Document:

GENERATION CAPITAL ASSOCIATES
                              1085 Riverside Trace
                           Atlanta, Georgia 30328-3642
                     TEL: (404) 303-8450 FAX: (404) 255-2218

VIA FACSIMILE
(561) 526-3309

June 1, 2000

Mr. Mark Schaftlein
Chairman & C.E.O.
Westmark Group Holdings, Inc.
8000 North Federal Highway
Boca Raton, FL  33487

Dear Mr. Schaftlein:

         Generation Capital Associates (GCA) hereby agrees to purchase and
Westmark Group Holdings, Inc. (WGHI) hereby agrees to issue and sell 3,500,000
shares of WGHI Series I Convertible Preferred Stock (Series I Preferred Stock)
for the sum of $2,000,000 upon the following terms and conditions:

1.       The closing of the transaction contemplated between WGHI and First NLC
         Financial Services, LLC (1st NLC) as set forth in the letter of intent
         dated May 15, 2000, takes place on or before July 31, 2000 (1st NLC
         Closing).

2.       WGHI wholly-owned subsidiary Westmark Mortgage USA is authorized to
         originate and purchase mortgage loans.

3.       Upon the consummation of the 1st NLC Closing and the purchase of the
         Series 1 Preferred Stock (GCA Closing), WGHI will have a tangible net
         worth of at least $2,200,000.

4.       At or before the GCA Closing WGHI must provide GCA with a budget of all
         corporate overhead and general and administrative items for the
         following 24 months which is acceptable to GCA.

5.       The 3,500,000 shares of Series I Preferred Stock shall be convertible
         into 3,500,000 shares of WGHI common stock. However, if immediately
         after the conversion of the last Series I Preferred Stock GCA's
         interest in WGHI is less than forty-eight percent of WGHI's issued and
         outstanding common stock, on a fully-diluted basis, then the final
         conversion shall be for the number of shares of WGHI common stock
         required for GCA to have such an interest.

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6.       The Holders of the Series I Preferred Stock shall be entitled to vote
         their shares of Series I Preferred Stock on the same basis as holders
         of common stock (one share equals one vote).

7.       The WGHI common stock shall be listed for trading on the NASDAQ Small
         Cap Stock Market at all times between today and the GCA Closing and the
         purchase and sale of the Series I Preferred Stock shall not require the
         filing by WGHI of a New Listing Application.

8.       The issuance and sale of the Series I Preferred Stock is subject to
         approval of the WGHI shareholders as required by the rules of the
         NASDAQ Small Cap Stock Market.

         GCA confirms that it has deposited the sum of $2,000,000.00 with David
A. Rapaport (General Counsel of GCA), as escrow agent (Escrow Agent), to be held
by the Escrow Agent until the earlier of: (a) the 1st NLC Closing; (b) August 1,
2000; or (c) delisting of the WGHI common stock from trading on the NASDAQ Small
Cap Stock Market. In the event the 1st NLC Closing has not been consummated on
or before July 31, 2000 or the WGHI common stock is delisted from trading on the
NASDAQ Small Cap Stock Market prior to July 31, 2000, GCA shall have the right
to require the Escrow Agent to return the $2,000,000 to GCA or to proceed with
the GCA Closing eliminating compliance with Item 8 above. In the event the 1st
NLC Closing is held on or before July 31, 2000, the Escrow Agent shall deliver
the $2,000,000 to WGHI in return for the 3,500,000 shares of Series I Preferred
Stock immediately upon WGHI's compliance with the terms and conditions of Item 1
through Item 8 above.

Sincerely,

/s/ Frank E. Hart

Frank E. Hart, General Partner

Generation Capital Associates

/s/ David A. Rapaport
---------------------
David A. Rapaport, Escrow Agent

AGREED AND ACCEPTED:
Westmark Group Holdings, Inc.

By: /s/ Mark Schaftlein
    -------------------
    Mark  Schaftlein
    Chairman & C.E.O.LOAN PURCHASE AGREEMENT

         THIS LOAN PURCHASE AGREEMENT (the "Agreement") is entered into and is
effective as of this 16th day of March, 2000 by and between Westmark Mortgage
Corporation (the "Seller"), with its principal place of business at the address
shown on Exhibit "A" attached hereto and Bayview Financial Trading Group, L.P.,
a Delaware limited partnership (the "Purchaser") with its principal place of
business at 2665 South Bayshore Drive, Suite 301, Miami, Florida, 33133.

                              W I T N E S S E T H:

         WHEREAS, Seller desires to sell and Purchaser desires to purchase, on a
servicing released basis, certain residential loans including both mortgage and
cooperative loans detailed on the Loan Schedule attached hereto.

         NOW, THEREFORE, in consideration of the mutual covenants made herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

         Section 1.1. Definitions. As used in this Agreement, the following
terms shall have the meanings specified below.

         "Affiliate" with respect to any Person shall mean any other Person
directly or indirectly controlling, controlled by or under common control with
such Person.

         "Applicable Requirements" shall mean and include with respect to the
Loans: (a) all contractual obligations of Seller, and the Originator and any
Prior Servicers including without limitation those contractual obligations
contained in this Agreement, in any agreement with any Insurer or in the Loan
Documents for which Seller, the Originator and any Prior Servicer was or is
responsible; (b) all applicable federal, state and local legal and regulatory
requirements (including statutes, rules, regulations and ordinances) binding
upon Seller, the Originator and any Prior Servicer; (c) all other applicable
requirements and guidelines of each governmental agency, board, commission,
instrumentality and other governmental body or office having jurisdiction,
including without limitation those of any Insurer; (d) all other applicable
judicial and administrative judgments, orders, stipulations, awards, writs and
injunctions, and (e) the reasonable and customary servicing practices of prudent
lending institutions which service loans of the same type as the Loans in the
respective jurisdictions in which the related Properties are located.

         "Assignment" means, with respect to a Mortgage Loan, an individual
assignment of the Mortgage Instrument, notice of transfer or equivalent
instrument in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to give record notice of the
sale of the Mortgage to the, Purchaser, all in accordance with Applicable

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Requirements; and, with respect to a Cooperative Loan, a document sufficient
under the laws of the jurisdiction wherein the related Cooperative Loan Property
is located to give record notice of the sale of the Cooperative Loan Instrument
to the Purchaser, all in accordance with Applicable Requirements.

         "Borrower" means any obligor under a Note, Mortgage or Security
Instrument.

         "Buydown" means the waiver by the Purchaser of a portion of the
indebtedness of a Mortgage Loan, which causes the VA to pay off the remaining
amount of the indebtedness owed and acquire the Mortgaged Property.

         "Claims" means any claim, demand or litigation.

         "Co-op Lease" means, with respect to a Cooperative Loan, the
proprietary lease with respect to a dwelling unit occupied by the Borrower,
which Co-op Lease is related to certain stock issued to the Borrower by the
cooperative housing corporation.

         "Cooperative Loans" means fixed and/or adjustable rate, cooperative
loans detailed on Exhibit "B" attached hereto.

         "Cooperative Loan Documents" means, with respect to each Cooperative
Loan, the original Security Instrument, the Cooperative Note bearing all
intervening endorsements, endorsed, at the direction of the Purchaser, in blank
and signed in the name of the Seller by a duly authorized individual, and the
original Assignment.

         "Cooperative Loan File" means the file containing the Cooperative Loan
Documents with respect to a Cooperative Loan, as well as the credit and closing
packages, custodial documents, servicing documents, security agreements, pledged
documents, loan modification and forbearance agreements, assumption agreements,
and all other files, records and documents necessary to: (a) establish the
eligibility of the Cooperative Loans for purchase by Purchaser, and (b) service
the Cooperative Loans in accordance with Applicable Requirements.

         "Cooperative Loan Payment" shall mean, with respect to a Cooperative
Loan, the amount of each monthly installment on such Cooperative Loan, whether
principal and interest or interest alone or escrow or other payment, required or
permitted to be paid by the Borrower in accordance with the terms of the
Cooperative Note.

         "Cooperative Loan Property" means the Co-op Lease for a particular
apartment at premises described in Exhibit "A" as the Co-op Premises (the "Co-op
Premises") and the shares of that entity shown on Exhibit "A" as the Co-op
Housing Corporation, the cooperative housing corporation which is the owner of
such premises, allocated thereto, which Co-op Lease and shares are pledged as
security in connection with a Cooperative Loan.

         "Cooperative Note" means the Note or other evidence of indebtedness
executed by a Borrower and secured by a Security Instrument evidencing the
indebtedness of the Borrower under a Cooperative Loan.

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<PAGE>

         "Custodian" means that entity shown on Exhibit "A" as the Custodian.

         "Cut-off Date" means the date(s) shown on the Loan Schedule as the
Cut-off Date.

         "Environmental Claim" means any investigative, enforcement, cleanup,
removal, containment, remedial or other private or governmental or regulatory
action at any time threatened, instituted or completed pursuant to any
applicable Environmental Requirement, against any Borrower or against or with
respect to the Mortgaged Property or any condition, use or activity on the
Mortgaged Property, and any claim at any time threatened or made by any person
against any Borrower or with respect to the Property or any condition, use or
activity on the Mortgaged Property, relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from or in any way arising in
connection with any Hazardous Material or any Environmental Requirement.

         "Environmental Law" means any federal, state or local law, statute,
ordinance, code, rule, regulation, license, authorization, decision, order,
injunction, decree, or rule of common law, and any judicial or agency
interpretation of any of the foregoing, which pertains to health, safety, any
Hazardous Material, or the environment (including but not limited to ground or
air or water or noise pollution or contamination, and underground or above
ground tanks) and shall include without limitation, the Solid Waste Disposal
Act, 42 U.S.C. ss.6901 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.ss.9601 et seq. ("CERCLA"), as
amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA");
the Hazardous Materials Transportation Act, 49 U.S.C.ss. 1801 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C.ss.1251 et seq.; the Clean Air
Act, 42 U.S.C.ss.7401 et seq.; the Toxic Substances Control Act, 15 U.S.C.ss.
2601 et seq.; the Safe Drinking Water Act, 42 U.S.C.ss. 300f et seq.; and any
other local, state or federal environmental statutes, and all rules,
regulations, orders and decrees now or hereafter promulgated under any of the
foregoing, as any of the foregoing now exist or may be changed or amended or
come into effect in the future.

         "Environmental Requirement" means any Environmental Law, agreement or
restriction (including but not limited to any condition or requirement imposed
by any insurance or surety company), as the same now exists or may be changed or
amended or come into effect in the future, which pertains to health, safety, any
Hazardous Material, or the environment, including but not limited to ground or
air or water or noise pollution or contamination, and underground or aboveground
tanks.

         "FNMA" means the Federal National Mortgage Association or any successor
thereto.

         "FHA" means the Federal Housing Administration of the Department of
Housing and Urban Development of the United States of America, or any successor
thereto.

         "Foreclosure" means with respect to a Mortgage Loan, the procedure
pursuant to which a lienholder acquires title to a Mortgaged Property in a
foreclosure sale, or pursuant to any other comparable procedure allowed under
applicable law, when a Mortgage Loan is in default, and with respect to a
Cooperative Loan, the procedure pursuant to which a lienholder acquires title to

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<PAGE>

a Cooperative Loan Property in a foreclosure sale, or pursuant to any other
comparable procedure allowed under applicable law when a Cooperative Loan is in
default, and includes, to the extent applicable, foreclosure on the stock
allocated to a dwelling unit in a residential cooperative housing corporation,
which foreclosure is accomplished by a sale in accordance with the provisions of
Article 9 of the Uniform Commercial Code related to secured transactions and
other corresponding law in the appropriate jurisdiction, and the security
agreement relating to such stock.

         "Hazardous Material" means any substance, whether solid, liquid or
gaseous which is listed, defined or regulated as a "hazardous substance,"
"hazardous waste" or "solid waste," or pesticide, or otherwise classified as
hazardous or toxic, in or pursuant to any Environmental Requirement; or which is
or contains asbestos, radon, any polychlorinated biphenyl, urea formaldehyde
foam insulation, explosive or radioactive material, or motor fuel or other
petroleum hydrocarbons; or which causes or poses a threat to cause a
contamination or nuisance on the Mortgaged Property or any adjacent property or
a hazard to the environment or to the health or safety of persons on the
Mortgaged Property.

         "Instruments of Collateral" means all Mortgage Instruments and Security
Instruments.

         "Insurer" means the FHA, VA or any provider of private mortgage
insurance, and providers of hazard, title or other insurance with respect to any
of the Mortgage Loans or Mortgaged Properties.

         "Insurance Policy" means any insurance policy provided by an Insurer
with respect to a Mortgage Loan.

         "Insurance Proceeds" means proceeds paid in respect of the Mortgage
Loans pursuant to any Insurance Policy, to the extent such proceeds are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with Applicable Requirements.

         "Liabilities" means Claims, liabilities and obligations of every nature
or kind, whether accrued, absolute, contingent or otherwise and whether asserted
or unasserted, known or unknown and whether due or to become due.

         "Lien" means any lien, claim, mortgage, security interest, pledge,
charge, easement, servitude or other encumbrance of any kind, including any of
the foregoing arising under any conditional sales or other title retention
agreement.

         "Litigation" means a court action, an administrative or regulatory
action or an arbitration proceeding involving the Seller, excluding Foreclosure
and bankruptcy actions.

         "Loans" means all Mortgage Loans and all Cooperative Loans.

         "Loan Documents" means all Mortgage Loan Documents and all Cooperative
Loan Documents.

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<PAGE>

         "Loan Files" means all Mortgage Files and all Cooperative Loan Files.

         "Loan Payments" means all Mortgage Loan Payments and all Cooperative
Loan Payments.

         "Loan Schedule" means the schedule of Loans attached hereto as Exhibit
"B", such schedule setting forth the following information with respect to each
Loan (a) Purchaser's Loan identifying number; (b) the Seller's Loan identifying
number; (c) the Borrower's name; (d) the street address of the Mortgaged
Property including the state and county; (e) the monthly principal and interest
payment; (f) the unpaid principal balance; (g) the Loan type; (h) the Mortgaged
Property type; (i) the occupancy status of the Mortgaged Property; j) the
origination date; (k) the maturity date; (l) the date the next Loan Payment is
due; (m) the Cut-off Date; (n) the private mortgage insurance percentage; (o)
the purpose of the Loan; (p) the purchase price of the Loan; (q) the lien status
of the Instrument of Collateral; (r) the current Loan interest rate; (s) the
first adjustment date following the Cut-off Date, if applicable; (t) the
interest paid through Cut-off Date; (u) the maximum interest rate, if
applicable; (v) the periodic rate cap, if applicable; (w) whether the Borrower
is in bankruptcy; (x) if the Borrower has filed for bankruptcy, the chapter and
date of such filing; (y) the bid percentage; (z) the amortization period; and
(aa) if the Loan is real estate owned.

         "Losses" means any and all losses, damages, deficiencies, Claims, costs
or expenses, including actual attorney's fees.

         "Mortgage Escrow Payments" means the portion, if any, of the Mortgage
Loan Payment in connection with a Mortgage Loan that, pursuant to the related
Mortgage Loan Documents, must be made by a Mortgagor for deposit in a Related
Escrow Account for the payment of real estate taxes and assessments, insurance
premiums, ground rents, and similar items.

         "Mortgage File" means the file containing the Mortgage Loan Documents
with respect to a Mortgage Loan, as well as the credit and closing packages,
custodial documents, servicing documents, escrow documents, mortgage documents,
loan modification and forbearance agreements, assumption agreements, title
policies and exceptions, and all other files, records and documents necessary
to: (a) establish the eligibility of the Mortgage Loans for purchase by
Purchaser or for insurance by an Insurer, and (b) service the Mortgage Loans in
accordance with Applicable Requirements.

         "Mortgage Instrument" means any deed of trust, security deed, mortgage,
or any other instrument which constitutes a first or second lien as specified in
Exhibit "B" on the improved Mortgaged Property securing payment by a Mortgagor
of a Mortgage Note and any modification thereto.

         "Mortgage Loans" means fixed and/or adjustable rate, residential
mortgage loans detailed on Exhibit "B" attached hereto.

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<PAGE>

         "Mortgage Loan Documents" means with respect to each Mortgage Loan, the
original Mortgage Instrument, the Mortgage Note bearing all intervening
endorsements, endorsed, at the direction of the Purchaser, in blank and signed
in the name of the Seller by an officer, and the original Assignment. These are
documents contained in the Mortgage File and each and every collateral document,
account or security agreement securing such Mortgage Loan including, without
limitation, any UCC Financing Statement, pledge agreement, guaranty, title
insurance policy, tax and insurance escrows or deposits or escrows of any kind,
fire and casualty insurance policies, flood insurance policies (if applicable),
other insurance and other documents, agreements or instruments under which legal
rights or obligations are created or exist, if any, provided to Seller or a
predecessor in interest to secure such Mortgage Loan.

         "Mortgage Loan Payment" shall mean, with respect to a Mortgage Loan,
the amount of each monthly installment on such Mortgage Loan, whether principal
and interest or interest alone or escrow or other payment, required or permitted
to be paid by the Mortgagor in accordance with the terms of the Mortgage Note.

         "Mortgage Note" means the mortgage note, deed of trust note, security
deed note or other form of promissory note executed by a Borrower and secured by
a Mortgage Instrument evidencing the indebtedness of the Borrower under a
Mortgage Loan.

         "Mortgaged Property" means the Borrower's real property securing
repayment of related Mortgage Loan, consisting of a one- to four-family
residence (at the time of origination) that is encumbered by a Mortgage
Instrument, including all buildings and fixtures thereon and all accessions
thereto including installations of mechanical, electrical, plumbing, heating and
air conditioning systems located in or affixed to such buildings, and all
additions, alterations and replacements.

         "Negative Escrow Payments" means, with respect to any Loan, any payment
made by an Originator, Prior Servicer or Seller on behalf of a Borrower.

         "No Bid" means a delinquent Mortgage Loan with respect to which the VA
has notified Purchaser that the VA intends to exercise its option to pay the
amount guaranteed by the VA (and leave the Mortgaged Property with Purchaser).

         "Non-Performing Mortgage Loans" means those Mortgage Loans for which
any payment by a Mortgagor is more than thirty (30) days past due as of the
Cut-off Date.

         "Notes" means all Mortgage Notes and all Cooperative Notes.

         "Originator" means, with respect to any Loan, the entity(ies) that: (a)
took the Borrower's loan application; (b) processed the Borrower's loan
application, and (c) closed and/or funded the Borrower's Loan.

         "Performing Mortgage Loans" means those Mortgage Loans for which no
payment due by a Mortgagor is more than thirty (30) days past due as of the
Cut-off Date.

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<PAGE>

         "Person" means an individual, corporation, partnership, joint venture,
trust or unincorporated organization or a federal, state, city, municipal or
foreign government or an agency or political subdivision thereof.

         "Prior Servicer" means any party that was a servicer of any Loan before
Seller became the servicer of the Loan.

         "Properties" means all Mortgaged Properties and all Cooperative Loan
Properties.

         "Related Escrow Accounts" means all funds held by Seller with respect
to the Loans, including, but not limited to, all principal and interest funds
and all buydown funds and all tax and insurance funds and other mortgage escrow
and impound amounts (including interest accrued thereon for the benefit of the
Mortgagors under the Loans) maintained by Seller relating to the Servicing
Rights.

         "REO" means, with respect to any Mortgage Loan, the Mortgaged Property
relating thereto after a foreclosure sale or deed-in-lieu transaction.

         "Sale Date" means as of the date which is shown on Exhibit "A" as the
Sale Date.

         "Security Instrument" means any deed of trust, security deed, mortgage,
or any other instrument which constitutes a first-lien on the Property securing
payment by a Borrower of a Cooperative Note and any modification thereto,
including, to the extent that the context shall permit or require, the security
agreement creating a first priority security interest in favor of Seller in the
stock allocated to a dwelling unit in a residential cooperative housing
corporation and pledged to secure a Cooperative Loan, and the related Co-op
Lease.

         "Servicing Rights" means the obligations to administer, collect the
payments for the reduction of principal and application of interest, pay taxes
and insurance, remit collected payments, provide foreclosure services, provide
full escrow administration and any other obligations required by any owner of
the Loans, together with the right to receive the servicing fee income and any
ancillary income arising from or connected to the Loans. Servicing Rights shall
include retention of the related escrow or impound accounts created and
maintained by Seller with respect to Loans for the deposit and retention of
interest and principal, taxes, assessments or ground rents, hazard and mortgage
insurance and other related escrow or custodial items.

         "Transfer Date" shall be no later than the date which is forty-five
(45) days after the Closing Date.

         "VA" means the Department of Veterans Affairs.

         Section 1.2. General. The terms defined herein include the plural as
well as the singular and the singular as well as the plural.

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<PAGE>

                                   ARTICLE II.
                           PURCHASE AND SALE OF LOANS

         Section 2.1. Purchase and Sale of Loans. Pursuant to this Agreement,
Seller hereby agrees to sell, assign, transfer, convey and deliver to Purchaser,
and Purchaser hereby agrees to purchase from Seller, all of Seller's right,
title and interest in and to the Loans, including the related Servicing Rights.

         Section 2.2.  Purchase Price.

         (a) The aggregate purchase price for the sale and transfer of the Loans
(the "Purchase Price") shall consist of, (i) the purchase price percentage as
shown on Exhibit "B" applicable to the Loans multiplied by the outstanding
principal balance of the Loans as of the Cut-off Date, plus (ii) accrued but
unpaid interest thereon up to but not including the Sale Date for each Loan not
more than thirty (30) days delinquent as of the Cut-off Date. Purchaser shall
not pay Seller for any Negative Escrows.

         (b) If, subsequent to the Sale Date, the amount on which the Purchase
Price with respect to a Loan was based is found to be in error, or if, for any
other reason, the Purchase Price or such other amounts are found to be in error,
within ten (10) business days of the receipt of information sufficient to
provide notice that payment is due, the party benefiting from the error shall
pay an amount sufficient to correct and reconcile the Purchase Price (plus
interest thereon) or such other amounts and shall provide a reconciliation
statement and such other documentation sufficient reasonably to satisfy the
other party concerning the accuracy of such reconciliation.

         Section 2.3. Payment of Purchase Price. The Purchase Price shall be
paid by Purchaser on the Sale Date, by wire transfer, in immediately available
funds.

         Section 2.4. Interim Servicing. Seller shall undertake the Servicing
Rights obligations for the Loans from the Sale Date to the Transfer Date for and
on behalf of Purchaser in accordance with all Applicable Requirements. To the
extent that Seller provides escrow service, Seller shall cause all taxes,
assessments, charges, condominium fees, cooperative maintenance fees on the
Cooperative Loan Property or the Mortgaged Property to be paid no less than
forty-five (45) days prior to the date any penalty will accrue. It is understood
that there may be certain Loans as to which Seller (or Originator or a Prior
Servicer) may have made Negative Escrow Payments. On the Transfer Date, Seller
shall transfer the Related Escrow Accounts to Purchaser and the Related Escrow
Accounts shall be transferred without deduction for Negative Escrow Payments.

         Section 2.5. Payments Received After Cut-off Date. From and after the
Cut-off Date all rights arising out of the Loans and their Servicing Rights
including, but not limited to, all unapplied funds, Mortgage Loan Payments,
principal prepayments, Insurance Proceeds, liquidation proceeds and condemnation
proceeds received on or in connection with a Loan, received by Seller shall be
held by Seller for the benefit of the Purchaser as the owner of the Loans and
shall be applied to reduce the Purchase Price or endorsed over to the Purchaser
and promptly delivered by the Seller to the Purchaser. All such payments
received by Seller on or after the Closing Date shall be held for the benefit of
Purchaser and delivered to Purchaser promptly after receipt thereof.

                                       8
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                                  ARTICLE III.
           GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

         As a material inducement to Purchaser to enter into this Agreement,
Seller represents and warrants to Purchaser, as of both the date of execution
hereof and the Sale Date; the following:

         Section 3.1. Due Incorporation and Good Standing. If a corporation,
Seller is duly organized, validly existing and in good standing under the laws
of its state of incorporation during the time of its activities with respect to
the origination, making, selling and servicing of the Loans. If a partnership,
limited partnership, joint venture or other entity, Seller is duly existing and
in good standing under the laws of its state of organization and all entities
which constitute Seller are also duly existing and in good standing under the
laws of their state of organization. Seller has (and had at the time of
origination and servicing, as applicable) in full force and effect all licenses,
registrations and qualifications in all appropriate jurisdictions to conduct all
activities performed with respect to the origination, making, acquiring,
selling, pooling and servicing of the Loans, if and to the extent it performed
any such functions.

         Section 3.2. Authority and Capacity. Seller has all requisite corporate
power, authority and capacity to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement, and any
related agreements or instruments and the consummation of the transactions
contemplated hereby and thereby, each has been duly and validly authorized by
all necessary corporate action. This Agreement and any related agreements or
instruments each constitutes a valid and legally binding agreement of Seller
enforceable in accordance with its terms, except as may be limited by judicial
discretion, equitable limitations, and applicable bankruptcy, insolvency,
receivership, conservatorship, reorganization, fraudulent conveyance or other
similar laws relating to or affecting the rights and remedies of creditors,
generally.

         Section 3.3. No Conflict. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, nor
compliance with its terms and conditions, shall: (a) violate, conflict with,
result in the breach of, or constitute a default under, be prohibited by, or
require any additional approval under any of the terms, conditions or provisions
of Seller's Articles of Incorporation or By-Laws, or of Seller's other formative
documents, including partnership, limited partnership or joint venture
agreements, if any, or of any mortgage, indenture, deed of trust, loan or credit
agreement or instrument to which Seller is now a party or by which it is bound,
or of any order, judgment or decree of any court or governmental authority
applicable to Seller, or (b) result in the creation or imposition of any lien,
charge or encumbrance of any material nature upon any of the properties or
assets of Seller.

         Section 3.4. Litigation. There is no litigation, proceeding, claim,
demand or governmental investigation pending or, to the knowledge of Seller,
threatened, nor is there any order, injunction or decree outstanding against or
relating to Seller or the Loans, which could have a material adverse effect upon

                                       9
<PAGE>

any of the Loans, result in any liability to Purchaser or materially impair the
ability of Seller to perform its obligations hereunder; nor does Seller know of
any material basis for any such litigation, proceeding, claim or demand or
governmental investigation. Seller is not in default with respect to any order
of any court, governmental authority or arbitration board or tribunal to which
Seller is a party or is subject, and Seller is not in violation of any laws,
ordinances, governmental rules or regulations to which it is subject, which such
default or violation might materially and adversely affect any of the Loans or
result in material cost or liability to Purchaser.

         Section 3.5. Statement Made. No representation, warranty or written
statement made by Seller in this Agreement, or in any schedule, exhibit, report,
written statement or certificate furnished to Purchaser by Seller in connection
with the transactions contemplated hereby by Seller, contains, or will contain,
any untrue statement of a material fact or omits, or will omit, to state a
material fact necessary to make the statements contained herein or therein not
misleading.

         Section 3.6. First Payment Default. Except with respect to Non
Performing Loans, Seller will repurchase within ten (10) days of Purchaser's
demand any Loan for which the first payment due Purchaser after the Sale Date is
not made by the borrower within thirty (30) days of its due date,
notwithstanding any other provision of this Agreement. The repurchase price
shall be an amount equal to the Purchase Price for the Loan plus accrued but
unpaid interest through the date of repurchase.

                                   ARTICLE IV.
               SPECIFIC REPRESENTATIONS AND WARRANTIES AS TO LOANS

         As further material inducement to Purchaser to enter into this
Agreement, Seller represents and warrants to Purchaser, except as disclosed on
Exhibit "C," as of both the date of execution hereof and the Sale Date the
following:

         Section 4.1. Enforceability of the Loans. Each and every Note, related
Instrument of Collateral and Loan Document is genuine and each is the legal,
valid and binding obligation of the Borrower thereof, enforceable in accordance
with its terms, except as may be limited by judicial discretion, equitable
limitations and applicable bankruptcy, insolvency, receivership,
conservatorship, reorganization, fraudulent conveyance or other similar laws
relating to or affecting the rights and remedies of creditors. All parties to
the Notes, the Instruments of Collateral and Loan Documents had legal capacity
to execute such instruments and each Note, Instrument of Collateral and Loan
Document has been duly and properly executed by such parties. No Loan is subject
to any right of rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms of any Note,
Instrument of Collateral or Loan Document, or the exercise of any right
thereunder, render such Note, Instrument of Collateral or Loan Document
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.

                                       10
<PAGE>

         Section 4.2. Disbursement. The full original principal amount of every
Loan has been fully disbursed or credited to the Borrower, there is no
requirement for any lender to make future advances thereunder and 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 satisfied. All costs, fees
and expenses incurred in making, closing or recording the Loans were paid. There
is no obligation on the part of Seller, or of any other party, to make
supplemental payments in addition to those made by the Borrowers. No Borrower is
entitled to any refund of any amounts paid or due to any lender pursuant to any
Note or Instrument of Collateral.

         Section 4.3. Priority of Lien. Each Mortgage Instrument has been duly
acknowledged and recorded and is a valid, enforceable and subsisting first or
second lien as noted on Exhibit "B," on the Mortgaged Property therein
described, and the Mortgaged Property is free and clear of all encumbrances and
Liens having priority over the lien of the Mortgage Instrument except for: (a)
liens for real estate taxes and special assessments not yet due and payable; (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording, acceptable to mortgage
lending institutions generally, (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage Instrument or the use,
enjoyment, value or marketability of the related Mortgaged Property, and (d)
with respect to second liens, the lien of the first Mortgage Instrument. All tax
identifications and property descriptions are legally sufficient. At the time
loans were closed, there were no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting any Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
Mortgage Instrument encumbering such property. Each Security Instrument is a
valid, enforceable, and subsisting first security interest in the Stock in the
residential housing corporation and the Co-op Lease that were pledged to secure
the Cooperative Loan related thereto, and the related Cooperative Loan Property
is free and clear of all encumbrances and Liens having priority over the lien of
the Security Instrument except for the lien of the residential housing
corporation for amounts, if any, due under the Co-op Lease. The cooperative
housing corporation which is the owner of the Co-op Premises owns a good,
marketable and insurable title to such premises free and clear of all liens. The
unpaid principal balance of the first and second, if applicable, Mortgage
Instrument set forth on Exhibit "B" is true and correct.

         Section 4.4. No Default. There is no default, breach, violation or
event of acceleration existing under (a) any Instrument of Collateral or the
related Note, or (b) any other senior, superior or prior Instrument of
Collateral or Note, or (c) any Loan Document and no event has occurred which,
with the passage of time or with notice and the 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.

         Section 4.5. No Borrower Bankruptcy/Insolvency. No Borrower was a
debtor in any state or federal bankruptcy or insolvency proceeding at the time
the Mortgage Loan or Cooperative Loan was originated and, on the Sale Date, no
Borrower was a debtor in any state or federal bankruptcy or insolvency
proceeding.

                                       11
<PAGE>

         Section 4.6. Taxes, Insurance. All taxes; governmental assessments;
insurance premiums; water, sewer and municipal charges; leasehold payments; and
ground rents; cooperative maintenance fees; fees and assessments of any
Condominium or Property Owners' Association or other outstanding charges
affecting the Mortgaged Property, Cooperative Unit or Condominium Unit which are
due and owing were paid at the time of loan closing.

         Section 4.7. No Waiver. Neither Seller nor, to the best of Seller's
knowledge, any Originator, or Prior Servicer has: (a) agreed to any
modification, extension or forbearance in connection with a Note, Instrument of
Collateral or Loan Document (b) released, satisfied or canceled any Note or
Instrument of Collateral in whole or in part; (c) subordinated any Instrument of
Collateral in whole or in part, or (d) released any Property in whole or in part
from the lien of any Instrument of Collateral, unless a written instrument
necessary to effect any of the foregoing has been recorded (or filed, if
applicable) and is held in the Loan File and otherwise satisfies Applicable
Requirements. Seller has not advanced funds to cure a default or delinquency
with respect to any such Loans, except for: (i) deficiencies in payments due
under Co-op Leases, and the applicable Borrowers have reimbursed Seller in full
for such payments made by Seller, and (ii) deficiencies in Mortgage Escrow
Payments.

         Section 4.8. Regulatory Compliance. Seller and, to Seller's knowledge,
each Originator and Prior Servicer have complied, in all material respects, with
all Applicable Requirements.

         Section 4.9. Title Insurance. Each Loan is covered by an American Land
Title Association or other similar lender's mortgage title insurance policy,
acceptable to Purchaser, or an attorney's opinion of title acceptable to
Purchaser in the jurisdiction where the Mortgaged Property or Co-op Premises is
located, with such other generally acceptable form of policy or insurance
acceptable to the Purchaser and Insurer, issued by and the valid and binding
obligation of a title insurer acceptable to the Purchaser and qualified to do
business in the jurisdiction where the Mortgaged Property or Co-op Premises is
located, insuring the originating mortgagee, its successors and/or assigns, as
to the first or second priority lien of the Mortgage Instrument or Co-op Lease
in the original principal amount of the Loan. The originating mortgagee is the
sole named insured of each such mortgage title insurance policy; the assignment
to Purchaser of Seller's interest in each such mortgage title insurance policy
does not require the consent of or notification to any insurer; and each such
mortgage title insurance policy is in full force and effect and will be in full
force and effect and inure to the benefit of Purchaser upon the consummation of
the transactions contemplated by this Agreement. No claims have been made under
any such mortgage title insurance policy, and no prior holder of the related
Loan, including Seller, has done, by act or omission, anything which would
impair the coverage of any such mortgage title insurance policy.

         Section 4.10. Application of Funds. All payments received by Seller
with respect to any Loan have been remitted and properly accounted for as
required by the Applicable Requirements. All funds received by Seller in
connection with the satisfaction of Loans, including but not limited to
foreclosure proceeds and insurance proceeds from hazard losses, have been
deposited in the appropriate principal and interest account or taxes and

                                       12
<PAGE>

insurance account included among the Related Escrow Accounts; and all such funds
have been applied to reduce the principal balance of the Loans in question, or
for reimbursement of repairs to the Mortgaged Property in question, or as
otherwise required by Applicable Requirements; or are and will be in one of the
Related Escrow Accounts on the Sale Date. The unpaid balances of the Loans are
as stated on Loan Files to be delivered to Purchaser.

         Section 4.11. Hazard and Flood Insurance. All buildings and
improvements upon every Mortgaged Property are insured by a generally acceptable
insurer against loss by fire, hazards of extended coverage and such other
hazards as are customarily insured against in the area where each Mortgaged
Property is located in an amount which is at least equal to the lesser of: (a)
the outstanding principal balance of the applicable Mortgage Loan; (b) the full
replacement value of the Mortgaged Property, or (c) in the case of flood
insurance, the maximum amount of insurance which is available under the Flood
Disaster Protection Act of 1973. If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards and in which flood insurance has been made
available, a flood insurance policy meeting the requirements of the current
guidelines of the Flood Insurance Administration is in effect with a generally
acceptable insurance carrier. All individual insurance policies (collectively,
the "hazard insurance policy") contain a standard mortgagee clause naming
Seller, its successors and/or assigns, as mortgagee, and all premiums thereon
have been paid. Each Mortgage Instrument obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage Instrument
to obtain and maintain such insurance at Mortgagor's cost and expense and to
seek reimbursement therefor from the Mortgagor.

         Section 4.12. Mortgage Insurance. Each Mortgage Loan which is
represented by Seller to have FHA insurance is insured, pursuant to the National
Housing Act. Each Mortgage Loan which is represented by Seller to be guaranteed
by the VA is guaranteed under the provisions of Chapter 37 of Title 38 of the
United States Code. Each conventional Mortgage Loan with a loan-to-value ratio
in excess of eighty percent (80%) at the time of origination is insured as to
payment defaults by a policy of primary mortgage guaranty insurance in the
amount required, and by an Insurer approved by FNMA, and all provisions of such
primary mortgage guaranty insurance policy have been and are being complied
with, such policy is in full force and effect and all premiums due thereunder
have been paid. As to each mortgage insurance or guaranty certificate, each of
Seller and any Originator, has complied with applicable provisions of the
insurance for guaranty contract and federal statutes and regulations, all
premiums or other charges due in connection with such insurance or guaranty have
been paid, there has been no act or omission which would or may invalidate any
such insurance or guaranty with respect to Purchaser, and the insurance or
guaranty is, or when issued, will be, in full force and effect with respect to
each Mortgage Loan. There are no defenses, counterclaims or rights of set-off
against Purchaser affecting the validity or enforceability of any mortgage
insurance or guaranty with respect to a Mortgage Loan.

         Section 4.13. Related Escrow Accounts. All Related Escrow Accounts
required to be maintained by Seller have been established and continuously

                                       13
<PAGE>

maintained in all material respects in accordance with Applicable Requirements.
Except as to payments which are past due under the Mortgage Loans, all Related
Escrow Account balances required by the Mortgage Loans and paid to Seller for
the account of the Mortgagors under the Mortgage Loans are on deposit in the
appropriate Related Escrow Accounts. With regard to Mortgage Loans that provide
for Mortgage Escrow Payments, Seller and each Originator and Prior Servicer, in
all material respects, have: (a) computed the amount of such payments in
accordance with Applicable Requirements; (b) paid on a timely basis all charges
and other items to be paid out of the Mortgage Escrow Payments, and when
required by any applicable servicing agreement have advanced its own funds to
pay such charges and items, and (c) delivered to the related Mortgagors the
statements and notices required by Applicable Requirements in connection with
the Related Escrow Accounts, including without limitation, statements of taxes
and other items paid out of the Mortgage Escrow Payments and notices of
adjustments to the amount of the Mortgage Escrow Payments. No Mortgage Escrow
Payments or payments or other charges or prepayments due from any Mortgagor have
been capitalized under any Mortgage Instrument or the related Mortgage Note.

         Section 4.14. Damage; Condemnation. To the best of Seller's knowledge,
there exists no physical damage to any Mortgaged Property or any property that
is the subject of a Co-op Lease from waste, fire, flood, windstorm, earthquake,
tornado, hurricane or any other similar casualty, which physical damage would
materially and adversely affect the value or marketability of any Loan, or any
Property or, to the best of Seller's knowledge, the eligibility of any Loan for
insurance benefits, or the amount of insurance benefits, by any Insurer. There
is no proceeding pending for the total or partial condemnation of, or eminent
domain with respect to, any Mortgaged Property or any property that is the
subject of a Co-op Lease.

         Section 4.15. Good Title. As of the Sale Date, no Note or Instrument of
Collateral is assigned or pledged, and Seller is the owner of record thereof and
has good and marketable title thereto, without any basis for forfeiture thereof,
and Seller is the sole owner and holder of each and every Loan free and clear of
any and all liens, pledges, charges, or security interests of any nature and has
full right and authority, subject to no interest or participation of, agreement
with, or approval of any other party, to sell, assign and transfer the same
pursuant to this Agreement. The transfer, assignment and delivery of the Loans
in accordance with the terms and conditions of this Agreement shall vest in
Purchaser all rights as owner free and clear of any and all claims, charges,
defenses, offsets and encumbrances of any kind or nature whatsoever, including
but not limited to those of Seller.

         Section 4.16. Loan File. Each and every Loan File contains each of the
documents and instruments required to be maintained by Applicable Requirements
and this Agreement and such documents and instruments are duly executed, genuine
and in due and proper form, and the information contained therein is true,
accurate and complete. Each and every Mortgage Loan was originated in accordance
with Insurer underwriting standards in effect at the time such Mortgage Loan was
originated.

         Section 4.17. Hazardous Substances. To the best of Seller's knowledge,
no Hazardous Material, including oil and asbestos, is present on, in, at or

                                       14
<PAGE>

under any Mortgaged Property securing a Mortgage Loan or any property that is
the subject of a Co-op Lease such that: (a) the value of such property is
materially and adversely affected, or (b) under All Environmental Law: (i) such
Hazardous Material would be required to be eliminated before such property could
be altered, renovated, demolished or transferred or, (ii) the presence of such
Hazardous Material word subject the owner of such property, or the holder of a
security interest therein, to liability for the cost of eliminating or
mitigating such Hazardous Material or the hazard created thereby. Seller is not
aware of any Environmental Claim affecting the Mortgaged Property.

         Section 4.18. Fraud. No fraud occurred on the part of any person in
connection with any Loan that could materially and adversely affect Purchaser or
the Loans, or result in Purchaser incurring Losses.

         Section 4.19. Loan Characteristics. The information set forth on
Exhibits "A" and "B" is true and correct.

         Section 4.20. Notice of Relief Requested Pursuant to the Soldiers and
Sailors Relief Act of 1940. Seller has not received notice from any Borrower or
other party with respect to the Loans of a request for relief pursuant to or
invoking any of the provisions of the Soldiers and Sailors Relief Act of 1940 or
any similar law which would have the effect of suspending or reducing any
Borrower's payment obligations under a Loan or which would prevent such Loan
from going into foreclosure.

         Section 4.21. No Accrued Liabilities. There are no Liabilities of
Seller with respect to the Loans or Servicing Rights with respect to facts or
circumstances prior to the Transfer Date for which Purchaser would be
responsible or liable as a result of its consummation of the transactions
contemplated by this Agreement.

         Section 4.22. Additional Representations, Warranties and Covenants
regarding Co-ops. In addition to the representations, warranties, and covenants
set forth elsewhere herein, Seller hereby makes the following representations
and warranties in connection with each Cooperative Loan:

         (a) Securities Law: To the extent that the sale of the Cooperative
Loans is deemed to be the sale of "securities" under the Securities Act of 1933,
as amended (the "1933 Act") or any state securities law (a "State Act"):

                  (i) Seller has not offered or sold, and will not offer or
         sell, any security in a manner that would render the offer and sale of
         any Cooperative Loan a violation of Section 5 of the 1933 Act or
         require registration pursuant thereto, or require registration or
         qualification pursuant to any State Act, nor has it authorized nor will
         it authorize, any Person to act in such manner;

                  (ii) the foregoing and all other facts and circumstances
         relating to the offer and sale of any Cooperative Loans as contemplated
         by this Agreement are such that neither registration of the Cooperative
         Loans under the 1933 Act nor registration or qualification of the Loans
         under any State Act is required; and

                                       15
<PAGE>

                  (iii) the Purchaser has made no representation whatsoever to
         Seller concerning the applicability or inapplicability of the 1933 Act
         or of any State Act to the transactions that are the subject of this
         Agreement.

         (b) Recognition Agreement: Seller and the cooperative housing
corporation have entered into a recognition agreement in a form satisfactory to
the Purchaser, which such agreement sets forth the specific rights of Seller and
its successors (including Purchaser) and any successor servicer and the
responsibilities of the cooperative housing corporation to Seller and its
successors (including Purchaser) and any successor servicer.

         (c) Tenant-Stockholder of Cooperative Housing Corporation: The stock
that is pledged as security for the Cooperative Loan is held by a Person as a
tenant-stockholder (as that term is defined in Section 216 of the Internal
Revenue Code) in a cooperative housing corporation (as that term is defined by
Section 216 of the Internal Revenue Code).

         (d) To Seller's knowledge, no Borrower is in default under the related
Co-op Lease, except as set forth in Exhibit "C." Seller has not received any
notice to cure maintenance defaults in connection with any of these defaults.

         Section 4.23. Facts and Omissions. No representation, warranty or
written statement made by Seller in this Agreement, in any Exhibit to this
Agreement, in any written statement or certificate furnished by Seller to
Purchaser in connection with this Agreement, or in any data tape provided by
Seller to Purchaser hereunder, contain any material misstatement of fact or will
omit to state a material fact necessary in order to make the statements in light
of the circumstances in which they are made not misleading, except for ordinary
changes since the time such statements, certificates or data tape were provided
by Seller.

         Section 4.24. Qualifications to Representations. Unless otherwise
specifically disclosed to Purchaser hereunder, the inaccuracy in any material
respect of any representation or warranty made by Seller under this Agreement
shall constitute a breach by Seller regardless of Purchaser's or Seller's
knowledge concerning the truth or accuracy of such representations and
warranties when made.

                                   ARTICLE V.
               GENERAL REPRESENTATIONS AND WARRANTIES OF PURCHASER

         As a material inducement to Seller to enter into this Agreement,
Purchaser represents and warrants to Seller as follows, as of both the date of
execution hereof and the Sale Date:

         Section 5.1. Due Incorporation and Good Standing. Purchaser is and
shall continue to be duly organized, validly existing and in good standing under
the laws of its state of incorporation. Purchaser has in full force and effect
all licenses, registrations and certifications in all appropriate jurisdictions
to conduct all activities performed with respect to the acquiring and servicing
of the Loans.

                                       16
<PAGE>

         Section 5.2. Authority and Capacity. Purchaser has all requisite
corporate power, authority and capacity to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and any related agreements or instruments and the consummation of the
transactions contemplated hereby and thereby, each has been duly and validly
authorized by all necessary corporate action. This Agreement and any related
agreements or instruments each constitutes a valid and legally binding agreement
of Purchaser enforceable in accordance with its terms, except as may be limited
by judicial discretion, equitable limitations, and applicable bankruptcy,
insolvency, receivership, conservatorship, reorganization, fraudulent conveyance
or other similar laws relating to or affecting the rights and remedies of
creditors generally.

         Section 5.3. No Conflict. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, nor
compliance with its terms and conditions, shall: (a) violate, conflict with,
result in the breach of, or constitute a default under, be prohibited by, or
require any additional approval under any of the terms, conditions or provisions
of Purchaser's Articles of Incorporation or By-Laws, or of any mortgage,
indenture, deed of trust, loan or credit agreement or instrument to which
Purchaser in now a party or by which it is bound, or of any order, judgment or
decree of any court or governmental authority applicable to Purchaser, or (b)
result in the creation or imposition of any lien, charge or encumbrance of any
material nature upon any of the properties or assets of Purchaser.

                                   ARTICLE VI.
                               COVENANTS OF SELLER

         Section 6.1. Delivery of Documents. Seller agrees to do, at its sole
cost and expense, all acts necessary to perfect title to the Loans to Purchaser,
and does hereby sell and assign to Purchaser or its designee as part of each
Loan File, the following documents, all subject to the approval of Purchaser and
its legal counsel as to proper form and execution:

         (a) The original Note properly endorsed by Seller, without recourse, in
blank, and any modifications or amendments thereto (or if lost, then a copy of
the Note accompanied by a lost note affidavit from Seller that is acceptable to
Purchaser).

         (b) The original recorded or filed Instrument of Collateral and any
modifications or amendments thereto or, if the original Instrument of Collateral
has not been returned from the applicable public recording office, a copy
certified by such office.

         (c) With respect to each Cooperative Loan, a copy of Form UCC-l and any
continuation statements with evidence of filing thereon.

         (d) With respect to each Cooperative Loan, a stock certificate
representing the stock allocated to a dwelling unit in a residential cooperative
housing corporation and pledged with respect to the Cooperative Loan with an
executed stock power in blank attached.

         (e) With respect to each Cooperative Loan, an original proprietary
lease issued to the Borrower.

                                       17
<PAGE>

         (f) With respect to each Cooperative Loan, an original assignment of
proprietary lease executed by Borrower in blank.

         (g) With respect to each Cooperative Loan, an original recognition
agreement (or copy thereof) of the interests of the lender with respect to the
Cooperative Loan by the residential cooperative housing corporation, the stock
of which was pledged in respect of such Cooperative Loan.

         (h) An Assignment of the Instrument of Collateral, and with respect to
each Cooperative Loan, a UCC-3 assignment, from Seller in blank in recordable
(or, for UCC-3's, fileable) form but unrecorded, along with originally recorded
(and/or filed) or copies certified by the recording (and/or filing) office of
all required intervening assignments.

         (i) With respect to each Mortgage Loan, the Mortgage Insurance
Certificate.

         (j) With respect to each Mortgage Loan, the original (or if lost, a
certified copy) title insurance policy, which contains a legal description of
the Mortgaged Property and which has been marked up and signed on the date of
origination by an authorized agent of the title insurer, with the named insured
as "Seller, its successors and/or assigns."

         (k) With respect to each Mortgage Loan, a signed copy of the most
recently conducted report of appraisal or certification of valuation of the
Mortgage Property.

         (l) With respect to each Mortgage Loan, a survey of the Mortgaged
Property to the extent required by applicable state law.

         (m) A statement showing the unpaid principal balance of each Loan, the
amount of periodic installments and the date(s) to which principal, interest and
any escrows have been paid; and two years of computer-generated ledger history
reflecting all receipts and disbursements from the inception of the Loan
including the date of each receipt or disbursement. Upon ten (10) business days
prior notice, Seller shall provide ledger histories for particular Loans to the
extent necessary to allow Purchaser or its servicer to respond to Insurer or
Borrower inquiry, litigation or other reasonable cause.

         (n) A copy of the Settlement Statement (HUD- 1) and Truth-in-Lending
Disclosure statement prepared in connection with the Loan indicating that the
Borrower has received the disclosures required by the Truth-in-Lending Act and
Real Estate Settlement Procedures Act, the Cranston-Gonzales National Affordable
Housing Act, and copies of all other disclosures and agreements required to be
furnished to and/or executed by the Borrower by applicable state or federal law.

         (o) An original loan application duly executed by the Borrower.

         (p) The underwriter's work sheet evidencing the mortgage analysis.

                                       18
<PAGE>

         (q) A duly executed Limited Power of Attorney in substantially the same
form as Exhibit "D" attached hereto.

         (r) Any and all documents, agreements, instruments, or work papers
related to the Loan and Seller's right and benefits therein; all documents
related to the making and closing of the Loan; and any other documents,
agreements, instruments, or work papers related to the Loan or required by
Purchaser in order to: (i) establish the eligibility of the Loan for purchase;
(ii) perfect its right, title and interest in and to the Loan, and (iii) with
respect to each Mortgage Loan, obtain mortgage insurance or guaranty.

         All Loan Files shall be held by Seller until the Transfer Date;
provided, however, that the items listed in subsections (a)-(m) above shall be
delivered to the Custodian at least three (3) days prior to the Sale Date. All
Loan Documents and the Loan Files relating to the Loans and all other documents
required to be delivered to Purchaser by Seller pursuant to this Section 6.1
which have not been delivered to the Custodian and are in the possession or
control of Seller, actually or constructively, shall be held by Seller in trust
for the benefit of Purchaser until the Transfer Date. On the Transfer Date, the
Seller shall deliver to the Purchaser a certificate, substantially in the form
of Exhibit "E" attached hereto. All such documents shall not be destroyed unless
copies thereof have been converted to microfilm, microfiche or magnetic media
and, upon the written request of Purchaser, Seller shall promptly deliver copies
of such documents to Purchaser or its designee.

         Section 6.2. No Personal Solicitation. Seller hereby agrees that it
will not take any action or cause any action to be taken by any of its agents or
Affiliates, or independent contractors working on its behalf, personally, by
telephone or mail, to solicit the prepayment of any Loan by any Borrower, in
whole or in part, without the prior written consent of Purchaser. Seller agrees
that neither it nor its Affiliates will prepare or disseminate, for compensation
or otherwise, any mailing list of the Borrowers to parties other than Purchaser.

         Section 6.3. Further Assurances. Seller shall, at any time and from
time to time, promptly, upon the reasonable request of Purchaser or its
representatives, execute, acknowledge, deliver or perform all such further acts,
deeds, assignments, limited powers of attorney, transfers, conveyances, and
assurances as may be required for the better vesting and confirming to Purchaser
and its successors and assigns of title to, or to perfect any security interest
in, the Loans, or Insurance Policies. Seller shall also take any other acts as
may be necessary to effect the transactions contemplated by this Agreement.

         Section 6.4.  Expenses; Liabilities.

         (a) Seller and Purchaser shall, except as otherwise specifically
provided herein, bear their respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the transactions
contemplated thereby, including, without limitation, all fees and expenses of
agents, representatives, counsel and accountants.

         (b) Seller represents and warrants to Purchaser and Purchaser
represents and warrants to Seller, that neither it nor any of its Affiliates nor
any party acting on its behalf has incurred any liability, either express or

                                       19
<PAGE>

implied, to any "broker" or "finder" or similar Person in connection with this
Agreement or any of the transactions contemplated thereby.

         (c) Seller shall be responsible for the cost of preparing Assignments
in recordable form and UCC-3 form amendments in fileable or recordable form and
for the costs of recordation and filing of such Assignments and UCC-3 form
amendments by Purchaser.

                                  ARTICLE VII.
                                    REMEDIES

         Section 7.1. Indemnification by Seller. Seller shall indemnify and hold
Purchaser, its stockholders, Affiliates and respective officers, directors,
employees and agents, harmless from and against, and shall reimburse it or them
for, any Losses and indemnify same against any Claims incurred before or after
the Sale Date arising out of, in connection with or to the extent resulting
from:

         (a) any misrepresentation made by Seller, or any breach of warranty by
Seller, contained in this Agreement, or in any schedule, exhibit, report,
written statement or certificate furnished by Seller pursuant to this Agreement
which misrepresentation or breach of warranty materially or adversely affects
the value of the Loans or the interest of the Purchaser;

         (b) the non-fulfillment or non-performance of any covenant, condition
or action required of Seller pursuant to this Agreement;

         (c) any act, omission, or error of Seller (whether alleged or actual),
Originator or Prior Servicer, or any employee, agent or representative acting on
their behalf, with respect to the origination or servicing of any of the Loans,
or any document, agreement or instrument contained therein or relating thereto,
occurring on or prior to the Sale Date;

         (d) any claim resulting from a broker or finder acting on behalf of
Seller; or

         (e) With respect to Mortgage Loans, No Bids, including without
limitation, those resulting in Buydowns; provided, however, the indemnity
provided in this Section 7.1(d) shall only apply to Mortgage Loans with respect
to which Foreclosure is initiated within two (2) years after the Sale Date.

         Section 7.2. Cure or Repurchase of Loans. In the event Purchaser
discovers that any of the representations and warranties contained herein were
not accurate in any material respect at or as of the time they were made by
Seller and such inaccuracy materially and adversely affects the value of the
Loans or the interest of the Purchaser, or that there exists a basis to demand
indemnification hereunder with respect to any Loan, or if Seller defaults in its
obligations under this Agreement, then in addition to any other rights and
remedies it may have hereunder, at law or in equity, Purchaser may demand that
Seller repurchase the related Loan or REO Property from Purchaser.
Notwithstanding the foregoing, purchaser agrees to provide Seller with written
notice and not more than forty five (45) days opportunity to cure any breach of
a representation and warranty set forth in Articles III or IV of this Agreement
which breach is susceptible of cure. The purchase price under this section for

                                       20
<PAGE>

any repurchased Loan or REO Property shall equal the sum of: (a) the aggregate
unpaid principal balance of the Loan as of the repurchase date (with respect to
any REO Property, as of the date the foreclosure complaint is filed or with
respect to a Cooperative Loan as of the date the UCC sale occurs), multiplied by
the purchase price percentage applicable thereto; (b) any and all interest that
formed a part of the Purchase Price of such Loan less any interest payments
received after the Sale Date on account of interest accrued prior to the Sale
Date; (c) accrued and unpaid interest at the Note rate from and after the Sale
Date (and with respect to any REO Property, at the legal judgment rate from the
date the foreclosure judgment is entered or UCC sale occurs), plus (d) all other
unreimbursed reasonable out-of-pocket costs, expenses and advances incurred by
Purchaser in connection with such Loan or Loans after the Sale Date.

         Such purchase or repurchase shall be accomplished by wire transfer with
thirty (30) business days following receipt by Seller of written demand from
Purchaser pursuant hereto. Seller shall prepare the Assignment and pay all costs
and expenses reasonably incurred by Purchaser in effecting reconveyance of a
repurchased Loan including, without limitation, the cost of recording the
Assignment and/or UCC-3 with respect to the related Instrument of Collateral.
Upon completion of such purchase or repurchase by Seller, Purchaser promptly
shall forward to Seller and shall have Custodian forward to Seller all servicing
records and all documents relating to such repurchased Loan or Loans.

         Section 7.3. Indemnification by Purchaser. Purchaser shall indemnify
and hold Seller, its stockholders, Affiliates and respective officers,
directors, employees and agents, harmless from and against, and shall indemnify
it or them for, any Losses and defend against any Claims incurred before or
after the Sale Date to the extent resulting from:

         (a) any misrepresentation made by Purchaser, or any breach of warranty
by Purchaser, contained in this Agreement, or in any schedule, exhibit, report,
written statement or certificate furnished by Purchaser pursuant to this
Agreement which misrepresentation or breach of warranty materially and adversely
affects the value of the Loans or the interest of the Seller; or

         (b) the non-fulfillment or non-performance of any covenant, condition
or action required of Purchaser pursuant to this Agreement; or

         (c) any act, omission, or error of Purchaser, or any employee, agent or
representative acting on its behalf, with respect to the origination or
servicing of any of the Loans, or any document, agreement or instrument
contained therein or relating thereto, occurring after the Sale Date; or

         (d) any claim resulting from a broker or finder acting on behalf of
Purchaser.

                                  ARTICLE VIII.
                                  MISCELLANEOUS

         Section 8.1. Survival. The representations, warranties, covenants and
agreements contained in this Agreement shall survive the Sale Date and delivery
of the Loans to Purchaser and shall not terminate, notwithstanding the

                                       21
<PAGE>

termination of this Agreement, any restrictive or qualified endorsement on any
Note or Purchaser's examination or failure to examine any Loan File or
Purchaser's approval of any Loan for purchase. The representations and
warranties of Seller in this Agreement are unaffected by and supersede any
provision in any endorsement of any Loan or in any assignment with respect to
such Loan to the effect that such endorsement or assignment is without recourse
or without representation or warranty.

         Section 8.2. Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.

         Section 8.3. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which shall be considered one and the same instrument.

         Section 8.4. Entire Agreement. This Agreement contains the entire
agreement between the parties and supersedes all prior agreements, arrangements
and understandings relating to the subject matter thereof. There are no written
or oral agreements, understandings, representations or warranties between the
parties other than those set forth herein.

         Section 8.5. Exhibits. All exhibits and attachments to this Agreement
are specifically incorporated herein and made part of this Agreement.

         Section 8.6. Rights Cumulative; Waivers. The rights of each of the
parties under this Agreement are cumulative, may be exercised as often as any
party considers appropriate and are in addition to each such party's rights
under any other documents executed between the parties or, except as otherwise
modified herein, under law. The rights of each of the parties hereunder shall
not be capable of being waived or varied otherwise than by an express waiver or
variation in writing. Any failure to exercise or any delay in exercising any of
such rights shall not operate as a waiver or variation of that or any other such
right. Any defective or partial exercise of any of such rights shall not
preclude any other or further exercise of that or any other such right. No act
or course of conduct or negotiation on the part of any party shall in any way
preclude such party from exercising any such right or constitute a suspension or
any variation of any such right.

         Section 8.7. Notices. All notices and other communications hereunder
shall be in writing (including a writing delivered by facsimile transmission)
and shall be deemed to have been duly given: (a) when delivered, if sent by
registered or certified mail (return receipt requested); (b) when delivered, if
delivered personally or (c) on the first following business day, if sent by
United States Express Mail or overnight courier, in each case to the parties at
the following addresses (or at such other addresses as shall be specified by
like notice);

         If to Seller to:

         See the Seller's Notice Address which is shown on Exhibit "A" attached
hereto.

                                       22
<PAGE>

         If to Purchaser to:

         See the Purchaser's Notice Address which is shown on Exhibit "A"
attached hereto.

         Section 8.8. Governing Law, Venue and Jurisdiction. This Agreement
shall be construed and governed in accordance with the laws of the State of
Florida. Venue for any litigation arising under this Agreement or its subsequent
performance shall be Miami-Dade County, Florida. Any litigation between the
parties arising from this Agreement shall only be brought in Miami-Dade County,
Florida and the parties hereby agree to such jurisdiction in Miami-Dade County,
Florida. Any issue regarding enforceability of the Cooperative Loan Documents
shall be determined in accordance with the laws of the state in which the Co-op
Premises is located.

         Section 8.9. Attorneys' Fees. In the event of any dispute hereunder or
of any action to interpret or enforce this Agreement, any provision hereof or
any matter arising herefrom, the prevailing party (or substantially prevailing)
party in any dispute arising under this Agreement or its subsequent performance
shall be entitled to recover its actual costs, fees and expenses, including, but
not limited to, witness fees, expert fees, consultant fees, attorney (in-house
and outside counsel), paralegal and legal assistant fees, and other professional
fees, costs and expenses whether in settlement, in any declaratory action, at
trial or on appeal and in all dispute resolution proceedings, including
bankruptcy and post-judgment collection, proceedings to determine the amount of
attorneys' fees to be awarded; and whether or not suit be brought.

         Section 8.10. Severability. In the case any provision in this Agreement
shall be found by a court of competent jurisdiction to be invalid, illegal or
unenforceable, such provision shall be construed and enforced as if it had been
more narrowly drawn so as not to be invalid, illegal or unenforceable, and the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.

         Section 8.11. Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of the parties hereto and their respective permitted
successors and assigns. Without the consent of Purchaser, Seller may not assign
or delegate its rights or duties hereunder. Following payment of the Purchase
Price, Purchaser may, without the prior written consent of Seller, sell,
transfer, assign or pledge its interest in this Agreement or in any of the
Loans.

         Section 8.12. Facsimile Execution. Facsimile signatures on counterparts
of this Agreement are hereby authorized and shall be acknowledged as if such
facsimile signatures were an original execution, and this agreement shall be
deemed as executed when an executed facsimile hereof is transmitted by a party
to any other party.

         Section 8.13. Relationship of Parties. The relationship between the
parties is an independent contractor relationship, and each party is not, and
shall not represent to third parties that such party is acting as, an agent for
and on behalf of the other.

                                       23
<PAGE>

         Section 8.14. WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW)
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.

         Section 8.15. Confidentiality. Except as required by law or court
order, Seller shall keep confidential and shall not divulge to any party,
without Purchaser's prior written consent, the terms of this Agreement and the
proposed transaction contemplated hereunder; except that either party may
disclose such terms to its employees, officers, directors, shareholders,
financial advisors, consultants, partners, affiliates, lenders and attorneys who
need to know such terms for purposes of evaluating the proposed transaction.

                           [SIGNATURE PAGE TO FOLLOW]

                                       24
<PAGE>

         IN WITNESS WHEREOF, each of the undersigned parties to this Agreement
has caused this Agreement to be duly executed in its corporate name by one of
its duly authorized officers, all as of the date first above written.

                                    "SELLER"

                                    Westmark Mortgage Corporation

                                    By:     /s/ Payton Story, III
                                    ---     ---------------------
                                    Name:   Payton Story III
                                    Title:  President/COO

                                    "PURCHASER"

                                    BAYVIEW FINANCIAL TRADING GROUP, L.P.
                                    By:     Bayview Financial Management Corp.,
                                            its General Partner

                                    By:     /s/ Steve Gordon
                                    ---     ----------------
                                    Name:   Steve Gordon
                                    Title:  Managing Director

                                       25

<PAGE>

                                   EXHIBIT "A"

Seller:                             Westmark Mortgage Corporation,

Seller's Address:                   8000 North Federal Highway
                                    Boca Raton, FL 33487

Seller's Notice    Address:         SAME AS ABOVE
                                    Attn:   Marcelo Scigliano

Purchaser:                          Bayview Financial Trading Group, L.P. a
                                    Delaware Limited Partnership

Purchaser's Address:                2665 South Bayshore Drive, Suite 301
                                    Miami, Florida 33133

Purchaser's Notice Address          SAME AS ABOVE
                                    Fax:    (305) 854-3042
                                    Attn.:  Steven M. Gordon

Custodian:

Cut-off Date:                       See the Cut-off Date Column on Exhibit "B"

Sale Date:                          April 14, 2000

Transfer Date:

Co-op Premises:

Co-op Housing:
Corporation:

                                       A-1

<PAGE>

                                   EXHIBIT "B"

                                SCHEDULE OF LOANS

                                (TO BE ATTACHED)

                                       B-1

<PAGE>

                                   EXHIBIT "C"

              EXCEPTIONS TO SELLER'S REPRESENTATIONS AND WARRANTIES

                                       C-1

<PAGE>

                                   EXHIBIT "D"

                            LIMITED POWER OF ATTORNEY

         Westmark Mortgage Corporation (hereinafter called "Seller") hereby
appoints Bayview Financial Trading Group, L.P. ("Purchaser"), as its true and
lawful attorney-in-fact to act in the name, place and stead of Seller for the
purposes set forth below. This Limited Power of Attorney is given pursuant to a
certain Loan Purchase Agreement by and between Seller and Purchaser dated March
16 2000, (the "Agreement") to which reference is made for the definition of all
capitalized terms herein.

         Now therefore, Seller does hereby constitute and appoint Purchaser the
true and lawful attorney-in-fact of Seller and in Seller's name, place and stead
with respect to each mortgage loan sold to Purchaser pursuant to the Agreement
for the following, and only the following, purposes:

         1. To execute, acknowledge, seal and deliver deed of trust/mortgage
note endorsements, assignments of deed of trust/mortgage and other recorded
documents, satisfactions/ releases/reconveyances of deed of trust/mortgage, tax
authority notifications and declaration, deeds, bills of sale, and other
instruments of sale, conveyance, and transfer, appropriately completed, with all
ordinary or necessary endorsements, acknowledgments, affidavits, and supporting
documents as may be necessary or appropriate to effect its execution, delivery,
conveyance, recordation of filing.

         2. To execute and deliver affidavits of debt, substitutions of trustee,
substitutions of counsel, non-military affidavits, notices of rescission,
foreclosure deeds, transfer tax affidavit, affidavits of merit, verification of
complaint, notices to quit, bankruptcy declarations for the purpose of filing
motions to lift stays and other documents or notice filings on behalf of Seller
in connection with foreclosure, bankruptcy and eviction actions.

         3. To endorse and/or assign checks or negotiable instruments received
by Purchaser as a Mortgage Loan Payment.

         Seller intends that this Limited Power of Attorney be coupled with an
interest and is not revocable.

         Seller further grants to its attorney-in-fact full authority to act in
any manner both proper and necessary to exercise the foregoing powers, and
ratifies every act that Purchaser may lawfully perform in exercising those
powers by virtue hereof.

         Seller further grants to Purchaser the limited power of substitution
and revocation of another party for the purpose and only for the purpose of
endorsing or assigning notes or security instruments in our name, and hereby
ratifying and confirming all that the attorney-in-fact, or substitute or
substitutes, shall lawfully do or cause to be done by virtue of this power of
attorney and the rights and powers.

                                       D-1

<PAGE>

         Purchaser shall indemnify, defend and hold harmless Seller, its
successors and assigns, from and against any and all losses, costs, expenses
(including, without limitation, actual attorneys' fees), damages, liabilities,
demand or claims of any kind whatsoever, ("Claims") arising out of, related to,
or in connection with (i) any act taken by Purchaser pursuant to this Limited
Power of Attorney, which act results in a Claim solely by virtue of the unlawful
use of this Limited Power of Attorney (and not as a result of a Claim related to
the underlying instrument with respect to which this Limited Power of Attorney
has been used), or (ii) any use or misuse of this Limited Power of Attorney in
any manner or by any person not expressly authorized hereby.

         IN WITNESS WHEREOF, Seller has executed this Limited Power of Attorney
this 25th day of April, 2000.

                                              WESTMARK MORTGAGE CORPORATION

                                              By:      /s/ Payton Story, III
                                              ---      ---------------------
                                              Name:    Payton Story III
                                              Title:   President/COO
Witnesses:

         /s/ Joan Deluca
         ---------------

         /s/ Jennifer Foster
         -------------------

STATE OF FLORIDA           )
                           ) ss.:
COUNTY OF PALM BEACH       )

BEFORE ME, Barbara Bame, a Notary Public in and for the jurisdiction aforesaid,
this 25th day of April, 2000, personally appeared Payton Story, III, who is
personally known to me to be the President of Westmark Mortgage Corp. The person
who executed the foregoing instrument to be her free and voluntary act and deed
as President for the uses, purposes and consideration therein set forth.

         Witness my hand and official seal this 25th day of April, 2000.

/s/ Barbara Bame
----------------
Notary Public

My Commission Expires:     08/29/03

                                       D-2

<PAGE>
                                   EXHIBIT "E"

            CERTIFICATE OF SELLER RELATING TO DELIVERY OF LOAN FILES

         Westmark Mortgage Corp., as Seller (the "Seller") pursuant to the Loan
Purchase Agreement dated as of 4/25/00 (the "Loan Purchase Agreement"), by and
between the Seller and Bayview Financial Trading Group, L.P., hereby certifies
that on the Transfer Date the Seller delivered the Loan Files relating to the
Loans listed on Schedule A attached hereto directly to the Custodian.

         Capitalized terms used but not otherwise defined herein have the
meanings assigned to such terms in the Loan Purchase Agreement.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
4/25/00.

                                            WESTMARK MORTGAGE CORPORATION

                                            By:      /s/ Payton Story, III
                                            ---      ---------------------
                                            Name:    Payton Story, III
                                            Title:   President/COO

                                       E-1

<PAGE>

INTERIM PAYMENTS

         PRINCIPAL. INTEREST. TAX AND INSURANCE PAYMENTS (PITI) - You are hereby
         instructed to apply all payments received prior to the transfer date to
         the appropriate accounts. You are required to remit a check or wire to
         InterBay for P&I payments applied during the interim servicing period.

         INTERIM REMITTANCE REPORTS - Make certain to provide a detailed
         remittance report with updated pay histories. The report should be
         faxed to InterBay Funding on the remittance date. Please provide the
         remittance report on diskette in an Excel format for deals comprised of
         50 loans or more. This will greatly assist with the processing and
         reconciliation of the interim remittance. If you have any questions
         regarding interim servicing requirements please contact the Servicing
         Transfer Specialist immediately.

PAYMENTS RECEIVED AFTER THE TRANSFER

         All payments received after the transfer date must be properly endorsed
         to InterBay and forwarded by overnight delivery daily, with the
         attached transmittal form at the address provided above. Please use
         InterBay's loan # when forwarding payments and correspondence.

         ESCROW AND SUSPENSE BALANCES - Credit all interest on escrow payments
         accruing prior to the transfer date. Remit all related escrow and
         suspense balances maintained in connection with any loan being
         transferred no later than one business day following the transfer date.
         Provide a report of outstanding escrow items for taxes; hazard and
         flood insurance; and PMI/MIP.

         REMIT ESCROW, SUSPENSE and MAINTENANCE RESERVE BALANCES TO INTERBAY
         FUNDING (Servicing Transfer Department) MADE PAYABLE TO INTERBAY
         FUNDING.

         FHA/ MIP PAYMENTS - On all FHA loans, disburse monthly premiums for the
         month immediately following the transfer date.

TRANSFER REPORTS

         A Trial Balance Report or updated payment histories must be received by
         close of business on the transfer date to include:

                  o        Loan number
                  o        Borrower's last name
                  o        Monthly P&I payment
                  o        Monthly escrow payment
                  o        Unpaid principal balances and due dates
                  o        Escrow balances including buydown and restricted
                           funds
                  o        Suspense balances

                                      1
<PAGE>
                  o        Late charge balances
                  o        Current interest rate
                  o        Loan type

         You are required to provide the following additional information to
         InterBay Funding within one business day of the transfer date:

         1.       Collection Reports detailing all loans 30, 60, 90, 120+ days
                  past due, bankruptcies and foreclosures.

         2.       Collection histories from inception of the loan including:
                  screen prints (if maintained on servicing system), copies of
                  notices and letters.

         3.       Payment histories including screen prints (if maintained on
                  servicing system), handwritten ledger cards, spreadsheets,
                  etc.

         4.       Bankruptcy and foreclosure screen prints and trial balance
                  report (where applicable).

         5.       Servicing contact listing with key employees in these areas:
                  Default Administration and Loss Mitigation; Bankruptcy and
                  Foreclosure; Payment Processing; Escrow Administration;
                  Investor Reporting; and Customer Service.

WIRING INSTRUCTIONS

         Wiring instructions for InterBay Funding L.L.C. are as follows:

                  Wire Instructions:
                  First Union National Bank
                  ABA#063-000-02 1
                  Credit Account: InterBay Funding, LLC - 128001
                  Account #2000004886147
                  RE: (Servicing Transfer Specialist) and/or (borrower
                  information)

SERVICING FILES AND RECORDS

         ORIGINAL FILES AND RECORDS - All original servicing files and records
         must be if not sent to Transaction Manager at BayView Financial, please
         shipped to InterBay Funding on or before the transfer date.

                            InterBay Funding, L.L.C.
                      2601 South Bayshore Drive, Suite 400
                              Miami, Florida 33133
                    Attention: Servicing Transfer Specialist

         Report all escrow payees for loans transferring. Please include in the
         file pending correspondence such as loss drafts, payoffs, forbearance
         plans, workouts, customer service research, notices of default, etc.

                                      2
<PAGE>

         Provide copies of the most recent ARM adjustment notices and escrow
         analysis statements for each account in the pool.

         VENDOR NOTIFICATIONS - It is your responsibility to notify the
         following vendors of the servicing transfer:

                  o        Insurance vendors - InterBay Funding, L.L.C., It's
                           Successors and/or Assigns"
                  o        Tax service - First American - #05851
                  o        HUD #14244-0000-8
                  o        Forced placed insurance carrier
                  o        Flood insurance certification company
                  o        PMI vendors
                  o        File FHA 92080 (if applicable)
                  o        Credit bureaus

         Send a report of all escrow payees to InterBay Funding for loans
         transferring or copies of the appropriate vendor notification letters.

         FORECLOSURE/BANKRUPTCY ATTORNEYS - Provide a listing of attorneys
         currently handling foreclosure and bankruptcy cases for loans
         transferring. A complete history must be provided for these accounts.
         Please issue a copy of the Good-bye letter to all appropriate parties
         involved. PLEASE ENSURE ALL RELATED DOCUMENTS AND/OR FILES ARE SHIPPED
         UPON TRANSFER.

         ARM ADJUSTMENTS - Provide a report of pending ARM changes and the most
         recent ARM adjustment notices for each adjustable rate mortgage in the
         pool.

CERTIFICATION

I/We have read and understand the servicing transfer instructions contained
herein, and hereby agree to abide by the requirements imposed by InterBay
Funding, L.L.C. as evidenced by our signature(s) below.

/s/ Payton Story, III                                     4/25/00
-----------------------------                             ---------------
Seller's Representative                                   Date

-----------------------------                             ---------------
Servicer's Representative                                 Date

                                       3

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