Document:

Exhibit 10.32

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                       MASTER LOAN AND SECURITY AGREEMENT

                          -----------------------------

                            Dated as of June 21, 2000

                         -----------------------------

                          AMERICAN HOME MORTGAGE CORP.

                                       and

                          MARINA MORTGAGE COMPANY, INC.
                                  as Borrowers

                                       and

                MORGAN STANLEY DEAN WITTER MORTGAGE CAPITAL INC.
                                    as Lender

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                                TABLE OF CONTENTS

                                                                            Page
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Section 1.    Definitions and Accounting Matters...............................1

        1.01    Certain Defined Terms..........................................1
        1.02    Accounting Terms and Determinations...........................11

Section 2.    Loans, Note and Prepayments.....................................11

        2.01    Loans.........................................................11
        2.02    Notes.........................................................12
        2.03    Procedure for Borrowing.......................................12
        2.04    Limitation on Types of Loans; Illegality......................13
        2.05    Repayment of Loans; Interest..................................13
        2.06    Mandatory Prepayments or Pledge...............................14
        2.07    Extension of Termination Date.................................14

Section 3.    Payments; Computations; Etc.....................................15

        3.01    Payments......................................................15
        3.02    Computations..................................................15
        3.03    Requirements of Law...........................................15
        3.04    Facility Fee..................................................16

Section 4.    Collateral Security.............................................16

        4.01    Collateral; Security Interest.................................16
        4.02    Further Documentation.........................................17
        4.03    Changes in Locations, Name, etc...............................18
        4.04    Lender's Appointment as Attorney-in-Fact......................18
        4.05    Performance by Lender of Borrowers' Obligations...............19
        4.06    Proceeds......................................................19
        4.07    Remedies......................................................20
        4.08    Limitation on Duties Regarding Preservation of Collateral.....21
        4.09    Powers Coupled with an Interest...............................21
        4.10    Release of Security Interest..................................21

Section 5.    Conditions Precedent............................................21

        5.01    Initial Loan..................................................21
        5.02    Initial and Subsequent Loans..................................22

Section 6.    Representations and Warranties..................................24

        6.01    Existence.....................................................24
        6.02    Financial Condition...........................................24
        6.03    Litigation....................................................25
        6.04    No Breach.....................................................25
        6.05    Action........................................................25

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        6.06    Approvals.....................................................25
        6.07    Margin Regulations............................................26
        6.08    Taxes.........................................................26
        6.09    Investment Company Act........................................26
        6.10    Collateral; Collateral Security...............................26
        6.11    Chief Executive Office/Jurisdiction of Organization...........27
        6.12    Location of Books and Records.................................27
        6.13    Hedging.......................................................27
        6.14    True and Complete Disclosure..................................27
        6.15    Tangible Net Worth............................................27
        6.16    ERISA.........................................................27
        6.17    Takeout Commitments; Takeout Assignments......................27
        6.18    Subsidiaries..................................................28
        6.19    Solvency......................................................28

Section 7.    Covenants of the Borrower.......................................28

        7.01    Financial Statements..........................................28
        7.02    Litigation....................................................30
        7.03    Existence, etc................................................30
        7.04    Prohibition of Fundamental Changes............................31
        7.05    Borrowing Base Deficiency.....................................31
        7.06    Notices.......................................................31
        7.07    Hedging.......................................................32
        7.08    Reports.......................................................32
        7.09    Underwriting Guidelines.......................................32
        7.10    Transactions with Affiliates..................................32
        7.11    Limitation on Liens...........................................33
        7.12    Limitation on Guarantees......................................33
        7.13    Limitation on Distributions...................................33
        7.14    Servicer; Servicing Tape......................................33
        7.15    Required Filings..............................................33
        7.16    No Adverse Selection..........................................33
        7.17    Remittance of Prepayments.....................................33
        7.18    Agency Approvals..............................................33
        7.19    Takeout Commitments...........................................33

Section 8.    Events of Default...............................................34

Section 9.    Remedies Upon Default...........................................36

Section 10.   No Duty of Lender...............................................37

Section 11.   Miscellaneous...................................................37

        11.01   Waiver........................................................37
        11.02   Notices.......................................................37
        11.03   Indemnification and Expenses..................................37

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        11.04   Amendments....................................................38
        11.05   Successors and Assigns........................................38
        11.06   Survival......................................................38
        11.07   Captions......................................................39
        11.08   Counterparts..................................................39
        11.09   Loan Agreement Constitutes Security Agreement; Governing Law..39
        11.10   Submission To Jurisdiction; Waivers...........................39
        11.11   WAIVER OF JURY TRIAL..........................................40
        11.12   Acknowledgments...............................................40
        11.13   Hypothecation or Pledge of Loans..............................40
        11.14   Servicing.....................................................40
        11.15   Periodic Due Diligence Review.................................41
        11.16   Set-Off.......................................................42
        11.17   Joint and Several Liability...................................42
        11.18   Intent........................................................42

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SCHEDULES
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        SCHEDULE 1        Representations and Warranties re:  Mortgage Loans
        SCHEDULE 2        Alternate `A' Mortgage Loan Criteria
        SCHEDULE 3        Filing Jurisdictions and Offices
        SCHEDULE 4        Subsidiaries

EXHIBITS
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        EXHIBIT A         Form of Promissory Note
        EXHIBIT B         Form of Custodial Agreement
        EXHIBIT C         Form of Opinion of Counsel to Borrower
        EXHIBIT D         Form of Request for Borrowing
        EXHIBIT E-1       Form of Borrower's Release Letter
        EXHIBIT E-2       Form of Warehouse Lender's Release Letter
        EXHIBIT F         Underwriting Guidelines
        EXHIBIT G         Form of Servicer Notice
        EXHIBIT H         Form of Takeout Assignment
        EXHIBIT I         Form of Parent Guarantee
        EXHIBIT J         Form of Takeout Proceeds Identification Letter

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                       MASTER LOAN AND SECURITY AGREEMENT

            MASTER LOAN AND SECURITY AGREEMENT, dated as of June 21, 2000, among
AMERICAN HOME MORTGAGE CORP., a New York corporation ("American Home"), MARINA
MORTGAGE COMPANY, INC., a California corporation ("Marina" and together with
American Home each, a "Borrower", collectively, the "Borrowers"), and MORGAN
STANLEY DEAN WITTER MORTGAGE CAPITAL INC., a New York corporation (the
"Lender").

                                    RECITALS

            The Borrowers have requested that the Lender from time to time make
revolving credit loans to them to finance certain residential mortgage loans
owned by the Borrowers, and the Lender is prepared to make such loans upon the
terms and conditions hereof. Each Borrower is engaged in a business that is
complimentary to the business of the other Borrower. Each Borrower will directly
benefit from each extension of credit to the other Borrower, and the proceeds of
each Loan will inure to the benefit of each Borrower. Accordingly, the parties
hereto agree as follows:

            Section 1.  Definitions and Accounting Matters.

            1.01  Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Loan Agreement in the singular to have the same
meanings when used in the plural and vice versa):

            "Accepted Servicing Practices" shall mean, with respect to any
Mortgage Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage
Loans in the jurisdiction where the related Mortgaged Property is located.

            "Affiliate" shall mean with respect to any Person, any "affiliate"
of such Person, as such term is defined in the Bankruptcy Code.

            "Agency" shall mean FNMA or FHLMC.

            "Agency Approvals" shall have the meaning provided in Section
6.06(b) hereof.

            "Agency Eligible Mortgage Loan" shall mean a mortgage loan that is
in strict compliance with the eligibility requirements for swap or purchase by
the designated Agency, under the applicable Agency Guide and/or Agency Program.

            "Agency Guide" shall mean, with respect to FNMA securities, the
Fannie Mae Selling Guide and the Fannie Mae Servicing Guide and with respect to
FHLMC securities, the Freddie Mac Sellers' and Servicers' Guide; in each case
including all exhibits thereto, as such Agency Guide may be amended,
supplemented or otherwise modified from time to time.

<PAGE>

            "Agency Program" shall mean a specific mortgage backed securities
swap or purchase program under the relevant Agency Guide or as otherwise
approved by the Agency with respect to Mortgage Loans originated pursuant to the
Agency Guide.

            "Alternate `A' Mortgage Loan" shall mean a Mortgage Loan made by a
Borrower which is underwritten in conformity with the applicable Agency Guide or
Agency Program but subject to the exceptions and in accordance with the
provisions applicable to Alternate `A' Mortgage Loans contained in Schedule 2
attached hereto.

            "American Home" shall have the meaning provided in the heading
hereof.

            "Applicable Collateral Percentage" shall mean, with respect to each
Eligible Mortgage Loan, the applicable collateral percentage set forth in the
chart below opposite the applicable type of Mortgage Loan:

          ----------------------------------------------------------------
                                                  Applicable Collateral
                  Type of Mortgage Loan                 Percentage
          ----------------------------------------------------------------
              Agency Eligible Mortgage Loan                97%
          ----------------------------------------------------------------
               Alternate `A' Mortgage Loan                 96%
          ----------------------------------------------------------------
              Conduit Eligible Mortgage Loan               97%
          ----------------------------------------------------------------

            "Applicable Margin" shall mean 80 basis points (0.80%) per annum.

            "Bankruptcy Code" shall mean the United States Bankruptcy Code of
1978, as amended from time to time.

            "Borrower" shall have the meaning provided in the heading hereof.

            "Borrowing Base" shall mean the aggregate Collateral Value of all
Eligible Mortgage Loans.

            "Borrowing Base Deficiency" shall have the meaning provided in
Section 2.06 hereof.

            "Business Day" shall mean any day other than (i) a Saturday or
Sunday or (ii) a day on which the New York Stock Exchange, the Federal Reserve
Bank of New York or the Custodian is authorized or obligated by law or executive
order to be closed.

            "Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this Loan
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.

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            "Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all similar ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.

            "Cash Equivalents" shall mean (a) securities with maturities of 90
days or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of 90 days or less from the
date of acquisition and overnight bank deposits of any commercial bank having
capital and surplus in excess of $500,000,000, (c) repurchase obligations of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than seven days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d) commercial
paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P
or P-1 or the equivalent thereof by Moody's and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's, (f) securities with maturities of 90
days or less from the date of acquisition backed by standby letters of credit
issued by any commercial bank satisfying the requirements of clause (b) of this
definition, or (g) shares of money market, mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.

            "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

            "Collateral" shall have the meaning provided in Section 4.01(b)
hereof.

            "Collateral Value" shall mean, with respect to each Eligible
Mortgage Loan, the lesser of (a) the Applicable Collateral Percentage of the
Market Value of such Mortgage Loan, and (b) 100% of the outstanding principal
balance of such Mortgage Loan; provided, that the following additional
limitations shall apply:

            (i)   The aggregate Collateral Value of all Alternate `A' Mortgage
Loans included in the Borrowing Base at any time shall not exceed 25% of the
Borrowing Base at such time; and

            (ii)  Collateral Value shall be deemed to be zero with respect to
each Mortgage Loan:

                  (1) in respect of which there is a breach of a representation
            and warranty set forth on Schedule 1 (assuming each representation
            and warranty is made as of the date Collateral Value is determined),

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                  (2) in respect of which there is a delinquency in the payment
            of principal and/or interest which continues for a period in excess
            of 30 days (without regard to any applicable grace periods),

                  (3) which remains pledged to the Lender hereunder later than
            180 days after the date on which it is first included in the
            Collateral, or

                  (4) which has been released from the possession of the
            Custodian under the Custodial Agreement for a period in excess of 10
            days,

                  (5) which exceed the limitation on Collateral Value set forth
            in (i) above.

            "Collections" shall mean, collectively, all collections and proceeds
on or in respect of the Mortgage Loans, excluding collections required to be
paid to the Servicer or a mortgagor on the Mortgage Loans.

            "Conduit Eligible Mortgage Loan" shall mean a Mortgage Loan made by
a Borrower which is underwritten in conformity with the Borrowers' underwriting
guidelines for conduit eligible mortgage loan.

            "Credit Party" shall mean, collectively, each Borrower and the
Guarantor.

            "Custodial Agreement" shall mean the Custodial Agreement, dated as
of the date hereof, among the Borrowers, the Custodian and the Lender,
substantially in the form of Exhibit B hereto, as the same shall be modified and
supplemented and in effect from time to time.

            "Custodian" shall mean Bankers Trust Company, as custodian under the
Custodial Agreement, and its successors and permitted assigns thereunder.

            "Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.

            "Dollars" and "$" shall mean lawful money of the United States of
America.

            "Due Diligence Review" shall mean the performance by the Lender of
any or all of the reviews permitted under Section 11.15 hereof with respect to
any or all of the Mortgage Loans, as desired by the Lender from time to time.

            "Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 5.01 shall have been satisfied.

            "Eligible Mortgage Loan" shall mean a Mortgage Loan secured by a
first mortgage lien on a one-to-four family residential property (a) as to which
the representations and warranties in Section 6.10 and Part I of Schedule 1
hereof are correct and (b) which is either an Agency Eligible Mortgage Loan, an
Alternate `A' Mortgage Loan or a Conduit Eligible Mortgage Loan; provided, that

                                      -4-
<PAGE>

in no event shall any Eligible Mortgage Loan be a security for purposes of any
securities or blue sky laws.

            "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

            "ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which a Borrower is a member and (ii) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which a
Borrower is a member.

            "Eurodollar Rate" shall mean, with respect to each day a Loan is
outstanding, the rate per annum equal to the rate appearing at page 5 of the
Telerate Screen as one-month LIBOR on such date (and if such date is not a
Business Day, the Eurodollar Rate in effect on the Business Day immediately
preceding such date), and if such rate shall not be so quoted, the rate per
annum at which the Lender is offered Dollar deposits at or about 10:00 A.M., New
York City time, on such date by prime banks in the interbank eurodollar market
where the eurodollar and foreign currency exchange operations in respect of its
Loans are then being conducted for delivery on such day for a period of 30 days
and in an amount comparable to the amount of the Loans to be outstanding on such
day.

            "Event of Default" shall have the meaning provided in Section 8
hereof.

            "Federal Funds Rate" shall mean, for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Lender from three
federal funds brokers of recognized standing selected by it.

            "FHLMC" shall mean the Federal Home Loan Mortgage Corporation, or
any successor thereto.

            "FNMA" shall mean the Federal National Mortgage Association, or any
successor thereto.

            "Funding Date" shall mean the date on which a Loan is made
hereunder.

            "GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States.

            "Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over a Credit
Party, any of its Subsidiaries or any of its properties.

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<PAGE>

            "Guarantee" shall mean, as to any Person, any obligation of such
Person directly or indirectly guaranteeing any Indebtedness of any other Person
or in any manner providing for the payment of any Indebtedness of any other
Person or otherwise protecting the holder of such Indebtedness against loss
(whether by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay or otherwise);
provided that the term "Guarantee" shall not include (i) endorsements for
collection or deposit in the ordinary course of business, or (ii) obligations to
make servicing advances for delinquent taxes and insurance or other obligations
in respect of a Mortgaged Property, to the extent required by the Lender. The
amount of any Guarantee of a Person shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith. The terms "Guarantee" and "Guaranteed" used as verbs shall have
correlative meanings.

            "Guarantor" shall mean American Home Mortgage Holdings, Inc., a
Delaware Corporation.

            "Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) Capital Lease Obligations of such Person; (f)
obligations of such Person under repurchase agreements, sale/buy-back agreements
or like arrangements; (g) Indebtedness of others Guaranteed by such Person; (h)
all obligations of such Person incurred in connection with the acquisition or
carrying of fixed assets by such Person; and (i) Indebtedness of general
partnerships of which such Person is a general partner.

            "Interest Rate Protection Agreement" shall mean, with respect to any
or all of the Mortgage Loans, any short sale of US Treasury Securities, futures
contract, mortgage related security, Eurodollar futures contract, options
related contract, interest rate swap, cap or collar agreement or similar
arrangement providing for protection against fluctuations in interest rates or
the exchange of nominal interest obligations, either generally or under specific
contingencies, entered into by the Borrower and an Affiliate of the Lender, and
acceptable to the Lender.

            "Lender" shall have the meaning provided in the heading hereto.

            "Lien" shall mean any mortgage, lien, pledge, charge, security
interest or similar encumbrance.

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<PAGE>

            "Loan" shall have the meaning provided in Section 2.01(a) hereof.

            "Loan Agreement" shall mean this Master Loan and Security Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.

            "Loan Documents" shall mean, collectively, this Loan Agreement, the
Note, the Custodial Agreement and the Parent Guarantee.

            "Marina" shall have the meaning provided in the heading hereof.

            "Market Value" shall mean, as of any date in respect of an Eligible
Mortgage Loan, the price at which such Eligible Mortgage Loan could readily be
sold as determined in good faith by the Lender, which price may be determined to
be zero. The Lender's determination of Market Value shall be conclusive upon the
parties absent manifest error on the part of the Lender.

            "Material Adverse Effect" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition or prospects of any
Credit Party, (b) the ability of any Credit Party to perform its obligations
under any of the Loan Documents to which it is a party, (c) the validity or
enforceability of any of the Loan Documents, (d) the rights and remedies of the
Lender under any of the Loan Documents, (e) the timely payment of the principal
of or interest on the Loans or other amounts payable in connection therewith or
(f) the Collateral.

            "Maximum Credit" shall mean $75,000,000.

            "Moody's" shall mean Moody's Investors Service, Inc.

            "Mortgage" shall mean the mortgage, deed of trust or other
instrument securing a Mortgage Note, which creates a first lien on the fee in
real property securing the Mortgage Note.

            "Mortgage File" shall have the meaning assigned thereto in the
Custodial Agreement.

            "Mortgage Loan" shall mean a mortgage loan which the Custodian has
been instructed to hold for the Lender pursuant to the Custodial Agreement, and
which Mortgage Loan includes, without limitation, a Mortgage Note and related
Mortgage.

            "Mortgage Loan Documents" shall mean, with respect to a Mortgage
Loan, the documents comprising the Mortgage File for such Mortgage Loan.

            "Mortgage Loan Schedule" shall have the meaning assigned thereto in
the Custodial Agreement.

            "Mortgage Loan Schedule and Exception Report" shall mean the
mortgage loan schedule and exception report prepared by the Custodian pursuant
to the Custodial Agreement.

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            "Mortgage Loan Tape" shall mean a computer-readable file containing
information with respect to each Mortgage Loan, to be delivered by the Borrowers
to the Lender pursuant to Section 2.03(a) hereof which tape fields are
identified on Annex I to the Custodial Agreement.

            "Mortgage Note" shall mean the original executed promissory note or
other evidence of the indebtedness of a mortgagor/borrower with respect to a
Mortgage Loan.

            "Mortgaged Property" shall mean the real property (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing) and all other collateral securing repayment of the
debt evidenced by a Mortgage Note.

            "Mortgagor" shall mean the obligor on a Mortgage Note.

            "MS & Co." shall mean Morgan Stanley & Co.  Incorporated, a
registered broker-dealer.

            "MS Indebtedness" shall mean any indebtedness of the Borrowers
hereunder and under any other arrangement between any Borrower on the one hand
and the Lender or an Affiliate of the Lender on the other hand.

            "Multiemployer Plan" shall mean a Multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been or are required to be
made by the Borrower or any ERISA Affiliate and that is covered by Title IV of
ERISA.

            "Net Income" shall mean, for any period, the net income of the
Borrower for such period as determined in accordance with GAAP.

            "1934 Act" shall mean the Securities and Exchange Act of 1934, as
amended.

            "Note" shall have the meaning provided in Section 2.02(a) hereof.

            "PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.

            "Parent Guarantee" shall mean the guarantee by the Guarantor in
favor of the Lender, in the form of Exhibit I attached hereto, as amended,
supplemented or otherwise modified from time to time.

            "Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).

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<PAGE>

            "Plan" shall mean an employee benefit or other plan established or
maintained by the Borrower or any ERISA Affiliate and covered by Title IV of
ERISA, other than a Multiemployer Plan.

            "Post-Default Rate" shall mean, in respect of any principal of any
Loan or any other amount under this Loan Agreement, the Note or any other Loan
Document that is not paid when due to the Lender (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum during the period from and including the due date to but excluding the
date on which such amount is paid in full equal to 4% per annum plus the Prime
Rate.

            "Prime Rate" shall mean the prime rate announced to be in effect
from time to time, as published as the average rate in The Wall Street Journal.

            "Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.

            "Regulations T, U and X" shall mean Regulations T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as the same
may be modified and supplemented and in effect from time to time.

            "Responsible Officer" shall mean, as to any Person, the chief
executive officer or, with respect to financial matters, the chief financial
officer of such Person.

            "Requirement of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

            "S&P" shall mean Standard and Poor's Ratings Services.

            "Secured Obligations" shall have the meaning provided in Section
4.01(c) hereof.

            "Servicer" shall have the meaning provided in Section 11.14(c)
hereof.

            "Servicer Notice" shall have the meaning provided in Section
11.14(c) hereof.

            "Servicing Agreement" shall have the meaning provided in Section
11.14(c) hereof.

            "Servicing Records" shall have the meaning provided in Section
11.14(b) hereof.

            "Settlement Date" shall mean, with respect to each Mortgage Loan,
the actual date on which the Takeout Price for such Mortgage Loan is received by
the Lender or the Borrowers pursuant to a Takeout Commitment or on which the
purchase price for a Mortgage Loan is otherwise received by the Lender or the
Borrowers.

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<PAGE>

            "Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.

            "System" shall mean all hardware or software, or any system
consisting of one or more thereof, including, without limitation, any and all
enhancements, upgrades, customizations, modifications and the like utilized by
any Person for the benefit of such Person to perform its obligations and to
administer and track, store, process, provide, and where appropriate, insert,
true and accurate dates and calculations for dates and spans with respect to the
Mortgage Loans.

            "Takeout Assignment" shall mean an assignment executed by the
Borrowers, whereby the Borrowers irrevocably assign their rights and obligations
under a Takeout Commitment, and which assignment shall be substantially in the
form and content of Exhibit I hereto.

            "Takeout Commitment" shall mean either (i) with respect to each
Whole Loan Transfer pursuant to which an Agency is the Takeout Investor, a trade
confirmation from such Agency to the Borrowers confirming the details of a
forward trade between the Takeout Investor (as buyer) and the Borrowers (as
seller) constituting a valid binding and enforceable mandatory delivery
commitment by such Agency to purchase on the Settlement Date and at a given
Takeout Price the Mortgage Loans described therein or (ii) with respect each
Whole Loan Transfer (other than those in which the Takeout Investor is an
Agency), a trade confirmation from a Takeout Investor to the Borrowers
confirming the details of a forward trade between the Takeout Investor (as
buyer) and the Borrowers (as seller) constituting a valid, binding and
enforceable mandatory delivery commitment by such Takeout Investor to purchase
on the Settlement Date and at a given Takeout Price the Mortgage Loans described
therein.

            "Takeout Investor" shall mean a securities broker-dealer, Agency or
other institution, acceptable to the Lender, which has made a Takeout
Commitment.

            "Takeout Price" shall mean as to each Takeout Commitment the
purchase price (expressed as a percentage of par) set forth therein.

            "Takeout Proceeds" shall mean as to each Settlement Date, the actual
amount of proceeds delivered to the Lender by the applicable Takeout Investor
for the purchase of Mortgage Loans on such Settlement Date.

            "Tangible Net Worth" shall mean, as of a particular date,

            (a)   all amounts which would be included under capital on a
consolidated balance sheet of the Guarantor at such date, determined in
accordance with GAAP, less

                                      -10-
<PAGE>

            (b)   (i) amounts owing to the Guarantor from Affiliates and (ii)
intangible assets.

            "Termination Date" shall mean June ____, 2001 or such earlier date
on which this Loan Agreement shall terminate in accordance with the provisions
hereof or by operation of law.

            "Test Period" shall have the meaning provided in Section 7.16
hereof.

            "Total Indebtedness" shall mean, for any period, the aggregate
Indebtedness of the Borrowers during such period less the amount of any
nonspecific balance sheet reserves maintained in accordance with GAAP.

            "Underwriting Guidelines" shall mean the underwriting guidelines
attached as Exhibit F hereto.

            "Uniform Commercial Code" shall mean the Uniform Commercial Code as
in effect on the date hereof in the State of New York; provided that if by
reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection.

            "Whole Loan Transfer" shall mean the sale or transfer of some or all
of the Mortgage Loans to a Takeout Investor in a whole loan transaction.

            "Year 2000 Compliant" shall mean the ability of a System to continue
its normal functions including and following January 1, 2000 and the ability of
such System to support its continued normal usage such that neither the
performance nor the correct functioning of such System will be affected by the
approach, and passing into, the year 2000.

            1.02  Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lender hereunder shall be
prepared, in accordance with GAAP.

            Section 2.  Loans, Note and Prepayments.

            2.01  Loans.

            (a)   The Lender agrees to make, on the terms and subject to the
conditions of this Loan Agreement, loans (individually, a "Loan" and,
collectively, the "Loans") to the Borrowers in Dollars, from and including the
Effective Date to and including the Termination Date in an aggregate principal
amount at any one time outstanding up to but not exceeding the lesser of (i) the
Maximum Credit and (ii) the Borrowing Base as in effect from time to time.

            (b)   Subject to the terms and conditions of this Loan Agreement,
during such period the Borrowers may borrow, repay and reborrow hereunder;
provided, that, notwithstanding the foregoing, the Lender shall have no

                                      -11-
<PAGE>

obligation to make Loans to the Borrowers in excess of the Maximum Credit and,
in the event the obligation of the Lender to make Loans to the Borrowers is
terminated as permitted hereunder, the Lender shall have no further obligation
to make additional Loans hereunder.

            2.02  Notes.

            (a)   The Loans made by the Lender shall be evidenced by a single
promissory note of the Borrowers substantially in the form of Exhibit A hereto
(the "Note"), dated the date hereof, payable to the Lender in a principal amount
equal to the amount of the Maximum Credit as originally in effect and otherwise
duly completed. The Lender shall have the right to have its Note subdivided, by
exchange for promissory notes of lesser denominations or otherwise.

            (b)   The date, amount and interest rate of each Loan made by the
Lender to the Borrowers, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of the Note, endorsed by the Lender on the schedule attached to the Note or any
continuation thereof; provided, that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrowers to
make a payment when due of any amount owing hereunder or under the Note in
respect of the Loans.

            2.03  Procedure for Borrowing.

            (a)   The Borrowers may request a borrowing hereunder, on any
Business Day during the period from and including the Effective Date to and
including the Termination Date, by delivering to the Lender, with a copy to the
Custodian, a written request for borrowing, substantially in the form of Exhibit
D attached hereto, which request must be received by the Lender prior to 11:00
a.m., New York City time, one (l) Business Day prior to the requested Funding
Date. Such request for borrowing shall (i) attach a schedule identifying the
Eligible Mortgage Loans that the Borrowers propose to pledge to the Lender and
to be included in the Borrowing Base in connection with such borrowing, (ii)
specify the requested Funding Date, (iii) be accompanied by a Mortgage Loan Tape
containing information with respect to the Eligible Mortgage Loans that the
Borrowers propose to pledge to the Lender and to be included in the Borrowing
Base in connection with such borrowing, and (iv) attach an officer's certificate
signed by a Responsible Officers of the Borrowers as required by Section 5.02(b)
hereof.

            (b)   Upon the Borrowers' request for a borrowing pursuant to
Section 2.03(a), the Lender shall, upon satisfaction of all conditions precedent
set forth in Section 5.01 and 5.02 hereof and provided that no Default shall
have occurred and be continuing, make a Loan to the Borrowers on the requested
Funding Date, in the amount so requested.

            (c)   The Borrowers shall release to the Custodian no later than
12:00 p.m., New York City time, two (2) Business Days prior to the requested
Funding Date, the Mortgage File pertaining to each Eligible Mortgage Loan to be
pledged to the Lender and included in the Borrowing Base on such requested
Funding Date, in accordance with the terms and conditions of the Custodial
Agreement.

                                      -12-
<PAGE>

            (d)   Pursuant to the Custodial Agreement, the Custodian shall
deliver to the Lender and the Borrowers, no later than 11:00 a.m., New York City
time on a Funding Date, a Trust Receipt (as defined in the Custodial Agreement)
in respect of all Mortgage Loans pledged to the Lender on such Funding Date, and
a Mortgage Loan Schedule and Exception Report.

            (e)   Subject to Section 5 hereof, such borrowing will then be made
available to the Borrowers by the Lender transferring, via wire transfer, to the
following account of the Borrowers: 00381528 , for the A/C of First Union
National Bank, ABA# 021001033, Attn: [_________], in the aggregate amount of
such borrowing in funds immediately available to the Borrower.

            2.04  Limitation on Types of Loans; Illegality. Anything herein to
the contrary notwithstanding, if, on or prior to the determination of any
Eurodollar Rate:

            (a)   the Lender determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits referred
to in the definition of "Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Loans as provided herein; or

            (b)   the Lender determines, which determination shall be
conclusive, that the relevant rate of interest referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof upon the basis of which the rate of
interest for Loans is to be determined is not likely adequately to cover the
cost to the Lender of making or maintaining Loans; or

            (c)   it becomes unlawful for the Lender to honor its obligation to
make or maintain Loans hereunder using a Eurodollar Rate;

then the Lender shall give the Borrowers prompt notice thereof and, so long as
such condition remains in effect, the Lender shall be under no obligation to
make additional Loans, and the Borrowers shall, either prepay all such Loans as
may be outstanding or pay interest on such Loans at a rate per annum equal to
the Federal Funds Rate plus 0.50% plus the Applicable Margin.

            2.05  Repayment of Loans; Interest.
                  ----------------------------

            (a)   The Borrowers hereby promise, jointly and severally, to repay
in full on the Termination Date the then aggregate outstanding principal amount
of the Loans.

            (b)   The Borrowers hereby promise, jointly and severally, to pay to
the Lender interest on the unpaid principal amount of each Loan for the period
from and including the date of such Loan to but excluding the date such Loan
shall be paid in full, at a rate per annum equal to the Eurodollar Rate plus the
Applicable Margin. Notwithstanding the foregoing, the Borrowers hereby promise,
jointly and severally, to pay to the Lender interest at the applicable
Post-Default Rate on any principal of any Loan and on any other amount payable
by the Borrowers hereunder or under the Note that shall not be paid in full when
due (whether at stated maturity, by acceleration or by mandatory prepayment or
otherwise) for the period from and including the due date thereof to but
excluding the date the same is paid in full. Accrued interest on each Loan shall
be payable monthly on the first Business Day of each month and for the last

                                      -13-
<PAGE>

month of the Loan Agreement on the first Business Day of such last month and on
the Termination Date; provided, that, the Lender may, in its sole discretion,
require accrued interest to be paid simultaneously with any prepayment of
principal made by the Borrowers on account of any of the Loans outstanding.
Interest payable at the Post-Default Rate shall accrue daily and shall be
payable upon such accrual.

            (c)   It is understood and agreed that, unless and until a Default
shall have occurred and be continuing, the Borrowers shall be entitled to the
proceeds of the Mortgage Loans pledged to the Lender hereunder.

            2.06  Mandatory Prepayments or Pledge.

            (a)   If at any time the aggregate outstanding principal amount of
Loans exceeds the Borrowing Base (a "Borrowing Base Deficiency"), as determined
by the Lender and notice is given to the Borrowers on any Business Day, the
Borrowers shall no later than one Business Day after receipt of such notice,
either prepay the Loans in part or in whole or pledge additional Eligible
Mortgage Loans (which Collateral shall be in all respects acceptable to the
Lender) to the Lender, such that after giving effect to such prepayment or
pledge the aggregate outstanding principal amount of the Loans does not exceed
the Borrowing Base.

            (b)   The Borrowers shall instruct each Takeout Investor to remit
all Takeout Proceeds directly to the Lender at the account designated in Section
3.01 hereof no later than 3:00 p.m. New York City time. Simultaneously, the
Borrowers shall deliver to the Lender a purchase advice (the "Purchase Advice")
and shall indicate on such Purchase Advice the Mortgage Loan identification
number which identified such Mortgage Loan when the Lender previously financed
the Mortgage Loan. In the event that the Purchase Advice indicates that some of
the proceeds forwarded to the Lender do not belong to the Lender (such amount,
the "Excess Proceeds") then (i) the Borrower shall provide the Lender with a
takeout proceeds identification letter in the form of Exhibit J hereto, and (ii)
upon confirmation by the Lender that the information set forth in the Purchase
Advice matches the information that the Lender has in its possession with
respect to the Mortgage Loans, the Lender shall promptly remit by wire transfer
the Excess Proceeds in accordance with the Borrowers' instructions. If funds are
received before 3:00 p.m., New York City time on a Business Day, but either (A)
no Purchase Advice is received or (B) such funds are not properly identified on
the related Purchase Advice (a "Purchase Advice Deficiency"), then such funds
shall be retained by the Lender in a non-interest bearing account until such
Purchase Advice Deficiency is remedied, and such Purchase Advice shall in no
event be back-dated to the date of its issuance. All Takeout Proceeds shall be
applied by the Lender to the prepayment of principal outstanding on the Loans.

            2.07  Extension of Termination Date.

            At the request of the Borrowers made at least thirty (30) days, but
in no event earlier than ninety (90) days, prior to the then current Termination
Date, the Lender may in its sole discretion extend the Termination Date for a
period to be determined by Lender in its sole discretion by giving written
notice of such extension to the Borrowers no later than twenty (20) days, but in
no event earlier than thirty (30) days, prior to the then current Termination
Date. Any failure by the Lender to deliver such notice of extension shall be

                                      -14-
<PAGE>

deemed to be the Lender's determination not to extend the then current
Termination Date.

            Section 3.  Payments; Computations; Etc.

            3.01  Payments.

            (a)   Except to the extent otherwise provided herein, all payments
of principal, interest and other amounts to be made by the Borrowers under this
Loan Agreement and the Note, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Lender at the
following account maintained by the Lender: Account No. 40615114, for the
account of MSMCI, Citibank, N.A., ABA No. 021000089, Attn: Whole Loan
Operations, not later than 1:00 p.m., New York City time, on the date on which
such payment shall become due (and each such payment made after such time on
such due date shall be deemed to have been made on the next succeeding Business
Day). Each Borrower acknowledges that it has no rights of withdrawal from the
foregoing account.

            (b)   Except to the extent otherwise expressly provided herein, if
the due date of any payment under this Loan Agreement or the Note would
otherwise fall on a day that is not a Business Day, such date shall be extended
to the next succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.

            3.02  Computations. Interest on the Loans shall be computed on the
basis of a 360-day year for the actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.

            3.03  Requirements of Law.

            (a)   If any Requirement of Law (other than with respect to any
amendment made to the Lender's certificate of incorporation and by-laws or other
organizational or governing documents) or any change in the interpretation or
application thereof or compliance by the Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:

               (i)  shall subject the Lender to any tax of any kind whatsoever
      with respect to this Loan Agreement, the Note or any Loan made by it
      (excluding net income taxes) or change the basis of taxation of payments
      to the Lender in respect thereof;

               (ii) shall impose, modify or hold applicable any reserve, special
      deposit, compulsory Loan or similar requirement against assets held by,
      deposits or other liabilities in or for the account of, advances, Loans or
      other extensions of credit by, or any other acquisition of funds by, any
      office of the Lender which is not otherwise included in the determination
      of the Eurodollar Rate hereunder;

               (iii) shall impose on the Lender any other condition;

and the result of any of the foregoing is to increase the cost to the Lender, by
an amount which the Lender deems to be material, of making, continuing or
maintaining any Loan or to reduce any amount due or owing hereunder in respect

                                      -15-
<PAGE>

thereof, then, in any such case, the Borrowers, jointly and severally, shall
promptly pay the Lender such additional amount or amounts as will compensate the
Lender for such increased cost or reduced amount receivable.

            (b)   If the Lender shall have determined that the adoption of or
any change in any Requirement of Law (other than with respect to any amendment
made to the Lender's certificate of incorporation and by-laws or other
organizational or governing documents) regarding capital adequacy or in the
interpretation or application thereof or compliance by the Lender or any
corporation controlling the Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on the Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which the Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration the Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by the Lender to
be material, then from time to time, the Borrowers, jointly and severally, shall
promptly pay to the Lender such additional amount or amounts as will compensate
the Lender for such reduction.

            (c)   If the Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrowers of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section submitted by the Lender to the
Borrowers shall be conclusive in the absence of manifest error.

            3.04  Facility Fee.

            The Borrowers agree, jointly and severally, to pay to the Lender on
or prior to the Effective Date a facility fee equal to $112,500, such payment to
be made in Dollars, in immediately available funds, without deduction, set-off
or counterclaim, to the Lender at the account set forth in Section 3.01(a)
hereof.

            Section 4.  Collateral Security.

            4.01  Collateral; Security Interest.

            (a)   Pursuant to the Custodial Agreement, the Custodian shall hold
the Mortgage Loan Documents as exclusive bailee and agent for the Lender
pursuant to terms of the Custodial Agreement and shall deliver to the Lender
Trust Receipts (as defined in the Custodial Agreement) each to the effect that
it has reviewed such Mortgage Loan Documents in the manner and to the extent
required by the Custodial Agreement and identifying any deficiencies in such
Mortgage Loan Documents as so reviewed.

            (b)   All of each Borrower's right, title and interest in, to and
under each of the following items of property, whether now owned or hereafter
acquired, now existing or hereafter created and wherever located, is hereinafter
referred to as the "Collateral":

               (i) all Mortgage Loans;

                                      -16-
<PAGE>

               (ii) all Mortgage Loan Documents, including without limitation
      all promissory notes, and all Servicing Records, Servicing Agreements and
      any other collateral pledged or otherwise relating to such Mortgage Loans,
      together with all files, documents, instruments, surveys, certificates,
      correspondence, appraisals, computer programs, computer storage media,
      accounting records and other books and records relating thereto;

               (iii) all mortgage guaranties and insurance (issued by
      governmental agencies or otherwise) and any mortgage insurance certificate
      or other document evidencing such mortgage guaranties or insurance
      relating to any Mortgage Loan and all claims and payments thereunder;

               (iv) all other insurance policies and insurance proceeds relating
      to any Mortgage Loan or the related Mortgaged Property;

               (v) all Takeout Commitments now existing or hereafter arising,
      covering any part of the foregoing Collateral, all rights to deliver such
      Mortgage Loans to Takeout Investors or to permanent investors and other
      purchasers pursuant thereto and all proceeds resulting from the
      disposition of such Collateral pursuant thereto, including such Borrower'
      right and entitlement to receive the entire Takeout Price specified in
      each Takeout Commitment;

               (vi) all Interest Rate Protection Agreements, relating to or
      constituting any and all of the foregoing;

               (vii) any collateral, however defined, under any other agreement
      between the Borrower or any of its Affiliates on the one hand and the
      Lender or any of its Affiliates on the other hand;

               (viii) all "general  intangibles",  "accounts"  and "chattel
      paper" as defined in the Uniform  Commercial  Code relating to or
      constituting any and all of the foregoing; and

               (ix) any and all replacements, substitutions, distributions on or
      proceeds of any and all of the foregoing.

            (c)   Each Borrower hereby assigns, pledges and grants a security
interest in all of its right, title and interest in, to and under the Collateral
to the Lender to secure the MS Indebtedness including without limitation the
repayment of principal of and interest on all Loans and all other amounts owing
to the Lender hereunder, under the Note and under the other Loan Documents
(collectively, the "Secured Obligations"). Each Borrower agrees to mark its
computer records and tapes to evidence the interests granted to the Lender
hereunder.

            4.02  Further Documentation. At any time and from time to time, upon
the written request of the Lender, and at the sole expense of the Borrowers, the
Borrowers will promptly and duly execute and deliver, or will promptly cause to
be executed and delivered, such further instruments and documents and take such
further action as the Lender may reasonably request for the purpose of obtaining
or preserving the full benefits of this Loan Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Liens created hereby. The Borrowers also

                                      -17-
<PAGE>

hereby authorize the Lender to file any such financing or continuation statement
without the signatures of the Borrowers to the extent permitted by applicable
law. A carbon, photographic or other reproduction of this Loan Agreement shall
be sufficient as a financing statement for filing in any jurisdiction.

            4.03  Changes in Locations, Name, etc. No Borrower shall (i) change
the location of its chief executive office/chief place of business from that
specified in Section 6 hereof or (ii) change its name, identity or corporate
structure (or the equivalent) or (iii) unless it shall have given the Lender at
least 30 days prior written notice thereof and shall have delivered to the
Lender all Uniform Commercial Code financing statements and amendments thereto
as the Lender shall request and taken all other actions deemed necessary by the
Lender to continue its perfected status in the Collateral with the same or
better priority.

            4.04  Lender's Appointment as Attorney-in-Fact.

            (a)   Each Borrower hereby irrevocably constitutes and appoints the
Lender and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Borrower and in the name of such Borrower or in its
own name, from time to time in the Lender's discretion, for the purpose of
carrying out the terms of this Loan Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Loan Agreement, and,
without limiting the generality of the foregoing, each Borrower hereby gives the
Lender the power and right, on behalf of such Borrower, without assent by, but
with notice to, such Borrower, if an Event of Default shall have occurred and be
continuing, to do the following:

               (i) in the name of each Borrower or its own name, or otherwise,
      to take possession of and endorse and collect any checks, drafts, notes,
      acceptances or other instruments for the payment of moneys due under any
      mortgage insurance or with respect to any other Collateral and to file any
      claim or to take any other action or proceeding in any court of law or
      equity or otherwise deemed appropriate by the Lender for the purpose of
      collecting any and all such moneys due under any such mortgage insurance
      or with respect to any other Collateral whenever payable;

               (ii) to pay or discharge taxes and Liens levied or placed on or
      threatened against the Collateral; and

               (iii) (A) to direct any party liable for any payment under any
      Collateral to make payment of any and all moneys due or to become due
      thereunder directly to the Lender or as the Lender shall direct; (B) to
      ask or demand for, collect, receive payment of and receipt for, any and
      all moneys, claims and other amounts due or to become due at any time in
      respect of or arising out of any Collateral; (C) to sign and endorse any
      invoices, assignments, verifications, notices and other documents in
      connection with any of the Collateral; (D) to commence and prosecute any
      suits, actions or proceedings at law or in equity in any court of
      competent jurisdiction to collect the Collateral or any portion thereof
      and to enforce any other right in respect of any Collateral; (E) to defend
      any suit, action or proceeding brought against any Borrower with respect
      to any Collateral; (F) to settle, compromise or adjust any suit, action or

                                      -18-
<PAGE>

      proceeding described in clause (E) above and, in connection therewith, to
      give such discharges or releases as the Lender may deem appropriate; and
      (G) generally, to sell, transfer, pledge and make any agreement with
      respect to or otherwise deal with any of the Collateral as fully and
      completely as though the Lender were the absolute owner thereof for all
      purposes, and to do, at the Lender's option and the Borrowers' expense, at
      any time, and from time to time, all acts and things which the Lender
      deems necessary to protect, preserve or realize upon the Collateral and
      the Lender's Liens thereon and to effect the intent of this Loan
      Agreement, all as fully and effectively as the Borrowers might do.

Each Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.

            (b)   Each Borrower also authorizes the Lender, at any time and from
time to time, to execute, in connection with any sale provided for in Section
4.07 hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.

            (c)   The powers conferred on the Lender are solely to protect the
Lender's interests in the Collateral and shall not impose any duty upon the
Lender to exercise any such powers. The Lender shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither the Lender nor any of its officers, directors, or employees shall be
responsible to the Borrowers for any act or failure to act hereunder, except for
its own gross negligence or willful misconduct.

            4.05  Performance by Lender of Borrowers' Obligations. If any
Borrower fails to perform or comply with any of its agreements contained in the
Loan Documents and the Lender may itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the Lender
incurred in connection with such performance or compliance, together with
interest thereon at a rate per annum equal to the Post-Default Rate, shall be
payable by the Borrowers to the Lender on demand and shall constitute Secured
Obligations.

            4.06  Proceeds. If an Event of Default shall occur and be
continuing, (a) all proceeds of Collateral received by the Borrowers consisting
of cash, checks and other near-cash items shall be held by the Borrowers in
trust for the Lender, segregated from other funds of the Borrowers, and shall
forthwith upon receipt by any Borrower be turned over to the Lender in the exact
form received by such Borrower (duly endorsed by such Borrower to the Lender, if
required) and (b) any and all such proceeds received by the Lender (whether from
a Borrower or otherwise) may, in the sole discretion of the Lender, be held by
the Lender as collateral security for, and/or then or at any time thereafter may
be applied by the Lender against, the Secured Obligations (whether matured or
unmatured), such application to be in such order as the Lender shall elect. Any
balance of such proceeds remaining after the Secured Obligations shall have been
paid in full and this Loan Agreement shall have been terminated shall be paid
over to the Borrowers or to whomsoever may be lawfully entitled to receive the
same. For purposes hereof, proceeds shall include, but not be limited to, all
principal and interest payments, all prepayments and payoffs, insurance claims,

                                      -19-
<PAGE>

condemnation awards, sale proceeds, real estate owned rents and any other income
and all other amounts received with respect to the Collateral.

            4.07  Remedies. If a Default shall occur and be continuing, the
Lender may, at its option, enter into one or more Interest Rate Protection
Agreements covering all or a portion of the Mortgage Loans pledged to the Lender
hereunder, and the Borrowers shall be responsible for all damages, judgments,
costs and expenses of any kind which may be imposed on, incurred by or asserted
against the Lender relating to or arising out of such Interest Rate Protection
Agreements; including without limitation any losses resulting from such Interest
Rate Protection Agreements. If an Event of Default shall occur and be
continuing, the Lender may exercise, in addition to all other rights and
remedies granted to it in this Loan Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the Uniform Commercial Code.
Without limiting the generality of the foregoing, the Lender without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Borrower or any other Person (each and all of which demands, presentments,
protests, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels or as an entirety at public or private sale or sales, at any
exchange, broker's board or office of the Lender or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Lender shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Borrower, which right or equity is hereby waived or released.
The Borrowers further agree, at the Lender's request, to assemble the Collateral
and make it available to the Lender at places which the Lender shall reasonably
select, whether at the Borrower's premises or elsewhere. The Lender shall apply
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Lender
hereunder, including without limitation reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Secured Obligations, in
such order as the Lender may elect, and only after such application and after
the payment by the Lender of any other amount required or permitted by any
provision of law, including without limitation Section 9-504(1)(c) of the
Uniform Commercial Code, need the Lender account for the surplus, if any, to the
Borrowers. To the extent permitted by applicable law, each Borrower waives all
claims, damages and demands it may acquire against the Lender arising out of the
exercise by the Lender of any of its rights hereunder, other than those claims,
damages and demands arising from the gross negligence or willful misconduct of
the Lender. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The Borrowers
shall remain liable for any deficiency (plus accrued interest thereon as
contemplated pursuant to Section 2.05(b) hereof) if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay the Secured
Obligations and the fees and disbursements of any attorneys employed by the
Lender to collect such deficiency.

                                      -20-
<PAGE>

            4.08  Limitation on Duties Regarding Preservation of Collateral. The
Lender's duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the Uniform
Commercial Code or otherwise, shall be to deal with it in the same manner as the
Lender deals with similar property for its own account. Neither the Lender nor
any of its directors, officers or employees shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Borrowers or otherwise.

            4.09  Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.

            4.10  Release of Security Interest. Upon termination of this Loan
Agreement and repayment to the Lender of all Secured Obligations and the
performance of all obligations under the Loan Documents the Lender shall release
its security interest in any remaining Collateral.

            Section 5.  Conditions Precedent.

            5.01  Initial Loan. The obligation of the Lender to make its initial
Loan hereunder is subject to the satisfaction, immediately prior to or
concurrently with the making of such Loan, of the condition precedent that the
Lender shall have received all of the following items, each of which shall be
satisfactory to the Lender and its counsel in form and substance:

            (a)   Loan Documents.

            (i) Loan Agreement. The Loan Agreement, duly executed and delivered
      by the Borrower;

            (ii) Note. The Note, duly executed and delivered by the Borrowers;

            (iii) Custodial Agreement. The Custodial Agreement, duly executed
      and delivered by the Borrowers and the Custodian;

            (iv) Parent Guarantee. The Parent Guarantee, duly executed and
      delivered by the Guarantor.

            (b)   Organizational Documents. A good standing certificate and
certified copies of the charter and by-laws (or equivalent documents) of each
Credit Party and of all corporate or other authority for each Credit Party with
respect to the execution, delivery and performance of the Loan Documents and
each other document to be delivered by such Credit party from time to time in
connection herewith (and the Lender may conclusively rely on such certificate
until it receives notice in writing from such Credit Party to the contrary);

            (c)   Legal  Opinion.  A legal  opinion of outside  counsel to the
Credit  Parties,  substantially  in the form  attached  hereto as Exhibit C;

                                      -21-
<PAGE>

            (d)   Trust Receipt and Mortgage Loan Schedule and Exception Report.
A Trust Receipt, substantially in the form of Annex 2 of the Custodial
Agreement, dated the Effective Date, from the Custodian, duly completed, with a
Mortgage Loan Schedule and Exception Report attached thereto;

            (e)   Servicing Agreement(s). Any Servicing Agreement, certified as
a true, correct and complete copy of the original together, with a fully
executed Servicer Notice and, if the Servicer is a Borrower or an Affiliate of a
Borrower, the letter of the applicable Servicer consenting to termination of
such Servicing Agreement upon the occurrence of an Event of Default;

            (f)   Filings, Registrations, Recordings. Any documents (including,
without limitation, financing statements) required to be filed, registered or
recorded in order to create, in favor of the Lender, a perfected, first-priority
security interest in the Collateral, subject to no Liens other than those
created hereunder, shall have been properly prepared and executed for filing
(including the applicable county(ies) if the Lender determines such filings are
necessary in its sole discretion), registration or recording in each office in
each jurisdiction in which such filings, registrations and recordations are
required to perfect such first-priority security interest; provided, that
assignments of the Mortgages securing or related to the Mortgage Loans shall not
be required to be recorded prior to the occurrence of an Event of Default;

            (g)   Facility Fee.  The facility fee as contemplated by Section
3.04;

            (h)   Financial Statements.  The financial statements referenced in
Section 6.02;

            (i)   Underwriting Guidelines.  A certified copy of the Underwriting
Guidelines,  which shall be in form and substance satisfactory to the Lender;

            (j)   Consents, Licenses, Approvals, etc. Copies certified by each
Credit Party of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by such Credit Party of,
and the validity and enforceability of, the Loan Documents, which consents,
licenses and approvals shall be in full force and effect; and

            (k)   Other Documents. Such other documents as the Lender may
reasonably request.

            5.02  Initial and Subsequent Loans. The making of each Loan to the
Borrowers (including the initial Loan) on any Business Day is subject to the
satisfaction of the following further conditions precedent, both immediately
prior to the making of such Loan and also after giving effect thereto and to the
intended use thereof:

            (a)   No Default.  No Default or Event of Default shall have
occurred and be continuing;

            (b)   Representations and Warranties. Both immediately prior to the
making of such Loan and also after giving effect thereto and to the intended use
thereof, the representations and warranties made by the Borrowers in Section 6
and Schedule 1 hereof, and elsewhere in each of the Loan Documents, shall be
true, correct and complete on and as of the date of the making of such Loan in

                                      -22-
<PAGE>

all material respects (in the case of the representations and warranties in
Section 6.10 and Schedule 1, solely with respect to Mortgage Loans included in
the Borrowing Base) with the same force and effect as if made on and as of such
date (or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date). The Lender shall
have received an officer's certificate signed by a Responsible Officer of each
Borrower certifying as to the truth, accuracy and completeness of the above,
which certificate shall specifically include a statement that such Borrower is
in compliance with all governmental licenses and authorizations and is qualified
to do business and in good standing in all required jurisdictions.

            (c)   Borrowing Base.  The aggregate outstanding principal amount of
the Loans shall not exceed the Borrowing Base;

            (d)   Due Diligence. Subject to the Lender's right to perform one or
more Due Diligence Reviews pursuant to Section 11.15 hereof, the Lender shall
have completed its due diligence review of the Mortgage Loan Documents for each
Loan and such other documents, records, agreements, instruments, mortgaged
properties or information relating to such Mortgage Loans as the Lender in its
sole discretion deems appropriate to review and such review shall be
satisfactory to the Lender in its sole discretion;

            (e)   Mortgage Loan Schedule and Exception Report. The Lender shall
have received from the Custodian a Mortgage Loan Schedule and Exception Report
with Exceptions as are acceptable to the Lender in its sole discretion in
respect of Eligible Mortgage Loans to be pledged hereunder on such Business Day;

            (f)   Release Letter. The Lender shall have received from the
Borrowers a Warehouse Lender's Release Letter substantially in the form of
Exhibit E-2 hereto (or such other form acceptable to the Lender) or a Seller's
Release Letter substantially in the form of Exhibit E-1 hereto (or such other
form acceptable to the Lender) covering each Mortgage Loan to be pledged to the
Lender;

            (g)   Fees and Expenses. The Lender shall have received all fees and
expenses of counsel to the Lender as contemplated by Section 11.03(b), which
amount, at the Lender's option, may be netted from any Loan advanced under this
Agreement;

            (h)   Takeout Assignment. The Lender shall have received a Takeout
Assignment for each Takeout Commitment relating to Mortgage Loans included in
the Borrowing Base as of the Funding Date;

            (i)   No Market Events.  None of the following shall have occurred
and/or be continuing:

               (i) an event or events shall have occurred resulting in the
      effective absence of a "repo market" or comparable "lending market" for
      financing debt obligations secured by mortgage loans or securities or an
      event or events shall have occurred resulting in the Lender not being able
      to finance any Mortgage Loans through the "repo market" or "lending
      market" with traditional counterparties at rates which would have been
      reasonable prior to the occurrence of such event or events;

                                      -23-
<PAGE>

               (ii) an event or events shall have occurred resulting in the
      effective absence of a "securities market" for securities backed by
      mortgage loans or an event or events shall have occurred resulting in the
      Lender not being able to sell securities backed by mortgage loans at
      prices which would have been reasonable prior to such event or events; or

               (iii) there shall have occurred a material adverse change in the
      financial condition of the Lender which affects (or can reasonably be
      expected to affect) materially and adversely the ability of the Lender to
      fund its obligations under this Loan Agreement; or

            (j)   No Morgan Stanley Downgrade. Morgan Stanley Dean Witter &
Co.'s corporate bond rating as calculated by S&P or Moody's has not been lowered
or downgraded to a rating below A- as indicated by S&P or below A3 as indicated
by Moody's.

Each request for a borrowing by the Borrower hereunder shall constitute a
certification by the Borrower that all the conditions set forth in this Section
5 (other than Section 5.02(j)) have been satisfied (both as of the date of such
notice, request or confirmation and as of the date of such borrowing).

            Section 6.  Representations and Warranties. Each Borrower represents
and warrants to the Lender that throughout the term of this Loan Agreement:

            6.01  Existence. Each Borrower (a) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite corporate or other power, and has all
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted, except where the lack of such licenses, authorizations, consents and
approvals would not be reasonably likely to have a Material Adverse Effect; and
(c) is qualified to do business and is in good standing in all other
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary, except where failure so to qualify would not be
reasonably likely (either individually or in the aggregate) to have a Material
Adverse Effect.

            6.02  Financial Condition. The Borrowers have heretofore furnished
to the Lender a copy of (a) the consolidated balance sheet of the Guarantor and
its consolidated Subsidiaries for the fiscal year ended December 31, 1999 and
the related consolidated statements of income and retained earnings and of cash
flows for the Guarantor and its consolidated Subsidiaries for such fiscal year,
setting forth in each case in comparative form the figures for the previous
year, with the opinion thereon of Deloitte & Touche and (b) its consolidated
balance sheet and the consolidated balance sheets of its consolidated
Subsidiaries for the quarterly fiscal period ended March 31, 2000 and the
related consolidated statements of income and retained earnings and of cash
flows for the Guarantor and its consolidated Subsidiaries for such quarterly
fiscal period, setting forth in each case in comparative form the figures for
the previous year. All such financial statements are complete and correct and
fairly present, in all material respects, the consolidated financial condition
of the Guarantor and its Subsidiaries and the consolidated results of their
operations as at such dates and for such fiscal periods, all in accordance with
GAAP applied on a consistent basis. Since December 31, 1999, there has been no
material adverse change in the consolidated business, operations or financial

                                      -24-
<PAGE>

condition of the Guarantor and its consolidated Subsidiaries taken as a whole
from that set forth in said financial statements.

            6.03  Litigation. There are no actions, suits, arbitrations,
investigations (including, without limitation, any of the foregoing which are
pending or threatened) or other legal or arbitrable proceedings affecting any
Borrower or any of its Subsidiaries or affecting any of the Property of any of
them before any Governmental Authority that (i) questions or challenges the
validity or enforceability of any of the Loan Documents or any action to be
taken in connection with the transactions contemplated hereby, (ii) makes a
claim or claims in an aggregate amount greater than $1,000,000, (iii) which,
individually or in the aggregate, if adversely determined, could reasonably be
likely to have a Material Adverse Effect, or (iv) requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act or any rules
thereunder.

            6.04  No Breach. Neither (a) the execution and delivery of the Loan
Documents nor (b) the consummation of the transactions therein contemplated in
compliance with the terms and provisions thereof will conflict with or result in
a breach of the charter or by-laws of any Borrower, or any applicable law, rule
or regulation, or any order, writ, injunction or decree of any Governmental
Authority, or any Servicing Agreement or other material agreement or instrument
to which any Borrower or any of their Subsidiaries is a party or by which any of
them or any of their Property is bound or to which any of them is subject, or
constitute a default under any such material agreement or instrument or result
in the creation or imposition of any Lien (except for the Liens created pursuant
to this Loan Agreement) upon any Property of any Borrower or any of their
Subsidiaries pursuant to the terms of any such agreement or instrument.

            6.05  Action. Each Borrower has all necessary corporate or other
power, authority and legal right to execute, deliver and perform its obligations
under each of the Loan Documents; the execution, delivery and performance by
Borrower of each of the Loan Documents have been duly authorized by all
necessary corporate or other action on its part; and each Loan Document has been
duly and validly executed and delivered by Borrower and constitutes a legal,
valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms.

            6.06  Approvals.

            (a)   No authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority or any securities exchange are
necessary for the execution, delivery or performance by each Borrower of the
Loan Documents or for the legality, validity or enforceability thereof, except
for filings and recordings in respect of the Liens created pursuant to this Loan
Agreement.

            (b)   Each Borrower is approved by FNMA as an approved lender and
each Borrower and each Servicer is approved by FHLMC as an approved
seller/servicer, in each case in good standing (such collective approvals and
conditions, "Agency Approvals"), with no event having occurred or any Borrower
having any reason whatsoever to believe or suspect will occur (including,
without limitation, a change in insurance coverage) which would either make any
Borrower (or any Servicer) unable to comply with the eligibility requirements
for maintaining all such applicable Agency Approvals or require notification to

                                      -25-
<PAGE>

the relevant Agency. Each Borrower (and any Servicer) has adequate financial
standing, servicing facilities, procedures and experienced personnel necessary
for the sound servicing of mortgage loans of the same types as may from time to
time constitute Mortgage Loans and in accordance with Accepted Servicing
Practices.

            6.07  Margin Regulations. Neither the making of any Loan hereunder,
nor the use of the proceeds thereof, will violate or be inconsistent with the
provisions of Regulations T, U or X.

            6.08  Taxes. Each Borrower and each of their Subsidiaries has filed
all Federal income tax returns and all other material tax returns that are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by any of them, except for any
such taxes as are being appropriately contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves
have been provided. The charges, accruals and reserves on the books of each
Borrower and each of their Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of each Borrower, adequate.

            6.09  Investment Company Act. No Borrower nor any of their
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.

            6.10  Collateral; Collateral Security.

            (a)   No Borrower has assigned, pledged, or otherwise conveyed or
encumbered any Mortgage Loan or other Collateral to any other Person, and
immediately prior to the pledge of such Mortgage Loan or any other Collateral to
the Lender, the Borrowers were the sole owner of such Mortgage Loan or such
other Collateral and had good and marketable title thereto, free and clear of
all Liens, in each case except for Liens to be released simultaneously with the
Liens granted in favor of the Lender hereunder. No Mortgage Loan or other
Collateral pledged to the Lender hereunder was acquired (by purchase or
otherwise) by any Borrower from an Affiliate of any Borrower.

            (b)   The provisions of this Loan Agreement are effective to create
in favor of the Lender a valid security interest in all right, title and
interest of the Borrowers in, to and under the Collateral.

            (c)   Upon receipt by the Custodian of each Mortgage Note, endorsed
in blank by a duly authorized officer of the relevant Borrower, the Lender shall
have a fully perfected first priority security interest therein, in the Mortgage
Loan evidenced thereby and in the Borrowers' interest in the related Mortgaged
Property.

            (d)   Upon the filing of financing statements on Form UCC-1 naming
the Lender as "Secured Party" and the Borrowers as "Debtors", and describing the
Collateral, in the jurisdictions and recording offices listed on Schedule 2
attached hereto, the security interests granted hereunder in the Collateral will
constitute fully perfected first priority security interests under the Uniform

                                      -26-
<PAGE>

Commercial Code in all right, title and interest of the Borrowers in, to and
under such Collateral which can be perfected by filing under the Uniform
Commercial Code.

            6.11  Chief Executive Office/Jurisdiction of Organization. On the
Effective Date, and during the four months immediately preceding the Effective
Date, each Borrower's chief executive office, is, and has been, located at 520
Broadhollow Road, Melville, New York 11747. On the Effective Date, American
Home's jurisdiction of organization is New York. On the Effective Date, Marina's
jurisdiction or organization is California.

            6.12  Location of Books and Records. The location where each
Borrower keeps its books and records, including all computer tapes and records
relating to the Collateral is its chief executive office.

            6.13  Hedging. Each Borrower has entered into Interest Rate
Protection Agreements in accordance with its respective hedging policy
guidelines, having terms with respect to protection against fluctuations in
interest rates reasonably acceptable to the Lender.

            6.14  True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Credit Parties to the Lender in connection with the negotiation,
preparation or delivery of this Loan Agreement and the other Loan Documents or
included herein or therein or delivered pursuant hereto or thereto, when taken
as a whole, do not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading. All
written information furnished after the date hereof by or on behalf of the
Credit Parties to the Lender in connection with this Loan Agreement and the
other Loan Documents and the transactions contemplated hereby and thereby will
be true, complete and accurate in every material respect, or (in the case of
projections) based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to a Responsible
Officer of a Credit Party, after due inquiry, that could reasonably be expected
to have a Material Adverse Effect that has not been disclosed herein, in the
other Loan Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Lender for use in connection
with the transactions contemplated hereby or thereby.

            6.15  Tangible Net Worth.  On the Effective Date, the Tangible Net
Worth is not less than $14,000,000.

            6.16  ERISA. Each Plan to which any Borrower or its Subsidiaries
make direct contributions, and, to the knowledge of such Borrower, each other
Plan and each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other Federal or State law. No
event or condition has occurred and is continuing as to which any Borrower would
be under an obligation to furnish a report to the Lender under Section 7.01(d)
hereof.

            6.17  Takeout Commitments; Takeout Assignments. Each Takeout
Commitment (if any) has been delivered by the Borrowers and constitutes a valid,
binding and existing obligation of a Takeout Investor, enforceable against the
Borrowers and the Takeout Investor, respectively, in accordance with its terms

                                      -27-
<PAGE>

(subject to bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application of the rules of
equity, including those relating to specific performance). Each Takeout
Commitment (if any) has been duly and validly assigned by the Borrowers to the
Lender pursuant to a Takeout Assignment.

            6.18  Subsidiaries. Schedule 3 sets forth the name of each direct or
indirect Subsidiary of the Borrowers and of the holders of Capital Stock of the
Borrowers, its form of organization, its jurisdiction of organization, the total
number of issued and outstanding shares or other interests of Capital Stock
thereof, the classes and number of issued and outstanding shares or other
interests of Capital Stock of each such class, the name of each holder of
Capital Stock thereof and the number of shares or other interests of such
Capital Stock held by each such holder and the percentage of all outstanding
shares or other interests of such class of Capital Stock held by such holders.

            6.19  Solvency. After giving effect to the making of each Loan (i)
the amount of the "present fair saleable value" of the assets of each Borrower
and of such Borrower and its Subsidiaries, taken as a whole, will, as of such
date, exceed the amount of all "liabilities of such Borrower and of such
Borrower and its Subsidiaries, taken as a whole, contingent or otherwise", as of
such date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of debtors,
(ii) the present fair saleable value of the assets of each Borrower and of such
Borrower and its Subsidiaries, taken as a whole, will, as of such date, be
greater than the amount that will be required to pay the liabilities of such
Borrower and of such Borrower and its Subsidiaries, taken as a whole, on their
respective debts as such debts become absolute and matured, (iii) no Borrower,
nor any Borrower and its Subsidiaries, taken as a whole, will have, as of such
date, an unreasonably small amount of capital with which to conduct their
respective businesses, and (iv) each Borrower and such Borrower and its
Subsidiaries, taken as a whole, will be able to pay their respective debts as
they mature. For purposes of this Section 6.19, "debt" means "liability on a
claim", "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured, and (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.

            Section 7. Covenants of the Borrower. Each Borrower covenants and
agrees with the Lender that, so long as any Loan is outstanding and until
payment in full of all Secured Obligations:

            7.01  Financial Statements.  The Borrowers shall deliver to the
Lender:

            (a)   as soon as available and in any event within 45 days after the
end of each of the first three quarterly fiscal periods of each fiscal year of
the Guarantor, the unaudited consolidated balance sheets of the Guarantor and
its consolidated Subsidiaries as at the end of such period and the related
unaudited consolidated statements of income and retained earnings and of cash
flows for the Guarantor and its consolidated Subsidiaries for such period and
the portion of the fiscal year through the end of such period, setting forth in

                                      -28-
<PAGE>

each case in comparative form the figures for the previous year, accompanied by
a certificate of a Responsible Officer of the Guarantor, which certificate shall
state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of the Guarantor and
its consolidated Subsidiaries in accordance with GAAP, consistently applied, as
at the end of, and for, such period (subject to normal year-end audit
adjustments);

            (b)   as soon as available and in any event within 90 days after the
end of each fiscal year of the Guarantor, the consolidated balance sheets of the
Guarantor and its consolidated Subsidiaries as at the end of such fiscal year
and the related consolidated statements of income and retained earnings and of
cash flows for the Guarantor and its consolidated Subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous
year, accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall not be
qualified as to scope of audit or going concern and shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the Guarantor and its consolidated
Subsidiaries as at the end of, and for, such fiscal year in accordance with
GAAP, and a certificate of such accountants stating that, in making the
examination necessary for their opinion, they obtained no knowledge, except as
specifically stated, of any Default or Event of Default;

            (c)   from time to time such other information regarding the
financial condition, operations, or business of any Credit Party as the Lender
may reasonably request; and

            (d)   as soon as reasonably possible, and in any event within thirty
(30) days after a Responsible Officer of any Borrower knows, or with respect to
any Plan or Multiemployer Plan to which any Borrower or any of its Subsidiaries
makes direct contributions, has reason to believe, that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan has
occurred or exists, a statement signed by a senior financial officer of the
Borrowers setting forth details respecting such event or condition and the
action, if any, that the Borrowers or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC by the Borrowers or an ERISA Affiliate with respect to such event
or condition):

               (i) any reportable event, as defined in Section 4043(c) of ERISA
      and the regulations issued thereunder, with respect to a Plan, as to which
      PBGC has not by regulation waived the requirement of Section 4043(a) of
      ERISA that it be notified within thirty (30) days of the occurrence of
      such event (provided that a failure to meet the minimum funding standard
      of Section 412 of the Code or Section 302 of ERISA, including without
      limitation the failure to make on or before its due date a required
      installment under Section 412(m) of the Code or Section 302(e) of ERISA,
      shall be a reportable event regardless of the issuance of any waivers in
      accordance with Section 412(d) of the Code); and any request for a waiver
      under Section 412(d) of the Code for any Plan;

               (ii) the distribution under Section 4041(c) of ERISA of a notice
      of intent to terminate any Plan or any action taken by the Borrower or an
      ERISA Affiliate to terminate any Plan;

                                      -29-
<PAGE>

               (iii) the institution by PBGC of proceedings under Section 4042
      of ERISA for the termination of, or the appointment of a trustee to
      administer, any Plan, or the receipt by the Borrower or any ERISA
      Affiliate of a notice from a Multiemployer Plan that such action has been
      taken by PBGC with respect to such Multiemployer Plan;

               (iv) the complete or partial withdrawal from a Multiemployer Plan
      by the Borrower or any ERISA Affiliate that results in liability under
      Section 4201 or 4204 of ERISA (including the obligation to satisfy
      secondary liability as a result of a purchaser default) or the receipt by
      the Borrower or any ERISA Affiliate of notice from a Multiemployer Plan
      that it is in reorganization or insolvency pursuant to Section 4241 or
      4245 of ERISA or that it intends to terminate or has terminated under
      Section 4041A of ERISA;

               (v) the institution of a proceeding by a fiduciary of any
      Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
      Section 515 of ERISA, which proceeding is not dismissed within 30 days;
      and

               (vi) the adoption of an amendment to any Plan that would result
      in the loss of tax-exempt status of the Plan and trust of which such Plan
      is a part if the Borrower or an ERISA Affiliate fails to provide timely
      security to such Plan if and as required by the provisions of Section
      401(a)(29) of the Code or Section 307 of ERISA.

The Borrowers will furnish to the Lender, at the time it furnishes each set of
financial statements pursuant to paragraphs (a) and (b) above, a certificate of
a Responsible Officer of Borrower to the effect that, to the best of such
Responsible Officer's knowledge, The Borrowers during such fiscal period or year
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Loan Agreement and the other Loan
Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate (and, if any Default or Event of Default
has occurred and is continuing, describing the same in reasonable detail and
describing the action the Borrowers have taken or proposes to take with respect
thereto).

            7.02  Litigation. Each Borrower will promptly, and in any event
within 10 days after service of process on any of the following, give to the
Lender notice of all litigation, actions, suits, arbitrations, investigations
(including, without limitation, any of the foregoing which are pending or
threatened) or other legal or arbitrable proceedings affecting such Borrower or
any of its Subsidiaries or affecting any of the Property of any of them before
any Governmental Authority that (i) questions or challenges the validity or
enforceability of any of the Loan Documents or any action to be taken in
connection with the transactions contemplated hereby, (ii) makes a claim or
claims in an aggregate amount greater than $1,000,000, (iii) which, individually
or in the aggregate, if adversely determined, could be reasonably likely to have
a Material Adverse Effect, or (iii) requires filing with the Securities and
Exchange Commission in accordance with the 1934 Act and any rules thereunder.

            7.03  Existence, etc.   Each Borrower will:

                                      -30-
<PAGE>

            (a)   preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided that nothing in
this Section 7.03(a) shall prohibit any transaction expressly permitted under
Section 7.04 hereof);

            (b)   comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities (including, without
limitation, all environmental laws) if failure to comply with such requirements
would be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect;

            (c)   keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied;

            (d)   not move its chief executive office from the address referred
to in Section 6.11 or change its jurisdiction of organization from the
jurisdiction referred to in Section 6.11 unless it shall have provided the
Lender 30 days' prior written notice of such change;

            (e)   pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper proceedings and against which adequate reserves are
being maintained; and

            (f)   permit representatives of the Lender, during normal business
hours, to examine, copy and make extracts from its books and records, to inspect
any of its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by the Lender.

            7.04  Prohibition of Fundamental Changes. No Borrower shall enter
into any transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation, winding up or
dissolution) or sell all or substantially all of its assets; provided, that a
Borrower may merge or consolidate with (a) any wholly owned subsidiary of such
Borrower, or (b) any other Person if such Borrower is the surviving corporation;
and provided further, that if after giving effect thereto, no Default would
exist hereunder.

            7.05  Borrowing Base Deficiency. If at any time there exists a
Borrowing Base Deficiency the Borrowers shall cure same in accordance with
Section 2.06 hereof.

            7.06  Notices.  The Borrowers shall give notice to the Lender:

            (a)   promptly upon receipt of notice or knowledge of the occurrence
of any Default or Event of Default;

            (b)   with respect to any Mortgage Loan pledged to the Lender
hereunder, immediately upon receipt of any principal prepayment (in full or
partial) of such pledged Mortgage Loan;

            (c)   with respect to any Mortgage Loan pledged to the Lender
hereunder, immediately upon receipt of notice or knowledge that the underlying
Mortgaged Property has been damaged by waste, fire, earthquake or earth

                                      -31-
<PAGE>

movement, windstorm, flood, tornado or other casualty, or otherwise damaged so
as to affect adversely the Collateral Value of such pledged Mortgage Loan; and

            (d)   promptly upon receipt of notice or knowledge of (i) any
default related to any Collateral, (ii) any Lien or security interest (other
than security interests created hereby or by the other Loan Documents) on, or
claim asserted against, any of the Collateral or (iii) any event or change in
circumstances which could reasonably be expected to have a Material Adverse
Effect.

            (e)   promptly upon any material change in the market value of any
or all of the Borrowers' assets.

            Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of each Borrower setting forth details of the
occurrence referred to therein and stating what action such Borrower have taken
or proposes to take with respect thereto.

            7.07  Hedging. The Borrowers shall at all times maintain Interest
Rate Protection Agreements in accordance with their respective hedging policy
guidelines, which guidelines are reasonably acceptable to the Lender in its sole
discretion. The Interest Rate Protection Agreements maintained by the Borrowers
shall have terms with respect to protection against fluctuations in interest
rates reasonably acceptable to the Lender. The Borrowers shall deliver to the
Lender monthly a written summary of the notional amount of all outstanding
Interest Rate Protection Agreements.

            7.08  Reports. The Borrowers shall provide the Lender with a
quarterly report, which report shall include, among other items, a summary of
the Borrower's delinquency and loss experience with respect to mortgage loans
serviced by the Borrowers, any Servicer or any designee of either, plus any such
additional reports as the Lender may reasonably request with respect to the
Borrowers' or any Servicer's servicing portfolio or pending originations of
mortgage loans.

            7.09  Underwriting Guidelines. Without the prior written consent of
the Lender, the Borrowers shall not amend or otherwise modify the Underwriting
Guidelines. Notwithstanding the preceding sentence, in the event that the
Borrowers make any amendment or modification to the Underwriting Guidelines, the
Borrowers shall promptly deliver to the Lender a complete copy of the amended or
modified Underwriting Guidelines.

            7.10  Transactions with Affiliates. The Borrowers will not enter
into any transaction, including without limitation any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Loan Agreement, (b) in
the ordinary course of the Borrowers' business and (c) upon fair and reasonable
terms no less favorable to the Borrowers than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate, or make a
payment that is not otherwise permitted by this Section 7.10 to any Affiliate.
In no event shall any Borrower pledge to the Lender hereunder any Mortgage Loan
acquired by such Borrower from an Affiliate of such Borrower.

                                      -32-
<PAGE>

            7.11  Limitation on Liens. The Borrowers will defend the Collateral
against, and will take such other action as is necessary to remove, any Lien,
security interest or claim on or to the Collateral, other than the security
interests created under this Loan Agreement, and the Borrowers will defend the
right, title and interest of the Lenders in and to any of the Collateral against
the claims and demands of all persons whomsoever.

            7.12  Limitation on Guarantees.  The Borrowers shall not create,
incur, assume or suffer to exist any Guarantees.

            7.13  Limitation on Distributions. After the occurrence and during
the continuation of any Default, no Borrower shall make any payment on account
of, or set apart assets for, a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of any equity or
partnership interest of such Borrowers, whether now or hereafter outstanding, or
make any other distribution in respect of any of the foregoing or to any
shareholder or equity owner of such Borrower, either directly or indirectly,
whether in cash or property or in obligations of such Borrower or any of such
Borrower's consolidated Subsidiaries.

            7.14  Servicer; Servicing Tape. The Borrowers shall provide to the
Lender on the fifth Business Day of each month a computer readable file
containing servicing information, including without limitation those fields
specified by the Lender from time to time, on a loan-by-loan basis and in the
aggregate, with respect to the Mortgage Loans serviced hereunder by the
Borrowers or any Servicer. The Borrowers shall not cause the Mortgage Loans to
be serviced by any servicer other than a servicer expressly approved in writing
by the Lender.

            7.15  Required Filings. Each Borrower shall promptly provide the
Lender with copies of all documents which such Borrower or any Affiliate of such
Borrower is required to file with the Securities and Exchange Commission in
accordance with the 1934 Act or any rules thereunder.

            7.16  No Adverse Selection.  No Borrower has selected the Collateral
in a manner so as to adversely affect the Lender's interests.

            7.17  Remittance of Prepayments. The Borrowers shall remit, with
sufficient detail to enable the Lender to appropriately identify the Mortgage
Loan to which any amount remitted applies, to the Lender on each Thursday (or
the next Business Day if such Thursday is not a Business Day) all principal
prepayments that the Borrowers have received during the previous week.

            7.18  Agency Approvals. Should the Borrowers, for any reason, cease
to possess all such applicable Agency Approvals, or should notification to the
relevant Agency be required, the Borrowers shall so notify the Lender
immediately in writing. Notwithstanding the preceding sentence, each Borrower
shall take all necessary action to maintain all of its (and each Servicer's)
applicable Agency Approvals at all times during the term of this Loan Agreement
and so long as any Loan remains outstanding.

            7.19  Takeout Commitments. The Borrowers shall promptly deliver to
the Lender a Takeout Assignment for each Takeout Commitment relating to any
Mortgage Loan.

                                      -33-
<PAGE>

            Section 8.  Events of Default. Each of the following events shall
constitute an event of default (an "Event of Default") hereunder:

            (a)   the Borrowers shall default in the payment of any principal of
or interest on any Loan when due (whether at stated maturity, upon acceleration
or at mandatory prepayment); or

            (b)   the Borrowers shall default in the payment of any other amount
payable by it hereunder or under any other Loan Document after notification by
the Lender of such default, and such default shall have continued unremedied for
five Business Days; or

            (c)   any representation, warranty or certification made or deemed
made herein or in any other Loan Document by any Credit Party or any certificate
furnished to the Lender pursuant to the provisions hereof or thereof shall prove
to have been false or misleading in any material respect as of the time made or
furnished (other than the representations and warranties set forth in Schedule
1, which shall be considered solely for the purpose of determining the
Collateral Value of the Mortgage Loans; unless (i) such Credit Party shall have
made any such representations and warranties with knowledge that they were
materially false or misleading at the time made or (ii) any such representations
and warranties have been determined by the Lender in its sole discretion to be
materially false or misleading on a regular basis); or

            (d)   any Credit Party shall fail to comply with the requirements of
Section 7.03(a), Section 7.04, Section 7.05, Section 7.06, or Sections 7.09
through 7.20 hereof; or any Borrower shall otherwise fail to comply with the
requirements of Section 7.03 hereof and such default shall continue unremedied
for a period of five Business Days; or any Borrower shall fail to observe or
perform any other covenant or agreement contained in this Loan Agreement or any
other Loan Document and such failure to observe or perform shall continue
unremedied for a period of seven (7) Business Days; or

            (e)   a final judgment or judgments for the payment of money in
excess of $1,000,000 in the aggregate shall be rendered against any Credit Party
or any of their Affiliates by one or more courts, administrative tribunals or
other bodies having jurisdiction and the same shall not be satisfied, discharged
(or provision shall not be made for such discharge) or bonded, or a stay of
execution thereof shall not be procured, within 30 days from the date of entry
thereof, and any Credit Party or any such Affiliate shall not, within said
period of 30 days, or such longer period during which execution of the same
shall have been stayed or bonded, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or

            (f)   any Credit Party shall admit in writing its inability to pay
its debts as such debts become due; or

            (g)   any Credit Party or any of their Affiliates shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator or the like of itself or of
all or a substantial part of its property, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of debts, (v) fail to

                                      -34-
<PAGE>

controvert in a timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the Bankruptcy Code or
(vi) take any corporate or other action for the purpose of effecting any of the
foregoing; or

            (h)   a proceeding or case shall be commenced, without the
application or consent of any Credit Party or any of their Affiliates, in any
court of competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or readjustment of
its debts, (ii) the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner, liquidator or the like of any Credit Party or any
such Affiliate or of all or any substantial part of its property, or (iii)
similar relief in respect of any Credit Party or any such Affiliate under any
law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 30 or more days; or an order for relief
against any Credit Party or any such Affiliate shall be entered in an
involuntary case under the Bankruptcy Code; or

            (i)   the Custodial Agreement or any Loan Document shall for
whatever reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by any Credit Party; or

            (j)   The Parent Guarantee shall cease, for any reason, to be in
full force and effect or the Guarantor shall so assert; or

            (k)   any Credit Party shall grant, or suffer to exist, any Lien on
any Collateral except the Liens contemplated hereby; or the Liens contemplated
hereby shall cease to be first priority perfected Liens on the Collateral in
favor of the Lender or shall be Liens in favor of any Person other than the
Lender; or

            (l)   any Credit Party or any of its Affiliates shall be in default
under any note, indenture, loan agreement, guaranty, swap agreement or any other
contract to which it is a party, including, without limitation, any MS
Indebtedness, which default (i) involves the failure to pay a matured
obligation, or (ii) permits the acceleration of the maturity of obligations by
any other party to or beneficiary of such note, indenture, loan agreement,
guaranty, swap agreement or other contract; or

            (m)   any materially adverse change in the Property, business,
financial condition or prospects of any Credit Party or any of its Affiliates
shall occur, in each case as determined by the Lender in its sole discretion, or
any other condition shall exist which, in the Lender's sole discretion,
constitutes a material impairment of the such Credit Party's ability to perform
its obligations under this Loan Agreement, the Note or any other Loan Document;

            (n)   MS & Co.'s corporate bond rating has been lowered or
downgraded to a rating below A- by S&P or A3 by Moody's and the Borrowers shall
have failed to repay all amounts owing to the Lender under this Agreement, the
Note and the other Loan Documents within 90 days following such downgrade; or

                                      -35-
<PAGE>

            (o)   the discovery by the Lender of a condition or event which
existed at or prior to the execution hereof and which the Lender, in its sole
discretion, determines materially and adversely affects: (i) the condition
(financial or otherwise) of any Credit Party, any of its Subsidiaries or
Affiliates; or (ii) the ability of either any Credit Party or the Lender to
fulfill its respective obligations under this Loan Agreement.

            (p)   The Tangible Net Worth shall at any time be less than the sum
of (i) 80% of the Tangible Net Worth as of June 30, 2000 plus (ii) an amount
equal to 75% of the aggregate or positive Net Income (without deduction for
quarterly losses) plus (iii) 50% of net proceeds from the issuance of any equity
securities of Borrower or any of the Borrowers' consolidated subsidiaries.

            (q)   The ratio of Total Indebtedness to Tangible Net Worth shall at
any time be greater than 12.00:1.00.

            (r)   Net Income for any period of two consecutive fiscal quarters
(each such period, a "Test Period"), before income taxes for such Test Period
and distributions made during such Test Period, shall be less than $1.00.

            Section 9.  Remedies Upon Default.

            (a)   An Event of Default shall be deemed to be continuing unless
expressly waived by the Lender in writing. Upon the occurrence of one or more
Events of Default hereunder, the Lender's obligation to make additional Loans to
the Borrowers shall automatically terminate without further action by any
Person. Upon the occurrence of one or more Events of Default other than those
referred to in Section 8(g) or (h), the Lender may immediately declare the
principal amount of the Loans then outstanding under the Note to be immediately
due and payable, together with all interest thereon and fees and expenses
accruing under this Loan Agreement. Upon the occurrence of an Event of Default
referred to in Sections 8(g) or (h), such amounts shall immediately and
automatically become due and payable without any further action by any Person.
Upon such declaration or such automatic acceleration, the balance then
outstanding on the Note shall become immediately due and payable, without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrowers.

            (b)   Upon the occurrence of one or more Events of Default, the
Lender shall have the right to obtain physical possession of the Servicing
Records and all other files of the Borrowers relating to the Collateral and all
documents relating to the Collateral which are then or may thereafter come in to
the possession of the Borrowers or any third party acting for the Borrowers and
the Borrowers shall deliver to the Lender such assignments as the Lender shall
request. The Lender shall be entitled to specific performance of all agreements
of the Borrowers contained in this Loan Agreement.

                                      -36-
<PAGE>

            Section 10. No Duty of Lender. The powers conferred on the Lender
hereunder are solely to protect the Lender's interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. The Lender shall
be accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Borrowers for any act or failure
to act hereunder, except for its or their own gross negligence or willful
misconduct.

            Section 11. Miscellaneous.

            11.01 Waiver. No failure on the part of the Lender to exercise and
no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under any Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.

            11.02 Notices. Except as otherwise expressly permitted by this Loan
Agreement, all notices, requests and other communications provided for herein
and under the Custodial Agreement (including without limitation any
modifications of, or waivers, requests or consents under, this Loan Agreement)
shall be given or made in writing (including without limitation by telex or
telecopy) delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof or thereof); or, as to
any party, at such other address as shall be designated by such party in a
written notice to each other party provided, that a copy of all notices given
under Section 7.01 shall simultaneously be delivered to Credit Department,
Morgan Stanley Dean Witter, 1221 Avenue of the Americas, 35th Floor, New York,
New York 10036; Attention: Patrick Romaine. Except as otherwise provided in this
Loan Agreement and except for notices given under Section 2 (which shall be
effective only on receipt), all such communications shall be deemed to have been
duly given when transmitted by telex or telecopy or personally delivered or, in
the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.

            11.03 Indemnification and Expenses.

            (a)   Each Borrower agrees to hold the Lender, and its Affiliates
and their officers, directors, employees, agents and advisors (each an
"Indemnified Party") harmless from and indemnify any Indemnified Party against
all liabilities, losses, damages, judgments, costs and expenses of any kind
which may be imposed on, incurred by or asserted against such Indemnified Party
(collectively, the "Costs") relating to or arising out of this Loan Agreement,
the Note, any other Loan Document or any transaction contemplated hereby or
thereby, or any amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Loan Agreement, the Note, any other Loan
Document or any transaction contemplated hereby or thereby, that, in each case,
results from anything other than any Indemnified Party's gross negligence or
willful misconduct. Without limiting the generality of the foregoing, each
Borrower agrees to hold any Indemnified Party harmless from and indemnify such
Indemnified Party against all Costs with respect to all Mortgage Loans relating
to or arising out of any violation or alleged violation of any environmental
law, rule or regulation or any consumer credit laws, including without
limitation the Truth in Lending Act and/or the Real Estate Settlement Procedures
Act, that, in each case, results from anything other than such Indemnified

                                      -37-
<PAGE>

Party's gross negligence or willful misconduct. In any suit, proceeding or
action brought by an Indemnified Party in connection with any Mortgage Loan for
any sum owing thereunder, or to enforce any provisions of any Mortgage Loan,
each Borrower will save, indemnify and hold such Indemnified Party harmless from
and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of the
account debtor or obligor thereunder, arising out of a breach by any Borrower of
any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from any Borrower. Each Borrower also agrees to reimburse an
Indemnified Party as and when billed by such Indemnified Party for all such
Indemnified Party's costs and expenses incurred in connection with the
enforcement or the preservation of such Indemnified Party's rights under this
Loan Agreement, the Note, any other Loan Document or any transaction
contemplated hereby or thereby, including without limitation the reasonable fees
and disbursements of its counsel Each Borrower hereby acknowledges that,
notwithstanding the fact that the Note is secured by the Collateral, the
obligation of the Borrowers under the Note is a recourse obligation of the
Borrowers.

            (b)   The Borrowers, jointly and severally, agree to pay as and when
billed by the Lender all of the out-of-pocket costs and expenses incurred by the
Lender in connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Loan Agreement, the Note, any
other Loan Document or any other documents prepared in connection herewith or
therewith. The Borrowers, jointly and severally, agree to pay as and when billed
by the Lender all of the out-of-pocket costs and expenses incurred in connection
with the consummation and administration of the transactions contemplated hereby
and thereby including without limitation (i) all the reasonable fees,
disbursements and expenses of counsel to the Lender and (ii) all the due
diligence, inspection, testing and review costs and expenses incurred by the
Lender with respect to Collateral under this Loan Agreement, including, but not
limited to, those costs and expenses incurred by the Lender pursuant to Sections
11.03(a), 11.14 and 11.15 hereof; provided, however, that in no event shall the
Borrowers be required to reimburse the Lender for due diligence costs and
expenses pursuant to Section 11.15 in excess of $25,000 for any calendar year.

            11.04 Amendments. Except as otherwise expressly provided in this
Loan Agreement, any provision of this Loan Agreement may be modified or
supplemented only by an instrument in writing signed by the Borrowers and the
Lender and any provision of this Loan Agreement may be waived by the Lender.

            11.05 Successors and Assigns. This Loan Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

            11.06 Survival. The obligations of the Borrowers under Sections 3.03
and 11.03 hereof shall survive the repayment of the Loans and the termination of
this Loan Agreement. In addition, each representation and warranty made or
deemed to be made by a request for a borrowing, herein or pursuant hereto shall
survive the making of such representation and warranty, and the Lender shall not
be deemed to have waived, by reason of making any Loan, any Default that may
arise because any such representation or warranty shall have proved to be false
or misleading, notwithstanding that the Lender may have had notice or knowledge
or reason to believe that such representation or warranty was false or

                                      -38-
<PAGE>

misleading at the time such Loan was made.

            11.07 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this Loan
Agreement.

            11.08 Counterparts. This Loan Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Loan Agreement
by signing any such counterpart.

            11.09 Loan Agreement Constitutes Security Agreement; Governing Law.
This Loan Agreement shall be governed by New York law without reference to
choice of law doctrine, and shall constitute a security agreement within the
meaning of the Uniform Commercial Code.

            11.10 Submission To Jurisdiction; Waivers.  Each Borrower hereby
irrevocably and unconditionally:

            (A)   SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS LOAN AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

            (B)   CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

            (C)   AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH
THE LENDER SHALL HAVE BEEN NOTIFIED; AND

            (D)   AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.

                                      -39-
<PAGE>

            11.11.WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE LENDER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS LOAN AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

            11.12 Acknowledgments.  Each Borrower hereby acknowledges that:

            (a)   it has been advised by counsel in the negotiation, execution
and delivery of this Loan Agreement, the Note and the other Loan Documents;

            (b)   the Lender has no fiduciary relationship to any Borrower, and
the relationship between each Borrower and the Lender is solely that of debtor
and creditor; and

            (c)   no joint venture exists between the Lender and any Borrower.

            11.13 Hypothecation or Pledge of Loans. The Lender shall have free
and unrestricted use of all Collateral and nothing in this Loan Agreement shall
preclude the Lender from engaging in repurchase transactions with the Collateral
or otherwise pledging, repledging, transferring, hypothecating, or
rehypothecating the Collateral. Nothing contained in this Loan Agreement shall
obligate the Lender to segregate any Collateral delivered to the Lender by the
Borrowers. Notwithstanding the foregoing, no such pledge, repledge, transfer,
hypothecation or rehypothecation shall impair the Borrower's rights with respect
to the Collateral hereunder.

            11.14 Servicing.

            (a)   Each Borrower covenant to maintain or cause the servicing of
the Mortgage Loans to be maintained in conformity with accepted and prudent
servicing practices in the industry for the same type of mortgage loans as the
Mortgage Loans and in a manner at least equal in quality to the servicing the
Borrowers provide for mortgage loans which it owns. In the event that the
preceding language is interpreted as constituting one or more servicing
contracts, each such servicing contract shall terminate automatically upon the
earliest of (i) an Event of Default, (ii) the date on which all the Secured
Obligations have been paid in full or (iii) the transfer of servicing approved
by the Borrowers.

            (b)   If the Mortgage Loans are serviced by a Borrower, (i) such
Borrower agrees that the Lender is the collateral assignee of all servicing
records, including but not limited to any and all servicing agreements, files,
documents, records, data bases, computer tapes, copies of computer tapes, proof
of insurance coverage, insurance policies, appraisals, other closing
documentation, payment history records, and any other records relating to or
evidencing the servicing of Mortgage Loans (the "Servicing Records"), and (ii)
such Borrower grants the Lender a security interest in all servicing fees and
rights relating to the Mortgage Loans and all Servicing Records to secure the
obligation of each Borrower or its designee to service in conformity with this
Section and any other obligation of the Borrowers to the Lender. The Borrowers
covenant to safeguard such Servicing Records and to deliver them promptly to the
Lender or its designee (including the Custodian) at the Lender's request.

                                      -40-
<PAGE>

            (c)   If the Mortgage Loans are serviced by a third party servicer
(such third party servicer, the "Servicer"), the Borrowers (i) shall provide a
copy of the servicing agreement to the Lender, which shall be in form and
substance acceptable to the Lender (the "Servicing Agreement"), and (ii) shall
provide a Servicer Notice to the Servicer substantially in the form of Exhibit H
hereto (a "Servicer Notice") and shall cause the Servicer to acknowledge and
agree to the same. Any successor or assignee of a Servicer shall be approved in
writing by the Lender and shall acknowledge and agree to a Servicer Notice prior
to such successor's assumption of servicing obligations with respect to the
Mortgage Loans.

            (d)   If the servicer of the Mortgage Loans is a Borrower or the
Servicer is an Affiliate of a Borrower, such Borrower shall provide to the
Lender a letter from the Borrower or the Servicer, as the case may be, to the
effect that upon the occurrence of an Event of Default, the Lender may terminate
any Servicing Agreement and in any event transfer servicing to the Lender's
designee, at no cost or expense to the Lender, it being agreed that the
Borrowers will pay any and all fees required to terminate the Servicing
Agreement and to effectuate the transfer of servicing to the designee of the
Lender.

            (e)   After the Funding Date, until the pledge of any Mortgage Loan
is relinquished by the Custodian, the Borrowers will have no right to modify or
alter the terms of such Mortgage Loan and the Borrowers will have no obligation
or right to repossess such Mortgage Loan or substitute another Mortgage Loan,
except as provided in the Custodial Agreement.

            (f)   In the event a Borrower or its Affiliate is servicing the
Mortgage Loans, such Borrower shall permit the Lender from time to time to
inspect such Borrower's or its Affiliate's servicing facilities, as the case may
be, for the purpose of satisfying the Lender that such Borrower or its
Affiliate, as the case may be, has the ability to service the Mortgage Loans as
provided in this Loan Agreement.

            11.15 Periodic Due Diligence Review. Each Borrower acknowledges that
the Lender has the right to perform continuing due diligence reviews with
respect to the Mortgage Loans, for purposes of verifying compliance with the
representations, warranties and specifications made hereunder, or otherwise,
each Borrower agrees that upon reasonable (but no less than one (1) Business
Day's) prior notice to the Borrowers, the Lender or its authorized
representatives will be permitted during normal business hours to examine,
inspect, and make copies and extracts of, the Mortgage Files and any and all
documents, records, agreements, instruments or information relating to such
Mortgage Loans in the possession or under the control of each Borrower and/or
the Custodian. The Borrowers also shall make available to the Lender a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Mortgage Files and the Mortgage Loans. Without limiting
the generality of the foregoing, each Borrower acknowledges that the Lender may
make Loans to the Borrowers based solely upon the information provided by the
Borrowers to the Lender in the Mortgage Loan Tape and the representations,
warranties and covenants contained herein, and that the Lender, at its option,
has the right at any time to conduct a partial or complete due diligence review
on some or all of the Mortgage Loans securing such Loan, including without
limitation ordering new credit reports and new appraisals on the related
Mortgaged Properties and otherwise re-generating the information used to
originate such Mortgage Loan. The Lender may underwrite such Mortgage Loans

                                      -41-
<PAGE>

itself or engage a mutually agreed upon third party underwriter to perform such
underwriting. Each Borrower agrees to cooperate with the Lender and any third
party underwriter in connection with such underwriting, including, but not
limited to, providing the Lender and any third party underwriter with access to
any and all documents, records, agreements, instruments or information relating
to such Mortgage Loans in the possession, or under the control, of the
Borrowers. Each Borrower further agrees that the Borrowers shall reimburse the
Lender for any and all out-of-pocket costs and expenses incurred by the Lender
in connection with the Lender's activities pursuant to this Section 11.15,
subject to the proviso of Section 11.03(b).

            11.16 Set-Off. In addition to any rights and remedies of the Lender
provided by this Loan Agreement and by law, the Lender shall have the right,
without prior notice to the Borrowers, any such notice being expressly waived by
the Borrowers to the extent permitted by applicable law, upon any amount
becoming due and payable by the Borrowers hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Lender or any
Affiliate thereof to or for the credit or the account of the Borrowers. The
Lender agrees promptly to notify the Borrowers after any such set-off and
application made by the Lender; provided that the failure to give such notice
shall not affect the validity of such set-off and application.

            11.17 Joint and Several Liability. Each Borrower hereby acknowledges
and agrees that such Borrower shall be jointly and severally liable to the
Lender to the maximum extent permitted by applicable law for all
representations, warranties, covenants, obligations and indemnities of the
Borrowers hereunder.

            11.18 Intent. The parties recognize that each Loan is a "securities
contract" as that term is defined in Section 741 of Title 11 of the United
States Code, as amended.

                            [SIGNATURE PAGE FOLLOWS]

                                      -42-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed and delivered as of the day and year first above
written.

                                       BORROWER
                                       --------

                                       AMERICAN HOME MORTGAGE CORP.

                                       By: /s/ Michael Strauss
                                          ------------------------------------
                                          Title: President

                                       Address for Notices:
                                       -------------------
                                       520 Broadhollow Road
                                       Melville, New York  11747
                                       Attention:  Michael Strauss
                                       Facsimile: (631) 777-3253
                                       Telephone: (516) 396-7700

                                       MARINA MORTGAGE COMPANY, INC.

                                       By: /s/ Michael Strauss
                                          ------------------------------------
                                          Name: Michael Strauss
                                          Title: President

                                       Address for Notices:
                                       -------------------
                                       520 Broadhollow Road
                                       Melville, New York  11747
                                       Attention:  Michael Strauss
                                       Facsimile: (631) 777-3253
                                       Telephone: (516) 396-7700

                                      -43-
<PAGE>

                                       LENDER
                                       ------

                                       MORGAN STANLEY DEAN WITTER
                                         MORTGAGE CAPITAL INC.

                                       By: /s/ Marc Flamino
                                          ------------------------------------
                                          Name: Marc Flamino
                                          Title: Vice President

                                       Address for Notices:
                                       -------------------

                                       1585 Broadway
                                       New York, New York 10036
                                       Attention:  Marc Flamino
                                       Telecopier No.:  212-761-0093
                                       Telephone No.:  212-761-4243

                                      -44-Exhibit 10.33

                             AMENDMENT NO. 5 TO THE
                       MASTER LOAN AND SECURITY AGREEMENT

            Amendment No. 5, dated as of June 29, 2001 (this "Amendment"), to
the Master Loan and Security Agreement, dated as of June 21, 2000 (the "Existing
Loan Agreement", as previously amended and as amended hereby, the "Loan
Agreement"), among American Home Mortgage Corp. and Marina Mortgage Company,
Inc. (each a "Borrower", collectively, the "Borrowers") and Morgan Stanley Dean
Witter Mortgage Capital Inc. (the "Lender").

                                    RECITALS

            The Borrowers and the Lender are parties to the Existing Loan
Agreement. Capitalized terms used but not otherwise defined herein shall have
the meanings given to them in the Existing Loan Agreement.

            The Borrowers and the Lender have agreed, subject to the terms and
conditions of this Amendment, that the Existing Loan Agreement be amended to
reflect certain agreed upon revisions to the terms of the Existing Loan
Agreement.

            Accordingly, the Borrowers and the Lender hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Loan Agreement is hereby amended as follows:

            SECTION 1.  Amendments.

            (a) Section 1.01 of the Existing Loan Agreement is hereby amended by
deleting the definition of "California Program Mortgage Loan" in its entirety
and substituting in lieu thereof the following new definition:

            "California Program Mortgage Loan" shall mean an Agency Eligible
            Mortgage Loan that is in strict compliance with the eligibility
            requirements for swap or purchase under a program sponsored by the
            State of California or such other program as the Lender shall
            approve in its sole discretion as set forth in the applicable Agency
            Guide and/or Agency Program."

            (b) Section 1.01 of the Existing Loan Agreement is hereby amended by
deleting the definition of "Collateral Value" and substituting in lieu thereof
the following new definition:

            "`Collateral Value' shall mean, with respect to each Eligible
      Mortgage Loan, the lesser of (a) the Applicable Collateral Percentage of
      the Market Value of such Mortgage loan, and (b) 100% of the outstanding
      principal balance of such Mortgage Loan; provided, that the following
      additional limitations shall apply:

<PAGE>

                  (i) The aggregate Collateral Value of all Alternate `A'
            Mortgage Loans included in the Borrowing base at any time shall not
            exceed 25% of the Maximum Credit at such time;

                  (ii) The aggregate Collateral value of all California Program
            Mortgage Loans included in the Borrowing Base at any time shall not
            exceed $20,000,000; and

                  (iii) Collateral value shall be deemed to be zero with respect
            to each Mortgage Loan:

                        (1) in respect of which there is a breach of a
                  representation and warranty set forth on Schedule 1 (assuming
                  each representation and warranty is made as of the date
                  Collateral value is determined),

                        (2) in respect of which there is a delinquency in the
                  payment of principal and/or interest which continues for a
                  period in excess of 30 days (without regard to applicable
                  grace periods),

                        (3) which remains pledged to the Lender hereunder later
                  than 180 days after the date on which it is first included in
                  the Collateral,

                        (4) which has been released from the possession of the
                  Custodian under the Custodial Agreement for a period in excess
                  of 18 days, or

                        (5)   which exceeds the limitation on Collateral value
                  set forth in (i) and (ii) above.

            (c) Section 1.01 of the Existing Loan Agreement is hereby amended by
deleting the definition of "Termination Date" in its entirety and substituting
in lieu thereof the following new definition:

            "`Termination Date' shall mean June 21, 2002 or such earlier date on
      which this Loan Agreement shall terminate in accordance with the
      provisions hereof or by operation of law."

            (d) Section 2.06(b) of the Existing Loan Agreement is hereby amended
by inserting the phrase "via facsimile or electronic mail" immediately following
the word "deliver" in the second sentence thereof.

            (e) Section 7.01 of the Existing Loan Agreement is hereby amended by
(i) relettering clauses "(a)", "(b)", "(c)" and "(d)" to "(b)", "(c)", "(d)" and
"(e)" and (ii) inserting the following new clause (a):

            "(a) as soon as available, and in any event not later than 45 days
      after the end of each calendar month, the unaudited balance sheet of the
      Borrowers as at the end of such month and the related unaudited statement

<PAGE>

      of income of the Borrowers for such month and the portion of the fiscal
      year through the end of such month;"

            (f) Part I of Schedule 1 to the Existing Loan Agreement is hereby
amended by deleting clause (o) in its entirety and substituting in lieu thereof
the following new clause (o):

            "(o) LTV. No Mortgage loan (other than an Alternate `A' Mortgage
      Loan, Agency Eligible Mortgage Loan, California Program Mortgage Loan,
      Conduit Eligible Mortgage Loan or Jumbo Mortgage Loan) has an LTV greater
      than 80%. No Alternate `A' Mortgage Loan has an LTV greater than 90%. No
      Agency Eligible Mortgage Loan (other than California Program Mortgage
      Loans) has an LTV greater than 97%, no California Program Mortgage Loan
      has an LTV greater than 100% and no Conduit Eligible Mortgage Loan has an
      LTV greater than 90%; provided, that with respect to each Agency Eligible
      Mortgage Loan and each California Program Mortgage Loan with an LTV
      greater than 80% the excess over 80% is and will be insured as to payment
      defaults by a PMI Policy until the LTV of such Mortgage Loan is reduced to
      80%. With respect to each Jumbo Mortgage Loan with an LTV greater than
      80%, the excess over 80% is and will be insured as to payment defaults by
      a PMI Policy until the LTV of such Mortgage Loan is reduced to 80%."

            (g) Part I of Schedule 1 to the Existing Loan Agreement is hereby
amended by deleting clause (qq) in its entirety and substituting in lieu thereof
the following new clause (qq):

            "(qq) Withdrawn Mortgage Loans. If the Mortgage Loan has been
      released to any Borrower pursuant to a Request for Release as permitted
      under Section 5 of the Custodial Agreement, then the promissory note
      relating to the Mortgage Loan was returned to the Custodian within 18 days
      (or if such eighteenth day was not a Business Day, the next succeeding
      Business Day)."

            SECTION 2. Amendment Fee. The Borrowers shall pay, jointly and
severally, to the Lender on or prior to the Amendment Effective Date (as defined
below) an amendment fee in the amount of $112,500 (the "Amendment Fee"); such
payment to be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim, to the Lender at the account set forth in
Section 3.01(a) of the Loan Agreement.

            SECTION 3. Conditions Precedent. This Amendment shall become
effective on the date (the "Amendment Effective Date") on which the following
conditions precedent shall have been satisfied:

            3.1 Delivered Documents. On the Amendment Effective Date, the Lender
shall have received the following documents, each of which shall be satisfactory
to the Lender in form and substance:

            (a) Amendment. This Amendment, executed and delivered by a duly
authorized officer of each Borrower and the Lender;

<PAGE>

            (b) Legal Opinion. A legal opinion of counsel to the Borrowers in
form and substance satisfactory to the Lender;

            (c) Organizational Documents. Certified copies of the charter and
by-laws (or equivalent documents) of each Borrower or a certificate of each
Borrower certifying that there has been no change to any organizational document
previously delivered to the Lender and certified copies of all resolutions
authorizing the execution, delivery and performance of the Loan Documents by
each Borrower;

            (d) Incumbency Certificates. A certificate of each Borrower, dated
the date hereof, as to the incumbency and signature of the officers of such
Borrower executing any Loan Document satisfactory in form and substance to the
Lender;

            (e) Lien Searches. The results of a recent search of the Uniform
Commercial Code, judgment and tax lien filings which may have been filed with
respect to personal property of each Borrower, which results shall be
satisfactory to the Lender; and

            (f) Other Documents. Such other documents as the Lender or counsel
to the Lender may reasonably request.

            3.2 No Default. On the Amendment Effective Date, (i) the Borrowers
shall be in compliance with all the terms and provisions set forth in the
Existing Loan Agreement on its part to be observed or performed, (ii) the
representations and warranties made and restated by the Borrowers pursuant to
Section 3 of this Amendment shall be true and complete on and as of such date
with the same force and effect as if made on and as of such date, and (ii) no
Default or Event of Default shall have occurred and be continuing on such date.

<PAGE>

            SECTION 4. Representations and Warranties. Each Borrower hereby
represents and warrants to the Lender that it is in compliance with all the
terms and provisions set forth in the Loan Documents on its part to be observed
or performed, and that no Default or Event of Default has occurred or is
continuing, and hereby confirms and reaffirms the representations and warranties
contained in Section 6 of the Existing Loan Agreement.

            SECTION 5. Limited Effect. Except as expressly amended and modified
by this Amendment, the Existing Loan Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms; provided,
however, that reference therein and herein to the "Loan Documents" shall be
deemed to include, in any event, (i) the Existing Loan Agreement, (ii) the
Amendment to the Master Loan and Security Agreement, dated as of August 21,
2000, (iii) Amendment No. 2 to the Master Loan and Security Agreement, dated as
of September 15, 2000, (iv) Amendment No. 3 to the Master Loan and Security
Agreement, dated as of June 22, 2001, (v) Amendment No. 4 to the Master Loan and
Security Agreement, dated as of June 26, 2001, (vi) the Note, (vii) the
Custodial Agreement and (viii) the Parent Guarantee. Each reference to the Loan
Agreement in any of the Loan Documents shall be deemed to be a reference to the
Loan Agreement as amended hereby.

            SECTION 6. Counterparts. This Amendment may be executed by each of
the parties hereto on any number of separate counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same
instrument.

            SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO THE CHOICE OF LAW PROVISIONS THEREOF.

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.

                                       BORROWER
                                       --------

                                       AMERICAN HOME MORTGAGE CORP.

                                       By: /s/ Richard Silver
                                          ----------------------------
                                          Name: Richard Silver
                                          Title: Senior Vice President

                                       MARINA MORTGAGE COMPANY, INC.

                                       By: /s/ Richard Silver
                                          ----------------------------
                                          Name: Richard Silver
                                          Title: Senior Vice President

<PAGE>

                                       LENDER
                                       ------

                                       MORGAN STANLEY DEAN WITTER
                                       MORTGAGE CAPITAL INC.

                                       By: /s/ Marc Flamino
                                          --------------------------
                                          Name: Marc Flamino
                                          Title: Vice President

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