Document:

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                       SERVICING RIGHTS PURCHASE AGREEMENT

                                 by and between

                             OCWEN FEDERAL BANK FSB
                                   (Purchaser)

                                       and

                         FIRST ALLIANCE MORTGAGE COMPANY
                                    (Seller)

                            Dated as of July 1, 2000

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                                TABLE OF CONTENTS
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                                                                            PAGE

ARTICLE I         DEFINITIONS
Section 1.01      DEFINED TERMS................................................1
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ARTICLE II        SALE AND CONVEYANCE OF SERVICING RIGHTS
Section 2.01      AGREEMENT TO SELL THE SERVICING RIGHTS.......................7
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Section 2.02      TRANSFER OF SERVICING RIGHTS.................................7
                  ----------------------------
Section 2.03      PURCHASE PRICE...............................................8
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Section 2.04      REIMBURSEMENT OF ADVANCES...................................10
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Section 2.05      TRANSFER CONDITIONS.........................................10
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Section 2.06      BREAKUP FEE.................................................12
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Section 2.07      OVERBID PROCEDURES.  .......................................12
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Section 2.08      LIQUIDATED DAMAGES.  .......................................12
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ARTICLE III       REPRESENTATIONS AND WARRANTIES
Section 3.01      REPRESENTATIONS AND WARRANTIES OF THE SELLER................14
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Section 3.02      CERTAIN PROVISIONS RELATING TO THE SELLER'S REPRESENTATIONS
                  -----------------------------------------------------------
                  AND WARRANTIES..............................................17
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Section 3.03.     REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.............18
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ARTICLE IV        TRANSFER DATE DELIVERIES
Section 4.01      DOCUMENTS, SCHEDULES AND EXHIBITS REQUIRED WITH RESPECT
                  -------------------------------------------------------
                  TO THE TRANSFER DATE........................................19
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Section 4.02      ACCESS TO INFORMATION.......................................23
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Section 4.03      TRANSFER EXPENSES...........................................23
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Section 4.04      DOCUMENT DEFICIENCIES.......................................23
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ARTICLE V         ADMINISTRATION OF TRANSFER OF SERVICING
Section 5.01      NOTICE LETTERS OF TRANSFER.  ...............................25
                  --------------------------
Section 5.02      STATEMENTS..................................................25
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Section 5.03      TAX CONTRACTS...............................................25
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Section 5.04      PAYMENTS AND NOTICES RECEIVED AFTER THE TRANSFER DATE.......26
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Section 5.05      EDP DEPARTMENT..............................................26
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Section 5.06      CUSTODIAN APPROVAL..........................................26
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Section 5.07      MISSING SOCIAL SECURITY NUMBER; FORMS W-8 OR W-9............27
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ARTICLE VI        ADDITIONAL AGREEMENTS
Section 6.01      PUBLICITY...................................................28
                  ---------
Section 6.02      CONSENTS....................................................28
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ARTICLE VII       MISCELLANEOUS PROVISIONS
Section 7.01      AMENDMENT...................................................29
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Section 7.02      GOVERNING LAW...............................................29
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Section 7.03      NOTICES.....................................................29
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Section 7.04      EXHIBITS....................................................30
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Section 7.05      GENERAL INTERPRETIVE PRINCIPLES.............................30
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Section 7.06      REPRODUCTION OF DOCUMENTS...................................30
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Section 7.07      COUNTERPARTS................................................31
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Section 7.08      ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS....................31
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Section 7.09      INTENTION OF THE PARTIES....................................31
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Section 7.10      BROKERAGE COMMISSIONS.......................................31
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Section 7.11      FURTHER ASSURANCES..........................................31
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Section 7.12      CONSENT AGREEMENT...........................................32
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                                       ii

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                                    EXHIBITS
                                    --------
1.       Contents of Mortgage File
2.       Form of Seller's Closing Certificate
3.       Transfer Instructions
4.       Computer Tape Format
5.       List of Pooling and Servicing Agreements
6.       List of Participation Agreements
7.       List of Document Deficiencies
8.       List of Custodial Agreements for Pooled Mortgage Loans
9.       Form of Purchaser's Closing Certificate
10.      Form of Assignment and Assumption Agreement
1.

                                      iii
<PAGE>

                       SERVICING RIGHTS PURCHASE AGREEMENT
                       -----------------------------------

         This Servicing Rights Purchase Agreement ("Agreement") is made as of
July 1, 2000 and is executed between First Alliance Mortgage Company, a
corporation formed under the laws of California, as debtor-in-possession
("Seller") and Ocwen Federal Bank FSB, a federally chartered savings bank
("Purchaser").

                              PRELIMINARY STATEMENT

         The Seller owns the right to service certain residential mortgage loans
which are subject to either one of the Pooling and Servicing Agreements which
are identified on Exhibit 5 hereto or which are subject to one of the
Participation Agreements which are identified on Exhibit 6 hereto. The Seller
desires to sell and transfer the Servicing Rights, and the Purchaser desires to
be appointed as the servicer under the Pooling and Servicing Agreements and the
Participation Agreements and to purchase and assume the Servicing Rights to the
extent hereinafter provided.

         In consideration of the mutual agreements hereinafter set forth, the
Seller and the Purchaser agree as follows:

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

         Section 1.01 DEFINED TERMS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings specified in this
Article:

                  "Advance": Any amounts advanced in accordance with the terms
of a Servicing Agreement in connection with delinquent Monthly Payments, the
payment of taxes and insurance or otherwise made with respect to a Mortgage Loan
in accordance with the Servicing Requirements applicable to the Mortgage Loan or
any principal advances made pursuant to any Participation Agreement and
reimbursable in accordance with such Servicing Requirements or Participation
Agreements.

                  "Agreement": This Servicing Rights Purchase Agreement
including all schedules, exhibits and supplements hereto and amendments hereof.

                  "Assignment of Mortgage": An assignment of a Mortgage, notice
of transfer or equivalent instrument, in form acceptable for recording and
sufficient under the laws of the jurisdiction wherein the Mortgaged Property is
located to reflect of record the transfer of the Mortgage.

                  "Bankruptcy Code": Title 11 of the United States Code, as
amended from time to time.

<PAGE>

                  "Bankruptcy Court": The United States Bankruptcy Court for the
Central District of California.

                  "Bankruptcy Court Order": A final, non-appealable order of the
Bankruptcy Court, in a form acceptable to the Purchaser and its counsel,
authorizing and approving the sale and/or assumption and assignment free and
clear of all liens, claims, encumbrances and interests in accordance with
Sections 363 and 365 of the Bankruptcy Code of the Servicing Rights to the
Purchaser under this Agreement, which order is not the subject of any pending
appeal, stay, injunction, request for a stay or injunction, or request for
reargument or reconsideration of any sort.

                  "Bond Insurance Policy": With respect to each Pooling and
Servicing Agreement as to which any of the certificates issued thereunder are
subject to bond insurance, the policy issued by the related Bond Insurer
pursuant to which such insurance is provided.

                  "Bond Insurer": With respect to each Pooling and Servicing
Agreement as to which any of the certificates issued thereunder are subject to a
Bond Insurance Policy, the related issuer of such Bond Insurance Policy, which
shall be either MBIA Insurance Company or Financial Security Assurance, Inc.

                  "Bond Insurer Letters": With respect to each Pooling and
Servicing Agreement as to which any of the certificates issued thereunder are
subject to a Bond Insurance Policy, a letter or letters from the related Bond
Insurer sufficient to satisfy the requirements of such Pooling and Servicing
Agreement with respect to the appointment of the Purchaser as the servicer under
the Pooling and Servicing Agreement, and which does not reduce or limit the
rights or compensation of the servicer under the applicable Pooling and
Servicing Agreement.

                  "Borrower": The individual(s) obligated to repay a Mortgage
Loan.

                  "Breakup Fee": As defined in Section 2.06.

                  "Business Day": A day of the week other than (a) Saturday or
Sunday or (b) a day on which banking or savings institutions in the state of
incorporation or principal business location of the Seller or of the Purchaser
are authorized or permitted under applicable law to be closed.

                  "Collection Account": An account or accounts maintained by the
Seller for the deposit of principal and interest payments received in respect of
one or more Mortgage Loans in accordance with the Servicing Agreements, whether
designated as a certificate account, collection account, custodial account or
otherwise (other than an Escrow Account).

                  "Custodial File": With respect to an individual Mortgage Loan,
the Mortgage Loan documents required to be held by a Custodian pursuant to the
terms of the related Servicing Agreement.

                  "Custodian": An entity acting as Mortgage Loan document
custodian pursuant to the terms of the related Servicing Agreement.

                                       2
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                  "Data Base": All information in the computer tape format
attached hereto as Exhibit 4 delivered by the Seller, whether before or on or
after the Transfer Date, in connection with this Agreement.

                  "EDP":  Electronic data processing.

                  "Escrow Account": Each account, if any, maintained by the
Seller pursuant to the terms of a Servicing Agreement for the deposit of Escrow
Payments received in respect of one or more Mortgage Loans in accordance with
the related Servicing Requirements.

                  "Escrow Payments": The amounts constituting ground rents,
taxes, assessments, water rates, common charges in condominiums and planned unit
developments, mortgage insurance premiums, fire and hazard insurance premiums
and other payments which have been escrowed by the Borrower with the mortgagee
pursuant to any Mortgage Loan.

                  "Hold Back Amount":  As defined in Section 2.03(b).

                  "Insurance Policy": All of the Seller's right, title and
interest and under any of the hazard insurance, title insurance and credit life
insurance policies and certificates related to a Mortgage Loan. References in
this Agreement to hazard insurance shall be construed to include flood insurance
to the extent that flood insurance is required of a Mortgage Loan pursuant to
the Servicing Requirements.

                  "Investor": With respect to each Mortgage Loan the Person or
Persons who own the beneficial interest in the Mortgage Loan pursuant to the
terms of the related Servicing Agreement.

                  "Master Servicer": With respect to each Pooling and Servicing
Agreement, the entity identified as the "Master Servicer" or "Oversight Agent"
therein.

                  "Master Servicer Letter": With respect to each Pooling and
Servicing Agreement, a letter from the related Master Servicer sufficient to
satisfy the requirements of such Pooling and Servicing Agreement with respect to
the appointment of the Purchaser as the servicer under the Pooling and Servicing
Agreement, and which does not reduce or limit the rights or compensation of the
servicer under the applicable Pooling and Servicing Agreement.

                  "Monthly Payment": The scheduled monthly payment of principal
and interest on a Mortgage Loan.

                  "Mortgage": The mortgage, deed of trust or other instrument
creating a first or junior lien on real property securing the Mortgage Note.

                  "Mortgage File": The documents pertaining to a particular
Mortgage Loan which are specified on Exhibit 1 hereto.

                                       3
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                  "Mortgage Loan": An individual mortgage loan which is subject
to this Agreement and identified on the Mortgage Loan Schedule.

                  "Mortgage Loan Schedule": The hard copy list of Mortgage Loans
attached as Schedules 1-A and 1-B to the Seller's Closing Certificate which list
shall set forth, as of the date specified in such list, the following
information for each Mortgage Loan:

                  (i)      the loan number, investor code and, where available,
                           Pool Number;

                  (ii)     the outstanding principal balance;

                  (iii)    the last due date with respect to which interest has
                           been paid;

                  (iv)     codes indicating the applicable Investor;

                  (v)      note rate, servicing fee rate payable pursuant to the
                           Servicing Agreement and Investor guarantee fee;

                  (vi)     maturity date, where available;

                  (vii)    property location, by state;

                  (viii)   the guarantee fee or pool policy insurance fee, if
                           any; and

                  (ix)     a code indicating the Servicing Agreement pursuant to
                           which the Mortgage Loan is serviced; and

                  (x)      the servicing fee under the Servicing Agreement.

                  "Mortgage Note": The note or other evidence of the
indebtedness of a Borrower secured by a Mortgage.

                  "Mortgaged Property": The underlying real property securing
repayment of a Mortgage Note.

                  "Participation Agreement": Each of the Participation
Agreements identified on Exhibit 6 hereto.

                  "Participation Mortgage Loan": Each Mortgage Loan which is
identified on Schedule 1-A to the Seller's Closing Certificate and which is
serviced pursuant to a Participation Agreement and owned by the related Investor
in a whole loan format.

                  "Petition Date": The date on which Seller's petition for
relief under the Bankruptcy Code commences.

                                       4
<PAGE>

                  "Pool": A group of loans which includes any Mortgage Loan and
is considered by the applicable Investor to be aggregated for purposes of
servicing.

                  "Pool Number": Such pool or accounting group designation as
may be required by the Investors to service the Mortgage Loans or to transfer
the Servicing Rights.

                  "Pool Schedules": The Schedule of Mortgage Loans by Pool in a
form acceptable to the Purchaser.

                  "Pooled Mortgage Loan": Each Mortgage Loan which is identified
on Schedule 1-B to the Seller's Closing Certificate and which is serviced
pursuant to a Pooling and Servicing Agreement and beneficially owned by the
related Investors in a pass-through format.

                  "Pooling and Servicing Agreement": Each of the Pooling and
Servicing Agreements identified on Exhibit 5 hereto.

                  "Preliminary Pricing Cut-off Date": June 30, 2000.

                  "Purchase Price": As defined in Section 2.03.

                  "Purchaser": Ocwen Federal Bank FSB.

                  "Purchaser's Closing Certificate": An officer's certificate in
the form of Exhibit 9 prepared by or on behalf of the Purchaser and delivered to
the Seller pursuant to this Agreement.

                  "Rating Agency": As defined in the applicable Pooling and
Servicing Agreement.

                  "Seller": First Alliance Mortgage Company.

                  "Seller's Closing Certificate": An officer's certificate in
the form of Exhibit 2 prepared by or on behalf of the Seller and delivered to
the Purchaser pursuant to this Agreement.

                  "Servicing Agreement": With respect to each Mortgage Loan
underlying a mortgage-backed security, the related Pooling and Servicing
Agreement to which the beneficial interest in such Mortgage Loan was sold to
Investors and pursuant to which the Mortgage Loan is serviced, and with respect
to each Mortgage Loan identified on the Mortgage Loan Schedule as being subject
to a Participation Agreement, the related agreement pursuant to which such
Mortgage Loan is being serviced.

                  "Servicing Fee": The amount to be paid to the Purchaser under
the applicable Servicing Agreement related to a Mortgage Loan, as consideration
for servicing the Mortgage Loan which is specified on the Mortgage Loan
Schedule.

                                       5
<PAGE>

                  "Servicing Requirements": With respect to each Mortgage Loan,
the applicable provisions of the related Servicing Agreement with respect to the
servicing, control and administration of such Mortgage Loan.

                  "Servicing Rights": All of Seller's right, title and interest
in and to the servicing of the Mortgage Loans and the securities, if any, backed
thereby, including all rights under each applicable Servicing Agreement to
receive or retain amounts in respect of servicing fees, reimbursement for
Advances, or other expenses and costs, and investment earnings or other benefits
from positive account balances, together with all Collection Account balances,
Escrow Account balances, contract rights, incidental income and benefits to the
extent payable to Seller, including prepayment penalties and charges, and
exclusive rights to possession and use of servicing files and records directly
or indirectly related thereto, including, without limitation, Borrower lists,
Insurance Policies and tax service agreements and including the right to
exercise any clean-up call provided under the Servicing Agreement; provided,
however, that the term Servicing Rights shall not include any obligations of
Seller in its capacity as "the Company" or "the Seller" under any Pooling and
Servicing Agreement, or in any other capacity than as servicer under any other
Servicing Agreement, including but not limited to, any obligations in connection
with any representations or warranties made by the Seller in its capacity as
"the Company" or "the Seller" under any Pooling and Servicing Agreement, or in
its capacity as seller under any other Servicing Agreement or any obligation to
remedy breaches of any representations or warranties or to indemnify any party
in connection therewith or any other recourse obligation of the Seller
thereunder in its capacity as "the Company" or "the Seller" under any Pooling
and Servicing Agreement, or in its capacity as seller under any other Servicing
Agreement.

                  "Transfer Date": With respect to a Mortgage Loan, the date on
which the physical servicing of the Mortgage Loan and the related Servicing
Rights and the obligation to service the Mortgage Loans pursuant to the
Servicing Agreements are transferred to and assumed by the Purchaser pursuant to
this Agreement which date shall not be later than July 31, 2000 or such later
date as mutually agreed to by the parties hereto.

                  "Transfer Instructions": The instructions specifying the
manner in which the servicing of the Mortgage Loans shall be transferred to
Purchaser as agreed upon by Purchaser and Seller in good faith, attached hereto
as Exhibit 3.

                  "Trustee": With respect to each Pooling and Servicing
Agreement, the entity identified as the "trustee" therein.

                  "Trustee Letters": With respect to each Pooling and Servicing
Agreement, a letter or letters from the related Trustee sufficient to satisfy
the requirements of such Pooling and Servicing Agreement with respect to the
appointment of the Purchaser as the servicer under the Pooling and Servicing
Agreement, and which does not reduce or limit the rights or compensation of the
servicer under the applicable Pooling and Servicing Agreement.

                  "Uncollected Late Charges": With respect to each Mortgage
Loan, the amount of the late charges which were assessed but not collected as of
the Transfer Date.

                                       6
<PAGE>

                                   ARTICLE II

                     SALE AND CONVEYANCE OF SERVICING RIGHTS
                     ---------------------------------------

         Section 2.01 AGREEMENT TO SELL THE SERVICING RIGHTS.

         Subject to the terms and provisions of this Agreement and entry of the
Bankruptcy Court Order in accordance with all applicable provisions of the
Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and Local Rules of
the Bankruptcy Court, effective as of the Transfer Date, the Purchaser hereby
purchases and assumes from the Seller and the Seller hereby sells, transfers,
assigns, conveys and sets over to the Purchaser as of the Transfer Date, the
Servicing Rights, and the Purchaser hereby assumes all of the obligations of the
Seller as servicer under each of the Servicing Agreements arising on and after
the Transfer Date and agrees to perform the servicing of each Mortgage Loan in
accordance with the terms of each related Servicing Agreement, including,
without limitation, all obligations to make Advances pursuant to the applicable
Pooling and Servicing Agreements.

         To the extent permitted under the related Servicing Agreement, in
connection with the purchase of the Servicing Rights, the Purchaser shall be
entitled to retain the Servicing Fees and all late fees and other ancillary
income as additional servicing compensation. Such ancillary income will include,
without limitation, investment earnings on Collection and Escrow account
balances, assumption fees, charges for bad checks, late charges, release fees
and any prepayment penalties or charges collected on a Mortgage Loan following
the Transfer Date (whether assessed before or after the Transfer Date).

         From and after the Transfer Date, the sole and exclusive ownership of
the Servicing Rights shall vest in the Purchaser. The possession of all Mortgage
Files and other books, records, accounts and funds by the Seller following the
Transfer Date is solely in a fiduciary capacity for and at the will of the
Purchaser.

                                       7
<PAGE>

         Section 2.02 TRANSFER OF SERVICING RIGHTS.

         On the Transfer Date, and subject to the satisfaction or waiver of all
of the conditions of the Seller and Purchaser set forth herein, all of the
Seller's rights and obligations with respect to the Servicing Rights shall be
transferred to and all of the Seller's obligations as servicer shall be assumed
by the Purchaser in accordance with the terms of this Agreement without the
necessity of any further act or deed on the part of the Purchaser or the Seller;
provided, however, that the Purchaser shall not assume and the Seller is not
hereby conveying any obligations of Seller as "the Company" or "the Seller"
under any Pooling and Servicing Agreement, or in any capacity other than as
servicer under any other Servicing Agreement, including but not limited to, any
obligations (other than servicer obligations) in connection with any
representations or warranties made by the Seller in its capacity as "the
Company" or "the Seller" under any Pooling and Servicing Agreement, or in its
capacity as "seller" under any other Servicing Agreement or any obligation to
remedy breaches of any representations or warranties or to indemnify any party
in connection therewith or any other recourse obligation of the Seller
thereunder in its capacity as "the Company" or "the Seller" under any Pooling
and Servicing Agreement, or in its capacity as "seller" under any other
Servicing Agreement. From and after the Transfer Date, the Purchaser agrees that
it shall be responsible for assuring that the Mortgage Loans are serviced in
accordance with the Servicing Requirements and shall have full power and
authority, acting alone, to do any and all things in connection with such
servicing and administration that the Purchaser may deem necessary or desirable,
consistent with the terms of this Agreement and the Servicing Requirements. The
Purchaser agrees to service the Mortgage Loans with the same level of care,
skill, prudence and diligence that the Purchaser would ordinarily employ in
servicing like loans. To assure that there is no differential treatment of the
Mortgage Loans, such loans will be combined with other Purchaser loans of a
similar platform to be serviced by uniform personnel operating under uniform
policies and procedures and will not be specifically identified to Purchaser's
employees.

         On the Transfer Date, the Purchaser shall execute assignment and
assumption agreements in the form of Exhibit 10 hereto, assuming all the rights
and obligations of the Seller as servicer under the insurance and/or indemnity
agreements entered into with the Bond Insurers.

         Notwithstanding anything in this Agreement to the contrary, the
Purchaser shall not assume any obligations or liabilities of the Seller that
arose prior to the Transfer Date.

         On and after the Transfer Date the Purchaser shall make all remittances
required to be made in accordance with the Servicing Requirements; provided
that, the Seller agrees to perform within fifteen (15) days thereafter all
Investor reporting requirements attributable to the period prior to the Transfer
Date whether or not such reports are required to be provided prior to or after
the Transfer Date.

         Section 2.03 PURCHASE PRICE.

         (a) The purchase price to be paid by the Purchaser to the Seller for
the Servicing Rights (the "Purchase Price") shall be equal to the product of (a)
1.11% (the "Purchase Price Percentage") times (b) the aggregate unpaid principal
balances of the Mortgage Loans as of July 31, 2000. The Purchaser's obligation
to pay the Purchase Price will terminate without further liability of the
Purchaser in the event that the transfer of the Servicing Rights as contemplated
in this Agreement is not consummated for any reason, other than due to a breach
by the Purchaser, including the Seller's failure to satisfy all the required
closing and transfer conditions, including the procurement of the necessary
Bankruptcy Court Order. The Purchase Price Percentage has been based upon the
exclusive servicing offering supplement and other information provided therewith
by the Seller in connection with the Purchaser's bid for the Servicing Rights.
In the event that there are any differences in this information from due
diligence findings by the Purchaser, or in the event that the Transfer Date
occurs after July 31, 2000, the Purchase Price Percentage shall be subject to a
mutually agreeable adjustment by the Purchaser and the Seller.

                                       8
<PAGE>

         (b) The Purchase Price shall be paid by the Purchaser as follows:
ninety percent (90%) of the Purchase Price will be paid on the Transfer Date and
the remaining ten percent (10%) constituting the Hold Back Amount shall be paid
to the Seller pursuant to Section 2.03(c). The Purchaser and the Seller agree
that it shall be impractical for the Purchaser and the Seller to determine the
actual unpaid principal balance of the Mortgage Loan on or before the Transfer
Date. Accordingly, the portion of the Purchase Price to be paid on the Transfer
Date shall be based on the unpaid principal balance of the Mortgage Loans as of
the Preliminary Pricing Cut-off Date. Within fifteen (15) days following the
Transfer Date, the Purchaser and Seller shall conduct a reconciliation to
determine the actual balance of the Mortgage Loans as of the Transfer Date and
the Purchaser shall credit the purchase price differential against the Hold Back
Amount to be paid to the Seller. To the extent that the Hold Back Amount is not
sufficient to compensate the Purchaser for any such price differential,
following such reconciliation the Seller shall refund to the Purchaser the
amount by which such price differential exceeds the Hold Back Amount within
three (3) Business Days of a request therefor from the Purchaser.

         (c) Within fifteen (15) days following the Transfer Date, the Purchaser
shall deliver to the Seller a list of any servicing documents that are required
to be delivered pursuant to the Transfer Instructions which have not been
delivered to Purchaser or its designee and shall notify Seller of any errors
with respect to the reconciliation statements provided pursuant to the Transfer
Instructions (each such document deficiency or reconciliation statement error, a
"Deficiency"). The Purchaser shall retain the Hold Back Amount for a period of
ninety (90) days following the Transfer Date. During such time, the Purchaser
shall have the right to reduce the Hold Back Amount to compensate the Purchaser
for any expenses incurred by the Purchaser in connection with curing any
document deficiencies pursuant to Section 4.04 (subject to the $25,000
limitation set forth in Section 4.04) or for losses resulting from the breach of
any representation or warranty made by the Seller pursuant to Section 3.01. The
remaining Hold Back Amount (reduced by the credit applied by the Purchaser
pursuant to Section 2.03(b) or pursuant to the preceding sentence) shall be paid
to the Seller on the ninetieth (90th) day following the Transfer Date.

                                       9
<PAGE>

         (d) The Purchaser and the Seller acknowledge and agree that a
substantial portion of the Purchase Price being paid for the Servicing Rights
relates to the Purchaser's acquisition of the Seller's right to receive
prepayment penalties with respect to the Mortgage Loans and that any court,
regulatory or other legal action that would restrict or otherwise impair the
Purchaser's right to receive such prepayment penalties would have an adverse
effect on the value of the Servicing Rights purchased hereunder. In order to
provide a reserve amount to compensate the Purchaser for any diminution in value
of the Servicing Rights due to any such event, on the Transfer Date, the Seller
shall establish a reserve account, which may be an interest bearing account, in
an amount equal to $1,500,000. Such amount shall be held in an account and at a
banking institution each reasonably acceptable to the Purchaser and the Seller
and shall require the joint signatures of the Purchaser and the Seller for any
withdrawal or draw from such account. Any amounts held in such account shall be
invested in investments which would customarily be deemed to be eligible
investments pursuant to a customary rated securitization in the secondary market
that are acceptable to the Purchaser. If at any time any court, regulatory or
other legal action restricts or otherwise impairs the Purchaser's right to
receive prepayment penalties on any Mortgage Loans, the Purchaser shall
reasonably and in good faith determine the diminution in value of the Servicing
Rights due such action and shall direct the payment of such amount to the
Purchaser from such reserve account. To the extent that payments to the
Purchaser have not reduced the balance of the account below such amount, the
Seller shall have the right to withdraw $250,000 from the account on the three
month, six month, nine month and one year anniversary of the Transfer Date. In
addition, on the one year anniversary of the Transfer Date, any earnings in the
reserve account shall be released to the Seller. Ten (10) days prior to the
confirmation hearing for the final order from the Bankruptcy Court providing for
the liquidation of the Seller, which hearing shall be not less than one year
following the Transfer Date, any amount remaining in the reserve account shall
be paid to the Seller.

         Section 2.04 REIMBURSEMENT OF ADVANCES.

         (a) On the Transfer Date, the Purchaser agrees to reimburse the Seller
for 90% of the amount of the unreimbursed Advances which were outstanding as of
the Preliminary Pricing Cut-off Date, which were made pursuant to the terms of
any Servicing Agreement and which the Purchaser reasonably believes will be
recoverable in accordance with the terms of such Servicing Agreement.
Notwithstanding anything in this section to the contrary, the Purchaser shall
not reimburse the Seller for any unreimbursed but reimbursable Advances which
constitute principal and interest advances pursuant to the Pooling and Servicing
Agreements or principal advances pursuant to the Participation Agreements which
amounts may be netted from the amount of the Collection Accounts remitted to the
Purchaser pursuant to Section 4.01(e)(1). The Seller shall, within two (2)
Business Days after the Transfer Date, provide to the Purchaser evidence of the
dollar amount of all Advances as of the Preliminary Pricing Cut-off Date, broken
down by Servicing Agreement, made by the Seller as servicer which have not been
previously reimbursed. As soon as practical following the Transfer Date the
Purchaser and Seller shall reconcile the actual amount of Advances that were
outstanding as of the Transfer Date and the recoverability status of such
Advances and make any monetary adjustments to the amount required to be
reimbursed to the Seller. Following such reconciliation, the remaining ten
percent (10%) of the reimbursable Advance amount shall be paid to the Seller, as
adjusted to reflect any monetary adjustments required to be made as a result of
such reconciliation. To the extent that such remaining ten percent (10%) is not
sufficient to compensate the Purchaser in connection with such reconciliation,
the Seller shall refund to the Purchaser such price differential within three
(3) Business Days of a request therefor from the Purchaser. The foregoing
true-up is anticipated to be completed within 15 Business Days following the
Transfer Date on which date any payment required hereunder shall be made. The
Purchaser shall be entitled to retain the full amount of any reimbursements for
any Advances or Uncollected Late Charges that are received following the
Transfer Date.

         Section 2.05 TRANSFER CONDITIONS.

         (a) The Purchaser's obligations to consummate its purchase of the
Servicing Rights pursuant to this Agreement is subject to the satisfaction or
waiver (other than with respect to subclause (v) below which shall not be waived
without the consent of the Trustees and Master Servicers) on or prior to the
Transfer Date of the following conditions:

                    (i) The Seller shall have performed in all material respects
all of its covenants and agreements contained herein which are required to be
performed by them on or prior to the Transfer Date;

                                       10
<PAGE>

                   (ii) All of the representations and warranties of the Seller
contained in this Agreement shall be true and correct in all material respects
as of the Transfer Date, and no material deterioration shall have occurred to
the Servicing Rights prior to the Transfer Date;

                  (iii) The Purchaser shall have received in escrow, or the
Purchaser's attorneys shall have received in escrow, and the Trustees and Master
Servicers shall have received copies of, each of the documents specified in
Section 4.01 for delivery on or prior to the Transfer Date, duly executed by all
signatories other than the Purchaser, as required by the respective terms
thereof;

                   (iv) The Purchaser, Trustees and Master Servicers shall have
received copies of each Bond Insurer Letter, Master Servicer Letter and Trustee
Letter required under the terms of each Pooling and Servicing Agreement as
provided under Section 6.02;

                    (v) Any other approval of the transfer of the Servicing
Rights required to be obtained under the related Servicing Agreements shall have
been obtained and satisfactory evidence thereof provided to the Purchaser,
Trustees, Master Servicers and their respective counsel;

                   (vi) The Seller shall have obtained the necessary Bankruptcy
Court Order in accordance with all applicable provisions of the Bankruptcy Code,
the Federal Rules of Bankruptcy Procedure and Local Rules of the Bankruptcy
Court. The foregoing notwithstanding, if on or prior to August 1, 2000, any
party obtains a stay pending appeal of the Bankruptcy Court's order approving
the assumption and assignment of the Servicing Rights, then the parties'
obligations pursuant to this Agreement to sell and purchase the Servicing Rights
shall remain in effect to and including August 31, 2000, despite the existence
of such stay, subject to a mutually agreed upon pricing adjustment; and

                  (vii) The Seller shall have provided to the Purchaser a list
of any exceptions to the representations and warranties made in Section 3.01(i),
3.01(l) and Section 3.01(r) by July 6, 2000, and the Purchaser shall have
determined by July 12, 2000 in its reasonable discretion that such exceptions do
not materially and adversely affect the Servicing Rights.

         (b) The obligation of the Seller to consummate the sale of the
Servicing Rights to Purchaser pursuant to this Agreement is subject to the
satisfaction or waiver on or prior to the Transfer Date of the following
conditions:

                  (i) The Purchaser shall have performed in all material
respects all of its covenants and agreements contained herein which are required
to be performed by it on or prior to the Transfer Date;

                  (ii) All of the representations and warranties of the
Purchaser contained in this Agreement shall be true and correct in all material
respects as of the Transfer Date;

                  (iii) The Seller shall have received in escrow, or Seller's
attorneys shall have received in escrow, and the Trustees and Master Servicers
shall have received copies of, a copy of the Purchaser's Closing Certificate in
the form of Exhibit 9 hereto; and

                                       11
<PAGE>

                  (iv) The Purchaser shall have paid to the Seller the portion
of the Purchase Price required to be paid on the Transfer Date.

         Section 2.06 BREAKUP FEE.

         (a) In the event the Seller enters into an alternative transaction
pursuant to Section 2.07 (an "Alternative Transaction") then the Seller will pay
the Purchaser a breakup fee in the amount equal to $100,000 (the "Breakup Fee"),
such amount to be paid within two (2) Business Days following the consummation
of such Alternative Transaction. If the Breakup Fee is not paid from the
proceeds of an Alternative Transaction for any reason, in violation of the terms
of the Bankruptcy Court order described in Section 2.06(b) below, the Breakup
Fee will be paid as an administrative claim of the bankruptcy estate and shall
accrue interest from the date required for payment at a per annum rate equal to
the one month LIBOR rate as in effect from time to time.

         (b) The Seller agrees to obtain not later than July 14, 2000, an order
of the Bankruptcy Court (i) approving the amount and manner of payment of the
Breakup Fee described in Section 2.06(a), (ii) determining that, in the event
that a proposal for an Alternative Transaction is accepted by the Seller and the
Bankruptcy Court for the Servicing Rights, cash proceeds from the sale of the
Servicing Rights equal to the Breakup Fee is not encumbered by any lien of any
party, pursuant to Section 506(a) and (c) of the Bankruptcy Code or by agreement
of otherwise, and further that such proceeds shall be used for the purpose of
paying the Breakup Fee to the Purchaser in accordance with the terms of this
Agreement; and (iii) determining that, if the sale of the Servicing Rights to
the Purchaser does not occur on or before July 31, 2000 or such later date
reasonably agreeable to the parties hereto, because an Alternative Transaction
is accepted by the Seller and the Bankruptcy Court, that the Seller shall pay
the Breakup Fee to the Purchaser within two (2) Business Days following the
closing of such Alternative Transaction.

         Section 2.07 OVERBID PROCEDURES.

         Third parties interested in acquiring the Servicing Rights, may submit
to the Seller an acquisition proposal (an "Acquisition Proposal") including
terms and conditions that are at least as favorable to the Seller as those set
forth in this Agreement, in accordance with the provisions of a sales procedure
order of the Bankruptcy Court which shall include terms and procedures as set
forth in the order entered on June 29, 2000.

                                       12
<PAGE>

         Section 2.08 LIQUIDATED DAMAGES.

         In the event that the Servicing Rights for the Mortgage Loans are not
transferred to the Purchaser on or before July 31, 2000 or such later date
reasonably agreeable to the parties hereto (including any date provided pursuant
to Section 2.05(a)(vi)) for any reason, other than due to a breach by the
Purchaser of this Agreement, then the Seller will pay the Purchaser as
liquidated damages an amount equal to $100,000, such amount to be paid within
two (2) Business Days following July 31, 2000 (or within two (2) Business Days
following such later date by which the Purchaser and the Seller had agreed to
transfer the Servicing Rights). The payment of liquidated damages pursuant to
this Section 2.08 or the payment of the Breakup Fee pursuant to Section 2.06
shall constitute the sole and exclusive remedies available to the Purchaser in
connection with the Seller's failure to sell the Servicing Rights to the
Purchaser as provided herein. In the event that the Servicing Rights for the
Mortgage Loans are not transferred to the Purchaser as a result of the Seller
entering into an Alternative Transaction with respect to which the Breakup Fee
has been paid pursuant to Section 2.06, the Purchaser shall not be entitled to
receive liquidated damages pursuant to this Section 2.08.

                                       13
<PAGE>

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

         Section 3.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER.

         The Seller represents, warrants and covenants to the Purchaser as to
the Servicing Rights (and the related Mortgage Loans) that as of the Transfer
Date:

         (a) The Seller is a corporation duly organized and in good standing
under the laws of the state under whose laws it is organized and was at all
material times and now is qualified to do business and duly licensed in those
states in which each Mortgaged Property is located if the laws of such states
require qualification or licensing for the servicing of the Mortgage Loans.

         (b) Subject to Bankruptcy Court approval, the Seller has full power and
authority, corporate and otherwise, to execute and deliver this Agreement and to
perform all its obligations hereunder. The execution, delivery and performance
of this Agreement by the Seller and consummation of the transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary corporate, shareholder or other action, and this Agreement has been
duly and validly executed and delivered by the Seller and is valid and
enforceable against the Seller in accordance with its terms.

         (c) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by any Seller of, or compliance by any Seller with, this Agreement,
or the consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Seller has obtained
such approval. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement nor compliance
with its terms and conditions, shall conflict with or result in the breach of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance of any nature upon, any of the Mortgage Loans, the
Servicing Rights or the properties or assets of the Seller, any of the terms,
conditions or provisions of its charter or by-laws or any similar corporate
documents of the Seller or any mortgage, indenture, deed of trust, loan or
credit agreement or other agreement or instrument to which the Seller is now a
party or by which it is bound or any federal or state law, rule or regulation or
any judicial or administrative decree, order (including the Bankruptcy Court
Order), ruling or regulation applicable to it, or to the Servicing Rights.

         (d) Except as previously disclosed to the Purchaser in writing, there
is no litigation or action at law or in equity pending, or, to its knowledge,
threatened in writing against the Seller and no proceeding or investigation of
any kind is pending or, to its knowledge, threatened, by any federal, state or
local governmental or administrative body, which could reasonably be expected to
materially affect the Servicing Rights or the Seller's ability to consummate the
transactions contemplated hereby.

                                       14
<PAGE>

         (e) The sale and transfer of the Servicing Rights by the Seller are not
subject to the bulk transfer or similar statutory provisions of applicable state
or federal law.

         (f) Subject to Bankruptcy Court approval, the Seller is the sole holder
of the Servicing Rights and has good and marketable title to and has the right
to assign and transfer the Servicing Rights as of the Transfer Date and to
assign, transfer and deliver the Servicing Rights as contemplated by this
Agreement free and clear of any and all claims, charges, defenses, security
interests, liens, offsets and encumbrances.

         (g) The Seller was at all material times duly licensed in order to
originate, sell or service the Mortgage Loans and has obtained from any
originator or prior holder of the Mortgage Loans a representation to that
effect. The Bankruptcy Court Order shall provide that the Purchaser shall have
no liability for any default by the Seller in the performance of its obligations
under any Servicing Agreement.

         (h) The Seller has taken all necessary steps to make and keep any
hazard insurance policy and title insurance policy valid, binding and
enforceable; and to the best knowledge of the Seller, each such insurance policy
is the binding, valid and enforceable obligation of the private insurer to the
full extent thereof, without surcharge, defense or set-off, subject to
bankruptcy and insolvency laws.

         (i) To the actual knowledge of the Seller's President, Chief Executive
Officer and General Counsel, as of July 1, 2000, there are (i) no material
pending claims filed against the Seller in the Seller's pending bankruptcy case,
and (ii) no material pending lawsuits or governmental investigations commenced
against the Seller with respect to which the Seller has been duly served with
legal process, which relate to the Mortgage Loans or the Seller's right to sell,
assign and transfer the Servicing Rights, other than those disclosed to the
Purchaser in writing and usual and customary actions such as foreclosure
proceedings as to the Mortgage Loans.

         (j) The information set forth on the Mortgage Loan Schedule and the
Data Base, and on any updates thereof or other document, instrument or schedule
furnished to the Purchaser by the Seller or one of its affiliates pursuant to,
or prior to and in connection with, this Agreement is accurate and complete in
all material respects, and relates exclusively to the subject Mortgage Loans, as
of the dates indicated thereon or otherwise applicable. All Mortgage Loan
interest rate information is net of any and all insurance premiums.

         (k) All Collection Accounts and Escrow Accounts are maintained by the
Seller and have been maintained in accordance with applicable law, the terms of
the Mortgage Loans and the Servicing Requirements related thereto. The Escrow
Payments required by the Mortgages which have been paid to the Seller for the
account of the Borrower are on deposit in the appropriate Escrow Account.

                                       15
<PAGE>

         (l) Subject to the exception report provided to the Purchaser, all
documentation with respect to the servicing of the Mortgage Loans has been
properly and accurately completed and executed, and all documents required
hereby or by Servicing Requirements to be in the Custodial File and Mortgage
File are contained therein and final certifications thereto by the Custodian
have been completed.

         (m) All funds received by the Seller in connection with the Mortgage
Loans, including, without limitation, foreclosure proceeds, fire insurance
proceeds from fire losses, condemnation proceeds and principal reductions, have
promptly been deposited in the Collection Account or Escrow Account, and all
such funds have been applied to reduce the principal balance of the Mortgage
Loans in question, or for reimbursement of repairs to the Mortgaged Property or
as otherwise required by applicable law and the Servicing Requirements.

         (n) All payments received by the Seller with respect to any Mortgage
Loan have been remitted and properly accounted for pursuant to Servicing
Requirements. No payment of principal or interest on any such Mortgage Loan has
been forgiven, suspended or rescheduled except as disclosed on the Mortgage Loan
Schedule and Data Base, and no waiver, alteration or modification which would
adversely affect the value of the Servicing Rights has been made to the terms or
provisions of such Mortgage Loans except as disclosed on the Mortgage Loan
Schedule and Data Base.

         (o) The Seller has complied in all respects with every applicable
federal, state, or local law, statute, and ordinance, and any rule, regulation,
or order issued thereunder in connection with the servicing of the Mortgage
Loans. The collection and all other practices of the Seller in connection with
the servicing of the Mortgage Loans including, without limitation, the timing
and manner of liquidation, are and have been reasonable, prudent and customary
and in conformity with accepted servicing practices of prudent lending
institutions and in compliance with all applicable laws. There has been no
improper act or omission or alleged improper act or omission, or material error
by the Seller or any employees, agent or representative of the Seller, with
respect to the servicing of any of the Mortgage Loans. The Mortgage Loan
documents being delivered to the Purchaser are adequate and sufficient to
properly service the Mortgage Loans in accordance with the standards set forth
in the Servicing Agreements.

         (p) All Mortgaged Properties are currently insured against loss by
fire, hazards of extended coverage and such other hazards as are customary in
the area where such Mortgaged Property is located (including, where required by
applicable rules or regulations, flood insurance policies)pursuant to insurance
policies in conformity with Servicing Requirements and in an amount at least
equal to the outstanding principal balance of the applicable Mortgage Loans or,
where applicable, carry a sufficient amount of guaranteed replacement cost
coverage.

         (q) None of the Servicing Rights are subject to recourse against the
servicer for losses on liquidation of a Mortgage Loan, or otherwise or any third
party expenses such as attorney's fees and restoration expenses, or to
repurchase obligations upon the occurrence of non-payment or other events.

                                       16
<PAGE>

         (r) There are no sub-servicing agreements with respect to the Mortgage
Loans. Each Servicing Agreement delivered to Purchaser represents a certified
copy of the original as it may have been amended and in either case represents
true, correct, and complete copies of the same. Each of the Servicing Agreements
is in full force and effect and has not been amended, modified, or altered,
except as the same shall have been provided to Purchaser. Except as disclosed to
the Purchaser in writing, the Seller is not a party to or subject to any
agreement, stipulation, conditional approval, memorandum of understanding,
notice of determination, consent decree, advisory settlement, compromise,
litigation, or other agreement or understanding with any Investor, court or
other governmental agency or body which seeks to modify, interpret or clarify or
has the effect of modifying, interpreting, or clarifying any of the terms of the
Servicing Agreements or otherwise affects Seller's servicing obligations and
practices (including, without limitation, Seller's escrow practices).

         (s) Each Servicing Agreement delivered to the Purchaser on the Transfer
Date is a copy of an executed original and represents a true, correct and
complete copy of the same. Each Servicing Agreement is in full force and effect
and, to the best of the Seller's knowledge, has not been amended, modified or
altered; the Seller has performed and shall perform all obligations to be
performed under the related Servicing Requirements. The Seller has serviced the
Mortgage Loans and has kept and maintained complete and accurate books and
records in connection therewith, all in accordance with the related Servicing
Requirements, and the Seller has made all remittances required to be made by it
under the related Servicing Agreement.

         (t) The dollar amount of Advances with respect to the Mortgage Loans to
be provided by the Seller to the Purchaser pursuant to this Agreement will be
true and correct as of the date given. Nothing has come to the attention of
Seller that would lead the Seller to believe that any Advance is not recoverable
pursuant to the related Servicing Agreement.

         (u) All of the terms and conditions of each Pooling and Servicing
Agreement have been complied with in connection with the sale and transfer of
the Servicing Rights, and the Seller has obtained all required approvals and
consents from the trustees, insurance carriers, master servicers and any other
necessary parties pursuant to each applicable Pooling and Servicing Agreement
for the transfer of the Servicing Rights to the Purchaser.

         Section 3.02 CERTAIN PROVISIONS RELATING TO THE SELLER'S
REPRESENTATIONS AND WARRANTIES.

         The Seller agrees that the representations and warranties set forth in
Section 3.01 shall survive the sale of the Servicing Rights to the Purchaser,
the Transfer Date, any resale thereof in whole or in part by the Purchaser and
the delivery of each Mortgage File to the Purchaser and shall inure to the
benefit of the Purchaser and its successors and any subsequent holder of the
Servicing Rights or any of them, notwithstanding any qualified endorsement or
Assignment of Mortgage or the examination or lack of examination of any Mortgage
File; provided that each of the representations and warranties shall terminate
on the date which is ten (10) days prior to the confirmation hearing for the
final order from the Bankruptcy Court providing for the liquidation of the
Seller, which hearing shall be not less than one year following the Transfer
Date.

                                       17
<PAGE>

         Section 3.03. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

         The Purchaser represents, warrants and covenants to the Seller that, as
of the Transfer Date:

         (a) The Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. The Purchaser
has all requisite power and authority to own its properties and carry on its
business as and where now being conducted. The Purchaser has all requisite power
and authority to enter into this Agreement, and the agreements to which it is or
will become a party as contemplated by this Agreement, and to carry out the
transactions contemplated hereby.

         (b) The execution and delivery by the Purchaser of this Agreement, and
of the agreements to be entered into pursuant hereto, and the consummation of
the transactions contemplated hereby have each been duly and validly authorized
by all necessary action, and this Agreement and such other agreements constitute
valid and legally binding agreements enforceable in accordance with their
respective terms.

         (c) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not violate, conflict with, result
in a breach of, constitute a default under or be prohibited by, or require any
additional approval, waiver or consent under the Purchaser's charter or other
agreement relating to its organization or any instrument or agreement to which
it is a party or by which it is bound or any federal or state law, rule or
regulation or any judicial or administrative decree, order, ruling or regulation
applicable to it, or to the Servicing Rights.

         (d) There is no litigation or action at law or in equity pending, or,
to its knowledge, threatened against the Purchaser and no proceeding or
investigation of any kind is pending or, to its knowledge, threatened, by any
federal, state or local governmental or administrative body, which could
reasonably be expected to materially affect the Servicing Rights or the
Purchaser's ability to consummate the transactions contemplated hereby.

         (e) Other than the consents required to be obtained by the Seller
pursuant to this Agreement, no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Purchaser of, or compliance by the Purchaser with, this
Agreement, or the consummation of the transactions contemplated hereby, or if
any such consent, approval, authorization or order is required, the Purchaser
has obtained such approval.

                                       18
<PAGE>

                                   ARTICLE IV

                            TRANSFER DATE DELIVERIES
                            ------------------------

         Section 4.01 DOCUMENTS, SCHEDULES AND EXHIBITS REQUIRED WITH RESPECT TO
THE TRANSFER DATE.

         The Seller shall deliver to the Purchaser, or as otherwise designated
by the Purchaser, on the Transfer Date or such other date as shall be specified
herein the following documents, in such forms as are agreed upon and reasonably
acceptable to the Purchaser:

         (a) Letters reasonably satisfactory to the Purchaser dated the Transfer
Date stating the incumbency of any Seller's signatory of all applicable
certificates and opinions described in this Section 4.01.

         (b) A Seller's Closing Certificate with copies of the Mortgage Loan
Schedules attached thereto for the Participation Mortgage Loans and the Pooled
Mortgage Loans. Such Seller's Closing Certificate shall be delivered on the
Transfer Date.

         The Seller shall deliver to the Purchaser the documents and files and
perform any other obligations specified in the Transfer Instructions attached
hereto as Exhibit 3, by the dates specified therein.

         The Seller shall deliver on the dates specified herein, the following
documents and files to the Purchaser:

         (a) The Seller shall submit or cause to be delivered to the Purchaser
all of the consents required pursuant to Section 6.02 on or before the Transfer
Date.

         (b) If required or permitted by the related Servicing Agreement, the
Seller shall prepare, or cause to be prepared, Assignments of Mortgage to the
Trustee or any other required party under any Servicing Agreement (including any
intervening Assignment of Mortgage), and, in any event, prepare and cause to be
recorded Assignments of Mortgage in conformity with Servicing Requirements.
Blanket Assignments of Mortgage, if permitted by the applicable Investor and
local recordation authority, are acceptable except as set forth below. The
Seller has engaged, at its cost, Richardson Consulting to prepare and record all
Assignments of Mortgage that are required to be provided to the Trustee or any
other required party under any Servicing Agreement. The Purchaser shall use
reasonable efforts to enforce the obligations of Richardson Consulting in
connection with the preparation and recording of such Assignments of Mortgage. A
copy of each of such Assignment of Mortgage shall be delivered to the Purchaser
on or before the Transfer Date.

                                       19
<PAGE>

         The Seller shall deliver on the Transfer Date a certification signed by
an authorized officer that all Assignments of Mortgage have been sent for
recording and all recorded Assignments of Mortgage have been requested to be
returned to the Custodian. To the extent received by the Seller following the
Transfer Date, the Seller shall subsequently send the original recorded
Assignments of Mortgage to the Custodian with a copy to the Purchaser via a
nationally-recognized overnight courier. To the extent received by the
Purchaser, the Purchaser shall subsequently send the original recorded
Assignments of Mortgage to the Custodian via a nationally-recognized overnight
courier.

         Seller will pay all costs of preparing and recording Assignments of
Mortgage.

         (c) On or prior to the Transfer Date, the Seller shall have made all
payments of taxes and insurance and other escrow items for which Seller has
received a bill or invoice prior to the Transfer Date. The Seller shall
reimburse the Purchaser upon request for any penalties or costs incurred due to
non-payment of tax, or insurance or other escrow items as a result of the
Seller's failure to perform as provided in this subsection (d). Advances of tax,
insurance payments and escrow payments, and advances of principal and interest
shall be reimbursed to the Seller as provided in Section 2.04.

         (d) The Seller shall provide to such Purchaser within a reasonable time
prior to the Transfer Date, records as may be reasonably requested by the
Purchaser for the Purchaser to review the investor accounting status of the
Mortgage Loans; such records shall include, but, shall not be limited to, the
following: (i) monthly Investor remittance reports for at least the previous six
months, (ii) most recent trial balance and Pool-to-Security reconciliation,
minimum cash or expected principal and interest and schedule of principal and
interest collected, and (iii) records relating to all Mortgage Loans liquidated
during the past six months showing sales prices, expenses, etc.

         (e) Seller shall have furnished the Purchaser with the following
additional information and documents not later than the Transfer Date, except
where otherwise specified:

            (1)        A wire transfer, or at the Purchaser's option, a check,
                       payable to the Purchaser, in trust for the applicable
                       Investors and/or Borrowers in an amount equal to the
                       outstanding balances identified on the mortgage records
                       in full payment of all funds held or due in the
                       applicable Collection Accounts and Escrow Accounts and
                       any unremitted principal or interest net of any amounts
                       permitted pursuant to subsection (d) herein. Funds
                       representing the amounts deposited in such accounts as of
                       the day prior to the Transfer Date must be received by
                       the Purchaser by the Transfer Date and any amounts
                       received by the Seller on the Transfer Date must be
                       remitted to the Purchaser within two (2) Business Days
                       following the Transfer Date. The Seller shall be
                       permitted to reduce the remittance allocable to the
                       Collection Accounts by the net amount of the unreimbursed
                       but reimbursable Advances of principal and interest made
                       pursuant to the Pooling and Servicing Agreements and
                       unreimbursed but reimbursable principal advances made
                       pursuant to the Participation Agreements. The Seller
                       shall provide the Purchaser with a loan by loan
                       reconciliation of such principal and interest advances
                       within five (5) Business Days following the Transfer
                       Date;

                                       20
<PAGE>

            (2)        A hard copy of the Seller's system trial balance as of
                       such Transfer Date, which shall include, without
                       limitation, as to each Mortgage Loan: (i) the Mortgage
                       Loan number, (ii) the next due date, (iii) the principal
                       balance thereof, (iv) the escrow balance, and (v) the
                       Monthly Payment, and escrow; this hard copy trial balance
                       must be received by the Purchaser by the second Business
                       Day after such Transfer Date;

            (3)        The Mortgage File on each Mortgage Loan processed and
                       shipped in compliance with Exhibit 3;

            (4)        Trial balances and pool to Investor security
                       reconciliations for each Pool for each month for at least
                       the last six months as reasonably available and to the
                       extent reasonably necessary to and requested by such the
                       Purchaser, including the month of transfer and a
                       reconciliation of the over and/or under collateralization
                       for each Pool and corrections/adjustments for all under
                       collateralized Pools;

            (5)        Complete principal and interest, tax, and insurance bank
                       account reconciliations as of such Transfer Date (to be
                       delivered within five (5) Business Days following the
                       Transfer Date);

            (6)        The loan analysis (including tax and interest statement)
                       for each Mortgage Loan to the extent such loan analysis
                       is reasonably necessary to and requested by such the
                       Purchaser;

            (7)        Foreclosure and bankruptcy files and collection records,
                       including collection cards, default letters, demand
                       letters, payment plans and other forbearance agreements,
                       and property inspections for each Mortgage Loan as
                       required by Servicing Requirements;

            (8)        Within two (2) Business Days following the Transfer Date,
                       (A) a certification by an appropriate officer of the
                       Seller to the effect that the Seller has caused the
                       documents (including, without limitation, each executed
                       Mortgage and related Mortgage Note, title policy and
                       mortgage insurance policy, and/or certificate, as the
                       case may be) for each Participation Mortgage Loan to have
                       been delivered to the Purchaser or its designee,
                       including a release certification from the Seller's
                       custodial bank and (B) evidence of the assignment of the
                       Seller's rights under each custodial agreement relating
                       to the Pooled Mortgage Loans to the Purchaser and the
                       acceptance of such assignment by the Custodian; and

            (9)        The Seller shall deliver to the Purchaser a copy of any
                       available certification executed on each Pool or, if such
                       certification is not available, the Seller shall deliver
                       to the Purchaser a status report on a loan-by-loan basis,
                       listing said missing documentation.

                                       21
<PAGE>

         (f) All records delivered or transferred to the Purchaser shall be
clearly identified, segregated by Pool and in Seller loan number order. All
boxes shall be sequentially labeled and contain a complete listing of Mortgage
Files therein. The Seller shall provide the Purchaser a summary schedule
reflecting Mortgage Files therein and exceptions thereto and the Purchaser shall
sign and return one copy of the summary schedule.

         (g) No later than two (2) Business Days after the Transfer Date, a copy
of the Seller's delinquency report showing the due date of the Monthly Payment
and the paid-to date as of such Transfer Date.

         (h) No later than two (2) Business Days after the Transfer Date, a copy
of loan payment history and escrow analysis for each Mortgage Loan since
origination.

         (i) No later than two (2) Business Days after the Transfer Date, a list
of the taxing authorities, due dates, amounts due, payee codes, reason for
disbursement, optional insurance remittance date, and amounts and/or assignable
tax contracts with a real estate tax service accompanied by a copy of the
Seller's letter or computer listing to the tax servicer requesting assignment to
the Purchaser.

         (j) No later than ten (10) Business Days after the Transfer Date, the
Seller's certification that either (1) with respect to Mortgage Loans as to
which the Seller maintains escrows for such items, all real estate and property
taxes have been paid on all related Mortgaged Properties for which such taxes
are payable or the net payment period will expire within thirty (30) days before
or after the Transfer Date, as requested by the Purchaser or (2) otherwise,
Seller has received no notice of delinquent taxes.

         (k) No later than ten (10) Business Days after the Transfer Date, the
Seller's certification that either (1) with respect to Mortgage Loans as to
which the Seller maintains escrows for such items, all Insurance Policy premiums
have been paid on all Mortgaged Properties which premiums are due or will become
due within thirty (30) days before or after the Transfer Date, as requested by
the Purchaser or (2) otherwise, Seller has received no notice of delinquent
premium payments.

         (l) At least fifteen (15) days prior to the Transfer Date, copies of
notifications prepared by the Seller, in duplicate, addressed to each of the
related insurance companies requesting endorsements to the mortgagee clause to
the Purchaser.

         (m) At least fifteen (15) days prior to the Transfer Date, copies of
the Seller's notice of transfer letters to each Borrower and insurer as required
in Section 6.02 hereof. Such notices shall inform the Borrower and insurer to
address all communication and remittances to the address of the Purchaser.

         (n) A Seller's Closing Certificate, dated the Transfer Date.

                                       22
<PAGE>

         (o) At least fifteen (15) days prior to the Transfer Date, a certified
true copy of each Servicing Agreement.

         (p) No later than fifteen (15) Business Days after the Transfer Date,
the Seller's certification of the Advances as of the Transfer Date, the amount
thereof to be paid in cash by the Purchaser pursuant to Section 2.04.

         Section 4.02 ACCESS TO INFORMATION.

         Upon reasonable prior notice to the Seller, the Seller shall afford
reasonable cooperation to the Purchaser and its counsel, accountants and other
representatives in providing reasonable access during normal business hours
throughout the period prior to the Transfer Date, to the Mortgage Files and all
the Seller's files, books and records relating to the Mortgage Loans, the
Advances and the Servicing Rights; provided, however, that the Seller shall be
entitled to take reasonable and appropriate actions to assure that the Purchaser
maintains the confidentiality of the names and addresses of the Borrowers under
the Mortgage Loans and all non-public information obtained in such investigation
that could reasonably be construed to be of a confidential or proprietary
nature, and the Seller shall provide the Purchaser with access to and reasonable
cooperation with its officers and employees. The Purchaser and its
representatives and affiliates shall treat as confidential all information
obtained in such investigation and not otherwise in the public domain. Following
the Transfer Date, to the extent permitted by applicable law, upon reasonable
prior notice to the Purchaser, the Purchaser shall allow the Seller, at the
Seller's cost, to have reasonable access to the Mortgage Files to the extent
that such access is necessary in connection with any legal proceedings with
respect to the Mortgage Loans in which the Seller is a party.

         Section 4.03 TRANSFER EXPENSES.

         Except as otherwise provided in this Agreement, the Seller and the
Purchaser shall each bear their own expenses incurred in connection with the
transactions contemplated by this Agreement. The Seller shall be responsible for
all costs of preparing and recording Assignments of Mortgage as contemplated
hereby, all Investor transfer fees required hereunder, and all costs related to
preparing, obtaining and delivering such documents as are necessary under the
Real Estate Settlement Procedures Act and the Cranston Gonzalez National
Affordable Housing Act of 1990. The Seller shall deliver notices to each
Borrower regarding the transfer of the related Mortgage Loan and provide a copy
of such notices in a form reasonably acceptable to the Purchaser. The Purchaser
shall pay all costs related to Purchaser's computer service transfer and for
shipping the loan files.

                                       23
<PAGE>

         Section 4.04 DOCUMENT DEFICIENCIES.

         Following the Transfer Date, the Purchaser agrees to exercise
reasonable and prudent efforts to assist the Seller in curing the document
deficiencies identified on Exhibit 7 hereto with respect to the Mortgage Loans;
provided that, the Purchaser shall not be responsible for any out of pocket
costs incurred in connection with curing any such document deficiencies. The
Purchaser agrees to designate sufficient personnel to assist in curing any such
document deficiencies and to cooperate with the Trustees and Custodians in
connection with tracking, identifying and curing same. In the event that the
Purchaser incurs any such out of pocket costs, the Purchaser shall be reimbursed
for such costs (up to a maximum of $25,000) from the Hold Back Amount as
provided in Section 2.03(c) of this Agreement, and, in the event that the Hold
Back Amount is not sufficient to reimburse the Purchaser for the full amount of
such costs (up to a maximum of $25,000), the Seller shall reimburse such amounts
to the Purchaser.

                                       24
<PAGE>

                                    ARTICLE V

                     ADMINISTRATION OF TRANSFER OF SERVICING
                     ---------------------------------------

         Section 5.01 NOTICE LETTERS OF TRANSFER.

         No less than fifteen (15) days prior to the Transfer Date, unless
otherwise agreed by the parties, the Seller shall, at the Seller's expense,
notify each Borrower of the transfer of the Servicing Rights and instruct the
Borrower to remit all Monthly Payments and all tax and insurance notices to the
Purchaser after the Transfer Date. Such letters shall be mailed on such date and
be in such form as is reasonably acceptable to the Seller and the Purchaser. The
Seller shall exchange copies of letters with the Purchaser prior to mailing and
shall cooperate on a joint mailing program for notification to the Borrowers.
The Seller shall also, at Seller's expense, notify any Custodian and insurance
companies and/or agents, that the Servicing Rights are being transferred and
instruct such entities to deliver all payments, notices, and insurance
statements to the Purchaser after the Transfer Date. Such notices shall instruct
such entities to deliver, from and after the Transfer Date, all applicable
payments, notices, bills, statements, records, files and other documents to
Purchaser. All such notices sent to hazard, flood, earthquake, private mortgage
guarantee and other insurers shall comply with the requirements of the
applicable master policies and shall instruct such insurers to change the
mortgagee clause to "Ocwen Federal Bank, FSB, its successors and assigns" or as
otherwise required under applicable Servicing Requirements. Seller shall be
responsible for the cost of preparing and delivering the notices described in
this Section and shall provide Purchaser with a copy of the form of each notice
used by Seller to comply with this Section.

         Section 5.02 STATEMENTS.

         The Seller shall provide the Purchaser within a reasonable period
following the Transfer Date (which shall not exceed sixty days) with all the
information necessary to provide each Borrower with an annual year-end statement
in accordance with Investor, and Internal Revenue Service or Treasury Department
regulations. Such information shall reflect the status of the Mortgage Loans up
to and including the Transfer Date and cover the period of time the Mortgage
Loans were serviced by the Seller.

         Section 5.03 TAX CONTRACTS.

         The Seller shall cooperate with the Purchaser to accomplish an EDP tape
transfer of any tax contracts that are in effect, and reasonably promptly
following the Transfer Date the Seller shall assign to the Purchaser
"life-of-loan" assignable tax contracts with Fidelity National Tax Service on
each Mortgage Loan. The Seller shall also pay any fees required to transfer the
existing transferable tax service contracts to the Purchaser. In the event that
such a "Life-time" tax contract is not presently in force, not presently
assignable to a Purchaser or not documented with a complete EDP tax record, the
Seller agrees to pay all fees necessary to obtain a tax contract for the related
Mortgage Loan subject to a maximum fee per Mortgage Loan of $15.00.

                                       25
<PAGE>

         Section 5.04 PAYMENTS AND NOTICES RECEIVED AFTER THE TRANSFER DATE.

         The Seller and the Purchaser acknowledge that, during the sixty (60)
day period after the Transfer Date, all funds received in connection with the
Mortgage Loans, including, but not limited to, tax, insurance, principal,
interest and all other types of payments, including, without limitation,
mortgage guaranty or mortgage insurance payments, insurance loss drafts and tax
refunds, are to be immediately paid over to the Purchaser without offset or
deduction. The Purchaser shall be entitled to the service fees and other
Servicing Related income on all such payments. During such sixty (60) day period
such funds shall be identified by the Seller's loan numbers and shall be
immediately transferred to the Purchaser at the Seller's expense by overnight
courier, for next Business Day delivery, at the address for notices to the
Purchaser. In addition, Seller shall deliver or cause to be delivered to the
Purchaser, as promptly as practicable after receipt by Seller, copies of all
correspondence received from any Investor or any Borrower or otherwise relating
to any Mortgage Loans. Following such sixty (60) day period, all such funds and
correspondence shall be returned to the sender with a letter of explanation a
copy of which letter shall be sent to the Purchaser. The Seller hereby covenants
and agrees that it shall maintain such staff and facilities during such sixty
(60) day period that are sufficient to perform all of such responsibilities.

         Section 5.05 EDP DEPARTMENT.

         The Seller will cause its EDP department to cooperate with the
Purchaser, and the Seller will provide a test tape, trial tape, and an accurate
conversion tape containing all history maintained by the EDP department with
respect to the period from July 1996 through the Transfer Date, Pool and loan
information as of the Transfer Date so as to complete the conversion of all
loan, Pool, and security information recorded on an EDP to EDP basis, or such
other basis as may reasonably be requested by Purchaser, including the
information set forth in Section 4.01. Such tapes shall be provided to Purchaser
in accordance with Section 4.01.

         Section 5.06 CUSTODIAN APPROVAL.

         Prior to the Transfer Date, the Seller will use its best efforts to,
obtain and deliver to the Purchaser a letter from the Seller's document
Custodian(s) for the Pooled Mortgage Loans reflecting its or their willingness
to continue to perform the custodial activities for the Purchaser. Such approval
shall specify all current prices that the Custodian will charge the Purchaser
for services. The Seller will facilitate the assignment of any existing
agreement with respect to the Pooled Mortgage Loans between such Custodian and
the Purchaser, and the Purchaser hereby assumes as of the Transfer Date the
Seller's obligations as "Servicer" under the Custodial Agreement dated as of
December 1, 1999 among The Chase Manhattan Bank as trustee, First Alliance
Mortgage Company as servicer, First Alliance Mortgage Company as seller and
Wells Fargo Bank Minnesota, National Association (f/k/a Norwest Bank Minnesota,
National Association) as custodian. The Purchaser shall pay the fees and
expenses of the Custodians incurred following the Transfer Date as specified in
the related custodial agreements.

                                       26
<PAGE>

         Section 5.07 MISSING SOCIAL SECURITY NUMBER; FORMS W-8 OR W-9.

         The Seller will provide a report satisfactory in form and content to
the Purchaser to substantiate compliance with Internal Revenue Service and other
applicable Treasury Department regulations and requirements applicable to
reporting of interest and obtaining Social Security numbers. The Seller also
agrees to provide the certification of an authorized officer that the Seller has
complied with all Internal Revenue Service and U.S. Treasury Department
requirements for due diligence in obtaining and maintaining tax identification
numbers for each Mortgage Loan transferred. In addition to the foregoing, the
Seller agrees to reimburse the Purchaser for any and all penalties incurred
because of Internal Revenue Service and, or, Treasury Department requirements
for any missing tax numbers and forms incurred as a result of infractions prior
to the Transfer Date.

                                       27
<PAGE>

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS
                              ---------------------

         Section 6.01 PUBLICITY.

         As soon as practicable after the Closing, a joint press release, in
such form as mutually agreed by the parties hereto, shall be issued by the
parties hereto. No other publicity regarding the transactions contemplated by
this Agreement shall be made without the prior written approval of the parties
hereto, except as may be required by applicable law upon the advice of counsel;
provided that, the Seller and the Purchaser shall have the right to file this
Agreement with, and disclose the terms hereof to, the Bankruptcy Court and to
disclose the terms hereof to the Seller's creditors and their representatives
and advisors.

         Section 6.02 CONSENTS.

              (a) The purchase and sale of any Servicing Rights is subject to
Seller obtaining all Bond Insurer Letters, Master Servicer Letters and Trustee
Letters at its sole expense. The Seller shall obtain such letters prior to the
Transfer Date. The Purchaser shall cooperate with Seller in obtaining such
consent letters and shall timely respond to all reasonable requests from the
Investor concerning the Purchaser and its business operations. The Seller shall
notify the Purchaser in writing immediately upon obtaining such consent letters,
and the Seller shall provide a copy of each such consent letter to Purchaser.

              (b) If Seller fails, for any reason, to obtain consent letters
required pursuant to Section 6.02(a) from any applicable Bond Insurer, Master
Servicer or Trustee before the Transfer Date, the Purchaser and the Seller shall
have the option, each in its sole and absolute discretion upon notice to the
other party, to terminate this Agreement in its entirety, and, the Seller shall
pay the Purchaser liquidated damages as provided pursuant to Section 2.08 upon
such termination by the Seller or the Purchaser; provided that such liquidated
damages shall not be required to be paid if the Bankruptcy Court determines that
such consents are not required and the Purchaser elects to terminate this
Agreement.

                                       28
<PAGE>

                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS
                            ------------------------

         Section 7.01 AMENDMENT.

         This Agreement may be amended from time to time by the Purchaser and
the Seller only by written agreement signed by the Purchaser and the Seller, and
with the prior written consent of the Trustees and Master Servicers, which
consent shall not be unreasonably withheld.

         Section 7.02 GOVERNING LAW.

         THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL
LAW.

         Section 7.03 NOTICES.

         All notices or other communications hereunder shall be in writing and
shall be deemed to have been given and received: (a) upon receipt if delivered
personally (unless subject to clause (b)) or if mailed by registered or
certified mail return receipt requested, postage prepaid; (b) at 5:00 p.m. local
time on the business day following dispatch if sent by a nationally recognized
overnight courier; or (c) upon completion of transmission (which is confirmed by
telephone or by a statement generated by the transmitting machine) if
transmitted by telecopy or other means of facsimile which provided immediate or
near immediate transmission to compatible equipment in the possession of the
recipient, in any case to the parties at the following addresses or telecopy
numbers (or at such other address or telecopy number for a party as will be
specified by like notice):

                       If to the Purchaser:

                       Ocwen Federal Bank FSB
                       The Forum, Suite 1002
                       1675 Palm Beach Lakes Blvd.
                       West Palm Beach, Florida 33401
                       Attention: Secretary
                       Facsimile Number: (561) 682-8177
                       Confirmation Number (561) 682-8517

                       If to the Seller

                       First Alliance Mortgage Company
                       17305 Von Karman Avenue
                       Irvine, California 92614
                       Attention: Francisco Nebot / Anne Lane
                       Facsimile Number: (949) 224-6696

                                       29
<PAGE>

                       Confirmation Number (949) 224-8403

         Section 7.04 EXHIBITS.

         The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.

         Section 7.05 GENERAL INTERPRETIVE PRINCIPLES.

         For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

              (a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular;

              (b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;

              (c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;

              (d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;

              (e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and

              (f) the term "include" or "including" shall mean without
limitation by reason of enumeration.

         Section 7.06 REPRODUCTION OF DOCUMENTS.

         This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

                                       30
<PAGE>

         Section 7.07 COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one instrument. It shall not be necessary in making proof of this
Agreement or any counterpart thereof to produce or account for any other
counterpart.

         Section 7.08 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.

         Except as otherwise provided herein, this Agreement constitutes the
entire agreement between the parties hereto and supersedes all rights and prior
agreements and understandings, oral and written, between the parties hereto with
respect to the subject matter hereof. This Agreement shall not be assignable in
whole or in part by the Seller or the Purchaser without the written consent of
the other party hereto and subject to the acquisition of all consents required
under the terms of the applicable Pooling and Servicing Agreements and the
approval of the Bankruptcy Court. This Agreement and any rights, remedies,
obligations or liabilities under or by reason of the Agreement shall inure to
the benefit of and be binding on the parties hereto or their respective
successors and permitted assigns.

         Section 7.09 INTENTION OF THE PARTIES

         It is the intention of the parties that the Seller is selling, and the
Purchaser is purchasing, only the Servicing Rights to the Mortgage Loans and not
any interest in the Mortgage Loans themselves.

         Section 7.10 BROKERAGE COMMISSIONS.

         The Purchaser and the Seller represent, each to the other party hereto,
that it has dealt with no broker in connection with the transactions
contemplated by this Agreement other than a broker whose compensation is the
sole responsibility of the party that retained such broker, and each party shall
indemnify the other party against any claims for brokerage commissions based
solely on such party's own acts.

         Section 7.11 FURTHER ASSURANCES.

         From time to time prior to the Transfer Date, the Seller shall furnish
to the Purchaser such reports, information or documentation supplementary to the
information contained in the documents and schedules delivered pursuant hereto
and deliver such reports as may reasonably be requested by the Purchaser and as
are reasonably normal and customary in the mortgage servicing industry, and the
Purchaser and the Seller shall afford reasonable cooperation each to the other
both prior to and following the Transfer Date.

                                       31
<PAGE>

         The Seller and the Purchaser will each, at the request of the other,
execute and deliver to each other all such other instruments or documentation
that either may reasonably request in order to perfect the transfer, assignment
and delivery to the Purchaser of the Servicing Rights and the consummation of
the agreements hereunder, and the assumption by the Purchaser of the Servicing
Rights and the obligations set forth herein.

         Section 7.12 CONSENT AGREEMENT.

         Notwithstanding any provision of this Agreement to the contrary, in the
event that any provision of this Agreement is inconsistent or conflicts in any
way with the provisions of the Consent Agreement (the "Consent Agreement"),
dated as of July 14, 2000, by and among the Seller, the Trustees, the Master
Servicers, the Bond Insurers and the Purchaser, then the provisions of the
Consent Agreement shall control.

                                       32
<PAGE>

         IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first above written.

                                      OCWEN FEDERAL BANK FSB,
                                             (Purchaser)

                                      By: /S/ Richard Delgado
                                         ---------------------------------------
                                      Title: Vice President
                                            ------------------------------------
                                      Dated:
                                            ------------------------------------

                                      FIRST ALLIANCE MORTGAGE COMPANY,
                                             (Seller)

                                      By: /S/ Francisco Nebot
                                         ---------------------------------------
                                      Title: President and CFO
                                            ------------------------------------
                                      Dated:
                                            ------------------------------------

                                       33
<PAGE>

                                    EXHIBIT 1

                            CONTENTS OF MORTGAGE FILE

              With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items:

      1.      Copy of the original Mortgage Note.

      2.      Copy of the original recorded Mortgage or Deed of Trust or
              certified true copy of the Mortgage submitted for recording if the
              original recorded Mortgage has not yet been returned except that,
              in Louisiana and Puerto Rico, a true copy thereof, certified by a
              Notary, may be substituted and if the Mortgage Loan is evidenced
              by a consolidated mortgage and the consolidation was not
              accomplished within the body of the most recent Mortgage of
              record, then a copy of the original recorded Consolidation
              Agreement shall be included as well.

      3.      A copy of the original Assignment of Mortgage executed by the
              Seller pursuant to Servicing Requirements, which assignment shall
              be in form and substance acceptable for recording and, if required
              by Servicing Requirements, recorded. Subject to the foregoing and
              to Servicing Requirements, such assignments may be by blanket
              assignments for Mortgage Loans covering Mortgaged Properties
              situated within the same county.

      4.      Copy of the original policy of lender's title insurance.

      5.      Evidence of all Insurance Policies and Insurance Agreements.

      6.      Copy of the original of each assumption, extension and
              modification agreements.

      7.      Copy of the original recorded intervening Assignments of Mortgage.

      8.      Original hazard insurance policy or certificate thereof and, if
              required by law, evidence of flood insurance, with extended
              coverage of the hazard insurance policy.

      9.      Residential appraisal.

      10.     Origination documents:

              A.     Conventional loan application;

              B.     Credit Report;

              C.     Preliminary Title Report and/or Commitment for Title
                     Insurance. Copies of easements and/or restrictions and Tax
                     Search sheet, if applicable;

                                       34
<PAGE>

      11.     Closing certificates:

              A.     Executed Truth in Lending statement pursuant to Federal
                     Reserve Board Regulation Z;

              B.     Notices pursuant to the Equal Credit Opportunity Act and
                     Federal Reserve Board Regulation B, as amended;

              C.     Form HUD-1 (Real Estate Settlement Procedures Act);

              D.     If a refinance Mortgage, copy of the notice of right to
                     rescind, signed and dated;

              E.     Sale contract/deposit receipt, or escrow instructions, as
                     required.

      12.    Other papers and records developed or originated by the Seller or
             others, required to document the Mortgage Loan or to service the
             Mortgage Loan pursuant to Servicing Requirements.

                                       35
<PAGE>

                                    EXHIBIT 2

                      FORM OF SELLER'S CLOSING CERTIFICATE

              I, ______________________, hereby certify that I am the duly
elected [Vice] President of _______________________________, a
____________________________________ (the "Seller") and further as follows:

              1. There are no actions, suits or proceedings pending (nor, to my
      knowledge, are any actions, suits or proceedings threatened), against or
      affecting the Seller which if adversely determined, individually or in the
      aggregate, would adversely affect the Seller's obligations under the
      Servicing Rights Purchase Agreement dated as of July 1, 2000 between the
      Seller and Ocwen Federal Bank FSB (the "Purchase Agreement").

              2. All of the representations and warranties of the Seller
      contained in the Purchase Agreement are true and correct in all material
      respects as of the date hereof and the Seller has complied with all of the
      agreements and satisfied all of the conditions on its part to be performed
      or satisfied at or prior to the date hereof.

              3. Each person who, as an officer or representative of the Seller,
      signed the Purchase Agreement and any document delivered prior hereto or
      on the date hereof in connection with the purchase described in the
      Purchase Agreement was, at the respective times of such signing and
      delivery, and is now duly elected or appointed, qualified and acting as
      such officer or representative, and the signatures of such persons
      appearing on such documents are their genuine signatures.

            4. Attached hereto is a certified true copy of the authorization of
      the execution of the Purchase Agreement, and such authorization has not
      been amended, modified, annulled or revoked and is in full force and
      effect.

            5. Attached hereto as Schedule 1 is the Mortgage Loan Schedule for
      ____________ _________ (the "Subject Mortgage Loans") as of
      ___________________.

            6. Attached hereto as Schedule 2 is a list of defaults on the
      Subject Mortgage Loans as of ______________.

                                       36
<PAGE>

             IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Seller. Dated: _________________________________________________

                                      By: __________________________
                                      Name:_________________________
[Seal]                                     Title:  [Vice] President

              I, ________________________, a ________________________ of
_________ ___________________________________________________, hereby certify
that ________________________ is the duly elected, qualified and acting [Vice]
President of the Seller and that the signature appearing above is [her] [his]
genuine signature.

              IN WITNESS WHEREOF, I have hereunto assigned my name.

Dated:  _________________, 2000.

                                         By:___________________________
                                         Name:_________________________
                                         Title:________________________

                                       37
<PAGE>

                        Schedule 1-A and 1-B to Exhibit 2
                         (Seller's Closing Certificates)

                             MORTGAGE LOAN SCHEDULE

                                       38
<PAGE>

                                    EXHIBIT 3

                              TRANSFER INSTRUCTIONS

                                       39
<PAGE>

                                    EXHIBIT 4

                              COMPUTER TAPE FORMAT

                                       40
<PAGE>

                                    EXHIBIT 5

                    LIST OF POOLING AND SERVICING AGREEMENTS

                                       41
<PAGE>

                                    EXHIBIT 6

                        LIST OF PARTICIPATION AGREEMENTS

                                       42
<PAGE>

                                   EXHIBIT 7

                          LIST OF DOCUMENT DEFICIENCIES

                                       43
<PAGE>

                                    EXHIBIT 8

             LIST OF CUSTODIAL AGREEMENTS FOR POOLED MORTGAGE LOANS

                                       44
<PAGE>

                                    EXHIBIT 9

                     FORM OF PURCHASER'S CLOSING CERTIFICATE

              I, ______________________, hereby certify that I am the duly
elected [Vice] President of _______________________________, a
____________________________________ (the "Purchaser") and further as follows:

              1. There are no actions, suits or proceedings pending (nor, to my
      knowledge, are any actions, suits or proceedings threatened), against or
      affecting the Purchaser which if adversely determined, individually or in
      the aggregate, would adversely affect the Purchaser's obligations under
      the Servicing Rights Purchase Agreement dated as of July 1, 2000 between
      the Purchaser and First Alliance Mortgage Company (the "Purchase
      Agreement").

              2. All of the representations and warranties of the Purchaser
      contained in the Purchase Agreement are true and correct in all material
      respects as of the date hereof and the Purchaser has complied with all of
      the agreements and satisfied all of the conditions on its part to be
      performed or satisfied at or prior to the date hereof.

              3. Each person who, as an officer or representative of the
      Purchaser, signed the Purchase Agreement and any document delivered prior
      hereto or on the date hereof in connection with the purchase described in
      the Purchase Agreement was, at the respective times of such signing and
      delivery, and is now duly elected or appointed, qualified and acting as
      such officer or representative, and the signatures of such persons
      appearing on such documents are their genuine signatures.

              4. Attached hereto is a certified true copy of the authorization
      of the execution of the Purchase Agreement, and such authorization has not
      been amended, modified, annulled or revoked and is in full force and
      effect.]

                                       45
<PAGE>

             IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Purchaser. Dated: _________________________________________________

                                          By:___________________________
                                          Name:_________________________
[Seal]                                             Title:  Secretary

              I, ________________________, a ________________________ of
_________ ___________________________________________________, hereby certify
that ________________________ is the duly elected, qualified and acting
Secretary of the Purchaser and that the signature appearing above is [her] [his]
genuine signature.

             IN WITNESS WHEREOF, I have hereunto assigned my name. Dated:
_________________, 2000.

                                          By:___________________________
                                          Name:_________________________
                                          Title:________________________

                                       46
<PAGE>

                                   EXHIBIT 10

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENTCONSENT AGREEMENT

         THIS CONSENT AGREEMENT (this "Agreement"), dated as of July 14, 2000,
by and among FIRST ALLIANCE mORTGAGE COMPANY, a corporation formed under the
laws of California, as debtor-in-possession ("First Alliance"), Wells Fargo Bank
Minnesota, National Association (formerly known as Norwest Bank Minnesota,
National Association), in its capacity as trustee for the Wells Fargo
Transactions, as defined below and also in its various capacities as master
servicer, oversight agent, and custodian, as applicable, for certain other
Transactions as defined below (acting in any and all such capacities, "Wells
Fargo"), The Chase Manhattan Bank, in its capacity as trustee for the Chase
Transactions, as defined below and also in its various capacities as master
servicer and oversight agent, as applicable, for certain other Transactions as
defined below (acting in any and all such capacities, "Chase"), and THE BANK OF
NEW YORK, solely in its capacity as trustee for the BONY Transactions, as
defined below ("BONY"), MBIA Insurance Corporation ("MBIA"), and OCWEN FEDERAL
BANK FSB, a federally chartered savings bank (the "Purchaser"), recites and
provides as follows:

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, Wells Fargo serves as trustee with respect to each of the
following five series of First Alliance Mortgage Company, First Alliance
Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates securitization
transactions (the "Wells Fargo Transactions"): Series 1998-3, Series 1998-4,
Series 1999-1, Series 1999-2 and Series 1999-3;

         WHEREAS, Chase serves as trustee with respect to each of the following
sixteen series of First Alliance Mortgage Company, First Alliance Mortgage Loan
Trust, Mortgage Loan Asset-Backed Certificates securitization transactions (the
"Chase Transactions"): Series 1993-1, Series 1993-2, Series 1994-1, Series
1994-2, Series 1994-3, Series 1994-4, Series 1995-2, Series 1996-1, Series
1996-2, Series 1996-4, Series 1997-1, Series 1997-2, Series 1997-3, Series
1998-1A, Series 1998-1F and Series 1999-4;

         WHEREAS, BONY serves as trustee, with respect to each of the following
two series of First Alliance Mortgage Company, First Alliance Mortgage Loan
Trust, Mortgage Loan Asset-Backed Certificates securitization transactions (the
"BONY Transactions"): Series 1996-3 and Series 1997-4;

         WHEREAS, MBIA acts as certificate insurer with respect to all
twenty-three series of the Wells Fargo Transactions, the Chase Transactions and
the BONY Transactions (collectively, the "Transactions"). With respect to each
Transaction, the applicable trustee, either Wells Fargo, Chase or BONY, is
referred to herein as the "Trustee," and collectively as the "Trustees," which
terms as applied to Wells Fargo and Chase includes Wells Fargo and Chase,
respectively, in all of their respective capacities as trustee, master servicer,
oversight agent and custodian, as applicable;

         WHEREAS, the trust related to each of the Transactions (each, a
"Trust") has been established pursuant to the terms of a Pooling and Servicing
Agreement or an Indenture and is serviced pursuant to an agreement identified on
SCHEDULE 1 hereto (collectively, the "Pooling and Servicing Agreements");

<PAGE>

         WHEREAS, First Alliance has also entered into various Insurance
Agreements, Indemnification Agreements and other documents with respect to each
of the Transactions as also identified on SCHEDULE 1 hereto (collectively, the
"Documents");

         WHEREAS, First Alliance commenced a case under Chapter 11 of the United
States Bankruptcy Code (the "Bankruptcy Code") on March 23, 2000 (the "Chapter
11 Case") in the United States Bankruptcy Court for the Central District of
California (the "Bankruptcy Court");

         WHEREAS, First Alliance has proposed entering into a Servicing Rights
Purchase Agreement (the "Purchase Agreement") with Purchaser for the sale and
conveyance of servicing rights and the assumption of servicing responsibilities
with respect to the Transactions, and certain other transactions, to the
Purchaser pursuant to Section 363 (b) of the Bankruptcy Code that will provide
for the assumption of the Pooling and Servicing Agreements under Section 365 (b)
of the Bankruptcy Code by First Alliance and the assignment of the servicing
rights under the Pooling and Servicing Agreements to the Purchaser pursuant to
Section 365 (f) of the Bankruptcy Code (such assumption and assignment, the
"Acquisition");

         WHEREAS, the (1) Purchaser has required the consent of MBIA and the
Trustees to the assumption of the Pooling and Servicing Agreements by First
Alliance, the assignment to and assumption of servicing rights by the Purchaser,
the execution of the Purchase Agreement and the Acquisition and (2) MBIA and the
Trustees believe that such consents are a condition to the foregoing in any
event;

         WHEREAS, the Trustees and MBIA assert that First Alliance has failed to
repurchase certain Mortgage Loans owned by the Trusts as to which various
alleged breaches of representations or warranties materially and adversely
affecting the value of such mortgage loans have occurred and have not been cured
(collectively, the "Breaches"), and the Trustees and MBIA further assert that
First Alliance has the obligation under Section 365 (b) of the Bankruptcy Code
to cure such defaults by repurchasing the related Mortgage Loans in accordance
with certain of the Pooling and Servicing Agreements contemporaneously with the
assumption of those Pooling and Servicing Agreements;

         WHEREAS, MBIA and the Trustees assert certain rights and remedies
against First Alliance in respect of various defaults under the terms of certain
of the Documents and various rights of consent to the appointment of any
servicer;

         WHEREAS, First Alliance believes that it may have claims against MBIA,
the Trusts and the Trustees, which alleged claims MBIA and the Trustees dispute;

         WHEREAS, in the event that this Agreement is not approved by the
Bankruptcy Court, nothing contained herein shall constitute or be construed as
an admission of liability or be used for any purpose; and

         WHEREAS, the Parties hereto have agreed to resolve certain issues
arising from the proposed assumption of the Pooling and Servicing Agreements
upon the terms and conditions set forth herein;

                                       2
<PAGE>

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto hereby agree as follows:

         1. DEFINITIONS. Except as otherwise expressly provided herein or unless
the context otherwise requires, capitalized terms used and not otherwise defined
herein shall have the meanings assigned to them in the Pooling and Servicing
Agreements. In addition, the following terms shall have the following
definitions:

                  (a) "ACQUISITION ORDER" shall mean the order or orders, if
         more than one, of the Bankruptcy Court approving the Acquisition and
         the settlement contained in this Agreement.

                  (b) "CLOSING DATE" shall mean the date on which the
         Acquisition is closed.

                  (c) "CONFIRMATION ORDER" shall mean the order of the
         Bankruptcy Court confirming a plan of reorganization or liquidation of
         First Alliance (or a plan of First Alliance proposed by any other
         party), dismissing First Alliance's bankruptcy case or converting First
         Alliance's bankruptcy case to any other chapter of the Bankruptcy Code.

                  (d) "CONFIRMATION HEARING" shall mean the hearing with respect
         to the Confirmation Order.

                  (e) "FINAL ORDER" shall mean an order or judgment entered by a
         court of competent jurisdiction, including without limitation the
         Bankruptcy Court, that (i) is effective, (ii) has not been reversed,
         stayed, modified or amended, (iii) is not the subject of a pending
         appeal or motion for review or reconsideration, (iv) has not been and
         may no longer be appealed from or otherwise reviewed or reconsidered,
         and (v) is final and non-appealable in accordance with applicable law,
         including without limitation Rule 8002 of the Federal Rules of
         Bankruptcy Procedure.

                  (f) "EXCESS LOSS" shall mean, with respect to a Trust, any
         loss, whenever incurred, that would be allocated, in accordance with
         the applicable Pooling and Servicing Agreement, to any of the Class A
         Certificates or Notes related to such Trust absent any payment under
         any Certificate Insurance Policy, which is to say the amount of any
         loss incurred by a Trust in excess of the amount of available credit
         support for the related Class A Certificates or Notes (including credit
         support represented by any related Residual Interests excess cashflow
         or overcollateralization, but excluding payments and rights to payment
         under any Certificate Insurance Policy).

                  (g) "RESIDUAL INTERESTS" shall mean, with respect to a Trust,
         any Class R Certificates, uninsured interest-only securities or any and
         all other economic interests in the Trust that are uninsured and are
         subordinated in right of payment to the related Class A Certificates or
         Notes.

                                       3
<PAGE>

         2. CURING OF EXCEPTIONS; REPURCHASE OF LOANS AS ADMINISTRATIVE CLAIM.

                  (a) CURING OF EXCEPTION MORTGAGE LOANS. Certain of the
         Breaches arise from deficiencies in the contents of the related
         Mortgage Files from the requirements of the Pooling and Servicing
         Agreements with respect to the items to be contained therein (the
         "Exception Loans"). First Alliance, directly or through the Purchaser,
         shall cause all such deficiencies to be cured and no Exception Loans to
         continue to exist on or before the Confirmation Hearing.

                  (b) REPURCHASE OBLIGATIONS. In the event that notwithstanding
         Section 2 (a) above, there continue to exist ten (10) days prior to the
         Confirmation Hearing, any Exception Loans, First Alliance agrees to
         repurchase each Exception Loan which continues to be an Exception Loan
         in the reasonable judgment of the applicable Trustee or MBIA on or
         before such date. First Alliance shall notify the Trustees and MBIA of
         the date proposed for the Confirmation Hearing at least forty five (45)
         business days prior to such proposed date and the Trustees and MBIA
         shall notify First Alliance of the remaining Exception Loans at least
         fifteen (15) business days prior to such proposed date. First Alliance
         shall repurchase all such Exception Loans ten (10) days prior to the
         Confirmation Hearing, without any further process before the Bankruptcy
         Court. Such repurchase shall be effected in accordance with the terms
         of the applicable Pooling and Servicing Agreement and other Documents
         by payment to each related Trust of the full amount of the purchase
         price (as defined by the applicable Pooling and Servicing Agreement or
         other document related to the Trust) in immediately available funds for
         each related Exception Loan.

                  (c) ADMINISTRATIVE CLAIM. The obligation of First Alliance set
         forth in Section 2 (b) above, to the extent any Exception Loan
         deficiency is not cured or such Exception Loan has not been
         repurchased, shall constitute an allowed administrative claim under
         Section 503 (b) of the Bankruptcy Code in favor of MBIA and each
         Trustee respecting each applicable Trust, without the necessity of any
         request therefor under Section 503 (a) of the Bankruptcy Code.

                  (d) FUNDING FROM ESCROW ACCOUNTS. In the event that
         notwithstanding Section 2 (b) and Section 2 (c) above, there continue
         to exist after the Confirmation Order is entered, any Exception Loans,
         the applicable Trustee may use funds in the Escrow Account for which it
         is the Controlling Party (as defined below) to cure or otherwise deal
         with such Exception Loans as provided herein, including without
         limitation the payment of any Excess Loss.

         3. ESTABLISHMENT AND USE OF ESCROW ACCOUNTS.

                  (a) FUNDING OF ESCROW ACCOUNTS BY FIRST ALLIANCE. First
         Alliance agrees, on or before the Closing Date, to establish and fund
         the following escrow accounts (the "Escrow Accounts") for the
         respective benefit of MBIA, and the respective Trusts and the Trustees
         and, to the limited extent provided herein, First Alliance as
         debtor-in-possession. The amount of one million dollars shall be
         deposited into an escrow account for the benefit of MBIA (the "MBIA

                                       4
<PAGE>

         Escrow Account"). The amount of one million dollars shall be deposited
         into an escrow account for the benefit of the Trusts for the Wells
         Fargo Transactions, Wells Fargo and MBIA (the "Wells Fargo Escrow
         Account"). The amount of nine hundred thousand dollars shall be
         deposited into an escrow account for the benefit of the Trusts for the
         Chase Transactions, Chase and MBIA (the "Chase Escrow Account"). The
         amount of up to four hundred thousand dollars shall be deposited into
         an escrow account for the benefit of the Trusts for the BONY
         Transactions, BONY and MBIA (the "BONY Escrow Account").

                  (b) USE OF ESCROW ACCOUNTS. Subject to subsection (c) below,
         the amounts on deposit in the Escrow Accounts may be used (i) to pay on
         behalf of MBIA, or to reimburse MBIA for, any amounts which are
         required to be paid by MBIA as claims, and not otherwise reimbursed,
         under the Certificate Insurance Policies issued in connection with any
         or all of the Transactions, (ii) to pay or reimburse MBIA or the
         Trustees for any other claims that MBIA or any Trustee may have against
         First Alliance or any entity affiliated with First Alliance under a
         Pooling and Servicing Agreement or any Documents or other documents
         related to the Trusts, or amounts owing or which would otherwise have
         been owing thereunder, (iii) to cure any Exception Loan after the
         Confirmation Order as provided in Section 2 (d) hereof, (iv) to pay to
         Chase the sum of one hundred and fifty thousand dollars ($150,000) from
         the Chase Escrow Account in satisfaction of all cure amounts due in
         connection with the Acquisition, and (v) to pay or reimburse MBIA or
         the Trustees for costs or expenses incurred by any of them with respect
         to any of the Transactions or this Agreement, including without
         limitation the fees and expenses of counsel to MBIA and counsel to each
         of the Trustees.

                  (c) WITHDRAWALS FROM ESCROW ACCOUNTS. MBIA shall have the sole
         authority to make withdrawals from the MBIA Escrow Account. Wells Fargo
         shall have the sole authority to make withdrawals from the Wells Fargo
         Escrow Account. Chase shall have the sole authority to make withdrawals
         from the Chase Escrow Account. BONY shall have the sole authority to
         make withdrawals from the BONY Escrow Account. MBIA, Wells Fargo, Chase
         and BONY are referred to herein as the "Controlling Party" with respect
         to the MBIA Escrow Account, the Wells Fargo Escrow Account, the Chase
         Escrow Account and the BONY Escrow Account, respectively. Any
         Controlling Party may withdraw from its escrow account to pay or
         reimburse an amount properly owing to it hereunder or under any Pooling
         and Servicing Agreement or other Documents. In addition, any
         Controlling Party may in its sole and absolute discretion permit the
         withdrawal from its escrow account to pay or reimburse an amount
         properly owing hereunder to any other Controlling Party. Withdrawals
         may be made with five (5) business days prior notice to (1) First
         Alliance or its designee and (2) at the option of First Alliance or its
         designee, its counsel as set forth in prior written notices from First
         Alliance or its designee to MBIA and the Trustees received at least ten
         (10) business days before the sending of the notice of withdrawal.

                  (d) INVESTMENT OF ESCROW ACCOUNTS. The Escrow Accounts shall
         be separate interest bearing trust accounts held in the name of the
         respective Controlling Party and First Alliance as
         debtor-in-possession, at the Controlling Party or a financial
         institution specified by such Controlling Party and shall be held in
         trust by such Controlling Party or other financial institution for the
         respective benefit of MBIA, the Trusts and the Trustees and, to the

                                       5
<PAGE>

         extent provided herein, First Alliance as debtor-in-possession. Amounts
         on deposit in the Escrow Accounts may be invested at the direction of
         the Controlling Party. Earnings on amounts on deposit in the Escrow
         Accounts shall be retained in the respective Escrow Account until
         withdrawn pursuant to this Agreement.

                  (e) LIQUIDATION OF ESCROW ACCOUNTS. On or before August 1,
         2002 and annually thereafter each Controlling Party shall assess
         whether in its sole judgement any amount remaining in its Escrow
         Account may be required in the future to satisfy any use authorized in
         this Agreement by it or any other Controlling Party. Any amounts in
         excess of such anticipated future use shall be returned to, or at the
         previous direction of, First Alliance or pursuant to its plan of
         reorganization or liquidation. In any event, upon the termination of
         this Agreement pursuant to Section 18 hereof, any amount remaining in
         any of the Escrow Accounts shall be returned to, or at the previous
         direction of, First Alliance or pursuant to its plan of reorganization
         or liquidation.

                  (f) SECURITY INTEREST IN ESCROW ACCOUNTS. First Alliance
         hereby conveys, assigns, grants, transfers, pledges, sets over and
         confirms to, and grants a security interest to MBIA, the Trusts and the
         Trustees, for the benefit of MBIA, the Trusts and the Trustees, in the
         Escrow Accounts and all amounts deposited or credited to the Escrow
         Accounts from time to time, all investments made with amounts on
         deposit therein, all earnings and distributions thereon and the
         proceeds thereof to secure payment of the claims and other amounts set
         forth in, and the performance of, this Agreement; provided, however,
         that as between the Controlling Parties, the security interest in favor
         of each Controlling Party is subject to Section 3 (c) of this
         Agreement.

         4. ASSIGNMENT AND ASSUMPTION OF SERVICING; CONDITIONAL AGREEMENT TO
EXTEND SERVICING TERM.

                  (a) EXECUTION OF SERVICING RIGHTS PURCHASE AGREEMENT;
         SERVICING BY PURCHASER. First Alliance and the Purchaser shall enter
         into the Servicing Rights Purchase Agreement in the form attached
         hereto as Exhibit B. The Purchaser shall assume all responsibilities as
         servicer with respect to all of the Transactions as set forth in the
         Pooling and Servicing Agreements, except as may be specifically
         provided in the Servicing Rights Purchase Agreement. All servicing
         under the Pooling and Servicing Agreements shall be subject to the
         provisions of this Agreement.

                  (b) EXTENSION OF SERVICING TERMS OF PURCHASER AS SERVICER.
         Each of the Parties acknowledges and agrees that with respect to all of
         the Transactions except the Series 1993-1, the Series 1993-2, the
         Series 1994-1, the Series 1994-2, the Series 1994-3, the Series 1994-4,
         the Series 1995-2 and the Series 1996-1 Transactions (the "Non-term
         Transactions") the servicing term of the Purchaser as servicer is for a
         period of two months, subject to extension of such servicing term as
         provided in the Pooling and Servicing Agreements, as amended. First
         Alliance and the Purchaser hereby agree with MBIA and the Trustees to
         treat all of the Transactions, including the Non-term Transactions, as
         having a servicing term for the Purchaser as servicer of two months on
         the same terms and conditions respecting the term of the respective
         Pooling and Servicing Agreements as set forth in the Pooling and
         Servicing Agreements with respect to the Transactions that are not
         Non-term Transactions.

                                       6
<PAGE>

                  The Trustees and MBIA hereby agree, upon the satisfaction of
         all Conditions Precedent under Section 7 of this Consent Agreement, to
         continue to extend the servicing term of the Purchaser as servicer with
         respect to all Transactions, and to forbear from exercising any rights
         to remove the Purchaser as servicer with respect to the Transactions
         based solely upon a servicer termination event that is a
         collateral-based performance trigger under the Pooling and Servicing
         Agreements, for so long as the following conditions are met:

                           (i) the Purchaser is appointed and performing as
                  provided in this Agreement, on or before August 15, 2000;

                           (ii) The Purchaser is in compliance with all other
                  terms and conditions of the Pooling and Servicing Agreements
                  as assumed pursuant to the Servicing Rights Purchase Agreement
                  and all terms and conditions of this Consent Agreement;

                           (iii) the Purchaser meets the following financial
                  covenants: (A) The Purchaser maintains at least "well
                  capitalized" status at all times, as defined by its banking
                  regulators, and is in good standing with all of its regulators
                  including the Office of Thrift Supervision, the Federal
                  Deposit Insurance Corporation, the Office of Controller of the
                  Currency and the Federal Reserve Bank; (B) The Purchaser
                  agrees to notify MBIA of the entry of any consent or cease and
                  desist order or similar order or directive issued against the
                  Purchaser by any regulator of the Purchaser; and (C) the
                  Purchaser agrees to notify MBIA of any material adverse change
                  in the operations or finances of the Purchaser;

                           (iv) on and after the Closing Date, the Purchaser
                  meets certain resource and procedural criteria selected by
                  MBIA in its sole and absolute discretion, from the resource
                  and procedural standards contained in the Purchaser's current
                  servicing manual and attached to this Agreement, as Exhibit A;

         provided, however, that the Trustees and MBIA agree that the Purchaser
         shall be entitled to a period of 30 days following any failure by the
         Purchaser to meet the conditions contained in subsections (iii) or (iv)
         above to cure such breach. Without limiting the following sentence, the
         parties agree that time is of the essence in any transition to a
         successor servicer, and shall cooperate with each other if the breach
         is to be cured through the replacement of the servicer.

                  (c) ENFORCEMENT OF REMEDIES. Upon breach of or failure to
         satisfy any of (i) through (iv) of Section 4 (b) above or of any other
         of the conditions to the agreement to extend the servicing term and any
         applicable cure period under this Agreement, (i) each of the parties
         hereby agrees that MBIA no longer has the obligation to extend any
         rights of Purchaser as Servicer under the Pooling and Servicing
         Agreements for any of the related Transactions, including the Non-term

                                       7
<PAGE>

         Transactions, or to forbear from exercising any other rights and,
         subject to any rights of certificate holders, shall have the right to
         cause all authority and power of the Purchaser as Servicer under each
         such Pooling and Servicing Agreement to pass to and be vested in the
         applicable Master Servicer, Oversight Agent or Trustee, or other
         successor servicer approved by MBIA, (ii) each of the parties (other
         than the Trustees) agrees not to contest, challenge or object in any
         way to MBIA's exercise at any time of any such right or remedy, and
         (iii) the Purchaser agrees to resign as servicer with respect to the
         Non-term Transactions at the same time as the expiration of its term as
         servicer with respect to the other Transactions.

         5. SATISFACTION OF TRUSTEES AND MBIA CLAIMS. Subject to and conditioned
upon the full and complete satisfaction of the Conditions Precedent specified in
Section 7, the Trustees and MBIA hereby agree that any claim of the Trustees and
MBIA against First Alliance which is based on any actions which occurred prior
to the date of this Agreement, with respect to the Pooling and Servicing
Agreements or any other transaction documents related to the Trusts, shall be
deemed satisfied so long as and conditional upon (i) MBIA, the Trusts and the
Trustees receive all amounts to be deposited in the Escrow Accounts and a valid,
first priority perfected security interest in the collateral pledged hereunder,
(ii) the representations and warranties of First Alliance and the Purchaser in
this Agreement are true and correct, and all Breaches and facts which could give
rise to claims have been disclosed to MBIA and the Trustees, (iii) neither the
Escrow Accounts nor any transfer of an amount into or out of the Escrow Accounts
is avoided or otherwise subject to any adverse decision of a court, (iv) this
Agreement is not deemed unenforceable and (v) MBIA's and the Trustees' ability
to use the amounts deposited into the Escrow Accounts in the manner contemplated
in this Agreement is not limited in any respect. Subject to the foregoing, MBIA
and the Trustees hereby consent to the assumption of the Pooling and Servicing
Agreements by First Alliance for the purpose of the simultaneous assignment to
and assumption of the servicing rights under all such Pooling and Servicing
Agreements by the Purchaser pursuant to the Servicing Rights Purchase Agreement.
The Trustees and MBIA, and their successors in interest, waive and shall be
forever estopped from asserting any claim or demand arising out of such
rejections or in any way related to the Breaches, except as expressly set forth
in this Consent Agreement.

         Notwithstanding the foregoing or any other provisions of this
Agreement, Wells Fargo is not releasing its claims with respect to certain
specified miscellaneous claims identified in Exhibit C hereto.

         6. RELEASES OF THE TRUSTEES AND MBIA. First Alliance and its bankruptcy
estate hereby jointly and severally irrevocably and absolutely release, remise,
acquit, and discharge each of the Trustees and MBIA, their respective
affiliates, and each of their respective current and former officers, directors,
employees, attorneys, agents, consultants, shareholders, successors and assigns
from and of any and all claims, demands, causes of action, actions, liabilities,
damages, losses, expenses and costs, of any kind or nature whatsoever, absolute
or contingent, matured or unmatured, liquidated or unliquidated, now known or
subsequently discovered, that (i) arise out of or in any way relate to the
settlement set forth herein and/or the transactions contemplated hereby (other
than the performance by the Trustees and MBIA of their obligations under this
Agreement) or (ii) relate to the Pooling and Servicing Agreements or the
Documents. Each of First Alliance and the Purchaser hereby represents and
warrants that it is not currently aware of any other claims against the Trustees
or MBIA.

                                       8
<PAGE>

         Nothing contained herein shall extinguish any rights of First Alliance
or its bankruptcy estate in its capacity as owner of a residual certificate or
interest with respect to any of the Trusts.

         The parties intend that none of the terms and provisions of this
Agreement alter the Certificate Insurance Policies.

         7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE TRUSTEES AND MBIA
HEREUNDER. The obligations of the Trustees and MBIA under this Agreement shall
not arise until each of the following conditions (the "Conditions Precedent") is
satisfied (or waived) to the reasonable satisfaction of the Trustees and MBIA,
as evidenced by an officer's certificate from each of the Trustees and MBIA to
such effect:

                  (a) The Acquisition Order approves the terms hereof, is in
         form and substance acceptable to the Trustees and MBIA in their sole
         and absolute discretion, and becomes a Final Order;

                  (b) The Purchaser and First Alliance have executed the
         Servicing Rights Purchase Agreement in the form attached hereto as
         Exhibit B; and

                  (c) The procedures for transfer of servicing of the Mortgage
         Loans to the Purchaser have been presented to MBIA and MBIA has
         consented to such procedures, which consent shall not unreasonably be
         withheld.

         8. CONTINUING REPRESENTATIONS, WARRANTIES AND COVENANTS.

                  (a) Notwithstanding the failure of the Purchaser to assume any
         Insurance Agreement or other Document, the Purchaser hereby represents,
         warrants and covenants as follows:

                           (i) Upon the request of MBIA, the Purchaser shall
                  furnish, with reasonable promptness, any financial data,
                  financial reports and other data relating to the Purchaser as
                  MBIA may reasonably request.

                           (ii) The Purchaser shall, upon the request of MBIA,
                  permit MBIA, or its authorized agent, at reasonable times and
                  upon reasonable notice, to inspect the books and records of
                  the Purchaser as they may relate to the Class A Certificates,
                  the Mortgage Loans and the Purchaser's obligations under the
                  Transaction Documents and to discuss matters relating to the
                  Class A Certificates, the Mortgage Loans or the Purchaser's
                  obligations under the Transaction Documents with an
                  appropriate authorized officer of the Purchaser.

                           (iii) The Purchaser shall promptly deliver to MBIA
                  any Notice of Material Event (as defined in the Insurance
                  Agreement).

                                       9
<PAGE>

                           (iv) Except as permitted in this Agreement or the
                  Pooling and Servicing Agreement, the Purchaser, in its
                  capacity as Servicer, shall not take any action, or fail to
                  take any action, if such action or failure to take action will
                  have a material adverse effect on MBIA's ability to enforce
                  its rights under any of the Transaction Documents.

                  (b) First Alliance shall assume and assign to the Purchaser
         any custodial arrangements for the Mortgage Loans and the Purchaser
         shall assume all obligations of First Alliance to pay fees and costs
         related to any existing custodial arrangements for the Mortgage Loans.
         In either event, First Alliance shall pay all fees due and payable
         before the Closing Date.

                  (c) First Alliance shall continue to provide to the Trustees
         all release requests as required under any Pooling and Servicing
         Agreement for any Mortgage Loans paid off or otherwise subject to
         release through the Closing Date (and shall pay all fees associated
         with such releases), assisted as required and as customary by the
         Trustees.

                  (d) Nothing in the Confirmation Order shall be inconsistent
         with this Agreement or the Acquisition Order.

         9. REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby
represents and warrants that each of the following statements is true and
accurate as of the date hereof:

                  (a) This Agreement has been duly authorized and validly
         executed and delivered by such party and constitutes such party's
         legal, valid and binding obligation, enforceable against such party in
         accordance with its terms;

                  (b) Subject, in the case of First Alliance, to the authority
         of the Bankruptcy Court, such party is not subject to any restriction,
         agreement or law, order, writ, injunction, decree, rule or regulation
         of any court, administrative agency or other governmental authority
         that, with or without the giving of notice, the passage of time or
         both, would prohibit, contravene, be violated by, or be inconsistent
         with the execution, delivery and performance by such party of this
         Agreement or the consummation of the transaction effected hereby or
         contemplated herein; and

                  (c) There is no action, suit or proceeding pending or, to the
         best of such party's knowledge and belief, threatened against such
         party that questions the validity of, in any way legally impairs, or
         seeks to enjoin or otherwise prevent the execution, delivery and/or
         performance by such party of this Agreement or, if adversely
         determined, would have a material adverse effect on such party's
         ability to perform his or its, as the case may be, obligations
         hereunder.

         10. NO EXCESS LOSS; NO OTHER BREACHES. First Alliance hereby represents
and warrants that to its best knowledge there has not been any loss prior to the
date hereof and there will be no loss as of the Closing Date which would be
defined as an "Excess Loss" if it occurred after the Closing Date. First
Alliance hereby represents and warrants to each of the Trustees and MBIA that
First Alliance is not aware of any breach of any representation or warranty of

                                       10
<PAGE>

First Alliance or any affiliate of First Alliance under any Pooling and
Servicing Agreement or any other Documents other than the Breaches resulting
directly from First Alliance's bankruptcy, or dealt with in this Agreement. MBIA
and the Trustees represent that they are not aware of any such additional
breaches.

         11. ATTORNEYS' FEES. In the event any litigation, arbitration or other
proceeding is commenced by a party hereto against one or more of the other
parties hereto for purposes of enforcing the terms of this Agreement, the
prevailing party in such litigation, arbitration or other proceeding shall be
entitled to recover its attorneys' fees and expenses from the non-prevailing
party or parties in such litigation, arbitration or other proceeding.

         12. CONSENT TO JURISDICTION. Each of the parties hereby agrees that all
actions, suits or other proceedings arising out of or relating in any way to
this Agreement may, but need not, be brought in the Bankruptcy Court. Each of
the parties hereby knowingly, voluntarily, intelligently, absolutely and
irrevocably waives and agrees not to assert in any such action, suit or
proceeding that it is not subject to the personal jurisdiction of the Bankruptcy
Court or that the action, suit or proceeding should be transferred to a
different venue under FORUM NON CONVENIENS principles or statutes embodying such
principles.

         13. AMENDMENT. This Agreement may be amended from time to time by the
parties hereto pursuant to a written agreement signed by the parties hereto.

         14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.

         15. NOTICES. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
at or mailed by registered mail, postage prepaid, addressed as follows, or such
other address as may be furnished by proper notice as described herein
(facsimile numbers are provided below for convenience of communication and not
as an alternative means of delivery of notice):

         First Alliance:     First Alliance Mortgage Company
                             17305 Von Karman Avenue
                             Irvine, California 92614
                             Attention:  Francisco Nebot / Anne Lane
                             Facsimile No.: (949) 224-6696

         Wells Fargo:        Wells Fargo Bank Minnesota, National Association
                             11000 Broken Land Parkway
                             Columbia, Maryland 21044-3562
                             Attention:  Ms. Diane E. TenHoopen
                             Facsimile No.: (410) 884-2372

                                       11
<PAGE>

         Chase:              The Chase Manhattan Bank
                             450 West 33rd Street, 15th Floor
                             New York, New York 10001-2697
                             Attention: Ms. Gale St. John
                             Facsimile No.: (212) 946-8744

         BONY:               The Bank of New York
                             101 Barclay Street - 12 East
                             New York, NY  10286
                             Attention: Trust Department
                             Fax No.: (212) 815-5309

         MBIA:               MBIA Insurance Corporation
                             113 King Street
                             Armonk, NY 10504
                             Attention:  Mr. Stephen G. Holliday
                             Facsimile No.: (914) 765-3810

         Purchaser:          Ocwen Federal Bank FSB
                             The Forum. Suite 1002
                             1675 Palm Beach Lakes BLVD.
                             West Palm Beach, Florida  33401
                             Attention:  Secretary
                             Facsimile No.:  (561)- 682-8177

         16. RELATIONSHIP OF PARTIES. Nothing herein contained shall be deemed
or construed to create a partnership or joint venture between the parties
hereto.

         17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.

         18. TERM. The term of this Agreement shall extend until satisfaction of
all obligations of the parties hereunder and until payment in full of any and
all amounts required to be paid hereunder or under the terms of any Pooling and
Servicing Agreement. This Agreement shall be of no force or effect unless
approved by the Bankruptcy Court in a Final Order.

         19. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement and understanding between the parties concerning the subject matter
hereof and supersedes and terminates all prior written and oral agreements,
proposals, promises and representations of the parties respecting the subject
matter hereof. No representation or promise hereafter made, nor any modification
or amendment of this Agreement, shall be binding upon either party, unless made
in writing and signed by the parties hereto.

                                       12
<PAGE>

         The parties hereto agree that this Agreement shall be effective as to
them as provided herein without regard to whether BONY signs or does not sign
this Agreement. If BONY does not sign this Agreement, the other parties to this
Agreement shall have the right to treat the BONY Transactions as Transactions as
defined herein, BONY shall not be a Trustee or one of the Trustees as defined
herein and no amount shall be required to be deposited into the BONY Escrow
Account.

         20. ASSIGNMENT; BINDING EFFECT. None of the parties hereto may assign
its rights hereunder or delegate its duties and obligations hereunder without
the express prior written consent of each of the Trustees and MBIA. Subject to
all terms and conditions hereof, this Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns.

         21. NO SEVERABILITY. The terms and provisions of this Agreement are
dependent upon the validity and enforceability of all of the terms and
provisions hereof, and no term or provision shall be severable from this
Agreement.

                            [Signature Page Follows]

                                       13
<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer thereunto
as of the day and year first above written.

                                       FIRST ALLIANCE MORTGAGE COMPANY

                                       By: /S/ Francisco Nebot
                                           -----------------------------
                                       Name: Francisco Nebot
                                       Title: President and CFO

                                       WELLS FARGO BANK MINNESOTA,
                                       NATIONAL ASSOCIATION, as
                                       Trustee or Indenture
                                       Trustee and, where
                                       applicable, Master Servicer
                                       and/or Oversight Agent

                                       By: /S/ Diane E. TenHoopen
                                           -----------------------------
                                       Name: Diane E. TenHoopen
                                       Title: Vice President

                                       THE CHASE MANHATTAN BANK,
                                       as Trustee or Indenture
                                       Trustee and, where
                                       applicable, Master
                                       Servicer, Oversight Agent
                                       and/or Custodian

                                       By: /S/ Gale St. John
                                           -----------------------------
                                       Name: Gale St. John
                                       Title: Vice President

                                       THE BANK OF NEW YORK

                                       By: /S/ John Barbera
                                           -----------------------------
                                       Name: John Barbera
                                       Title: Vice President

                                       MBIA INSURANCE CORPORATION

                                       By: /S/ Christopher W. Tilley
                                           -----------------------------
                                       Name: Christopher W. Tilley
                                       Title: Senior Managing Director

                                       OCWEN FEDERAL BANK FSB

                                       By: /S/ Richard Delgado
                                           -----------------------------
                                       Name: Richard Delgado
                                       Title: Vice President

                                       14
<PAGE>

                                    EXHIBIT A
                          EXCERPTS FROM THE PURCHASER'S
                            CURRENT SERVICING MANUAL

                        SERVICING PERFORMANCE OBLIGATIONS

         On and after the Closing Date, Servicer shall meet the resource and
procedural criteria below:

1.   Servicer will make at least one collection call attempt per business day**
     for the first 15 days of delinquency. These calls are made for all mortgage
     loans that are past due between the first and 15th day of delinquency,
     except for loans that are screened out from such calls for reasons
     including, but not limited to: bankruptcies, interim payments in the first
     30 days after transfer, loans for which the historical average payment date
     is before the 15th day of delinquency for which borrowers have requested in
     writing that Servicer not contact them. Once a promise to pay is obtained,
     calls will cease until the promise period, not to exceed seven days, has
     expired. Servicer is deemed to have satisfied this requirement if it is
     achieved at least 90% of the time in a given month.
2.   Servicer will make at least one collection call attempt per business day**
     for loans greater than 15 days delinquent but not yet in foreclosure. These
     calls are made for all mortgage loans that are delinquent more than 15
     days, except for loans that are screened out from such calls for reasons
     including, but not limited to: bankruptcies, loans in foreclosure and loans
     for which borrowers have requested in writing that Servicer not contact
     them. Once a promise to pay is obtained, calls will cease until the promise
     period, not to exceed seven days, has expired. Servicer is deemed to have
     satisfied this requirement if it is achieved at lest 90% of the time in a
     given month.
3.   Servicer will mail a late notice to all borrowers once they are 5 days past
     their due date, except for the following loans that are screened out for
     such written correspondence for reasons including, but not limited to:
     bankruptcies, interim payments in the first 30 days after transfer and
     loans for which the historical average payment date is before the 15th day
     of delinquency. Servicer is deemed to have satisfied this requirement if it
     is achieved at least 90% of the time in a given month.
4.   Servicer will mail a letter of intent to foreclose to all borrowers on or
     before the 20th day of delinquency. Servicer is deemed to have satisfied
     this requirement if it is achieved at least 90% of the time in a given
     month.
5.   Servicer will send a demand letter via certified mail to all borrowers on
     or before the 35th day of delinquency on all loans not in bankruptcy or
     formal dispute. Servicer is deemed to have satisfied this requirement if it
     is achieved at least 90% of the time in a given month.
6.   Servicer will commence foreclosure action on all borrowers on or before the
     90th day of delinquency, except for borrowers in bankruptcy, borrowers who
     have filed a formal dispute and mortgage loans for which there is not
     sufficient documentation in the file for commencement of foreclosure.
     Servicer is deemed to have satisfied this requirement if it is achieved at
     lest 90% of the time in a given month.

                                       15
<PAGE>

7.   Servicer will specifically assign all loans in foreclosure to a qualified
     Loan Resolution Consultant who will, within Accepted Servicing Practices,
     work with the borrower to resolve the loan pre-foreclosure sale. Servicer
     agrees to assign no more than 275 loans per Loan Resolution Consultant.*
8.   Servicer will assign all REO to a qualified REO Sales Manager. Servicer
     agrees to assign no more than 140 REO per REO Sales Manager.*

*SERVICER MAY REQUEST AN INCREASE TO THESE STANDARDS ON AN ANNUAL BASIS BY
DEMONSTRATING THAT TECHNOLOGY AND PROCESS IMPROVEMENTS WARRANT SUCH INCREASE AND
THAT PERFORMANCE WILL REMAIN CONSISTENT WITH THAT PRIOR YEAR. APPROVAL OF SUCH
CHANGES SHALL NOT BE UNREASONABLY WITHHELD.

**For purposes of defining Business Day, Friday will include Friday, Saturday
and Sunday.

                                       16
<PAGE>

                                                                      SCHEDULE 1
                                                                      ----------

                                  TRANSACTIONS

                                    DOCUMENTS
                                    INCLUDING
                        POOLING AND SERVICING AGREEMENTS

FIRST ALLIANCE MORTGAGE LOAN TRUST 1993-1 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1993-1
---------------------------

INSURANCE AGREEMENT dated as of August 1, 1993 by and among Municipal Bond
Investors Assurance Corporation, as Insurer, First Alliance Mortgage Company, as
Company and as Servicer, and Chemical Bank, as Trustee.

MORTGAGE LOAN SUBSERVICING AGREEMENT dated as of April 1, 1993 by and between
First Alliance Mortgage Company, as Principal, and Lomas Mortgage USA, Inc., as
Subservicer.

POOLING AND SERVICING AGREEMENT dated as of August 1, 1993 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, Chemical Bank, as Trustee, and Chemical Bank, as Master Servicer, as
amended by the Amendment and Waiver dated April 15, 1996 among First Alliance
Mortgage Company, First Alliance Mortgage Company, as Servicer, and Chemical
Bank, as Trustee and Master Servicer, as further amended by the First Amendment
to the Pooling and Servicing Agreement dated July 16, 1997 among First Alliance
Mortgage Company, as Company, First Alliance Mortgage Company, as Servicer, and
The Chase Manhattan Bank (as successor to Chemical Bank), as Trustee and Master
Servicer, and as further amended by the Second Amendment to the Pooling and
Servicing Agreement dated February 25, 1998 among First Alliance Mortgage
Company, as Company, First Alliance Mortgage Company, as Servicer, and The Chase
Manhattan Bank (as successor to Chemical Bank), as Trustee and Master Servicer.

MASTER LOAN TRANSFER AGREEMENT dated as of August 1, 1993 by and between
Security Financial Acceptance, L.P. and First Alliance Mortgage Company, as
Affiliated Originators, and First Alliance Mortgage Company, as Company.

INDEMNIFICATION AGREEMENT dated as of August 17, 1993 by and among Municipal
Bond Investors Assurance Corporation, as Insurer, First Alliance Mortgage
Company, as Issuer, and Prudential Securities Incorporated, as Underwriter.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1993-2 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1993-2
---------------------------

MORTGAGE LOAN SUBSERVICING AGREEMENT dated as of April 1, 1993 by and between
First Alliance Mortgage Company, as Principal, and Lomas Mortgage USA, Inc., as
Subservicer.

                                       17
<PAGE>

MASTER LOAN TRANSFER AGREEMENT dated as of August 1, 1993 by and between
Security Financial Acceptance, L.P. and First Alliance Mortgage Company, as
Affiliated Originators, and First Alliance Mortgage Company, as Company.

CONVEYANCE AGREEMENT dated as of November 1, 1993 by and among First Alliance
Mortgage Company, as Company, and First Alliance Mortgage Company and Security
Financial Acceptance, L.P., as Affiliated Originators, pursuant to the Master
Loan Transfer Agreement dated as of August 1, 1993 among themselves.

POOLING AND SERVICING AGREEMENT dated as of November 1, 1993 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, Chemical Bank, as Trustee, and Chemical Bank, as Master Servicer, as
amended by the First Amendment to the Pooling and Servicing Agreement dated July
16, 1997 among First Alliance Mortgage Company, as Company, First Alliance
Mortgage Company, as Servicer, and The Chase Manhattan Bank (as successor to
Chemical Bank), as Trustee and Master Servicer, and as further amended by the
Second Amendment to the Pooling and Servicing Agreement dated February 25, 1998
among First Alliance Mortgage Company, as Company, First Alliance Mortgage
Company, as Servicer, and The Chase Manhattan Bank (as successor to Chemical
Bank), as Trustee and Master Servicer.

INSURANCE AGREEMENT dated as of November 1, 1993 by and among Municipal Bond
Investors Assurance Corporation, as Insurer, First Alliance Mortgage Company, as
Company and as Servicer, and Chemical Bank, as Trustee.

INDEMNIFICATION AGREEMENT dated as of November 16, 1993 by and among Municipal
Bond Investors Assurance Corporation, as Insurer, First Alliance Mortgage
Company, as Issuer, and Prudential Securities Incorporated, as Underwriter.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1994-1 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1994-1
---------------------------

MORTGAGE LOAN SUBSERVICING AGREEMENT dated as of April 1, 1993 by and between
First Alliance Mortgage Company, as Principal, and Lomas Mortgage USA, Inc., as
Subservicer.

POOLING AND SERVICING AGREEMENT dated as of February 1, 1994 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, Chemical Bank, as Trustee, and Chemical Bank, as Master Servicer, as
amended by the First Amendment to the Pooling and Servicing Agreement dated July
16, 1997 among First Alliance Mortgage Company, as Company, First Alliance
Mortgage Company, as Servicer, and The Chase Manhattan Bank (as successor to
Chemical Bank), as Trustee and Master Servicer, and as further amended by the
Second Amendment to the Pooling and Servicing Agreement dated February 25, 1998
among First Alliance Mortgage Company, as Company, First Alliance Mortgage
Company, as Servicer, and The Chase Manhattan Bank (as successor to Chemical
Bank), as Trustee and Master Servicer.

                                       18
<PAGE>

INSURANCE AGREEMENT dated as of February 1, 1994 by and among Municipal Bond
Investors Assurance Corporation, as Insurer, First Alliance Mortgage Company, as
Company and as Servicer, and Chemical Bank, as Trustee.

INDEMNIFICATION AGREEMENT dated as of February 14, 1994 by and among Municipal
Bond Investors Assurance Corporation, as Insurer, First Alliance Mortgage
Company, as Issuer, and Prudential Securities Incorporated, as Underwriter.

MASTER LOAN TRANSFER AGREEMENT dated as of August 1, 1993 by and between
Security Financial Acceptance, L.P. and First Alliance Mortgage Company, as
Affiliated Originators, and First Alliance Mortgage Company, as Company.

CONVEYANCE AGREEMENT dated as of February 23, 1994 by and among First Alliance
Mortgage Company, as Company, and First Alliance Mortgage Company and Security
Financial Acceptance, L.P., as Affiliated Originators, pursuant to the Master
Loan Transfer Agreement dated as of August 1, 1993 among themselves.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1994-2 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1994-2
---------------------------

MORTGAGE LOAN SUBSERVICING AGREEMENT dated as of April 1, 1993 by and between
First Alliance Mortgage Company, as Principal, and Lomas Mortgage USA, Inc., as
Subservicer.

POOLING AND SERVICING AGREEMENT dated as of May 1, 1994 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, Chemical Bank, as Trustee, and Chemical Bank, as Master Servicer, as
amended by the First Amendment to the Pooling and Servicing Agreement dated July
16, 1997 among First Alliance Mortgage Company, as Company, First Alliance
Mortgage Company, as Servicer, and The Chase Manhattan Bank (as successor to
Chemical Bank), as Trustee and Master Servicer, and as further amended by the
Second Amendment to the Pooling and Servicing Agreement dated February 25, 1998
among First Alliance Mortgage Company, as Company, First Alliance Mortgage
Company, as Servicer, and The Chase Manhattan Bank (as successor to Chemical
Bank), as Trustee and Master Servicer.

INSURANCE AGREEMENT dated as of May 1, 1994 by and among Municipal Bond
Investors Assurance Corporation, as Insurer, First Alliance Mortgage Company, as
Company and as Servicer, and Chemical Bank, as Trustee.

INDEMNIFICATION AGREEMENT dated as of May 20, 1994 by and among Municipal Bond
Investors Assurance Corporation, as Insurer, First Alliance Mortgage Company, as
Issuer, and Prudential Securities Incorporated, as Underwriter.

MASTER LOAN TRANSFER AGREEMENT dated as of August 1, 1993 by and between
Security Financial Acceptance, L.P. and First Alliance Mortgage Company, as
Affiliated Originators, and First Alliance Mortgage Company, as Company.

CONVEYANCE AGREEMENT dated as of May 25, 1994 by and among First Alliance
Mortgage Company, as Company, and First Alliance Mortgage Company and Security
Financial Acceptance, L.P., as Affiliated Originators, pursuant to the Master
Loan Transfer Agreement dated as of August 1, 1993 among themselves.

                                       19
<PAGE>

FIRST ALLIANCE MORTGAGE LOAN TRUST 1994-3 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1994-3
---------------------------

MORTGAGE LOAN SUBSERVICING AGREEMENT dated as of April 1, 1993 by and between
First Alliance Mortgage Company, as Principal, and Lomas Mortgage USA, Inc., as
Subservicer.

POOLING AND SERVICING AGREEMENT dated as of August 1, 1994 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, Bankers Trust Company, as Trustee, and Bankers Trust Company, as
Master Servicer, as amended by the First Amendment to the Pooling and Servicing
Agreement dated July 16, 1997 among First Alliance Mortgage Company, as Company,
First Alliance Mortgage Company, as Servicer, and The Chase Manhattan Bank (as
successor to Bankers Trust Company of California, N.A.), as Trustee and Master
Servicer, and as further amended by the Second Amendment to the Pooling and
Servicing Agreement dated February 25, 1998 among First Alliance Mortgage
Company, as Company, First Alliance Mortgage Company, as Servicer, and The Chase
Manhattan Bank (as successor to Bankers Trust Company of California, N.A.), as
Trustee and Master Servicer.

INSURANCE AGREEMENT dated as of August 1, 1994 by and among Municipal Bond
Investors Assurance Corporation, as Insurer, First Alliance Mortgage Company, as
Company and as Servicer, and Bankers Trust Company of California, N.A., as
Trustee.

MASTER LOAN TRANSFER AGREEMENT dated as of August 1, 1993 by and between
Security Financial Acceptance, L.P. and First Alliance Mortgage Company, as
Affiliated Originators, and First Alliance Mortgage Company, as Company.

CONVEYANCE AGREEMENT dated as of August 1, 1994 by and among First Alliance
Mortgage Company, as Company, and First Alliance Mortgage Company and Security
Financial Acceptance, L.P., as Affiliated Originators, pursuant to the Master
Loan Transfer Agreement dated as of August 1, 1993 among themselves.

INDEMNIFICATION AGREEMENT dated as of August 22, 1994 by and among Municipal
Bond Investors Assurance Corporation, as Insurer, First Alliance Mortgage
Company, as Issuer, and Prudential Securities Incorporated, as Underwriter.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1994-4 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1994-4
---------------------------

MORTGAGE LOAN SUBSERVICING AGREEMENT dated as of April 1, 1993 by and between
First Alliance Mortgage Company, as Principal, and Lomas Mortgage USA, Inc., as
Subservicer.

POOLING AND SERVICING AGREEMENT dated as of December 1, 1994 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, and Bankers Trust Company of California, N.A., as Trustee, as amended
by the First Amendment to the Pooling and Servicing Agreement dated July 16,
1997 among First Alliance Mortgage Company, as Company, First Alliance Mortgage
Company, as Servicer, and The Chase Manhattan Bank (as successor to Bankers
Trust Company of California, N.A.), as Trustee, and as further amended by the
Second Amendment to the Pooling and Servicing Agreement dated February 25, 1998
among First Alliance Mortgage Company, as Company, First Alliance Mortgage
Company, as Servicer, and The Chase Manhattan Bank (as successor to Bankers
Trust Company of California, N.A.) as Trustee.

                                       20
<PAGE>

INDEMNIFICATION AGREEMENT dated as of December 1, 1994 by and among Municipal
Bond Investors Assurance Corporation, as Insurer, First Alliance Mortgage
Company, as Issuer, and Prudential Securities Incorporated, as Underwriter.

INSURANCE AGREEMENT dated as of December 1, 1994 by and among Municipal Bond
Investors Assurance Corporation, as Insurer, First Alliance Mortgage Company, as
Company and as Servicer, and Bankers Trust Company of California, N.A., as
Trustee.

MASTER LOAN TRANSFER AGREEMENT dated as of August 1, 1993 by and between
Security Financial Acceptance, L.P. and First Alliance Mortgage Company, as
Affiliated Originators, and First Alliance Mortgage Company, as Company.

CONVEYANCE AGREEMENT dated as of December 16, 1994 by and among First Alliance
Mortgage Company, as Company, and First Alliance Mortgage Company and Security
Financial Acceptance, L.P., as Affiliated Originators, pursuant to the Master
Loan Transfer Agreement dated as of December 1, 1994 among themselves.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1995-2 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1995-2
---------------------------

MORTGAGE LOAN SUBSERVICING AGREEMENT dated as of April 1, 1993 by and between
First Alliance Mortgage Company, as Principal, and Lomas Mortgage USA, Inc., as
Subservicer.

MORTGAGE LOAN MASTER TRANSFER AGREEMENT dated as of June 30, 1995 by and between
First Alliance Mortgage Company and Nationscapital Mortgage Corporation, as
Originator.

CONVEYANCE AGREEMENT dated as of December 20, 1995 by and between First Alliance
Mortgage Company and Nationscapital Mortgage Corporation, as Originator,
pursuant to the Mortgage Loan Master Transfer Agreement dated as of June 30,
1995 between themselves.

MORTGAGE LOAN MASTER TRANSFER AGREEMENT dated as of June 30, 1995 by and between
First Alliance Mortgage Company and Coast Security Mortgage Inc., as Originator.

CONVEYANCE AGREEMENT dated as of December 20, 1995 by and between First Alliance
Mortgage Company and Coast Security Mortgage Inc., as Originator, pursuant to
the Mortgage Loan Master Transfer Agreement dated as of June 30, 1995 between
themselves.

POOLING AND SERVICING AGREEMENT dated as of December 1, 1995 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, and The Chase Manhattan Bank (as successor to Bankers Trust Company of
California, N.A.), as Trustee.

                                       21
<PAGE>

INSURANCE AGREEMENT dated as of December 1, 1995 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and Bankers Trust Company of California,
N.A., as Trustee.

INDEMNIFICATION AGREEMENT dated as of December 15, 1995 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Issuer,
and Prudential Securities Incorporated, as Underwriter.

SUBSEQUENT TRANSFER AGREEMENT dated as of December 20, 1995 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, First Alliance Mortgage Loan Trust 1995-2, as Purchaser, and Bankers
Trust Company of California, N.A., as Trustee for the First Alliance Mortgage
Loan Trust 1995-2.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1996-1 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1996-1
---------------------------

UNAFFILIATED SELLER'S AGREEMENT dated as of March 1, 1996 by and between
Prudential Securities Secured Financing Corporation, as Depositor, and First
Alliance Mortgage Company, as Unaffiliated Seller.

POOLING AND SERVICING AGREEMENT dated as of March 1, 1996 by and among
Prudential Securities Secured Financing Corporation, as Depositor, First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, and The Chase Manhattan Bank (as successor to Bankers Trust Company of
California, N.A.), as Trustee.

INSURANCE AGREEMENT dated as of March 1, 1996 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, Prudential Securities Secured Financing
Corporation, as Depositor, and Bankers Trust Company of California, N.A., as
Trustee.

INDEMNIFICATION AGREEMENT dated as of March 28, 1996 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, Prudential
Securities Secured Financing Corporation, as Depositor, and Prudential
Securities Incorporated, as Underwriter.

CONVEYANCE AGREEMENT dated as of March 29, 1996 by and between First Alliance
Mortgage Company and Nationscapital Mortgage Corporation, as Originator,
pursuant to the Mortgage Loan Master Transfer Agreement dated as of June 30,
1995 between themselves.

CONVEYANCE AGREEMENT dated as of March 29, 1996 by and between First Alliance
Mortgage Company and Coast Security Mortgage Inc., as Originator, pursuant to
the Mortgage Loan Master Transfer Agreement dated as of June 30, 1995 between
themselves.

                                       22
<PAGE>

FIRST ALLIANCE MORTGAGE LOAN TRUST 1996-2 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1996-2
---------------------------

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as of February 12,
1999 among First Alliance Mortgage Company, as Company and Servicer, The Chase
Manhattan Bank (as successor to Bankers Trust Company of California, N.A.), as
Trustee, and Norwest Bank Minnesota, National Association, as Master Servicer.

INSURANCE AGREEMENT dated as of June 1, 1996 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and Bankers Trust Company of California,
N.A., as Trustee.

INDEMNIFICATION AGREEMENT dated as of June 10, 1996 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, and
Prudential Securities Incorporated, as Underwriter.

CONVEYANCE AGREEMENT dated as of June 14, 1996 by and between First Alliance
Mortgage Company and Nationscapital Mortgage Corporation, as Originator,
pursuant to the Mortgage Loan Master Transfer Agreement dated as of June 30,
1995 between themselves.

CONVEYANCE AGREEMENT dated as of June 14, 1996 by and among First Alliance
Mortgage Company and Coast Security Mortgage Inc., as Originator, pursuant to
the Mortgage Loan Master Transfer Agreement dated as of June 30, 1995 between
themselves.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1996-3 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1996-3
---------------------------

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as of February 12,
1999 among First Alliance Mortgage Company, as Company and Servicer, The Bank of
New York, as Trustee, and Norwest Bank Minnesota, National Association, as
Master Servicer.

INSURANCE AGREEMENT dated as of September 1, 1996 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and The Bank of New York, as Trustee.

INDEMNIFICATION AGREEMENT dated as of September 10, 1996 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Company,
and Prudential Securities Incorporated, as Underwriter.

SUBSEQUENT TRANSFER AGREEMENT dated as of September 30, 1996 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Loan Trust
1996-3, as Purchaser and The Bank of New York as Trustee for the First Alliance
Mortgage Loan Trust 1996-3.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1996-4 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1996-4
---------------------------

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as of February 12,
1999 among First Alliance Mortgage Company, as Company and Servicer, The Chase
Manhattan Bank, as Trustee, and Norwest Bank Minnesota, National Association, as
Master Servicer.

                                       23
<PAGE>

CUSTODIAL AGREEMENT dated as of December 1, 1996 by and among The Chase
Manhattan Bank, as Trustee, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and The Bank of New York, as Custodian.

INSURANCE AGREEMENT dated as of December 1, 1996 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and The Chase Manhattan Bank, as
Trustee.

INDEMNIFICATION AGREEMENT dated as of December 10, 1996 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Company,
and Prudential Securities Incorporated and Lehman Brothers Inc., as
Underwriters.

SUBSEQUENT TRANSFER AGREEMENT dated as of December 31, 1996 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, First Alliance Mortgage Loan Trust 1996-4, as Purchaser, and The Chase
Manhattan Bank, as Trustee for the First Alliance Mortgage Loan Trust 1996-4.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1997-1 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1997-1
---------------------------

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as of February 12,
1999 among First Alliance Mortgage Company, as Company and Servicer, The Chase
Manhattan Bank, as Trustee, and Norwest Bank Minnesota, National Association, as
Master Servicer.

CUSTODIAL AGREEMENT dated as of March 1, 1997 by and among The Chase Manhattan
Bank, as Trustee, First Alliance Mortgage Company, as Company, First Alliance
Mortgage Company, as Servicer, and The Bank of New York, as Custodian.

INSURANCE AGREEMENT dated as of March 1, 1997 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and The Chase Manhattan Bank, as
Trustee.

INDEMNIFICATION AGREEMENT dated as of March 11, 1997 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, and
Prudential Securities Incorporated and Lehman Brothers Inc., as Underwriters.

SUBSEQUENT TRANSFER AGREEMENT dated as of March 27, 1997 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, First Alliance Mortgage Loan Trust 1997-1, as Purchaser, and The Chase
Manhattan Bank, as Trustee for the First Alliance Mortgage Loan Trust 1997-1.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1997-2 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1997-2
---------------------------

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as of February 12,
1999 among First Alliance Mortgage Company, as Company and Servicer, The Chase
Manhattan Bank, as Trustee, and Norwest Bank Minnesota, National Association, as
Master Servicer.

                                       24
<PAGE>

CUSTODIAL AGREEMENT dated as of June 1, 1997 by and among The Chase Manhattan
Bank, as Trustee, First Alliance Mortgage Company, as Company, First Alliance
Mortgage Company, as Servicer, and The Bank of New York, as Custodian.

INSURANCE AGREEMENT dated as of June 1, 1997 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and The Chase Manhattan Bank, as
Trustee.

INDEMNIFICATION AGREEMENT dated as of June 10, 1997 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, and
Prudential Securities Incorporated and Lehman Brothers Inc., as Underwriters.

SUBSEQUENT TRANSFER AGREEMENT dated as of June 30, 1997 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, First Alliance Mortgage Loan Trust, 1997-2, as Purchaser, and The
Chase Manhattan Bank, as Trustee for the First Alliance Mortgage Loan Trust,
1997-2.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1997-3 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1997-3
---------------------------

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as of February 12,
1999 among First Alliance Mortgage Company, as Company and Servicer, The Chase
Manhattan Bank, as Trustee, and Norwest Bank Minnesota, National Association, as
Master Servicer.

CUSTODIAL AGREEMENT dated as of September 1, 1997 by and among The Chase
Manhattan Bank, as Trustee, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and The Bank of New York, as Custodian.

INSURANCE AGREEMENT dated as of September 1, 1997 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and The Chase Manhattan Bank, as
Trustee.

INDEMNIFICATION AGREEMENT dated as of September 9, 1997 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Company,
and Prudential Securities Incorporated and Lehman Brothers Inc., as
Underwriters.

SUBSEQUENT TRANSFER AGREEMENT dated as of September 30, 1997 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, First Alliance Mortgage Loan Trust 1997-3, as Purchaser, and The Chase
Manhattan Bank, as Trustee for the First Alliance Mortgage Loan Trust 1997-3.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1997-4 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1997-4
---------------------------

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as of February 12,
1999 among First Alliance Mortgage Company, as Company and Servicer, The Bank of
New York, as Trustee, and Norwest Bank Minnesota, National Association, as
Master Servicer.

                                       25
<PAGE>

INSURANCE AGREEMENT dated as of December 1, 1997 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Company, First
Alliance Mortgage Company, as Servicer, and The Bank of New York, as Trustee.

INDEMNIFICATION AGREEMENT dated as of December 9, 1997 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Company,
and Prudential Securities Incorporated and First Union Capital Markets Corp., as
Underwriters.

SUBSEQUENT TRANSFER AGREEMENT dated as of December 31, 1997 by and among First
Alliance Mortgage Company, as Company, First Alliance Mortgage Company, as
Servicer, First Alliance Mortgage Loan Trust 1997-4, as Purchaser, and The Bank
of New York, as Trustee for the First Alliance Mortgage Loan Trust 1997-4.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1998-1A MORTGAGE LOAN ASSET BACKED
---------------------------------------------------------------------
CERTIFICATES, SERIES 1998-1A
----------------------------

TRUST AGREEMENT dated as of March 1, 1998 by and between First Alliance Mortgage
Company, as Seller, and
Wilmington Trust Company, as Owner Trustee

AMENDED AND RESTATED SALE AND SERVICING AGREEMENT dated as of February 12, 1999
among First Alliance Mortgage Loan Trust 1998-1A, as Issuer, First Alliance
Mortgage Company, as Seller and Servicer, The Chase Manhattan Bank, as Indenture
Trustee, and Norwest Bank Minnesota, National Association, as Master Servicer.

INDENTURE dated as of March 1, 1998 by and between First Alliance Mortgage Loan
Trust 1998-1A, as Issuer, and The Chase Manhattan Bank, as Indenture Trustee.

INSURANCE AGREEMENT dated as of March 1, 1998 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller and as
Servicer, First Alliance Mortgage Loan Trust 1998-1A, as Issuer, and The Chase
Manhattan Bank, as Indenture Trustee.

CUSTODIAL AGREEMENT dated as of March 1, 1998 by and among The Chase Manhattan
Bank, as Indenture Trustee, First Alliance Mortgage Company, as Seller and
Servicer, First Alliance Mortgage Loan Trust 1998-1A, as Issuer, and The Bank of
New York, as Custodian.
INDEMNIFICATION AGREEMENT dated as of March 10, 1998 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, and
Prudential Securities Incorporated, as Underwriter.

SUBSEQUENT TRANSFER AGREEMENT dated as of March 31, 1998 by and among First
Alliance Mortgage Company, as Servicer and Seller, First Alliance Mortgage Loan
Trust 1998-1A, as Purchaser, and The Chase Manhattan Bank, as Indenture Trustee
for the First Alliance Mortgage Loan Trust 1998-1A.

                                       26
<PAGE>

FIRST ALLIANCE MORTGAGE LOAN TRUST 1998-1F MORTGAGE LOAN ASSET BACKED
---------------------------------------------------------------------
CERTIFICATES, SERIES 1998-1F
----------------------------

TRUST AGREEMENT dated as of March 1, 1998 by and between First Alliance Mortgage
Company, as Seller, and Wilmington Trust Company, as Owner Trustee.

AMENDED AND RESTATED SALE AND SERVICING AGREEMENT dated as of February 12, 1999
among First Alliance Mortgage Loan Trust 1998-1F, as Issuer, First Alliance
Mortgage Company, as Seller and Servicer, The Chase Manhattan Bank, as Indenture
Trustee, and Norwest Bank Minnesota, National Association, as Master Servicer.

INDENTURE dated as of March 1, 1998 by and between First Alliance Mortgage Loan
Trust 1998-1F, as Issuer, and The Chase Manhattan Bank, as Indenture Trustee.

INSURANCE AGREEMENT dated as of March 1, 1998 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller and as
Servicer, First Alliance Mortgage Loan Trust 1998-1F, as Issuer, and The Chase
Manhattan Bank, as Indenture Trustee.

CUSTODIAL AGREEMENT dated as of March 1, 1998 by and among The Chase Manhattan
Bank, as Indenture Trustee, First Alliance Mortgage Company, as Seller and
Servicer, First Alliance Mortgage Loan Trust 1998-1F, as Issuer, and The Bank of
New York, as Custodian.

INDEMNIFICATION AGREEMENT dated as of March 10, 1998 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, and Wheat
First Securities, Inc., acting through First Union Capital Markets, a division
of Wheat First Securities, Inc., as Underwriter.

SUBSEQUENT TRANSFER AGREEMENT dated as of March 31, 1998 by and among First
Alliance Mortgage Company, as Servicer and Seller, First Alliance Mortgage Loan
Trust 1998-1F, as Purchaser, and The Chase Manhattan Bank, as Indenture Trustee
for the First Alliance Mortgage Loan Trust 1998-1F.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1998-3 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1998-3
---------------------------

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT dated as of February 12,
1999 among First Alliance Mortgage Company, as Seller and Servicer, and Norwest
Bank Minnesota, National Association, as Trustee and Master Servicer.

INSURANCE AGREEMENT dated as of September 1, 1998 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, First
Alliance Mortgage Company, as Servicer, and Norwest Bank Minnesota, National
Association, as Trustee.

INDEMNIFICATION AGREEMENT dated as of September 14, 1998 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Seller,
and Prudential Securities Incorporated and Wheat First Securities, Inc., acting
through First Union Capital Markets, a division of Wheat First Securities, Inc.,
as Underwriters.

SUBSEQUENT TRANSFER AGREEMENT dated as of September 30, 1998 by and among First
Alliance Mortgage Company, as Seller and Servicer, First Alliance Mortgage Loan
Trust 1998-3, as Purchaser, and Norwest Bank Minnesota, National Association, as
Trustee for the First Alliance Mortgage Loan Trust 1998-3.

                                       27
<PAGE>

FIRST ALLIANCE MORTGAGE LOAN TRUST 1998-4 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1998-4
---------------------------

POOLING AND SERVICING AGREEMENT dated as of December 1, 1998 by and between
First Alliance Mortgage Company, as Seller and Servicer, and Norwest Bank
Minnesota, National Association, as Trustee and Master Servicer.

INSURANCE AGREEMENT dated as of December 1, 1998 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, First
Alliance Mortgage Company, as Servicer, and Norwest Bank Minnesota, National
Association, as Trustee and Master Servicer.

INDEMNIFICATION AGREEMENT dated as of December 7, 1998 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Seller,
and Prudential Securities Incorporated, as Underwriter.

SUBSEQUENT TRANSFER AGREEMENT dated as of December 29, 1998 by and among First
Alliance Mortgage Company, as Seller and Servicer, First Alliance Mortgage Loan
Trust 1998-4, as Purchaser, and Norwest Bank Minnesota, National Association, as
Trustee and Master Servicer.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1999-1 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1999-1
---------------------------

POOLING AND SERVICING AGREEMENT dated as of March 1, 1999 by and between First
Alliance Mortgage Company, as Seller and Servicer, and Norwest Bank Minnesota,
National Association, as Trustee and Oversight Agent.

INSURANCE AGREEMENT dated as of March 1, 1999 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, First
Alliance Mortgage Company, as Servicer, and Norwest Bank Minnesota, National
Association, as Trustee and Oversight Agent.

INDEMNIFICATION AGREEMENT dated as of March 11, 1999 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, and Lehman
Brothers Inc., as Underwriter.

SUBSEQUENT TRANSFER AGREEMENT dated as of March 30, 1999 by and among First
Alliance Mortgage Company, as Seller and Servicer, First Alliance Mortgage Loan
Trust 1999-1, as Purchaser, and Norwest Bank Minnesota, National Association, as
Trustee and Oversight Agent.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1999-2 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1999-2
---------------------------

POOLING AND SERVICING AGREEMENT dated as of June 1, 1999 by and between First
Alliance Mortgage Company, as Seller and Servicer, and Norwest Bank Minnesota,
National Association, as Trustee and Oversight Agent.

                                       28
<PAGE>

INSURANCE AGREEMENT dated as of June 1, 1999 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, First
Alliance Mortgage Company, as Servicer, and Norwest Bank Minnesota, National
Association, as Trustee and Oversight Agent.

INDEMNIFICATION AGREEMENT dated as of June 7, 1999 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, and Lehman
Brothers Inc., as Underwriter.

SUBSEQUENT TRANSFER AGREEMENT dated as of June 28, 1999 by and among First
Alliance Mortgage Company, as Seller and Servicer, First Alliance Mortgage Loan
Trust 1999-2, as Purchaser, and Norwest Bank Minnesota, National Association, as
Trustee and Oversight Agent.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1999-3 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1999-3
---------------------------

POOLING AND SERVICING AGREEMENT dated as of September 1, 1999 by and between
First Alliance Mortgage Company, as Seller and Servicer, and Norwest Bank
Minnesota, National Association, as Trustee and Oversight Agent.

INSURANCE AGREEMENT dated as of September 1, 1999 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, First
Alliance Mortgage Company, as Servicer, and Norwest Bank Minnesota, National
Association, as Trustee and Oversight Agent.

INDEMNIFICATION AGREEMENT dated as of September 13, 1999 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Seller,
and Lehman Brothers Inc., as Underwriter.

SUBSEQUENT TRANSFER AGREEMENT dated as of September 28, 1999 by and among First
Alliance Mortgage Company, as Seller and Servicer, First Alliance Mortgage Loan
Trust 1999-3, as Purchaser, and Norwest Bank Minnesota, National Association, as
Trustee and Oversight Agent.

FIRST ALLIANCE MORTGAGE LOAN TRUST 1999-4 MORTGAGE LOAN ASSET BACKED
--------------------------------------------------------------------
CERTIFICATES, SERIES 1999-4
---------------------------

POOLING AND SERVICING AGREEMENT dated as of December 1, 1999 by and between
First Alliance Mortgage Company, as Seller and Servicer, and The Chase Manhattan
Bank, as Trustee and Oversight Agent.

INSURANCE AGREEMENT dated as of December 1, 1999 by and among MBIA Insurance
Corporation, as Insurer, First Alliance Mortgage Company, as Seller, First
Alliance Mortgage Company, as Servicer, and Norwest Bank Minnesota, National
Association, as Trustee and Oversight Agent.

CUSTODIAL AGREEMENT dated as of December 1, 1999 by and among The Chase
Manhattan Bank, as Trustee, First Alliance Mortgage Company, as Seller and
Servicer, and Norwest Bank Minnesota, National Association, as Custodian.

INDEMNIFICATION AGREEMENT dated as of December 10, 1999 by and among MBIA
Insurance Corporation, as Insurer, First Alliance Mortgage Company, as Seller,
and Lehman Brothers Inc., as Underwriter.

                                       29
<PAGE>

                                    EXHIBIT B

                   FORM OF SERVICING RIGHTS PURCHASE AGREEMENT

                                       30
<PAGE>

                                    EXHIBIT C

                MISCELLANEOUS CLAIMS NOT RELEASED BY WELLS FARGO

Proof of claim in the amount of $2,236.46 filed on June 29, 2000 at 3:33 p.m.
for attorneys' fees and expenses incurred in connection with the failed First
Alliance Mortgage Loan Trust 2000-1 transaction.

Proof of claim in the amount of $12,621.00 filed on June 29, 2000 at 3:33 p.m.
for fees relating to initial pool certifications.

                                       31

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