulgated thereunder and all applicable usury laws and
restrictions, and all notices, disclosures and other statements or information
required by 

                                       24

<PAGE>

law or regulation to be given, and any other act required by law or regulation
to be performed, in connection with said Mortgage Loan have been given and
performed as required.

                  (g) All advance payments and other deposits on said Mortgage
Loan have been paid in cash, and no part of said sums has been loaned, directly
or indirectly, by the Company to the Obligor.

                  (h) At all times said Mortgage Loan will be free and clear of
all Liens, except in favor of the Lender.

                  (i) The Property covered by said Mortgage Loan is insured
against loss or damage by fire and all other hazards normally included within
standard extended coverage in accordance with the provisions of said Mortgage
Loan with the Company named as a loss payee thereon.

                  (j) The Property covered by said Mortgage Loan is free and
clear of all Liens except of the Company subject only to (1) the Lien of current
real property taxes and assessments not yet due and payable; (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record, as of the date of recording, as are acceptable to mortgage
lending institutions generally and specifically referred to in a lender's title
insurance policy delivered to the originator of the Mortgage Loan and (i)
referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan or (ii) which do not materially adversely affect the appraised
value of the Property as set forth in such appraisal; (3) other matters to which
like properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage Loan or the
use, enjoyment, value or marketability of the related Property; (4) Liens
subordinate in priority to the Lien in favor of the Company; and (5) in the case
of a second mortgage loan, Liens of other mortgage lenders which may be prior to
the Lien in favor of the Company and shall be reflected on the lender's title
insurance policy delivered to the originator of the Mortgage Loan.

                  (k) If said Mortgage Loan has been withdrawn from the
possession of the Lender and:

                           (1) If said Mortgage Loan was withdrawn by the
         Company for purposes of correcting clerical or other nonsubstantive
         documentation problems pursuant to a trust receipt, as permitted under
         Paragraph 6 of the Security Agreement, the Unit Collateral Value of
         said Mortgage Loan when added to the Unit Collateral Values of other
         Mortgage Loans included in the calculation of the Collateral Value of
         the Borrowing Base, the promissory notes for which have been similarly
         withdrawn by the Company does not exceed $250,000, and the promissory
         note and other documents relating to said Mortgage Loan are returned to
         the Lender within ten (10) calendar days from the date of withdrawal;

                           (2) If said Mortgage Loan was shipped by the Lender
         directly to a permanent investor for purchase, the full purchase price
         therefor has been received by the Lender (or said Mortgage Loan has
         been returned to the Lender) within thirty (30) days from the date of
         shipment by the Lender; and

                                       25
<PAGE>

                           (3) If said Mortgage Loan was shipped by the Lender
         directly to a custodian for purposes of formation of a pool supporting
         a Mortgage-Backed Security, the Mortgage-Backed Security is issued,
         sold and the purchase price therefor has been received by the Lender
         (or said Mortgage Loan has been returned to the Lender) within thirty
         (30) days from the date of shipment by the Lender.

                  (l) The original principal balance of said Mortgage Loan did
not exceed $350,000; provided, however, that the original principal balance or
original maximum principal amount, as applicable, of said Mortgage Loan may
exceed $350,000 so long as (i) such Mortgage Loan is covered by a loan-specific
Take-Out Commitment from an Approved Investor, (ii) the original principal
balance or original maximum principal amount, as applicable, of said Mortgage
Loan did not exceed $600,000, and (iii) the Unit Collateral Value of said
Mortgage Loan when added to the Unit Collateral Values of all other Mortgage
Loans included in the Borrowing Base with an original principal balance in
excess of $350,000 does not exceed ten percent (10%) of the Credit Limit.

                  (m) Said Mortgage Loan has an aggregate loan-to-value ratio of
equal to or less than one hundred percent (100%); provided, however, that a
Mortgage Loan which has an aggregate loan-to-value ratio of greater than one
hundred percent (100%) may be included in the Borrowing Base so long as (i) said
Mortgage Loan has an aggregate loan-to-value ratio of equal to or less than one
hundred twenty-five percent (125%); (ii) said Mortgage Loan strictly complies to
the High-LTV Investor Guidelines; (iii) said Mortgage Loan possesses, in the
sole judgment of the Lender, the standard underwriting characteristics of the
standard secondary market for "high-LTV" Mortgage Loans; and (iv) the Unit
Collateral Value of said Mortgage Loan when added to the Unit Collateral Values
of all other Mortgage Loans included in the Borrowing Base of the type described
in this proviso does not exceed $1,000,000 (Eligible Mortgage Loans meeting all
of the requirements of this proviso shall be referred to in this Agreement as
"Eligible High-LTV Mortgage Loans").

                  (n) The improvements on the Property consist of a completed
one-to-four unit single family residence, including but not limited to a
condominium, planned unit development or townhouse but excluding in any event a
co-op.

                  (o) There has been delivered to the Lender the Required
Documents for said Mortgage Loan; provided, however, that the Required Documents
for said Mortgage Loan may be delivered to the Lender within seven (7) Business
Days of the inclusion of said Mortgage Loan in the Borrowing Base so long as the
Unit Collateral Value of said Mortgage Loan for which the Required Documents are
delivered within seven (7) Business Days after its inclusion in the Borrowing
Base, when added to the Unit Collateral Value of all other such Mortgage Loans
for which the Required Documents are delivered within seven (7) Business Days
after such Mortgage Loans are included in the Borrowing Base, does not exceed
twenty-five percent (25%) of the Credit Limit.

                  (p) Said Mortgage Loan is not subject to any servicing
arrangement with any Person other than the Company nor are any servicing rights
relating to said Mortgage Loan 


                                       26
<PAGE>

subject to any Lien, claim, interest or negative pledge in favor of any Person
other than as permitted hereunder.

                  (q) More than one hundred twenty (120) days have not elapsed
since said Mortgage Loan was included in the Borrowing Base (provided, however,
that with respect to an Eligible High-LTV Mortgage Loan, more than forty-five
(45) days shall not have elapsed since said Mortgage Loan was included in the
Borrowing Base).

                  (r)      INTENTIONALLY OMITTED.

                  (s) The Company obtained an appraisal in connection with the
origination of said Mortgage Loan that would satisfy all appraisal requirements
for said Mortgage Loan if such appraisal had been originated by a federally
insured depositary institution.

                  (t)      INTENTIONALLY OMITTED.

                  (u)      INTENTIONALLY OMITTED.

                  (v) Said Mortgage Loan is secured by a first or second
priority mortgage or deed of trust on the Property covered thereby.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be supplemented or amended.

         "ERISA Affiliate" shall mean, with respect to any Person, any trade or
business (whether or not incorporated) that is a member of the group of which
such Person is a member and which is treated as a single employer under Section
414 of the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder in effect from time to time.

         "Eurodollar Business Day" shall mean a Business Day upon which
commercial banks in London, England are open for domestic and international
business.

         "Eurodollar Loans" shall mean Loans hereunder at such time as they are
bearing interest at the Applicable Eurodollar Rate.

         "Eurodollar Rate" shall mean, with respect to any Eurodollar Loan, the
arithmetic average of the rates at which deposits in immediately available U.S.
dollars in an amount equal to the aggregate amount of Eurodollar Loans proposed
to be subject to such rates having a maturity approximately equal to one month
are offered to or by reference banks in the London interbank market, as
determined by the Lender in accordance with its standard practices and
calculated by Lender on each Eurodollar Business Day during the term of this
Agreement, it being understood that the Eurodollar Rate may change from week to
week based on the Lender's weekly determination of the Eurodollar Rate as
provided above, said changes to be effective as of the date of determination of
the Eurodollar Rate by Lender.

                                       27
<PAGE>

         "Eurodollar Reserve Percentage" shall mean for any day, that percentage
expressed as a decimal, which is in effect on such day, as specified by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum aggregate reserve requirement (including all basis,
supplemental, marginal and other reserves) which is imposed on eurocurrency
liabilities.

         "Event of Default" shall have the meaning set forth in Paragraph 8 
above.

         "Fair Market Value" shall mean, with respect to any Mortgage Loan, the
market bid price obtainable for such Mortgage Loan, as determined on a
reasonable basis by the Lender (based upon whole loan prices currently available
to the Company) at such time as it shall elect, including without limitation
after receipt of a notice from the Company pursuant to Paragraph 6(f)(6) above.

         "Funding Account" shall mean Account No. ________________ maintained 
in the Company's name alone with the Lender at the Contact Office.

         "GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.

         "Governmental Authority" shall mean any nation or governments any state
or other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

         "Guaranty" shall have the meaning given such term in Paragraph 3(b)
above, as such instrument may be amended, extended or replaced from time to
time.

         "Guarantor" shall mean Westmark Group Holdings, Inc., a Delaware 
corporation.

         "High-LTV Investor Guidelines" shall mean, collectively, those
guidelines promulgated by Approved Investors with respect to "high-LTV" Mortgage
Loans attached as Exhibit K hereto, as any of such guidelines may be amended
from time to time with the prior written consent of the Lender, which consent
shall not be unreasonably withheld.

         "Indebtedness" of any Person shall mean all items of indebtedness
which, in accordance with GAAP, would be included in determining liabilities as
shown on the liability side of a statement of condition of such Person as of the
date as of which indebtedness is to be determined, including; without
limitation, all obligations for money borrowed and Capitalized Lease
Obligations, all amounts for which such Person may be obligated under gestation
or other repurchase facilities, and shall also include all indebtedness and
liabilities of others assumed or guaranteed by such Person or in respect of
which such Person is secondarily or contingently liable (other than by
endorsement of instruments in the course of collection) whether by reason of any
agreement to acquire such indebtedness or to supply or advance sums or
otherwise.

         "Lender" shall have the meaning given such term in the introductory
paragraph hereof.

                                       28

<PAGE>

         "Lien" shall mean any security interest, mortgage, pledge, lien, claim
on property, charge or encumbrance (including any conditional sale or other
title retention agreement), any lease in the nature thereof, and the filing of
or agreement to give any financing statement under the Uniform Commercial Code
of any jurisdiction (other than a true lease notice filing).

         "Loan" shall have the meaning given such term in Paragraph 1(a)(1)
above.

         "Loan Request" shall mean a request for a Loan conveyed to the Lender
from a duly authorized officer of the Company, with such request to be confirmed
in writing upon the request of the Lender.

         "Maturity Date" shall mean the earlier of: (a) ____________, 1999 [364
DAYS FROM CLOSING] as such date may be extended annually until __________ 2001
from time to time in writing by the Lender, in its sole discretion (provided,
however, that such date shall not be extended for another one-year term in
__________ 1999 unless either (i) the price per share of the Company's common
stock as of December 31, 1998 is equal to or greater than $2.75, or (ii) the
Company's pre-tax net income (as determined in accordance with GAAP) as of
December 31, 1998 is equal to or greater than $2,000,000), and (b) the date the
Lender terminates its obligation to make further Loans hereunder pursuant to
Paragraph 8 above.

         "Mortgage-Backed Security" shall mean (a) any security (including,
without limitation, a participation certificate) that represents an interest in
a pool of mortgages, deeds of trusts or other instruments creating a Lien on
Property which is improved by a completed one-to-four unit single family
residence, including but not limited to a condominium, planned unit development
or townhouse.

         "Mortgage Loan" shall mean a residential real estate secured loan,
including, without limitation: (a) a promissory note, any reformation thereof
and related deed of trust (or mortgage) and security agreement; (b) all
guaranties and insurance policies, including, without limitation, all mortgage
and title insurance policies and all fire and extended coverage insurance
policies and rights of the Company to return premiums or payments with respect
thereto; and (c) all right, title and interest of the Company in the Property
covered by said deed of trust (or mortgage).

         "Multiemployer Plan" shall mean, as to the Company or any of its ERISA
Affiliates, a Plan of such Person which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

         "Note" shall mean have the meaning given such term in Paragraph 2(c)
hereof.

         "Obligations" shall mean any and all debts, obligations and liabilities
of the Company to the Lender (whether now existing or hereafter arising,
voluntary or involuntary, whether or not jointly owed with others, direct or
indirect, absolute or contingent, liquidated or unliquidated, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred), arising out of or related to the Credit Documents.

         "Obligor" shall mean the Person or Persons obligated to pay the
Indebtedness which is the subject of a Mortgage Loan.

                                       29
<PAGE>

         "Participant" shall have the meaning given such term in Paragraph 9(h)
above.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.

         "Permitted Secured Debt" shall mean that Indebtedness which is the
subject of a Lien and described as "Permitted Secured Debt" on Exhibit H
attached hereto.

         "Permitted Unsecured Debt" shall mean that Indebtedness described as
"Permitted Unsecured Debt" on Exhibit H attached hereto.

         "Person" shall mean any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization or Governmental Authority.

         "Plan" shall mean, with respect to the Company or any of its ERISA
Affiliates, any pension plan that is covered by Title IV of ERISA and in respect
of which such Person or a Commonly Controlled Entity of such Person is an
"employer" as defined in Section 3(5) of ERISA.

         "Potential Default" shall mean an event which but for the lapse of time
or the giving of notice, or both, would constitute an Event of Default.

         "Prime Rate" shall mean a rate per annum equal to the rate announced
from time to time by the Lender to be its "Prime Rate" as such "Prime Rate" may
change from time to time, said changes to occur on the first date the "Prime
Rate" changes; it being understood that the "Prime Rate" is the rate announced
by the Lender from time to time as its "Prime Rate" and is not necessarily the
lowest interest rate charged by the Lender to its customers.

         "Proceeds" shall mean whatever is receivable or received when
Collateral or proceeds are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including return premiums, with respect to
any insurance relating thereto.

         "Property" shall mean the real property, including the improvements
thereon, and the personal property (tangible and intangible) which are
encumbered pursuant to a Mortgage Loan.

         "Reportable Event" shall mean a reportable event as defined in Title IV
of ERISA, except actions of general applicability by the Secretary of Labor
under Section 110 of ERISA.

         "Required Documents" shall mean for any Mortgage Loan those items
described on Exhibit I attached hereto.

         "Requirements of Law" shall mean, as to any Person, the Articles or
Certificate of Incorporation and Bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or a final
and binding determination of an arbitrator or a 

                                       30

<PAGE>

determination of a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

         "Security Agreement" shall have the meaning given such term in
Paragraph 3(a) above, as the same may be amended, extended or replaced from time
to time.

         "Settlement Account" shall mean Account No. _________________ 
maintained in the name of the Lender at the Contact Office.

         "Single Employer Plan" shall mean, as to the Company or any of its
ERISA Affiliates, any Plan of such Person which is not a Multiemployer Plan.

         "Statement Date" shall mean ____________________, 19__ [DATE OF LAST 
AUDITED FINANCIALS OF GUARANTOR].

         "Subsidiary" shall mean any corporation, partnership or joint venture
more than fifty percent (50%) of the stock or other ownership interest of which
having by the terms thereof ordinary voting power to elect the board of
directors, managers or trustees of such corporation, partnership or joint
venture (irrespective of whether or not at the time stock of any other class or
classes of such corporation, partnership or joint venture shall have or might
have voting power by reason of the happening of any contingency) shall, at the
time as of which any determination is being made, be owned, either directly or
through Subsidiaries.

         "Take-Out Commitment" with respect to any Mortgage Loan shall mean a
bona fide current, unused and unexpired whole loan commitment or forward sale
Mortgage-Backed Security commitment issued in favor of and held by the Company
made by an Approved Investor, under which said Approved Investor agrees, prior
to the expiration thereof, upon the satisfaction of certain terms and conditions
therein, to purchase such Mortgage Loan or related Mortgage-Backed Security at a
Take-Out Price, which commitment is not subject to any term or condition which
is not customary in commitments of like nature or which, in the reasonably
anticipated course of events, cannot be fully complied with prior to the
expiration thereof.

         "Take-Out Price" with respect to any Mortgage Loan shall mean the
specified price to be paid for such Mortgage Loan under the applicable Take-Out
Commitment or Buy/Sell Agreement covering said Mortgage Loan, as such price may
be set forth in such Take-Out Commitment or calculated according to the formula
set forth in such Buy/Sell Agreement.

         "Total Liabilities" shall mean total liabilities of the Guarantor and
its consolidated Subsidiaries reflected on its balance sheet in accordance with
GAAP.

         "Unit Collateral Value" shall mean:

                  (i) with respect to each Eligible Mortgage Loan (other than an
         Eligible High-LTV Mortgage Loan) included in the Borrowing Base, one
         hundred percent (100%) of the lesser of: (A) the original principal
         balance thereof, and (B) the Fair Market Value thereof.

                                       31
<PAGE>

                  (ii) with respect to each Eligible High-LTV Mortgage Loan
         included in the Borrowing Base, ninety-eight percent (98%) of the
         original principal balance thereof.

         "Warehouse Related MBS" shall have the meaning given such term in the
Security Agreement.



                                       32
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

                                         WESTMARK MORTGAGE CORPORATION,
         [CORPORATE SEAL]                a California corporation

ATTEST:
By________________________               By_________________________________
Name______________________               Name_______________________________
Title_____________________               Title______________________________



                                         FIRST UNION NATIONAL BANK, a national 
                                         banking association


                                         By_________________________________
                                         Name_______________________________
                                         Title______________________________



                                         WESTMARK GROUP HOLDINGS, INC., a
         [CORPORATE SEAL]                Delaware corporation, as Guarantor

ATTEST:

By________________________               By_________________________________
Name______________________               Name_______________________________
Title_____________________               Title______________________________



                                       33

<PAGE>


                         LIST OF SCHEDULES AND EXHIBITS
                         ------------------------------
<TABLE>
<CAPTION>



<S>               <C>   
Schedule I        Schedule of Addresses

Schedule II       Shareholders of Company

Schedule III      Approved Investors

Exhibit A         Form of Promissory Note

Exhibit B         Form of Security Agreement

Exhibit C         Form of Guaranty

Exhibit D         Form of Legal Opinion of Counsel for the Company and the Guarantor

Exhibit E         Litigation Schedule

Exhibit F         Schedule of Additional Required Documents

Exhibit G         Form of Covenant Compliance Certificate

Exhibit H         Schedule of Permitted Other Debt (Including Permitted Secured Debt)

Exhibit I         Schedule of Required Documents

Exhibit J         Form of Wet Funding Mortgage Loan Transmittal Form

Exhibit K         High-LTV Investor Guidelines

Exhibit L         Borrowing Base Schedule
</TABLE>


<PAGE>


                                   SCHEDULE I
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                       DATED AS OF _________________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                              Schedule of Addresses
                              ---------------------


BORROWER:

Westmark Mortgage Corporation
355 N.E. 5th Avenue, Suite 4
Delray Beach, Florida  33483
Attention:  Mr. Payton Story, President
Facsimile: (561) 279-1821



BANK:

First Union National Bank
One First Union Center, TW-06
301 South College Street
Charlotte, North Carolina  28288
Attention:  Mr. Evan Peverley
Facsimile: (704) 383-8121


GUARANTOR:

Westmark Group Holdings, Inc.
355 N.E. 5th Avenue, Suite
Delray Beach, Florida  33483
Attention:  Mr. Mark Schaftlein, CEO
Facsimile: (561) 279-1801



<PAGE>


                                   SCHEDULE II
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                       DATED AS OF ________________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                             Shareholders of Company
                             -----------------------

COMMON VOTING STOCK

Shareholder                                                   Number of Shares
-----------                                                   ----------------

Westmark Group Holdings, Inc.                                       727

TOTAL NUMBER OF SHARES                                              727


PREFERRED STOCK

Shareholder                                                   Number of Shares
-----------                                                   ----------------

N/A                                                                 None

TOTAL NUMBER OF SHARES                                              None




<PAGE>
                                  SCHEDULE III
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                        DATED AS OF _______________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                               Approved Investors
                               ------------------

GE Capital Mortgage Services
GreenTree Mortgage Services
Household Bank, F.S.B.
Master Financial, Inc.
MCA Mortgage Corporation
The Money Store


<PAGE>


                                    EXHIBIT A
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                        DATED AS OF _______________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                             Form of Promissory Note
                             -----------------------


<PAGE>

                                    EXHIBIT B
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                        DATED AS OF _______________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                           Form of Security Agreement
                           --------------------------


<PAGE>


                                    EXHIBIT C
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                       DATED AS OF ________________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                                Form of Guaranty
                                ----------------


<PAGE>


                                    EXHIBIT D
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                        DATED AS OF ______________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                        Form of Legal Opinion of Counsel
                            for Company and Guarantor
                            -------------------------


<PAGE>


                                    EXHIBIT E
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                         DATED AS OF _____________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                               Litigation Schedule
                               -------------------


                              [Company to provide]


<PAGE>


                                    EXHIBIT F
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                         DATED AS OF _____________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                    Schedule of Additional Required Documents
                    -----------------------------------------


         1. The original executed mortgage or deed of trust relating to the 
Mortgage Loan;

         2. A casualty insurance policy on the property subject to the Mortgage
Loan covering fire, hazard and extended coverage, and if applicable, flood and
earthquake insurance, all in amounts not less than the principal amount of the
promissory note relating to the Mortgage Loan (or the maximum amount issuable
for flood insurance) which insurance has been endorsed to provide for payment
thereof to the Company, as mortgagee, together with written notice to the
mortgagor of the fact, if true, that mortgagor's property lies within a flood
zone;

         3. Disclosure statements complying with Regulation Z ("Truth in
Lending") of the Board of Governors of the Federal Reserve System;

         4. Equal Credit Opportunity Act notice and additional disclosure;

         5. An appraisal of the Property covered by the Mortgage Loan by an
appraiser acceptable to the Lender in its sole and absolute discretion, which
appraisal shall be in form and content satisfactory to the Lender;

         6. Written statement signed by the attorney, title company or closing
agent responsible for supervising the closing of the Mortgage Loan that such
person or entity closed the Mortgage Loan in accordance with any closing
instructions received by such person or entity;

         7. Evidence of hazard insurance in the form of a copy of the hazard
insurance policy or hazard insurance certificate indicating coverage greater
than or equal to the face amount of the Mortgage Loan;

         8. An original mortgagee title insurance policy (or "marked-up" interim
title insurance binder with policy to follow not later than ninety (90) days
after the date of the Mortgage Loan) issued by a nationally recognized title
insurance company acceptable to the Lender, together with any attachments and
customary endorsements thereto, which insures that the mortgage or deed of trust
securing the promissory note relating to the Mortgage Loan is a valid and
enforceable first or second lien on the Property covered by the mortgage Loan
with no prior liens or encumbrances other than as permitted hereunder;

         9. If a Take-Out Commitment does not exist, a true copy of the
applicable original Buy/Sell Agreement between the Company and an Approved
Investor pursuant to which such 


<PAGE>

Mortgage Loan will be purchased, which is executed by the Company and the
Approved Investor and which is in full force and effect; and

         10. Such other documents as the Lender may reasonably request from time
to time, including without limitation credit information relating to the Obligor
on such Mortgage Loan.


<PAGE>


                                    EXHIBIT G
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                         DATED AS OF _____________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK


                     Form of Covenant Compliance Certificate
                     ---------------------------------------



TO:      First Union National Bank

         This is the Covenant Compliance Certificate referred to in Section
6(a)(2) of the Mortgage Loan Warehousing Agreement dated as of ____________,
1998, by and between the Company and the Lender (the "Agreement," with
capitalized terms not otherwise defined herein having the same meanings assigned
such terms in the Agreement). Attached hereto are the consolidated and
consolidating financial statements of the undersigned as of ______________ __,
19__ prepared by the undersigned. This Covenant Compliance Certificate and the
attached consolidated and consolidating financial statements are furnished for
the purpose of procuring credit, and shall be substituted for the Covenant
Compliance Certificate and attached financial statements last submitted to the
Lender by the Company pursuant to Section 6(a)(2) of the Agreement.

         I hereby certify that (i) I have carefully read the attached financial
statements, (ii) the attached financial statements are complete, true and
correct statements to the best of my knowledge and belief, (iii) the attached
financial statements were prepared in conformity with GAAP, as applied on a
basis consistent with that of the preceding statements submitted to Lender as of
the end of the previous reporting period, and (iv) the attached financial
statements fairly present the financial position of the undersigned and its
consolidated Subsidiaries (including, without limitation, the Company) and the
results of its operations as of _________________, 19___ and for the period then
ended.

         I also hereby certify that, as of the date hereof, (i) each and every
covenant of the Company contained in the Agreement has been performed and
observed (except for covenants made in connection with Mortgage Loans, it being
the intention of the parties to the Agreement that the violation or breach of
any such covenant in respect of any Mortgage Loan regarding the qualification of
such Mortgage Loan as an "Eligible Mortgage Loan" under the Agreement shall not
constitute an Event of Default, provided that the Company is and continues to be
in compliance with the provisions of Section 2(f) of the Agreement), and (ii) no
Event of Default or Potential Default has occurred under the Agreement.

         Attached are calculations of the financial ratios set forth in Sections
7(i), 7(j) and 7(k) of the Agreement all as of the date hereof, which
calculations are hereby certified to be complete, true and correct calculations
of the financial ratios contained in such sections.

<PAGE>

         Certified on behalf of the undersigned this ____ day of ______________,
19__.

                                            WESTMARK GROUP HOLDINGS, INC.

                                            By:_________________________________
                                            Name:_______________________________
                                            Title: Chief Executive Officer


<PAGE>



                          WESTMARK GROUP HOLDINGS, INC.
                        Covenant Compliance Calculations

                     Made as of ____________________, 19___


Section         Covenant                       Required              Actual

7.1(i)   Maximum Leverage Ratio            (i) 3/31/98 through
                                           9/29/98: 40.0:1.0
                                           (ii) thereafter:
                                           15.0:1.0                  ____: 1.0

7.1(j)   Minimum Book Net Worth            (i) 3/31/98 through
                                           9/29/98: $500,000
                                           (ii) thereafter:
                                           $1,000,000                $_______

7.1(k)   Minimum Current Ratio             (i) 3/31/98 through
                                           9/29/98: 0.70:1.0
                                           (ii) thereafter:
                                           0.85:1.0                  ____: 1.0


Calculations:

         Leverage Ratio:

                  Total Liabilities/Divided/Adjusted Tangible Net Worth


         Adjusted Tangible Net Worth:

                  Total assets - Total Liabilities - (intangible assets +
                  receivables from officers, directors and shareholders)


         Book Net Worth:

                  Total assets - Total Liabilities


         Current Ratio:

                  Total current assets/Divided/total current liabilities

<PAGE>

                                    EXHIBIT H
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                         DATED AS OF ____________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

         Schedule of Permitted Secured Debt and Permitted Unsecured Debt
         ---------------------------------------------------------------



Permitted Secured Debt:



         Capitalized Lease Obligations.

         Mortgage warehousing credit facilities extended to the Company from
time to time; provided, however, that the aggregate amount outstanding under
such facilities shall at no time exceed $2,000,000.




Permitted Unsecured Debt:

         Those liabilities of the Company arising from settlements and judgments
shown in the columns "WMC Stl Bal" and "WMC Note Bal" on the schedule attached
to this Exhibit H and in existence on the date of this Agreement.



<PAGE>


                                    EXHIBIT I
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                        DATED AS OF _______________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                         Schedule of Required Documents
                         ------------------------------

         1. An original written Loan Request, signed by an officer of the
Company who is authorized to make such request;

         2. An original fully completed Delivery Certificate (as defined in the
Security Agreement);

         3. The original executed promissory note relating to the Mortgage Loan
(properly endorsed or assigned to the Company if purchased by the Company),
which promissory note shall be duly endorsed in blank and assigned in blank
without recourse by the Company;

         4. A copy of the original executed mortgage or deed of trust relating
to the Mortgage Loan, certified by the Company, or the title company or closing
attorney which closed the Mortgage Loan, to be a true copy of such original
mortgage or deed of trust;

         5. An original executed and recordable but unrecorded assignment of the
mortgage or deed of trust relating to the Mortgage Loan (unless the Lender
determines that under applicable State law the assignment should be recorded in
order to adequately protect its interest, in which case the assignment shall be
recorded by the Company and a certified true copy thereof shall be provided to
the Lender), together with the original or a duly certified copy of a proper
assignment or assignments of the mortgage or deed of trust from the original
holder through any subsequent transferees to the Company, duly recorded if local
requirements in the jurisdiction in which the Property is located required the
recordation of such assignment or assignments;

         6. If a Take-Out Commitment exists:

         a. A true copy of the original Take-Out Commitment, certified by the
Company, which is in full force and effect, from an Approved Investor or, if a
copy of the Take-Out Commitment is not available, a certificate of the Company
that a verbal Take-Out Commitment exists, such certificate to include all
relevant details thereof; and

         b. An original assignment of the Take-Out Commitment, substantially in
the form supplied by the Lender, executed by an authorized officer of the
Company;

         7. A certified copy of the closing settlement statement (HUD-1); and

         8. Satisfactory evidence of compliance with the requirements of such
other laws as may, from time to time, become applicable to the Mortgage Loan.


<PAGE>


                                    EXHIBIT J
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                        DATED AS OF _______________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

               Form of Wet Funding Mortgage Loan Transmittal Form
               --------------------------------------------------

                         MORTGAGE LOAN TRANSMITTAL FORM
                          WESTMARK MORTGAGE CORPORATION


Date Loan Requested under Credit Agreement:_____________________________________
Mortgage Loan Number:___________________________________________________________
Mortgagor's Name:_______________________________________________________________

Date of Mortgage Note:__________________________________________________________
Note Amount:___________                     Note Interest Rate:_________________
Check number:__________                     Mortgage Type:______________________
   (if applicable)

Net Loan Value:________                     Payment Type:     FRM, ARM, OTHER

Advance %:                                  Mortgage Term:    30, 15, 5, 10
          _____________           

Check Applicable Box:


         This is the post-closing transmittal, therefore, the following
         documents checked are enclosed pursuant to the Credit Agreement:

         1.       Original Mortgage Note Endorsed in Blank              ________
         2.       Original Assignment of Mortgage in Recordable Form    ________
         3.       Certified Copy of HUD-1 Settlement Statement          ________
         4.       Certified Copy of Original Mortgage                   ________

Loan Request:     $______________

Wire Advance proceeds to:_______________________________________________________
_____________________________________________________ Account No._______________
Bank Routing No._____________________________________ Contact Person:___________
Telephone No.____________________________

Investor Name:__________________________________________________________________
Investor Commitment Price:______________________________________________________
Commitment Number:______________________________________________________________

<PAGE>

Commitment Amount:______________________________________________________________
Expiration Date:________________________________________________________________

Borrower hereby pledges and affirms to the Bank pursuant to the terms of the
Agreement a first lien security interest in the loan(s) listed above, and in all
related documents and writings pertaining thereto, and all proceeds thereof
which security interest shall secure all past, present and future obligations of
Borrower to Bank under the Agreement. Borrower holds all documents relating to
such loan(s) in trust for the benefit of and subject to the security interest of
Bank.


                                               _________________________________
                                                       (Authorized Signature)
                                               Name:____________________________
                                                               Print
                                               Title:___________________________


________________________________________________________________________________
                                  BANK USE ONLY

__________                 ___________
   CH                          AA

__________                 ___________
   I                           PD


<PAGE>


                                    EXHIBIT K
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                         DATED AS OF _____________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                          High-LTV Investor Guidelines
                          ----------------------------



<PAGE>


                                    EXHIBIT L
                                       TO
                       MORTGAGE LOAN WAREHOUSING AGREEMENT
                         DATED AS OF _____________, 1998
                BY AND BETWEEN WESTMARK MORTGAGE CORPORATION AND
                            FIRST UNION NATIONAL BANK

                         Form of Borrowing Base Schedule
                         -------------------------------



         This Borrowing Base Schedule is furnished pursuant to the Mortgage Loan
Warehousing Agreement dated as of _____________, 1998, as amended from time to
time, among the Company and the Lender (the "Agreement"). Unless otherwise
defined herein, the terms used in this Borrowing Base Schedule have the meanings
ascribed thereto in the Agreement.
<TABLE>
<CAPTION>

<S>      <C>                                                                                         <C>    
A.       Aggregate Unit Collateral Values of
         Eligible Mortgage Loans
         in Borrowing Base as of previous
         Borrowing Base Schedule delivered
         by the Company                                                                              $_____________

B.       Aggregate Unit Collateral Values of
         Eligible Mortgage Loans
         submitted for inclusion in Borrowing
         Base since previous Borrowing Base
         Schedule delivered by the Company                                                            $____________

C.       Sum of (A plus B)                                                                            $____________

D.       Aggregate Unit Collateral Values of 
         Eligible Mortgage Loans 
         previously released by the Lender for 
         which the full purchase price has been
         received by the Lender since previous 
         Borrowing Base Schedule delivered by the
         Company                                                                                      $____________

E.       Amount by which Aggregate Unit Collateral
         Values of Eligible Mortgage Loans
         withdrawn from the possession of the
         Lender under a trust receipt and not
         returned to the Lender exceeds $250,000                                                      $____________

F.       Aggregate Unit Collateral Values of Eligible 
         Mortgage Loans withdrawn from the 





<PAGE>

         possession of the Lender under a trust
         receipt more than 10 days prior to the date 
         of this schedule and not returned to
         the Lender                                                                                   $____________

G.       Aggregate Unit Collateral Values of
         Eligible Mortgage Loans withdrawn from
         the possession of the Lender and shipped
         to an investor for purchase or to a
         custodian for pool formation more than
         30 days prior to the date of this schedule
         and not returned to the Lender or for which
         the full purchase price has not been
         received by the Lender                                                                       $____________

H.       Aggregate Unit Collateral Values of
         Eligible Mortgage Loans submitted
         for inclusion in the Borrowing Base more
         than 120 days in the case of Eligible
         Mortgage Loans which are not Eligible
         High-LTV Mortgage Loans (or more than
         45 days in the case of Eligible High-LTV
         Mortgage Loans) prior to the date of this
         schedule                                                                                     $____________

I.       Aggregate Unit Collateral Values of
         Eligible Mortgage Loans which are
         more than 30 days past due the payment
         due date set forth therein                                                                   $____________

J.       Aggregate Unit Collateral Values of 
         Eligible Mortgage Loans the
         Required Documents for which have not 
         been delivered to the Lender within 
         seven (7) Business Days after the 
         submission of such Eligible Mortgage 
         Loans for inclusion in the
         Borrowing Base                                                                               $____________

K.       Amount by which Aggregate Unit Collateral
         Values of Eligible Mortgage Loans
         for which the Required Documents are not
         delivered upon, but within seven (7)
         Business Days following, the submission
         of such Eligible Mortgage Loans
         for inclusion in the Borrowing Base

<PAGE>

         exceeds twenty-five percent (25%) of
         the Credit Limit                                                                              $___________

L.       Amount by which Aggregate Unit Collateral
         Values of Eligible High-LTV Mortgage
         Loans exceeds $1,000,000                                                                      $___________

M.       Amount by which Aggregate Unit Collateral
         Values of Eligible Mortgage Loans with
         original principal balances over $350,000
         exceeds ten percent (10%) of the Credit Limit                                                 $___________

N.       Sum of (D plus E plus F plus G plus H
         plus I plus J plus K plus L plus M)                                                           $___________

O.       Adjusted Collateral Value of the
         Borrowing Base (C minus N)                                                                    $___________

P.       Aggregate principal amount of
         Loans outstanding                                                                             $___________

Q.       Borrowing Base availability (O
         minus P; must equal or exceed zero)                                                           $___________
</TABLE>

         The undersigned hereby certifies that, as of the date hereof:

(1)      I am the duly elected _______________ of the Company;

(2)      The above schedule accurately states the Collateral Value of the
         Borrowing Base and the aggregate principal amount of Loans outstanding;

(3)      All Mortgage Loans included in the Borrowing Base as Eligible Mortgage
         Loans comply in all respects with the requirements of the definition of
         such term; and

(4)      I have no knowledge of the existence of any condition or event
         which constitutes an Event of Default under the Agreement.



<PAGE>


Certified on behalf of the undersigned this _____ day of _________, 19___.

                                            WESTMARK MORTGAGE CORPORATION

                                            By:_________________________________
                                               Name:____________________________
                                               Title:___________________________