Document:

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                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT ("Agreement") made this first day of January 2001,
between NVR, INC., a Virginia corporation (the "Company") and PAUL C. SAVILLE, a
resident of Virginia (the "Executive").

WHEREAS, the parties wish to terminate all prior employment agreements and
amendments thereto; and

WHEREAS, the parties wish to establish the terms of the Executive's future
employment with the Company.

ACCORDINGLY, the parties agree as follows:

1.   Employment, Duties and Acceptance.
     ---------------------------------

     1.1  Employment by the Company.  The Company hereby employs the Executive,
          -------------------------
          for itself and its affiliates, to render exclusive and full-time
          services to the Company. The Executive will serve in the capacity of
          Senior Vice President -Finance, Chief Financial Officer and Treasurer
          of the Company. The Executive will perform such duties as are imposed
          on the holder of that office by the By-laws of the Company and such
          other duties as are customarily performed by one holding such position
          in the same or similar businesses or enterprises as those of the
          Company. The Executive will perform such other related duties as may
          be assigned to him from time to time by the Company's Board of
          Directors. The Executive will devote all his full working time and
          attention to the performance of such duties and to the promotion of
          the business and interests of the Company. This provision, however,
          will not prevent the Executive from investing his funds or
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          assets in any form or manner, or from acting as a member of the Board
          of Directors of any companies, businesses, or charitable
          organizations, so long as such investments or companies do not compete
          with the Company, subject to the limitations set forth in Section 7.1.

     1.2  Acceptance of Employment by the Executive.  The Executive accepts such
          -----------------------------------------
          employment and shall render the services described above.

     1.3  Place of Employment.  The Executive's principal place of employment
          -------------------
          shall be the Washington, D.C. metropolitan area, subject to such
          reasonable travel as the rendering of services associated with such
          position may require.

2.   Duration of Employment.
     ----------------------

     This Agreement and the employment relationship hereunder will continue
in effect for six (6) years from January 1, 2001 through January 1, 2007.  It
may be extended beyond January 1, 2007 by mutual, written agreement at any time.
In the event of the Executive's termination of employment during the term of
this Agreement, the Company will be obligated to pay all base salary, bonus and
other benefits then accrued, as well as cash reimbursement for all accrued but
unused vacation, plus, if applicable, the additional payments provided for in
Sections 6.1, 6.2, 6.4 and 6.6 of this Agreement.

     3.   Compensation.
          ------------

     3.1  Base Salary.  As compensation for all services rendered pursuant to
          -----------
          this Agreement, the Company will pay to the Executive an annual base
          salary of THREE HUNDRED SIXTY-THREE THOUSAND DOLLARS ($363,000),
          payable in equal monthly installments of THIRTY THOUSAND TWO HUNDRED
          FIFTY DOLLARS ($30,250). The Company's Board of Directors in its sole
          discretion may increase, but may not reduce, the Executive's annual
          base salary.

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     3.2  Bonuses.  The Executive shall be eligible to be paid a bonus annually
          -------
          in cash or in the registered stock of NVR, Inc. as determined by the
          Compensation Committee of the Board of Directors or in a combination
          thereof in a maximum amount of 100% of the Executive's annual base
          salary. This bonus shall be paid at the same time (or times) and in
          the same manner as other senior executives of the Company. Entitlement
          to the bonus is dependent on the Executive meeting certain goals,
          which shall be established annually by the Company.

     3.3  Participation in Employee Benefit Plans.  The Executive shall be
          ---------------------------------------
          permitted during the term of this Agreement, if and to the extent
          eligible to participate in any group life, hospitalization or
          disability insurance plan, health program, pension plan, Employee
          Stock Ownership Plan or similar benefit plan of the Company, which may
          be available to other comparable executives of the Company generally,
          on the same terms as such other executives. The Executive shall be
          entitled to paid vacation and all customary holidays each year during
          the term of this Agreement in accordance with the Company's policies.

     3.4  Expenses.  Subject to such policies as may from time to time be
          ---------
          established by the Company's Board of Directors, the Company shall pay
          or reimburse the Executive for all reasonable expenses actually
          incurred or paid by the Executive in the performance of the
          Executive's services under this Agreement upon presentation of expense
          statements or vouchers or such other supporting information as it may
          require.

4.   Management Long-Term Stock Option Plans.
     ---------------------------------------

     The Executive is a participant in the 1993 NVR, Inc. Management Equity
     Incentive Plan, 1994 NVR, Inc. Management Equity Incentive Plan, 1996 NVR,
     Inc. Management Long-Term Stock Option Plan and the 1998 NVR, Inc.
     Management Long-Term Stock Option Plan.  The Executive has entered into
     separate agreements

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     governing the terms of his participation in the Plans.

5.   High Performance Compensation Plan.
     ----------------------------------

     The Executive is a participant in the NVR, Inc. High Performance
     Compensation Plan. - Number 1 and the NVR, Inc. High Performance
     Compensation Plan - Number 2.  The Executive has entered into separate
     agreements governing the terms of his participation in the Plans.

6.   Termination or Disability.
     -------------------------

     6.1  Termination Upon Death.  If the Executive dies during the term hereof,
          ----------------------
          this Agreement shall terminate, except that the Executive's legal
          representatives shall be entitled to receive the Executive's base
          salary and accrued Bonus for the period ending on the last day of the
          second calendar month following the month in which the Executive's
          death occurred.  Accrued Bonus shall be calculated as one hundred
          percent of Base Salary multiplied by the fraction (x) the number of
          days in calendar year up to last day of second calendar month
          following the month in which Executive died  divided by (y) 365 days.

     6.2  Disability.  If during the term hereof the Executive becomes
          ----------
          physically or mentally disabled, whether totally or partially, so that
          the Executive is, in the discretion of the Company's Board of
          Directors, substantially unable to perform his services hereunder, the
          Executive shall transfer from active to disability status. Nothing in
          this Section 6.2 shall be deemed to in any way affect the Executive's
          right to participate in any disability plan maintained by the Company
          and for which the Executive is otherwise eligible. If the Executive
          transfers to disability status he would be entitled to receive the
          Executive's Base Salary and accrued Bonus for the period ending on the
          last day of the second calendar month following the month in which the
          Executive is transferred to disability status. Accrued Bonus shall be
          calculated as one hundred percent of Base Salary multiplied by the
          fraction (x) the number of days in calendar

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          year up to last day of second calendar month following the month in
          which the Executive was transferred to disability status divided by
          (y) 365 days.

     6.3  Termination for Cause.  If the Executive is convicted of any felony,
          ---------------------
          other crime involving moral turpitude, or any crime or offense which
          results in his incarceration for more than three months, is guilty of
          gross misconduct in connection with the performance of his duties as
          described in Section 1.1 hereunder, or materially, breaches
          affirmative or negative covenants or undertakings set forth in Section
          7, the Company at any time by written notice to the Executive, may
          terminate the Executive's employment hereunder.  Any such termination
          shall be for Cause.

     6.4  Termination Without Cause.  In the event the Company on sixty (60)
          -------------------------
          days' notice terminates the Executive's employment without Cause (as
          such term is defined in Section 6.3) during the term of this
          Agreement, then as full satisfaction of the Company's obligations to
          the Executive, the Executive shall be entitled to payment of TWO
          HUNDRED PERCENT (200%) of his then annual base salary, paid in twelve
          equal monthly installments beginning on the fifteenth day of the first
          month following the date of termination.  The Executive shall also be
          provided with outplacement services with a firm jointly selected by
          the Executive and the Company at a cost not to exceed THIRTY THOUSAND
          DOLLARS ($30,000).

     6.5  Voluntary Termination.  The Executive may on sixty (60) days' notice
          ---------------------
          terminate his employment hereunder.  In such event, he shall not be
          entitled to any severance pay except in the circumstances described in
          Section 6.6 below.

     6.6  Voluntary Termination-Change of Control.  In the event the Executive
          ---------------------------------------
          voluntarily terminates his employment hereunder in connection with or
          within one (1) year after a Change of Control of the Company (as
          defined below), the Executive shall receive a payment of TWO HUNDRED
          PERCENT (200%) of his then annual

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          base salary, as well as his accrued pro-rata bonus (on the assumption
          that the maximum annual bonus would have been paid pursuant to Section
          3.2) through the date of termination. Payment of such amount shall be
          in twelve equal monthly installments beginning on the first day of the
          first month following the date of termination. For purposes of this
          Agreement, "Change of Control" means (i) any transaction or series of
          transactions (including, without limitation, a tender offer, merger or
          consolidation) the result of which is that any "person" or "group"
          (within the meaning of Section 13 (d) and 14 (d) (2) of the Exchange
          Act), becomes the "beneficial owner" (as defined in rule 13d-3 under
          the Exchange Act) of more than 50 percent of the total aggregate
          voting power of all classes of the voting stock of the Company and/or
          warrants or options to acquire such voting stock, calculated on a
          fully diluted basis, or (ii) if all or substantially all of the assets
          of the Company are sold or otherwise transferred to any individual,
          corporation, partnership, trust, association, joint venture, pool,
          syndicate or similar organization or group acting in concert or (iii)
          the Company is liquidated or dissolved or adopts a plan of liquidation
          or (iv) a merger consolidation or other reorganization or business
          combinations with any party including a leveraged buy-out or a going
          private transaction and where there has been a significant reduction
                              ---
          in Executive's responsibilities.

     6.7  Voluntary Termination-Change in Senior Management Accompanied by
          ----------------------------------------------------------------
          Change in Business Philosophy.  If the Company elects a new Chairman
          -----------------------------
          and/or Chief Executive Officer (the "New Officer") or provided that
          the New Officer enacts major changes in the Company's business
          philosophy, mission or business strategies, the Executive may
          voluntarily terminate his employment.  To provide sufficient time for
          a transfer of the Executive's responsibilities and duties, he shall be
          required to provide sixty (60) days notice prior to such voluntary
          termination and the Company shall have the option of extending the
          notice an additional thirty (30) days.  In the event the Executive
          voluntarily terminates his employment in connection with or within one
          year after the election of a New Officer accompanied by any of the
          changes described in this Section 6.7, he shall not be

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          entitled to any severance pay and shall not be bound by the "Covenant
          Not to Compete" described in Section 7.

     6.8  Effectiveness.  In the event any of the events described in this
          -------------
          Section 6 should occur during the term of this Agreement, and result
          in payments to the Executive which would in their normal course
          continue beyond the term of this Agreement, such payments shall be
          made at such times and in such amounts as if the term of this
          Agreement had not expired.

7.   Covenant Not to Compete.
     -----------------------

     The covenant set forth in Section 7.1 shall be applicable for a period of
     one (1) year after termination in the event the Executive is terminated
     pursuant to Section 6.4 "Without Cause" or to Section 6.5 "Voluntary" or to
     Section 6.6 "Voluntary Termination -Change of Control".  It shall be
     applicable for a period of two (2) years after termination in the event the
     Executive is terminated pursuant to Section 6.3 for "Cause".

     7.1  Scope.  During the term of Executive's employment under this
          -----
          Agreement, and for the applicable period thereafter, Executive hereby
          covenants and agrees that neither he nor any affiliate (as defined
          hereinbelow), at any time, directly or indirectly, will (i) engage,
          whether as an employee or otherwise, in the Homebuilding and Mortgage
          Financing Business (as defined hereinbelow) on behalf of himself or
          any other person or entity, whether conducted individually or through
          an affiliate; (ii) own, acquire an interest in, manage, operate, join
          or control, or participate in the ownership, acquisition, management,
          operation or control of, or be a director, agent, representative,
          shareholder of more than 1% of the outstanding stock, partner,
          employee, officer, or consultant of, any enterprise of any kind that
          is engaged in the Homebuilding Business or Mortgage Financing
          Business; (iii) induce or attempt to induce any customer or potential
          customer of the Company to discontinue, in whole or in part, business,
          or not to do business, with the Company or (iv) hire or attempt to
          hire any person now or hereafter

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          employed by the Company.

     7.2  Definitions.  For purposes of this Agreement, (i) the term "affiliate"
          -----------
          shall mean Executive, Executive's spouse, and any minor children
          ("immediate family") and any entity that Executive and/or any members
          of his immediate family control, either directly or indirectly; (ii)
          "control" for purposes of the immediately preceding clause shall mean
          possession, directly or indirectly, of power to direct or cause the
          direction of management or policies (whether through ownership of
          voting securities, by contract, or otherwise); and (iii) the term
          "Homebuilding Business" and "Mortgage Financing Business" shall mean
          the business of designing, constructing, and/or the origination,
          underwriting, placement or sale of residential home mortgages at any
          location within any Standard Metropolitan Statistical Area (as
          determined by the Census Bureau, Department of Commerce, United States
          Government) in which is located any office of the Company which has
          been assigned to the Executive's area of managerial responsibility at
          any time within the last two years of the employment of the Executive
          with the Company.

     7.3  Reasonableness.  The Executive acknowledges that the restrictions
          --------------
          contained in this Section 7 are reasonable and necessary to protect
          the business and interests of the Company, and that it would be
          impossible to measure in money the damages that would accrue to the
          Company by reason of the Executive's failure to perform his
          obligations under this Section 7. Therefore, the Executive hereby
          agrees that in addition to any other remedies that the Company may
          have at law or at equity with respect to this Section 7, the Company
          shall have the right to have all obligations, undertakings,
          agreements, and covenants set forth herein specifically performed, and
          that the Company shall have the right to obtain an order of such
          specific performance (including preliminary and permanent injunctive
          relief to prevent a breach or contemplated breach of any provision of
          this Section 7) in any court of the United States or any state or
          political subdivision thereof, without the necessity of proving actual
          damage; provided that the Company is not in breach of any of its
          obligations hereunder.

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     7.4  No Waiver.  No waiver by the Company of a breach of, or of a default
          ---------
          under, any of the provisions of this Agreement, nor their failure on
          one or more occasions, to enforce any of the provisions of this
          Agreement or to exercise any right or privilege hereunder shall
          thereafter be construed as a waiver of any subsequent breach or
          default of a similar nature, or as to the waiver of any such
          provision, rights, or privileges hereunder.

     7.5  Blue-Pencilling.  If any part of any provision of this Section 7
          ---------------
          shall be determined to be invalid or unenforceable under applicable
          law, such part shall be ineffective to the extent of such invalidity
          or unenforceability only, without in any way affecting the remaining
          terms of such provision or the remaining provisions of this Section 7.
          The Executive hereby covenants and agrees that to the extent any
          provision or portion of this Agreement shall be held, found, or deemed
          to be unreasonable, unlawful, or unenforceable, then any necessary
          modifications shall be made (but only to such extent) so that such
          provision or portion hereof shall be legally enforceable to the
          fullest extent permitted by applicable law. The Executive further
          agrees and authorizes any court of competent jurisdiction to enforce
          any such provision or portion hereof in order that such provision or
          portion hereof shall be enforced by such court to the fullest extent
          permitted by applicable law.

     7.6  Confidentiality.  During the term of the Executive's employment with
          ---------------
          the Company, he will acquire information of a proprietary or
          confidential nature and knowledge about the operations of the Company.
          Accordingly, the Executive agrees not to use or to disclose to any
          third party, or cause to be used, in any manner, directly or
          indirectly, the information described immediately above. The Executive
          further agrees to return to the Company promptly upon the termination
          of the Executive's employment with the Company, and all information of
          a proprietary or confidential nature acquired by the Executive at any
          time during the course of his employment with the Company, to the
          extent such information has been reduced to writing, together with any
          and all documents and materials of any

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          kind then in the possession or control of the Executive which may be
          the property of the Company or any affiliate, whether confidential or
          otherwise, including any copies which may have been made by or for the
          Executive.

     7.7  No Conflict.  The Covenant Not to Compete set forth in this Section 7
          -----------
          shall supersede and override any and all limitations on Executive's
          right to compete with the Company including, without limitation, any
          similar covenants not to compete in the Stock Option Agreements and
          the Performance Share Agreements executed in conjunction with the 1993
          and 1994 NVR, Inc. Management Equity Incentive Plans, 1996 and 1998
          NVR, Inc. Management Long-Term Stock Option Plans and the NVR, Inc.
          High Performance Compensation Plans - Number 1 and 2 and shall be the
          sole standard by which Executive shall be bound.

8.   Other Provisions.
     ----------------

     8.1  Notices.  Any notice or other communication required or which may be
          -------
          given hereunder shall be in writing and shall be delivered personally,
          telegraphed, telexed, sent by facsimile transmission or sent by
          certified, registered or express mail, postage prepaid, and shall be
          deemed given when so delivered personally, telegraphed, telexed, or
          sent by facsimile transmission, or if mailed, four days after the date
          of mailing as follows:

          (i)  if the Company, to:

               NVR, Inc.
               7601 Lewinsville Road, Suite 300
               McLean, Virginia 22102

          (ii) if the Executive, to:

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               Paul C. Saville
               9616 Brookmeadow Drive
               Vienna, Virginia 22182

     8.2  Entire Agreement.  This Agreement contains the entire agreement
          ----------------
          between the parties with respect to the subject matter hereof and
          supersedes all prior agreements, written or oral, with respect
          thereto.

     8.3. Waiver and Amendments. This Agreement may be amended, modified,
          ---------------------
          superseded, cancelled, renewed or extended, and the terms and
          conditions hereof may be waived, only by a written instrument signed
          by the parties or, in the case of a waiver, by the party waiving
          compliance. No delay on the part of any party in exercising any right,
          power or privilege hereunder shall operate as a waiver thereof, nor
          shall any waiver on the part of any party of any right, power or
          privilege hereunder, nor any single or partial exercise of any right,
          power or privilege hereunder, preclude any other or further exercise
          thereof or the exercise of any other right, power or privilege
          hereunder.

     8.4  Governing Law.  This Agreement shall be governed and construed in
          -------------
          accordance with the laws of the Commonwealth of Virginia.

     8.5  Assignability.  This Agreement, and the Executive's rights and
          -------------
          obligations hereunder, may not be assigned by the Executive. The
          Company shall assign this Agreement and its rights, together with its
          obligations, to any entity which will substantially carry on the
          business of the Company subject to the Executive's rights set forth in
          this Agreement, but the Company shall even after such assignment be
          fully liable to the Executive for all obligations set forth herein.

     8.6  Counterparts.  This Agreement may be executed in two or more
          ------------
          counterparts, each of which shall be deemed an original but all of
          which shall constitute one and the same instrument.

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     8.7  Headings.  The headings in this Agreement are for reference purposes
          --------
          only and shall not in any way affect the meaning or interpretation of
          this Agreement.

     8.8  Indemnification.  The Company shall indemnify the Executive and hold
          ---------------
          him harmless for any acts or decisions made by him in good faith while
          performing services for the Company or its affiliates and shall use
          its best efforts to obtain coverage for him under an insurance policy
          (whether now in force or hereinafter obtained) during the term of this
          Agreement covering the officers and directors of the Company or its
          affiliates. The Company will pay all expenses including attorney's
          fees, actually and necessarily incurred by the Executive in connection
          with any appeal thereon including the cost of court settlement arising
          or alleged to arise from his employment by the Company.

9.   Arbitration.
     -----------

Any controversy or claim arising out of or in connection with this Agreement
shall be settled by arbitration in accordance with the rules then pertaining of
the American Arbitration Association.  Such controversies shall be submitted to
three arbitrators, one arbitrator being selected by the Company, one arbitrator
being selected by the Executive, and the third being selected by the two so
selected by the Company and the Executive or, if they cannot agree upon a third,
by the American Arbitration Association.  In the event that either the Company
or the Executive, within one month after any notification of any demand for
arbitration hereunder, shall not have selected its arbitrator and given notice
thereof by registered or certified mail to the other, such arbitrator shall be
selected by the American Arbitration Association.  Confirmation of any award in
any such arbitration may be held in any court having jurisdiction of the person
against whom such award is rendered.  Regardless of the circumstances giving
rise to the need for arbitration, until such arbitration shall be finally
determined and ended, the base salary of the Executive pursuant to Section 3.1,
subject to the provisions of Section 6, shall be paid monthly until the
expiration of the term of this Agreement, and Bonus pursuant to Section 3.2,
subject to the provisions of Section 6, shall be earned and paid in accordance
with Section 3.2 until the expiration of the term of this agreement.  If the
results of such

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arbitration are more favorable to the position taken by the Executive than that
taken by the Company, in the opinion of the arbitrators, then all costs and
expenses incurred by the Executive in connection with such arbitration shall be
paid by the Company.

10.  Effective Date.
     --------------

This Agreement shall be effective as of January 1, 2001.

IN WITNESS WHEREOF, The parties hereto, intending to be legally bound hereby,
have executed this Agreement as of the day and year first above mentioned.

NVR, INC.

By:___________________________          ________________________________________
                                                       PAUL C. SAVILLE

                                       13<PAGE>

                                                                   EXHIBIT 10.35

                                                                [EXECUTION COPY]

                          MASTER REPURCHASE AGREEMENT

                                                     Dated as of January 9, 2001

Between:

BEAR STEARNS MORTGAGE CAPITAL CORPORATION

and

NVR MORTGAGE FINANCE INC.

Applicability
-------------

     From time to time the parties hereto may enter into transactions in which
NVR Mortgage Finance Inc. ("Seller") agrees to transfer to Bear Stearns Mortgage
Capital Corporation ("Buyer") Mortgage Loans against the transfer of funds by
Buyer, with a simultaneous agreement by Buyer to transfer to Seller such
Mortgage Loans at a date certain or on demand, against the transfer of funds by
Seller.  Each such transaction shall be referred to herein as a "Transaction"
and shall be governed by this Agreement, as the same shall be amended from time
to time.

Definitions
-----------

"Act of Insolvency", with respect to either Buyer or Seller, (i) the
commencement by such party as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law,
or such party seeking the appointment of a receiver, trustee, custodian or
similar official for such party or any substantial part of its property, or (ii)
the commencement of any such case or proceeding against such party, or another
seeking such an appointment, or the filing against a party of an application for
a protective decree under the provisions of the Securities Investor Protection
Act of 1970, which (A) is consented to or not timely contested by such party,
(B) results in the entry of an order for relief, such an appointment, the
issuance of such a protective decree or the entry of an order having a similar
effect, or (C) is not dismissed within 15 days, (iii) the making by a party of a
general assignment for the benefit of creditors, or (iv) the admission in
writing by a party of such party's inability to pay such party's debts as they
become due;
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"Additional Purchased Mortgage Loans", Mortgage Loans provided by Seller to
Buyer pursuant to Paragraph 4(a) hereof;

     (a)  "Agency" shall refer to GNMA, FNMA or FHLMC, as the case may be;

     (b)  "Agency Security" shall refer to a GNMA Security, a FNMA Security or a
FHLMC Security;

     (c)  "BSCI", Bear Stearns & Co. Incorporated;

"Business Day", any day other than a Saturday, Sunday and any day on which banks
located in the State of New York are authorized or required to close for
business;

"Buyer's Margin Amount", with respect to any Transaction as of any date, the
amount obtained by application of a percentage, agreed to by Buyer and Seller
prior to entering into the Transaction and specified in the related
Request/Confirmation, to the Repurchase Price for such Transaction as of such
date;

"Custodian", the custodian named in the Custodial Agreement and any permitted
successor thereto;

"Custodial Agreement", the Custodial Agreement among Buyer, Seller and the
Custodian providing for the custody of records relating to the Purchased
Mortgage Loans;

     (d)  "FHA", the Federal Housing Administration;

     (e)  "FHLMC", the Federal Home Loan Mortgage Corporation;

     (f)  "FHLMC Guide", the Freddie Mac Sellers' and Servicers' Guide, as such
Guide may hereafter from time to time be amended;

     (g)  "FHLMC Security", a Mortgage Participation Certificate issued and
guaranteed by FHLMC and backed by a pool of Mortgage Loans;

     (h)  "FNMA", the Federal National Mortgage Association;

     (i)  "FNMA Guide", the Fannie Mae MBS Selling and Servicing Guide, as such
Guide may hereafter from time to time be amended;

     (j)  "FNMA Security", a Guaranteed Mortgage Pass-Through Certificate issued
and guaranteed by FNMA and backed by a pool of Mortgage Loans;

     (k)  "GAAP", to generally accepted accounting principals consistently
applied.

     (l)  "GNMA", the Government National Mortgage Association;

     (m)  "GNMA Guide", the GNMA Mortgage-Backed Securities Guide, as such Guide
may hereafter from time to time be amended;

     (n)  "GNMA Security", a fully-modified pass-through mortgage-backed
certificate guaranteed by GNMA and backed by a pool of Mortgage Loans;

     (o)  "Guide", the GNMA Guide, the FNMA Guide or the FHLMC Guide, as

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applicable;

"Income", with respect to any Mortgage Loan at any time, any principal thereof
then payable and all payments of interest and principal together with other
distributions thereon or proceeds thereof;

"Loan Schedule", a schedule of Mortgage Loans identifying each Mortgage Loan:
(1) in the case of all Mortgage Loans, by Seller's loan number, Mortgagor's name
and address (including the state and zip code) of the mortgaged property,
whether such Mortgage Loan bears a fixed or adjustable interest rate, the loan-
to-value ratio, the outstanding principal amount as of a specified date, the
initial interest rate borne by such Mortgage Loan, the original principal
balance thereof, the current scheduled monthly payment of principal and
interest, the maturity of the related Note, the property type, the occupancy
status, the appraised value, the original term to maturity and whether or not
the Mortgage Loan (including the related Note) has been modified; and (2) in the
case of adjustable rate Mortgage Loans, the interest rate borne by such Mortgage
Loan on the Purchase Date, the index and applicable determination date for each
adjustment period, the gross margin, the payment adjustment period (in months),
months to next payment adjustment, periodic payment adjustment cap, lifetime
payment adjustment cap, lifetime payment cap, interest rate adjustment, periodic
interest adjustment cap, lifetime interest rate adjustment, cap amount paid to
date, credit grade, FICO score, lien flag, prepay flag/terms, debt to income
ratio, fees charged up front and pre-tax disposable income;

"Margin Deficit", the meaning specified in Paragraph 4(a) hereof;

"Market Value", with respect to any Mortgage Loans as of any date, the fair
market value of such Mortgage Loans on such date as determined by Buyer in its
reasonable business judgment from time to time and at such times as it may elect
in its sole discretion; provided, however, that a Market Value of zero shall be
                        --------  -------
assigned to (i) any Mortgage Loan that has been delinquent for at least thirty
(30) days, (ii) any Mortgage Loan that has been subject to this Agreement for
more than one hundred and eighty (180) days in aggregate or (iii) any Mortgage
Loan with respect to which there is a breach of a representation or warranty
made by Seller in this Agreement or the Custodial Agreement that materially
adversely affects Buyer's interests hereunder;

"Mortgage", the mortgage, deed of trust or other instrument creating a first or
second lien on an estate in fee simple interest in real property securing a
Note;

"Mortgage Loan", a first lien mortgage loan on single family residential
property consisting of a Note secured by a Mortgage that is intended to back the
Agency Security specified in the related Request/Confirmation;

"Mortgagor", the obligor on a Note;

"Note", the Note or other evidence of indebtedness evidencing the indebtedness
of a Mortgagor under a Mortgage Loan;

"Price Differential", with respect to any Transaction hereunder as of any date,
the aggregate amount obtained by daily application of the Pricing Rate for such

                                       3
<PAGE>

Transaction to the Purchase Price for such Transaction on a 360 day per year
basis for the actual number of days during the period commencing on (and
including) the Purchase Date for such Transaction and ending on (but excluding)
the date of determination (reduced by any amount of such Price Differential
previously paid by Seller to Buyer with respect to such Transaction);

"Pricing Rate", the per annum percentage rate for determination of the Price
Differential, which rate shall be specified in the related Request/Confirmation;

"Prime Rate", the prime rate of U.S. money center commercial banks as published
in The Wall Street Journal;

"Purchase Date", the date with respect to each Transaction on which Purchased
Mortgage Loans are sold by Seller to Buyer hereunder;

"Purchase Price", (i) on the Purchase Date, the price at which Purchased
Mortgage Loans are sold by Seller to Buyer hereunder, and (ii) thereafter, such
price decreased by the amount of any cash transferred by Seller to Buyer
pursuant to Paragraph 4(a) hereof;

"Purchased Mortgage Loans", the Mortgage Loans sold by Seller to Buyer in a
Transaction hereunder, and any Mortgage Loans substituted therefor in accordance
with Paragraph 9 hereof.  The term "Purchased Mortgage Loans" with respect to
any Transaction at any time also shall include Additional Purchased Mortgage
Loans delivered pursuant to Paragraph 4(a);

"Replacement Mortgage Loans", the meaning specified in Paragraph 11(e)(ii)
hereof;

"Repurchase Date", the date on which Seller is to repurchase the Purchased
Mortgage Loans from Buyer, including any date determined by application of the
provisions of Paragraphs 3(e) or 11 hereof;

"Repurchase Price", the price at which Purchased Mortgage Loans are to be resold
by Buyer to Seller upon termination of a Transaction, which will be determined
in each case (including Transactions terminable upon demand) as the sum of the
Purchase Price and the Price Differential as of the date of such determination,
increased by any amount determined by the application of the provisions of
Paragraph 11 hereof;

"Request/Confirmation", the request and confirmation substantially in the form
of Exhibit A hereto delivered pursuant to Paragraph 3 hereof;

     (p)  "Security Release Form" shall refer to (i) Freddie Mac Form 996
(Warehouse Lender Release of Security Interest) in the case of a FHLMC Security,
(ii) Fannie Mae Form 2004 (Security Release Certification) in the case of a FNMA
Security and (iii) Form HUD 11711A (Release of Security Interest) in the case of
a GNMA Security;

     (q)  "Takeout Assignment" shall refer to an assignment, substantially in
the form of Exhibit C hereto, executed by the Seller in favor of Buyer assigning
all of the Seller's rights under a Takeout Commitment;

                                       4
<PAGE>

     (r)  "Takeout Commitment" shall refer to a trade confirmation from the
Takeout Investor to the Seller confirming the details of a forward trade between
the Takeout Investor and the Seller with respect to one or more Agency
Securities, which trade confirmation shall be valid, binding and in full force
and effect and relate to pools of Mortgage Loans that satisfy the "good delivery
standard" of the Public Securities Association as set forth in the Public
Securities Association Uniform Practices Guide;

     (s)  "Takeout Investor" shall refer to a securities dealer or other
financial institution, listed in Exhibit F hereto, who has made a Takeout
Commitment. Such list may be modified from time to time by Buyer in its sole
discretion, upon written notice to the Seller, or by the Seller with the written
consent of Buyer. Such amended list shall be delivered by the Seller to the
Custodian;

     (t)  "VA" shall refer to the Department of Veterans Affairs.

Initiation; Request/Confirmation; Termination; Transactions Optional
--------------------------------------------------------------------

Any agreement to enter into a Transaction shall be made in writing at the
initiation of Seller.  In the event that Seller desires to enter into a
Transaction hereunder, Seller shall deliver to Buyer prior to 5:00 p.m., New
York City time, on the Business Day prior to the proposed Purchase Date, a
Request/Confirmation complete in every respect except for the signature of an
authorized representative of Buyer.  Buyer shall, upon its receipt and approval
thereof, promptly execute and return the signed Request/Confirmation to Seller.

The Request/Confirmation shall describe the Purchased Mortgage Loans in a manner
satisfactory to Buyer (which may be by attaching a Loan Schedule thereto),
identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase
Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on
demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction,
and (v) any additional terms or conditions of the Transaction mutually agreeable
to Buyer and Seller.

Each Request/Confirmation shall be binding upon the parties hereto unless
written notice of objection is given by the objecting party to the other party
within one (1) Business Day after Buyer has delivered the completed
Request/Confirmation to Seller.

In the event of any conflict between the terms of a Request/Confirmation and
this Agreement, such Request/Confirmation shall prevail.

In the case of Transactions terminable upon demand, such demand shall be made by
Buyer or Seller, no later than such time as is customary in accordance with
market practice, by telephone or otherwise on or prior to the Business Day on
which such termination will be effective.  On the date specified in such demand,
or on the date fixed for termination in the case of Transactions having a fixed
term, termination of the Transaction will be effected by resale by Buyer to
Seller or its agent of the Purchased Mortgage Loans and any Income in respect
thereof received by Buyer (and not previously credited or transferred to, or
applied to the obligations of, Seller hereunder) against the transfer of the
Repurchase Price to

                                       5
<PAGE>

an account of Buyer.

The adjustment mechanism and the index for any adjustable rate Mortgage Loan
must be satisfactory to Buyer in its sole discretion.

Notwithstanding any provision of this Agreement or the Custodial Agreement to
the contrary, the initiation of each Transaction is subject to the approval of
Buyer in its sole discretion.  Buyer may, in its sole discretion, reject any
Mortgage Loan from inclusion in a Transaction hereunder for any reason.

Margin Maintenance
------------------

If at any time the aggregate Market Value of all Purchased Mortgage Loans
subject to all Transactions hereunder is less than the aggregate Buyer's Margin
Amount for all such Transactions (a "Margin Deficit"), then Buyer may by notice
to Seller require Seller in such Transactions, at Buyer's option, to transfer to
Buyer cash or additional Mortgage Loans reasonably acceptable to Buyer
("Additional Purchased Mortgage Loans"), so that the cash and aggregate Market
Value of the Purchased Mortgage Loans, including any such Additional Purchased
Mortgage Loans, will thereupon equal or exceed such aggregate Buyer's Margin
Amount.

If the notice to be given by Buyer to Seller under subparagraph (a) above is
given at or prior to 10:00 a.m. New York city time on a Business Day, Seller
shall transfer cash or Additional Purchased Mortgage Loans to Buyer prior to the
close of business in New York City on the date of such notice, and if such
notice is given after 10:00 a.m. New York City time, Seller shall transfer cash
or Additional Purchased Mortgage Loans prior to the close of business in New
York City on the Business Day following the date of such notice.

Any cash transferred pursuant to this Paragraph shall be held by Buyer as though
it were Additional Purchased Mortgage Loans and, unless Buyer shall otherwise
consent, shall not reduce the Repurchase Price of the related Transaction.

Income Payments
---------------

Where a particular Transaction's term extends over an Income payment date on the
Mortgage Loans subject to that Transaction, all payments and distributions,
whether in cash or in kind, made on or with respect to the Purchased Mortgage
Loans shall, unless otherwise mutually agreed by Buyer and Seller and so long as
an Event of Default on the part of Seller shall not have occurred and be
continuing, be paid directly to Seller by the related Mortgagor.  Buyer shall
not be obligated to take any action pursuant to the preceding sentence to the
extent that such action would result in the creation of a Margin Deficit, unless
prior thereto or simultaneously therewith Seller transfers to Buyer, at Buyer's
option, cash or Additional Purchased Mortgage Loans sufficient to eliminate such
Margin Deficit.

     (u)  All payments and distributions, whether in cash or in kind, made on or
with respect to the Agency Securities shall, unless otherwise mutually agreed by
Buyer and the Seller, be paid, delivered or transferred directly to BSGI as
agent

                                       6
<PAGE>

for Buyer pursuant to the instructions set forth in Exhibit __.

Security Interest
-----------------

     (v)  Each Transaction involving Mortgage Loans is entered into in
contemplation of the issuance of one or more Agency Securities backed by the
related Mortgage Loans. The parties intend that the Seller will act as issuer or
seller and/or servicer with respect to such Agency Securities, as applicable,
and that each Agency Security will be issued in the name of, and delivered to or
upon the order of BSCI.

     (w)  Although the parties intend that all Transactions hereunder be sales
and purchases and not loans, in the event any such Transactions are deemed to be
loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Mortgage Loans with respect to all Transactions hereunder and all proceeds
thereof. Seller shall pay all fees and expenses associated with perfecting such
security interest including, without limitation, the cost of filing financing
statements under the Uniform Commercial Code and recording assignments of
mortgage as and when required by Buyer in its sole discretion.

Payment and Transfer
--------------------

     Unless otherwise mutually agreed, all transfers of funds hereunder shall be
in immediately available funds.  All Mortgage Loans transferred by one party
hereto to the other party shall be transferred by notice to the Custodian to the
effect that the Custodian is now holding for the benefit of the transferee the
related documents and assignment forms delivered to it under the Custodial
Agreement.

Segregation of Documents Relating to Purchased Mortgage Loans
-------------------------------------------------------------

     All documents relating to Purchased Mortgage Loans in the possession of
Seller shall be segregated from other documents and securities in its possession
and shall be identified as being subject to this Agreement.  Ownership of all
Purchased Mortgage Loans shall pass to Buyer and nothing in this Agreement shall
preclude Buyer from engaging in repurchase transactions with the Purchased
Mortgage Loans or otherwise pledging or hypothecating the Purchased Mortgage
Loans, but no such transaction shall relieve Buyer of its obligations to resell
and transfer Purchased Mortgage Loans to Seller pursuant to the terms hereof.

Substitution
------------

     Seller may, subject to agreement with, acceptance by and upon notice to
Buyer, substitute Mortgage Loans substantially similar to the Purchased Mortgage
Loans (the "Substitute Mortgage Loans") for any Purchased Mortgage Loans.  If
Seller gives notice to the Buyer at or prior to 10:00 a.m. New York City time on
a Business Day, Buyer may elect, by the close of business on the Business Day
notice is received or by the close of the next Business Day if notice is given
after 10:00 a.m. New York City time on such day, not to accept such
substitution.  In the event such substitution is accepted by Buyer, such
substitution shall be made by Seller's transfer to Buyer of such Substitute
Mortgage Loans and Buyer's transfer to Seller of the Purchased Mortgage Loans
for which substitution is being made, and after such substitution, the
Substitute Mortgage Loans shall be deemed to be Purchased Mortgage Loans.  In
the event Buyer elects not to accept such substitution, Buyer shall offer Seller
the right to

                                       7
<PAGE>

terminate the Transaction.

     In the event Seller exercises its right to substitute or terminate under
this Paragraph 9, Seller shall be obligated to pay to Buyer, by the close of the
Business Day of such substitution or termination, as the case may be, an amount
equal to (A) Buyer's actual cost (including all fees, expenses and commissions)
of (i) entering into replacement transactions; (ii) entering into or terminating
hedge transactions; and/or (iii) terminating transactions or substituting
securities in like transactions with third parties in connection with or as a
result of such substitution or termination, and (B) to the extent Buyer
determines not to enter into replacement transactions, the loss incurred by
Buyer directly arising or resulting from such substitution or termination.  The
foregoing amounts shall be solely determined and calculated by Buyer in good
faith.  Upon the reasonable request of Seller, Buyer will provide reasonable
evidence of the basis of its calculation of such amounts.

     Delivery of Additional Documents.

     (x)  The Seller shall, prior to or simultaneously with the funding of each
Transaction, deliver to Buyer through the Custodian the following
documents:

               (i)   A fully executed Custody Receipt, and all other applicable
            documents required by the Custody Agreement; and

               (ii)  In the case of a Transaction involving Mortgage Loans that
            are intended to back an Agency Security, Takeout Assignments in
            blank in an amount at least equal to all Mortgage Loans subject to
            this Agreement.

     (y)  The Seller shall, within thirty (30) days of an Mortgage Loan becoming
subject to this Agreement where such Mortgage Loan is intended to back an Agency
Security, deliver to Buyer (i) a duly authorized and originally executed Takeout
Assignment naming Buyer as the assignee, relating to a pool of Mortgage Loans of
which such Mortgage Loan forms a part and in form and substance satisfactory to
Buyer and (ii) a copy of the related Agency Registration Form in form and
substance satisfactory to Buyer.

     (z)  The Seller shall, simultaneously with the funding of the initial
Transaction under this Agreement relating to each type of Agency Security and
from time to time thereafter upon the request of Buyer, deliver to Buyer
evidence of the commitment of FHLMC, FNMA or GNMA, as appropriate, pursuant to
which the related Agency Securities shall be issued.

     (aa) The Seller shall deliver to Buyer on a weekly basis (or more
frequently if requested by Buyer), an investor commitment report, substantially
in the form attached hereto as Exhibit E, listing the existing commitments of
GNMA, FHLMC and FNMA, as applicable (for securitizations) relating to all
outstanding Request/Confirmations.

     (bb) Buyer, simultaneously with the funding of each Transaction involving
Mortgage Loans, shall cause the Custodian to be provided with an executed
Security Release Form appropriate for the related Agency Security indicating
that Buyer releases its interest in the related Mortgage Loans in the case of
securitization of such Mortgage Loans into one or more Agency Securities, upon
the issuance of such Agency Security or Securities. Such form

                                       8
<PAGE>

shall be prepared by the Seller and provided to the Custodian on behalf of Buyer
in advance of the date on which delivery thereof is required hereby. The
Custodian shall execute such form on behalf of Buyer.

Representations, Warranties and Covenants
-----------------------------------------

Buyer and Seller each represents and warrants, and shall on and as of the
Purchase Date of any Transaction be deemed to represent and warrant, to the
other that:

  it is duly authorized to execute and deliver this Agreement, to enter into the
  Transactions contemplated hereunder and to perform its obligations hereunder
  and has taken all necessary action to authorize such execution, delivery and
  performance;

  it will engage in such Transactions as principal (or, if agreed in writing in
  advance of any Transaction by the other party hereto, as agent for a disclosed
  principal);

  the person signing this Agreement on its behalf is duly authorized to do so on
  its behalf (or on behalf of any such disclosed principal);

  it has obtained all authorizations of any governmental body required in
  connection with this Agreement and the Transactions hereunder and such
  authorizations are in full force and effect; and

  the execution, delivery and performance of this Agreement and the Transactions
  hereunder will not violate any law, ordinance, charter, by-law or rule
  applicable to it or any agreement by which it is bound or by which any of its
  assets are affected.

Seller represents and warrants to Buyer, and shall on and as of the Purchase
Date of any Transaction be deemed to represent and warrant, as follows:

  The documents disclosed by Seller to Buyer pursuant to this Agreement are
  either original documents or genuine and true copies thereof;

  Seller is a separate and independent corporate entity from the Custodian,
  Seller does not own a controlling interest in the Custodian either directly or
  through affiliates and no director or officer of Seller is also a director or
  officer of the Custodian;

  None of the Purchase Price for any Mortgage Loan will be used either directly
  or indirectly to acquire any security, as that term is defined in Regulation T
  of the Regulations of the Board of Governors of the Federal Reserve System,
  and Seller has not taken any action that might cause any Transaction to
  violate any regulation of the Federal Reserve Board;

  Each Mortgage Loan was underwritten in accordance with the written
  underwriting standards of Seller furnished by Seller to Buyer, and no change
  to such underwriting standards has occurred since the date of the last written
  revision to such standards was furnished to Buyer by Seller;

  Seller shall be at the time it transfers to Buyer any Mortgage Loans for any
  Transaction the legal and beneficial owner of such Mortgage Loans, free of any
  lien, security interest, option or encumbrance; and

  Seller used no selection procedures that identified the Mortgage Loans
  relating to a Transaction as being less desirable or valuable than other
  comparable assets in Seller's portfolio on the related Purchase Date.

          (i)  The Seller is a GNMA-approved issuer, a GNMA-approved servicer a
     FHA-approved mortgagee, a VA-approved lender, a FNMA-approved issuer, a
     FNMA-approved servicer and a FHLMC-approved seller/servicer in good
     standing

                                       9
<PAGE>

     ("Approvals");

          (ii)   Each Mortgage Loan conforms to the requirements and
     specifications (including, without limitation, all representations and
     warranties required in respect thereof) set forth in the GNMA Guide, FNMA
     Guide or FHLMC Guide, as applicable;

          (iii)  There exists Takeout Assignments in blank relating to Takeout
     Commitments for an amount of Agency Securities at least equal to the
     aggregate outstanding principal amount of all Mortgage Loans subject to
     this Agreement that are not Pooled Mortgage Loans;

          (iv)   Each and every document, certificate, instrument, insurance
     policy, escrow and any other item necessary to satisfy the final delivery
     requirements of FHLMC, FNMA or GNMA as required by the FHLMC Guide, the
     FNMA Guide or the GNMA Guide, as applicable, for the issuance of the
     related Agency Security are in form and substance acceptable to FHLMC, FNMA
     or GNMA, as appropriate, and have been delivered to the Custodian;

          (v)    The Seller has no notice or knowledge of any fact, event or
     circumstance whatsoever on the basis of which FHLMC, FNMA or GNMA, as
     applicable, may delay the issuance of, or refuse to issue, the related
     Agency Security;

          (vi)   Each copy of the document or documents evidencing the Agency
     commitment delivered to Buyer through the Custodian is a true and correct
     copy, and such GNMA, FHLMC or FNMA commitment has not been withdrawn,
     amended or supplemented except as has been theretofore disclosed to Buyer
     in writing;

          (vii)  Each Mortgage Loan that is intended to back an Agency Security
     conforms in all respects with all requirements of the Takeout Commitment
     applicable to the Agency Security to be backed by such Mortgage Loans;

          (viii) Each Takeout Commitment is a legal, valid and binding
     obligation of the Seller enforceable against it in accordance with its
     terms, subject to applicable bankruptcy, insolvency and similar laws
     affecting creditors' rights generally and subject, as to enforceability, to
     general principles of equity (regardless of whether enforcement is sought
     in a proceeding in equity or at law);

          (ix)   Each Takeout Commitment is enforceable by the Seller against
     the related Takeout Investor;

          (x)    Each Takeout Commitment is, by virtue of the related Takeout
     Assignment, enforceable by Buyer against the related Takeout Investor; and

          (xi)   Each Takeout Assignment is a legal, valid and binding
     obligation of the Seller enforceable against it in accordance with its
     terms, subject to applicable bankruptcy, insolvency and similar laws
     affecting creditors' rights generally and subject, as to enforceability, to
     general principles of equity (regardless of whether enforcement is sought
     in a proceeding in equity or at law).

Seller makes the representations and warranties set forth at Exhibit B with
respect to the Mortgage Loans as of the related Purchase Date.

Seller covenants with Buyer, from and after the date hereof, as follows:

          (xii)  The Seller shall immediately notify Buyer if any Approvals are
     withdrawn or modified;

                                       10
<PAGE>

          (xiii)  In the case of a Transaction involving Mortgage Loans that
     will back an Agency Security, the Seller shall not alter or amend the
     Agency Registration Form relating to such Transaction following the initial
     preparation thereof without the express approval of Buyer.

          (xiv)   Without Buyer's express prior written approval, the Seller
     shall not execute, in favor of any third party other than Buyer or BSGI,
     any assignment of rights held or purportedly held by the Seller under a
     Takeout Commitment;

  Seller shall immediately notify Buyer if an Event of Default shall have
  occurred;

  Seller shall deliver to Buyer a current Loan Schedule with respect to all
  Mortgage Loans subject to this Agreement with such frequency as Buyer may
  require but in no event less frequently than weekly; and

  No Mortgage Loan shall be subject to this Agreement for more than one hundred
  and eighty (180) days in aggregate.

  Seller shall, at its own expense, register the Mortgage Loans with MERS and
  prepare and send, or cause to be prepared and sent, for recordation an
  individual assignment of each Mortgage Loan to MERS in a form acceptable under
  the applicable Agency Guide and satisfactory to Buyer.

  In the event that MERS is no longer the mortgagee of record, Seller shall
  assign each Mortgage to such entity as Buyer shall require, in its sole
  discretion.

Events of Default; Event of Termination
---------------------------------------

The following events shall constitute events of default (each an "Event of
Default") hereunder with respect to Buyer or Seller, as applicable:

  Seller fails to repurchase or Buyer fails to transfer Purchased Mortgage Loans
  upon the applicable Repurchase Date pursuant to the terms hereof;
  Seller or Buyer fails, after one (1) Business Day's notice, to comply with
  Paragraph 4 hereof;
  An Act of Insolvency occurs with respect to Seller or Buyer or any controlling
  entity thereof;

  Any representation or warranty made by Seller or Buyer shall have been
  incorrect or untrue in any material respect when made or repeated or deemed to
  have been made or repeated; provided, however, that in the case of
                              --------  -------
  representations and warranties made with respect to the Purchased Mortgage
  Loans, such circumstance shall not constitute an Event of Default if, after
  determining the Market Value of the Purchased Mortgage Loans without taking
  into account the Purchased Mortgage Loans with respect to which such
  circumstance has occurred, no other Event of Default shall have occurred and
  be continuing;

  Any covenant shall have been breached in any material respect; provided,
                                                                 --------
  however, that in the case of covenants made with respect to the Purchased
  -------
  Mortgage Loans, such circumstance shall not constitute an Event of Default if,
  after determining the Market Value of the Purchased Mortgage Loans without
  taking into account the Purchased Mortgage Loans with respect to which such
  circumstance has occurred, no other Event of Default shall have occurred and
  be continuing;

  Buyer shall have reasonably determined that Seller is or will be unable to
  meet its commitments under this Agreement, shall have notified Seller of such
  determination and Seller shall not have responded with appropriate information
  to the contrary to the

                                       11
<PAGE>

  satisfaction of Buyer within twenty-four (24) hours;

  This Agreement shall for any reason cease to create a valid, first priority
  security interest in any of the Purchased Mortgage Loans purported to be
  covered hereby;

  A final judgment by any competent court in the United States of America for
  the payment of money in an amount of at least $100,000 is rendered against
  Seller, and the same remains undischarged for a period of sixty (60) days
  during which execution of such judgment is not effectively stayed;

  Any event of default or any event which with notice, the passage of time or
  both shall constitute an event of default shall occur and be continuing under
  any repurchase or other financing agreement for borrowed funds or indenture
  for borrowed funds by which Seller is bound or affected shall occur and be
  continuing;

  In the judgment of Buyer a material adverse change shall have occurred in the
  business, operations, properties, prospects or condition (financial or
  otherwise) of Seller;

  Seller shall be in default with respect to any normal and customary covenants
  under any debt contract or agreement, any servicing agreement or any lease to
  which it is a party, which default could materially adversely affect the
  financial condition of Seller (which covenants include, but are not limited
  to, an Act of Insolvency of Seller or the failure of Seller to make required
  payments under such contract or agreement as they become due);

  Seller shall fail to promptly notify Buyer of (i) the acceleration of any debt
  obligation or the termination of any credit facility of Seller; (ii) the
  amount and maturity of any such debt assumed after the date hereof; (iii) any
  adverse developments with respect to pending or future litigation involving
  Seller; and (iv) any other developments which might materially and adversely
  affect the financial condition of Seller; or

  Seller shall have failed to comply in any material respect with its
  obligations under the Custodial Agreement.

If an Event of Default shall have occurred and be continuing, then, at the
option of the nondefaulting party, exercised by written notice to the defaulting
party (which option shall be deemed to have been exercised, even if no notice is
given, immediately upon the occurrence of an Act of Insolvency), the Repurchase
Date for each Transaction hereunder shall be deemed immediately to occur.

In all Transactions in which the defaulting party is Seller, if Buyer is deemed
to have exercised the option referred to in subparagraph (b) of this Paragraph,
(i) Seller's obligations hereunder to repurchase all Purchased Mortgage Loans in
such Transactions shall thereupon become immediately due and payable, (ii) to
the extent permitted by applicable law, the Repurchase Price with respect to
each such Transaction shall be increased by the aggregate amount obtained by
daily application of (x) the greater of the Pricing Rate for such Transaction
and the Prime Rate to (y) the Repurchase Price for such Transaction as of the
Repurchase Date as determined pursuant to subparagraph (b) of this Paragraph
(decreased as of any day by (A) any amounts retained by Buyer with respect to
such Repurchase Price pursuant to clause (iii) of this subparagraph, (B) any
proceeds from the sale of Purchased Mortgage Loans pursuant to subparagraph
(e)(i) of this Paragraph, and (C) any amounts credited to the account of Seller
pursuant to subparagraph (f) of this Paragraph) on a 360 day per year basis for

                                       12
<PAGE>

the actual number of days during the period from and including the date of the
Event of Default giving rise to such option to but excluding the date of payment
of the Repurchase Price as so increased, (iii) all Income paid after such
exercise or deemed exercise shall be payable to and retained by Buyer applied to
the aggregate unpaid Repurchase Prices owed by Seller, and (iv) Seller shall
immediately deliver or cause the Custodian to deliver to Buyer any documents
relating to Purchased Mortgage Loans subject to such Transactions then in
Seller's possession.

In all Transactions in which the defaulting party is Buyer, upon tender by
Seller of payment of the aggregate Repurchase Prices for all such Transactions,
Buyer's right, title and interest in all Purchased Mortgage Loans subject to
such Transactions shall be deemed transferred to Seller, and Buyer shall deliver
or cause the Custodian to deliver all documents relating to such Purchased
Mortgage Loans to Seller.

After one (1) Business Day's notice to the defaulting party (which notice need
not be given if an Act of Insolvency shall have occurred, and which may be the
notice given under subparagraph (b) of this Paragraph or the notice referred to
in clause (ii) of the first sentence of subparagraph (a) of this Paragraph), the
nondefaulting party may:

  as to Transactions in which the defaulting party is Seller, (A) immediately
  sell on a servicing released or servicing retained basis as Buyer deems
  desirable, in a recognized market at such price or prices as Buyer may in its
  sole discretion deem satisfactory, any or all Purchased Mortgage Loans subject
  to such Transactions and apply the proceeds thereof to the aggregate unpaid
  Repurchase Prices and any other amounts owing by Seller hereunder or (B) in
  its sole discretion elect, in lieu of selling all or a portion of such
  Purchased Mortgage Loans, to give Seller credit for such Purchased Mortgage
  Loans in an amount equal to the Market Value therefor on such date against the
  aggregate unpaid Repurchase Prices and any other amounts owing by Seller
  hereunder; and

  as to Transactions in which the defaulting party is Buyer, (A) purchase
  mortgage loans ("Replacement Mortgage Loans") having substantially the same
  outstanding principal amount, maturity and interest rate as any Purchased
  Mortgage Loans that are not transferred by Buyer to Seller as required
  hereunder or (B) in its sole discretion elect, in lieu of purchasing
  Replacement Mortgage Loans, to be deemed to have purchased Replacement
  Mortgage Loans at the price therefor on such date, calculated as the average
  of the prices obtained from three (3) nationally recognized registered
  broker/dealers that buy and sell comparable mortgage loans in the secondary
  market.

As to Transactions in which the defaulting party is Buyer, Buyer shall be liable
to Seller (i) with respect to Purchased Mortgage Loans (other than Additional
Purchased Mortgage Loans), for any excess of the price paid (or deemed paid) by
Seller for Replacement Mortgage Loans therefor over the Repurchase Price for
such Purchased Mortgage Loans and (ii) with respect to Additional Purchased
Mortgage Loans, for the price paid (or deemed paid) by Seller for the
Replacement Mortgage Loans therefor.  In addition, Buyer shall be liable to
Seller for interest on such remaining liability with respect to each such
purchase (or

                                       13
<PAGE>

deemed purchase) of Replacement Mortgage Loans from the date of such purchase
(or deemed purchase) until paid in full by Buyer. Such interest shall be at a
rate equal to the greater of the Pricing Rate for such Transaction or the Prime
Rate.

For purposes of this Paragraph 11, the Repurchase Price for each Transaction
hereunder in respect of which the defaulting party is Buyer shall not increase
above the amount of such Repurchase Price for such Transaction determined as of
the date of the exercise or deemed exercise by Seller of its option under
subparagraph (b) of this Paragraph.

The defaulting party shall be liable to the nondefaulting party for the amount
of all reasonable legal or other expenses incurred by the nondefaulting party in
connection with or as a consequence of an Event of Default, together with
interest thereon at a rate equal to the greater of the Pricing Rate for the
relevant Transaction or the Prime Rate. Expenses incurred in connection with an
Event of Default shall include without limitation those costs and expenses
incurred by the nondefaulting party as a result of the early termination of any
repurchase agreement or reverse repurchase agreement entered into by the
nondefaulting party in connection with the Transaction then in default.

The nondefaulting party shall have, in addition to its rights hereunder, any
rights otherwise available to it under any other agreement or applicable law.

At the option of Buyer, exercised by written notice to Seller, the Repurchase
Date for any or all Transactions shall be deemed to immediately occur in the
event that the senior debt obligations or short-term debt obligations of Bear
Stearns & Co. Inc. shall be rated below the four highest generic grades (without
regard to any pluses or minuses reflecting gradations within such generic
grades) by any nationally recognized statistical rating organization.

The exercise by any party of remedies after the occurrence of an Event of
Default shall be conducted in a commercially reasonable manner.

Servicing of the Purchased Mortgage Loans
-----------------------------------------

The parties hereto agree and acknowledge that, notwithstanding the purchase and
sale of the Purchased Mortgage Loans contemplated hereby, Seller shall service
the Purchased Mortgage Loans for the benefit of Buyer and, if Buyer shall
exercise its rights to sell the Purchased Mortgage Loans pursuant to this
Agreement prior to the related Repurchase Date, Buyer's assigns; provided,
                                                                 --------
however, that the obligation of Seller to service Purchased Mortgage Loans for
-------
the benefit of Buyer as aforesaid shall cease upon the payment to Buyer of the
Repurchase Price therefor.

The Seller shall service and administer the Mortgage Loans in accordance with
prudent mortgage loan servicing standards and procedures generally accepted in
the mortgage banking industry and in accordance with the standards incorporated
(with respect to the GNMA securitization program) the GNMA Guide or (with
respect to the FNMA securitization program) the FNMA Guide or (with respect to
the FHLMC securitization program) the FHLMC Guide; provided,
                                                   --------

                                       14
<PAGE>

however, that the Seller shall at all times comply with applicable law and FHA
-------
regulations and VA regulations so that the FHA insurance, VA guarantee or any
other applicable insurance or guarantee, if any, in respect of any Mortgage Loan
is not voided or reduced. The Seller shall at all times maintain accurate and
complete records of its servicing of the Mortgage Loans. Seller will provide
Buyer with monthly reports, substantially identical in form to FNMA's standard
form of remittance report with respect to all Purchased Mortgage Loans then
involved in any Transaction hereunder.

Buyer may, in its sole discretion if an Event of Default shall have occurred and
be continuing, without payment of any termination fee or any other amount to
Seller, (i) sell the Mortgage Loans on a servicing released basis or (ii)
terminate Seller as the servicer of the Purchased Mortgage Loans with or without
cause.

Single Agreement
----------------

     Buyer and Seller acknowledge that, and have entered hereinto and will enter
into each Transaction hereunder in consideration of and in reliance upon the
fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, each of Buyer and Seller agrees (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in the
performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to set
off claims and apply property held by them in respect of any Transaction against
obligations owing to them in respect of any other Transactions hereunder and
(iii) that payments, deliveries and other transfers made by either of them in
respect of any Transaction shall be deemed to have been made in consideration of
payments, deliveries and other transfers in respect of any other Transactions
hereunder, and the obligations to make any such payments, deliveries and other
transfers may be applied against each other and netted.

Notices and Other Communications
--------------------------------

     Except as otherwise expressly provided herein, all such notices or
communications shall be in writing (including, without limitation, telegraphic,
facsimile or telex communication) or confirmed in writing and such notices and
other communications shall, when mailed, telegraphed, communicated by facsimile
transmission or telexed, be effective when received at the address for notices
for the party to whom such notice or communications is to be given as follows:

     if to Seller:

          NVR Mortgage Finance Inc.
          100 Ryan Court
          Pittsburgh, PA  15205
          Attention: Barbara Bubak
          Telephone: (412) 429-4576
          Telecopy:  ____________________

     if to Buyer:

          Bear Stearns Mortgage Capital Corporation
          245 Park Avenue
          New York, New York

                                       15
<PAGE>

          Attention: John M. Garzone
          Telephone: (212) 272-3853
          Telecopy: (212) 272-2053

Notwithstanding the foregoing, however, that a facsimile transmission shall be
deemed to be received when transmitted so long as the transmitting machine has
provided an electronic confirmation of such transmission, and provided further,
                                                              -------- -------
however, that all financial statements delivered shall be hand-delivered or sent
-------
by first-class mail.  Either party may revise any information relating to it by
notice in writing to the other party, which notice shall be effective on the
third business day following receipt thereof.

Payment of Expenses
-------------------

     Seller shall pay on demand all fees and expenses (including, without
limitation, the fees and expenses for legal services of any kind whatsoever)
incurred by Buyer or the Custodian in connection with this Agreement and the
Custodial Agreement and the transactions contemplated hereby and thereby,
whether or not any Transactions are entered into hereunder, including, by way of
illustration and not by way of limitation, the fees and expenses incurred in
connection with (i) the preparation, reproduction and distribution of this
Agreement and the Custodial Agreement and any opinions of counsel, certificates
of officers or other documents contemplated by the aforementioned agreements and
(ii) any Transaction under this Agreement; provided, however, that Seller shall
                                           --------  -------
not be required to pay the fees and expenses of Buyer incurred as a result of
Buyer's default under this Agreement.  The obligation of Seller to pay such fees
and expenses incurred prior to or in connection with the termination of this
Agreement shall survive the termination of this Agreement.

Opinions of Counsel
-------------------

     Seller shall, on the Purchase Date of the first Transaction hereunder and,
upon the request of Buyer, on the Purchase Date of any subsequent Transaction,
cause to be delivered to Buyer, with reliance thereon permitted as to any person
or entity that purchases the Mortgage Loans from Buyer in a repurchase
transaction, a favorable opinion of counsel with respect to the matters set
forth in Exhibit G hereto, in form and substance acceptable to Buyer and its
counsel.

Further Assurances; Additional Information
------------------------------------------

Seller shall promptly provide such further assurances or agreements as Buyer may
request in order to effect the purposes of this Agreement.

At any reasonable time, Seller shall permit Buyer, its agents or attorneys, to
inspect and copy any and all documents and data in its possession pertaining to
each Purchased Mortgage Loan that is the subject of such Transaction. Such
inspection shall occur upon the request of Buyer at a mutually agreeable
location during regular business hours and on a date not more than two (2)
Business Days after the date of such request.

Seller agrees to provide Buyer or its agents, from time to time, with such
information concerning Seller of a financial or operational nature as Buyer may
reasonably request.

Seller shall provide Buyer or its agents, with copies of all filings made by or
on

                                       16
<PAGE>

behalf of Seller or any entity that controls Seller, with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended,
promptly upon making such filings.

Buyer as Attorney-in-Fact
-------------------------

     Buyer is hereby appointed the attorney-in-fact of Seller for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing any instruments that Buyer may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest.  Without limiting the generality of
the foregoing, Buyer shall have the right and power during the occurrence and
continuation of any Event of Default to receive, endorse and collect all checks
made payable to the order of Seller representing any payment on account of the
principal of or interest on any of the Purchased Mortgage Loans and to give full
discharge for the same.

Appointment of Agent
--------------------

     Buyer hereby appoints Bear Stearns Mortgage Capital Corporation as its
agent for purposes of issuing Requests/Confirmations, determining Market Value,
exercising Buyer's rights under any margin maintenance provision of this
Agreement and such other purposes as Buyer may direct. The appointment of such
agent shall not relieve Buyer of its obligations hereunder.

Wire Instructions
-----------------

Any amounts to be transferred by Buyer to Seller hereunder shall be sent by wire
transfer in immediately available funds to the account of Seller at:

          US BANK, N.A.
          ABA No. 091000022
          Ref.: NVR Mortgage Collateral Account
          Acct. No. 104756234357

Any amounts to be transferred by Seller to Buyer hereunder shall be sent by wire
transfer in immediately available funds to the account of Buyer at:

          BANK ONE, NATIONAL ASSOCIATION
          Acct. No.: 5801230
          ABA. No.: 071000013
          Attn: John Garzone

Amounts received after 3:00 p.m., New York City time, on any Business Day shall
be deemed to have been paid and received on the next succeeding Business Day.

Entire Agreement; Severability
------------------------------

     This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions.  Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.

                                       17
<PAGE>

Non-assignability; Termination
------------------------------

The rights and obligations of the parties under this Agreement and under any
Transaction shall not be assigned by either party without the prior written
consent of the other party.  Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns.

This Agreement and all Transactions outstanding hereunder shall terminate
automatically without any requirement for notice on the date occurring three
hundred and sixty-four (364) days after the date as of which this Agreement is
entered into; provided, however, that this Agreement and any Transaction
outstanding hereunder may be extended by mutual agreement of Buyer and Seller;
and provided further, however, that no such party shall be obligated to agree to
such an extension.

Counterparts
------------

     This Agreement may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

Governing Law
-------------

     This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.

No Waivers, Etc.
----------------

     No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder.  No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto.  Without limitation on any of the foregoing, the failure to give
a notice pursuant to subparagraph 4(a) hereof will not constitute a waiver of
any right to do so at a later date.

Use of Employee Plan Assets
---------------------------

If assets of an employee benefit plan subject to any provision of the Employee
Retirement Income Security Act of 1974 ("ERISA") are intended to be used by
either party hereto (the "Plan Party") in a Transaction, the Plan Party shall so
notify the other party prior to the Transaction.  The Plan Party shall represent
in writing to the other party that the Transaction does not constitute a
prohibited transaction under ERISA or is otherwise exempt therefrom, and the
other party may proceed in reliance thereon but shall not be required so to
proceed.

Subject to the last sentence of subparagraph (a) of this Paragraph, any such
Transaction shall proceed only if Seller furnishes or has furnished to Buyer its
most recent available audited statement of its financial condition and its most
recent subsequent unaudited statement of its financial condition.

                                       18
<PAGE>

By entering into a Transaction pursuant to this Paragraph, Seller shall be
deemed (i) to represent to Buyer that since the date of Seller's latest such
financial statements, there has been no material adverse change in Seller's
financial condition which Seller has not disclosed to Buyer, and (ii) to agree
to provide Buyer with future audited and unaudited statements of its financial
condition as they are issued, so long as it is a Seller in any outstanding
Transaction involving a Plan Party.

Intent
------

The parties intend and acknowledge that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of the United
States Code, as amended (except insofar as the type of Mortgage Loans subject to
such Transaction or the term of such Transaction would render such definition
inapplicable), and a "securities contract" as that term is defined in Section
741 of Title 11 of the United States Code, as amended.

It is understood that either party's right to liquidate Mortgage Loans delivered
to it in connection with Transactions hereunder or to exercise any other
remedies pursuant to Paragraph 11 hereof, is a contractual right to liquidate
such Transaction as described in Sections 555 and 559 of Title 11 of the United
States Code, as amended.

Disclosure Relating to Certain Federal Protections
--------------------------------------------------

     The parties acknowledge that they have been advised that:

          (a) in the case of Transactions in which one of the parties is a
     broker or dealer registered with the Securities and Exchange Commission
     ("SEC") under Section 15 of the Securities Exchange Act of 1934 ("1934
     Act"), the Securities Investor Protection Corporation has taken the
     position that the provisions of the Securities Investor Protection Act of
     1970 ("SAPPY") do not protect the other party with respect to any
     Transaction hereunder;

          (b) in the case of Transactions in which one of the parties is a
     government securities broker or a government securities dealer registered
     with the SEC under Section 15C of the 1934 Act, SAPPY will not provide
     protection to the other party with respect to any Transaction hereunder;
     and

          (c) in the case of Transactions in which one of the parties is a
     financial institution, funds held by the financial institution pursuant to
     a Transaction hereunder are not a deposit and therefore are not insured by
     the Federal Deposit Insurance Corporation, the Federal Savings and Loan
     Insurance Corporation or the National Credit Union Share Insurance Fund, as
     applicable.

BEAR STEARNS MORTGAGE CAPITAL                   NVR MORTGAGE FINANCE INC.
   CORPORATION

By:  ____________________________               By:  ___________________________

                                       19
<PAGE>

Title:  __________________________              Title:  _______________________

Date:  ___________________________              Date:  ________________________

                                       20
<PAGE>

                                                                      EXHIBIT A

                             REQUEST/CONFIRMATION

TO:   NVR Mortgage Finance Inc.
      100 Ryan Court
      Pittsburgh, PA 15205
      Attention:  Barbara Bubak

FROM: Bear Stearns Mortgage Capital Corporation

RE:       Request/Confirmation under Master Repurchase Agreement, dated as of
          January 9, 2001, between Bear Stearns Mortgage Capital Corporation and
          NVR Mortgage Finance Inc.

          AGENCY (Check one):  FNMA      FHLMC      GNMA

Bear Stearns Mortgage Capital Corporation ("Buyer") is pleased to confirm your
sale and its purchase of the Mortgage Loans described below and listed on the
attached Loan Schedule pursuant to the above-referenced Master Repurchase
Agreement under the following terms and conditions:

                                                Additional         Aggregate

ORIG. PRINCIPAL AMOUNT OF MORTGAGE LOANS:                      _____________

CURRENT PRINCIPAL AMOUNT OF MORTGAGE LOANS:                    _____________

PURCHASE DATE:                                 ____________    _____________

REPURCHASE DATE:                               ____________    _____________

PURCHASE PRICE:                                ____________    _____________

PRICING RATE:                                  ____________    _____________

MINIMUM REQUIRED MARGIN PERCENTAGE:            ____________    _____________

PRICE DIFFERENTIAL DUE DATE:                   ____________    _____________

                                      A-1
<PAGE>

The Master Repurchase Agreement is incorporated by reference into this
Request/Confirmation and made a part hereof as if it were fully set forth
herein. All capitalized terms used herein but not otherwise defined shall have
the meanings specified in the Master Repurchase Agreement.

                              BEAR STEARNS MORTGAGE CAPITAL
                                 CORPORATION

                              BY: ___________________________
                              NAME:__________________________
                              TITLE:_________________________

                                      A-2
<PAGE>

                                                                    ATTACHMENT I

                                                                    TO EXHIBIT A

                    REQUEST/CONFIRMATION FOR MORTGAGE LOANS
                    =======================================

                               Request No.  ___

                                Date:  ________

<TABLE>
<CAPTION>
                                                                  Amount
                                                                  Funded
                                                                    to
             Product  Wire   Loan   Borrower   Loan   Purchase  Qualified   Market  Takeout  Note  Commitment  Takeout  Maturity
 Investor     Type    Date  Number    Last    Amount   Price    Originator  Value    Date    Rate    Number     Price     Date
-----------  -------  ----  ------  --------  ------  --------  ----------  ------  -------  ----  ----------  -------  --------
<S>          <C>      <C>   <C>     <C>       <C>     <C>       <C>         <C>     <C>      <C>    <C>        <C>      <C>

TOTALS:
</TABLE>

NVR MORTGAGE FINANCE INC.

By: ____________________________________________________
Title: _________________________________________________
Date:___________________________________________________

                                                               Amount to be
$ ________________                                             funded by Buyer:

                                      A-1
<PAGE>

                                                                       EXHIBIT B

                         REPRESENTATIONS AND WARRANTIES
                    RELATING TO THE PURCHASED MORTGAGE LOANS

     (i)     The information with respect to each Mortgage Loan set forth in the
related Loan Schedule is true and correct;

     (ii)    All documentation required to be delivered to the Custodian under
the Custodial Agreement has been so delivered;

     (iii)   Each Purchased Mortgage Loan is a Mortgage;

     (iv)    Each mortgaged property is improved by a single (one-to-four)
family residential dwelling;

     (v)     No more than 5% by original principal balance of the Purchased
Mortgage Loans had loan-to-value ratios in excess of 85%, except for those
Purchased Mortgage Loans which are FHA Loans, which had loan-to-value ratios of
no more than 100%;

     (vi)    Each Purchased Mortgage Loan is being serviced by Seller in
accordance with the terms of this Agreement;

     (vii)   The Note related to each Purchased Mortgage Loan bears a fixed or
adjustable interest rate;

     (viii)  Each Mortgage is a valid and subsisting first of record (or is in
the process of being recorded) on the mortgaged property subject in all cases to
the exceptions to title set forth in the title insurance policy or attorney's
opinion of title, with respect to the related Mortgage Loan, which exceptions
are generally acceptable to banking institutions in connection with their
regular mortgage lending activities, and such other exceptions to which similar
properties are commonly subject and which do not individually, or in the
aggregate, materially and adversely affect the benefits of the security intended
to be provided by such Mortgage;

     (ix)    Immediately prior to the transfer and assignment of the Mortgage
Loans by Seller to Buyer as contemplated by this Agreement, Seller held good and
indefeasible title to, and was the sole owner of, each Mortgage Loan (including
the related Note) conveyed by Seller subject to no liens, charges, mortgages,
encumbrances or rights of others or other liens which will be released
simultaneously with such transfer and assignment; and immediately upon the
transfer of the Purchased Mortgage Loans as contemplated in this Agreement,
Buyer will be the sole owner of each Purchased Mortgage Loan subject to no
liens, charges, mortgages, encumbrances or rights of others except as set forth
in paragraph (ix) or other liens which will be released simultaneously with such
transfer;

                                      B-1
<PAGE>

     (x)     No Purchased Mortgage Loan is thirty (30) days or more delinquent;

     (xi)    There is no delinquent tax or assessment lien on any mortgaged
property, and each mortgaged property is free of substantial damage and is in
good repair;

     (xii)   There is no valid and enforceable offset, defense or counterclaim
to any Note or Mortgage, including the obligation of the related Mortgagor to
pay the unpaid principal of or interest on such Note;

     (xiii)  There is no mechanics' lien or claim for work, labor or material
affecting any mortgaged property which is or may be a lien prior to, or equal
with, the lien of the related Mortgage except those which are insured against by
any title insurance policy referred to in paragraph (xvi) below;

     (xiv)   Each Purchased Mortgage Loan at the time it was made complied in
all material respects with applicable state and federal laws and regulations,
including, without limitation, the federal Truth-in-Lending Act (including the
Riegle Community Development Act of 1994) and other consumer protection laws,
usury, equal credit opportunity, disclosure and recording laws;

     (xv)    With respect to each Purchased Mortgage Loan either (a) an
attorney's opinion of title has been obtained but no title policy has been
obtained or (b) a lender's title insurance policy, issued in standard American
Land Title Association form by a title insurance company authorized to transact
business in the state in which the related mortgaged property is situated, in an
amount at least equal to the original balance of such Purchased Mortgage Loan,
insuring the mortgagee's interest under the related Mortgage Loan as the holder
of a valid first mortgage lien of record on the real mortgaged property
described in the related Mortgage, as the case may be, subject only to
exceptions of the character referred to in paragraph (ix) above, was effective
on the date of the origination of such Mortgage Loan, and such policy is valid
and thereafter such policy shall continue in full force and effect;

     (xvi)   The improvements upon each mortgaged property are covered by a
valid and existing hazard insurance policy with a carrier generally acceptable
to Seller that provides for fire and extended coverage representing coverage not
less than the least of (A) the outstanding principal balance of the related
Purchased Mortgage Loan, (B) the minimum amount required to compensate for
damage or loss on a replacement cost basis or (C) the full insurable value of
the mortgaged property;

     (xvii)  If any mortgaged property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy in a form meeting the requirements of the
current guidelines of the Flood Insurance Administration is in effect with
respect to such mortgaged property with a carrier generally acceptable to Seller
in an amount representing coverage not less than the least of (A) the
outstanding principal balance of the related Purchased Mortgage Loan, (B) the
minimum amount required to compensate for damage or loss on a replacement cost
basis or (C) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973;

                                      B-2
<PAGE>

     (xviii) Each Mortgage and Note is the legal, valid and binding obligation
of the maker thereof and is enforceable in accordance with its terms, except
only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law), and all parties to
each Purchased Mortgage Loan had full legal capacity to execute all documents
relating to such Mortgage Loan and convey the estate therein purported to be
conveyed;

     (xix)   Seller has caused and will cause to be performed any and all acts
required to be performed to preserve the rights and remedies of Buyer in any
insurance policies applicable to any Purchased Mortgage Loans transferred by
Seller including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of co-insured,
joint loss payee and mortgagee rights in favor of Buyer;

     (xx)    No more than 10% of the aggregate original outstanding principal
balance will be secured by mortgaged properties located within any single zip
code area;

     (xxi)   Each original Mortgage was recorded or is in the process of being
recorded, and all subsequent assignments of the original Mortgage have been
registered with MERS and have been prepared and delivered for recordation with
MERS. In the event that MERS is not being used, all subsequent assignments of
the original Mortgage have been prepared and delivered for recordation or have
been recorded in the appropriate jurisdictions wherein such recordation is
necessary to perfect the lien thereof as against creditors of or purchasers from
Seller;

     (xxii)  The terms of each Note and each Mortgage have not been impaired,
altered or modified in any respect, except by a written instrument which has
been recorded, if necessary, to protect the interest of Buyer and which has been
delivered to the Custodian. The substance of any such alteration or modification
is reflected on the related Loan Schedule;

     (xxiii) The proceeds of each Purchased Mortgage Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to make
future advances thereunder; any and all requirements as to completion of any on-
site or off-site improvements and as to disbursements of any escrow funds
therefor have been complied with; all costs, fees and expenses incurred in
making or closing or recording such Mortgage Loans were paid;

     (xxiv)  The related Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the corresponding Mortgage;

     (xxv)   No Purchased Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;

     (xxvi)  Each mortgaged property is located in the state identified in the
respective Loan Schedule and consists of one or more parcels of real mortgaged
property with a residential dwelling erected thereon;

                                      B-3
<PAGE>

     (xxvii)  Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Purchased Mortgage Loan
in the event the related mortgaged property is sold without the prior consent of
the mortgagee thereunder;

     (xxviii) Any advances made after the date of origination of a Purchased
Mortgage Loan have been consolidated with the outstanding principal amount
secured by the related Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term reflected
on the respective Loan Schedule; the consolidated principal amount does not
exceed the original principal amount of the related Purchased Mortgage Loan; no
Note permits or obligates Seller to make future advances to the related
Mortgagor at the option of the Mortgagor;

     (xxix)   There is no proceeding pending or threatened for the total or
partial condemnation of any mortgaged property, nor is such a proceeding
currently occurring, and each mortgaged property is undamaged by waste, fire,
water, flood, earthquake or earth movement;

     (xxx)    All of the improvements which were included for the purposes of
determining the appraised value of any mortgaged property lie wholly within the
boundaries and building restriction lines of such mortgaged property, and no
improvements on adjoining properties encroach upon such mortgaged property, and
are stated in the title insurance policy and affirmatively insured;

     (xxxi)   No improvement located on or being part of any mortgaged property
is in violation of any applicable zoning law or regulation; all inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of each mortgaged property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities and such mortgaged property is lawfully occupied under
the applicable law;

     (xxxii)  With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the owner of the Mortgage Loan to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the related Mortgagor;

     (xxxiii) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related mortgaged property of the benefits of the
security, including (A) in the case of a Mortgage designated as a deed of trust,
by trustee's sale and (B) otherwise by judicial foreclosure. There is no
homestead or other exemption other than any applicable Mortgagor redemption
rights available to the related Mortgagor which would materially interfere with
the right to sell the related mortgaged property at a trustee's sale or the
right to foreclose the related Mortgage;

     (xxxiv)  There is no default, breach, violation or event of acceleration
existing under any Mortgage or the related Note and no event which, with the
passage of time or with notice and the

                                      B-4
<PAGE>

expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration; and Seller has not waived any default,
breach, violation or event of acceleration;

     (xxxv)    No instrument of release or waiver has been executed in
connection with any Purchased Mortgage Loan, and no Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement which has
been approved by the primary mortgage guaranty insurer, if any, and which has
been delivered to the Custodian;

     (xxxvi)   Each Purchased Mortgage Loan was originated based upon a full
appraisal, which included an interior inspection of the subject mortgaged
property unless such Mortgage Loan was subject to FNMA or FHLMC underwriting
guides, in which case the Purchased Mortgage Loan conformed to such guidelines;

     (xxxvii)  No more than 15% of the aggregate original outstanding principal
balance is secured by mortgaged properties that are non-owner occupied mortgaged
properties (i.e., investor-owned and vacation);

     (xxxviii) There do not exist any hazardous substances, hazard wastes or
solid wastes, as such terms are defined in the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and Recovery
Act of 1976, or other federal, state or local environmental legislation on any
mortgaged property;

     (xxxix)   Seller was properly licensed or otherwise authorized, to the
extent required by applicable law, to originate or purchase each Purchased
Mortgage Loan; and the consummation of the transactions herein contemplated,
including, without limitation, the ownership of the Purchased Mortgage Loans by
Buyer will not involve the violation of such laws;

     (xl)      With respect to each mortgaged property subject to a ground lease
(i) the current ground lessor has been identified and all ground rents which
have previously become due and owing have been paid; (ii) the ground lease term
extends, or is automatically renewable, for at least five (5) years beyond the
maturity date of the related Purchased Mortgage Loan; (iii) the ground lease has
been duly executed and recorded; (iv) the amount of the ground rent and any
increases therein are clearly identified in the lease and are for predetermined
amounts at predetermined times; (v) the ground rent payment is included in the
mortgagor's monthly payment as an expense item in determining the qualification
of the mortgagor for such Mortgage Loan; (vi) Buyer has the right to cure
defaults on the ground lease; and (vii) the terms and conditions of the
leasehold do not prevent the free and absolute marketability of the mortgaged
property. The outstanding principal balance of Purchased Mortgage Loans with
related mortgaged properties subject to ground leases does not exceed 10% of the
aggregate original outstanding principal balance;

     (xli)     Seller has not received a notice of default of any first-lien
Mortgage Loan secured by any mortgaged property which has not been cured by a
party other than Seller;

                                      B-5
<PAGE>

     (xlii)  No Purchased Mortgage Loan is subject to a temporary rate reduction
pursuant to a buydown program;

     (xliii) No more than 10% of the aggregate original outstanding principal
balance of the Purchased Mortgage Loans was originated under Seller's non-income
verification program; and

     (xliv)  The interest rate on each Purchased Mortgage Loan is calculated on
the basis of a year of 360 days with twelve 30-day months.

     (xlv)   Each Mortgage Loan that is not a FHA Loan or VA Loan with an LTV in
excess of 80% is covered by a Primary Mortgage Insurance Policy which is
disclosed on the Mortgage Loan Schedule attached hereto, and the Primary
Mortgage Insurance Policy is in full force and effect.

     (xlvi)  With respect to each Mortgage Loan that is a FHA Loan or a VA Loan
is indicated as such on the Mortgage Loan Schedule; the Mortgage Loan is fully
insured by FHA or guaranteed by the VA, as applicable; the FHA insurance or VA
guarantee is in full force and effect; no FHA Loan or VA Loan is subject to any
defect which would diminish or impair such insurance or guarantee; all prior
transfers, if any, of any FHA Loan or VA Loan have been, and the sale to the
Purchaser of any such FHA Loan or VA Loan is, in compliance with applicable law
and the regulations; and no circumstances exist with respect to any such FHA
Loan or VA Loan which would permit FHA or VA to deny the effectiveness of its
insurance or guarantee.

     (xlvii) In servicing and administering any FHA Loan or VA Loan, the Seller
has complied with applicable law and regulations, as the same may be amended
from time to time, and has promptly discharged all obligations of the mortgagee
thereunder and under the related Mortgage including the timely giving of notices
thereunder; the full benefit of the insurance or guarantee, as the case may be,
shall inure to the Purchaser; and no reduction or curtailment of principal,
interest or any fees, costs or expenses to be paid by the FHA or VA under the
insurance contract or guarantee shall result from any act or omission of the
Seller.

                                      B-6
<PAGE>

                                                                       EXHIBIT C
                                                                       ---------

                              [TAKEOUT ASSIGNMENT]

___________________("Takeout Investor")
(Address)
Attention:  _____________________

Gentlemen:

     Attached hereto is a correct and complete copy of your confirmation of
commitment (the "Commitment"), trade-dated ____________, 19__, to purchase
$______________ of ____% ____ year:

(Check Box)

          (a) Government National Mortgage Association;

          (b) Federal National Mortgage Association; or

          (c) Federal Home Loan Mortgage Corporation;

mortgage-backed pass-through securities ("Securities") at a purchase price of
_____________ from __________________.  This is to confirm that (i) the
Commitment is in full force and effect, (ii) the Commitment has been assigned to
_____________________ ("Assignee") whose acceptance of such assignment is
indicated below, (iii) you will accept delivery of such Securities directly from
Assignee and (iv) you will pay Assignee for such Securities.  Payment will be
made "delivery versus payment (DVP)" to Assignee in immediately available funds.
Assignee shall have the right to require you to fulfill your obligation to
purchase the Securities.

     Notwithstanding the foregoing, the obligation to deliver the Securities to
you shall be that of NVR Mortgage Finance Inc. and your sole recourse for the
failure of such delivery shall be against NVR Mortgage Finance Inc..

                                      C-1
<PAGE>

     If you have any questions, please call ______________________ of the
Assignee at __________________ immediately.

                                        Very truly yours,

                                        NVR MORTGAGE FINANCE INC.

                                        By:____________________
                                        Title:_________________
                                        Date:__________________

Agreed to:

[ASSIGNEE]

By:_____________________
Title:__________________
Date:___________________

                                      C-2
<PAGE>

                                                                       EXHIBIT D
                                                                       ---------

                   PAYMENT INSTRUCTIONS FOR AGENCY SECURITIES
                   ==========================================

FED FNMA AND FHLMC SECURITY INSTRUCTIONS:  __________________

                                                     __________________

PTC GNMA SECURITY INSTRUCTIONS:            __________________

                                      D-1
<PAGE>

                                                                       EXHIBIT E
                                                                       ---------

                           INVESTOR COMMITMENT REPORT
                           ==========================

                                 Mortgage Loans
                                (Securitization)
                                 --------------

<TABLE>
<CAPTION>
     Confirmation/              Takeout Investor
    Funding Request      Trade   or Purchasing    Delivery   MBS    Note/Coupon   Delivery            Trade    Commitment
   (Listed by Number)    Date        Agency        Month     Type      Rate        Price     Amount   Number     Number     Reason
   ------------------    -----  ----------------   -----     ----   -----------   --------   ------   ------   ----------   ------
   <S>                   <C>    <C>               <C>        <C>    <C>           <C>        <C>      <C>      <C>          <C>
</TABLE>

                                      E-1
<PAGE>

                                                                       EXHIBIT F
                                                                       ---------

                               TAKEOUT INVESTORS
                               -----------------

                                      F-1
<PAGE>

                                                                       EXHIBIT G

                          OPINION OF COUNSEL TO SELLER

     1.   Seller is duly organized and validly existing as a corporation in good
standing under the laws of the State of __________ and has power and authority
to enter into and perform its obligations under this Agreement and the Custodial
Agreement.  Seller is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the business transacted by it
requires such qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets or condition
(financial or other) of Seller and its subsidiaries, considered as a whole.

     2.   This Agreement and the Custodial Agreement have each been duly
authorized, executed and delivered by Seller, and each constitutes a valid and
legally binding obligation of Seller enforceable against Seller in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles.

     3.   No consent, approval, authorization or order of any state or federal
court or government agency or body is required to be obtained by Seller for the
consummation of the transactions contemplated by this Agreement or the Custodial
Agreement.

     4.   The consummation of any of the transactions contemplated by this
Agreement and the Custodial Agreement will not conflict with, result in a breach
of, or constitute a default under the articles of incorporation or bylaws of
Seller or the terms of any indenture or other agreement or instrument known to
us to which Seller is party or bound, or any order known to such counsel to be
applicable to Seller or any regulations applicable to Seller, of any state or
federal court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over Seller.

     5.   There is no pending or threatened action, suit or proceeding before
any court or governmental agency, authority or body or any arbitrator involving
Seller or relating to the transaction contemplated by this Agreement or the
Custodial Agreement which, if adversely determined, would have a material
adverse effect on Buyer.

     6.   Seller is duly registered as a finance company in each state in which
Mortgage Loans were originated, to the extent such registration is required by
applicable law.

Each Mortgage Loan will have been endorsed in a manner which satisfies any
requirement of endorsement in order to transfer all right, title and interest in
and to that Mortgage Loan from Seller to Buyer.  Each assignment of Mortgage
related to each such Mortgage Loan is in recordable form and is sufficient under
applicable law to validly and effectively transfer all right, title and interest
of Seller to Buyer.  This Agreement together with (a) the delivery of such
related Mortgage Loans to Custodian, (b) the endorsement of such Mortgage Loans
to Buyer and (c) the delivery of the

                                      F-2
<PAGE>

assignments of Mortgages related to the Mortgage Loans to the Custodian in
recordable form assigning such Mortgages to Buyer, creates a valid, perfected
security interest in such Mortgage Loans in favor of Buyer. Such security
interest will have the same priority and will be subject to the same security
interests and liens as apply to such Mortgage Loans in the hands of Seller.

                                      F-3

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