Document:

<PAGE>   1
                                                                   Exhibit 10.12

July 19, 2000

Mr. Greg Martin
Bank One, Texas N.A.
Mortgage Finance Group
1717 Main Street
Dallas, TX 75201

Dear Greg,

This letter will serve as notification of Ryland Mortgage Company's desire to
decrease the total amount of commitment under terms of the Second Restated Loan
and Security Agreement, dated as of February 18, 2000 (warehouse agreement) from
$200 million to $150 million. I would like to have this decrease effective as of
August 1, 2000.

In light of Ryland Mortgage's decision to exit the spot loan business and the
improved efficiencies we have developed in our loan delivery process, we project
that a warehouse line of $150 million is sufficient to meet our needs.

Please call me if you have any questions.  Thank you for your assistance.

Sincerely,

Susan M. Cass
Senior Vice President/CFO<PAGE>   1
                                                                   EXHIBIT 10.13

                                 9/00 AMENDMENT
                            (THE SEVENTH AMENDMENT)

                         DATED AS OF SEPTEMBER 1, 2000
                                       TO

                         REPURCHASE FINANCING AGREEMENT
                          DATED AS OF OCTOBER 9, 1996

                                     AMONG

                            ASSOCIATES FUNDING, INC.
                                  ("BORROWER")

                            RYLAND MORTGAGE COMPANY
                                 ("GUARANTOR")

                            THE CHASE MANHATTAN BANK
                         ("CHASE"), AS AGENT ("AGENT")

                                      AND

                                CERTAIN LENDERS

        $45,000,000 (ORIGINALLY $100,000,000) REVOLVING CREDIT FACILITY

<PAGE>   2
                                     INDEX

"9/00 Amendment" ............................................................. 1
"Agent" ...................................................................... 1
"Borrower" ................................................................... 1
"Chase" ...................................................................... 1
"Companies" .................................................................. 1
"Guarantor" .................................................................. 1
"Lenders" .................................................................... 1
"LIBOR" ...................................................................... 2
"Loan Agreement" ............................................................. 1
"Termination Date" ........................................................... 2
<PAGE>   3
                               TABLE OF CONTENTS

Preamble ..................................................................... 1
Recitals ..................................................................... 1
Amendments ................................................................... 1
1. Amendment of Section 1.1 .................................................. 1
2. Conditions Precedent ...................................................... 3
3. Representations and Warranties ............................................ 3
4. Ratification .............................................................. 3
5. Miscellaneous ............................................................. 3
<PAGE>   4
                               9/00 AMENDMENT TO
                         REPURCHASE FINANCING AGREEMENT

                                    PREAMBLE

     This 9/00 AMENDMENT TO REPURCHASE FINANCING AGREEMENT (THE "9/00
AMENDMENT") entered into as of September 1, 2000, among ASSOCIATES FUNDING,
INC., a Delaware corporation ("BORROWER"), RYLAND MORTGAGE COMPANY, an Ohio
corporation ("GUARANTOR"), THE CHASE MANHATTAN BANK ("CHASE"), a New York
banking corporation and successor by merger to Chase Bank of Texas, National
Association, a national banking association formerly named Texas Commerce Bank
National Association, as a lender and as agent for the lenders from time to time
party thereto (in that capacity, the "AGENT"), and Chase, as currently the only
lender party to the Loan Agreement (defined below) to amend (for the seventh
time) the Loan Agreement, recites and provides as follows:

                                    RECITALS

     Borrower and Guarantor (the "COMPANIES") and Chase, as Agent and the only
lender (the lenders thereunder being called the "LENDERS"), are party to the
Repurchase Financing Agreement dated as of October 9, 1996 (as amended through
the date of this amendment, the "LOAN AGREEMENT") providing for revolving credit
loans of (originally) up to $100 million of principal lent and outstanding on
any day during the term of the Loan Agreement and previously amended to, among
other things, reduce such limit to $35 million. Terms defined in the Loan
Agreement have the same meanings when used, unless otherwise defined, in this
amendment. This amendment is for the purposes of (i) increasing such limit to
$45 million, (ii) eliminating the sublimit for financing the Borrower's
investments in performing single-family mortgage loans that was added by the
First Amendment (and subsequently modified by later amendments to be a $10
million sublimit), (iii) increasing the Borrower's required minimum Net Worth
from $1 million to $3 million, (iv) providing for automatic termination of the
availability of Borrowings under this Agreement if the Existing Loan Agreement
or the Borrower's right to borrow under it is terminated at any time or for any
reason and (v) adding new definitions and updating the definition of "LIBOR".
Accordingly, for valuable and acknowledged consideration, the parties to this
amendment agree as follows:

                                   AMENDMENTS

                          1. AMENDMENT OF SECTION 1.1.

     SECTION 1.1 is amended by adding the following new definitions, in
alphabetical order:

          "9/00 AMENDMENT" means the 9/00 Amendment to Repurchase Financing
     Agreement dated as of September 1, 2000, executed by the parties hereto and
     amending this Agreement (for the seventh time).

          "CHASE" is defined in the preamble of the 9/00 Amendment.

     SECTION 1.1 is further amended by amending the following definitions to
henceforth read as follows:

     "BORROWING BASE" means, at any time, the sum of:

                                       1
<PAGE>   5
               (a) ninety-nine percent (99%) of the market value of Agency
     mortgage-backed securities covered by Lender Liens;

          plus (b) ninety-five percent (95%) of the market value of private
     mortgage-backed securities covered by Lender Liens.

     After the effective date of the 9/00 Amendment, mortgage loans are no
     longer eligible Collateral under this Agreement, and no mortgage loan shall
     have any value for purposes of determining the Borrowing Base, and
     accordingly Section 3 of each Borrowing Base Report made for any date after
     such effective date shall be left blank (or completed with zeros) and
     disregarded, and the following definitions added by the First Amendment
     likewise also may be disregarded: "Certifying Officer's Certificate",
     "Conforming", "FHA", "In Default", "Loan Papers", "Mortgage", "Mortgage
     Loan", "Mortgage Note", "Mortgaged Premises", "Nonconforming", "Permitted
     Encumbrances", "Single-family", "VA" and "Warehouse Transmission File
     Instructions".

          "LIBOR" means, for any LIBOR Borrowing and for any day, the rate
     quoted by the principal London Branch of The Chase Manhattan Bank at
     approximately 11:00 a.m. London time on the second Business Day before the
     first day of the applicable Interest Period for the offering to leading
     banks in the London interbank market of U.S. dollar deposits each for a
     term and in an amount that are fairly comparable, respectively, to the term
     of the Interest Period and the amount of the LIBOR Borrowing; provided that
     if for any reason the Agent cannot determine such rate for any such second
     Business Day, then LIBOR for that day shall be the rate of interest per
     annum that is equal to the arithmetic mean of the rates appearing on the
     Bloomberg British Bankers Association LIBOR page as of 11:00 a.m., London
     time, on the second Business Day before the first day of the applicable
     Interest Period for the offering by such institutions as are named therein
     to prime banks in the Eurodollar interbank market in London, England, for
     U.S. dollar deposits each for a term and in an amount that are fairly
     comparable, respectively, to the term of the relevant Interest Period and
     the amount of the relevant LIBOR Borrowing. The Agent's determination of
     LIBOR for each day shall be conclusive and binding, absent manifest error.

          "TERMINATION DATE" means the earliest of (a) the Stated Termination
     Date, (b) the date all commitments or obligations of all Lenders to extend
     any credit under this agreement have terminated or been canceled or (c) the
     date when the Existing Loan Agreement or the Borrower's right to borrow
     under it terminates, without regard to the reason therefor.

     And SCHEDULE 1.1(a) (first referred to in the Loan Agreement in the
definition of "Commitment" in SECTION 1.1 and last updated by the 3/00 Amendment
to Repurchase Financing Agreement dated March 31, 2000) is amended in its
entirety to henceforth read as does SCHEDULE 9/00-1.1(a) attached to this
amendment and hereby made a part hereof.

                                       2
<PAGE>   6
                          2. AMENDMENT OF SECTION 9.1.

     Section 9.1 is hereby amended in its entirety to henceforth read as
follows:

          9.1  NET WORTH. Borrower's stockholders' equity reflected on its
     balance sheet may not be less than Three Million Dollars ($3,000,000) at
     the end of any quarter in Borrower's fiscal year.

                            3. CONDITIONS PRECEDENT.

     The Companies agree to forthwith deliver to the Agent: (a) counterparts of
this amendment executed by all of the parties named below, (b) for any officer
of either Company signing below on behalf of that Company but not included in
certificates of incumbency for that Company delivered to the Agent before this
amendment, a certificate of the secretary or assistant secretary of that
Company about the due incumbency of that officer, and (c) if the Agent
reasonably requires, resolutions of the directors of any Company authorizing
this amendment certified as accurate and complete by the secretary or assistant
secretary of the appropriate Company. This Amendment shall become effective as
of the effective date of this Amendment upon execution of this Amendment by the
Borrower and the Agent.

                       4. REPRESENTATIONS AND WARRANTIES.

     The Companies jointly and severally represent and warrant to Agent and
Lenders that, as of the date of this amendment and on the date of its execution
(a) the representations and warranties in the Loan Papers are true and correct
in all material respects except to the extent that (i) a representation or
warranty speaks to a specific date or (ii) the facts on which a representation
or warranty is based have changed by transactions or conditions contemplated or
permitted by the Loan papers, and (b) no Default or Potential Default exists.

                                5. RATIFICATION.

     The Companies ratify and confirm (a) all provisions of the Loan Papers as
amended by this amendment and (b) that all guaranties, assurances and Liens
granted, conveyed, or assigned to Agent or Lenders under the Loan Papers, as
they may have been revised, extended, and amended, continue to guarantee,
assure, and secure the full payment and performance of the Obligation
(including, without limitation, all amounts evidenced now or in the future by
any note delivered under this amendment).

                               6. MISCELLANEOUS.

     All references in the Loan Papers to the "Loan Agreement" are to the Loan
Agreement as amended by this amendment. This amendment is a "Loan Paper"
referred to in the Loan Agreement, and the provisions relating to Loan Papers
in the Loan Agreement are incorporated in this amendment by reference. Except
as specifically amended and modified in this amendment, the Loan Agreement is
unchanged and continues in full force and effect. This amendment may be executed
in any number of counterparts with the same effect as if all signatories had
signed the same document. All counterparts must be construed together to
constitute one and the same instrument. This amendment binds and benefits the
Companies, Agent, Lenders, and their respective successors and permitted
assigns. THIS AMENDMENT AND THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                                       3
<PAGE>   7
The remainder of this page is intentionally left blank; counterpart signature
pages follow.

                                       4
<PAGE>   8
     EXECUTED as of the day and year first stated above.

ASSOCIATES FUNDING, INC.                    RYLAND MORTGAGE COMPANY

By: SUSAN M. CASS                           By: SUSAN M. CASS
    --------------------------------            --------------------------------
(Name) Susan M. Cass                        (Name) Susan M. Cass
      ------------------------------              ------------------------------
(Title) Sr VP/CFO                           (Title) Sr VP/CFO
       -----------------------------               -----------------------------

THE CHASE MANHATTAN BANK, as Agent and as a Lender

By:
    --------------------------------
(Name)
      ------------------------------
(Title)
       -----------------------------

UNNUMBERED COUNTERPART SIGNATURE PAGE TO 9/00 AMENDMENT TO REPURCHASE FINANCING
AGREEMENT AMONG ASSOCIATES FUNDING, INC., RYLAND MORTGAGE COMPANY AND THE CHASE
MANHATTAN BANK

<PAGE>   9
     EXECUTED as of the day and year first stated above.

ASSOCIATES FUNDING, INC.                    RYLAND MORTGAGE COMPANY

By:                                         By:
    --------------------------------            --------------------------------
(Name)                                      (Name)
      ------------------------------              ------------------------------
(Title)                                     (Title)
       -----------------------------               -----------------------------

THE CHASE MANHATTAN BANK, as Agent and as a Lender

By: MICHAEL W. NICHOLSON
    --------------------------------
(Name) Michael W. Nicholson
      ------------------------------
(Title) Vice President
       -----------------------------

UNNUMBERED COUNTERPART SIGNATURE PAGE TO 9/00 AMENDMENT TO REPURCHASE FINANCING
AGREEMENT AMONG ASSOCIATES FUNDING, INC., RYLAND MORTGAGE COMPANY AND THE CHASE
MANHATTAN BANK

<PAGE>   10
                              SCHEDULE 9/00-1.1(a)

                            LENDERS AND COMMITMENTS

-------------------------------------------------------------------------------
     NAME OF LENDER                               COMMITMENT
-------------------------------------------------------------------------------
 The Chase Manhattan Bank                         $45,000,000
 717 Travis, 6th Floor
 O6TCBSouth56
 Houston, TX 77252-7056
 Attention: Michael Nicholson,
 Vice President
 Fed Tax ID No. 74-0800980
 Tel (713) 216-5335
 Fax (713) 216-1567
-------------------------------------------------------------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]