Document:

EXHIBIT 10.2

                    SECURITY AND COLLATERAL AGENCY AGREEMENT

      THIS SECURITY AND COLLATERAL AGENCY AGREEMENT (this "Security Agreement")
is made and dated as of the 30th day of August, 2004, by and among AMERICAN HOME
MORTGAGE SERVICING, INC., a Maryland corporation ("AHMS"), AMERICAN HOME
MORTGAGE CORP., a New York corporation ("AHMC"), AMERICAN HOME MORTGAGE
ACCEPTANCE, INC., a Maryland corporation ("AHMA") (AHMS, AHMC and AHMA each, a
"Borrower" and, collectively, the "Borrowers"), BANK OF AMERICA, N.A., a
national banking association, acting in its capacity as administrative agent (in
such capacity, the "Administrative Agent") for the Lenders from time to time
party to that certain Credit Agreement dated as of even date herewith, by and
among the Borrowers, the Lenders and the Administrative Agent (as amended,
extended and replaced from time to time, the "Credit Agreement," and with
capitalized terms not otherwise defined herein used with the meanings given such
terms in the Credit Agreement, and DEUTSCHE BANK NATIONAL TRUST COMPANY, acting
in its capacity as custodian and collateral agent for the benefit of the
Administrative Agent and the Lenders (in such capacity, the "Collateral Agent").

                                     RECITAL

      As a condition precedent to the effectiveness to the Credit Agreement, the
Borrowers are required to execute and deliver this Security Agreement.

      NOW, THEREFORE, in consideration of the above Recital and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                                    AGREEMENT

      1. Appointment of Collateral Agent. By executing and delivering the Credit
Agreement or otherwise becoming a "Lender" thereunder, each Lender shall
automatically be deemed to have appointed the Collateral Agent to act as secured
party, agent, bailee and custodian for the exclusive benefit of the
Administrative Agent, the Collateral Agent, and the Lenders (collectively and
severally, the "Secured Parties"), with respect to the Collateral (to the extent
that such Collateral consists of the documents delivered to the Collateral Agent
under Paragraph 2(a) hereof). The Collateral Agent hereby accepts such
appointment and agrees to maintain and hold all Collateral (to the extent that
such Collateral consists of the documents delivered to the Collateral Agent
under Paragraph 2(a) hereof) at any time delivered to it as secured party,
agent, bailee and custodian for the exclusive benefit of the Secured Parties.
The Collateral Agent acknowledges and agrees that the Collateral Agent is acting
and will act with respect to the Collateral for the exclusive benefit of the
Secured Parties and is not, and shall not at any time in the future be, subject
with respect to the Collateral, in any manner or to any extent, to the direction
or control of any of the Borrowers except as expressly permitted hereunder and
under the other Loan Documents. The Collateral Agent agrees to act in accordance
with this Security Agreement and in accordance with any written instructions
properly delivered pursuant hereto. Under no circumstances shall the Collateral
Agent deliver possession of Collateral to any of the Borrowers except in
accordance with the express terms of this Security Agreement and the other Loan
Documents. The Collateral Agent hereby confirms that it is a MERS patron member
in good standing and in compliance with all rules, regulations, procedures, and
requirements set forth by MERS with respect to patron members, including, but
not limited to, the payment of membership fees. The Borrowers shall cause the
MERS System to reflect the name of the Collateral Agent in the Custodian
Category; however the Collateral Agent's interest with respect to MERS Loans
governed hereby shall be only that of custodian on behalf of the Administrative
Agent. The Borrowers shall cause the MERS System to reflect the name of the
Administrative Agent in the Interim Funder Category and to reflect the security
interest granted to Administrative Agent on behalf of the Lenders. The Borrowers
shall provide the Administrative Agent and the Collateral Agent with MERS
Identification Numbers for each MERS Mortgage.

      2. Delivery of Required Documents; Review of Collateral; Up-Date of
Information.

            (a) From time to time, the Borrowers shall deliver or cause to be
delivered to the Collateral Agent Collateral consisting of, among other things,
Mortgage Loans and Mortgage-Backed Securities ("Mortgage-Related Collateral").
Such delivery shall be effected: (1) by delivery of the Required Documents
therefor (and the Additional Required Documents if so requested by the
Administrative Agent) under cover of a certificate in the form of Exhibit 1
(each, a "Delivery Certificate"), accompanied by the information described on
Exhibit 2 which the Borrowers shall automatically be deemed to have represented
and warranted to be accurate and complete (a "Mortgage-Related Collateral
Schedule") no later than 11:00 a.m. (Dallas time) on the Business Day preceding
the date such Mortgage Loans and Mortgage-Backed Securities secured or otherwise
supported by any Mortgage-Related Collateral (as used herein, "Warehouse-Related
MBS") are first to be included in the Warehouse Borrowing Base or (2) in the
case of a Wet Mortgage Loan, by the delivery of a Collateral Confirmation
Agreement covering such Mortgage Loan (and subsequent delivery of the Required
Documents therefor as required under Subparagraph (n) of the definition of
"Eligible Mortgage Loan" under cover of a Delivery Certificate accompanied by a
Mortgage-Related Collateral Schedule) by 3:00 p.m. (Dallas time) on the first
Business Day such Mortgage Loan is first to be included in the Warehouse
Borrowing Base.

            (b) Upon any receipt of Required Documents for any Mortgage-Related
Collateral, the Collateral Agent shall review the same and verify that:

                   (1) All the Required Documents relating to such item of
     Mortgage-Related Collateral appear regular on their face and, except for
     item number 5 on Schedule VI to the Credit Agreement unless specifically
     requested by the Administrative Agent, are in the possession of the
     Collateral Agent; and

                   (2) The statements set forth on Exhibit 3 hereto are accurate
     and complete in all respects.

If the Collateral Agent notes any exception in the review described in
Subparagraphs (1) and (2) above, the Collateral Agent shall prepare a report
covering the deficient Mortgage-Related Collateral noting such exception (an
"Exception Report") and deliver it to the Administrative Agent and the Borrowers
as soon as the review is complete but in no event later than 11:00 a.m. (Dallas
time) on the next Business Day following receipt of the Required Documents so
long as the Required Documents are received by 11:00 a.m. (Dallas time) on the
preceding Business Day by the Collateral Agent. Subject to the right of the
Administrative Agent to waive certain requirements for eligibility as expressly
set forth in the Credit Agreement (any such waiver to be evidenced by facsimile
notice to such effect delivered by the Administrative Agent to the Borrowers and
the Collateral Agent), the Mortgage-Related Collateral on the Exception Report
shall not be included in the Warehouse Borrowing Base until such
Mortgage-Related Collateral has been removed from the Exception Report.

            (c) The Collateral Agent shall not be required to make any
independent examination of any Mortgage-Related Collateral beyond the review
specifically required herein. The Collateral Agent's review of the
Mortgage-Related Collateral delivered by 11:00 a.m. (Dallas time) on any
Business Day shall be completed by 11:00 a.m. (Dallas time) on the next
succeeding Business Day; provided, however, that the Collateral Agent shall not
be required to review on any Business Day the Required Documents for more than
500 Mortgage Loans. It is expressly acknowledged and agreed that when the
Required Documents for a Mortgage Loan which was initially included in the
calculation of the Collateral Value of the Warehouse Borrowing Base pursuant to
a Collateral Confirmation Agreement are delivered on a given Business Day, the
Collateral Agent shall include said Mortgage Loan in the calculation of the
Collateral Value of the Warehouse Borrowing Base on such Business Day prior to
reviewing the Required Documents; provided, however, that such Required
Documents must be reviewed in accordance herewith following their delivery to
the Collateral Agent before the Mortgage Loan ceases to be subject to the Wet
Mortgage Loan provisions pursuant to Subparagraph (n) of the definition of
Eligible Mortgage Loan. If following such review the related Mortgage Loan
appears on the Exception Report, then, subject to the right of the
Administrative Agent to waive certain requirements for eligibility as expressly
set forth in the Credit Agreement, such Mortgage Loan shall not be included in
the calculation of the Collateral Value of the Warehouse Borrowing Base until
such Mortgage Loan has been removed from the Exception Report.

            (d) In the event any of the Borrowers has been requested to deliver
the Additional Required Documents with respect to any item of Mortgage-Related
Collateral, the Collateral Agent shall be notified of such request by the
Administrative Agent and the Collateral Agent shall review and verify such
Additional Required Documents consistent with the requirements set forth above
in subparagraph 2(b), as applicable, except that the Collateral Agent is not
required to verify whether it is in possession of the documents listed in item
number 4 or 7 of Schedule VII to the Credit Agreement unless Collateral Agent is
specifically requested to so verify by the Administrative Agent.

            (e) All Mortgage-Related Collateral at any time delivered to the
Collateral Agent hereunder shall be held by the Collateral Agent in a fire
resistant vault, drawer or other suitable depository maintained and controlled
solely by the Collateral Agent, with the Collateral Agent records showing the
interest therein of the Administrative Agent and the other Secured Parties and
not commingled with any other assets or property of, or held by, the Collateral
Agent.

            (f) On or before the close of business on the first Business Day of
each calendar week, the Borrowers will deliver to the Collateral Agent and the
Administrative Agent the information described on the Collateral Information
Certificate (herein so called) attached hereto as Exhibit 4, which the Borrowers
shall automatically be deemed to have represented and warranted to be accurate
and complete, dated as of the close of business of the Borrowers on the last
Business Day of the immediately preceding week and duly certified by a
responsible officer of the Borrowers.

            (g) From time to time, the Borrowers may cause to be delivered to
the Administrative Agent Collateral consisting of Warehouse-Related MBS by
causing such Warehouse-Related MBS to be the subject of a Perfected Assignment
such that the Administrative Agent's MBS Safekeeping Account receives a book
entry on the records of the applicable issuer of such Warehouse-Related MBS or
its trustee or transfer agent. The Borrowers shall notify the Administrative
Agent and the Collateral Agent in writing no later than 10:00 a.m. (Dallas time)
on the day such Warehouse-Related MBS are being issued, setting forth in such
written notice the initial face amount, the receipt or CUSIP number, the
interest rate and the delivery date of such Warehouse-Related MBS. Upon receipt
of evidence satisfactory to it that such Warehouse-Related MBS is the subject of
a Perfected Assignment, the Administrative Agent shall notify the Collateral
Agent whether to include such Warehouse-Related MBS into the calculation of the
Collateral Value of the Warehouse Borrowing Base in accordance with Paragraph
5(d) below.

            (h) The Collateral Agent shall examine the Required Documents
delivered by or on behalf of any of the Borrowers hereunder to determine whether
the Collateral includes the documents, and instruments required pursuant to this
Security Agreement (except with respect to item number 5 on Schedule VI to the
Credit Agreement and item numbers 4 and 7 on Schedule VII to the Credit
Agreement unless specifically requested by the Administrative Agent) and that
the same are in conformity with the requirements of Paragraph 2(b) of this
Security Agreement and any other customary collateral review criteria which the
Collateral Agent may communicate to the Borrowers and Administrative Agent from
time to time. Upon completing its review of the Delivery Certificate,
Mortgage-Related Collateral Schedule and Collateral Confirmation Agreement and
accompanying documents received each day, the Collateral Agent shall, not later
than 11:00 a.m. (Dallas time) on the next succeeding Business Day enter such
information in the data base maintained by the Collateral Agent. The Collateral
Agent shall within one Business Day of its receipt of Required Documents
pursuant to Paragraph 2, confirm that the Administrative Agent is listed as
Interim Funder.

      3. Grant of Security Interest. Each Borrower hereby pledges and grants to
the Administrative Agent for the benefit of the Secured Parties and to each of
the Secured Parties a first priority, perfected security interest in the
Collateral to secure payment and performance of the Obligations.

      4. Collateral. The Collateral shall consist of all now existing and
hereafter arising right, title and interest of any or all of the Borrowers in,
under and to each of the following:

            (a) All Mortgage Loans, now owned and hereafter acquired by any of
the Borrowers the Required Documents for which are delivered to the Collateral
Agent or which Mortgage Loans are otherwise identified as "Collateral" hereunder
(including, without limitation, on a Collateral Confirmation Agreement),
including, without limitation, the promissory notes or other instruments or
agreements evidencing the indebtedness of Obligors thereon, all mortgages, deeds
to secure debt, trust deeds and security agreements related thereto, all rights
to payment thereunder, all rights in the Properties securing payment of the
indebtedness of the Obligors thereon, all rights under documents related
thereto, such as guaranties and insurance policies (issued by governmental
agencies or otherwise), including, without limitation, mortgage and title
insurance policies, fire and extended coverage insurance policies (including
commitments to issue the same and the right to any return premiums) and FHA
insurance and VA guaranties, all casualty insurance assigned to any Borrower in
connection with any Mortgage Loan, and all rights in cash deposits consisting of
impounds, insurance premiums or other funds held on account thereof;

            (b) All Warehouse-Related MBSs (as defined in Paragraph 6(b)(2)
below), now owned and hereafter acquired by any of the Borrowers, which, if
uncertificated, are delivered to the Collateral Agent for inclusion as
"Collateral" hereunder, or which, if uncertificated, are subject to Perfected
Assignments pursuant to Paragraph 2(g) of this Security Agreement, and all right
to the payment of monies and non-cash distributions on account of any of the
above and all new, substituted and additional securities at any time issued with
respect thereto;

            (c) All rights of any of the Borrowers (but not its obligations)
under all Take-Out Commitments, Hedging Arrangements, now existing and hereafter
arising, covering any part of the foregoing Collateral, and all rights to
deliver Mortgage Loans and/or Warehouse-Related MBS included in the Collateral
to permanent investors and other purchasers, and all proceeds resulting from the
disposition of such Collateral;

            (d) All now existing and hereafter established accounts maintained
with broker-dealers by any Borrower for the purpose of carrying out transactions
under Take-Out Commitments and hedge contracts and other futures and futures
options transactions involving Mortgage Loans and/or Warehouse-Related MBS
included in the Collateral;

            (e) All now existing and hereafter arising rights to service,
administer and/or collect Mortgage Loans included in the Collateral at any date
(it being acknowledged and agreed that prior to the occurrence of an Event of
Default and acceleration of the Obligations, the security interest in such
servicing rights granted hereunder shall be automatically terminated without
need for further action upon the sale, transfer or other disposition of the
related Mortgage Loans in accordance with the provisions of the Loan Documents);

            (f) All now existing and hereafter arising Servicing Rights,
including, without limitation, rights relating in any way to any Borrower's
Servicing Contracts with FHLMC, FNMA, or GNMA, or other private investor,
together with all present and future sums paid or payable to any Borrower on
account of, or as a result of the performance of, those Servicing Rights,
whether as compensation for the performance by any Borrower, damages related to
any of the foregoing, amounts payable upon cancellation or termination thereof,
or otherwise;

            (g) All now existing and hereafter arising Servicing Receivables;

            (h) All now existing and hereafter arising accounts, escrow
accounts, contract rights and general intangibles constituting or relating to
any of the foregoing in this Paragraph 4;

            (i) All now existing and hereafter acquired files, documents,
instruments, surveys, certificates, correspondence, appraisals, computer
programs, tapes, discs, cards, accounting records and other books, records,
information and data of the Borrowers relating to the foregoing Collateral
(including all information, records, data, programs, tapes, discs, and cards
necessary or helpful in the administration or servicing of any of the foregoing
in this Paragraph 4);

            (j) The Funding Account, the Settlement Account, the MBS Safekeeping
Account, and any and all Custodian Settlement Accounts (as defined in Paragraph
6(c) below) and any and all funds at any time held in any such accounts; and

            (k) All products and Proceeds of any of the foregoing in this
Paragraph 4.

      5. Determination of Availability; Calculation Assumptions.

            (a) No later than 11:00 a.m. (Dallas time) on each Business Day, the
Collateral Agent shall independently calculate and certify the calculation of
the Collateral Value of the Warehouse Borrowing Base current as of 7:00 p.m.
(Dallas time) on the preceding Business Day with respect to Mortgage Loans for
which Required Documents have been received and reviewed by the Collateral
Agent, and current as of 11:00 a.m. (Dallas time) on such Business Day with
respect to Mortgage Loans submitted under a Collateral Confirmation Agreement
and all other Collateral included in the computation of the Collateral Value of
the Warehouse Borrowing Base and notify the Administrative Agent and the
Borrowers thereof via facsimile transmission (the "Collateral Value
Determination").

            (b) In making any Collateral Value Determination, the Collateral
Agent shall be permitted to rely, without independent investigation of the
correctness thereof and without any duty to verify that it has received the most
updated version of the following (including, without limitation, the Aggregate
Credit Limit (and the Administrative Agent or the Borrowers shall notify the
Collateral Agent of any changes in the Aggregate Credit Limit)): (1) with
respect to any Mortgage-Related Collateral, on information supplied by any of
the Borrowers to the Collateral Agent on the Delivery Certificate and
accompanying Mortgage-Related Collateral Schedule therefor, as the same
information is updated pursuant to the most recent Collateral Information
Certificate provided by the Borrowers pursuant to Paragraph 2(f) above and any
other information that the Collateral Agent receives from the Borrowers or the
Administrative Agent that the Collateral Agent requires in order for it to
calculate the Collateral Value of the Warehouse Borrowing Base, and (2) with
respect to a determination as to whether amounts received in the Settlement
Account represent the purchase price paid for a specific item of
Mortgage-Related Collateral and, consequently, whether such Mortgage-Related
Collateral should be removed from the calculation of the Collateral Value of the
Warehouse Borrowing Base, on information supplied by any of the Borrowers to the
Collateral Agent in writing.

            (c) No later than 1:00 p.m. (Dallas time) on each Business Day (the
"Information Cutoff Time") the Borrowers shall deliver to the Administrative
Agent and the Collateral Agent a list of Mortgage Loans that have been shipped
and sold to investors or for pool formation pursuant to the procedures in
Paragraph 6 below (the "Paid Loan Listing"), together with appropriate detail
identifying the specific wire that represents the proceeds of each Mortgage Loan
on the Paid Loan Listing.

            (d) Upon receipt of the Paid Loan Listing by the Information Cutoff
Time, the Collateral Agent will review all wires received in the Settlement
Account on or before 2:00 p.m. (Dallas time) (the "Wire Cutoff Time") and
confirm that the wires detailed in the Paid Loan Listing have been received in
the Settlement Account and that the actual amounts match those shown in the Paid
Loan Listing or, through confirmation with the Administrative Agent, that a book
entry for any identified uncertificated Warehouse-Related MBS has been received
in the MBS Safekeeping Account or that any identified certificated
Warehouse-Related MBS has been delivered to the Collateral Agent (the "Paid
Reconciliation Process"). The Collateral Agent will no later than 3:00 p.m.
(Dallas time) determine and notify the Administrative Agent in writing as to
which Mortgage Loans have been purchased and paid for and, consequently, which
should no longer be included in the calculation of the Collateral Value of the
Warehouse Borrowing Base, and by such time the Administrative Agent shall notify
the Collateral Agent in writing as to whether any Warehouse-Related MBS should
be included in the calculation of the Collateral Value of the Warehouse
Borrowing Base. Any Mortgage Loans that cannot be reconciled by the
Administrative Agent and the Collateral Agent will remain in the Warehouse
Borrowing Base, and the associated settlement proceeds will remain in the
Settlement Account until such time as the Administrative Agent and the
Collateral Agent receive the necessary information from the Borrowers to
complete the Paid Reconciliation Process.

            (e) On or before 3:30 p.m. (Dallas time), provided that the
Collateral Agent has timely received the reconciliation information from the
Administrative Agent, the Collateral Agent will remove the reconciled Mortgage
Loans from the Warehouse Borrowing Base, and will use commercially reasonable
efforts to provide an updated Collateral Value Determination reflecting the
removal of such Mortgage Loans from the Warehouse Borrowing Base; provided,
however, that the Collateral Agent shall not be obligated to provide such
updated Collateral Value Determination and, if it fails to do so, the Borrowers
acknowledge and agree that the Borrowers shall not be entitled to additional
advances under the Credit Agreement until an updated Collateral Value
Determination is provided as required pursuant to Paragraph 5(a) above.

      6. Handling of Collateral; Settlement Account.

            (a) Unless an Event of Default or Potential Default has occurred and
is continuing, from time to time until otherwise notified by the Administrative
Agent (which notice shall be by facsimile), the Collateral Agent is hereby
authorized to release documentation relating to Mortgage Loans to any of the
Borrowers against a Trust Receipt executed by the Borrowers in the form of
Exhibit 5 hereto. The Collateral Agent will hold all Trust Receipts as it holds
all other Mortgage-Related Collateral hereunder. The Borrowers hereby covenant
that any request by the Borrowers for release of Collateral under this
Subparagraph (a) shall be solely for the purposes of correcting clerical or
other non-substantial documentation problems in preparation for ultimate sale or
exchange and that the Borrowers have requested such release in compliance with
all terms and conditions of such release set forth herein and in the Credit
Agreement, including, without limitation, Subparagraph (k)(1) of the definition
of "Eligible Mortgage Loan." Any MERS Mortgage for which documentation is
delivered to the Borrowers pursuant to this subparagraph shall not be
de-registered from the Interim Funder Category or Custodian Category on the MERS
System with respect to such MERS Mortgage.

            (b) Unless an Event of Default or Potential Default has occurred and
is continuing, upon delivery by the Borrowers to the Collateral Agent of a
shipping request in the form of that attached hereto as Exhibit 6, the
Collateral Agent will transmit Mortgage-Related Collateral held by it as
directed by the Borrowers as follows:

                  (1) If the transmittal is of documentation for
      Mortgage-Related Collateral in the possession of the Collateral Agent in
      connection with the sale thereof to a permanent investor, as the
      Collateral Agent is notified by the applicable Borrower in writing, such
      transmittal will be under cover of a transmittal letter in the form of
      that attached hereto as Exhibit 7A.

                  (2) If the transmittal is of documentation for
      Mortgage-Related Collateral in the possession of the Collateral Agent in
      connection with the shipment to a custodian or trustee in connection with
      the formation of a mortgage pool supporting a Mortgage-Backed Security, as
      the applicable Borrower shall notify the Collateral Agent in writing:

                        (i) Such transmittal will be under cover of a
            transmittal letter in the form of that attached hereto as Exhibit 7B
            (or such other form as may be required under the government program
            pursuant to which such Warehouse-Related MBS is being issued); and

                        (ii) The Collateral Agent shall have delivered to the
            transfer agent or trustee for the Warehouse-Related MBS a letter in
            the form of that attached hereto as Exhibit 7C (or such other form
            as may be required under the government program pursuant to which
            such Warehouse-Related MBS is being issued); and

                        (iii) Such Warehouse-Related MBS is to be delivered by
            the transfer agent or trustee to:

                              a. A third party purchaser of such
                  Warehouse-Related MBS who has been instructed by the transfer
                  agent or trustee to remit the purchase price therefor directly
                  to the Settlement Account, or

                              b. A custodian, which custodian has agreed to hold
                  such Warehouse-Related MBS and the proceeds of any sale or
                  other disposition thereof as custodian, agent and bailee for
                  the benefit of the Secured Parties pursuant to a custodian
                  agreement in form and substance acceptable to the
                  Administrative Agent (the custodian acting in such capacity
                  being referred to herein as an "Approved Custodian"), or

                              c. If such Warehouse-Related MBS is
                  uncertificated, the MBS Safekeeping Account pursuant to a
                  Perfected Assignment; or

                              d. If such Warehouse-Related MBS is certificated,
                  the Collateral Agent, endorsed by the applicable Borrower; and

                        (iv) If such Warehouse-Related MBS is to be sent to an
            Approved Custodian, as the applicable Borrower shall notify the
            Collateral Agent in writing, there will be delivered to the Approved
            Custodian a letter in the form of that attached hereto as Exhibit
            7D.

                  (3) If the transmittal is of documentation for
      Mortgage-Related Collateral in the possession of the Collateral Agent in
      connection with the shipment to another financer to be included as
      collateral under another financing, as the applicable Borrower shall
      notify the Collateral Agent in writing, such transmittal will be under
      cover of a transmittal letter in the form of that attached hereto as
      Exhibit 7E.

In no event shall the Collateral Agent have any obligation to obtain written
acknowledgment of receipt from the addressee of any transmittal letter or other
communication sent by the Collateral Agent hereunder or verify the occurrence of
Paragraph 6(b)(2)(iii). Except in connection with a transaction permitted
hereby, the Borrowers covenant and agree that, with respect to each MERS Loan
and MERS Mortgage, they will not identify any party in the Interim Funder
Category on the MERS System other than the Administrative Agent or any party in
the Custodian Category on the MERS System other than the Collateral Agent.

            (c) All amounts payable on account of (1) the sale of
Mortgage-Related Collateral and (2) a requested release of Mortgage-Related
Collateral pursuant to Paragraph 6(d) below requiring payment by the Borrowers
to the Lenders, will be instructed to be paid directly by the purchaser or the
Borrowers, as the case may be, to the Settlement Account, which Settlement
Account shall be maintained by the Collateral Agent (for the benefit of
Administrative Agent on behalf of the Lenders) as a "no access" account to the
Borrowers, or, in the case of Mortgage-Related Collateral delivered to the
Approved Custodian pursuant to Paragraph 6(b)(2)(iii)(c), to a demand deposit
account maintained with such Approved Custodian (a "Custodian Settlement
Account") and, thereafter, to the Settlement Account as provided in the
applicable Custodial Agreement. Amounts in the Settlement Account will be held
uninvested. The Borrowers will provide to the Collateral Agent and the
Administrative Agent a reconciliation establishing those items of Collateral to
which funds deposited in the Settlement Account relate on each Business Day.
Pursuant to Paragraph 3 above, the Borrowers have granted a security interest in
and lien upon the Settlement Account, the Funding Account and in all Custodian
Settlement Accounts and in any and all amounts at any time held therein as
collateral security for the Obligations. The Collateral Agent hereby agrees that
it will comply with all instructions of the Administrative Agent directing
disposition of the funds in the Settlement Account without further consent of
any of the Borrowers. The Collateral Agent shall transfer to the Administrative
Agent, in accordance with its instructions, the entire collected balance of the
Settlement Account on a daily basis by wire transfer no later than 5:00 p.m.
(Dallas time). The Collateral Agent shall have no liability for compliance with
the wire transfer instructions of the Administrative Agent, absent gross
negligence or willful misconduct. This Paragraph 6(c) shall constitute notice to
the Collateral Agent, the Administrative Agent and any custodian which may be or
become an Approved Custodian of such security interest pursuant to the New York
Uniform Commercial Code and any other law or regulation requiring such notice.
The Administrative Agent for the benefit of the Secured Parties shall hold such
security interest in and lien upon the accounts referred to in Paragraph 4(j)
above and all funds at any time held therein for the benefit of the Secured
Parties with all rights of a secured party under the New York Uniform Commercial
Code. Upon remittance of the full amount of the release price for each item of
Mortgage-Related Collateral (as notified by the Administrative Agent to the
Collateral Agent), the lien created by this Security Agreement on the affected
Mortgage-Related Collateral shall be automatically and concurrently released.

            (d) Prior to the occurrence of an Event of Default, upon written
request of the Borrowers to the Collateral Agent, the Collateral Agent is hereby
authorized, and does hereby agree, to release any Mortgage-Related Collateral in
its possession, together with all documentation relating thereto, to the
Borrowers or as directed by the Borrowers, upon receiving the Administrative
Agent's written authorization as specified in the following sentence. Upon
receipt of a request for such a release, the Collateral Agent will forward a
copy to the Administrative Agent and the Administrative Agent will, on the same
Business Day if such request is received by the Administrative Agent by 2:00
p.m. (Dallas time), and no later than the next Business Day if such request is
received after 2:00 p.m. (Dallas time), verify the aggregate outstanding
principal balance of all Loans outstanding for purposes of making the foregoing
calculation, and shall authorize in writing (which may be by facsimile
transmission) the release of such Mortgage-Related Collateral if following such
release the Borrowers will be in compliance with the requirements of Paragraph
6(d) of the Credit Agreement. In no event shall the Collateral Agent release any
such Mortgage-Related Collateral under this Paragraph 6(d) without the express
written authorization of the Administrative Agent. Subject to the previous
sentence, the Collateral Agent agrees to transmit all Mortgage-Related
Collateral released pursuant to this Paragraph 6(d) as directed by the Borrowers
at the Borrowers' expense, and upon request by the Borrowers, to endorse the
related notes (without recourse).

            (e) Neither the Borrowers nor the Collateral Agent shall release any
item of Collateral from the security interest created hereby or, with respect to
the Borrowers, cause any such release to be reflected on the MERS System except,
with respect to the Collateral Agent, as permitted under this Security
Agreement, and, with respect to the Borrowers, as permitted under the Loan
Documents.

            (f) So long as no Event of Default or Potential Default has occurred
and is continuing, the Administrative Agent and the Collateral Agent shall take
such steps as they may be reasonably directed from time to time by the Borrowers
in writing and not unduly burdensome on the Collateral Agent which are not
inconsistent with the provisions of this Security Agreement and which the
Borrowers deem necessary to enable the Borrowers to perform and comply with
agreements for the sale or other disposition in whole or in part of Collateral,
including, without limitation, any Warehouse-Related MBS.

            (g) As long as no Event of Default or Potential Default has occurred
and is continuing and if, but only if, such action is not inconsistent with the
express provisions of this Security Agreement and the Credit Agreement and would
not result in an Event of Default or Potential Default, the Borrowers may engage
in the residential mortgage banking business and, in connection therewith, may
originate, acquire and service Mortgage Loans; receive payments on Mortgage
Loans from the Obligors thereon and impounds and fees in connection therewith;
retain, use and apply fees and payments made on account of Mortgage Loans by the
Obligors thereunder; disburse from impound accounts; in the ordinary course of
the Borrowers' business, create, use, destroy and transfer records, files and
other items described in Paragraph 4(i) above; sell or otherwise dispose of
Mortgage Loans and Mortgage-Backed Securities not included in the Warehouse
Borrowing Base, with or without servicing rights; pledge Mortgage Loans to the
extent permitted under the Loan Documents; and sell servicing rights.

            (h) Following the occurrence of an Event of Default or Potential
Default, the Collateral Agent shall not, and shall incur no liability to any of
the Borrowers or any other Person for refusing to, release any item of
Mortgage-Related Collateral to any of the Borrowers or any other Person without
the express prior written consent and at the direction of the Administrative
Agent.

      7. Mortgage-Related Collateral Reports. The Collateral Agent shall deliver
to the Borrowers and the Administrative Agent: (1) on or before the fifth day of
each calendar month, a collateral report in form reasonably satisfactory to the
Administrative Agent and the Collateral Agent with respect to the status of the
Warehouse Borrowing Base as of the last Business Day of the immediately
preceding calendar month, and (2) from time to time, such other reports and
information as the Administrative Agent may from time to time reasonably request
and that is in the Collateral Agent's possession. In preparing any such reports
the Collateral Agent shall be entitled to rely, without independent
investigation (other than the review steps described in Paragraph 2 above), on
information supplied to the Collateral Agent by the Borrowers and the
Administrative Agent.

      8. No Reliance. The Collateral Agent shall not be responsible to any of
the Borrowers, the Administrative Agent or any other Secured Party for any
recitals, statements, representations or warranties contained herein, in the
documents delivered to the Collateral Agent under this Security Agreement or in
any other Loan Document; or for the execution, effectiveness, genuineness,
validity, enforceability, collectability, accuracy, completeness, due
authorization or sufficiency of this Security Agreement, the documents delivered
to the Collateral Agent under this Security Agreement or any other Loan Document
or instruments executed and delivered, or which could have been executed or
delivered, in connection with this Security Agreement or the other Loan
Documents (except such as are prepared by the Collateral Agent and, then only to
the extent the Collateral Agent is responsible for verification of the accuracy
and completeness of information contained therein), including, without
limitation, the attachment, creation, effectiveness or perfection of the
security interest granted or purported to be granted hereunder in and to the
Collateral, other than the review required under Paragraph 2 above.

      9. Costs and Expenses. The Collateral Agent shall notify the Borrowers in
writing of all costs and expenses reasonably incurred (including, without
limitation, expenses of outside legal counsel to the Collateral Agent) of the
Collateral Agent arising out of the Collateral Agent's performance of this
Security Agreement, and such reasonable costs and expenses shall be paid
promptly by the Borrowers or, if already paid by the Collateral Agent, the
Borrowers promptly shall reimburse the Collateral Agent therefor.

      10. Availability of Documents. The Administrative Agent and the Lenders
and their agents, accountants, attorneys and auditors will be permitted during
normal business hours at any time and from time to time upon reasonable advance
written notice to the Collateral Agent to examine the files, documents, records
and other papers in the possession or under the control of the Collateral Agent
relating to any or all Collateral and to make copies thereof. Any such
information obtained by the Administrative Agent or Lenders and their agents,
accountants, attorneys and auditors will be maintained by such Persons in
accordance with all applicable laws and regulations governing the financial
privacy of the Obligors. Prior to the occurrence of an Event of Default, any
such activity will be at the cost and expense of the Administrative Agent or
Lender conducting such activity; following the occurrence of an Event of
Default, all reasonably incurred costs and expenses associated with the exercise
by the Administrative Agent or Lenders of their rights under this Paragraph 10
shall be promptly paid by the Borrowers upon demand of the Administrative Agent
or the Lenders made through the Administrative Agent.

      11. Representations and Warranties. The Borrowers hereby represent and
warrant that: (a) one or more of the Borrowers is the sole owner of the
Collateral (or, in the case of after-acquired Collateral, at the time one or
more of the Borrowers acquires rights in the Collateral, will be the sole owner
thereof); (b) except for security interests in favor of the Secured Parties
hereunder and the ownership interest of the Borrowers, no Person has (or, in the
case of after-acquired Collateral, at the time one or more of the Borrowers
acquires rights therein, will have) any right, title, claim or interest (by way
of Lien or otherwise) in, against or to the Collateral; and (c) all information
heretofore, herein or hereafter supplied to the Administrative Agent, the
Collateral Agent, or any Lender by or on behalf of any of the Borrowers with
respect to the Collateral is or will be accurate and complete.

      12. Covenants of the Borrowers. The Borrowers hereby agree: (a) to
procure, execute and deliver from time to time any endorsements, assignments,
financing statements, and other writings reasonably deemed necessary or
appropriate by the Administrative Agent to perfect, maintain, and protect the
security interest granted hereunder and the priority thereof and to deliver
promptly to the Collateral Agent all Required Documents and, if and as requested
by the Administrative Agent, the Additional Required Documents related to the
Mortgage-Related Collateral; (b) not to surrender or lose possession of (other
than to the Collateral Agent or the Administrative Agent), sell, encumber, or
otherwise dispose of or transfer any Collateral or right or interest therein
other than shipment of Mortgage-Related Collateral and Warehouse-Related MBS as
permitted under Paragraph 6 above or other than as permitted by the Loan
Documents; (c) to account fully for and promptly to deliver to the Settlement
Account or the Administrative Agent, in the form received, all Proceeds of the
Collateral received, endorsed to the Administrative Agent as appropriate and
accompanied by such assignments and powers, duly executed, as the Administrative
Agent shall reasonably request, and until so delivered all such Proceeds shall
be held in trust for the Administrative Agent and the Lenders, separately
identified as subject to the security interest granted hereby; (d) at any
reasonable time, upon demand by the Administrative Agent, to exhibit to and
allow inspection by the Administrative Agent (or Persons designated by the
Administrative Agent) of the Collateral and the records concerning the
Collateral; (e) to keep the records concerning the Collateral at the location(s)
set forth in Paragraph 23 below and not to remove the records from such
location(s) without the prior written consent of the Administrative Agent; (f)
at the request of the Administrative Agent, to place on each of its records
pertaining to any Collateral included in the Warehouse Borrowing Base a legend,
in form and content satisfactory to the Administrative Agent, indicating that
such Collateral has been assigned to the Secured Parties; (g) except in the
ordinary course of business in accordance with prudent servicing operations, not
to modify, compromise, extend, rescind or cancel any deed of trust, mortgage,
note or other document, instrument or agreement connected with any
Mortgage-Related Collateral or any document relating thereto or connected
therewith or consent to a postponement of strict compliance on the part of any
party thereto with any term or provision thereof; (h) to keep or cause the
Collateral to be insured against loss, damage, theft, and other risks
customarily covered by insurance, and such other risks as the Administrative
Agent may reasonably request; (i) to do all acts that a prudent investor would
reasonably deem necessary or desirable to maintain, preserve and protect the
Collateral; (j) not knowingly to use or permit any Collateral to be used
unlawfully or in violation of any provision of this Security Agreement or any
applicable statute, regulation or ordinance or any policy of insurance covering
the Collateral; (k) to notify the Administrative Agent before any such change
shall occur of any change in the any of the Borrowers' name, identity or
structure through merger, consolidation or otherwise; (l) to appear in and
defend, at the Borrowers' cost and expense, any action or proceeding which may
affect its title to or the Secured Parties' interest in the Collateral; (m) to
keep accurate and complete records of the Collateral and to provide the
Administrative Agent and the Collateral Agent with such records and such reports
and information relating to the Collateral as the Administrative Agent or the
Collateral Agent may request from time to time; and (n) to comply with all laws,
regulations and ordinances relating to the Collateral.

      13. Collection of Collateral Payments.

            (a) The Borrowers shall, at their sole cost and expense, endeavor to
obtain payment, when due and payable, of all sums due or to become due with
respect to any Collateral ("Collateral Payments" or a "Collateral Payment"),
including, without limitation, the taking of such action with respect thereto as
the Administrative Agent may reasonably request, or, in the absence of such
request, as the Borrowers may reasonably deem advisable; provided, however, that
the Borrowers shall not, without the prior written consent of the Administrative
Agent, grant or agree to any rebate, refund, compromise or extension with
respect to any Collateral Payment or, without notice to the Administrative
Agent, accept any prepayment on account thereof. Upon the request of the
Administrative Agent (which request will only be made following the occurrence
of an Event of Default with respect to Collateral Payments consisting of monthly
payments of principal and interest on Mortgage Loans included in the
Collateral), the Borrowers will notify and direct any party who is or might
become obligated to make any Collateral Payment, to make payment thereof to the
Administrative Agent (or to the Borrowers in care of the Administrative Agent)
at such address as the Administrative Agent may designate. The Borrowers will
reimburse the Administrative Agent promptly upon demand for all reasonable
out-of-pocket costs and expenses, including reasonable attorneys' fees and
litigation expenses, incurred by the Administrative Agent or the Collateral
Agent in seeking to collect any Collateral Payment.

            (b) Upon the request of the Administrative Agent, the Borrowers
will, forthwith upon receipt, transmit and deliver to the Administrative Agent,
in the form received, all cash, checks, drafts and other instruments for the
payment of money (properly endorsed where required so that such items may be
collected by the Administrative Agent) which may be received by any of the
Borrowers at any time as payment on account of any Collateral Payment and if
such request shall be made, until delivery to the Administrative Agent, such
items will be held in trust for the Administrative Agent for the benefit of the
Secured Parties and will not be commingled by any of the Borrowers with any of
its other funds or property. Thereafter, the Administrative Agent is hereby
authorized and empowered to endorse the name of the applicable Borrower on any
check, draft or other instrument for the payment of money received by the
Administrative Agent on account of any Collateral Payment if the Administrative
Agent believes such endorsement is necessary or desirable for purposes of
collection. It is expressly acknowledged and agreed by the Borrowers that
following the occurrence of an Event of Default the Administrative Agent is
entitled to notify any Obligor to make payments directly to the Administrative
Agent or its designee which shall hold all proceeds so received for the benefit
of the Secured Parties.

            (c) The Borrowers hereby agree to indemnify, defend and save
harmless each of the Administrative Agent, the Lenders and the Collateral Agent
and their agents, officers, employees and representatives from and against all
liabilities and reasonable out-of-pocket expenses on account of any adverse
claim asserted against the Administrative Agent or the Collateral Agent relating
to any moneys received by the Administrative Agent or the Collateral Agent on
account of any Collateral Payment (other than as a direct result of the gross
negligence or willful misconduct of the Administrative Agent or the Collateral
Agent, respectively) and such obligation of the Borrowers shall continue in
effect after and notwithstanding the discharge of the Obligations and the
release of the security interest granted in Paragraph 3 above.

      14. Authorized Action by Administrative Agent and Collateral Agent. Each
of the Borrowers hereby irrevocably appoints the Administrative Agent, as its
attorney-in-fact to do (but neither such Person shall be obligated to and shall
incur no liability to any of the Borrowers or any third party for failure so to
do) at any time and from time to time following the occurrence and during the
continuance of an Event of Default, any act which any of the Borrowers is
obligated by this Security Agreement to do, and to exercise such rights and
powers as any of the Borrowers might exercise with respect to the Collateral,
including, without limitation, the right to (a) collect by legal proceedings or
otherwise and endorse, receive and receipt for all dividends, interest,
payments, proceeds and other sums and property now or hereafter payable on or on
account of the Collateral; (b) enter into any extension pertaining to, or
deposit, surrender, accept, hold or apply other property in exchange for, the
Collateral; (c) insure, process and preserve the Collateral; (d) transfer the
Collateral to the Administrative Agent's own or its nominee's name; and (e) make
any compromise or settlement, and take any other action it reasonably deems
advisable with respect to the Collateral. Notwithstanding anything contained
herein, in no event shall the Collateral Agent or the Administrative Agent be
required to make any presentment, demand or protest, or give any notice and
neither the Collateral Agent nor the Administrative Agent need take any action
to preserve any rights against any prior party or any other person in connection
with the Obligations or with respect to the Collateral.

      15. The Collateral Agent.

            (a) The Collateral Agent may execute any of its duties under this
Security Agreement by or through agents or attorneys and shall be entitled to
rely on the advice of counsel concerning such duties. The Collateral Agent shall
not be responsible for the negligence of any agents or attorneys-in-fact
selected by it with due care.

            (b) Neither the Collateral Agent nor any of its officers, directors,
employees, agents, counsel, attorneys-in-fact or Affiliates shall be (1) liable
to any Lender, the Administrative Agent, or any of the Borrowers for any action
taken or omitted to be taken by it or such Person under or in connection with
the Loan Documents (except for its or such Person's own gross negligence or
willful misconduct), or (2) responsible in any manner to any of the Lenders, the
Administrative Agent or any of the Borrowers for: (i) any recitals, statements,
representations or warranties made by any of the Borrowers or any officer
thereof contained in the Loan Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the Collateral
Agent under or in connection with, the Loan Documents (except such as are
prepared by the Collateral Agent and, then, only to the extent the Collateral
Agent is responsible for verification of the accuracy and completeness of the
information contained therein or the facts upon which such information is based
as expressly provided herein, it being understood that the Collateral Agent is
in no event responsible for verifying the accuracy and completeness of
information given to it by another entity (including by the Administrative Agent
and the Borrowers) which may be used in any report, statement, certificate or
other document prepared by the Collateral Agent) or for the value, validity,
effectiveness, genuineness, enforceability, collectability, sufficiency of the
Loan Documents or the Collateral, conformity to its description on Schedule VI
or Schedule VII to the Credit Agreement, or for any failure of any of the
Borrowers to perform its obligations thereunder or (ii) any action taken or
omitted to be taken by the Collateral Agent with respect to the Collateral in
accordance with written instructions given as permitted under the Loan
Documents, or (iii) assuring compliance of the Loan Documents and the
transactions contemplated by the Loan Documents with any law or regulation
binding on such Person, it being expressly acknowledged, agreed and understood
that each such Person has obtained independent advice satisfactory to it in all
such respects. The Collateral Agent shall be under no obligation to the
Administrative Agent to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, the Loan
Documents (other than agreements required to be complied with by the Collateral
Agent hereunder and subject to the standards of care set forth herein with
respect thereto) or to inspect the properties, books or records of any of the
Borrowers. Notwithstanding any of the foregoing, the Collateral Agent shall
complete the required review steps as specifically set forth on Exhibit 3.

            (c) The Collateral Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certification, electronic medium, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any of the Borrowers),
independent accountants and other experts selected by the Collateral Agent. The
Collateral Agent may deem and treat the payee of any note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Collateral Agent. The Collateral Agent
shall be fully justified in failing or refusing to take any action under this
Security Agreement unless it shall first receive such advice or concurrence of
the Administrative Agent or the Lenders or it shall first be indemnified to its
satisfaction against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any action (other than liability
and expense arising out of the Collateral Agent's gross negligence or willful
misconduct). The Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Security Agreement in
accordance with a request of the Administrative Agent or, solely with respect to
the Borrowers, any request that a Borrower is permitted to give hereunder absent
gross negligence or willful misconduct on the part of the Collateral Agent in
the method in which it acts or refrains from acting in accordance therewith, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon the Administrative Agent.

            (d) The Collateral Agent shall be deemed to have no knowledge or
notice of the occurrence of any Event of Default or Potential Default under the
Loan Documents unless a Responsible Officer of the Collateral Agent has received
written notice from the Administrative Agent or the Borrowers referring to the
Loan Documents, describing such Event of Default or Potential Default. In the
event that the Collateral Agent receives such a notice from any of the
Borrowers, the Collateral Agent shall give notice thereof to the Administrative
Agent. The Collateral Agent shall take such action with respect to such Event of
Default or Potential Default as shall be reasonably directed by the
Administrative Agent; provided, however, that unless and until the Collateral
Agent shall have received such directions, the Collateral Agent shall refrain
from taking action.

            (e) The Borrowers agree to indemnify, defend and hold harmless the
Collateral Agent in its capacity as such and its agents, employees, officers,
and directors from and against and reimburse any and all claims, obligations,
penalties, actions, suits, judgments, reasonable out-of-pocket costs and
disbursements, losses, liabilities and damages (including, without limitation,
reasonable attorneys' fees and expenses) of any kind whatsoever which may at any
time be imposed on, assessed against or incurred by the Collateral Agent in any
way resulting from or arising from this Security Agreement or the transactions
contemplated herein, or any action taken or omitted to be taken by the
Administrative Agent or the Borrowers relating to or arising out of the Loan
Documents or any documents contemplated by or referred to therein or the
transactions contemplated thereby; provided, however, that nothing contained in
this Paragraph 15(e) shall relieve the indemnified party from liability for its
own gross negligence or willful misconduct. The Lenders and the Administrative
Agent agree to indemnify and hold harmless the Collateral Agent in its capacity
as such hereunder if the Collateral Agent is not reimbursed by the Borrowers
pursuant to the terms hereof and without limiting the obligation of the
Borrowers to do so. The indemnification obligations of the Borrowers, the
Lenders and the Administrative Agent under this Paragraph 15(e) shall survive
termination of the Loan Documents, the earlier removal or resignation of the
Collateral Agent, and payment in full of the Obligations.

            (f) The Collateral Agent and its Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with any of
the Borrowers as though the Collateral Agent were not the Collateral Agent
hereunder.

            (g) The Collateral Agent may resign as such upon 60 days' prior
written notice to the other parties hereto. The Administrative Agent may, with
ten days prior notice for cause, and otherwise upon 60 days' prior written
notice to the Collateral Agent, remove and discharge the Collateral Agent, or
any successor Collateral Agent thereafter appointed, from the performance of its
duties under this Security Agreement by written notice to the Collateral Agent
or the successor Collateral Agent, with copies thereof to the Borrowers. If the
Collateral Agent shall resign or is removed, then, on or before the effective
date of such resignation or removal, the Administrative Agent shall appoint a
successor agent, which successor agent shall, so long as no Event of Default or
Potential Default exists at the effective date of such appointment, be
reasonably acceptable to the Borrowers. If the Administrative Agent does not
appoint a successor agent within 60 days of the Collateral Agent's resignation
or removal, the Collateral Agent may appoint, or petition a court of competent
jurisdiction to appoint a successor agent. Any successor agent shall, so long as
no Event of Default or Potential Default exists at the effective date of such
appointment be reasonably acceptable to the Borrowers, whereupon such successor
agent shall succeed to the rights, powers and duties of the Collateral Agent,
and the term "Collateral Agent" shall mean such successor agent effective upon
its appointment, and the former Collateral Agent's rights, powers and duties
shall be terminated without any other or further act or deed on the part of such
former Collateral Agent or any of the parties to this Security Agreement or any
of the other Loan Documents or successors thereto. Any replacement "Collateral
Agent" hereunder shall be a MERS Member and shall be capable of assuming the
duties and rights of the Collateral Agent with respect to the MERS System. Upon
such appointment, the resigned or removed Collateral Agent will deliver all
Collateral to the successor Collateral Agent at the expense of the Borrowers and
take all other steps reasonably required by the Administrative Agent and not
unduly burdensome on the Collateral Agent to vest the successor Collateral Agent
with all rights, titles, and powers given to the Collateral Agent hereunder. The
Borrowers shall, promptly upon removal of the Collateral Agent, pay to the
Collateral Agent any accrued and unpaid fees and expenses which may be owing to
it. After the Collateral Agent's resignation hereunder, the provisions of this
Paragraph 15 shall continue for its benefit as to any actions taken or omitted
to be taken by it while it was Collateral Agent under the Loan Documents.

            (h) The Collateral Agent shall:

                  (i) At all times be a MERS patron Member;

                  (ii) Maintain on its data base the information, which shall be
      updated on a daily basis with respect to any newly delivered Collateral,
      which identifies and segregates the MERS Loans in which the Administrative
      Agent has a security interest from any other MERS Loans in which the
      Collateral Agent may have an interest separate and apart from that of the
      Secured Parties; and

                  (iii) In order to comply with its duties under the USA Patriot
      Act, obtain and verify certain information and documentation from the
      other parties hereto, including but not limited to such parties' name,
      address and other identifying information.

      16. Default and Remedies.

            (a) Upon the occurrence of an Event of Default and following the
acceleration of the Obligations, the Administrative Agent shall at the request
and direction of the Majority Lenders (which request and direction must be in
writing if so requested by the Administrative Agent), without notice to or
demand upon any of the Borrowers: (i) foreclose or otherwise enforce the
security interest for the benefit of the Secured Parties in the Collateral in
any manner permitted by law or provided for hereunder; (ii) sell or otherwise
dispose of the Collateral or any part thereof at one or more public or private
sales, whether or not such Collateral is present at the place of sale, for cash
or credit or future delivery and without assumption of any credit risk, on such
terms and in such manner as the Administrative Agent may determine; (iii)
require the Borrowers to assemble the Collateral and/or books and records
relating thereto and make such available to the Collateral Agent at a place to
be designated by the Collateral Agent; (iv) enter onto property where any
Collateral or books and records relating thereto are located and take possession
thereof with or without judicial process; and (v) prior to the disposition of
the Collateral, prepare it for disposition in any manner and to the extent the
Administrative Agent deems appropriate. Upon any sale or other disposition
pursuant to this Security Agreement, the Collateral Agent and the Administrative
Agent shall have the right to deliver, and the Administrative Agent shall have
the right to assign and transfer to the purchaser thereof, the Collateral or
portion thereof so sold or disposed of and all proceeds thereof shall be
promptly transmitted to the Administrative Agent for allocation to the Secured
Parties as provided in the Credit Agreement. Each purchaser at any such sale or
other disposition shall hold the Collateral free from any claim or right of
whatever kind, including any equity or right of redemption of any of the
Borrowers, and the Borrowers specifically waive (to the extent permitted by law)
all rights of redemption, stay or appraisal which it has or may have under any
rule of law or statute now existing or hereafter adopted.

            (b) Upon the occurrence of an Event of Default, the Administrative
Agent may also exercise its rights and remedies under the Electronic Tracking
Agreement.

      17. Cumulative Rights. The rights, powers and remedies of the Collateral
Agent, the Administrative Agent and the other Secured Parties under this
Security Agreement shall be in addition to all rights, powers and remedies given
to the Collateral Agent, the Administrative Agent and the other Secured Parties
by virtue of any statute or rule of law, the other Loan Documents or any other
agreement, all of which rights, powers and remedies shall be cumulative and may
be exercised successively or concurrently without impairing the Administrative
Agent's and the other Secured Parties' security interest in the Collateral.

      18. Binding Upon Successors. All rights of the Collateral Agent, the
Administrative Agent and the other Secured Parties under this Security Agreement
shall inure to the benefit of the Collateral Agent, the Administrative Agent and
the other Secured Parties and their successors and assigns, and all obligations
of the each of the Borrowers are joint and several and shall bind its successors
and assigns.

      19. Entire Agreement; Severability. This Security Agreement contains the
entire security agreement and custodial agreement with respect to the Collateral
among the Administrative Agent, the Collateral Agent and the Borrowers. All
waivers by the Borrowers provided for in this Security Agreement have been
specifically negotiated by the parties with full cognizance and understanding of
their rights. If any of the provisions of this Security Agreement shall be held
invalid or unenforceable, this Security Agreement shall be construed as if not
containing such provisions, and the rights and obligations of the parties hereto
shall be construed and enforced accordingly.

      20. Fees and Expenses of the Collateral Agent. It is understood that the
Collateral Agent will charge such fees for its services, and shall be entitled
to reimbursement for expenses, under this Security Agreement as are set forth on
the separate fee letter submitted to the Borrowers by the Collateral Agent and
approved by the Borrowers. The Borrowers shall pay such fees and reimburse such
expenses as set forth in the separate fee letter between the Borrowers and the
Collateral Agent.

      21. Insurance of the Collateral Agent. The Collateral Agent shall, at its
own expense, maintain at all times during the term of this Security Agreement
and keep in full force and effect insurance in amounts, and with standard
coverage and subject to deductibles, as shall be customary for similar insurance
typically maintained by banks that act as custodian in similar transactions.
Upon request from time to time, the Collateral Agent shall provide certificates
of such coverage to the Borrowers and the Administrative Agent.

      22. Choice of Law. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of New York and, where
applicable and except as otherwise defined herein, terms used herein shall have
the meanings given them in the New York Uniform Commercial Code.

      23. Place of Business; Records. Each of the Borrowers represents and
warrants that its chief place of business is at the address set forth on
Schedule II to the Credit Agreement, and that its books and records concerning
the Collateral are kept at its chief place of business.

      24. Notice. Any written notice, consent or other communication provided
for in this Security Agreement shall be delivered or sent as provided in the
Credit Agreement, except that the address of Collateral Agent shall be as set
forth beneath its signature below.

      25. Execution in Counterparts. This Security Agreement may be executed in
counterparts each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.

      26. Financing Statements Each of the Borrowers hereby acknowledges and
agrees that the Administrative Agent and the Collateral Agent, in connection
with the filing of any UCC financing statements necessary to perfect or maintain
the perfection of the Lien in the Collateral in favor of the Collateral Agent
hereunder, may utilize a general description of the Collateral, such as "all now
owned and hereafter acquired assets of the Borrower."

                     [Remainder of Page Intentionally Blank;
                           Signature Pages to Follow.]

<PAGE>

      EXECUTED the day and year first above written.

                                    AMERICAN HOME MORTGAGE SERVICING, INC.

                                    By:  /s/ Stephen A. Hozie
                                         ---------------------------------
                                         Name:   Stephen A. Hozie
                                         Title:  Executive Vice President and
                                                 Chief Financial Officer

                                    AMERICAN HOME MORTGAGE CORP.

                                    By:  /s/ Stephen A. Hozie
                                         ---------------------------------
                                         Name:   Stephen A. Hozie
                                         Title:  Executive Vice President and
                                                 Chief Financial Officer

                                    AMERICAN HOME MORTGAGE ACCEPTANCE, INC.

                                    By:  /s/ Stephen A. Hozie
                                         ---------------------------------
                                         Name:   Stephen A. Hozie
                                         Title:  Executive Vice President and
                                                 Chief Financial Officer

                                    BANK OF AMERICA, N.A., as
                                    Administrative Agent

                                    By:  /s/ Elizabeth Kurilecz
                                         ---------------------------------
                                         Name:   Elizabeth Kurilecz
                                         Title:  Managing Director

                                    DEUTSCHE BANK NATIONAL TRUST
                                    COMPANY, as Collateral Agent

                                    By: /s/ Christopher Corcoran
                                         ---------------------------------
                                         Name:   Christopher Corcoran
                                         Title:  Assistant Vice President

                                    By: /s/ Aimee Kemmeter
                                         ---------------------------------
                                         Name:   Aimee Kemmeter
                                         Title:  Assistant Vice PresidentEXHIBIT 10.3

                                   GUARANTY

FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in
consideration of any credit and/or financial accommodation heretofore or
hereafter from time to time made or granted to AMERICAN HOME MORTGAGE SERVICING,
INC., a Maryland corporation ("AHMS"), AMERICAN HOME MORTGAGE CORP., a New York
corporation ("AHMC"), AMERICAN HOME ACCEPTANCE, INC., a Maryland corporation
("AHMA") (AHMS, AHMC and AHMA each a "Borrower" and, collectively, the
"Borrowers"), by certain Lenders from time to time party to that certain Credit
Agreement dated as of even date herewith, by and among the Borrowers, such
Lenders and Bank of America, N.A., acting in its capacity as administrative
agent (in such capacity, the "Administrative Agent") for such Lenders (as
amended, extended and replaced from time to time, the "Credit Agreement," and
with capitalized terms not otherwise defined herein used with the meanings given
such terms in the Credit Agreement, the undersigned Guarantors (each a
"Guarantor" and, collectively, the "Guarantors", jointly and severally hereby
agree as follows:

1. Guaranty. The Guarantors hereby absolutely and unconditionally guarantee to
the Lenders and the Administrative Agent (collectively, the "Beneficiaries"), as
a guarantee of payment and not merely as a guarantee of collection, prompt
payment when due, whether at stated maturity, upon acceleration or otherwise due
pursuant to the Credit Agreement, and at all times thereafter, of the
Obligations under the Loan Documents (including all renewals, extensions and
modifications thereof and all out-of-pocket expenses, including reasonable
attorneys' fees and expenses incurred by the Beneficiaries in connection with
the collection or enforcement thereof) (collectively, the "Guaranteed
Obligations"). The Beneficiaries' books and records showing the amount of the
Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, and shall be binding upon the Guarantors and conclusive for the
purpose of establishing the amount of the Guaranteed Obligations. This Guaranty
shall not be affected by the genuineness, validity, regularity or enforceability
of the Obligations or the Guaranteed Obligations or any instrument or agreement
evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor, or by any fact
or circumstance relating to the Guaranteed Obligations which might otherwise
constitute a defense to the obligations of the Guarantors under this Guaranty.
The obligations of any Guarantor hereunder shall be limited to an aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance under Section 548 of the Bankruptcy Code (Title
11, United States Code) or any comparable provisions of any applicable state
law.

2. No Setoff or Deductions; Taxes. The Guarantors represent and warrant that
they are incorporated and residents in the United States of America. All
payments by the Guarantors hereunder shall be paid in full, without setoff or
counterclaim or any deduction or withholding whatsoever, including, without
limitation, for any and all present and future taxes. If the Guarantors must
make a payment under this Guaranty, the Guarantors represent and warrant that
they will make the payment from one of its U.S. resident offices to the
Beneficiaries so that no withholding tax is imposed on the payment. If
notwithstanding the foregoing, the Guarantors make a payment under this Guaranty
to which withholding tax applies, or any taxes (other than taxes on net income
(a) imposed by the country or any subdivision of the country in which any of the
Beneficiaries' principal office or actual lending office is located and (b)
measured by the United States taxable income the applicable Beneficiary would
have received if all payments under or in respect of this Guaranty were exempt
from taxes levied by the Guarantors' country) are at any time imposed on any
payments under or in respect of this Guaranty including, but not limited to,
payments made pursuant to this Paragraph 2, the Guarantors shall pay all such
taxes to the relevant authority in accordance with applicable law such that the
Beneficiaries receive the sum they would have received had no such deduction or
withholding been made and shall also pay to the applicable Beneficiaries, on
demand, all additional amounts which the applicable Beneficiaries specify as
necessary to preserve the after-tax yield the applicable Beneficiaries would
have received if such taxes had not been imposed. The Guarantors shall promptly
provide the applicable Beneficiaries with an original receipt or certified copy
issued by the relevant authority evidencing the payment of any such amount
required to be deducted or withheld.

3. No Termination. This Guaranty is a continuing and irrevocable guaranty of all
Guaranteed Obligations now or hereafter existing and shall remain in full force
and effect until all Guaranteed Obligations and any other amounts payable under
this Guaranty are indefeasibly paid and performed in full and any commitments of
the Lenders or facilities provided by the Lenders with respect to the Guaranteed
Obligations are terminated. All payments under this Guaranty shall be made to
the Administrative Agent for the benefit of the Beneficiaries in U.S. dollars.

4. Waiver of Notices. The Guarantors waive notice of the acceptance of this
Guaranty and of the extension or continuation of the Guaranteed Obligations or
any part thereof. The Guarantors further waive presentment, protest, notice,
dishonor or default, demand for payment, and any other notices to which the
Guarantors might otherwise be entitled.

5. Subrogation. The Guarantors shall exercise no right of subrogation,
contribution or similar rights with respect to any payments it makes under this
Guaranty until all of the Guaranteed Obligations and any amounts payable under
this Guaranty are indefeasibly paid and performed in full and any commitments of
the Lenders or facilities provided by the Lenders with respect to the Guaranteed
Obligations are terminated. If any amounts are paid to the Guarantors in
violation of the foregoing limitation, then such amounts shall be held in trust
for the benefit of the Beneficiaries and shall forthwith be paid to the
Administrative Agent to reduce the amount of the Guaranteed Obligations, whether
matured or unmatured.

6. Waiver of Suretyship Defenses. The Guarantors agree that the Beneficiaries
may, at any time and from time to time, and without notice to the Guarantors
make any agreement with any or all of the Borrowers or with any other person or
entity liable on any of the Guaranteed Obligations or providing collateral as
security for the Guaranteed Obligations, for the extension, renewal, payment,
compromise, discharge or release of the Guaranteed Obligations or any collateral
(in whole or in part), or for any modification or amendment of the terms thereof
or of any instrument or agreement evidencing the Guaranteed Obligations or the
provision of collateral, all without in any way impairing, releasing,
discharging, or otherwise affecting the obligations of the Guarantors under this
Guaranty. Each Guarantor waives any defense arising by reason of any disability
or other defense of any other guarantor, and waives the benefit of any statute
of limitations affecting the liability of the Guarantors hereunder. Further, to
the maximum extent permitted by applicable law, the Guarantors consent to the
taking of, or failure to take, any action which might in any manner or to any
extent vary the risks of the Guarantors under this Guaranty or which, but for
this provision, might operate as a discharge of the Guarantors.

7. Exhaustion of Other Remedies Not Required. The obligations of the Guarantors
hereunder are those of primary obligors, and not merely as sureties, and are
independent of the Guaranteed Obligations. The Guarantors waive diligence by the
Beneficiaries and action on delinquency in respect of the Guaranteed Obligations
or any part thereof, including, without limitation any provisions of law
requiring the Beneficiaries to exhaust any right or remedy or to take any action
against the Borrowers, any other guarantor or any other Person, or Property
before enforcing this Guaranty against the Guarantors.

8. Reinstatement. Notwithstanding anything in this Guaranty to the contrary,
this Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any portion of the Guaranteed Obligations is
revoked, terminated, rescinded or reduced or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of any Borrower or
any other Person, as if such payment had not been made and whether or not the
Lenders are in possession of or has released this Guaranty and regardless of any
prior revocation, rescission, termination or reduction.

9. Subordination. The Guarantors hereby subordinate the payment of all
obligations and indebtedness of the Borrowers owing to the Guarantors, whether
now existing or hereafter arising, including but not limited to any obligation
of the Borrowers to the Guarantors as subrogees of the Lenders or resulting from
the Guarantors' performance under this Guaranty, to the indefeasible payment in
full of all Guaranteed Obligations. If the Administrative Agent so requests, any
such obligation or indebtedness of the Borrowers to the Guarantors shall be
enforced and performance received by the Guarantors as trustees for the
Beneficiaries and the proceeds thereof shall be paid over to the Administrative
Agent on account of the Guaranteed Obligations, but without reducing or
affecting in any manner the liability of the Guarantors under this Guaranty.

10. Information. The Guarantors agree to furnish promptly to the Administrative
Agent and the Lenders any and all financial or other information regarding the
Guarantors or their property as the Administrative Agent of any of the Lenders
may reasonably request in writing.

11. Stay of Acceleration. In the event that acceleration of the time for payment
of any of the Guaranteed Obligations is stayed, upon the insolvency, bankruptcy
or reorganization of the Borrowers or any other Person, all such amounts shall
nonetheless be payable by the Guarantors immediately upon demand by the Lenders.

12. Expenses. The Guarantors shall pay on demand all out-of-pocket expenses
(including reasonable attorneys' fees and expenses) in any way relating to the
enforcement or protection of the Beneficiaries' rights under this Guaranty,
including any incurred in the preservation, protection or enforcement of any
rights of the Lenders in any case commenced by or against the Guarantors under
the Bankruptcy Code (Title 11, United States Code) or any similar or successor
statute. The obligations of the Guarantors under the preceding sentence shall
survive termination of this Guaranty.

13. Amendments. No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by the
Administrative Agent, on behalf of the Beneficiaries, and the Guarantors.

14. No Waiver; Enforceability. No failure by any of the Beneficiaries to
exercise, and no delay in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy or power hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity. The
unenforceability or invalidity of any provision of this Guaranty shall not
affect the enforceability or validity of any other provision herein.

15. Assignment; Governing Laws; Jurisdiction. This Guaranty shall (a) bind the
Guarantors and their successors and assigns, provided that the Guarantors may
not assign their rights or obligations under this Guaranty without the prior
written consent of the Beneficiaries (and any attempted assignment without such
consent shall be void), (b) inure to the benefit of the Beneficiaries and their
successors and assigns and the Lenders may, without notice to the Guarantors and
without affecting the Guarantors' obligations hereunder, assign or sell
participations in the Guaranteed Obligations and this Guaranty, in whole or in
part, and (c) be governed by the internal laws of the State of New York. The
Guarantor hereby irrevocably (i) submits to the non-exclusive jurisdiction of
the courts of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York and any appellate
court from any thereof in any action or proceeding arising out of or relating to
this Guaranty, and (ii) waives to the fullest extent permitted by law any
defense asserting an inconvenient forum in connection therewith. Service of
process by the Lenders in connection with such action or proceeding shall be
binding on the Guarantors if sent to the Guarantors by registered or certified
mail at its address specified below. The Guarantors agree that the Lenders may
disclose to any prospective purchaser and any purchaser of all or part of the
Guaranteed Obligations any and all information in the Lenders' possession
concerning the Guarantors, this Guaranty and any security for this Guaranty.

16. Condition of the Borrowers. The Guarantors acknowledge and agree that they
have the sole responsibility for, and has adequate means of, obtaining from the
Borrowers such information concerning the financial condition, business and
operations of the Borrowers as the Guarantors require, and that none of the
Beneficiaries have a duty, and the Guarantors are not relying on any of the
Beneficiaries at any time, to disclose to the Guarantors any information
relating to the business, operations or financial condition of the Borrowers.

17. Setoff. If and to the extent any payment is not made when due hereunder, any
of the Beneficiaries may setoff and charge from time to time any amount so due
against any or all of the Guarantors' accounts or deposits with such
Beneficiary.

18. Other Guarantees. Unless otherwise agreed by the Administrative Agent, the
Lenders, and the Guarantors in writing, this Guaranty is not intended to
supersede or otherwise affect any other guaranty now or hereafter given by the
Guarantors for the benefit of the Lenders or any term or provision thereof.

19. Representations and Warranties. Each Guarantor represents and warrants that,
by virtue of its relationship with the Borrowers, the execution, delivery and
performance of this Guaranty is for the direct benefit of the Guarantors and
they will receive adequate consideration for this Guaranty.

20. ACKNOWLEDGMENT OF CREDIT AGREEMENT. Guarantors acknowledge that certain (a)
representations and warranties in the Credit Agreement are applicable to
Guarantors and confirm that each such representation and warranty is true and
correct, and (b) covenants and other provisions in the Credit Agreement are
applicable to Guarantors or are imposed upon Guarantors and agree to promptly
and properly comply with or be bound by each of them.

21. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE
LAW, THE GUARANTORS AND THE BENEFICIARIES EACH WAIVE TRIAL BY JURY WITH RESPECT
TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF THIS GUARANTY.

Executed this 30th day of August, 2004.

                                    AMERICAN HOME MORTGAGE
                                    INVESTMENT CORP.

                                    By:  /s/ Stephen A. Hozie
                                         ---------------------------------------
                                         Name:   Stephen A. Hozie
                                         Title:  Executive Vice President

                                    AMERICAN HOME MORTGAGE
                                    HOLDINGS, INC.

                                    By:  /s/ Stephen A. Hozie
                                         ---------------------------------------
                                         Name:   Stephen A. Hozie
                                         Title:  Executive Vice President

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