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                                                                EXHIBIT 10(ff)




                    MORTGAGE LOAN SUBSERVICING AGREEMENT

         THIS MORTGAGE LOAN SUBSERVICING AGREEMENT ("Agreement") is made as of
close of business on the Approval Date, by and between CHEMICAL MORTGAGE
COMPANY, an Ohio corporation, with offices at 200 Old Wilson Bridge Road,
Worthington, Ohio  43085-8500 ("Servicer") and SOURCE ONE MORTGAGE SERVICES
CORPORATION, with offices located at 27555 Farmington Road, Farmington Hills,
Michigan  48334-3357 ("Subservicer").

                                    RECITALS

A.               WHEREAS, Subservicer is engaged as an independent contractor
         in the business of servicing loans and performs servicing functions
         for various investors;

B.               WHEREAS, Servicer has contracted with Subservicer to perform
         the administration and subservicing of certain mortgage loans
         ("Mortgage Loans") the servicing rights to which were purchased by
         Servicer from Subservicer pursuant to a FNMA/FHLMC/GNMA Mortgage
         Servicing Purchase and Sale Agreement between Servicer and
         Subservicer, dated as of February 28, 1997 ("Sale Agreement"); and

C.               WHEREAS, pursuant to the terms of such Sale Agreement,
         Subservicer shall perform the servicing obligations on the Mortgage
         Loans during the Subservicing Period in accordance with the terms of
         this Agreement; and

D.               WHEREAS, such servicing obligations shall be performed under
         Servicer's seller/servicer identification numbers; and

E.               WHEREAS, Servicer and Subservicer desire to formalize and
         state the terms and conditions which shall govern the subservicing and
         administration of such Mortgage Loans by Subservicer.

         NOW, THEREFORE, the parties agree as follows:

1.       DEFINITIONS

         The following terms shall have the meaning set forth after each:

         1.1     Accepted Practices.  Prudent mortgage banking practices for
similar loans.

         1.2     Advances.  All customary and necessary out-of-pocket costs and
expenses incurred in accordance with Agency Requirements and the Loan Documents
with regard to performance by Subservicer of its subservicing obligations,
including, but not limited to, advances of principal, interest (including
Shortfall Interest), taxes, insurance, foreclosure and bankruptcy expenses and
guarantee fees.
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         1.3     Agency:  FNMA, FHLMC and/or GNMA, individually and
collectively, as applicable.

         1.4     Agency Requirements:  The rules, regulations, announcements,
notices, directives and instructions of the Agency, as applicable, including,
without limitation, the Agency contracts or commitments (which contracts or
commitments incorporate by reference all applicable Agency Selling and
Servicing Guides and the underlying FHA and/or VA rules, regulations and
requirements) with respect to the Mortgage Loans, and any revisions to same.

         1.5     Ancillary Fees:  Reasonable and customary fees acceptable to
the Agencies and collected by servicers as income incidental to the servicing
of the Mortgage Loans such as late fees, insurance administration fees and
commissions, processing fees and assumption fees, which Ancillary Fees shall
not, without the consent of Servicer (which consent shall not be unreasonably
withheld as to inflationary increases in fee amount or as to an additional fee
type dictated by the Agencies), exceed, in fee amount or type, the fees charged
by Subservicer as of November 28, 1996.

         1.6     Applicable Law:  All federal, state and local laws, rules and
regulations, as amended from time to time, applicable to the Mortgage Loans,
the Servicing, Subservicer and/or the performance by Subservicer of its duties
hereunder including but not limited to the Truth in Lending Act, the Real
Estate Settlement Procedures Act ("RESPA" including the provisions set forth in
the regulations enacted under the Cranston-Gonzalez amendment), The Fair Credit
Reporting Act, The Equal Credit Opportunity Act, The Flood Disaster Protection
Act and laws relative to escrow administration, usury, due on sale and loan
servicing.

         1.7     Borrower.  Any person obligated under the promissory note or
other instruments evidencing and securing a Mortgage Loan.

         1.8     Business Day. A day or a portion thereof during which both
Servicer and Subservicer are open for business, other than Saturday or Sunday,
or any legal holiday.

         1.9     Custodial Account[s].  The accounts maintained in accordance
with Applicable Law and Agency Requirements for the deposit of principal and
interest payments in respect of one or more Mortgage Loans.

         1.13    Escrow Account[s].  Any amounts collected from a Borrower for
the purpose of paying, on behalf of the  Borrower, hazard insurance premiums,
mortgage insurance  premiums, taxes, assessments and other similar items as
required or permitted under the Loan Documents.

         1.10    FNMA.  The Federal National Mortgage Association.

         1.11    FHLMC.  The Federal Home Loan Mortgage Corporation.





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         1.12    GNMA.  The Government National Mortgage Association.

         1.14    Investor.  FNMA, FHLMC and/or GNMA, as applicable.

         1.15    Mortgage Loan[s].  The conventional and government mortgage
loans, the Servicing associated therewith being the subject of this Agreement
and having been transferred from Subservicer to Servicer pursuant to the Sale
Agreement, a listing of which is attached hereto as Exhibit A.

         1.16 Loan Documents.  Any  promissory note, deed of trust, mortgage,
assignment, guaranty, title insurance policy, mortgage insurance policy, or
other instrument or document executed, issued or obtained in connection with a
Mortgage Loan.

         1.17    Mortgaged Property.  The property which is the subject of each
security agreement, mortgage or deed of trust securing repayment of the debt
evidenced by the Loan Documents.

         1.18    REO (Real Estate Owned).  Properties acquired through
foreclosure or by acceptance of a deed in lieu of foreclosure on behalf of
Servicer or the Investor.

         1.19    Sale Agreement.  As defined in the recitals.

         1.20    Servicing.  As defined in the Sale Agreement.

         1.21    Shortfall Interest.  The Mortgage Loan curtailment or payoff
interest which is required to be paid to the Agency but which the Borrower is
not obligated to pay.

         1.22    Subservicing Accounts:  The Escrow Accounts and Custodial
Accounts established pursuant to this Agreement.

         1.23    Subservicing Fee:  The compensation to be paid to Subservicer
for subservicing performed under this Agreement which shall be equal to Five
Dollars ($5.00) per each Mortgage Loan for which the Investor is FNMA or FHLMC,
and Six Dollars ($6.00) per each Mortgage Loan for whom GNMA is the Investor,
in existence on the first day of each month during the term of this Agreement.

         Defined terms used in this Agreement but not defined herein, shall
have the meanings ascribed to such terms in the Sale Agreement.

2.       SUBSERVICING DUTIES

         Subservicer shall have the following obligations with respect to all
Mortgage Loans:





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         2.1     General Servicing Responsibilities.  Subservicer shall
undertake all actions, with regard to the servicing and administration of the
Mortgage Loans, whether or not specifically outlined in this Agreement,
including, but not limited to, the advancing of funds, all in accordance with
the terms and conditions of the Loan Documents, Agency Requirements, Applicable
Law and this Agreement.  Such actions shall be undertaken in accordance with
Accepted Practices.  To the extent of any conflict between the terms and
conditions of this Agreement and the Agency Requirements, the Agency
Requirements shall control.

         As to vendors utilized by Subservicer in connection with the
performance of its obligations hereunder, whose services earn fees in excess of
$500,000 per year, Subservicer shall obtain the written approval of Servicer to
any change from a vendor currently utilized by Subservicer, which approval
shall not be unreasonably withheld.  Servicer has approved all vendors utilized
by Subservicer as of the date of execution of this Agreement.  Attached hereto
as Exhibit B is a list of such vendors which have been approved by Servicer.

         2.2     Collections.  Subservicer shall proceed diligently to collect
all sums which become due under the Loan Documents as if Subservicer were
servicing the Mortgage Loans for its own account, including without limitation
principal, whether or not prepaid, interest, late charges, prepayment fees,
private mortgage insurance premiums, fire, flood, earthquake and other hazard
insurance premiums, and taxes, assessments and other similar charges, all in
accordance with Agency Requirements.  Concerning Mortgage Loans for which the
Subservicer drafts monthly payments electronically from the Borrower's bank
account, such drafting occurs in compliance with Agency Requirements, and the
applicable agreement with the Borrower.

         2.3     Insurance.

         A.      Subservicer shall undertake all actions necessary to ensure
                 that fire, flood, earthquake and other hazard insurance
                 required by the Agency is maintained by each Borrower on the
                 Mortgaged Property in accordance with Agency Requirements.
                 Where any such required insurance coverage is allowed to
                 lapse, whether or not due to Borrower's fault or negligence,
                 Subservicer shall, immediately upon knowledge of such lapse,
                 promptly obtain new insurance in accordance with Agency
                 Requirements and the Loan Documents.  Subservicer shall
                 maintain records of all such insurance coverage in accordance
                 with Agency Requirements.

         B.      Upon receiving notice of any event which constitutes a loss
                 under any policy of insurance relative to a Mortgage Loan,
                 Subservicer shall undertake appropriate action, including the
                 filing of all necessary claims, to permit full recovery of
                 such loss under the policy of insurance.  If a claim ("Claim")
                 is made under a fire, flood, earthquake or other hazard
                 insurance policy, Subservicer is authorized to settle such
                 Claim, collect the insurance proceeds,





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                 make any arrangements with respect to restoration or
                 rehabilitation of the Mortgaged Property and disburse
                 insurance proceeds in accordance with Agency Requirements, the
                 Loan Documents and Applicable Law.  Subservicer will cause an
                 inspection(s) to be made so as to assure itself that the
                 Mortgaged Property has been satisfactorily repaired in
                 accordance with Agency Requirements and shall, if the loss is
                 in excess of $5,000, secure a statement from the Borrower
                 indicating satisfaction with the repairs.

         C.      Any Mortgage Loan involved with any type of optional insurance
                 has been properly serviced, including, without limitation, the
                 proper application and collection of premiums, the maintenance
                 of complete and accurate records, processing and payment of
                 claims and the handling of correspondence.

         2.4     Escrow Accounts.  Subservicer shall take all actions necessary
to ensure that each Mortgage Loan Escrow Account is maintained in an FDIC
insured depository institution in accordance with Agency Requirements and
Applicable Law.  Subservicer shall be responsible for all matters relating to
the administration of the Escrow Accounts, including without limitation: the
deposit of funds to the Escrow Accounts no later than the next Business Day
after receipt; the disbursement of funds to the proper parties when and if due
in payment of the items for which such Escrow Accounts are established; payment
of interest to Borrowers on funds deposited into such Escrow Accounts to the
extent required by Applicable Law (and Subservicer shall receive reimbursement
from the Servicer for its payment of interest to Borrowers on funds deposited
into such Escrow Account in accordance with this Agreement); and maintenance of
all books and records with respect to such Escrow Accounts, all in accordance
with Applicable Law and Agency Requirements.  Servicer shall have the right to
all income and other benefits derived from the Escrow Accounts.  The Escrow
Accounts shall be held in an institution designated by Servicer, established in
the name of Servicer and titled as mutually agreed by the parties for the
benefit of Servicer, the Agency and the Borrowers, as their interests appear.
Servicer shall permit Subservicer to have access to such Escrow Accounts to
make deposits and disbursements in accordance with the terms of this Agreement.
Subservicer shall provide all statements with regard to such Escrow Accounts as
required in compliance with Applicable Law, including but not limited to RESPA.

         2.5     Mortgage, Insurance.  Subservicer shall keep all records,
provide all notices and undertake all other actions which may be required to
preserve and enforce all rights of Servicer under any private mortgage
insurance applicable to the Mortgage Loans in accordance with Agency
Requirements and the applicable policy of private mortgage insurance.

         2.6     Delinquencies, Bankruptcy and Foreclosure. Subservicer shall
handle all Mortgage Loan delinquencies and bankruptcies and conduct all
Mortgage Loan foreclosures in strict accordance with Agency Requirements, the
Loan Documents, Applicable Law and Accepted Practices so as to minimize the
exposure and losses of Servicer and/or the Investor





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on such Mortgage Loans.  Subservicer's foreclosure responsibilities include
timely mailing and recording of all required notices, procuring all necessary
foreclosure guarantees, compliance with all Agency Requirements, including
specifically, but not limited to, those related to loss mitigation and
collection including referral to counselling; conducting the foreclosure sale
and undertaking all necessary eviction proceedings to vacate the Mortgaged
Property subject to the foreclosure and filing all appropriate claims with the
applicable insurer or guarantor in a timely manner.  Servicer shall grant to
Subservicer limited corporate authority to allow Subservicer to execute
satisfactions and bankruptcy and foreclosure documentation on Servicer's
behalf.

         2.7     REO's.  At the option of Servicer and at Servicer's expense,
Subservicer shall be responsible for the administration and maintenance of the
Mortgaged Property following any foreclosure sale to the extent required by
Agency Requirements; provided however that Subservicer shall pay, without
reimbursement from Servicer, the first $1,000 of REO expense on REOs located
outside of New York and the first $1,500 of REO expense on REOs located inside
New York, for any REO which related to a Mortgage Loan for which a fee would
have been due to Servicer as purchaser under the provisions of Section 7.24 of
the Sale Agreement but for the fact that such Mortgage Loan did not transfer.
All funds shall be held and remitted in accordance with Agency Requirements.
In the event that the Agency or Servicer should require Subservicer to market
the REO, Servicer agrees to pay Subservicer a fee for marketing the REO in an
amount equal to one thousand five hundred dollars ($1,500) per REO or one
percent (1%) of the REO sale price, whichever is greater.  REO expense shall be
reimbursed to Subservicer monthly, upon receipt of an invoice prepared by
Subservicer.

         2.8     Assumption and Other Modifications.  Subservicer shall have
full responsibility for processing applications for and documenting all
assumptions and other modifications of the Mortgage Loans in accordance with
Agency Requirements, Applicable Law and the Loan Documents.

         2.9     Annual Statements.  Subservicer shall annually prepare for
each Borrower, without charge, written statements for each calendar year in
compliance with the Internal Revenue Code of 1986, as amended, and any other
Applicable Law.

         2.10    Payoffs.  Subservicer shall process all Mortgage Loan Payoffs
and Loan Document satisfactions/reconveyances in compliance with Agency
Requirements and Applicable Law.  Subservicer shall not act or fail to act in
any manner which may result in imposition of any  penalty for late
satisfaction/reconveyance of a Mortgage Loan.  Servicer shall reimburse
Subservicer for recording fees imposed for the recording of
satisfactions/reconveyances required by applicable law to be recorded by the
lender, and which cannot, under applicable law, be imposed upon the Borrower.

         2.11    Reclassification of Delinquent Mortgage Loans:  In the event
that the Agency, or the Servicer, requires the Subservicer to reclassify a
delinquent Mortgage Loan from a





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pool into the Servicer's actual portfolio, Subservicer shall: (i) at the
direction of the Servicer and/or the Agency, effect any required repurchase;
(ii) if not already established, establish a new investor number on its system;
(iii) open the appropriate escrow and custodial accounts; and (iv) report the
Mortgage Loan under the Servicer's actual portfolio.  Subservicer and
Servicer shall perform all duties in connection with such reclassified Mortgage
Loans as defined in this Agreement.

         2.12    Notice of Relief Requested Pursuant to the Soldiers and
Sailors Relief Act of 1940 or Similar Laws.  Throughout the term of this
Agreement, Subservicer shall notify Servicer of any notification received from
any Borrower or other party with respect to any Mortgage Loan of a request for
relief pursuant to or invoking any of the provisions of the Soldiers and
Sailors Civil Relief Act of 1940 or similar state or federal law suspending
payments of amounts due under the Note or the commencement of foreclosure
proceedings.


3.       DEPOSIT AND REMITTANCE OF FUNDS

         3.1     Custodial Account.  All funds applicable to the payment of
principal and interest on Mortgage Loans shall be held in trust for the
Investors in accordance with Agency Requirements and Applicable Law.  Such
funds shall be deposited, no later than the next Business Day following
receipt, in a Custodial Account at an FDIC insured depository institution
meeting Agency Requirements.  The Custodial Account shall be held in an
institution designated by Servicer, established in the name of Servicer and
titled as mutually agreed by the parties for the benefit of Servicer and the
Agency, as their interests appear.  Servicer shall permit Subservicer to have
access to such Custodial Account to make deposits and disbursements in
accordance with the terms of this Agreement and Agency Requirements.
Subservicer shall provide all statements and reports relative to the Custodial
Account in accordance with Agency Requirements.  Servicer shall be entitled to
all interest earned on said Custodial Accounts.

         3.2     Remittance of Custodial Funds.  Subservicer shall remit all
payments applicable to principal and interest, including without limitation
prepayments of principal, less the servicing fee calculated and deducted
pursuant to Section 3.5 of this Agreement, in accordance with Agency
Requirements and shall make all principal and interest advances to the Agency
pursuant to Agency Requirements.

         3.3     Escrow Accounts.  Deposits and withdrawals from the Escrow
Accounts shall be in accordance with Section 2.4.

         3.4     Reimbursement of Subservicer.  Servicer will reimburse
Subservicer for Advances and Shortfall Interest within one (1) Business Day of
its receipt, on a Business Day, from Subservicer of a billing along with
supporting documentation and a reconciliation of the prior amount paid and the
current amount due.  Servicer shall reimburse Subservicer on a monthly basis
for any interest on escrow funds paid in the preceding month, within one





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(1) Business Day of its receipt, on a Business Day, of an invoice
substantiating such payments made.  Servicer shall reimburse Subservicer for
funds required in connection with repurchase and reclassification of a Mortgage
Loan in accordance with Section 2.11, within one (1) Business Day of Servicer's
receipt, on a Business Day, of an invoice substantiating such payments made.
Servicer will wire the FNMA and GNMA guarantee fees to Subservicer within one
(1) Business Day following its receipt, on a Business Day, of billing for the
guarantee fees which will include the FNMA draft report.  All requests for
Advances or reimbursement hereunder shall be accompanied by a certification
from an Assistant Vice President or high ranking or Servicer approved officer
of Subservicer certifying that all such sums for which  reimbursement of an
advance is requested has or will be paid to the proper parties in accordance
with Agency Requirements and Applicable Law and that all deposits and
disbursements required to be made on or prior to the date of said certification
have been made in accordance with Agency Requirements and Applicable Law.  In
the event of an improper payment to Subservicer, Subservicer shall make any
appropriate payment back to Servicer within one (1) Business Day of its
receipt, on a Business Day, of a demand for such payment together with
supporting documentation.

         3.5     Remittance to Servicer:  Subservicer shall deduct monthly from
each monthly payment received from a Borrower, an amount equal to one-twelfth
of the annual servicing fee payable to Servicer pursuant to Agency
Requirements.  On or before the 10th Business Day of each month, Subservicer
shall remit to Servicer the servicing fees pertaining to FNMA and GNMA
servicing, net of the Subservicing Fee described in Section 4.  On or before
the 25th day of each month (or the next Business Day if the 25th day is not a
Business Day), Subservicer shall remit to Servicer the servicing fees
pertaining to FHLMC servicing, net of the Subservicing Fee described in Section
4.  Along with such remittances, Subservicer shall provide a report, reasonably
acceptable to Servicer, substantiating the amount remitted.  All funds remitted
under this section shall be sent by wire transfer of immediately available
federal funds to the following account:

                                    Banc One
                                 Columbus, Ohio
                               ABA No. 044000037
                          Credit Account No. 980116070
                   For:  Chase Manhattan Mortgage Corporation
                        Attention:  Ed Reik 614-842-7210

         3.6     Ownership of Escrow Accounts and Custodial Accounts:
Subservicer acknowledges that the Escrow Accounts, Custodial Accounts and any
collections it receives on the Mortgage Loans during the term of this Agreement
(except for Ancillary Fees) are for the account of Servicer, the Borrowers or
the Agency, as their interests may appear.


4.       COMPENSATION





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         Subservicer shall receive as compensation, with respect to each
Mortgage Loan serviced by it hereunder, the Subservicing Fee.  Subservicer will
also retain Ancillary Fees.


5.       CUSTODY OF LOAN DOCUMENTS, BOOKS, RECORDS
         AND REPORTS

         5.1     Documents, Books, Records.  Subservicer shall either retain
copies of all original Loan Documents required in connection with its
subservicing obligations and delivered to Servicer or its designee pursuant to
the Sale Agreement, or incur any expense in connection with obtaining such
copies after delivery to Servicer or its designee.  All Loan Documents shall be
held and delivered by Subservicer to Servicer pursuant to the terms of the Sale
Agreement.  Subservicer acknowledges that Servicer alone owns the documents and
records related to the Mortgage Loans and the Servicing, subject to the rights
of the Agency, notwithstanding that the documents and/or the records may remain
in the possession of Subservicer during the term hereof to facilitate the
performance of subservicing activities described herein.  Servicer shall
instruct its custodian that certain authorized representatives of Subservicer
may obtain release of Loan Documents, in accordance with Agency Requirements,
directly from the custodian.  Servicer shall reimburse Subservicer for the
expense of obtaining any original document from a custodian in situations where
the original is reasonably required (i.e. lien release or default proceedings
when required by applicable law).  Subservicer shall promptly provide the
Servicer, on reasonable request, on a loan by loan basis, copies of all
correspondence, reports, statements and other items regarding any Mortgage
Loan.  Subservicer shall maintain records with respect to each Mortgage Loan in
accordance with Agency Requirements and Applicable Law, which shall include,
without limitation the application of payments as received from the Borrower
and all sums paid into and disbursed from any Escrow Account.  Subservicer
shall also place copies of all relevant documentation received or sent by
Subservicer (**except on-line letters for which records are kept on the
system**) during the term of this Agreement with regard to the Mortgage Loans
in the Servicing File, as defined in the Sale Agreement, or in a separate
foreclosure file, all of which will be delivered to Purchaser on the Transfer
Date, as defined in the Sale Agreement.

         Servicer shall have the right at reasonable times and upon forty-eight
(48) hours written notice, to inspect all books, records and practices of
Subservicer which relate to the Mortgage Loans serviced under this Agreement.

         5.2     Reports.  On or before the 5th Business Day of each month
through the month following termination of this Agreement, Subservicer shall
forward to Servicer, Attn: Servicing Portfolio Management, 200 Old Wilson
Bridge Road, Worthington, Ohio 43085, a copy of the month end delinquency
report and loss mitigation report for the Mortgage Loans reflecting the current
status for each Mortgage Loan including bankruptcy, foreclosure and collection
status, and the month end delinquency report for all Agency Mortgage Loans
subserviced by Subservicer for the preceding month.  Upon reasonable request,
Subservicer





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will provide Servicer with evidence substantiating its compliance with Agency
Requirements including but not limited to those regarding Borrower counselling
and bankruptcy and foreclosure monitoring requirements.  On or before the 25th
day (or the next Business Day if the 25th day is not a Business Day) of each
month (unless an earlier date is required by Servicer to allow for combining of
reports of Servicer and its other affiliates as required by GNMA, which date
will be subsequently identified), through the month following termination of
this Agreement, Subservicer shall provide Servicer, to Attn: Servicing
Portfolio Management, Chase Manhattan Mortgage Corporation, 200 Old Wilson
Bridge Road, Worthington, Ohio 43085, with copies of all required standard
FNMA, FHLMC and GNMA month end cut-off reports and applicable copies of
standard pool and loan level accounting and reconciliation reports, all
relating to the preceding month.  Subservicer shall, at Servicer's expense
which expense shall not exceed fifty dollars ($50.00) per month, monthly,
within five (5) Business Days of month end, provide to Servicer a servicing
data tape in form approved by Servicer (a copy of such form is attached hereto
as Exhibit C), for Servicer's use in valuation of the Servicing.

         Subservicer shall, upon reasonable request of Servicer, provide such
other information or reports not previously agreed to in this Agreement as may
be requested by Servicer.  Such requests shall be reimbursed by Servicer in an
amount previously approved by Servicer.


6.       REPRESENTATIONS, WARRANTIES, AND COVENANTS

         6.1     Subservicer's Representations, Warranties and Covenants.

         A.      As an inducement to Servicer to enter into this Agreement,
                 Seller represents and warrants that the following are true as
                 of the execution of this Agreement and further represents and
                 warrants that the following will continue to be true through
                 and including the final Transfer Date, unless another date is
                 specified:

                          (1)              Due Incorporation and Good Standing.
                 Subservicer is a corporation duly organized, validly existing
                 and in good standing under the laws of its jurisdiction during
                 the time of its activities with respect to the Mortgage Loans.
                 Subservicer is properly licensed, qualified and in good
                 standing to transact business in all appropriate jurisdictions
                 and to conduct all activities performed with respect to
                 subservicing of the Mortgage Loans.

                          (2)              Authority and Capacity.  Subservicer
                 has all requisite corporate power, authority and capacity to
                 enter into this Agreement and to perform the obligations
                 required of it hereunder.  This Agreement constitutes a valid
                 and legally binding agreement of Subservicer enforceable in
                 accordance with its terms except as such enforceability may be
                 limited by bankruptcy, insolvency and similar laws and
                 equitable principles affecting the enforceability of the
                 rights of creditors generally.





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                          (3)              Effective Agreement.  The execution,
                 delivery and performance of this  Agreement by Subservicer,
                 its compliance with the terms hereof and consummation of the
                 transactions contemplated hereby will not violate, conflict
                 with, result in a breach of, constitute a default under, be
                 prohibited by or require any additional approval under its
                 charter, bylaws, or any instrument or agreement to which it is
                 a party or by which it is bound or which affects the Mortgage
                 Loans, including but not limited to the servicing agreements
                 related to the Mortgage Loans, or any state or federal law,
                 rule, or regulation or any judicial or administrative decree,
                 order, ruling or regulation applicable to it or to the
                 servicing of the Mortgage Loans.

                          (4)              Compliance with Contracts and
                 Regulations.  Subservicer has complied with all material
                 obligations under all contracts to which it is or was a party,
                 and with all applicable federal, state and local laws and
                 regulations with respect to and which affect the servicing of
                 the Mortgage Loans.  The laws and regulations which
                 Subservicer has complied with include but are not limited to
                 all applicable Agency Requirements.  Subservicer has done, and
                 will do, no act or thing which will materially adversely
                 affect the servicing of the Mortgage Loans or the Mortgage
                 Loans.

                          (5)              Related Escrow Account Maintenance.
                 All related escrow accounts are being maintained in accordance
                 with applicable law and Agency Requirements, and in accordance
                 with the Servicing Agreements and the terms of the Mortgages
                 related thereto.  Except as to payments which are past due
                 under the Notes, all escrow balances required by the Mortgages
                 and paid to Subservicer for the account of the Borrowers and
                 Subservicer are on deposit in the appropriate escrow/impound
                 accounts.  All funds received by the Subservicer in connection
                 with the Mortgage Loans, including, without limitation,
                 foreclosure proceeds, hazard insurance proceeds, condemnation
                 proceeds and principal reductions, have promptly been
                 deposited in the appropriate account, and all such funds have
                 been applied to reduce the principal balance of the Mortgage
                 Loans in question, or for reimbursement or repairs to the
                 Mortgaged Property or as otherwise required by applicable law
                 and the Agency Requirements.  There are no pledged accounts in
                 lieu of escrow deposits.

                          (6)              Litigation; Compliance with Laws.
                 There is and shall be no litigation, proceeding or
                 governmental investigation existing or pending or to the
                 knowledge of Subservicer threatened, or any order, injunction,
                 decree or settlement agreement outstanding against or relating
                 to Subservicer or the servicing of the Mortgage Loans or the
                 Mortgage Loans, which may have a material adverse effect upon
                 the business, operations, assets or financial condition of
                 Subservicer or which may impair the ability of Subservicer to
                 perform its obligations under this Agreement, nor does
                 Subservicer know of





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                 any basis for any such litigation, proceeding or governmental
                 investigation.  Subservicer has not violated and will not
                 violate any applicable law, regulation, ordinance, order,
                 injunction, decree or settlement agreement, nor any other
                 requirement of any governmental body or court, which may
                 materially affect any of the Mortgage Loans or the servicing
                 of the Mortgage Loans.  For purposes of this Section 4.6,
                 "litigation" shall include a suit for damages alone and shall
                 not require that a specific performance remedy or injunction
                 impacting the transfer of the servicing be pending.

                          (7)              Ability to Perform.  Subservicer
                 does not believe, nor does it have any reason or cause to
                 believe, that it cannot perform each and every covenant
                 contained in this Agreement.

                          (8)              Statements Made.  As of the date of
                 execution of this Agreement, no representation, warranty or
                 written statement made by Subservicer, in connection with this
                 Agreement, or any exhibit, schedule, data tape, statement or
                 certificate furnished to Servicer by Subservicer, in
                 connection with the transactions contemplated hereby by
                 Subservicer contains or will contain any untrue statement of a
                 material fact or omits or will omit to state a material fact
                 necessary to make the statements contained herein or therein
                 not misleading.

                          (9)              Insolvency.  Subservicer has not (i)
                 admitted in writing its inability to pay its debts generally
                 as they become due, (ii) filed a petition to take advantage of
                 any applicable insolvency or reorganization statute, (iii)
                 made an assignment for the benefit of its creditors or (iv)
                 voluntarily suspended payment of any of its obligations.

                          (10)             Agency Requirements.  Subservicer
                 has performed all material obligations to be performed under
                 Agency Requirements, and no event has occurred and is
                 continuing which, but for the passage of time or the giving of
                 notice or both, would constitute an event of default
                 thereunder.  Subservicer is an approved seller/servicer/issuer
                 in good standing with FNMA, FHLMC and GNMA.

                          (11)             Audits.  Subservicer has not, been
                 the subject of allegations of material failure to comply with
                 applicable servicing or claims procedures, in its most recent
                 Agency or PMI policy provider audits (if any).

                          (12)             Compliance with Insurance Contracts.
                 Subservicer has complied with all material obligations under
                 all applicable insurance contracts, including hazard, flood
                 and private mortgage insurance contracts, with respect to, and
                 which affect any of the servicing of the Mortgage Loans.
                 Subservicer





                                       12
<PAGE>   13


                 has not taken any action or failed to take any action which
                 might cause the cancellation of or otherwise affect any of the
                 insurance contracts.

                          (13)             Accuracy of Servicing Information.
                 The information provided by Subservicer to Servicer pursuant
                 to this Agreement is true and correct, in all material
                 respects.

                          (14)             Errors and Omissions Policy.
                 Subservicer has in full force and effect an adequate errors
                 and omissions policy or policies satisfying all Agency
                 Requirements with respect to its servicing operations and a
                 standard mortgage bankers blanket bond.

                          (15)             Financial Condition of
                 Subservicer/Regulatory Approval.  Subservicer is not in
                 receivership, conservatorship or bankruptcy.  Subservicer is
                 not operating pursuant to any restrictive operating agreement
                 or order mandated by the OTS, the FDIC or any federal or state
                 regulatory body.

         B.      Subservicer covenants that it shall subservice the loans
                 hereunder in accordance with the terms of this Agreement.
                 Subservicer shall notify Servicer of all employees currently
                 under employment agreements with Subservicer or who are
                 entitled to receive any additional compensation conditioned on
                 continued employment through a designated future date.   In
                 addition, Subservicer shall provide Servicer advance (i.e.
                 with reasonable time to comment) notification of the granting
                 of any employment agreement or additional compensation
                 conditioned on continued employment through a designated
                 future date.  Subservicer further covenants that during the
                 period of time that Subservicer is performing its services
                 hereunder, it will not make any of the following significant
                 changes in its operations, without the prior written consent
                 of the Servicer, which consent shall not be unreasonably
                 withheld:

                          Any servicing system change to a system which is not
                          generally accepted in the industry as customary and
                          competent of handling large loan volume.

                          Any system conversion occurring during the time
                          period less than five (5) months prior to any
                          Transfer Date.

                          Operational changes in lockbox operations, loan
                          numbers, force placed insurance carriers, or which
                          are associated with any change in a significant
                          vendor (vendors whose services earn fees in excess of
                          $500,000 per year).

                          Operational changes which require a waiver of an
                          Agency.





                                       13
<PAGE>   14


                          The outsourcing of any servicing obligation done by
                          Subservicer internally as of December 31, 1996.

                          A change in the ownership structure of Subservicer.

                 In addition, Subservicer shall timely notify Servicer of any
                 operational changes which must be made by Subservicer at the
                 request of any Agency.

         C.      Subservicer covenants that as of the date indicated below, it
                 will provide evidence to Servicer of the following:

                 (1)      That as of June 1, 1997, Subservicer will have in
                          place a disaster recovery plan which will operate in
                          accordance with Agency Requirements.

                 (2)      That as of June 1, 1997, Subservicer's escrow
                          analysis department will have procedures in place to
                          adequately report on the placement and removal of
                          stop analysis flags on Mortgage Loans.

                 (3)      That by the Transfer Date, as defined in the Sale
                          Agreement, Subservicer will have ensured that the
                          integrity of the Mortgage Loan data on its servicing
                          system is acceptable under Agency Requirements.

                 (4)      That as of June 1, 1997, Subservicer's customer
                          service department will be adequately staffed to meet
                          the following customer service performance
                          parameters:

                              Phone call blockage cannot exceed 10%.
                              A phone call abandonment rate of less than 6%.
                              An eighty percent (80%) probability that a
                              phone call will be answered within ninety (90)
                              seconds.
                              Phones must be available for Borrowers between
                              8:15 a.m. and 8 p.m. eastern time.

                 (5)      That as of June 1, 1997, Subservicer will have in
                          place an active procedure to ensure that complaints
                          of a discriminatory basis, or which have been made to
                          regulators or to the Agencies and forwarded to
                          Subservicer, are dealt with at a senior officer
                          level.

                 (6)      That as of June 1, 1997, Subservicer's bankruptcy
                          department will be performing escrow analyses, in
                          accordance with Agency Requirements, on Mortgage
                          Loans for which the Borrower has filed for protection
                          under the Bankruptcy Code.





                                       14
<PAGE>   15


                 (7)      That as of June 1, 1997, Subservicer will have in
                          place a proactive loss mitigation function which
                          complies with Agency Requirements.

                 (8)      That by March 1, 1997, Subservicer's Assumptions
                          Department will be reporting its mortgage record
                          change notices to the FHA by electronic transmission,
                          as required by HUD, and not by tape, unless such date
                          is extended by HUD.  Additionally, by June 1, 1997,
                          Subservicer's Assumptions Department will have
                          procedures in place to ensure compliance with
                          Applicable Laws, including but not limited to such
                          reporting as is required under the Home Mortgage
                          Disclosure Act (HMDA) and such early disclosures as
                          are required by the Real Estate Settlement Procedures
                          Act and the Truth in Lending Act.

                 (9)      That by June 1, 1997, Subservicer will have performed
                          a full audit of the adjustable rate Mortgage Loans
                          which Subservicer acquired as part of its acquisition
                          from Empire.

                 (10)     That by June 1, 1997, Subservicer will have
                          procedures in place to (i) properly report to HUD the
                          total payment amount on the HUD 300 for Mortgage
                          Loans with Escrow Account shortage spreads and (ii)
                          ensure that unapplied HUD 235 subsidies are being
                          reconciled timely each month to the HUD billings and
                          to the loan level detail.


         6.2     Servicer's Representations, Warranties and Covenants

         A.      Servicer hereby makes, as if fully restated herein, the
                 representations and  warranties of Purchaser set forth in
                 Article VI of the Sale Agreement, which are hereby
                 incorporated herein by this reference, as if they were fully
                 restated.

         B.      Servicer covenants that it will perform its duties hereunder
                 in accordance with the terms of this Agreement.

         C.      Servicer shall inform Subservicer in writing of any action
                 that Servicer contracts for which requires any action on the
                 part of Subservicer, and Servicer shall hold Subservicer
                 harmless from and against any acts or omissions of Subservicer
                 resulting from Servicer's failure to give such notice.


7.       TERMINATION





                                       15
<PAGE>   16


         This Agreement shall terminate (i) on each of Transfer Dates set forth
in the Sale Agreement with respect to the Mortgage Loans transferred on each
such Transfer Date, or (ii) by mutual consent of Servicer and Subservicer, in
writing.  Irrespective of what is contained in the prior sentence relating to
termination, Servicer retains the option to extend the term of this Agreement,
for all or part of the Servicing, for interim periods of no less than one
hundred fifty (150) days, for up to another two (2) years (e.g., up to February
28, 2000) at the same Subservicing Fee and in accordance with the terms of this
Agreement.  This Agreement may be terminated by Servicer at an earlier time for
cause, upon sixty (60) days written notice, if one or more of the following
events of default by Subservicer shall occur and be continuing:

         (a)     any failure by Subservicer to remit to the Agency and/or
Servicer any material (individually or in the aggregate) payment required to be
made by Subservicer under the terms of this Agreement or Agency Requirements
which continues unremedied for a period of one (1) Business Day after the
earlier of:  (i) discovery by Subservicer of such non-payment; or (ii) the date
upon which written notice of such failure, requiring the same to be remedied,
shall have been given to Subservicer by Servicer or the Agency,

         (b)     failure on the part of Subservicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
Subservicer set forth in this Agreement which continue unremedied for a period
of thirty (30) days, or (with notice to Subservicer) such shorter cure period
as may be permitted by the Agency after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to
Subservicer by Servicer or the Agency;

         (c)     a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against Subservicer and such decree or
order shall have remained in force undischarged or unstated for a period of
thirty (30) days;

         (d)     Subservicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to Subservicer
or relating to all or substantially all of its property;

         (e)     Subservicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or

         (f)     Subservicer shall cease to be eligible to sell mortgage loans
to or service mortgage loans for the Agency;





                                       16
<PAGE>   17


then, and in each and every such case, so long as an event of default shall not
have been remedied, Servicer by notice in writing to Subservicer may, in
addition to whatever rights Servicer may have at law or in equity, to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of Subservicer without incurring any penalty or fee of any kind
whatsoever in connection therewith.  On or after the receipt by Subservicer of
such written notice, all authority and power of Subservicer under this
Agreement shall cease.  Upon such termination, Subservicer shall promptly
prepare, execute and deliver any and all documents and other instruments, all
Servicing Files (as defined in the Sale Agreement), and do or accomplish all
other acts or things, all in accordance with the servicing transfer
instructions (as set forth in the Sale Agreement or as otherwise provided by
Servicer), Agency Requirements and Applicable Law, necessary or appropriate to
effect the purposes of such notice of termination at Subservicer's sole cost.
Subservicer agrees to cooperate with Servicer in effecting the termination of
Subservicer's responsibilities and rights hereunder, including, without
limitation the transfer to Servicer or its designee, in accordance with the
terms of the servicing transfer instructions (as set forth in the Sale
Agreement or as otherwise provided by Servicer), the Sale Agreement and Agency
Requirements, for administration by it of all Subservicing Accounts which are
at the time maintained by Subservicer relative to the Mortgage Loans.

         In the event this Agreement is terminated by Servicer for cause due to
an event of default by Subservicer, then Subservicer shall reimburse Servicer
for any losses, damages and reasonable out-of-pocket expenses that Servicer
suffers as a result of termination prior to the Transfer Date which losses
shall include, but not be limited to the following:  (i) all costs incurred in
transferring the Servicing to Servicer or its designee (including cost of
transferring electronic data or transferring onto a different technological
platform); (ii) any reasonable (given the circumstances that exist at the time)
increase in amount over and above the Subservicing Fee which Servicer is
required to pay to a third party subservicer to subservice the Mortgage Loans
prior to the Transfer Date; (iii) any penalties which may be assessed by any
party; and (iv) reasonable attorney fees and costs.

8.       INDEMNITY; BONDING

         8.1     Indemnification of Servicer.  Subservicer agrees to indemnify
and hold Servicer harmless from and against any and all claims, losses, damages
and reasonable out-of-pocket expenses arising out of or in any way related to
breach of any representation, warranty or covenant set forth in this Agreement.

         8.2     Indemnification of Subservicer.  Servicer agrees to indemnify
and hold Subservicer harmless from any and all claims, losses, damages and
reasonable out-of-pocket expenses arising out of or in any way related to
breach of any representation, warranty or covenant set forth in this Agreement
or any actions of Subservicer taken in compliance with written instruction from
Servicer.

         8.3     Survival.   The indemnifications set forth in Sections 8.1 and
8.2 of this Agreement shall survive termination of this Agreement for a period
of ten (10) years from





                                       17
<PAGE>   18

the Sale Date (the "Survival Period").  Servicer may recover under this
Section, provided that written notice of a claim shall have been given prior to
the expiration of the Survival Period.  Notwithstanding anything to the
contrary in this Section 8.3, in the event that, prior to the expiration of the
Survival Period, written notice of a claim for indemnification is given, and
either the loss which is indemnifiable has not yet been incurred or litigation
in connection with the claim for indemnification has not yet commenced, such
claim shall survive beyond the Survival Period only if the threat of litigation
arose within six (6) months prior to the expiration of the Survival Period
(which threat is evidenced by written correspondence from an attorney) and
litigation commences within six (6) months after expiration of the Survival
Period.

         8.4     Insurance.  Subservicer shall maintain such insurance as may
be required to maintain its status as an Agency approved Seller/Servicer.
Subservicer shall maintain at Subservicer's expense and keep in effect
throughout the term hereof for itself, and for Servicer as co-insured or loss
payee, in accordance with Applicable Law and Agency Requirements, fidelity,
theft and forgery bond coverage and errors and omissions insurance in amounts
and with carriers satisfactory to the Agencies.  Subservicer shall provide
Servicer, upon written request, with evidence satisfactory to Servicer of its
compliance with the requirements of this Subsection. In addition, Subservicer
shall provide Servicer, or any person authorized by Servicer, full and complete
access during reasonable business hours to copies of then-current policies of
insurance required hereunder, given advance written notice of five (5) Business
Days from Servicer to Subservicer.  All such policies shall provide that they
may not be canceled by the carrier without thirty (30) days' prior written
notice to Servicer.

9.       MISCELLANEOUS

         9.1     No Joint Venture.  Nothing herein shall be deemed or construed
to create a co-partnership or joint venture between the parties hereto, and the
services of Subservicer shall be rendered as an independent contractor.

         9.2     Waiver.  No delay, failure or discontinuance of either party
in exercising any right, power or remedy under this Agreement, shall affect or
operate as a waiver of such right, power or remedy, nor shall any single or
partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy.  Any waiver, permit, consent or approval of any
kind by either party of any breach or default under this Agreement must be in
writing and shall be effective only to the extent set forth in such writing.

         9.3     Successors; Assignment.  Subservicer does not have the right
to sell, assign, delegate or otherwise transfer its rights or obligations under
this Agreement to a third party without obtaining the prior written consent of
Servicer.  Servicer reserves the right in its reasonable discretion to approve
the new subservicer.  In determining the acceptability of the new subservicer,
Servicer may consider such subservicer's reputation in the industry,





                                       18
<PAGE>   19

financial status, approval status with the Agencies, as well as with private
investors and regulators, status as a competitor to Servicer, and ability to
service non-standard mortgage products.  Subject to the restrictions on
assignment set forth in this Agreement and the Sale Agreement, this Agreement
shall be binding on and inure to the benefit of the successors and assigns of
the parties.  Any assignment shall not release Subservicer from liability
hereunder for acts or omissions of Subservicer prior to such assignment.  Any
assignee shall assume all of Subservicer's obligations hereunder, as well as
assume the performance of all functions related to the transfer of the
Servicing on the Transfer Date, as set forth in Exhibit D and Exhibit E.
Additionally, any assignee shall, as of the date of assignment, make all of
those representations and warranties required of Subservicer hereunder in
reference to this Agreement.

         Should Servicer choose to resell portions of the Servicing portfolio
due to no fault of the Subservicer, Subservicer shall reasonably cooperate with
Servicer and its assignee or designee to affect due diligence and transfer.  In
such event, Subservicer shall not be responsible for any out-of-pocket expenses
related to such sale that it would not have otherwise incurred in connection
with transferring the Mortgage Loans to Servicer.  In no event, other than
Subservicer Default or as mutually agreed by the parties, shall the Mortgage
Loans be transferred before the Transfer Dates set forth in the Sale Agreement.
The transfer dates associated with any such transfer shall be agreed upon in
accordance with the terms of this Agreement and the Sale Agreement.


         9.4     Entire Agreement; Amendment.  This Agreement and the Sale
Agreement and Exhibits and Schedules thereto constitute the entire agreement
between Subservicer and Servicer with regard to subservicing the Mortgage Loans
and supersedes all prior negotiations, communications, discussions and
correspondence concerning the subject matter hereof and may be amended or
modified only by a written instrument executed by each party hereto.

         9.5     Notices.  All notices, requests and demands given to or made
upon any party hereto must be in accordance with Section 11.11 of the Sale
Agreement.

         9.6     Time.  Time is of the essence of each and every provision of
this Agreement.

         9.7     Severability of Provisions.  If any provision of this
Agreement shall be prohibited by or deemed invalid under Applicable Law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or any
remaining provisions of this Agreement.

         9.8     Ohio Law Applicable.  This Agreement shall be governed by and
construed in accordance with the law of the State of Ohio.





                                       19
<PAGE>   20


         9.9     Solicitation of Mortgages.  Neither Subservicer nor any
affiliate or agent of Subservicer shall, during the remaining term of any of
the Mortgage Loans, take any action to personally, by telephone, by mail or
otherwise, directly or indirectly, solicit the prepayment or modification of
the Mortgage Loans, in whole or in part, or offer any Borrower any other
mortgage or non-mortgage related products.  Notwithstanding the foregoing, it
is understood and agreed that promotions which are directed to the general
public, including, without limitation, mass mailings based on commercially
acquired mailing lists, newspaper, radio and television advertisements, shall
not constitute solicitations under this paragraph.

         9.10 Cooperation.  To the extent reasonably possible, the parties
hereto shall cooperate with and assist each other, as requested, in carrying
out the other's covenants, agreements, duties and responsibilities under this
Agreement and in connection herewith shall execute and deliver all such
documents and instruments as shall be necessary and appropriate in the
furtherance thereof.

         9.11 Confidentiality of Information.  Except as otherwise required by
law, Subservicer and Servicer and their affiliates shall, and shall cause their
respective directors, officers, employees and authorized representatives to,
hold in strict confidence and not use or disclose to anyone without the prior
written consent of the other party all information concerning customers or
proprietary business procedures, servicing fees or prices, policies or plans of
the other party or any of its affiliates received by them from the other party
in connection with the transactions contemplated hereby.

         9.12 Supplementary Information.  From time to time, upon reasonable
notice, prior to and after the Transfer Date, Subservicer shall furnish
Servicer such incidental information, which is reasonably available to
Subservicer, supplementary to the information contained in the documents and
schedules delivered pursuant hereto, as Purchaser may reasonably request within
ten (10) years of the Sale Date.  Any request for information under this
Section which is in reference to information which was not required to have
been provided under the terms of this Agreement shall be fulfilled at the
reasonable expense of Purchaser.

         9.13 Set-off.  Servicer agrees that Subservicer may, at its option,
deduct from any payment due Servicer under the terms of this Agreement, any
monies due to Subservicer under the terms of this Agreement and based upon
Servicer's failure to make payment to Subservicer as required under the terms
of this Agreement.





                                       20
<PAGE>   21


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


                                              SERVICER:

                                              CHEMICAL MORTGAGE COMPANY

ATTEST:

                                              BY:_____________________________
_________________________                     NAME:___________________________
                                              TITLE:__________________________
                                              DATE:___________________________



                                              SUBSERVICER:

                                              SOURCE ONE MORTGAGE SERVICES
                                              CORPORATION

ATTEST:

                                              BY:_____________________________
_________________________                     NAME:___________________________
                                              TITLE:__________________________
                                              DATE:___________________________





                                       21
<PAGE>   22


Exhibit A - Mortgage Loan Listing
Exhibit B - Approved Vendors
Exhibit C - Tape Format
Exhibit D - Transfer Obligations
Exhibit E - Transfer Instructions





                                       22