EQCC HOME EQUITY LOAN TRUST 1998-2
8-K, 1998-10-01
ASSET-BACKED SECURITIES
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934



Date of Report:  September 30, 1998
(Date of earliest event reported)

Commission File No. 333-48053



                          EQCC Receivables Corporation
                          EQCC Asset Backed Corporation


                                                       59-3170055
       Delaware                                        59-3170052
- --------------------------------------------------------------------------------
(State of Incorporation)                    (I.R.S. Employer Identification No.)


10401 Deerwood Park Boulevard
Jacksonville, Florida                                  32256
- --------------------------------------------------------------------------------
Address of principal executive offices                 (Zip Code)


                                 (904) 987-5000
- --------------------------------------------------------------------------------
               Registrant's Telephone Number, including area code


- --------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


<PAGE>


Item 5.  Other Events

     On June 30,  1998,  EQCC  Receivables  Corporation  and EQCC  Asset  Backed
Corporation (collectively,  the "Registrant"),  sold EQCC Home Equity Loan Asset
Backed  Certificates,  Series 1998-2,  Class A-1F, Class A-2F, Class A-3F, Class
A-4F, Class A-5F, Class A-6F and Class A-7F (the "Offered Certificates"), having
an  aggregate  original  principal  balance  of  $753,082,344.00.   The  Offered
Certificates were issued pursuant to a Pooling and Servicing Agreement, dated as
of June 1, 1998,  among the Registrant,  Equicredit  Corporation of America,  as
representative and servicer (the "Servicer") and U.S. Bank National Association,
as trustee  (the  "Agreement"),  a copy of which is filed as an exhibit  hereto.
EQCC Home Equity Loan Asset Backed Certificates, Series 1998-2, Class X, Class R
and Class LR Certificates  (the "Private  Certificates"  and,  together with the
Offered  Certificates,  the  "Certificates"),  were also issued  pursuant to the
Agreement.

     The Servicer  obtained from Ambac  Assurance  Corporation  (the "Insurer) a
securities  guaranty  surety bond in favor of the Trustee for the benefit of the
Certificateholders  of  the  Offered  Certificates  (the  "Securities  Insurance
Policy").

     As of the date of initial issuance,  the Offered Certificates  evidenced an
interest in a trust fund (the "Trust  Estate"),  consisting  primarily  of (i) a
pool of  fixed-rate,  mortgage  loans,  secured by mortgages,  deeds of trust or
other  instruments  creating  a first  or  second  lien  on one- to  four-family
dwellings,  (ii) all  monies  received  on the  Mortgage  Loans on and after the
Cut-Off  Date  (other  than the  Representative's  Yield,  as  described  in the
Agreement),  (iii)  the  Securities  Insurance  Policy  and (iv)  certain  other
property. The remaining undivided interests in the Trust Estate are evidenced by
the Class X, Class R and Class LR Certificates.

     Interest on the Offered  Certificates  will be  distributed on each Payment
Date (as defined in the Agreement).  Monthly  distributions  in reduction of the
principal  balance of the Offered  Certificates will be allocated to the Offered
Certificates in accordance with the priorities set forth in the Agreement.

     Elections  will be made to treat  certain  assets in the Trust  Fund as two
REMICs for federal income tax purposes (the  "Upper-Tier  REMIC" and "Lower-Tier
REMIC,"  respectively).  The Class A and Class X Certificates will be treated as
"regular  interests"  in the  Upper-Tier  REMIC and the  Class R and Class  A-LR
Certificates will be treated as the "residual interests" in the Upper-Tier REMIC
and Lower-Tier REMIC, respectively.


<PAGE>


Item 7.  Financial Statements and Exhibits

Item 601(a)
of Regulation S-K
Exhibit No.                             Description
- -----------                             -----------

(EX-4)                                  Pooling and Servicing  Agreement,  dated
                                        as  of  June   1,   1998,   among   EQCC
                                        Receivables  Corporation  and EQCC Asset
                                        Backed      Corporation,      Equicredit
                                        Corporation  of  America  and U.S.  Bank
                                        National Association, as trustee.

(EX-99.1)                               Securities  Guaranty  Surety Bond issued
                                        by Ambac Assurance Corporation


<PAGE>


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrants  have duly caused  this  report to be signed on their  behalf by the
undersigned hereunto duly authorized.

                                        EQCC RECEIVABLES CORPORATION


September 30, 1998

                                        By:    /s/ Lenore Hanapel
                                           -----------------------------
                                        Name:      Lenore Hanapel
                                        Title:     Senior Vice President



                                        EQCC ASSET BACKED CORPORATION


September 30, 1998

                                        By:    /s/ Lenore Hanapel
                                             ---------------------------
                                        Name:      Lenore Hanapel
                                        Title:     Senior Vice President


<PAGE>


                                INDEX TO EXHIBITS
                                -----------------



                                                                 Paper (P) or
Exhibit No.                         Description                  Electronic (E)
- -----------                         -----------                  --------------

(EX-4)                     Pooling and Servicing Agreement,              E
                           dated as of June 1, 1998,
                           among EQCC Receivables Corporation
                           and EQCC Asset Backed Corporation,
                           Equicredit Corporation of America and
                           U.S. Bank National Association, as trustee.

(EX-99.1)                  Securities Guaranty Surety Bond issued by     E
                           Ambac Assurance Corporation




EX-4

================================================================================



                         POOLING AND SERVICING AGREEMENT
                            Dated as of June 1, 1998
                          EQCC RECEIVABLES CORPORATION
                          EQCC ASSET BACKED CORPORATION
                                  (Depositors)


                                       and


                        EQUICREDIT CORPORATION OF AMERICA
                          (Representative and Servicer)


                                       and


                         U.S. BANK NATIONAL ASSOCIATION
                                    (Trustee)



                EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
                                  Series 1998-2



================================================================================


<PAGE>


                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

                                    ARTICLE I

                                   DEFINITIONS

      Account ..................................................................
      Accrual Period ...........................................................
      Act ......................................................................
      Actual Loss Severity .....................................................
      Advance ..................................................................
      Affiliate ................................................................
      Agreement ................................................................
      Assignment of Beneficial Interest ........................................
      Assignment of Mortgage ...................................................
      Authorized Denominations .................................................
      Available Payment Amount .................................................
      Bankruptcy Loan ..........................................................
      Base Spread Account Requirement ..........................................
      Basic Documents ..........................................................
      Basic Principal Amount ...................................................
      Book-Entry Certificates ..................................................
      Business Day .............................................................
      Carry-Forward Amount .....................................................
      Certificate ..............................................................
      Certificate Custodian ....................................................
      Certificate Depository Agreement .........................................
      Certificate Insurance Policy .............................................
      Certificate Insurer ......................................................
      Certificate Owner ........................................................
      Certificate Register .....................................................
      Certificateholder or Holder ..............................................
      Class ....................................................................
      Class A Certificateholder ................................................
      Class A Certificates .....................................................
      Class A Interest Remittance Amount .......................................
      Class A Principal Balance ................................................
      Class A Principal Remittance Amount ......................................
      Class A Remittance Amount ................................................
      Class A-1F Certificate ...................................................
      Class A-1F Pass-Through Rate .............................................
      Class A-1F Principal Balance .............................................
      Class A-2F Certificate ...................................................
      Class A-2F Pass-Through Rate .............................................


<PAGE>


      Class A-2F Principal Balance .............................................
      Class A-3F Certificate ...................................................
      Class A-3F Pass-Through Rate .............................................
      Class A-3F Principal Balance .............................................
      Class A-4F Certificate ...................................................
      Class A-4F Pass-Through Rate .............................................
      Class A-4F Principal Balance .............................................
      Class A-5F Certificate ...................................................
      Class A-5F Pass-Through Rate .............................................
      Class A-5F Principal Balance .............................................
      Class A-6F Certificate ...................................................
      Class A-6F Pass-Through Rate .............................................
      Class A-6F Principal Balance .............................................
      Class A-7F Certificate ...................................................
      Class A-7F Pass-Through Rate .............................................
      Class A-7F Principal Balance .............................................
      Class A Principal Balance ................................................
      Class LR Certificate .....................................................
      Class LR Certificateholder ...............................................
      Class LT1 Interest .......................................................
      Class LT2 Interest .......................................................
      Class LT3 Interest .......................................................
      Class LT4 Interest .......................................................
      Class LT5 Interest .......................................................
      Class LT6 Interest .......................................................
      Class LT7 Interest .......................................................
      Class R Certificate ......................................................
      Class R Certificateholder ................................................
      Class X Certificate ......................................................
      Class X Certificateholder ................................................
      Class X Interest .........................................................
      Closing Date .............................................................
      Code .....................................................................
      Collection Account .......................................................
      Combined Loan-To-Value Ratio or CLTV .....................................
      Commission ...............................................................
      Component X-1F Distribution Amount .......................................
      Component X-1F Notional Balance ..........................................
      Component X-2F Distribution Amount .......................................
      Component X-2F Notional Balance ..........................................
      Component X-3F Distribution Amount .......................................
      Component X-3F Notional Balance ..........................................
      Component X-4F Distribution Amount .......................................
      Component X-4F Notional Balance ..........................................
      Component X-5F Distribution Amount .......................................


<PAGE>


      Component X-5F Notional Balance ..........................................
      Component X-6F Distribution Amount .......................................
      Component X-6F Notional Balance ..........................................
      Component X-7F Distribution Amount .......................................
      Component X-7F Notional Balance ..........................................
      Corporate Trust Office ...................................................
      Cross-over Date ..........................................................
      Cumulative Excess Spread Receipts ........................................
      Cumulative Losses ........................................................
      Current CLTV .............................................................
      Curtailment ..............................................................
      Custodial Agreement ......................................................
      Custodian ................................................................
      Cut-off Date .............................................................
      Default ..................................................................
      Definitive Certificates ..................................................
      Deleted Mortgage Loan ....................................................
      Depositor ................................................................
      Depository ...............................................................
      Depository Participant ...................................................
      Destroyed Mortgage Note ..................................................
      Destroyed Mortgage Note Affidavit ........................................
      Determination Date .......................................................
      Disqualified Non-U.S. Person .............................................
      Disqualified Organization ................................................
      Due Date .................................................................
      Due Period ...............................................................
      Eligible Account .........................................................
      Event of Nonpayment ......................................................
      Excess Proceeds ..........................................................
      Excess Spread ............................................................
      Exchange Act .............................................................
      FDIC .....................................................................
      FHLMC ....................................................................
      Fidelity Bond ............................................................
      Final Scheduled Payment Date .............................................
      First Lien ...............................................................
      FNMA .....................................................................
      Holder ...................................................................
      Illinois Land Trust ......................................................
      Independent ..............................................................
      Up-Front Servicer Distribution Amount ....................................
      Insurance Account ........................................................
      Insurance Proceeds .......................................................
      Insured Payment ..........................................................


<PAGE>


      Latest Maturity Date .....................................................
      Lien .....................................................................
      Liquidated Mortgage Loan .................................................
      Liquidation Proceeds .....................................................
      Lockout Percentage .......................................................
      Lockout Pro Rata Remittance Amount .......................................
      Lockout Remittance Amount ................................................
      Loss Coverage Ratio ......................................................
      Loss Coverage Requirement ................................................
      Loss Trigger Date ........................................................
      Lower-Tier Distribution Account ..........................................
      Lower-Tier Regular Interests .............................................
      Lower-Tier REMIC .........................................................
      Majority in Aggregate Voting Interest ....................................
      Monthly Excess Spread Amount .............................................
      Monthly Payment ..........................................................
      Monthly Premium ..........................................................
      Moody's ..................................................................
      Mortgage .................................................................
      Mortgage File ............................................................
      Mortgage Impairment Insurance Policy .....................................
      Mortgage Interest Rate ...................................................
      Mortgage Loan ............................................................
      Mortgage Loan Losses .....................................................
      Mortgage Loan Schedule ...................................................
      Mortgage Note ............................................................
      Mortgage Pool ............................................................
      Mortgaged Property .......................................................
      Mortgaged Property State .................................................
      Mortgagor ................................................................
      Net Weighted Average Mortgage Interest Rate ..............................
      Net Liquidation Proceeds .................................................
      Nondisqualification Opinion ..............................................
      Nonrecoverable Advances ..................................................
      Non-United States Person .................................................
      Officer's Certificate ....................................................
      Opinion of Counsel .......................................................
      Optional Purchase Date ...................................................
      Original Class A-1F Principal Balance ....................................
      Original Class A-2F Principal Balance ....................................
      Original Class A-3F Principal Balance ....................................
      Original Class A-4F Principal Balance ....................................
      Original Class A-5F Principal Balance ....................................
      Original Class A-6F Principal Balance ....................................
      Original Class A-7F Principal Balance ....................................


<PAGE>


      Original Pool Principal Balance ..........................................
      Original Loss Severity ...................................................
      Originator ...............................................................
      Owner-Occupied Mortgaged Property ........................................
      Ownership Interest .......................................................
      Pass-Through Rate ........................................................
      Payment Date .............................................................
      Percentage Interest ......................................................
      Performance Default ......................................................
      Permitted Instruments ....................................................
      Permitted Transferee .....................................................
      Person ...................................................................
      Plan .....................................................................
      Pool Factor ..............................................................
      Pool Principal Balance ...................................................
      Pre-Plan Interest ........................................................
      Pre-Plan Interest Payments ...............................................
      Principal and Interest Account ...........................................
      Principal Balance ........................................................
      Principal Prepayment .....................................................
      Proceeding ...............................................................
      Projected Excess Spread ..................................................
      Prospectus ...............................................................
      Qualified Substitute Mortgage Loan .......................................
      Rating Agencies ..........................................................
      Reassignment of Assignment of Beneficial Interest ........................
      Record Date ..............................................................
      Recordation Trigger ......................................................
      Registered Holder ........................................................
      Regular Interests ........................................................
      Reimbursable Amounts .....................................................
      Released Mortgaged Property Proceeds .....................................
      Remainder Excess Spread Amount ...........................................
      REMIC ....................................................................
      REMIC Provisions .........................................................
      REMIC Reporting Agent ....................................................
      Remittance Report ........................................................
      REO Disposition ..........................................................
      REO Property .............................................................
      Representative ...........................................................
      Representative's Yield ...................................................
      Residential Dwelling .....................................................
      Residual Certificate .....................................................
      Responsible Officer ......................................................
      Series ...................................................................


<PAGE>


      Servicer .................................................................
      Servicer Default .........................................................
      Servicer Employees .......................................................
      Servicing Advances .......................................................
      Servicing Compensation ...................................................
      Servicing Fee ............................................................
      Servicing Officer ........................................................
      Specified Spread Account Requirement .....................................
      Spread Account ...........................................................
      Spread Account Amount ....................................................
      Spread Account Excess ....................................................
      S&P ......................................................................
      Startup Day ..............................................................
      Subordinated Amount ......................................................
      Subservicer ..............................................................
      Subservicing Agreement ...................................................
      Substitution Adjustment ..................................................
      Tax Matters Person .......................................................
      Termination Price ........................................................
      Transfer .................................................................
      Transfer Agreement .......................................................
      Transfer Affidavit and Agreement .........................................
      Transferee ...............................................................
      Transferor ...............................................................
      Trust ....................................................................
      Trust Fund ...............................................................
      Trustee ..................................................................
      Trust REMIC ..............................................................
      UCC ......................................................................
      United States Person .....................................................
      Upper-Tier Distribution Account ..........................................
      Upper-Tier Regular Interests .............................................
      Upper-Tier REMIC .........................................................
      Voting Interest ..........................................................
      Weighted Average Mortgage Interest Rate ..................................

                                   ARTICLE II

                         CONVEYANCE OF THE TRUST ASSETS

      Section 2.01  Sale and Conveyance of Trust Assets; Priority
                       and Subordination of Ownership Interests ................
      Section 2.02  Possession of Mortgage Files ...............................
      Section 2.03  Books and Records ..........................................
      Section 2.04  Delivery of Mortgage Loan Documents ........................


<PAGE>


      Section 2.05  [Reserved] .................................................
      Section 2.06  Acceptance by Trustee of the Trust Fund;
                       Certain Substitutions; Certification by Trustee .........
      Section 2.07  REMIC Administration .......................................
      Section 2.08  Execution of Certificates ..................................
      Section 2.09  Application of Principal and Interest ......................

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      Section 3.01  Representations of the Servicer and the Depositors .........
      Section 3.02  Assignment of Transfer Agreement;
                       Representations and Warranties as to the
                       Individual Mortgage Loans and the Mortgage Pool .........
      Section 3.03  Purchase and Substitution ..................................

                                   ARTICLE IV

                                THE CERTIFICATES

      Section 4.01  The Certificates ...........................................
      Section 4.02  Registration of Transfer and Exchange of Certificates ......
      Section 4.03  Mutilated, Destroyed, Lost or Stolen Certificates ..........
      Section 4.04  Persons Deemed Owners ......................................

                                    ARTICLE V

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

      Section 5.01  Duties of the Servicer .....................................
      Section 5.02  Liquidation of Mortgage Loans ..............................
      Section 5.03  Establishment of Principal and Interest Accounts;
                       Deposits in Principal and Interest Accounts .............
      Section 5.04  Permitted Withdrawals from the Principal
                       and Interest Account ....................................
      Section 5.05  Payment of Taxes, Insurance and Other Charges ..............
      Section 5.06  Transfer of Accounts; Monthly Statements ...................
      Section 5.07  Maintenance of Hazard Insurance ............................
      Section 5.08  Maintenance of Mortgage Impairment Insurance Policy ........
      Section 5.09  Fidelity Bond ..............................................
      Section 5.10  Title, Management and Disposition of REO Property ..........
      Section 5.11  Collection of Certain Mortgage Loan Payments ...............
      Section 5.12  Access to Certain Documentation and
                       Information Regarding the Mortgage Loans ................
      Section 5.13  Superior Liens .............................................


<PAGE>


                                   ARTICLE VI

                       PAYMENTS TO THE CERTIFICATEHOLDERS

      Section 6.01  Establishment of Lower-Tier Distribution
                       Account and Upper-Tier Distribution Account;
                       Deposit in Accounts .....................................
      Section 6.02  Permitted Withdrawals from Lower-Tier
                       Distribution Account and Upper-Tier
                       Distribution Account ....................................
      Section 6.03  Establishment of Insurance Account:
                       Deposits in Insurance Account: Permitted
                       Withdrawals from Insurance Account ......................
      Section 6.04  Investment of Accounts .....................................
      Section 6.05  Priority and Subordination of Distributions ................
      Section 6.06  Certificate Insurer Default ................................
      Section 6.07  Statements .................................................
      Section 6.08  Advances by the Servicer ...................................
      Section 6.09  Establishment of Spread Account;
                       Deposits in Spread Account; Permitted
                       Withdrawals from Spread Account .........................

                                   ARTICLE VII

                          GENERAL SERVICING PROCEDURES

      Section 7.01  Assumption Agreements ......................................
      Section 7.02  Satisfaction of Mortgages
                       and Release of Mortgage Files ...........................
      Section 7.03  Servicing Compensation .....................................
      Section 7.04  Annual Statement as to Compliance ..........................
      Section 7.05  Annual Independent Public Accountants' Servicing Report ....
      Section 7.06  Right to Examine Servicer Records ..........................
      Section 7.07  Reports to the Trustee;
                       Principal and Interest Account Statements ...............

                                  ARTICLE VIII

                       REPORTS TO BE PROVIDED BY SERVICER

      Section 8.01  Financial Statements .......................................

                                   ARTICLE IX

                                  THE SERVICER

      Section 9.01  Indemnification; Third Party Claims ........................
      Section 9.02  Merger or Consolidation of the Servicer ....................
      Section 9.03  Limitation on Liability of the Servicer and Others .........
      Section 9.04  Servicer Not to Resign .....................................
      Section 9.05  Removal of Servicer ........................................


<PAGE>


                                    ARTICLE X

                                SERVICER DEFAULT

      Section 10.01  Servicer Default ..........................................
      Section 10.02  Trustee to Act; Appointment of Successor Servicer .........
      Section 10.03  Waiver of Defaults ........................................
      Section 10.04  Control by Majority in Aggregate Voting Interest ..........

                                   ARTICLE XI

                                   TERMINATION

      Section 11.01  Termination ...............................................
      Section 11.02  Additional Termination Requirements .......................
      Section 11.03  Accounting Upon Termination of Servicer ...................
      Section 11.04  Representative's Right to
                        Representative's Yield Absolute ........................
      Section 11.05  Termination Upon Loss of REMIC Status .....................

                                   ARTICLE XII

                                   THE TRUSTEE

      Section 12.01  Duties of Trustee .........................................
      Section 12.02  Certain Matters Affecting the Trustee .....................
      Section 12.03  Trustee Not Liable for Certificates or Mortgage Loans .....
      Section 12.04  Trustee May Own Certificates ..............................
      Section 12.05  Servicer to Pay Trustee's Fees and Expenses ...............
      Section 12.06  Eligibility Requirements for Trustee ......................
      Section 12.07  Resignation and Removal of the Trustee ....................
      Section 12.08  Successor Trustee .........................................
      Section 12.09  Merger or Consolidation of Trustee ........................
      Section 12.10  Appointment of Co-Trustee or Separate Trustee .............
      Section 12.11  Appointment of Custodians .................................
      Section 12.12  Protection of Trust Fund ..................................

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

      Section 13.01  The Certificate Insurer ...................................
      Section 13.02  Amendment .................................................
      Section 13.03  Recordation of Agreement ..................................
      Section 13.04  Duration of Agreement .....................................
      Section 13.05  Governing Law .............................................
      Section 13.06  Notices ...................................................


<PAGE>


      Section 13.07  Severability of Provisions ................................
      Section 13.08  No Partnership ............................................
      Section 13.09  Counterparts ..............................................
      Section 13.10  Successors and Assigns ....................................
      Section 13.11  Headings ..................................................
      Section 13.12  Limitation of Liability of Trustee ........................
      Section 13.13  Limitations on Rights of Others ...........................
      Section 13.14  No Petition ...............................................
      Section 13.15  Third Party Beneficiary ...................................


<PAGE>


                                    EXHIBITS
                                    --------


EXHIBIT A              -     Contents of Mortgage File
EXHIBIT B-1            -     Form of Class A-1F Certificate
EXHIBIT B-2            -     Form of Class A-2F Certificate
EXHIBIT B-3            -     Form of Class A-3F Certificate
EXHIBIT B-4            -     Form of Class A-4F Certificate
EXHIBIT B-5            -     Form of Class A-5F Certificate
EXHIBIT B-6            -     Form of Class A-6F Certificate
EXHIBIT B-7            -     Form of Class A-7F Certificate
EXHIBIT B-8            -     Form of Class X Certificate
EXHIBIT B-9            -     Form of Class R Certificate
EXHIBIT B-10           -     Form of Class LR Certificate
EXHIBIT B-11           -     Form of Reverse of Certificate
EXHIBIT C              -     [Reserved]
EXHIBIT D              -     Mortgage Loan Schedule
EXHIBIT E              -     Form of Trustee Initial Certification
EXHIBIT F-1            -     Form of Trustee Interim Certification
EXHIBIT F-2            -     Form of Trustee Final Certification
EXHIBIT G              -     List of Bankruptcy Loans
EXHIBIT H              -     Form of Delinquency Report
EXHIBIT I              -     Certificate Insurance Policy
EXHIBIT J              -     Form of Transferor Certificate
EXHIBIT K              -     List of Originators
EXHIBIT L              -     [Reserved]
EXHIBIT M-1            -     Form of Transfer Affidavit and Agreement
EXHIBIT M-2            -     Form of Investor Representation Letter
EXHIBIT M-3            -     Form of Transferor Representation Letter
EXHIBIT M-4            -     Form of Rule 144A Investment Representation
EXHIBIT N              -     Form of Custodial Agreement
EXHIBIT O              -     Form of Liquidation Report
EXHIBIT P              -     Principal and Interest Account Letter Agreement
EXHIBIT Q              -     Form of Notice of Event of Nonpayment
EXHIBIT R              -     Monthly Information Delivered by Servicer
EXHIBIT S              -     List of Delinquent Loans
EXHIBIT T              -     Schedule of Mortgage Loans subject to the
                             Home Ownership and Equity Protection Act of 1994
EXHIBIT U              -     Destroyed Mortgage Note Affidavit
EXHIBIT V              -     Schedule of Mortgage Loans that do not have
                             Title Insurance Policies


<PAGE>


                         POOLING AND SERVICING AGREEMENT

     This  Pooling  and  Servicing  Agreement,  dated  as of June 1,  1998  (the
"Agreement"),   is  by  and  among   EQUICREDIT   CORPORATION  OF  AMERICA,   as
representative  (the  "Representative")  and as servicer (the "Servicer"),  EQCC
RECEIVABLES  CORPORATION and EQCC ASSET BACKED  CORPORATION  (collectively,  the
"Depositors") and U.S. BANK NATIONAL ASSOCIATION, as trustee (the "Trustee"):

                              PRELIMINARY STATEMENT

     In order to transfer  certain  Mortgage  Loans from the  Depositors  to the
Trustee for the benefit of the  Certificateholders  and the Certificate Insurer,
as their  interests  may appear,  and to  facilitate  the  servicing  of certain
Mortgage  Loans  by the  Servicer,  the  Representative,  the  Servicer  and the
Depositors are entering into this Agreement with the Trustee. The Depositors are
transferring  the  Mortgage  Loans  to  the  Trustee  for  the  benefit  of  the
Certificateholders  and the Certificate  Insurer, as their interests may appear,
under this Agreement,  pursuant to which ten classes of  Certificates  are being
issued,  denominated  on the face  thereof as EQCC Home Equity Loan Asset Backed
Certificates,  Series 1998-2,  Class A-1F,  Class A-2F,  Class A-3F, Class A-4F,
Class A-5F, Class A-6F, Class A-7F, Class X, Class R and Class LR, respectively,
representing  in the aggregate a 100%  ownership  interest in the Mortgage Loans
and all payments and other collections thereon received on or after June 1, 1998
(the  "Cut-off  Date")  (exclusive  of the  Representative's  Yield and  amounts
received  after the  Cut-off  Date in respect of interest  accrued  prior to the
Cut-off  Date).  As of the Cut-off  Date,  the Mortgage  Loans have an aggregate
outstanding  principal balance of $753,082,344.39  after application of payments
received by the Depositors on or before such date.

     As provided  herein,  the Trustee will make an election to treat the assets
of the Trust  Fund other than the  Spread  Account  as two  separate  REMICs (as
defined  herein) for federal income tax purposes.  The Class A Certificates  and
the Class X Interest represent all of the "regular  interests" in the Upper-Tier
REMIC  and the  Class R  Certificates  represent  the sole  class  of  "residual
interest"  in the  Upper-Tier  REMIC for purposes of the REMIC  Provisions.  The
Class LR  Certificates  represent  the sole class of "residual  interest" in the
Lower-Tier  REMIC for  purposes  of the REMIC  Provisions.  There are also seven
classes  of  uncertificated  Lower-Tier  Regular  Interests  issued  under  this
Agreement  (the Class LT1, Class LT2, Class LT3, Class LT4, Class LT5, Class LT6
and Class LT7 Interests), each of which will constitute regular interests in the
Lower-Tier REMIC. The Lower-Tier Regular Interests will be held as assets of the
Upper-Tier REMIC.

     The following table sets forth the designation,  type,  aggregate  Original
Principal   Balance  and  Final  Scheduled   Payment  Date  for  each  Class  of
Certificates comprising the interests in the Trust Fund.


<PAGE>


                              Aggregate Original       Final Scheduled
Designation        Type       Principal Balance          Payment Date
- -----------        ----       -----------------          ------------

Class A-1F        Senior         $286,685,000          April 15, 2008
Class A-2F        Senior          $22,350,000          October 15, 2008
Class A-3F        Senior         $191,650,000          March 15, 2013
Class A-4F        Senior          $70,250,000          January 15, 2022
Class A-5F        Senior          $69,147,344          July 15, 2029
Class A-6F        Senior          $58,600,000          April 15, 2008
Class A-7F        Senior          $54,400,000          April 15, 2008
Class X           Subordinate         N/A              July 15, 2029
Class R           Residual            N/A              July 15, 2029
Class LR          Residual            N/A              July 15, 2029
- ---------------

     Unless  otherwise  noted,  references in this  Agreement to  percentages of
Mortgage Loans refer in each case to the  percentage of the aggregate  principal
balance of the Mortgage Loans as of the Cut-off Date,  based on the  outstanding
principal  balances of the  Mortgage  Loans as of the Cut-off  Date,  and giving
effect to principal payments received prior to the Cut-off Date.

     The parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     Whenever used herein,  the following words and phrases,  unless the context
otherwise requires, shall have the following meanings.

     Account:  The Principal and Interest Account,  the Collection Account,  the
Spread Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account or the Insurance Account.

     Accrual  Period:  With  respect to each Payment  Date,  the period from and
including the first day of the immediately preceding calendar month,  commencing
June 1, 1998, to and including  the last day of the calendar  month  immediately
preceding the month in which such Payment Date occurs.

     Act: As defined in Section 4.02.

     Actual  Loss  Severity:  With  respect to any  Payment  Date,  a  fraction,
expressed  as a  percentage,  (a) the  numerator  of which equals the sum of all
Mortgage Loan Losses  incurred with respect to Liquidated  Mortgage  Loans as of
the last day of the immediately preceding calendar month and (b) the denominator
of which equals the sum as of such Payment


<PAGE>


Date of the Principal  Balances of all Liquidated  Mortgage Loans, the amount of
such Principal  Balances to be determined in each case as of the last day of the
calendar  month  immediately  preceding  the month in which such  Mortgage  Loan
became a Liquidated Mortgage Loan.

     Advance: An advance made by the Servicer pursuant to Section 6.08 hereof.

     Affiliate:   With  respect  to  any  specified  Person,  any  other  Person
controlling,  controlled by or under common control with such specified  Person.
For the  purposes of this  definition,  "control"  when used with respect to any
specified  Person means the power to direct the  management and policies of such
Person,  directly  or  indirectly,  whether  through  the  ownership  of  voting
securities,   by  contract  or  otherwise;   and  the  terms  "controlling"  and
"controlled" have meanings correlative to the foregoing.

     Agreement:  This Pooling and Servicing  Agreement and all amendments hereof
and supplements hereto.

     Assignment  of  Beneficial  Interest:  With respect to each  Mortgage  Loan
secured by an interest in an Illinois Land Trust, an instrument  executed by all
of the  beneficiaries  of such  Illinois Land Trust and by any Person having any
interest in such  Illinois  Land Trust or the power to direct the trustee  under
such  Illinois  Land  Trust,  which  assigns  and  transfers  to the  respective
Depositor  as a  secured  party,  all  of  the  beneficiaries'  rights,  powers,
privileges and beneficial interest in such Illinois Land Trust.

     Assignment of Mortgage:  An assignment of the Mortgage,  notice of transfer
or equivalent instrument sufficient,  upon proper recordation thereof, under the
laws of the jurisdiction  wherein the related  Mortgaged  Property is located to
reflect of record the  transfer  of the  Mortgage to the party named as assignee
therein.

     Authorized Denominations: The authorized denominations of the Certificates,
as set forth in Section 4.01 of this Agreement.

     Available Payment Amount: With respect to any Payment Date, an amount equal
to (i) the sum of all amounts described in clauses (i) through (vii), inclusive,
of Section  5.03  received by the  Servicer or any  Subservicer  (including  any
amounts paid by the Servicer and the  Representative  and  excluding any amounts
not required to be deposited in the Principal and Interest  Account  pursuant to
Section 5.03 and  excluding  any amounts  withdrawn by the Servicer  pursuant to
Section   5.04(ii),   (iii),  (v),  (vi),  (vii)  and  (x)  as  of  the  related
Determination  Date)  during the related Due Period with respect to the Mortgage
Loans and on deposit in the Collection  Account on such Payment Date,  plus (ii)
the amount of any  Advances  remitted  pursuant to Section 6.08 for such Payment
Date with respect to the Mortgage Loans and on deposit in the Collection Account
on such Payment Date,  less (iii) the Excess Spread with respect to such Payment
Date.  No amount  included in the  Available  Payment  Amount by virtue of being
described by any component of the definition thereof shall be included more than
once by virtue of also being described by any other component or otherwise.


<PAGE>


     Bankruptcy  Loan: Each Mortgage Loan set forth on Exhibit G hereto (as such
Exhibit G may be supplemented in accordance with an Assignment Agreement).

     Base Spread Account  Requirement:  (x) $26,357,882.05,  provided,  however,
that the Certificate Insurer may, in its sole discretion, reduce the Base Spread
Account  Requirement to such amount as is specified in a notice delivered to the
Trustee, the Representative and each Rating Agency; provided, further, that such
reduction shall not affect the rating assigned to the Certificates.

     Basic  Documents:  The  Transfer  Agreement,  this  Pooling  and  Servicing
Agreement,  the Custodial Agreement,  the Certificate Depository Agreement,  and
the other documents and certificates delivered in connection therewith.

     Basic Principal Amount:  With respect to the Mortgage Loans and any Payment
Date and related Due Period, the sum (without  duplication) of (i) the principal
portion of all Monthly  Payments  received by the Servicer or any Subservicer in
the related Due Period,  (ii) all  Curtailments  and all  Principal  Prepayments
received  during such  related Due Period,  (iii) the  principal  portion of all
Insurance  Proceeds,  Released  Mortgaged  Property Proceeds and Net Liquidation
Proceeds  received  during the related Due Period,  (iv) (A) that portion of the
purchase price (as set forth in Section 2.06(b)) of any purchased Mortgage Loans
which  represents  principal and (B) the principal  portion of any  Substitution
Adjustments  deposited into the Principal and Interest Account as of the related
Determination Date and (v) the Principal Balance of each Mortgage Loan as of the
beginning  of the related Due Period which  became a  Liquidated  Mortgage  Loan
during the related Due Period  (exclusive of any  principal  payments in respect
thereof included in clauses (i) through (iv) above).

     Book-Entry  Certificates:  A beneficial  interest in the Certificates,  the
ownership  and  transfer  of which  shall be made  through  book  entries by the
Depository as described in Section 4.01 hereof.

     Business  Day: Any day other than (i) a Saturday or Sunday or (ii) a day on
which banking  institutions  in the States of Illinois,  New York or Florida are
authorized  or  obligated  by law or  executive  order to be  closed;  provided,
however, that on the Closing Date the Servicer shall provide the Trustee and the
Certificate  Insurer  with an Officer's  Certificate  listing the dates on which
banking  institutions  in the  States  of  Illinois,  Florida  and New  York are
authorized or obligated by law or executive  order to be closed and the Servicer
shall deliver a new Officer's Certificate annually thereafter to the Trustee and
the  Certificate  Insurer  prior  to the  expiration  of the  most  recent  list
provided.  Failure to provide such an Officer's Certificate shall not constitute
an Event of Default;  provided that the Trustee and the Certificate  Insurer may
rely on the most recently delivered list without further investigation.

     Carry-Forward Amount: As of any Payment Date, the sum of (i) the amount, if
any, by which (x) the Class A Remittance Amount as of the immediately  preceding
Payment  Date  exceeded  (y) the amount of the actual  distribution  made to the
Certificateholders  pursuant to Section 6.05 hereof, exclusive of any portion of
such amount attributable to any Insured Payment,  on such immediately  preceding
Payment Date and (ii) if any portion of the amount in


<PAGE>


clause (i) represents Insured Payments made by the Certificate Insurer, interest
on such portion, if any, described in clause (i) above, at the Pass-Through Rate
with  respect to the Class of  Certificates  to which such  Insured  Payment was
applied from such immediately preceding Payment Date.

     Certificate: Any Class A-1F Certificate, Class A-2F Certificate, Class A-3F
Certificate,   Class  A-4F  Certificate,  Class  A-5F  Certificate,  Class  A-6F
Certificate, Class A-7F Certificate, Class X Certificate, Class R Certificate or
Class LR  Certificate  executed  by the  Trustee on behalf of the Trust Fund and
authenticated by the Trustee or its authenticating  agent,  substantially in the
form annexed  hereto as Exhibits  B-1, B-2, B-3, B-4, B-5, B-6, B-7, B-8, B-9 or
B-10, respectively.

     Certificate   Custodian:   Initially,   U.S.  Bank  National   Association;
thereafter  any other  Certificate  Custodian  acceptable to the  Depository and
selected by the Trustee.

     Certificate  Depository Agreement:  The agreement,  dated as of the Closing
Date, among the Depositors and the initial  Depository,  relating to the Class A
Certificates.

     Certificate  Insurance Policy: The certificate guaranty surety bond, policy
number AB0180BE,  in the name of the Trustee,  dated the Closing Date, issued by
the  Certificate  Insurer  for the  benefit  of the Class A  Certificateholders,
pursuant to which the Certificate Insurer guarantees Insured Payments, a copy of
which is attached hereto as Exhibit I.

     Certificate  Insurer:  Ambac  Assurance  Corporation,   a  Wisconsin  stock
insurance  company,  or any  successor  thereof,  as issuer  of the  Certificate
Insurance Policy.

     Certificate Owner: With respect to a Book-Entry Certificate, the Person who
is the  beneficial  owner of such  Certificate  as reflected on the books of the
Depository or on the books of a Depository Participant.

     Certificate Register: As described in Section 4.02 hereof.

     Certificateholder  or Holder:  Each Person in whose name a  Certificate  is
registered in the Certificate Register;  provided, however, that, solely for the
purposes  of giving any  consent  (except  any  consent  required to be obtained
pursuant  to  Section  10.02),  waiver,  request  or  demand  pursuant  to  this
Agreement,  any Certificate  registered in the name of the  Representative,  the
Servicer,  any Originator or either Depositor,  or any Affiliate of any of them,
shall be deemed not to be  outstanding  and the  undivided  Percentage  Interest
evidenced  thereby  shall not be taken into account in  determining  whether the
requisite  percentage  of  Certificates  necessary  to effect any such  consent,
waiver,  request or demand  has been  obtained.  For  purposes  of any  consent,
waiver, request or demand of Certificateholders pursuant to this Agreement, upon
the  Trustee's  or  the  Certificate   Insurer's  request,  the  Servicer,   the
Representative, any Originator and either Depositor shall provide to the Trustee
and the  Certificate  Insurer  a  notice  identifying  any of  their  respective
Affiliates that is a


<PAGE>


Certificateholder  as of the date(s) specified by the Trustee or the Certificate
Insurer in such request.

     Class: Collectively, Certificates bearing the same alphabetical designation
(A-1F, A-2F, A-3F, A-4F, A-5F, A-6F, A-7F, X, R or LR).

     Class A Certificateholder: A Holder of a Class A Certificate.

     Class A Certificates: The Class A-1F Certificates, Class A-2F Certificates,
Class A-3F Certificates, Class A-4F Certificates, Class A-5F Certificates, Class
A-6F Certificates and Class A-7F Certificates.

     Class A Interest  Remittance  Amount:  For any Payment Date,  the aggregate
interest   accrued  during  the  related   Accrual  Period  at  the  Class  A-1F
Pass-Through  Rate, Class A-2F Pass-Through  Rate, Class A-3F Pass-Through Rate,
Class  A-4F  Pass-Through   Rate,  Class  A-5F  Pass-Through  Rate,  Class  A-6F
Pass-Through  Rate and Class A-7F  Pass-Through Rate on the principal balance of
the related  Certificates  outstanding  during such Accrual Period (after giving
effect to payments of principal made on the preceding  Payment Date)  calculated
on the basis of 30 days over a 360 day year.

     Class A Principal Balance: As of any date of determination,  the sum of the
Original  Class A-1F  Principal  Balance,  the  Original  Class  A-2F  Principal
Balance,  the Original  Class A-3F  Principal  Balance,  the Original Class A-4F
Principal Balance, the Original Class A-5F Principal Balance, the Original Class
A-6F Principal Balance and the Original Class A-7F Principal Balance, reduced by
the  sum of all  amounts  (including,  except  for  purposes  of  effecting  the
Certificate  Insurer's  subrogation rights, that portion of Insured Payments, if
any, made in respect of principal) previously  distributed to Certificateholders
in respect of principal.

     Class A Principal  Remittance Amount: As to any Payment Date, the lesser of
(A) the Class A Principal Balance as of such Payment Date and (B) the sum of (a)
the Basic  Principal  Amount  for such  Payment  Date and (b) the  Carry-Forward
Amount.

     Class A Remittance Amount: The sum of (i) the Class A Principal  Remittance
Amount and (ii) the Class A Interest Remittance Amount.

     Class A-1F  Certificate:  A  Certificate  designated as an EQCC Home Equity
Loan Asset  Backed  Certificate,  Series  1998-2,  Class A-1F  Certificate,  and
evidencing  an interest  designated  as a "regular  interest" in the  Upper-Tier
REMIC for purposes of the REMIC Provisions.

     Class A-1F Pass-Through Rate: 6.235% per annum.

     Class A-1F Principal Balance: As of any date of determination, the Original
Class A-1F  Principal  Balance,  reduced by the sum of all  amounts  (including,
except for purposes of effecting the Certificate  Insurer's  subrogation rights,
that portion of Insured


<PAGE>


Payments, if any, made in respect of principal) previously  distributed to Class
A-1F Certificateholders in respect of principal.

     Class A-2F  Certificate:  A  Certificate  designated as an EQCC Home Equity
Loan Asset  Backed  Certificate,  Series  1998-2,  Class A-2F  Certificate,  and
evidencing  an interest  designated  as a "regular  interest" in the  Upper-Tier
REMIC for purposes of the REMIC Provisions.

     Class A-2F Pass-Through Rate: 6.086% per annum.

     Class A-2F Principal Balance: As of any date of determination, the Original
Class A-2F  Principal  Balance,  reduced by the sum of all  amounts  (including,
except for purposes of effecting the Certificate  Insurer's  subrogation rights,
that  portion  of  Insured  Payments,  if any,  made in  respect  of  principal)
previously distributed to Class A-2F Certificateholders in respect of principal.

     Class A-3F  Certificate:  A  Certificate  designated as an EQCC Home Equity
Loan Asset  Backed  Certificate,  Series  1998-2,  Class A-3F  Certificate,  and
evidencing  an interest  designated  as a "regular  interest" in the  Upper-Tier
REMIC for purposes of the REMIC Provisions.

     Class A-3F Pass-Through Rate: 6.229% per annum.

     Class A-3F Principal Balance: As of any date of determination, the Original
Class A-3F  Principal  Balance,  reduced by the sum of all  amounts  (including,
except for purposes of effecting the Certificate  Insurer's  subrogation rights,
that  portion  of  Insured  Payments,  if any,  made in  respect  of  principal)
previously distributed to Class A-3F Certificateholders in respect of principal.

     Class A-4F  Certificate:  A  Certificate  designated as an EQCC Home Equity
Loan Asset  Backed  Certificate,  Series  1998-2,  Class A-4F  Certificate,  and
evidencing  an interest  designated  as a "regular  interest" in the  Upper-Tier
REMIC for purposes of the REMIC Provisions.

     Class A-4F Pass-Through Rate: 6.326% per annum.

     Class A-4F Principal Balance: As of any date of determination, the Original
Class A-4F  Principal  Balance,  reduced by the sum of all  amounts  (including,
except for purposes of effecting the Certificate  Insurer's  subrogation rights,
that  portion  of  Insured  Payments,  if any,  made in  respect  of  principal)
previously distributed to Class A-4F Certificateholders in respect of principal.

     Class A-5F  Certificate:  A  Certificate  designated as an EQCC Home Equity
Loan Asset  Backed  Certificate,  Series  1998-2,  Class A-5F  Certificate,  and
evidencing  an interest  designated  as a "regular  interest" in the  Upper-Tier
REMIC for purposes of the REMIC Provisions.


<PAGE>


     Class A-5F Pass-Through Rate: 6.640% per annum.

     Class A-5F Principal Balance: As of any date of determination, the Original
Class A-5F  Principal  Balance,  reduced by the sum of all  amounts  (including,
except for purposes of effecting the Certificate  Insurer's  subrogation rights,
that  portion  of  Insured  Payments,  if any,  made in  respect  of  principal)
previously distributed to Class A-5F Certificateholders in respect of principal.

     Class A-6F  Certificate:  A  Certificate  designated as an EQCC Home Equity
Loan Asset  Backed  Certificate,  Series  1998-2,  Class A-6F  Certificate,  and
evidencing  an interest  designated  as a "regular  interest" in the  Upper-Tier
REMIC for purposes of the REMIC Provisions.

     Class A-6F Pass-Through Rate: 6.159% per annum.

     Class A-6F Principal Balance: As of any date of determination, the Original
Class A-6F  Principal  Balance,  reduced by the sum of all  amounts  (including,
except for purposes of effecting the Certificate  Insurer's  subrogation rights,
that  portion  of  Insured  Payments,  if any,  made in  respect  of  principal)
previously distributed to Class A-6F Certificateholders in respect of principal.

     Class A-7F  Certificate:  A  Certificate  designated as an EQCC Home Equity
Loan Asset  Backed  Certificate,  Series  1998-2,  Class A-7F  Certificate,  and
evidencing  an interest  designated  as a "regular  interest" in the  Upper-Tier
REMIC for purposes of the REMIC Provisions.

     Class A-7F Pass-Through Rate: 6.325% per annum.

     Class A-7F Principal Balance: As of any date of determination, the Original
Class A-7F  Principal  Balance,  reduced by the sum of all  amounts  (including,
except for purposes of effecting the Certificate  Insurer's  subrogation rights,
that  portion  of  Insured  Payments,  if any,  made in  respect  of  principal)
previously distributed to Class A-7F Certificateholders in respect of principal.

     Class Principal Balance: As of any date of determination, each of the Class
A-1F  Principal  Balance,  the Class  A-2F  Principal  Balance,  the Class  A-3F
Principal Balance,  the Class A-4F Principal  Balance,  the Class A-5F Principal
Balance, the Class A-6F Principal Balance and the Class A-7F Principal Balance.

     Class LR Certificate:  A Certificate designated as an EQCC Home Equity Loan
Asset Backed Certificate,  Series 1998-2, Class LR Certificate and evidencing an
interest  designated  as the  "residual  interest" in the  Lower-Tier  REMIC for
purposes of the REMIC Provisions.

     Class LR Certificateholder: A Holder of a Class LR Certificate.


<PAGE>


     Class LT1 Interest: A regular interest in the Lower-Tier REMIC that is held
as an asset of the Upper-Tier REMIC that has an initial  principal balance equal
to the  Original  Class A-1F  Principal  Balance  and bears  interest at the Net
Weighted Average Mortgage Interest Rate.

     Class LT2 Interest: A regular interest in the Lower-Tier REMIC that is held
as an asset of the Upper-Tier REMIC that has an initial  principal balance equal
to the  Original  Class A-2F  Principal  Balance  and bears  interest at the Net
Weighted Average Mortgage Interest Rate.

     Class LT3 Interest: A regular interest in the Lower-Tier REMIC that is held
as an asset of the Upper-Tier REMIC that has an initial  principal balance equal
to the  Original  Class A-3F  Principal  Balance  and bears  interest at the Net
Weighted Average Mortgage Interest Rate.

     Class LT4 Interest: A regular interest in the Lower-Tier REMIC that is held
as an asset of the Upper-Tier REMIC that has an initial  principal balance equal
to the  Original  Class A-4F  Principal  Balance  and bears  interest at the Net
Weighted Average Mortgage Interest Rate.

     Class LT5 Interest: A regular interest in the Lower-Tier REMIC that is held
as an asset of the Upper-Tier REMIC that has an initial  principal balance equal
to the  Original  Class A-5F  Principal  Balance  and bears  interest at the Net
Weighted Average Mortgage Interest Rate.

     Class LT6 Interest: A regular interest in the Lower-Tier REMIC that is held
as an asset of the Upper-Tier REMIC that has an initial  principal balance equal
to the  Original  Class A-6F  Principal  Balance  and bears  interest at the Net
Weighted Average Mortgage Interest Rate.

     Class LT7 Interest: A regular interest in the Lower-Tier REMIC that is held
as an asset of the Upper-Tier REMIC that has an initial  principal balance equal
to the  Original  Class A-7F  Principal  Balance  and bears  interest at the Net
Weighted Average Mortgage Interest Rate.

     Class R Certificate:  A Certificate  designated as an EQCC Home Equity Loan
Asset Backed Certificate,  Series 1998-2, Class R Certificate, and evidencing an
interest  designated  as the  "residual  interest" in the  Upper-Tier  REMIC for
purposes of the REMIC Provisions.

     Class R Certificateholder: A Holder of a Class R Certificate.

     Class X Certificate:  A Certificate  designated as an EQCC Home Equity Loan
Asset Backed Certificate,  Series 1998-2, Class X Certificate and evidencing (i)
the Class X Interest  designated as a "regular interest" in the Upper-Tier REMIC
for purposes of the REMIC Provisions and (ii) rights under the Spread Account as
described herein.

     Class X Certificateholder: A Holder of a Class X Certificate.

     Class X Interest:  A regular  interest in the Upper-Tier REMIC for purposes
of the  REMIC  Provisions,  ownership  of  which  is  evidenced  by the  Class X
Certificates.

     Closing Date: June 30, 1998.


<PAGE>


     Code: The Internal Revenue Code of 1986, as amended from time to time.

     Collection  Account:  The collection account  established and maintained by
the Trustee pursuant to Section 6.01 hereof.

     Combined  Loan-To-Value  Ratio or CLTV:  With respect to any Mortgage Loan,
the ratio  (expressed as a percentage) of (a) the sum of the original  principal
balance  of such  Mortgage  Loan and the  outstanding  principal  balance of any
related First Lien as of the date of origination  of the Mortgage Loan,  divided
by (b) (i) the lesser of (1) the value of the related Mortgaged Property,  based
upon the appraisal  made at the time such Mortgage Loan was  originated,  or (2)
the purchase price of the Mortgaged  Property if the Mortgage Loan proceeds were
used to purchase the  Mortgaged  Property or (ii) in the case of a Mortgage Loan
that has been deemed  reissued  for  purposes  of Section  1001 of the Code as a
result of modifications  thereto, the value of the Mortgaged Property based upon
the appraisal made at the date of the most recent deemed reissuance.

     Commission: The Securities and Exchange Commission.

     Component X-1F  Distribution  Amount:  With respect to any Payment Date, an
amount equal to the product of (i) 1/12th of the Component X-1F Notional Balance
and (ii) the Net Weighted  Average  Mortgage  Interest  Rate less the Class A-1F
Pass-Through Rate.

     Component  X-1F  Notional  Balance:  With  respect to any Payment  Date,  a
notional  principal  balance  equal to the  principal  balance  of the Class LT1
Interest,  corresponding to the Class A-1F Principal Balance,  immediately prior
to the distribution of principal in respect thereof on such Payment Date.

     Component X-2F  Distribution  Amount:  With respect to any Payment Date, an
amount  equal to (A) the product of (i) 1/12th of the  Component  X-2F  Notional
Balance and (ii) the Net Weighted Average Mortgage  Interest Rate less the Class
A-2F Pass-Through Rate.

     Component  X-2F  Notional  Balance:  With  respect to any Payment  Date,  a
notional  principal  balance  equal to the  principal  balance  of the Class LT2
Interest,  corresponding to the Class A-2F Principal Balance,  immediately prior
to the distribution of principal in respect thereof on such Payment Date.

     Component X-3F  Distribution  Amount:  With respect to any Payment Date, an
amount equal to the product of (i) 1/12th of the Component X-3F Notional Balance
and (ii) the Net Weighted  Average  Mortgage  Interest  Rate less the Class A-3F
Pass-Through Rate.

     Component  X-3F  Notional  Balance:  With  respect to any Payment  Date,  a
notional  principal  balance  equal to the  principal  balance  of the Class LT3
Interest,  corresponding to the Class A-3F Principal Balance,  immediately prior
to the distribution of principal in respect thereof on such Payment Date.


<PAGE>


     Component X-4F  Distribution  Amount:  With respect to any Payment Date, an
amount equal to the product of (i) 1/12th of the Component X-4F Notional Balance
and (ii) the Net Weighted  Average  Mortgage  Interest  Rate less the Class A-4F
Pass-Through Rate.

     Component  X-4F  Notional  Balance:  With  respect to any Payment  Date,  a
notional  principal  balance  equal to the  principal  balance  of the Class LT4
Interest,  corresponding to the Class A-4F Principal Balance,  immediately prior
to the distribution of principal in respect thereof on such Payment Date.

     Component X-5F  Distribution  Amount:  With respect to any Payment Date, an
amount equal to the product of (i) 1/12th of the Component X-5F Notional Balance
and (ii) the Net Weighted  Average  Mortgage  Interest  Rate less the Class A-5F
Pass-Through Rate.

     Component  X-5F  Notional  Balance:  With  respect to any Payment  Date,  a
notional  principal  balance  equal to the  principal  balance  of the Class LT5
Interest,  corresponding to the Class A-5F Principal Balance,  immediately prior
to the distribution of principal in respect thereof on such Payment Date.

     Component X-6F  Distribution  Amount:  With respect to any Payment Date, an
amount equal to the product of (i) 1/12th of the Component X-6F Notional Balance
and (ii) the Net Weighted  Average  Mortgage  Interest  Rate less the Class A-6F
Pass-Through Rate.

     Component  X-6F  Notional  Balance:  With  respect to any Payment  Date,  a
notional  principal  balance  equal to the  principal  balance  of the Class LT6
Interest,  corresponding to the Class A-6F Principal Balance,  immediately prior
to the distribution of principal in respect thereof on such Payment Date.

     Component X-7F  Distribution  Amount:  With respect to any Payment Date, an
amount equal to the product of (i) 1/12th of the Component X-7F Notional Balance
and (ii) the Net Weighted  Average  Mortgage  Interest  Rate less the Class A-7F
Pass-Through Rate.

     Component  X-7F  Notional  Balance:  With  respect to any Payment  Date,  a
notional  principal  balance  equal to the  principal  balance  of the Class LT7
Interest,  corresponding to the Class A-7F Principal Balance,  immediately prior
to the distribution of principal in respect thereof on such Payment Date.

     Corporate Trust Office:  With respect to the Trustee,  the principal office
at which at any  particular  time the  corporate  trust  business of the Trustee
shall be principally administered, which offices at the Closing Date are located
at U.S. Bank National  Association,  111 East Wacker Drive, Suite 3000, Chicago,
Illinois 60601.

     Cross-over  Date: The date on which the  Subordinated  Amount is reduced to
zero.

     Cumulative  Excess Spread Receipts:  As of any date of  determination,  the
aggregate  amount of Excess  Spread from and after the Closing  Date paid to the
Class A


<PAGE>


Certificateholders  pursuant to Section 6.09(b)(ii),  to the extent attributable
to Mortgage Loan Losses.

     Cumulative Losses: As of any date of determination,  the aggregate Mortgage
Loan Losses for all Due Periods since the Cut-off Date.

     Current CLTV: With respect to any Bankruptcy  Loan, the ratio (expressed as
a percentage) of (a) the sum of (i) the outstanding  principal balance as of the
Cut-off Date of such Mortgage Loan and (ii) the outstanding principal balance of
any  related  First  Lien as of the  Cut-off  Date  divided  by (b) the  current
appraised  value  of  the  related  Mortgaged  Property,  as  determined  by  an
independent fee appraiser  acceptable to the Certificate  Insurer within 60 days
of the Closing Date.

     Curtailment:  With  respect to a Mortgage  Loan,  any payment of  principal
received in any month during a Due Period as part of a payment  which is neither
intended to satisfy the Mortgage Loan in full nor to cure a delinquency.

     Custodial Agreement:  The agreement for the retention of the Mortgage Files
initially in the form attached hereto as Exhibit N.

     Custodian:  Initially,  with respect to all Mortgage Loans,  Bank One Trust
Company,  N.A.,  and  thereafter,   any  successor  custodian  approved  by  the
Certificate  Insurer appointed  pursuant to either Custodial  Agreement which is
not  affiliated  with the Servicer,  the  Representative,  the Depositors or the
Originators.

     Cut-off Date: June 1, 1998.

     Default:  Any  occurrence  that is, or with  notice or the lapse of time or
both would become, a Servicer Default under Section 10.01 hereof.

     Definitive Certificates: As set forth in Section 4.01 hereof.

     Deleted  Mortgage  Loan: A Mortgage Loan replaced by or to be replaced by a
Qualified Substitute Mortgage Loan.

     Depositor:  Either  EQCC  Asset  Backed  Corporation  or  EQCC  Receivables
Corporation, each of which is a direct or an indirect wholly-owned subsidiary of
the Representative.

     Depository:  Initially,  The Depository Trust Company, the nominee of which
is Cede & Co.,  as the  registered  Holder of the Book Entry  Certificates.  The
Depository shall at all times constitute a "clearing  corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York.

     Depository   Participant:   A  broker,  dealer,  bank  or  other  financial
institution  or other  Person  for whom from time to time a  Depository  effects
book-entry transfers and pledges of securities deposited with the Depository.


<PAGE>


     Destroyed  Mortgage  Note:  A  Mortgage  Note the  original  of  which  was
permanently lost or destroyed and has not been replaced.

     Destroyed  Mortgage Note  Affidavit:  An affidavit in the form of Exhibit U
delivered pursuant to Section 2.04(a)(i)(B) with respect to a Destroyed Mortgage
Note.

     Determination Date: With respect to each Payment Date, the seventh Business
Day of the month in which such Payment Date occurs.

     Disqualified  Non-United  States Person: A transferee of a Class R or Class
LR Certificate other than a person that (i) is a United States Person or (ii) is
a  Non-United  States  Person  that holds a Class R or Class LR  Certificate  in
connection  with the conduct of a trade or business within the United States and
has furnished the transferor and the Trustee with an effective  Internal Revenue
Service Form 4224 or (iii) is a Non-United  States  Person that has delivered to
both the  transferor  and the Trustee an opinion of a nationally  recognized tax
counsel to the effect that the transfer of such Class R or Class LR  Certificate
to it is in accordance  with the  requirements  of the Code and the  regulations
promulgated  thereunder  and  that  such  transfer  of a  Class  R or  Class  LR
Certificate will not be disregarded for federal income tax purposes.

     Disqualified Organization:  Either (i) the United States, (ii) any state or
political   subdivision  thereof,   (iii)  any  foreign  government,   (iv)  any
international  organization,  (v) any  agency or  instrumentality  of any of the
foregoing,  (vi) any tax-exempt organization (other than a cooperative described
in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such  organization  is subject to the tax imposed by Section 511
of the Code,  (vii) any organization  described in Section  1381(a)(2)(C) of the
Code, or (viii) any other entity  designated as a Disqualified  Organization  by
relevant  legislation amending the REMIC Provisions and in effect at or proposed
to be  effective  as of the  time  of  the  determination.  Notwithstanding  the
foregoing, a corporation will not be treated as an instrumentality of the United
States or of any state or political subdivision thereof if all of its activities
are subject to tax and a majority of its board of  directors  is not selected by
such   governmental   unit.  The  terms  "United   States"  and   "international
organization" shall have the meanings set forth in Section 7701 of the Code.

     Due Date: The day of the month on which the Monthly Payment is due from the
Mortgagor on a Mortgage Loan.

     Due  Period:   With  respect  to  any  Payment  Date,  the  calendar  month
immediately preceding the calendar month in which such Payment Date occurs.

     Eligible Account:  Either (A) a segregated  account or segregated  accounts
maintained with an institution  whose deposits are insured by the Bank Insurance
Fund or the Savings  Association  Insurance  Fund of the FDIC, (x) the unsecured
and  uncollateralized  debt obligations of which shall be rated "A" or better by
S&P or have the  highest  short-term  rating  by S&P and (y) the  unsecured  and
uncollateralized  debt  obligations  of which  shall be  rated A1 or  better  by
Moody's  and have the highest  short-term  rating by Moody's and which is either
(i)


<PAGE>


a federal savings and loan association  duly organized,  validly existing and in
good  standing  under  the  federal  banking  laws,  (ii)  an  institution  duly
organized,  validly  existing and in good standing under the applicable  banking
laws of any state, (iii) a national banking association duly organized,  validly
existing and in good standing under the federal  banking laws,  (iv) a principal
subsidiary  of a  bank  holding  company,  or (v)  approved  in  writing  by the
Certificate  Insurer,  S&P and  Moody's  or (B) a  segregated  trust  account or
accounts  maintained with the corporate  trust  department of a federal or state
chartered depository institution or trust company, having capital and surplus of
not less than $50,000,000,  acting in its fiduciary  capacity,  and has a rating
from  Moody's  for  long-term  deposits  of at least  Baa3;  provided,  that any
Eligible Account  maintained with any Affiliate of NationsBank  Corporation must
be consented to by the Certificate  Insurer.  Any Eligible  Accounts  maintained
with the Trustee shall conform to the preceding clause (B).

     Event of Nonpayment: An event of nonpayment shall occur with respect to any
Payment  Date if the  amount  remitted  by the  Servicer  pursuant  to  Sections
5.04(i),  6.04(e) and 6.08 and on deposit in the Lower-Tier Distribution Account
for such  Payment  Date,  plus any  amounts  withdrawn  from the Spread  Account
pursuant to Section  6.09(b)(ii)  and on deposit in the Lower-Tier  Distribution
Account,  that are not subject to any  automatic  stay under  Section 362 of the
United States Bankruptcy Code pursuant to an order of a United States bankruptcy
court of competent jurisdiction,  will not, taken together, be sufficient to pay
the sum of (X) the Class A Remittance  Amount  (exclusive  of the portion of the
Carry-Forward    Amount   representing    amounts   previously   paid   to   the
Certificateholders, as Insured Payments) and (Y) the amount to be withdrawn from
the  Lower-Tier  Distribution  Account for deposit  into the  Insurance  Account
pursuant  to  Section  6.02(i)  in respect of such  Payment  Date,  unless  such
insufficiency  results from a failure by the  Certificate  Insurer to perform in
accordance with the terms of this Agreement or the Certificate  Insurance Policy
or a failure by the Trustee to perform in accordance with this Agreement.

     Excess Proceeds:  With respect to any Liquidated Mortgage Loan, the excess,
if any, of (a) the Net Liquidation Proceeds received in respect thereof over (b)
the  Principal  Balance of such  Mortgage Loan as of the date such Mortgage Loan
became a Liquidated  Mortgage Loan plus accrued but unpaid  interest  thereon at
the Mortgage Interest Rate.

     Excess Spread: With respect to any Payment Date, the excess (if any) of the
aggregate  interest  accrued for the related Due Period on the Mortgage Loans at
their respective Mortgage Interest Rates over the sum of (i) interest accrued on
the Class A Certificates  since the immediately  prior Payment Date and (ii) the
product of (a) 1/12th of 0.69% and (b) the aggregate of the  principal  balances
of the  Mortgage  Loans on which  interest  for such Due Period was  calculated.
Excess Spread is equal to the aggregate of (i) the Component  X-1F  Distribution
Amount,  (ii) the Component X-2F Distribution  Amount,  (iii) the Component X-3F
Distribution  Amount,  (iv) the  Component  X-4F  Distribution  Amount,  (v) the
Component X-5F Distribution  Amount, (vi) the Component X-6F Distribution Amount
and (vii) the Component X-7F Distribution Amount.

     Exchange Act: The Securities Exchange Act of 1934, as amended.


<PAGE>


     FDIC: The Federal Deposit Insurance Corporation and any successor thereto.

     FHLMC:  The  Federal  Home  Loan  Mortgage  Corporation  and any  successor
thereto.

     Fidelity Bond: As described in Section 5.09.

     Final Scheduled  Payment Date: With respect to each Class of  Certificates,
as specified in the table under the Preliminary Statement.

     First Lien:  With respect to any Mortgage Loan secured by a second priority
lien, the mortgage loan relating to the corresponding Mortgaged Property secured
by a first priority lien.

     FNMA: Fannie Mae and any successor thereto.

     Holder: A Certificateholder.

     Illinois  Land Trust:  A trust formed under a trust  agreement  between the
trustee  and one or more  beneficiaries  named  therein,  pursuant to which such
trustee holds legal and equitable title to a Mortgaged  Property  located in the
State of  Illinois  and such  beneficiaries  are the  owners  of the  beneficial
interest in such trust.

     Independent:  When used with  respect  to any  specified  Person,  that the
Person (i) does not have any direct financial  interest or any material indirect
financial  interest in the Depositors,  the  Representative,  the Servicer,  the
Originators  or any  Affiliate of any of the  foregoing  Persons and (ii) is not
connected  with  the  Representative,  the  Servicer,  the  Originators  or  any
Affiliate of any of the  foregoing  Persons as an officer,  employee,  promoter,
underwriter, trustee, partner, director or person performing similar functions.

     Initial Premium Fee Recovery Amount:  With respect to any Payment Date, the
product  of (i) 0.09% and (ii) the excess of (A) the Class A  Principal  Balance
immediately prior to giving effect to distributions of principal and interest on
the Certificates over (B) the Class A Principal Balance immediately after giving
effect to distributions of principal and interest on the Certificates.

     Insurance Account:  The insurance account established and maintained by the
Trustee in accordance with Section 6.03 hereof.

     Insurance  Proceeds:  Proceeds  paid to the Trustee or the  Servicer by any
insurer  (except  the  Certificate  Insurer)  or by the  Servicer  pursuant to a
deductible  clause under a blanket policy  insuring  against fire and hazards of
extended  coverage on all of the Mortgage  Loans  pursuant to Section  5.08,  in
either  event  pursuant  to any  insurance  policy  covering  a  Mortgage  Loan,
Mortgaged  Property,  or REO Property or any other  insurance  policy net of any
expenses  which are incurred by the Servicer or the Trustee in  connection  with
the  collection of such  proceeds and not otherwise  reimbursed to the Servicer,
other than proceeds


<PAGE>


to be applied to the restoration or repair of the Mortgaged Property or released
to  the  Mortgagor  in  accordance  with  customary  second  mortgage  servicing
procedures.

     Insured Payment:  As of each Payment Date, the amount, if any, by which (A)
the Class A Remittance  Amount  (excluding  from such amounts any amount thereof
attributable  to clause (iv) of the definition of "Basic  Principal  Amount," to
the  extent  such  amount  is  due  but  not  paid  by the  Representative,  the
Depositors, or the Originators) exceeds (B) the sum of (x) the Available Payment
Amount (minus the amount withdrawable from the Lower-Tier  Distribution  Account
and  Upper-Tier  Distribution  Account  pursuant to Sections  6.02(i),  (ii) and
(iii)) plus any amount  transferred  from the Spread  Account to the  Lower-Tier
Distribution  Account  pursuant  to Section  6.09(b)(ii)  and (y) the  aggregate
amount of any previous  Insured  Payments for which the Certificate  Insurer has
not been reimbursed  pursuant to Section 6.05(c);  provided,  however,  that the
determination  of  Insured  Payments  shall  not be  affected  in any way by any
recharacterization  of the  transactions  contemplated  by this  Agreement  as a
financing  in any  bankruptcy,  insolvency  or similar  proceeding  to which the
Depositors or the Originators may be subject,  and the Available  Payment Amount
shall for the purpose of this definition be deemed to be decreased by the amount
thereof that has been deposited in the Lower-Tier  Distribution  Account but may
not be withdrawn  therefrom  pursuant to an order of a United States  bankruptcy
court of competent  jurisdiction  imposing a stay pursuant to Section 362 of the
United States Bankruptcy Code.

     Latest Maturity Date: With respect to any Class of Certificates,  its Final
Scheduled Maturity Date.

     Lien: Any security interest, lien, charge, pledge, equity or encumbrance of
any kind  other than tax liens,  mechanics'  liens and any liens that  attach by
operation of law.

     Liquidated Mortgage Loan: Any defaulted Mortgage Loan or REO Property as to
which the Servicer has  determined  that all amounts which it reasonably  and in
good faith  expects to recover  have been  recovered  from or on account of such
Mortgage Loan.

     Liquidation Proceeds:  Cash, including Insurance Proceeds,  proceeds of any
REO Disposition,  amounts required to be deposited in the Principal and Interest
Account  pursuant to Section  5.10  hereof,  and any other  amounts  received in
connection  with the liquidation of defaulted  Mortgage  Loans,  whether through
trustee's sale, foreclosure sale or otherwise.

     Lockout  Percentage:  For any Payment Date, the percentage that corresponds
to the range of Payment  Dates in which such Payment  Date is  included,  as set
forth in the following table:


<PAGE>


Payment Dates                                   Lockout Percentage
- -------------                                   ------------------
July 1998 - June 2001                                    0%
July 2001 - June 2003                                   45%
July 2003 - June 2004                                   80%
July 2004 - June 2005                                  100%
July 2005 and thereafter                               300%

     Lockout  Pro Rata  Remittance  Amount:  For any  Payment  Date,  an amount,
determined immediately prior to giving effect to any payment of principal of the
Certificates on such date, equal to the product of (x) a fraction, the numerator
of which is the sum of the principal  balance of the Class A-6F Certificates and
the Class A-7F Certificates as of such Payment Date and the denominator of which
is the Class A Principal  Balance as of such Payment  Date,  and (y) the Class A
Principal Remittance Amount for such Payment Date.

     Lockout  Remittance  Amount:  For any Payment Date,  an amount,  determined
immediately  prior  to  giving  effect  to  any  payment  of  principal  of  the
Certificates  on such date,  equal to the least of:  (a) the  product of (i) the
applicable  Lockout  Percentage  for such  Payment Date and (ii) the Lockout Pro
Rata  Remittance  Amount  for  such  Payment  Date;  (b) the  Class A  Principal
Remittance  Amount  for such  Payment  Date;  and (c) the sum of the Class  A-6F
Principal Balance and the Class A-7F Principal Balance as of such Payment Date.

     Loss  Coverage  Ratio:  With  respect  to any  Payment  Date,  a  fraction,
expressed as a percentage,  (a) the numerator of which equals the sum of (i) the
product  of (A) the sum of (I) 25% of the  aggregate  Principal  Balance  of all
Mortgage  Loans that are 30-59 days  delinquent,  plus (II) 50% of the aggregate
Principal  Balance of all Mortgage  Loans that are 60-89 days  delinquent,  plus
(III) 100% of the aggregate  Principal Balance of all Mortgage Loans that are 90
or more days  delinquent,  in each case as of the close of  business on the last
day of the  immediately  preceding  calendar month and including  Mortgage Loans
that are in foreclosure or that have been converted to REO  Properties,  and (B)
the greater of (I) the Original Loss Severity and (II) prior to the Loss Trigger
Date,  zero,  and on or after the Loss Trigger Date,  the Actual Loss  Severity,
plus (ii) the  Cumulative  Losses,  and (b) the  denominator of which equals the
product  of (I) the  Loss  Coverage  Requirement  and  (II)  the  Original  Pool
Principal Balance.

     Loss Coverage Requirement: 10.50%.

     Loss  Trigger  Date:  The date that is the earlier of (i) the 30th  Payment
Date and (ii) the first Payment Date after which the Trust has incurred Mortgage
Loan Losses with respect to at least 20 Liquidated Mortgage Loans.

     Lower-Tier Distribution Account: The account established in accordance with
Section 6.01(a) hereof and maintained by the Trustee.

     Lower-Tier  Regular  Interests:  The Class LT1, LT2, LT3, LT4, LT5, LT6 and
LT7 Interests.


<PAGE>


     Lower-Tier REMIC: One of two separate REMICs comprising the Trust Fund, the
assets of which consist of the Mortgage  Loans,  such amounts as shall from time
to time be held in the Trust  Fund  (other  than the  Spread  Account),  if any,
relating to a Mortgage Loan and property which secured a Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure.

     Majority   in   Aggregate   Voting   Interest:   Class   A  and   Class   X
Certificateholders representing Class A and Class X Certificates voting together
as a single class  evidencing an aggregate  Voting Interest of at least 51% when
expressed as a percentage rounded to four decimal places.

     Monthly Excess Spread Amount:  On any Payment Date, the amount equal to the
product  of 100% and the amount of the Excess  Spread as of such  Payment  Date;
provided,  however,  that the  percentage  set forth above may be reduced at any
time, solely at the discretion of the Certificate Insurer, at which time written
notice shall be sent to the Representative, the Trustee, S&P and Moody's.

     Monthly Payment: The scheduled monthly payment of principal and/or interest
required to be made by a Mortgagor on the related Mortgage Loan, as set forth in
the related Mortgage Note.

     Monthly  Premium:  The monthly premium  payable to the Certificate  Insurer
pursuant to the Certificate  Insurance  Policy and the letter agreement dated as
of the Closing Date, among the Certificate Insurer and the Depositors.

     Moody's: Moody's Investors Service, Inc., or any successor thereto.

     Mortgage: The mortgage,  deed of trust or other instrument creating a first
or second lien on the Mortgaged Property.

     Mortgage File: As described in Exhibit A.

     Mortgage Impairment Insurance Policy: As defined in Section 5.08.

     Mortgage  Interest  Rate:  With respect to a Mortgage  Loan,  the fixed per
annum rate of interest  borne by a Mortgage  Note, as shown on the Mortgage Loan
Schedule.

     Mortgage   Loan:  An  individual   mortgage  loan  which  is  assigned  and
transferred to the Trustee pursuant to this Agreement,  together with the rights
and obligations of a holder thereof and payments thereon and proceeds therefrom,
the Mortgage Loans originally  subject to this Agreement being identified on the
Mortgage Loan  Schedules  annexed  hereto as Exhibit D. Any mortgage loan which,
although intended by the parties hereto to have been, and which purportedly was,
transferred and assigned to the Trustee by the applicable Depositor, in fact was
not  transferred  and  assigned  to  the  Trustee  for  any  reason  whatsoever,
including,  without limitation,  the incorrectness of the statement set forth in
Section 3.02(g) hereof with respect to such mortgage loan, shall nevertheless be
considered a "Mortgage Loan" for all purposes of


<PAGE>


this  Agreement.  As  applicable,  Mortgage Loan shall be deemed to refer to the
related REO Property.

     Mortgage  Loan  Losses:  With respect to any Payment  Date,  the sum of the
following amounts for each Mortgage Loan that became a Liquidated  Mortgage Loan
during the related Due Period:  the amount,  if any, by which (i) the sum of (A)
the Principal Balance of such Mortgage Loan (determined  immediately before such
Mortgage  Loan  became a  Liquidated  Mortgage  Loan) and (B) accrued and unpaid
interest  thereon  at the  Mortgage  Interest  Rate to the  date on  which  such
Mortgage Loan became a Liquidated Mortgage Loan exceeds (ii) the Net Liquidation
Proceeds  received  during such Due Period in connection with the liquidation of
such Mortgage Loan which have not theretofore  been used to reduce the Principal
Balance of such Mortgage Loan. For purposes of this definition,  a Mortgage Loan
as to which the  related  Mortgaged  Property is held by the Trust Fund shall be
deemed to have  continued to accrue  interest at the related  Mortgage  Interest
Rate.

     Mortgage Loan Schedule:  The schedules of Mortgage Loans attached hereto as
Exhibit D as each may be amended to reflect Qualified Substitute Mortgage Loans,
such  schedule  identifying  each  applicable  Mortgage  Loan by  address of the
Mortgaged  Property and the name of the  Mortgagor  and setting forth as to each
such Mortgage Loan the following  information:  (i) the Principal  Balance as of
the Cut-off Date, (ii) the account number,  (iii) the original principal amount,
(iv) the CLTV as of the date of the  origination  of the related  Mortgage Loan,
(v) the Due Date, (vi) the Mortgage Interest Rate, (vii) the first date on which
a Monthly  Payment is due under the Mortgage Note,  (viii) the Monthly  Payment,
(ix) the original  stated  maturity date of the Mortgage Note, (x) the remaining
number of months  to  maturity  as of the  Cut-off  Date and (xi) the  Mortgaged
Property State.

     Mortgage Note: The note or other  evidence of  indebtedness  evidencing the
indebtedness of a Mortgagor under a Mortgage Loan.

     Mortgage Pool: The Mortgage Loans indicated on the Mortgage Loan Schedule.

     Mortgaged  Property:  The  underlying  property  securing a Mortgage  Loan,
consisting of a fee simple estate or, with respect to certain properties located
in  Maryland,  a  leasehold  estate,  in a single  parcel of land  improved by a
Residential Dwelling.

     Mortgaged Property State: The state in which the Mortgaged Property related
to a Mortgage Loan is located, as set forth on the Mortgage Loan Schedule.

     Mortgagor: The obligor on a Mortgage Note.

     Net Weighted  Average  Mortgage  Interest Rate: With respect to any Accrual
Period, a rate equal to the Weighted Average Mortgage Interest Rate less 0.69%.

     Net Liquidation Proceeds: Liquidation Proceeds net of any reimbursements to
the Servicer made therefrom pursuant to Section 5.04(ii).


<PAGE>


     Nondisqualification Opinion: An Independent Opinion of Counsel addressed to
the Trustee that a contemplated  action will neither cause either Trust REMIC to
fail to qualify as a REMIC at any time the Class A Certificates  are outstanding
nor  cause  an   unindemnified   "prohibited   transaction"   or  a  "prohibited
contribution" tax to be imposed on either Trust REMIC.

     Nonrecoverable  Advances:  With  respect  to any  Mortgage  Loan,  (i)  any
Servicing  Advance or Advance  previously  made and not  reimbursed  pursuant to
Section 5.04(ii), or (ii) a Servicing Advance proposed to be made, in respect of
any Mortgage Loan or REO Property which, in the good faith business  judgment of
the  Servicer  would  not  be  ultimately  recoverable  from  late  collections,
Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
or otherwise.

     Non-United States Person: Any Person other than a United States Person.

     Officer's Certificate: A certificate delivered hereunder or under any other
Basic Document  signed by the President or a Vice President or an Assistant Vice
President of the Representative,  a Depositor,  the Trustee or the Servicer,  as
required hereunder or thereunder.

     Opinion of Counsel:  A written  opinion of counsel  delivered  hereunder or
under any Basic Document,  reasonably acceptable to the Trustee, and experienced
in matters  relating to the subject of such opinion;  except that any opinion of
counsel  relating to (a) the  qualification  of either Trust REMIC as a REMIC or
(b) compliance  with the REMIC  Provisions must be an opinion of counsel who (i)
is in fact  Independent of the  Representative  and the Servicer,  (ii) does not
have any direct financial  interest or any material indirect  financial interest
in the  Representative  or the Servicer or in an affiliate  thereof and (iii) is
not  connected  with the  Representative  or Servicer  as an officer,  employee,
director or person performing similar functions.

     Optional Purchase Date: As defined in Section 11.01.

     Original Class A-1F Principal Balance: $286,685,000.

     Original Class A-2F Principal Balance: $22,350,000.

     Original Class A-3F Principal Balance: $191,650,000.

     Original Class A-4F Principal Balance: $70,250,000.

     Original Class A-5F Principal Balance: $69,147,344.

     Original Class A-6F Principal Balance: $58,600,000.

     Original Class A-7F Principal Balance: $54,400,000.

     Original  Pool  Principal  Balance:  The Pool  Principal  Balance as of the
Cut-off Date, which amount is equal to $753,082,344.39.


<PAGE>


     Original Loss Severity: 50.70%.

     Originator:  Any of the entities listed on Exhibit K hereto,  each of which
is an "Originator" pursuant to the Transfer Agreement and, other than EquiCredit
Corporation  of  America,  is  (i)  a  direct  wholly-owned  subsidiary  of  the
Representative, and (ii) a Subservicer as of the date hereof with respect to the
Mortgage  Loans  sold  by  it to  either  Depositor  pursuant  to  the  Transfer
Agreement.

     Owner-Occupied  Mortgaged Property: A Residential Dwelling that the related
Mortgagor  represented  an  intent  to occupy  as such  Mortgagor's  primary  or
secondary residence at the origination of the Mortgage Loan.

     Ownership  Interest:  As to any  Certificate,  any  ownership  or  security
interest in such Certificate,  including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.

     Pass-Through Rate: Any one of the Class A-1F, Class A-2F, Class A-3F, Class
A-4F, Class A-5F, Class A-6F or Class A-7F Pass-Through Rates.

     Payment  Date:  The 15th  day of any  month,  or if such  15th day is not a
Business Day, the first Business Day immediately  following,  commencing on July
15, 1998.

     Percentage Interest:  With respect to a Class A-1F, Class A-2F, Class A-3F,
Class A-4F, Class A-5F, Class A-6F or Class A-7F Certificate, the portion of the
Certificates  evidenced by such Class A-1F,  Class A-2F, Class A-3F, Class A-4F,
Class A-5F, Class A-6F or Class A-7F Certificate,  respectively,  expressed as a
percentage rounded to four decimal places,  equal to a fraction the numerator of
which is the  denomination  represented  by such Class A-1F,  Class A-2F,  Class
A-3F,  Class  A-4F,   Class  A-5F,   Class  A-6F  or  Class  A-7F   Certificate,
respectively,  and the denominator of which is the Original Class A-1F Principal
Balance,  Original Class A-2F Principal  Balance,  Original Class A-3F Principal
Balance,  Original Class A-4F Principal  Balance,  Original Class A-5F Principal
Balance,  Original Class A-6F Principal Balance or Original Class A-7F Principal
Balance,  respectively.   With  respect  to  a  Class  X  Certificate,  Class  R
Certificate or Class LR Certificate,  the portion of the Class evidenced thereby
as stated on the face of such Certificate.

     Performance  Default:  The Servicing  Default  described in clause (vii) of
Section 10.01(a).

     Permitted Instruments:  As used herein, Permitted Instruments shall include
the following:

          (i) (A)  direct  general  obligations  of,  or  obligations  fully and
     unconditionally  guaranteed  as to the  timely  payment  of  principal  and
     interest by, the United  States or any agency or  instrumentality  thereof,
     provided  such  obligations  are backed by the full faith and credit of the
     United States,  and (B) Federal Housing  Administration  debentures,  FHLMC
     senior debt obligations,


<PAGE>


     and FNMA senior debt  obligations  assigned  ratings in at least one of the
     top two long-term rating  categories by S&P and Moody's,  but excluding any
     of such  securities  described  in clauses  (A) and (B) whose  terms do not
     provide for  payment of a fixed  dollar  amount  upon  maturity or call for
     redemption;

          (ii) federal funds,  certificates of deposit, time and demand deposits
     and banker's  acceptances (in each case having  maturities of not more than
     365 days) of any bank or trust company  incorporated  under the laws of the
     United States or any state thereof,  provided that (A) the short-term  debt
     obligations  of such  bank or  trust  company  at the  date of  acquisition
     thereof  have been rated "A-1+" or better by S&P (or, if so consented to by
     the Certificate Insurer, "A-1" or better by S&P) and (B) the short-term and
     long-term  debt  obligations  of such bank or trust  company at the date of
     acquisition thereof have been rated Prime-1 and A1 or better, respectively,
     by Moody's;

          (iii) deposits of any bank or savings and loan  association  which has
     combined  capital,  surplus and undivided  profits of at least  $3,000,000,
     which  deposits are not in excess of the  applicable  limits insured by the
     Bank Insurance Fund or the Savings Association  Insurance Fund of the FDIC,
     provided  that the  long-term  deposits  of such bank or  savings  and loan
     association are rated at least "BBB" by S&P and Baa3 by Moody's;

          (iv) commercial paper (having original maturities of not more than 180
     days) rated "A-1+" or better by S&P and Prime-1 by Moody's;

          (v)  investments in money market funds rated "AAAm" or "AAAm-G" by S&P
     and Aaa by Moody's;

          (vi)  investments in Permitted  Instruments  on an overnight  basis in
     investment accounts maintained at the Trustee; provided,  however, that any
     such account shall be an Eligible Account; and

          (vii)  any other  obligation  or  security  acceptable  to the  Rating
     Agencies and the  Certificate  Insurer (as  certified by a letter from each
     Rating Agency and the Certificate Insurer to the Trustee);  provided,  that
     no  instrument  described  hereunder  shall  evidence  either  the right to
     receive (a) only interest with respect to the  obligations  underlying such
     instrument  or (b)  both  principal  and  interest  payments  derived  from
     obligations  underlying  such  instrument  and the interest  and  principal
     payments  with respect to such  instrument  provided a yield to maturity at
     par greater  than 120% of the yield to  maturity  at par of the  underlying
     obligations;  and provided, further, that no instrument described hereunder
     may be purchased  at a price  greater  than par if such  instrument  may be
     prepaid or called at a price less than its  purchase  price prior to stated
     maturity;  and provided,  further that no  instrument  shall be a Permitted
     Instrument  unless such instrument is a "permitted  investment"  within the
     meaning of Section 860G(a)(5) of the Code.


<PAGE>


     Permitted Transferee:  Any Person other than a Disqualified Organization or
a Disqualified Non-United States Person, or an agent or nominee acting on behalf
of a Disqualified Organization or a Disqualified Non-United States Person.

     Person:   Any   individual,   corporation,   partnership,   joint  venture,
association,   joint-stock   company,   trust,   national  banking  association,
unincorporated organization or government or any agency or political subdivision
thereof.

     Plan:  A Plan filed by a  Mortgagor  pursuant  to the  Bankruptcy  Code (11
U.S.C.  Section 1321) and either confirmed or pending confirmation by a court of
competent jurisdiction pursuant to the Bankruptcy Code (11 U.S.C. Section 1325),
providing  for,  among other  things,  the payment of  defaulted  Mortgage  Loan
payments  all  of  which  were  due  prior  to,  but  in  no  event  after,  the
effectiveness of the Plan.

     Pool Factor: As of any date of determination, the Pool Principal Balance as
of such date divided by the Original Pool Principal Balance.

     Pool  Principal  Balance:  As of any date of  determination,  the aggregate
Principal Balances of the Mortgage Loans.

     Pre-Plan  Interest:  With respect to a Bankruptcy Loan,  accrued but unpaid
interest relating to the period prior to the filing of the related Plan.

     Pre-Plan  Interest  Payments:  With respect to a Bankruptcy Loan,  payments
made by a Mortgagor on account of Pre-Plan Interest.

     Principal and Interest Account:  One of the principal and interest accounts
established  and maintained in the name of the Trustee by the Servicer  pursuant
to Section 5.03 hereof.

     Principal  Balance:  With  respect  to any  Mortgage  Loan or  related  REO
Property,  at any date of  determination,  the principal balance of the Mortgage
Loan  outstanding as of such date. The Principal  Balance of any REO Property as
of the date on which  such REO  Property  became  an REO  Property  shall be the
Principal Balance of the related Mortgage Loan as of the date referred to in the
preceding sentence,  and the Principal Balance of a Mortgage Loan at the time it
becomes a Liquidated Mortgage Loan shall be zero.

     Principal  Prepayment:  Any  payment or other  recovery of  principal  on a
Mortgage Loan equal to the outstanding  principal  balance thereof,  received in
advance of the final  scheduled Due Date, that is intended to satisfy a Mortgage
Loan in full.

     Proceeding:  Any  suit  in  equity,  action  at law or  other  judicial  or
administrative proceeding.


<PAGE>


     Projected  Excess Spread:  With respect to any Payment Date, five (5) times
the amount of the Monthly  Excess Spread Amount  deposited in the Spread Account
pursuant to Section 6.09(a) hereof as of such Payment Date.

     Prospectus:  The prospectus (including the prospectus  supplement) prepared
by the Representative and the Depositors in connection with the initial issuance
and sale of the Class A Certificates.

     Qualified  Substitute  Mortgage  Loan:  A mortgage  loan or mortgage  loans
substituted for a Deleted Mortgage Loan pursuant to Section 2.06 or 3.03 hereof,
which (i) has or have a  mortgage  interest  rate or rates of not less than (and
not more than two  percentage  points more than) the Mortgage  Interest Rate for
the  Deleted  Mortgage  Loan,  (ii)  relates  or  relate  to the  same  type  of
Residential  Dwelling  as the  Deleted  Mortgage  Loan,  or relates to a one- to
four-family dwelling,  and has or have a lien priority that is no more junior or
subordinate  than that of the Deleted  Mortgage Loan, (iii) matures or mature no
later than (and not more than one year earlier than) the Deleted  Mortgage Loan,
(iv) has or have a Combined Loan-to-Value Ratio or Combined Loan-to-Value Ratios
at the time of such substitution no higher than the Combined Loan-to-Value Ratio
of the Deleted  Mortgage Loan, (v) has or have a principal  balance or principal
balances (after  application of all payments received on or prior to the date of
substitution)  equal  to or less  than  the  Principal  Balance  of the  Deleted
Mortgage  Loan as of such date,  (vi) is of equal or better  Class  quality  (as
described in the  Prospectus) as the Deleted  Mortgage  Loan,  (vii) complies or
comply as of the date of substitution with each  representation and warranty set
forth in  Sections  3.01(b)  and 3.02 and (viii) is of the same  type,  either a
balloon loan or fully-amortizing Mortgage Loan, as the Deleted Mortgage Loan.

     Rating Agencies: Collectively, Moody's and S&P.

     Reassignment  of Assignment of  Beneficial  Interest:  With respect to each
Mortgage Loan secured by an interest in an Illinois Land Trust, an assignment of
the  Assignment  of  Beneficial  Interest,  sufficient  under  the  laws  of the
jurisdiction  wherein  the related  Mortgaged  Property is located to effect the
transfer of the entire  beneficial  interest in such  Illinois Land Trust to the
Depositors  and the sale of such  beneficial  interest  to the  Trustee  for the
benefit of the Certificateholders.

     Record Date:  The last day of the  calendar  month  preceding  the month in
which each such Payment Date occurs.

     Recordation  Trigger:  The date on which (i) the long-term senior unsecured
debt of  NationsBank  Corporation  or its successor in interest is reduced below
"A-" by S&P or below A3 by Moody's or is withdrawn.

     Registered  Holder: The Person in whose name a Certificate is registered on
the Certificate Register.

     Regular Interests: The Class A Certificates and the Class X Interest.


<PAGE>


     Reimbursable Amounts: As of any date of determination, an amount payable to
the  Servicer,  the  Representative  or the  Depositors  with respect to (i) the
Servicing  Advances and Advances  reimbursable  pursuant to Section 5.04(ii) not
previously  reimbursed,  (ii) any advances reimbursable pursuant to Section 9.01
and not previously  reimbursed  pursuant to Section  6.05(d)(vi),  and (iii) any
other amounts expressly  reimbursable to the Servicer or the Depositors pursuant
to this Agreement.

     Released  Mortgaged Property  Proceeds:  As to any Mortgage Loan,  proceeds
received by the Servicer in connection with (a) a taking of an entire  Mortgaged
Property by exercise of the power of eminent domain or  condemnation  or (b) any
release of part of the Mortgaged Property from the lien of the related Mortgage,
whether by partial  condemnation,  sale or otherwise,  which are not released to
the Mortgagor in accordance with applicable law,  customary  mortgage  servicing
procedures and this Agreement.

     Remainder Excess Spread Amount: As of any Payment Date, the amount equal to
the excess of the aggregate Excess Spread over the Monthly Excess Spread Amount.

     REMIC: A "real estate  mortgage  investment  conduit" within the meaning of
Section 860D of the Code.

     REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits,  which appear at Sections 860A through 860G
of  the  Code,  and  related  provisions,   and  temporary  and  final  Treasury
regulations promulgated thereunder,  as the foregoing may be in effect from time
to time (or proposed, if proposed to be retroactive).

     REMIC Reporting Agent: As defined in Section 2.07.

     Remittance Report: As defined in Section 6.07.

     REO  Disposition:  The final sale by the  Servicer of a Mortgaged  Property
acquired by the Servicer in foreclosure or by deed in lieu of  foreclosure.  The
proceeds of any REO Disposition constitute part of the definition of Liquidation
Proceeds.

     REO Property: As described in Section 5.10.

     Representative:  EquiCredit  Corporation  of America,  or its  successor in
interest.

     Representative's  Yield:  For each  Mortgage  Loan,  the sum of  prepayment
penalties and premiums  collected on the Mortgage  Loans.  The  Representative's
Yield is  retained  by the  Representative  and is not part of the assets of the
Trust Fund.

     Residential  Dwelling:  Any of the  following:  (i) a one-  to  four-family
dwelling,  (ii) a  unit  in a  planned  unit  development,  (iii)  a  unit  in a
condominium  development,  or  (iv)  a  permanently  affixed  mobile  home  or a
permanently  affixed  manufactured  housing unit, as defined in the FNMA Selling
Guide, which does not constitute other than real property under


<PAGE>


state law provided  that such home or housing  would  qualify as a single family
residence under Section 25(c)(10) of the Code.

     Residual Certificate: Either the Class R or Class LR Certificates.

     Responsible  Officer:  When used with respect to the  Trustee,  any officer
assigned to the Corporate Trust Division (or any successor  thereto) with direct
responsibility  for the  administration  of this  Agreement,  including any Vice
President,  Assistant  Vice  President,  Senior Trust  Officer,  Trust  Officer,
Assistant Trust Officer, any Assistant Secretary, any trust officer or any other
officer  of such  Trustee  customarily  performing  functions  similar  to those
performed by any of the above designated officers and to whom, with respect to a
particular matter,  such matter is referred because of such officer's  knowledge
of and familiarity  with the particular  subject.  When used with respect to the
Representative, a Depositor, an Originator or the Servicer, the President or any
Vice  President,  Assistant  Vice  President,  or  any  Secretary  or  Assistant
Secretary  authorized  to  perform  the  actions  required,  including,  without
limitation,  each Person  whose name appears on a list of  Responsible  Officers
furnished to the Trustee and the  Certificate  Insurer on the Closing  Date,  as
such list may be amended from time to time.

     Series: 1998-2.

     Servicer:  EquiCredit  Corporation of America or any successor appointed as
herein provided.

     Servicer Default: As specified in Section 10.01(a).

     Servicer Employees: As defined in Section 5.09.

     Servicing Advances: All reasonable and customary  "out-of-pocket" costs and
expenses   incurred  in  the  performance  by  the  Servicer  of  its  servicing
obligations   which  are   "unanticipated,"   within  the  meaning  of  Treasury
Regulations Section 1.860G-1(b)(3)(iii), including, but not limited to, the cost
of (i) the preservation,  restoration and protection of the Mortgaged  Property,
including,  without  limitation,  advances in respect of real  estate  taxes and
assessments and insurance  premiums on fire, hazard and flood insurance policies
and leasehold payments, (ii) any enforcement or judicial proceedings,  including
foreclosures,  (iii) the  management and  liquidation of the REO Property,  (iv)
compliance  with the  obligations  under  Sections  5.02,  5.05 and 5.07,  which
Servicing  Advances are  reimbursable  to the Servicer to the extent provided in
Section 5.04(ii), and (v) in connection with the liquidation of a Mortgage Loan,
expenditures  relating to the purchase or maintenance of the First Lien pursuant
to Section 5.13, for all of which costs and expenses the Servicer is entitled to
reimbursement in accordance with this Agreement. Notwithstanding anything herein
to the contrary,  no Servicing Advance shall be required to be made hereunder if
such Servicing Advance would, if made, constitute a Nonrecoverable  Advance. The
determination by the Servicer that it has made a Nonrecoverable  Advance or that
any proposed  Servicing  Advance,  if made,  would  constitute a  Nonrecoverable
Advance, shall be evidenced by an Officer's


<PAGE>


Certificate delivered to the Certificate Insurer, the Depositors and the Trustee
no later than the Business Day following such determination.

     Servicing  Compensation:  The  Servicing Fee and other amounts to which the
Servicer is entitled pursuant to Section 7.03.

     Servicing Fee: With respect to any Accrual Period,  the amount equal to one
month's  interest at the  Servicing  Fee Rate on the  aggregate of the Principal
Balances of the Mortgage  Loans  (calculated  on the basis of 30 days over a 360
day year).  The Servicing Fee is payable solely from the interest portion of (i)
Monthly Payments, (ii) Liquidation Proceeds or (iii) Released Mortgaged Property
Proceeds collected by the Servicer or as otherwise provided in Section 5.04. The
Servicing  Fee with  respect  to each  Mortgage  Loan  shall  accrue on the same
principal balance on which interest accrues on such Mortgage Loan. The Servicing
Fee includes any Servicing Fees owed or payable to any Subservicer.

     Servicing  Fee Rate:  With respect to any Accrual  Period,  a rate equal to
0.60% per annum.

     Servicing Officer:  Any officer of the Servicer involved in, or responsible
for, the  administration  and  servicing  of the  Mortgage  Loans whose name and
specimen  signature  appear on a list of  servicing  officers  furnished  to the
Trustee by the Servicer on the Closing  Date, as such list may from time to time
be amended.

     Specified Spread Account Requirement: As of:

     (x) any  date on or prior  to the  thirtieth  Payment  Date  (occurring  in
December  2000),  the greatest of (a) the Base Spread Account  Requirement as of
such date; (b) the sum of the Principal  Balances of the three largest  Mortgage
Loans as of such  date;  and (c) two times the  excess  of (i)  one-half  of the
aggregate  Principal  Balance of the  Mortgage  Loans  which are 90 or more days
delinquent  (including REO Properties)  over (ii) the Projected Excess Spread as
of such date;

     (y) any date after the thirtieth Payment Date (occurring in December 2000),
the greatest of (a) the lesser of (A) the Base Spread Account  Requirement as of
such date and (B) the product of (x) 7.00% and (y) the Pool Principal Balance as
of such  date;  (b) the  sum of the  Principal  Balances  of the  three  largest
Mortgage  Loans as of such date; and (c) two times the excess of (i) one-half of
the aggregate  Principal Balance of the Mortgage Loans which are 90 or more days
delinquent  (including REO Properties)  over (ii) the Projected Excess Spread as
of such date.  Notwithstanding  the  foregoing,  however,  the Specified  Spread
Account  Requirement  for any  date  shall  in no  event  be  greater  than  the
Subordinated  Amount  as of such  date  and may be  reduced  by the  Certificate
Insurer at any time after the amount in the Spread  Account is equal to the Base
Spread Account  Requirement;  provided that such reductions shall not affect the
rating assigned by S&P or Moody's to the Class A Certificates.

     Spread  Account:  The account  maintained  pursuant to Section 6.09,  which
shall not be an asset of either Trust REMIC.


<PAGE>


     Spread Account Amount: As defined in Section 6.09(b)(ii) hereof.

     Spread Account Excess: As defined in Section 6.09(b)(iv) hereof.

     S&P: Standard & Poor's, or any successor thereto.

     Startup Day: The day designated as such pursuant to Section 2.07 hereof.

     Subordinated  Amount:  (a) The  Subordinated  Amount as of the Cut-off Date
shall be 10.50% times the Original Pool  Principal  Balance  (which is initially
equal to $79,073,646.16.

     (b) As of any  Payment  Date,  the  Subordinated  Amount  shall  equal  the
Subordinated  Amount as of the preceding June 1, minus Cumulative  Excess Spread
Receipts  since  such  preceding  June 1,  through  the  last  day of the  month
preceding  such  Payment  Date.  After  giving  effect to such  adjustment,  the
Subordinated Amount may be further adjusted on each respective June 1 as follows
to equal:

          (i) on each June 1 up to but not including June 1, 2003 the amount, if
     any, by which (A) 10.50% of the Original Pool Principal Balance exceeds (B)
     Cumulative  Excess Spread  Receipts since the Cut-off Date through the last
     day of May preceding such June 1;

          (ii) on June 1, 2003, the lesser of (A) the Subordinated  Amount as of
     the  preceding  Payment  Date,  and (B) the sum of (x)  10.50%  of the Pool
     Principal  Balance at the close of business on June 1, 2003, and (y) 80% of
     the  amount,  if any,  by which the amount set forth  under (A) exceeds the
     amount computed under clause (B)(x) of this paragraph (ii);

          (iii) on June 1, 2004, the lesser of (A) the Subordinated Amount as of
     the  preceding  Payment  Date,  and (B) the sum of (x)  10.50%  of the Pool
     Principal  Balance at the close of business on June 1, 2004, and (y) 75% of
     the  amount,  if any,  by which the amount set forth  under (A) exceeds the
     amount computed under clause (B)(x) of this paragraph (iii);

          (iv) on June 1, 2005, the lesser of (A) the Subordinated  Amount as of
     the  preceding  Payment  Date,  and (B) the sum of (x)  10.50%  of the Pool
     Principal Balance at the close of business on June 1, 2005, and (y) 66-2/3%
     of the amount,  if any, by which the amount set forth under (A) exceeds the
     amount computed under clause (B)(x) of this paragraph (iv);

          (v) on June 1, 2006, the lesser of (A) the  Subordinated  Amount as of
     the  preceding  Payment  Date,  and (B) the sum of (x)  10.50%  of the Pool
     Principal  Balance at the close of business on June 1, 2006, and (y) 50% of
     the  amount,  if any,  by which the amount set forth  under (A) exceeds the
     amount computed under clause (B)(x) of this paragraph (v); and


<PAGE>


          (vi) on June 1, 2007,  and on each June 1,  thereafter,  the lesser of
     (A) the  applicable  Subordinated  Amount on the  preceding  June 1,  minus
     Cumulative  Excess Spread Receipts since such preceding June 1, through the
     last day of the  preceding  June 1, as  appropriate,  and (B) 10.50% of the
     Pool Principal Balance at the close of business on such current June 1;

provided,  however,  that the amount  determined  for part (B) of  clauses  (ii)
through (vi) above shall not be less than the sum of the  Principal  Balances of
the three largest  Mortgage Loans at the beginning of each such period.  Subject
to the preceding  sentence,  the Subordinated Amount as of any date other than a
Payment  Date shall be equal to the  Subordinated  Amount as of the  immediately
preceding Payment Date; and provided,  further,  however, that in no event shall
the Subordinated Amount be less than zero.

     Notwithstanding  anything to the contrary herein contained, no reduction to
the  Subordinated  Amount described in clauses (ii) through (vi) hereof shall be
permitted  to take  effect  if (x) as of June  1,  2003,  the  amount  equal  to
aggregate  Cumulative  Excess  Spread  Receipts  exceeds 1% of the Original Pool
Principal  Balance or (y) as of any June 1,  after June 1, 2003,  (I) the amount
equal  to  aggregate  Cumulative  Excess  Spread  Receipts  exceeds  5%  of  the
Subordinated  Amount in effect on the  preceding  June 1, or (II) on any Payment
Date occurring within the annual period  immediately  preceding such June 1, the
aggregate  principal  balance of all  Mortgage  Loans which were 60 or more days
delinquent  on such  Payment  Date  equaled or  exceeded  2.5% of the  aggregate
principal balance of all Mortgage Loans outstanding on such Payment Date. If, by
reason of the  application  of the  provisions of clause (y) of the  immediately
preceding  sentence,  reduction  of  the  Subordinated  Amount  pursuant  to the
provisions  of any one of clauses (ii) through (vi) shall not have taken effect,
and, if as of any subsequent  June 1, no event shall have occurred the effect of
which  would be to prohibit a reduction  in the  Subordinated  Amount as of such
June 1, then the  Subordinated  Amount  shall be  reduced on such June 1, to the
amount  permitted by the clause which would have otherwise  taken effect had the
provisions of the immediately preceding sentence not been applied.

     Subservicer:  Any  Person  with  whom  the  Servicer  has  entered  into  a
Subservicing  Agreement and who satisfies any  requirements set forth in Section
5.01(b)  hereof in  respect of the  qualification  of a  Subservicer.  As of the
Closing Date, the only  Subservicers are the Originators  (other than EquiCredit
Corporation of America).

     Subservicing  Agreement:   Any  agreement  between  the  Servicer  and  any
Subservicer  relating to subservicing and/or  administration of certain Mortgage
Loans as provided in Section 5.01(b), a copy of which shall be delivered,  along
with any modifications thereto, to the Certificate Insurer and the Trustee.

     Substitution  Adjustment:  As to any  date on which a  substitution  occurs
pursuant  to Section  2.06 or 3.03,  the amount (if any) by which the  aggregate
Principal Balances of any Qualified  Substitute Mortgage Loans as of the date of
substitution, together with accrued and unpaid interest thereon (but only to the
extent  deposited in the Principal and Interest  Account and  transferred to the
Lower-Tier Distribution Account), are less than the aggregate of the


<PAGE>


Principal  Balances  (after  application  of principal  payments  received on or
before the date of  substitution  and deposited  into the Principal and Interest
Account),  together  with  accrued  and unpaid  interest  thereon to the date of
substitution,  of the  related  Deleted  Mortgage  Loans  plus any  unreimbursed
Servicing Advances.

     Tax Matters  Person:  The Person or Persons  appointed from time to time to
act as the "tax matters person" (within the meaning of the REMIC  Provisions) of
each of the Lower-Tier REMIC and the Upper-Tier REMIC.

     Termination Price: As defined in Section 11.01.

     Testing Date: As defined in Section 3.02(fff).

     Transfer: Any direct or indirect transfer,  sale, pledge,  hypothecation or
other form of assignment of any Ownership Interest in a Certificate.

     Transfer  Agreement:  The  agreement,  dated as of June 1, 1998,  among the
Originators  and the Depositors,  pursuant to which the Originators  transferred
the Mortgage Loans to the Depositors.

     Transfer Affidavit and Agreement: As defined in Section 4.02(j).

     Transferee:  Any Person who is acquiring by Transfer any Ownership Interest
in a Certificate.

     Transferor:  Any Person who is disposing by Transfer any Ownership Interest
in a Certificate.

     Trust: EQCC Home Equity Loan Trust 1998-2.

     Trust Fund: The segregated pool of assets subject hereto,  constituting the
trust created hereby and to be administered  hereunder,  consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement, together with
the Mortgage Files relating thereto and all proceeds  thereof,  (ii) such assets
as from time to time are  identified  as REO  Property or are  deposited  in the
Collection Account,  Lower-Tier  Distribution Account,  Upper-Tier  Distribution
Account,  Principal and Interest Account,  Spread Account and Insurance Account,
including amounts on deposit in the foregoing accounts and invested in Permitted
Instruments,  (iii) the  Trustee's  rights  under all  insurance  policies  with
respect  to the  Mortgage  Loans  required  to be  maintained  pursuant  to this
Agreement and any Insurance Proceeds, (iv) the Certificate Insurance Policy, (v)
Liquidation  Proceeds  and  (vi)  Released  Mortgaged  Property  Proceeds.   The
Representative's  Yield and amounts  received  on and after the Cut-off  Date in
respect of interest  accrued on the Mortgage  Loans prior to the Cut-off Date do
not constitute part of the Trust Fund.


<PAGE>


     Trustee: U.S. Bank National Association, not in its individual capacity but
solely as trustee under this  Agreement,  or its  successor in interest,  or any
successor trustee appointed pursuant to this Agreement.

     Trust REMIC: As defined in Section 2.07(a)(1).

     UCC: The Uniform Commercial Code as in effect in the relevant jurisdiction.

     United States Person: (i) A citizen or resident of the United States,  (ii)
a corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, (iii) an estate
the income of which is  includible  in gross  income for United  States  federal
income tax purposes,  regardless of its source or (iv) a trust if a court within
the  United   States  is  able  to  exercise   primary   supervision   over  the
administration  of such trust and one or more  United  States  Persons  have the
authority to control all substantial decisions of such trust.

     Upper-Tier Distribution Account: The account established in accordance with
Section 6.01(a) hereof and maintained by the Trustee.

     Upper-Tier  Regular  Interests:  The  Class  X  Interest  and  the  Class A
Certificates.

     Upper-Tier REMIC: One of the two separate REMICs comprising the Trust Fund,
the assets of which consist of the Lower-Tier Regular Interests and such amounts
as shall from time to time be held in the Upper-Tier Distribution Account.

     Voting  Interest:  The aggregate  Voting Interests of each Class of Class A
Certificates on any date will be equal to a percentage, expressed as a fraction,
the  numerator  of  which  is the  principal  balance  of  such  Class  and  the
denominator  of which is 95% of the Class A  Principal  Balance.  The  aggregate
Voting  Interests  of the Class X  Certificates  will be equal to a  percentage,
expressed as a fraction,  the  numerator of which is 5% of the Class A Principal
Balance  and the  denominator  of which is the Class A Principal  Balance.  Each
Certificateholder of a Class will have a Voting Interest equal to the product of
the  Voting  Interest  to which  such  Class is  collectively  entitled  and the
Percentage Interest in such Class represented by such Holder's Certificates. The
Class R and Class LR Certificates have no Voting Interest.

     Weighted  Average  Mortgage  Interest  Rate:  The  weighted  average of the
Mortgage Interest Rates on the Mortgage Loans.



                                   ARTICLE II

                         CONVEYANCE OF THE TRUST ASSETS

     Section  2.01  Sale  and   Conveyance   of  Trust   Assets;   Priority  and
Subordination of Ownership Interests.


<PAGE>


     (a) The Depositors do hereby sell, transfer, assign, set over and convey to
the  Trustee  (for the  benefit of the  Certificateholders  and the  Certificate
Insurer,  as their  interests may appear)  without  recourse,  all of the right,
title and interest of the Depositors in and to (i) the Mortgage Loans (excepting
the Representative's Yield and amounts received on and after the Cut-off Date in
respect of interest  accrued on the Mortgage  Loans prior to the Cut-off  Date),
(ii) the  Mortgage  Files  relating  to the  Mortgage  Loans,  (iii) the related
Mortgaged  Properties,  (iv) the Depositors' rights under all insurance policies
with  respect to the Mortgage  Loans  required to be  maintained  by it, (v) all
right,  title and  interest  of the  Depositors  in,  to and under the  Transfer
Agreement,  including  the  right to cause the  Originators  to  repurchase  the
Mortgage Loans under certain  circumstances,  (vi) all right, title and interest
of the Depositors in each of the Accounts established and maintained pursuant to
Articles V and VI and (vii) the  interest of the  Depositors  in any proceeds of
the  property  described  in  clauses  (i),  (ii),  (iii),  (iv),  (v) and (vi),
including  all  proceeds of the  conversion,  voluntary or  involuntary,  of the
foregoing  into  cash,  instruments,  securities  or other  property,  including
without  limitation,  all  amounts  from  time to time held or  invested  in the
Accounts.

     (b) The  rights of the  Holders  to receive  payments  with  respect to the
Mortgage Loans in respect of the  Certificates,  and all ownership  interests of
the  Certificateholders  in  such  payments,  shall  be as  set  forth  in  this
Agreement.

     (c)  It is the  intention  of  this  Agreement  that  the  transfer  of the
Depositors' right, title and interest in and to the assets of the Trust pursuant
to this  Agreement  shall  constitute an absolute sale by the  Depositors to the
Trustee of the Mortgage Loans for the benefit of the  Certificateholders and the
Certificate  Insurer and not a loan.  If a transfer  of  Mortgage  Loans from an
Originator to a Depositor pursuant to the Transfer Agreement is characterized as
a pledge and not an absolute sale,  then such Depositor  shall be deemed to have
transferred  to the Trustee for the  benefit of the  Certificateholders  and the
Certificate  Insurer,  as their  interests may appear,  all of such  Depositor's
right,  title and interest in, to and under the  obligations of such  Originator
deemed to be secured by said pledge;  and it is the intention of this  Agreement
that the  Depositors  shall also be deemed to have granted and for such purposes
the   Depositors   hereby  grant,   to  the  Trustee  for  the  benefit  of  the
Certificateholders and the Certificate Insurer, as their interests may appear, a
first priority  security  interest in all of the Depositors'  right,  title, and
interest in, to and under the  obligations of the  Originators to the Depositors
deemed to be secured by said pledge and that the  Trustee  shall be deemed to be
an  independent  custodian for purposes of  perfection of the security  interest
granted to the  Depositors.  If the transfer of the Mortgage Loans and the other
assets of the Trust from the  Depositors  to the  Trustee for the benefit of the
Certificateholders  is  characterized  as a pledge,  it is the intention of this
Agreement  that this  Agreement  shall  constitute  a security  agreement  under
applicable law, and that the Depositors  shall be deemed to have granted and for
such purposes the Depositors hereby grant, to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer, as their interests may appear, a
first priority  security  interest in all of the  Depositors'  right,  title and
interest  in, to and under the Mortgage  Loans,  all payments of principal of or
interest on such Mortgage Loans,  all other rights relating to and payments made
in  respect  of the  assets  of the  Trust,  and all  proceeds  of any  thereof,
including  all  proceeds of the  conversion,  voluntary or  involuntary,  of the
foregoing into cash, instruments, securities or


<PAGE>


other property,  including without limitation all amounts from time to time held
or invested in the Accounts.  If the trust created by this Agreement  terminates
prior to the satisfaction of the claims of any Person in any  Certificates,  the
security interest created hereby shall continue in full force and effect and the
Trustee  shall be deemed to be the  collateral  agent  for the  benefit  of such
Person.

     Section 2.02 Possession of Mortgage Files.

     (a) Upon the issuance of the  Certificates,  the ownership of each Mortgage
Note,  the Mortgage and the contents of the related  Mortgage  File is vested in
the Trustee for the benefit of the Certificateholders.

     (b) Pursuant to Section 2.04, the Depositors have delivered or caused to be
delivered each Mortgage File to the Custodian.

     Section 2.03 Books and Records.

     The  sale of each  Mortgage  Loan  shall  be  reflected  on the  applicable
Depositor's balance sheets and other financial statements prepared in accordance
with  generally  accepted  accounting  principles  as a sale of  assets  by each
Depositor.  The applicable  Depositor shall be responsible for maintaining,  and
shall maintain, a complete set of books and records for each Mortgage Loan which
shall be clearly  marked to reflect the  ownership of each  Mortgage Loan by the
Trustee for the benefit of the Certificateholders.

     Section 2.04 Delivery of Mortgage Loan Documents.

     Contemporaneously  with the  delivery  of this  Agreement,  the  Depositors
delivered  or caused to be delivered  hereunder  to the Trustee the  Certificate
Insurance Policy,  and each Depositor has delivered to the Trustee (which may be
by delivery to the  Custodian  on behalf of the Trustee)  each of the  following
documents for each Mortgage Loan:

     (a) (i) (A) The original Mortgage Note, with any intervening  endorsements,
endorsed "Pay to the order of U.S. Bank National  Association,  as Trustee under
the Pooling and Servicing  Agreement dated as of June 1, 1998, without recourse"
and signed, by facsimile or manual signature, in the name of the Originator by a
Responsible  Officer,  with all prior  and  intervening  endorsements  showing a
complete chain of endorsement  from the  originator to such  Originator,  if the
Originator  from whom the  Depositor  acquired  such  Mortgage  Loan was not the
originator  or (B) if  such  Mortgage  Note is a  Destroyed  Mortgage  Note,  an
original Destroyed Mortgage Note Affidavit together with a copy of such Mortgage
Note attached thereto and, (ii) with respect to manufactured  housing units, the
certificate of title, if any;

     (b) Either: (i) the original  Mortgage,  with evidence of recording thereon
(and, in the case of a Mortgage Loan secured by a Mortgaged  Property held in an
Illinois Land Trust,  signed by the trustee of such Illinois Land Trust), (ii) a
copy of the Mortgage  certified as a true copy by a  Responsible  Officer of the
Originator (provided, however, that such Responsible Officer may complete one or
more blanket certificates attaching copies of one or


<PAGE>


more Mortgages relating thereto) or by the closing attorney, or by an officer of
the title  insurer or agent of the title  insurer which issued the related title
insurance policy, or commitment  therefor,  if the original has been transmitted
for  recording  until  such  time as the  original  is  returned  by the  public
recording  office  or  (iii)  a copy of the  Mortgage  certified  by the  public
recording  office in those  instances where the original  recorded  Mortgage has
been lost or not yet returned;

     (c) The original  Assignment of Mortgage from the Originator to "U.S.  Bank
National Association, as Trustee under the Pooling and Servicing Agreement dated
as of June 1, 1998,  without  recourse"  or in blank;  any such  Assignments  of
Mortgage may be made by blanket  assignments  for Mortgage  Loans secured by the
Mortgaged Properties located in the same county if permitted by applicable local
law;

     (d) Except with respect to any Mortgage  Loan secured by a second  priority
lien and  having a  Principal  Balance  not in excess of  $50,000  and listed in
Exhibit V, the original  policy of title insurance or a true copy thereof or, if
such policy has not yet been delivered by the insurer,  the commitment or binder
to issue same, or original documents of assurance of title;

     (e) All  intervening  assignments,  if any,  showing  a  complete  chain of
assignment  from the  originator  to the  applicable  Originator,  including any
recorded warehousing assignments,  with evidence of recording thereon, certified
by a  Responsible  Officer of the  applicable  Originator  as a true copy of the
original of such intervening assignments;

     (f) A copy of all assumption and modification agreements, if any, certified
as a true copy by a Responsible Officer of the applicable Originator;

     (g) If the  Mortgaged  Property  is held in an  Illinois  Land  Trust,  the
original Assignment of Beneficial Interest,  or, if the trustee of such Illinois
Land Trust retains such original Assignment of Beneficial  Interest, a certified
true  copy of such  Assignment  of  Beneficial  Interest  so  certified  by such
trustee;

     (h) If the  Mortgaged  Property  is  held in an  Illinois  Land  Trust,  an
original  Reassignment of Assignment of Beneficial  Interest from the applicable
Originator to "U.S. Bank National Association,  as Trustee under the Pooling and
Servicing Agreement dated as of June 1, 1998, Series 1998-2" or in blank. In the
event that the Mortgage  Loan was  acquired by the  applicable  Originator  in a
merger,  the  Reassignment  of the Assignment of Beneficial  Interest must be by
"Originator,  successor  by merger to [name of  predecessor]";  and in the event
that the Mortgage Loan was acquired or originated by the  applicable  Originator
while doing  business  under another  name,  the  Reassignment  of Assignment of
Beneficial Interest must be by "Originator, formerly known as [previous name]";

     (i) If the Mortgaged Property is held in an Illinois Land Trust,  originals
of all intervening Reassignments of Assignment of Beneficial Interest, showing a
complete chain of assignment from the  beneficiaries of such Illinois Land Trust
to the applicable Originator of


<PAGE>


all of such  beneficiaries'  right,  title,  and  interest in, to, and under the
trust agreement with respect to such Illinois Land Trust; and

     (j) If the  Mortgaged  Property  is held in an Illinois  Land Trust,  (A) a
certified copy of the instrument creating the Illinois Land Trust, (B) a copy of
the UCC-1  Financing  Statement  evidencing  the  assignment of the  Mortgagor's
beneficial interest in the Illinois Land Trust, with evidence of filing thereon,
and (C) the original  personal  guaranty of the Mortgage Note,  executed by each
beneficiary of the Illinois Land Trust.

     The  applicable  Depositor  shall use its  reasonable  efforts to  promptly
deliver  or cause to be  delivered  to the  Trustee  or the  Custodian:  (a) the
original recorded Mortgage in those instances where a copy thereof was delivered
hereunder;  (b) the original  recorded  Assignment of Mortgage to the applicable
Originator,  which,  together  with any  intervening  assignments  of  Mortgage,
evidences a complete  chain of assignment  from the originator to the applicable
Originator in those instances where copies of such  Assignments  were delivered;
and (c) the title insurance policy or assurance required in paragraph (d) above.
The applicable  Depositor shall, within five (5) Business Days after the receipt
thereof,  and in any event, within twelve months after the Closing Date, deliver
or cause to be delivered to the Trustee or the Custodian each document described
in any of the preceding clauses (a), (b) and (c); provided,  however,  that if a
document  described  in the  preceding  clause  (a) or  clause  (b) has not been
returned from the appropriate public recording office, the applicable  Depositor
shall  deliver a certified  copy of the  Mortgage  and a  receipted  copy of the
Assignment from the appropriate recording office prior to the expiration of such
twelve-month period.  Notwithstanding anything to the contrary contained in this
Section 2.04,  the  applicable  Depositor  shall be deemed to have satisfied its
obligations to deliver a Mortgage or Assignment of Mortgage upon delivery to the
Trustee or the Custodian a copy of such  Mortgage or Assignment of Mortgage,  as
applicable,  certified by the public  recording  office to be a true copy of the
recorded  original  thereof.  From  time to time the  applicable  Depositor  may
forward or cause to be  forwarded  to the  Trustee or the  Custodian  additional
original documents  evidencing an assumption or modification of a Mortgage Loan.
All  Mortgage  Loan  documents  held by the Trustee or the  Custodian as to each
Mortgage Loan are referred to herein as the "Mortgage File".

     The Servicer covenants and agrees to take all action necessary or desirable
under  applicable  state law to transfer  the  benefits of the lien and security
interest in each manufactured or mobile home and the related Mortgaged  Property
to the Trustee, including,  without limitation, the filing of UCC-3 assignments,
notations on the  certificates  of title and  recordation  of the  Assignment of
Mortgage within the time periods required by this Section 2.04.

     As promptly as  practicable  following the  occurrence  of the  Recordation
Trigger,  but in no event  more than 90 days  following  the  occurrence  of the
Recordation  Trigger, the Servicer shall at its own expense either (i) record in
favor of the Trustee  each  Assignment  of  Mortgage  and each  Reassignment  of
Assignment of Beneficial  Interest referred to in paragraphs (c) and (h) of this
Section 2.04 with respect to all of the Mortgage Loans in the


<PAGE>


appropriate  real property or other  records,  or (ii) deliver to the Trustee an
Opinion  of Counsel  satisfactory  to the Rating  Agencies  and the  Certificate
Insurer to the effect that  recording is not required and no other action on the
part of such Depositor is required  (other than such actions as have been taken)
to  protect  the  Trustee's  right,  title and  interest  in and to the  related
Mortgage and Note.

     All recording  required pursuant to this Section 2.04 shall be accomplished
by and at the expense of the  Servicer.  For purposes of  determining  whether a
signature is made on an instrument or document,  stapling of an attachment shall
be a sufficient  affixation to cause the  attachment  to constitute  part of the
instrument or document.

     Section 2.05 [Reserved].

     Section   2.06   Acceptance   by  Trustee  of  the  Trust   Fund;   Certain
Substitutions; Certification by Trustee.

     (a) The Trustee hereby acknowledges receipt of, for each Mortgage Loan, the
items listed in Section  2.04 (a),  (b),  (c), (g) and (h) and declares  that it
will  hold  such  documents  and any  amendments,  replacements  or  supplements
thereto,  as well as any other assets delivered to it in trust, upon and subject
to  the  conditions  set  forth  in  this  Agreement  for  the  benefit  of  the
Certificateholders,  the Trustee as holder of the Lower-Tier  Regular  Interests
and Class X Interest and the Certificate Insurer, as their interests may appear.
The  Trustee   shall  execute  and  deliver  on  the  Closing  Date  an  initial
certification  of  receipt by it or by the  Custodian  on its  behalf,  for each
Mortgage Loan of the items listed in Section 2.04(a),  (b), (c), (g) and (h), in
the form  attached  as  Exhibit E hereto,  and  declares  that it will hold such
documents and any amendments,  replacements or supplements  thereto,  as well as
any other assets  delivered to it in trust, to the extent set forth herein,  for
the benefit of the  Certificateholders,  the Trustee as holder of the Lower-Tier
Regular  Interests and Class X Interest and the  Certificate  Insurer,  as their
interests  may appear.  The Trustee  agrees to review (or cause to be  reviewed)
each  Mortgage  File within 45 days after the Closing Date (or,  with respect to
any Qualified Substitute Mortgage Loan, within 45 days after the receipt thereof
by the  Custodian) and to deliver to the  Representative,  the  Depositors,  the
Servicer  and the  Certificate  Insurer  an  interim  certification  in the form
attached  hereto as Exhibit F-1 on or before such date to the effect that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan  paid  in  full  or any  Mortgage  Loan  specifically  identified  in  such
certification as not covered by such certification),  (i) all documents required
to be delivered to it pursuant to this  Agreement are in its  possession  (other
than those described in Section  2.04(a)(ii)  and 2.04(f)),  (ii) such documents
have been reviewed by it and have not been mutilated, damaged, torn or otherwise
physically  altered  (handwritten  additions,  changes or corrections  shall not
constitute  physical  alteration  if properly  initialed by the  Mortgagor)  and
relate to such Mortgage Loan, and (iii) based on its  examination and only as to
the foregoing documents, the information set forth on the Mortgage Loan Schedule
(other than items (i), (iv) and (x) of the definition of Mortgage Loan Schedule)
accurately  reflects the information set forth in the Mortgage File. The Trustee
shall be under no duty or  obligation  to  inspect,  review or examine  any such
documents, instruments, certificates or other papers to


<PAGE>


determine that they are genuine, enforceable, or appropriate for the represented
purpose  or that they are other  than what  they  purport  to be on their  face.
Within 375 days after the Closing  Date,  the Trustee shall deliver (or cause to
be delivered) to the Servicer,  the  Depositors  and the  Certificate  Insurer a
final  certification  in the form attached  hereto as Exhibit F-2 evidencing the
completeness of the Mortgage Files.

     (b) If the  Certificate  Insurer  or the  Trustee  during  the  process  of
reviewing  the  Mortgage  Files  finds  any  document  constituting  a part of a
Mortgage File which is not executed,  has not been received, is unrelated to the
Mortgage Loan  identified in the Mortgage Loan Schedule,  or does not conform to
the requirements of Section 2.04 or substantively to the description  thereof as
set  forth in the  Mortgage  Loan  Schedule,  the  Trustee,  or the  Certificate
Insurer, as applicable,  shall promptly so notify the Servicer, the Trustee, the
Representative,  the Depositors and the Certificate  Insurer.  In performing any
such review,  such Person may conclusively rely on the related  Originator as to
the purported  genuineness of any such document and any signature thereon. It is
understood  that the  scope of such  Person's  review of the  Mortgage  Files is
limited  solely to confirming  that the documents  listed in Section 2.04 (other
than those  described in Section  2.04(f))  have been  executed and received and
relate to the Mortgage  Files  identified  in the Mortgage  Loan  Schedule.  The
Servicer  agrees to use  reasonable  efforts to cause to be  remedied a material
defect in a  document  constituting  part of a  Mortgage  File of which it is so
notified by the Certificate Insurer or the Trustee. If, however,  within 60 days
after receipt by it of the final  certification  referred to in paragraph (a) of
this  Section  2.06,  the  Servicer  has not  caused to be  remedied  any defect
described in such final  certification  and such defect materially and adversely
affects the interest of the  Certificateholders  in the related Mortgage Loan or
the  interests  of the  Certificate  Insurer,  the  Servicer  will on the  third
Business Day preceding the Payment Date  immediately  succeeding the end of such
60 day period (i) if within 2 years of the Closing  Date,  substitute,  or cause
the  Depositors  or the  applicable  Originator to  substitute,  in lieu of such
Mortgage Loan a Qualified  Substitute Mortgage Loan in the manner and subject to
the  conditions  set  forth in  Section  3.03 or (ii)  purchase,  or  cause  the
Depositors or the applicable  Originators  to purchase,  such Mortgage Loan at a
purchase  price equal to the  Principal  Balance of such Mortgage Loan as of the
date of  purchase,  plus all  accrued  and  unpaid  interest  on such  Principal
Balance,  computed at the  Mortgage  Interest  Rate,  net of the  Servicing  Fee
(computed in the manner  described in paragraph (i) or (ii), as  applicable,  of
the definition  thereof) if the Representative is the Servicer,  plus the amount
of any unreimbursed Servicing Advances made by the Servicer with respect to such
Mortgage  Loan out of funds on deposit in the  Principal  and  Interest  Account
pursuant to Section  5.01(f),  which  purchase  price shall be  deposited in the
Principal and Interest Account on the next succeeding  Determination Date (after
deducting  therefrom any amounts received in respect of such purchased  Mortgage
Loan or Loans and being held in the  Principal  and Interest  Account for future
distribution);  provided that if such defect caused such Mortgage Loan not to be
a  "qualified  mortgage"  within the meaning of Code  Section  860G(a)(3),  such
repurchase  or, if  applicable,  substitution  shall occur within 90 days of the
earlier of the delivery of the  Trustee's  interim  certification  or Servicer's
discovery of such defect.


<PAGE>


     (c) Upon receipt by the Trustee of a certification  of a Servicing  Officer
of the  Servicer  of such  substitution  or  acceptance  and the  deposit of the
amounts   described   above  in  the  Principal  and  Interest   Account  (which
certification shall be in the form of Exhibit B to the Custodial  Agreement) the
Trustee  shall  release to the  Servicer  for release to the  Depositors  or the
Originators,  as  appropriate,  the  related  Mortgage  File and shall  execute,
without recourse, and deliver such instruments of transfer necessary to transfer
such Mortgage Loan to the Representative or the respective Depositor.

     (d) If  recordation  of any  Assignment  of  Mortgage  or  Reassignment  of
Assignment of Beneficial  Interest is required hereunder after the occurrence of
a Recordation Trigger, the original of each such recorded Assignment of Mortgage
and Reassignment of Assignment of Beneficial  Interest shall be delivered to the
Trustee  or the  Custodian  within  10 days  following  the  date on which it is
returned to the related  Depositor or the Servicer by the office with which such
Assignment of Mortgage or Reassignment of Assignment of Beneficial  Interest was
filed for recordation  and,  within 10 days following  receipt by the Trustee or
Custodian, as applicable, of the recorded Assignment of Mortgage or Reassignment
of Assignment of  Beneficial  Interest,  the Trustee shall review or shall cause
the  Custodian  to  review  such  Assignment  of  Mortgage  or  Reassignment  of
Assignment of Beneficial Interest to confirm that such Assignment of Mortgage or
Reassignment  of  Assignment  of  Beneficial  Interest has been  recorded.  Upon
receipt  by the  Trustee  or  the  Custodian,  as  applicable,  of the  recorded
Assignment of Mortgage or  Reassignment  of  Assignment of Beneficial  Interest,
such recorded Assignment of Mortgage or Reassignment of Assignment of Beneficial
Interest  shall become part of the Mortgage  File.  The Trustee shall notify the
related  Depositor,  the Servicer and the  Certificate  Insurer of any defect in
such Assignment of Mortgage or Reassignment of Assignment of Beneficial Interest
if it shall have actual  knowledge of any such defect based on such review.  The
Servicer or the related  Depositor shall have a period of 30 days following such
notice to correct or cure such  defect.  In the event that the  Servicer  or the
related  Depositor  fails to record an Assignment of Mortgage or Reassignment of
Assignment  of  Beneficial  Interest as herein  provided  (which  Assignment  of
Mortgage or Reassignment of Assignment of Beneficial Interest was required to be
recorded)  and the Trustee  shall have actual  knowledge  of such  failure,  the
Trustee  shall prepare and file or shall cause the Custodian to prepare and file
such Assignment of Mortgage or Reassignment of Assignment of Beneficial Interest
for  recordation  in the  appropriate  real property or other  records,  and the
Servicer and the related Depositor hereby appoints the Trustee and the Custodian
as its  attorney-in-fact  with full power and authority  acting in its stead for
the purpose of such preparation, execution and recordation. Any expense incurred
by the Trustee or the Custodian not otherwise paid for by the related  Depositor
or the Servicer as required  hereunder in connection  with the  preparation  and
recordation  of such  Assignment of Mortgage and  Reassignment  of Assignment of
Beneficial  Interest  shall  be  reimbursed  to the  Trustee  or  Custodian,  as
applicable, pursuant to Section 12.05.

     Section 2.07 REMIC Administration.

     (a) Tax Administration


<PAGE>


         (1)  Elections  will be made by the Trustee on behalf of the Trust Fund
to treat the assets of the Trust Fund,  excluding the Spread  Account (which for
the purpose of this Section  2.07 is  understood  to include  amounts on deposit
therein invested in Permitted Instruments and the proceeds of such investments),
as two  separate  REMICs  under  the Code  (each,  a "Trust  REMIC").  Each such
election  will be  made  on  Form  1066  or  other  appropriate  federal  tax or
information  return for the taxable  year ending on the last day of the calendar
year in which the  Certificates  are issued.  The assets of the Lower-Tier REMIC
will  consist  of all of the assets  constituting  the Trust Fund other than the
assets  of the  Upper-Tier  REMIC  and  the  Spread  Account  described  in this
paragraph.  The Lower-Tier  REMIC will issue classes of interests  which will be
the  Lower-Tier  Regular  Interests  (which  will  be  uncertificated  and  will
represent  the "regular  interests"  in the  Lower-Tier  REMIC) and the Class LR
Certificates,  which  will be the sole  class  of  "residual  interests"  in the
Lower-Tier  REMIC.  The Trustee will hold the  Lower-Tier  Regular  Interests in
trust for the  benefit of the  Upper-Tier  REMIC.  The assets of the  Upper-Tier
REMIC will  consist  of the  Lower-Tier  Regular  Interests  and the  Upper-Tier
Distribution  Account.  The Upper-Tier REMIC will issue the Class A Certificates
and the Class X Interest  (which will  represent the "regular  interests" in the
Upper-Tier REMIC) and the Class R Certificates,  which will be the sole class of
"residual interest" in the Upper-Tier REMIC. The Holder of the Class LR or Class
R Certificates,  respectively,  representing at any time the largest  Percentage
Interest  in such Class  shall be the Tax  Matters  Person  with  respect to the
Lower-Tier REMIC or Upper-Tier  REMIC, as applicable.  Each Holder of a Class LR
or  Class R  Certificate,  as a  condition  of  ownership  thereof,  irrevocably
appoints  the  Trustee to act as its agent and  attorney-in-fact  to perform all
duties of the Tax Matters Person. The "latest possible maturity date" within the
meaning of Treasury Regulation Section  1.860G-1(a)(4) of the Lower-Tier Regular
Interests and the Regular Interests shall be the Final Scheduled Payment Date.

         (2) The Closing Date is hereby  designated as the "Startup Day" of each
Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

         (3) Except as provided  in Section  12.05,  the Trustee  shall pay (and
shall be entitled to  reimbursement  thereof by the  Servicer  or  otherwise  in
accordance  with the terms of this Agreement) the ordinary and usual expenses in
connection with the preparation,  filing and mailing of tax information  reports
and returns that are incurred by it in the ordinary course of its administration
of its tax-related  duties under this Agreement,  but  extraordinary  or unusual
expenses,  costs or  liabilities  incurred in  connection  with its  tax-related
duties under this Agreement, including without limitation any expenses, costs or
liabilities associated with audits,  required independent opinions regarding tax
methodology and related matters or any  administrative  or judicial  proceedings
with respect to each Trust REMIC that involve the  Internal  Revenue  Service or
state tax authorities, shall be expenses of the Trust Fund.

         (4) The Trustee shall prepare and file all of the Trust REMICs' federal
and state income or franchise tax and information returns. Except as provided in
Section 12.05,  the expenses of preparing and filing such returns shall be borne
by the Trustee.  The Servicer and the Depositors shall provide on a timely basis
to the Trustee or its designee such information with respect to each Trust REMIC
as is in their possession, which the


<PAGE>


Servicer  or the  Depositors  has or have  received or prepared by virtue of its
activities as Servicer or Depositors  hereunder and reasonably  requested by the
Trustee to enable it to perform its obligations  under this subsection,  and the
Trustee shall be entitled to rely on such  information in the performance of its
obligations hereunder.

         (5) The  Trustee  shall  perform  on behalf of the Trust  Fund and each
Trust REMIC all tax reporting  duties and other tax  compliance  duties that are
the  responsibility of a Trust REMIC under the Code, REMIC Provisions,  or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority.  Among its other duties,  the Trustee shall provide (i) to the
Internal  Revenue Service or other Persons  (including,  but not limited to, the
transferor of any Residual  Certificate to a Disqualified  Organization or to an
agent that has  acquired any Residual  Certificate  on behalf of a  Disqualified
Organization)  such  information as is necessary for the  application of any tax
relating  to  the  transfer  of any  Residual  Certificate  to any  Disqualified
Organization   pursuant  to  Section  860E(e)  of  the  Code  and  the  Treasury
Regulations  thereunder and (ii) to the  Certificateholders  such information or
reports as are required by the Code or REMIC Provisions.  Each of the Depositors
and the Servicer  shall provide on a timely basis (and in no event later than 30
days  after  the  Trustee's  request)  to  the  Trustee  or  its  designee  such
information  with  respect  to each  Trust  REMIC  as is in its  possession  and
reasonably  requested  in  writing by the  Trustee  to enable it to perform  its
obligations under this subsection.

         (6) [Reserved]

         (7) The Trustee and the Servicer shall perform their  obligations under
this Agreement and the REMIC  Provisions in a manner  consistent with the status
of each  Trust  REMIC  as a REMIC  or,  as  appropriate,  shall  adopt a plan of
complete liquidation.

         (8) The  Trustee  and the  Servicer  shall not take any action or cause
either Trust REMIC to take any action,  within their respective  control and the
scope of their specific  respective  duties under this Agreement that, under the
REMIC Provisions, could (i) endanger the status of either Trust REMIC as a REMIC
or (ii) result in the imposition of a tax upon either Trust REMIC (including but
not limited to the tax on  prohibited  transactions  as defined in Code  Section
860F(a)(2)  and the tax on prohibited  contributions  as defined in Code Section
860G(d)) unless the Trustee has received a  Nondisqualification  Opinion (at the
expense of the party seeking to take such action) with respect to such action.

         (9) To the extent not paid  pursuant to  paragraph  (d) of this Section
2.07,  each Holder of any Residual  Certificate  shall pay when due its pro rata
share of any and all federal,  state and local taxes  imposed on the  applicable
Trust  REMIC or its  assets  or  transactions,  including,  without  limitation,
"prohibited  transaction" taxes, as defined in Section 860F of the Code, any tax
on  contributions  imposed by Section  860G(d) of the Code,  and any tax on "net
income from foreclosure  property" as defined in Section 860G(c) of the Code. To
the extent that such Trust REMIC taxes are not paid by the  applicable  Residual
Certificateholders, the Trustee shall pay any remaining Trust REMIC taxes out of
current  or  future  amounts  otherwise  distributable  to  the  Holders  of any
applicable Residual Certificates.


<PAGE>


         (10) The Trustee shall, for federal income tax purposes, maintain books
and  records  with  respect  to each Trust  REMIC on a  calendar  year and on an
accrual basis.  Notwithstanding  anything to the contrary  contained herein, all
amounts  collected on the Mortgage Loans shall, for federal income tax purposes,
be allocated first to interest due and payable on the Mortgage Loans  (including
interest on overdue interest) (other than additional  interest at a penalty rate
payable  following  a  default).  The  books  and  records  must  be  sufficient
concerning the nature and amount of each Trust REMIC's  investments to show that
each Trust REMIC has complied with the REMIC Provisions.

         (11)  Neither  the  Trustee  nor the  Servicer  shall  enter  into  any
arrangement by which either Trust REMIC will receive a fee or other compensation
for services.

         (12) In order to enable the  Trustee to perform its duties as set forth
herein,  the Depositors shall provide,  or cause to be provided,  to the Trustee
within 10 days after the Closing Date all  information  or data that the Trustee
reasonably  determines  to be relevant  for tax purposes on the  valuations  and
offering prices of the Certificates,  including,  without limitation, the yield,
issue prices,  pricing  prepayment  assumption  and projected  cash flows of the
Class A Certificates, the Class X Certificates and the Residual Certificates, as
applicable,  and the projected cash flows on the Mortgage Loans. Thereafter, the
Depositors  shall provide to the Trustee,  promptly upon request  therefor,  any
such  additional  information  or data that the Trustee may,  from time to time,
reasonably  request in order to enable the  Trustee to perform its duties as set
forth herein. The Trustee is hereby directed to use any and all such information
or data provided by the  Depositors in the  preparation of all federal and state
income or franchise tax and information returns and reports for each Trust REMIC
to  Certificateholders  as required herein.  The Depositors hereby indemnify the
Trustee for any losses, liabilities,  damages, claims or expenses of the Trustee
arising  from any errors or  miscalculations  of the  Trustee  pursuant  to this
Section that result from any failure of the  Depositors to provide,  or to cause
to be provided,  accurate  information or data to the Trustee (but not resulting
from  the  methodology  employed  by the  Trustee)  on a timely  basis  and such
indemnifications shall survive the termination of this Agreement.

         (13) The  Servicer  shall  prepare and file with the  Internal  Revenue
Service,  on  behalf  of  each  Trust  REMIC,  an  application  for  a  taxpayer
identification  number for each Trust REMIC on IRS Form SS-4. The Trustee,  upon
receipt   from  the  Internal   Revenue   Service  of  the  Notice  of  Taxpayer
Identification Number Assigned,  shall promptly forward a copy of such notice to
the  Depositors.  The Trustee shall prepare and file Form 8811 on behalf of each
Trust REMIC and shall  designate  from time to time an  appropriate  Person (the
"REMIC   Reporting   Agent")  to  respond  to  inquiries  by  or  on  behalf  of
Certificateholders  for  original  issue  discount  and related  information  in
accordance with applicable provisions of the Code.

     The Trustee agrees that all such  information or data so obtained by it are
to be regarded as confidential information and agrees that it shall use its best
reasonable efforts to retain in


<PAGE>


confidence,  and shall ensure that its officers,  employees and  representatives
retain in confidence,  and shall not disclose, without the prior written consent
of the  Depositors,  any or all of such  information  or  data,  or make any use
whatsoever  (other than for the purposes  contemplated by this Agreement) of any
such  information or data without the prior written  consent of the  Depositors,
unless such  information  is generally  available to the public (other than as a
result  of a  breach  of  this  Section)  or is  required  by law or  applicable
regulations to be disclosed.

     (b)  Modifications  of  Mortgage  Loans.  Notwithstanding  anything  to the
contrary in this  Agreement,  neither the Trustee nor the Servicer  shall permit
any  modification  of, or take any action with  respect to, the  Mortgage  Loans
(including the Mortgage Interest Rate, the Principal  Balance,  the amortization
schedule,  or any other term  affecting  the amount or timing of payments on the
Mortgage  Loans) that would result in an exchange within the meaning of Treasury
Regulations  Section  1.860G-2(b) of the Code unless the Trustee or the Servicer
has received a Nondisqualification Opinion or a ruling from the Internal Revenue
Service (at the expense of the party  making the request of the  Servicer or the
Trustee   to   modify   the   Mortgage   Loans)   to  the  same   effect   as  a
Nondisqualification Opinion with respect to such modification.

     (c) Prohibited  Transactions  and Activities.  The Trustee shall not permit
the sale, disposition (except in a disposition pursuant to (i) the bankruptcy or
insolvency of either Trust REMIC or (ii) the  termination  of either Trust REMIC
in a "qualified  liquidation"  as defined in Section  860F(a)(4) of the Code) or
substitution  of the Mortgage Loans (except a substitution  pursuant to Sections
2.06(b) or 3.03) or the substitution of a property for a Mortgaged Property, nor
acquire  any  assets  for either  Trust  REMIC  (other  than REO  Property  or a
Qualified  Substitute  Mortgage Loan pursuant to Sections  2.06(b) or 3.03), nor
accept any  contributions to either Trust REMIC (other than a cash  contribution
during the 3-month period beginning on the Startup Day),  unless it has received
an Opinion of Counsel  (at the expense of the Person  requesting  the Trustee to
take  such   action)  to  the  effect   that  such   disposition,   acquisition,
substitution,  or acceptance will not (a) affect  adversely the status of either
Trust  REMIC as a REMIC or of the Class A  Certificates  and Class X Interest as
the  regular  interests  therein,  (b) affect the  distribution  of  interest or
principal  on the  Certificates,  (c)  result in the  encumbrance  of the assets
transferred or assigned to either Trust REMIC (except pursuant to the provisions
of  this  Agreement)  or (d)  cause  either  Trust  REMIC  to be  subject  to an
unindemnified  tax on "prohibited  transactions"  or "prohibited  contributions"
pursuant to the REMIC Provisions.

     (d) In the event that any tax is imposed on  "prohibited  transactions"  of
either  Trust REMIC as defined in Section  860F(a)(2)  of the Code,  on the "net
income from  foreclosure  property"  of either Trust REMIC as defined in Section
860G(c) of the Code, on any contribution to either Trust REMIC after the Startup
Day pursuant to Section  860G(c) of the Code, or any other tax is imposed,  such
tax shall be paid by (i) the Trustee,  if such tax arises out of or results from
a breach by the Trustee of any of its obligations  under this  Agreement,  which
breach  constitutes  negligence or willful misconduct of the Trustee or (ii) the
Servicer or


<PAGE>


the  Depositors,  if such tax  arises  out of or  results  from a breach  by the
Servicer or the  Depositors of any of their  respective  obligations  under this
Agreement.  In no event shall the Trust Fund or either Trust REMIC be liable for
any such taxes.

     (e)  Any  inconsistencies  or  ambiguities  in  this  Agreement  or in  the
administration  of  either  Trust  REMIC  shall be  resolved  in a  manner  that
preserves the validity of the elections to be treated as two separate REMICs.

     Section 2.08 Execution of Certificates.

     The Trustee  acknowledges  (i) the  assignment  to it of Mortgage  Loans in
trust for the benefit of the  Certificateholders and the Certificate Insurer, as
their  interests  may appear,  and subject to the terms and  conditions  of this
Agreement  and (ii) the delivery of the  Mortgage  Files as set forth above and,
concurrently  with such  delivery,  in  exchange  for the  Mortgage  Loans,  the
Mortgage  Files and the other  assets  conveyed  by the  Depositors  pursuant to
Section  2.01 and  Section  2.04,  the  Trustee  has  executed  and caused to be
authenticated  and  delivered  to or  upon  the  order  of the  Depositors,  the
Certificates, each in Authorized Denominations.

     Section 2.09 Application of Principal and Interest.

     In the event that Net  Liquidation  Proceeds on a Liquidated  Mortgage Loan
are less than the Principal  Balance of such Mortgage Loan plus accrued interest
thereon,  or any Mortgagor makes a partial payment of any Monthly Payment due on
a Mortgage  Loan,  such Net  Liquidation  Proceeds or partial  payment  shall be
applied to payment of the related Mortgage Note as provided therein,  and if not
so provided or if the related  Mortgaged  Property  has become an REO  Property,
first to interest  accrued at the Mortgage  Interest Rate and then to principal;
provided,  however,  the Net  Liquidation  Proceeds with respect to a Bankruptcy
Loan shall be applied  first,  to unpaid  accrued  interest  with respect to the
period after the date of the related Plan,  second,  to principal and third,  to
Pre-Plan Interest.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

     Section 3.01 Representations of the Servicer and the Depositors.

     (1) The  Servicer  hereby  represents  and  warrants  to the  Trustee,  the
Certificate Insurer and the Certificateholders as of the Closing Date:

         (a) The  Servicer  is duly  organized,  validly  existing,  and in good
standing under the laws of the State of Delaware and has all licenses  necessary
to carry on its business as now being  conducted and is licensed,  qualified and
in good  standing  in each  Mortgaged  Property  State if the laws of such state
require  licensing  or  qualification  in order to conduct  business of the type
conducted by the Servicer and perform its obligations as Servicer hereunder; the
Servicer has the power and  authority to execute and deliver this  Agreement and
the  Basic  Documents  to  which  it is a party  and to  perform  in  accordance
herewith; the


<PAGE>


execution, delivery and performance of this Agreement and the Basic Documents to
which it is a party  (including  all  instruments  of transfer  to be  delivered
pursuant to this  Agreement  and the Basic  Documents to which it is a party) by
the Servicer and the consummation of the transactions  contemplated  hereby have
been duly and validly authorized by all necessary action; each of this Agreement
and the  Basic  Documents  to  which  it is a party is the  valid,  binding  and
enforceable  obligation of the Servicer; and all requisite action has been taken
by the Servicer to make this Agreement and the Basic  Documents to which it is a
party valid,  binding and  enforceable  upon the Servicer in accordance with its
terms,  subject  to  the  effect  of  bankruptcy,  insolvency,   reorganization,
moratorium and other,  similar laws relating to or affecting  creditors'  rights
generally or the application of equitable principles in any proceeding,  whether
at law or in equity;

         (b) All actions, approvals,  consents, waivers, exemptions,  variances,
franchises, orders, permits, authorizations,  rights and licenses required to be
taken, given or obtained,  as the case may be, by or from any federal,  state or
other governmental authority or agency (other than any such actions,  approvals,
etc.  under any state  securities  laws,  real estate  syndication or "Blue Sky"
statutes,  as to which the Servicer makes no such  representation  or warranty),
that are necessary in  connection  with the  performance  by the Servicer of its
obligations hereunder or under the Basic Documents to which it is a party or the
purchase  and sale of the  Certificates  and the  execution  and delivery by the
Servicer of the documents to which it is a party, have been duly taken, given or
obtained,  as the case may be, are in full force and effect,  are not subject to
any pending proceedings or appeals  (administrative,  judicial or otherwise) and
either the time within which any appeal therefrom may be taken or review thereof
may be  obtained  has  expired or no review  thereof  may be  obtained or appeal
therefrom  taken,  and  are  adequate  to  authorize  the  consummation  of  the
transactions  contemplated  by this  Agreement  and the Basic  Documents and the
other  documents on the part of the Servicer and the performance by the Servicer
of its  obligations  as the Servicer  under this Agreement and such of the other
Basic Documents to which it is a party;

         (c) The consummation of the transactions contemplated by this Agreement
and the Basic Documents will not result in the breach of any terms or provisions
of the bylaws of the  Servicer or result in the breach of any term or  provision
of, or conflict with or constitute a default under or result in the acceleration
of any obligation  under,  any material  agreement,  indenture or loan or credit
agreement or other material  instrument to which the Servicer or its property is
subject,  or  result  in the  violation  of any law,  rule,  regulation,  order,
judgment or decree to which the Servicer or its property is subject;

         (d) None of this Agreement, any of the Basic Documents to which it is a
party or the Prospectus nor any statement,  report or other document prepared by
the Servicer and furnished or to be furnished  pursuant to this  Agreement or in
connection  with  the  transactions  contemplated  hereby  contains  any  untrue
statement of material fact or omits to state a material  fact  necessary to make
the statements  contained herein or therein, in light of the circumstances under
which they were made, not misleading;


<PAGE>


         (e) There is no action, suit,  proceeding or investigation  pending or,
to the best of the  knowledge of the Servicer,  threatened  against the Servicer
which,  either  in any one  instance  or in the  aggregate,  may  result  in any
material  adverse  change  in the  business,  operations,  financial  condition,
properties or assets of the Servicer or in any material  impairment of the right
or  ability  of the  Servicer  to carry  on its  business  substantially  as now
conducted, or in any material liability on the part of the Servicer or any Basic
Document to which it is a party or which would draw into  question  the validity
of this Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Servicer  contemplated  herein,  or which
would be likely to impair  materially  the  ability of the  Servicer  to perform
under the terms of this Agreement or any Basic Document to which it is a party;

         (f) The  Servicer is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or  governmental  agency,  which  default  might  have  consequences  that would
materially and adversely affect the condition (financial or other) or operations
of the  Servicer  or its  properties  or  might  have  consequences  that  would
materially  and adversely  affect its  performance  hereunder or under the Basic
Documents or under any Subservicing Agreement;

         (g) The collection  practices used by the Servicer with respect to each
Mortgage Note and Mortgage have been in and will be all material respects legal,
proper,  prudent and customary in the second mortgage  origination and servicing
business; and

         (h) The Servicer is (i) an approved seller/servicer of first and second
mortgage  loans  for  FNMA  and  FHLMC in good  standing,  and (ii) a  mortgagee
approved by the Secretary of Housing and Urban  Development  pursuant to Section
203 and 211 of the National Housing Act.

     (2) Each  Depositor  hereby  represents  and warrants to the  Trustee,  the
Certificate Insurer and the Certificateholders as of the Closing Date:

         (a) Such Depositor is duly  organized,  validly  existing,  and in good
standing under the laws of the  jurisdiction  of its  incorporation  and has all
licenses  necessary  to carry on its  business  as now  being  conducted  and is
licensed, qualified and in good standing in each Mortgaged Property State if the
laws of such  state  require  licensing  or  qualification  in order to  conduct
business of the type conducted by such Depositor and perform its  obligations as
a Depositor hereunder; such Depositor has the power and authority to execute and
deliver this  Agreement and to perform in accordance  herewith;  the  execution,
delivery and  performance of this Agreement and the Basic  Documents to which it
is a party  (including all  instruments of transfer to be delivered  pursuant to
this Agreement and the Basic Documents to which it is a party) by such Depositor
and the consummation of the transactions  contemplated hereby have been duly and
validly authorized by all necessary action; each of this Agreement and the Basic
Documents  to  which  it is a  party  is  the  valid,  binding  and  enforceable
obligation of such  Depositor;  and all requisite  action has been taken by such
Depositor to make this Agreement and the Basic  Documents to which it is a party
valid, binding and enforceable upon


<PAGE>


such  Depositor  in  accordance  with  its  terms,  subject  to  the  effect  of
bankruptcy,  insolvency,  reorganization,  moratorium  and other,  similar  laws
relating to or  affecting  creditors  rights  generally  or the  application  of
equitable principles in any proceeding, whether at law or in equity;

         (b) All actions, approvals,  consents, waivers, exemptions,  variances,
franchises, orders, permits, authorizations,  rights and licenses required to be
taken, given or obtained,  as the case may be, by or from any federal,  state or
other governmental authority or agency (other than any such actions,  approvals,
etc.  under any state  securities  laws,  real estate  syndication or "Blue Sky"
statutes,  as to which such Depositor makes no such representation or warranty),
that are necessary in connection with the purchase and sale of the  Certificates
and the execution and delivery by such Depositor of the Basic Documents to which
it is a party, have been duly taken, given or obtained,  as the case may be, are
in full force and effect, are not subject to any pending  proceedings or appeals
(administrative,  judicial or  otherwise)  and either the time within  which any
appeal  therefrom may be taken or review  thereof may be obtained has expired or
no review thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the  consummation of the  transactions  contemplated by this Agreement
and the other Basic  Documents on the part of such Depositor and the performance
by such Depositor of its obligations as a Depositor  under this  Agreement,  the
Transfer Agreement and such of the other Basic Documents to which it is a party;

         (c) The consummation of the transactions contemplated by this Agreement
and the Basic Documents will not result in the breach of any terms or provisions
of the bylaws of such Depositor or result in the breach of any term or provision
of, or conflict with or constitute a default under or result in the acceleration
of any obligation  under,  any material  agreement,  indenture or loan or credit
agreement or other  material  instrument to which such Depositor or its property
is subject,  or result in the  violation of any law,  rule,  regulation,  order,
judgment or decree to which the Depositor or its property is subject;

         (d) None of this  Agreement,  any of the Basic  Documents to which such
Depositor  is a party  or the  Prospectus  nor any  statement,  report  or other
document prepared by the Depositor and furnished or to be furnished  pursuant to
this  Agreement or the Basic  Documents or in connection  with the  transactions
contemplated  hereby contains any untrue  statement of material fact or omits to
state a material  fact  necessary  to make the  statements  contained  herein or
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading;

         (e) There is no action, suit,  proceeding or investigation  pending or,
to the best of such  Depositor's  knowledge,  threatened  against such Depositor
which,  either  in any one  instance  or in the  aggregate,  may  result  in any
material  adverse  change  in the  business,  operations,  financial  condition,
properties  or assets of such  Depositor  or in any material  impairment  of the
right or ability of such Depositor to carry on its business substantially as now
conducted,  or in any material  liability on the part of such Depositor or which
would draw into question the validity of this  Agreement or the Basic  Documents
or the Mortgage  Loans or of any action taken or to be taken in connection  with
the obligations of


<PAGE>


such  Depositor  contemplated  herein,  or  which  would  be  likely  to  impair
materially  the  ability of the  Depositor  to  perform  under the terms of this
Agreement or the Basic Documents to which it is a party;

         (f) Such  Depositor  is not in  default  with  respect  to any order or
decree of any court or any order,  regulation  or demand of any federal,  state,
municipal or governmental  agency,  which default might have  consequences  that
would  materially  and adversely  affect the  condition  (financial or other) or
operations of such Depositor or its properties or might have  consequences  that
would materially and adversely affect its performance hereunder, under the Basic
Documents to which it is a party or under any Subservicing Agreement;

         (g) Upon the receipt of each  Mortgage File under this  Agreement,  the
Trustee   will   have   good   and   indefeasible   title  on   behalf   of  the
Certificateholders to each Mortgage Loan (other than the Representative's  Yield
and amounts received after the Cut-off Date in respect of interest accrued on or
prior to the Cut-off  Date) and such other items  conveyed by the  Depositors to
the Trustee hereunder free and clear of any lien (other than liens which will be
simultaneously released);

         (h) The transfer,  assignment  and conveyance of the Mortgage Notes and
the Mortgages by such  Depositor  pursuant to this  Agreement are not subject to
the bulk  transfer  laws or any similar  statutory  provisions  in effect in any
applicable jurisdiction;

         (i) Such  Depositor  did not transfer any interest in any Mortgage Loan
with any intent to hinder, delay or defraud any of its respective creditors;

         (j) Such  Depositor is solvent and such  Depositor will not be rendered
insolvent as a result of the transfer of the Mortgage Loans to the Trust Fund or
the sale of any of the Certificates;

         (k) Such  Depositor  will not amend Articles  THIRD,  NINTH,  TENTH and
ELEVENTH of its Certificate of  Incorporation  without the prior written consent
of the Certificate Insurer and the Rating Agencies; and

         (l) Such  Depositor  will not engage in any activity which would result
in a downgrading of the Certificates by any Rating Agency or in a downgrading of
the  "shadow  rating"  (that is, the rating  without  taking  into  account  the
Certificate Insurance Policy) below investment grade by any Rating Agency.

     Section  3.02  Assignment  of  Transfer   Agreement;   Representations  and
Warranties as to the Individual Mortgage Loans and the Mortgage Pool.

     Pursuant to Section 2.01,  each  Depositor  assigns to the Trustee (for the
benefit  of  the  Certificateholders  and  the  Certificate  Insurer,  as  their
interests may appear) all of its right,  title and interest in, to and under the
Transfer  Agreement  including,  without  limitation,  the  representations  and
warranties of the Originators made to the Depositors pursuant to


<PAGE>


Section 3.01 of the Transfer  Agreement.  The  Depositors  hereby  represent and
warrant to the  Trustee  that the  Depositors  have taken no action  which would
cause such  representations and warranties of the Originators to be false in any
material respect as of the Closing Date, and acknowledge that the Trustee relies
on the representations and warranties of the Depositors under this Agreement and
of the Originators under the Transfer  Agreement in accepting the Mortgage Loans
and executing and delivering the Certificates.  The foregoing representation and
warranty  speaks as of the Closing  Date,  but shall  survive the  transfer  and
assignment  of the  Mortgage  Loans  to  the  Trustee  for  the  benefit  of the
Certificateholders and the Certificate Insurer, as their interests may appear.

     Each  Depositor  hereby  represents and warrants as follows to the Trustee,
the  Certificate  Insurer  and  the  Certificateholders,  with  respect  to each
Mortgage Loan as of the Closing Date (except as otherwise indicated);  provided,
that all  references to  percentages  of the Mortgage Loans in this Section 3.02
refer in each case to the percentage of the aggregate  Principal  Balance of the
Mortgage Loans as of the Cut-off Date (rounded to two decimal points):

     (a) The  information  with respect to each  Mortgage  Loan set forth in the
Mortgage Loan Schedule is true and correct;

     (b) All of the  original or  certified  documentation  set forth in Section
2.04  (including  all material  documents  related  thereto) has been or will be
delivered  to the Trustee  (or the  Custodian  on behalf of the  Trustee) on the
Closing Date or as otherwise provided in Section 2.04;

     (c) (i) Each Mortgage Loan is  principally  secured by Mortgaged  Property.
Each  Mortgaged  Property  is  improved  by a one-  to  four-family  Residential
Dwelling, which, to the best of such Depositor's knowledge, does not include (A)
cooperatives, (B) mobile homes other than permanently affixed mobile homes which
constitute  real  property  under  state  law,  or (C)  except for not more than
approximately  0.90% of the  Mortgage  Loans,  manufactured  housing  units,  as
defined in the FNMA Selling  Guide,  which  constitute  other than real property
under state law; and

     (ii) With respect to each Mortgage Loan  involving  property  improved by a
manufactured  or mobile home, the  Originator has taken all action  necessary to
create a valid and  perfected  first or second  priority  (as  reflected  in the
Mortgage  Loan  Schedule)  lien and security  interest in such  manufactured  or
mobile home and the related Mortgaged Property,  including,  without limitation,
the filing of UCC financing  statements or notations on certificates of title if
necessary, under applicable state law;

     (d) Each  Mortgage  Loan is being  serviced by the  Servicer or one or more
Subservicers;

     (e) The Mortgage Note related to each Mortgage Loan bears a fixed  Mortgage
Interest Rate;


<PAGE>


     (f) Approximately 42.99% of the Mortgage Loans are balloon loans which will
provide for a final  Monthly  Payment  substantially  greater than the preceding
Monthly Payments.  Approximately  0.04%, 6.71%, 26.37% and 9.83% of the Mortgage
Loans are balloon loans based on a 30-year amortization schedule (or in the case
of 0.002% of the Mortgage Loans, based on a 15-year amortization schedule) and a
single  payment  of the  remaining  loan  balances  5, 7, 10 and 15 years  after
origination,  respectively.  All of  such  balloon  loans  provide  for  Monthly
Payments based on an  amortization  schedule  specified in the related  Mortgage
Note and have a final  balloon  payment  no  earlier  than 60  months  following
origination  and no later  than 180  months  following  origination.  Each other
Mortgage  Note will  provide  for a  schedule  of  substantially  equal  Monthly
Payments  which are, if timely paid,  sufficient to fully amortize the principal
balance of such Mortgage Note on or before its maturity date;

     (g) Each  Mortgage is a valid and  subsisting  first or more junior lien on
the Mortgaged Property subject, in the case of any second Mortgage Loan, only to
a First  Lien on such  Mortgaged  Property,  and  subject  in all  cases  to the
exceptions  to title  set  forth in the  title  insurance  policy  or the  other
evidence of title  enumerated  in Section  2.04(d),  with respect to the related
Mortgage  Loan,  which  exceptions are generally  acceptable to second  mortgage
lending  companies,  and such other  exceptions to which similar  properties are
commonly subject and which do not individually, or in the aggregate,  materially
and  adversely  affect the benefits of the  security  intended to be provided by
such  Mortgage.  If the Mortgaged  Property is held in an Illinois Land Trust (a
"Land Trust Mortgage"), (i) a natural person is the beneficiary of such Illinois
Land  Trust,  and  either  is a party  to the  Mortgage  Note or is a  guarantor
thereof, in either case, in an individual  capacity,  and not in the capacity of
trustee or  otherwise,  and,  if a party to the  Mortgage  Note,  is jointly and
severally  liable under the Mortgage Note;  (ii) the Mortgagor is the trustee of
such Illinois  Land Trust,  is a party to the Mortgage Note and is the mortgagor
under the Mortgage in its capacity as such  trustee and not  otherwise;  (iii) a
land trust trustee,  duly qualified  under  applicable law to serve as such, has
been  properly  designated  and  currently so serves and is named as such in the
land trust  agreement  and such  trustee is named in the Land Trust  Mortgage as
Mortgagor;  (iv) all fees and  expenses  of the land  trust  trustee  which have
previously  become due or owing have been paid and no such fees or expenses  are
or will become  payable by the  Certificateholders  or the Trust  Fund;  (v) the
beneficiary  is solely  obligated to pay any fees and expenses of the land trust
trustee and the priority of the lien of the Land Trust  Mortgage is not and will
not be subject or  subordinate  to any amounts owing to the land trust  trustee;
(vi) the Mortgaged  Property is occupied by the beneficiary under the land trust
agreement (if indicated to be owner occupied on the Mortgage Loan Schedule) and,
if such land trust agreement  terminates,  the beneficiary will become the owner
of the Mortgaged  Property;  (vii) the beneficiary is obligated to make payments
under the  related  Mortgage  Note and  (subject  to  applicable  law) will have
personal liability for deficiency judgments; (viii) the Land Trust Mortgages and
assignments of beneficial  interest relating to land trusts in the Mortgage Pool
were made in  compliance  with  their  respective  land trust  agreements,  were
validly  entered into by their  respective land trust trustee or beneficiary and
did not, do not currently,  and will not in the future, violate any provision of
their respective land trust agreement;  (ix) a UCC financing  statement has been
filed, continued, and will be continued, without intervening liens, as the first
lien upon the


<PAGE>


beneficial  interest  in  the  Land  Trust  Mortgage;  (x)  each  assignment  of
beneficial  interest  with respect to Land Trust  Mortgages in the Mortgage Pool
was at the time of respective  assignment the only assignment of such beneficial
interest in the land trust,  such assignment was accepted by the respective land
trust trustee, to the best of the Depositors' knowledge,  subsequent assignments
of the  beneficial  interest  in whole or in part have not been  made,  and such
subsequent  assignments of the  beneficial  interest or any part thereof are not
permitted pursuant to a written agreement between the respective beneficiary and
the Mortgagee, until the expiration of the Mortgage Note in each respective land
trust;  (xi) the Land  Trust  Mortgages  are the  first or  second  liens on the
Mortgaged Properties; no liens are in place against the beneficial interests, or
any part  thereof,  of any Land  Trust  Mortgage  or  collateral  assignment  of
beneficial  interest,  which  liens are  superior  to the  interest  held by the
related  Depositor;  and the  beneficiary  or land trust  trustee is  forbidden,
pursuant  to a written  agreement  between  the  beneficiary  or the land  trust
trustee (as applicable) and the Mortgagee, from using the land trust property or
beneficial  interest,  or any part of either,  as security for any other debt of
the same priority as or senior to such Land Trust  Mortgage until the expiration
date of its respective  Mortgage Note; and (xii) the terms and conditions of the
land trust agreement do not prevent the free and absolute  marketability  of the
Mortgaged  Property.  As of  the  Cut-off  Date,  approximately  0.0511%  of the
Mortgage Loans were related to Land Trust Mortgages;

     (h) Except with respect to liens released immediately prior to the transfer
herein  contemplated,  immediately  prior to the transfer and assignment  herein
contemplated,  the applicable Depositor held good and indefeasible title to, and
was the sole owner of, each Mortgage Loan conveyed by such Depositor  subject to
no liens, charges, mortgages,  encumbrances or rights of others; and immediately
upon the  transfer  and  assignment  herein  contemplated,  the  Trustee for the
benefit of the Certificateholders will hold good and indefeasible title, to, and
be the sole owner of, each Mortgage Loan (other than the Representative's  Yield
and  amounts  received  on or after the  Cut-off  Date) in respect  of  interest
accrued  prior to the  Cut-off  Date  subject to no liens,  charges,  mortgages,
encumbrances or rights of others;

     (i) No  Mortgage  Loans  (excluding  Bankruptcy  Loans) are 30 or more days
contractually  delinquent;  and none of the Mortgage  Loans in the Mortgage Pool
(excluding Bankruptcy Loans) have been 30 or more days contractually  delinquent
more than once in the 12 months preceding the Cut-off Date. For purposes of this
representation  and warranty "30 or more days  contractually  delinquent"  means
that a Monthly  Payment  due on a Due Date was unpaid as of the end of the month
of the next succeeding Due Date or following Due Dates.  Approximately  0.16% of
the Mortgage Loans are Bankruptcy Loans. Except for the Mortgage Loans listed on
Exhibit G, to the best of such Depositor's knowledge, none of the Mortgage Loans
is subject to a Plan.

     (j) To the best of such Depositor's  knowledge,  (i) there is no delinquent
tax or  assessment  lien on any  Mortgaged  Property  and  (ii)  each  Mortgaged
Property is free of material damage and is in average repair;


<PAGE>


     (k) No  Mortgage  Loan is  subject  to any  right of  rescission,  set-off,
counterclaim or defense,  including the defense of usury, nor will the operation
of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any
right thereunder,  render either the Mortgage Note or the Mortgage unenforceable
in  whole  or  in  part,  or  subject  to  any  right  of  rescission,  set-off,
counterclaim  or defense,  including the defense of usury,  and no such right of
rescission,  set-off,  counterclaim  or defense has been  asserted  with respect
thereto;

     (l) To the best of such Depositor's knowledge,  there is no mechanics' lien
or claim for work, labor or material  affecting any Mortgaged  Property which is
or may be a lien prior to, or equal with, the lien of such Mortgage except those
which are insured against by the title  insurance  policy referred to in Section
3.02(n) below;

     (m) Each  Mortgage  Loan at the time it was made  complied in all  material
respects  with  applicable  state and federal laws and  regulations,  including,
without limitation, usury, equal credit opportunity and disclosure laws;

     (n) With  respect  to each  Mortgage  Loan,  other than any  Mortgage  Loan
secured by a second  priority lien and having a Principal  Balance not in excess
of $50,000 and listed on Exhibit V hereto,  a written  commitment for a lender's
title insurance  policy,  issued in standard  American Land Title Association or
California Land Title  Association  form, or other form customary and acceptable
in a particular  jurisdiction,  by a title insurance company  acceptable to FNMA
and FHLMC and authorized to transact  business in the state in which the related
Mortgaged  Property is situated,  together  with a condominium  endorsement,  if
applicable,  in an amount at least equal to the  original  Principal  Balance of
such Mortgage Loan insuring the mortgagee's  interest under the related Mortgage
Loan as the  holder of a valid  first or second  mortgage  lien of record on the
real  property  described in the  Mortgage,  subject only to  exceptions  of the
character referred to in Section 3.02(g) above, was effective on the date of the
origination of such Mortgage Loan,  and, as of the Closing Date, such commitment
will be valid and thereafter the policy issued pursuant to such commitment shall
continue  in full force and  effect or,  with  respect  to  Mortgage  Properties
located in  jurisdictions  in which it is customary and  acceptable to obtain an
assurance of title in lieu of a title insurance policy,  such assurance of title
has been obtained;

     (o) The  improvements  upon each Mortgaged  Property are covered by a valid
and existing hazard  insurance policy with a generally  acceptable  carrier that
provides  for fire and  extended  coverage  representing  coverage  described in
Sections 5.07 and 5.08;

     (p) A flood  insurance  policy is in effect with respect to each  Mortgaged
Property with a generally acceptable carrier in an amount representing  coverage
described  in Sections  5.07 or 5.08,  if and to the extent  required by Section
5.07 or 5.08;

     (q) Each  Mortgage  and  Mortgage  Note is the  legal,  valid  and  binding
obligation of the maker thereof and is enforceable in accordance with its terms,
except  only as such  enforcement  may be  limited  by  bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting the  enforcement of
creditors'  rights  generally  and by  general  principles  of  equity  (whether
considered in a proceeding or action in equity or at law), and all


<PAGE>


parties to each  Mortgage  Loan had full legal  capacity to execute all Mortgage
Loan documents and convey the estate therein purported to be conveyed;

     (r) The  applicable  Depositor has directed the Servicer to perform any and
all acts  required to be  performed  to preserve  the rights and remedies of the
Trustee in any insurance  policies  applicable to the Mortgage Loans  including,
without  limitation,  any necessary  notifications  of insurers,  assignments of
policies or interests  therein,  and  establishments  of co-insured,  joint loss
payee and mortgagee rights in favor of the Trustee;

     (s) No more than  approximately  0.05% of the Mortgage Loans are secured by
Mortgaged Properties located within any single zip code area within the State of
California.  No more than approximately  0.27% of the Mortgage Loans are secured
by  Mortgaged  Properties  located  within any single zip code area  outside the
State of California;

     (t) At least  approximately  94.46% of the  Mortgage  Loans are  secured by
Owner Occupied Mortgaged Property;

     (u) The terms of the Mortgage Note and the Mortgage have not been impaired,
altered or  modified in any  material  respect,  except by a written  instrument
which has been recorded or is in the process of being recorded, if necessary, to
protect the  interests of the Trustee and which has been or will be delivered to
the Trustee.  The substance of any such  alteration or modification is reflected
on the Mortgage  Loan  Schedule.  Each original  Mortgage was recorded,  and all
subsequent  assignments of the original  Mortgage  (other than the Assignment to
the Trustee) have been recorded in the  appropriate  jurisdictions  wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Depositors  (or,  subject to Section  2.04  hereof,  are in the process of being
recorded);

     (v) No instrument of release or waiver has been executed in connection with
the Mortgage Loan, and no Mortgagor has been released, in whole or in part;

     (w) To the best of such  Depositor's  knowledge,  all  taxes,  governmental
assessments,  insurance premiums, water, sewer and municipal charges,  leasehold
payments or ground rents which  previously  became due and owing have been paid,
or an escrow of funds has been  established  in an amount  sufficient to pay for
every such item which remains  unpaid and which has been assessed but is not yet
due and payable. Except for payments in the nature of escrow payments, including
without limitation,  taxes and insurance payments, the Servicer has not advanced
funds,  or induced,  solicited or  knowingly  received any advance of funds by a
party other than the Mortgagor,  directly or indirectly,  for the payment of any
amount required by the Mortgage,  except for interest  accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage proceeds, whichever is
greater,  to the day  which  precedes  by one  month  the Due Date of the  first
installment of principal and interest. With respect to Mortgaged Properties that
are the subject of a ground lease,  to the best of such  Depositor's  knowledge,
all lease rents,  other payments or  assessments  that have become due have been
paid and the Mortgagor is not in material  default under any other provisions of
the lease and the lease is valid, in good standing and in full force and effect;


<PAGE>


     (x) To the  best of such  Depositor's  knowledge,  there  is no  proceeding
pending or  threatened  for the total or partial  condemnation  of the Mortgaged
Property,  nor is such a proceeding  currently  occurring,  and such property is
undamaged  by waste,  fire,  earthquake  or earth  movement,  windstorm,  flood,
tornado or other casualty,  so as to affect adversely the value of the Mortgaged
Property as security  for the  Mortgage  Loan or the use for which the  premises
were intended;

     (y) To the  best of such  Depositor's  knowledge,  all of the  improvements
which were included for the purpose of  determining  the appraised  value of the
Mortgaged  Property lie wholly within the  boundaries  and building  restriction
lines of such property,  and no  improvements on adjoining  properties  encroach
upon the Mortgaged Property;

     (z) To the best of such Depositor's knowledge, no improvement located on or
being part of the Mortgaged  Property is in violation of any  applicable  zoning
law or regulation.  To the best of such Depositor's knowledge,  all inspections,
licenses  and  certificates  required to be made or issued  with  respect to all
occupied  portions of the  Mortgaged  Property  and, with respect to the use and
occupancy of the same,  including but not limited to  certificates  of occupancy
and  fire  underwriting  certificates,  have  been  made or  obtained  from  the
appropriate  authorities and the Mortgaged  Property is lawfully  occupied under
applicable law;

     (aa) The proceeds of the Mortgage Loan have been fully disbursed, and there
is no  obligation  on  the  part  of  the  mortgagee  to  make  future  advances
thereunder. Any and all requirements as to completion of any on-site or off-site
improvements  and as to  disbursements  of any escrow funds  therefor  have been
complied  with.  All costs,  fees and expenses  incurred in making or closing or
recording the Mortgage Loans were paid;

     (bb)  The  related  Mortgage  Note is not and has not been  secured  by any
collateral,   pledged   account  or  other  security  except  the  lien  of  the
corresponding Mortgage;

     (cc) No Mortgage Loan was originated under a buydown plan;

     (dd) There is no obligation on the part of the applicable  Depositor or any
other party to make payments in addition to those made by the Mortgagor;

     (ee) With respect to each Mortgage constituting a deed of trust, a trustee,
duly  qualified  under  applicable  law to  serve as  such,  has  been  properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses  are or will become  payable by the  Trustee to the trustee  under such
deed of trust,  except in connection  with a trustee's sale after default by the
Mortgagor.  If the  Mortgaged  Property is held in an Illinois  Land Trust,  the
trustee thereof is duly qualified under applicable law to serve as such, and has
been properly designated and currently so serves, and no fees or expenses are or
will become payable by the Trustee to such trustee;

     (ff)  No  Mortgage  Loan  has  a  shared  appreciation  feature,  or  other
contingent interest feature;


<PAGE>


     (gg) With respect to each Mortgage Loan secured by a second  priority lien,
the  related  First Lien  requires  equal  monthly  payments,  or if it bears an
adjustable interest rate, the monthly payments for the related First Lien may be
adjusted not more frequently than once every six months;

     (hh) With respect to each Mortgage Loan secured by a second  priority lien,
either (i) no consent  for the  Mortgage  Loan is  required by the holder of the
related  First Lien or (ii) such  consent has been  obtained and is contained in
the Mortgage File;

     (ii) The maturity date of each  Mortgage Loan secured by a second  priority
lien is prior to the maturity  date of the related First Lien if such First Lien
provides for a balloon payment; and with respect to any First Lien that provides
for negative  amortization or deferred interest,  the balance of such First Lien
used to calculate  the  Combined  Loan-to-Value  Ratio for the Mortgage  Loan is
based on the maximum amount of negative  amortization  possible under such First
Lien;

     (jj) All parties which have had any interest in the Mortgage Loan,  whether
as  mortgagee,  assignee,  pledgee or otherwise,  are (or,  during the period in
which they held and disposed of such interest,  were) (1) in compliance with any
and all applicable  licensing  requirements of the laws of the state wherein the
Mortgaged  Property  is  located,  and (2)(A)  organized  under the laws of such
state, or (B) qualified to do business in such state, or (C) federal savings and
loan  associations or national banks having principal  offices in such state, or
(D)  not  doing  business  in  such  state  so as to  require  qualification  or
licensing;

     (kk) The Mortgage  contains a customary  provision for the  acceleration of
the payment of the unpaid  principal  balance of the Mortgage  Loan in the event
the related  security for the Mortgage Loan is sold without the prior consent of
the mortgagee thereunder;

     (ll) Any future  advances  made prior to (and  excluding)  the Cut-off Date
have been  consolidated  with the  outstanding  principal  amount secured by the
Mortgage,  and the secured  principal  amount,  as consolidated,  bears a single
interest rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated  principal amount does not exceed the original principal amount
of the Mortgage Loan. The Mortgage Note does not permit or obligate the Servicer
to make future advances to the Mortgagor at the option of the Mortgagor;

     (mm) The related  Mortgage  contains  customary and enforceable  provisions
which  render the rights and  remedies of the holder  thereof  adequate  for the
realization  against the  Mortgaged  Property of the  benefits of the  security,
including,  (i) in the case of a  Mortgage  designated  as a deed of  trust,  by
trustee's  sale,  and (ii)  otherwise by judicial or  non-judicial  foreclosure.
There is no homestead or other exemption  available to the Mortgagor which would
materially  interfere  with  the  right  to sell  the  Mortgaged  Property  at a
trustee's sale or the right to foreclose the Mortgage except as set forth in the
Prospectus;

     (nn) Except for bankruptcy-related  defaults under the Bankruptcy Loans, to
the best of such Depositor's knowledge,  there is no default,  breach, violation
or event of


<PAGE>


acceleration  existing  under the Mortgage or the related  Mortgage  Note and no
event which,  with the passage of time or with notice and the  expiration of any
grace or cure period, would constitute a default,  breach, violation or event of
acceleration;  and neither the Servicer nor the applicable  Depositor has waived
any default, breach, violation or event of acceleration;

     (oo) All parties to the Mortgage  Note and the Mortgage had legal  capacity
to  execute  the  Mortgage  Note and the  Mortgage  and each  Mortgage  Note and
Mortgage have been duly and properly executed by such parties;

     (pp) All amounts received on and after the Cut-off Date with respect to the
Mortgage Loans that are required to be deposited into the Principal and Interest
Account pursuant to Section 5.03 have been so deposited;

     (qq) Each Mortgage Loan was  originated and  underwritten  by, or purchased
and  re-underwritten  by, the Representative or by a wholly-owned  subsidiary of
the Representative;

     (rr) As of the Cut-off Date, each Mortgage Loan conforms,  and all Mortgage
Loans in the aggregate  conform,  in all material  respects,  to the description
thereof  set  forth  in the  Prospectus  dated  June  23,  1998,  including  all
statistical data provided therein in tabular format or otherwise;

     (ss)  The  Mortgage  Loans  were not  selected  by the  Originators  or the
Depositors   for   transfer   to  the   Trustee   (for   the   benefit   of  the
Certificateholders)  hereunder  on any basis  intended to  adversely  affect the
assets of the Trust;

     (tt) A full interior inspection  appraisal was performed in connection with
each Mortgaged Property;

     (uu) The Mortgage  Interest  Rate for each  Mortgage  Loan is not less than
7.40% per annum;

     (vv) [RESERVED];

     (ww) Each hazard  insurance  policy required to be maintained under Section
5.07 of this Agreement  with respect to such Mortgage Loan is a valid,  binding,
enforceable  and subsisting  insurance  policy of its respective  kind and is in
full force and effect;

     (xx) If the Mortgaged Property consists of a leasehold estate, the Mortgage
covers property  improvements and the Mortgagor's leasehold interest in the land
upon which such  improvements are situated;  at origination of the Mortgage Loan
the term of the  leasehold  estate was  scheduled to last for at least ten years
beyond the  maturity  date of the  Mortgage or provided  for  perpetual  renewal
covenants; the leasehold estate is assignable by the Mortgagee; and the lease is
valid and in full force and effect;


<PAGE>


     (yy) To the best of such Depositors' knowledge,  no Mortgaged Property was,
at  origination,  located  within  a 1 mile  radius  of any site  with  material
environmental or hazardous waste risks;

     (zz) With respect to each  Bankruptcy  Loan,  (a) except for the Bankruptcy
Loans  specified  on  Exhibit G, as of the  Cut-off  Date the  Mortgagor  is not
contractually delinquent more than 30 days with respect to any payment due under
the related  Plan,  (b) the Current  CLTV is less than or equal to 85%,  and (c)
either (i) if the Current  CLTV is between 60% and 85%, as of the Cut-off  Date,
the Mortgagor has made at least six consecutive  payments under the related Plan
or (ii) if the  Current  CLTV is less  than 60%,  as of the  Cut-off  Date,  the
Mortgagor has made at least three consecutive payments under the related Plan;

     (aaa) With respect to each Mortgage Loan which was  originated in the State
of  Alabama  (each,  an  "Alabama  Loan"),  (i) each such  Alabama  Loan was (A)
originated and underwritten by EquiCredit  Corporation/Ala.&  Miss. ("EQCC/Ala.&
Miss.") or (B) purchased and  re-underwritten  by EQCC/Ala.&  Miss. from another
lender (each  originating  entity, an "Alabama  Originator"),  (ii) with respect
each such  Alabama  Loan  secured by second  mortgages,  (A) the total  "prepaid
finance  charge"  (as  defined in  Regulation  Z  promulgated  under the Federal
Truth-in-Lending  Act) paid by the  related  Mortgagor  to the  related  Alabama
Originator plus (B) any yield spread premium ("rate  participation") paid by the
Alabama  Originator did not exceed 5% of the original  Principal Balance of such
Alabama Loan, (iii) the original Principal Balance of such Alabama Loan exceeded
$2,000, (iv) the aggregate of all points and broker's fees did not exceed 10% of
the original  principal  balance of the Mortgage Loan, (v) no "referral fee" (as
defined  in  Regulation  X  promulgated  under the Real  Estate  Settlement  and
Procedures  Act) was paid to any third party by the related  Alabama  Originator
with  respect to such  Alabama  Loan,  (vi) such  Alabama Loan and the manner in
which it was originated  fully complied with Alabama law, and (vii) such Alabama
Loan was not originated in such a manner,  and neither the related Mortgage Note
nor Mortgage  contain any  provisions,  that would cause such Alabama Loan to be
deemed  unconscionable  under  Alabama  law;  the  aggregate of all such Alabama
Mortgage Loans does not exceed approximately 0.15% of the Mortgage Loans;

     (bbb) None of the Mortgage  Loans were  originated in  connection  with the
sale of properties acquired by the Originators through foreclosure;

     (ccc) With respect to each Mortgage Loan, the CLTV does not exceed 100%;

     (ddd) Except for the Mortgage  Loans listed on Exhibit T, as of the Cut-off
Date none of the  Mortgage  Loans are subject to the Home  Ownership  and Equity
Protection  Act of 1994;  all notices  required to be  delivered  to the related
Mortgagor  pursuant to the Home Ownership and Equity Protection Act of 1994 have
been  delivered  with respect to each  Mortgage Loan listed on Exhibit T and all
other  requirements  of that Act have been  complied with for each such Mortgage
Loan;

     (eee) [Reserved];


<PAGE>


     (fff) Each Mortgage  Loan  constitutes  a "qualified  mortgage"  within the
meaning of Section 860G(a)(3) of the Code. For this purpose,  Section 860G(a)(3)
of the Code shall be applied  without  regard to the rule  contained in Treasury
Regulations Section  1.860G-2(f)(2)  which treats a defective mortgage loan as a
"qualified mortgage" under certain circumstances.  Accordingly,  the Transferors
represent and warrant that each Mortgage Loan is directly  secured by a Mortgage
on residential real property,  and either (1)  substantially all of the proceeds
of such Mortgage Loan were used to acquire,  improve or protect such residential
real  property  and such  interest in  residential  real  property  was the sole
security for such  Mortgage Loan as of the Testing Date (as defined  below),  or
(2) the fair market value of the interest in real  property  which  secures such
Mortgage Loan was at least equal to 80% of the principal  amount of the Mortgage
Loan (a) as of the Testing Date or (b) as of the Closing  Date.  For purposes of
the previous sentence,  (1) the fair market value of the referenced  interest in
real  property  shall  first be  reduced  by (a) the  amount of any lien on such
interest in real property that is senior to the lien of the Mortgage  Loan,  and
(b) a proportionate amount of any lien on such interest in real property that is
on a parity with the Mortgage Loan, and (2) the "Testing Date" shall be the date
on which the referenced  Mortgage Loan was  originated  unless (a) such Mortgage
Loan was modified after the date of its origination in a manner that would cause
a  "significant  modification"  of such  Mortgage  Loan  within  the  meaning of
Treasury   Regulations   Section  1.1001  -  3(b),  and  (b)  such  "significant
modification"  did not occur at a time when such Mortgage Loan was in default or
when default  with respect to such  Mortgage  Loan was  reasonably  foreseeable.
However,  if the  referenced  Mortgage Loan has been subjected to a "significant
modification" after the date of its origination and at a time when such Mortgage
Loan was not in default or when default with respect to such  Mortgage  Loan was
not reasonably foreseeable,  the "Testing Date" shall be the date upon which the
latest such "significant modification" occurred; and

     (ggg) The representations and warranties with respect to the Mortgage Loans
and Mortgage Pool set forth in Section  3.02(a) through (fff),  inclusive,  have
been made to the Depositors by the Originators and the  Representative  pursuant
to Section  3.02(a)  through (fff),  inclusive,  of the Transfer  Agreement with
respect to the Mortgage Loans and the Mortgage Pool, and the Certificate Insurer
is entitled to rely thereon.

     Section 3.03 Purchase and Substitution.

     It is understood  and agreed that the  representations  and  warranties set
forth in Sections 3.01 and 3.02 shall survive transfer of the Mortgage Loans and
delivery of the  Certificates  hereunder.  Upon discovery by any Depositor,  the
Servicer,  any Subservicer,  any Custodian, a Responsible Officer of the Trustee
or the  Certificate  Insurer  of a  breach  of any of such  representations  and
warranties which materially and adversely affects the value of Mortgage Loans or
the interest of the Trustee, the  Certificateholders or the Certificate Insurer,
or which  materially  and adversely  affects the  interests of the Trustee,  the
Certificate Insurer, or the  Certificateholders  in the related Mortgage Loan in
the case of a representation and warranty relating to a particular Mortgage Loan
(notwithstanding   that  such  representation  and  warranty  was  made  to  the
Depositors' best knowledge), the party discovering such breach shall give prompt
written notice to the others.  Within 60 days of the earlier of its discovery or
its


<PAGE>


receipt of notice of any breach of a  representation  or warranty,  the Servicer
shall (a) promptly  cure, or cause the  applicable  Depositor or the  applicable
Originator to cure, such breach in all material  respects,  or (b) purchase,  or
cause the  applicable  Depositor or  applicable  Originator  to  purchase,  such
Mortgage Loan by depositing in the Principal and Interest  Account,  on the next
succeeding  Determination  Date,  in the  manner and at the price  specified  in
Section  2.06(b),  or by causing  the  applicable  Depositor  or the  applicable
Originator to  substitute,  one or more  Qualified  Substitute  Mortgage  Loans,
provided  such  substitution  is  effected  not later than the date which is two
years after the Closing Date.  Any such  substitution  shall be  accompanied  by
payment of the Substitution Adjustment, if any, to be deposited in the Principal
and Interest Account.

     As to any Deleted Mortgage Loan for which a Qualified  Substitute  Mortgage
Loan or Loans is  substituted,  the Servicer shall effect such  substitution  by
delivering  to the  Trustee  or the  Custodian  on  behalf  of  the  Trustee,  a
certification  in the form of Exhibit B  attached  to the  Custodial  Agreement,
executed by a Servicing  Officer and delivering to the Trustee (or the Custodian
on behalf of the Trustee,  with a copy of such  certification  to the Trustee) a
copy of such  certification,  the documents  constituting  the Mortgage File for
such  Qualified  Substitute  Mortgage  Loan or Loans and a trust  receipt of the
Custodian as to the Substitute Mortgage Loan or Loans.

     The  Servicer  shall  deposit in the  Principal  and  Interest  Account all
payments received in connection with such Qualified  Substitute Mortgage Loan or
Loans after the date of such substitution;  provided,  however, that any amounts
received  after the date of  substitution  in respect of interest  accrued on or
prior to the date of  substitution  on such Qualified  Substitute  Mortgage Loan
will constitute the property of the related Depositor or Originator, as the case
may be. Monthly Payments received with respect to Qualified  Substitute Mortgage
Loans on or before the date of substitution  will be retained by the Servicer on
behalf of the related Depositor or related  Originator,  as the case may be. The
Trustee will own, for the benefit of the  Certificateholders and the Certificate
Insurer,  all payments  received on the Deleted  Mortgage  Loan on or before the
date  of  substitution,  and  the  Servicer  on  behalf  of  the  Depositors  or
Originator,  as the case may be,  shall  thereafter  be  entitled  to retain all
amounts  subsequently  received in respect of such Deleted  Mortgage  Loan.  The
Servicer shall give written notice to the Trustee,  the  Representative  and the
Certificate  Insurer that such  substitution has taken place and shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this  Agreement and the  substitution  of the Qualified  Substitute
Mortgage Loan. Upon such substitution,  such Qualified  Substitute Mortgage Loan
or Loans shall be subject to the terms of this  Agreement in all  respects,  and
the  Depositors  shall be deemed to have made  with  respect  to such  Qualified
Substitute  Mortgage  Loan  or  Loans,  as of  the  date  of  substitution,  the
covenants,  representations  and warranties set forth in Sections 3.01 and 3.02.
On the date of such  substitution,  the  applicable  Depositor or the applicable
Originator,  as the case may be, will remit to the  Servicer,  and the  Servicer
will deposit into the  Principal  and Interest  Account,  an amount equal to the
Substitution Adjustment, if any.


<PAGE>


     It is understood and agreed that the  obligations of the Servicer set forth
in Sections 2.06 and 3.03 to cure,  purchase or substitute or cause to be cured,
purchased or substituted  for a defective  Mortgage Loan as provided in Sections
2.06 and 3.03  constitute  the sole  remedies of the  Trustee,  the  Certificate
Insurer  and  the  Certificateholders  respecting  a  breach  of  the  foregoing
representations and warranties.

     Any  cause of  action  against  either of the  Depositors  or the  Servicer
relating to or arising  out of a defect in a Mortgage  File as  contemplated  by
Section  2.06  or the  breach  of any  representations  and  warranties  made in
Sections 3.01 or 3.02 shall arise as to any Mortgage Loan upon the occurrence of
not less than all of the  following  events:  (i)  discovery  of such  defect or
breach by any party and notice  thereof to the Servicer or notice thereof by the
Servicer  to the  Trustee  and the  Certificate  Insurer,  (ii)  failure  by the
Servicer  to cure or cause to be cured  such  defect or breach  or  purchase  or
substitute  or  cause to be  purchased  or  substituted  such  Mortgage  Loan as
specified  above,  and (iii)  demand  upon the  Servicer  by the  Trustee or the
Certificate  Insurer for all amounts  payable in respect of such Mortgage  Loan.
The party  delivering  such  notice  shall  also  deliver a copy  thereof to the
Certificate Insurer.

     The  Trustee  shall  give  prompt  written  notice  to  Moody's,  S&P,  the
Certificate  Insurer  and  to  each   Certificateholder  of  any  repurchase  or
substitution made pursuant to this Section 3.03 or Section 2.06(b).

                                   ARTICLE IV

                                THE CERTIFICATES

     Section 4.01 The Certificates.

     (a) The Class A-1F,  the Class A-2F,  the Class A-3F,  the Class A-4F,  the
Class  A-5F,  the Class A-6F,  the Class A-7F,  the Class X, the Class R and the
Class LR  Certificates  shall be  substantially  in the forms annexed  hereto as
Exhibits B-1, B-2, B-3, B-4, B-5, B-6, B-7, B-8, B-9 and B-10, respectively. The
Class A Certificates  shall be issued in minimum  denominations of $1,000 and in
integral  multiples of $1 in excess thereof.  The Class X Certificates  shall be
issued in minimum  denominations  of 25%  Percentage  Interest  and in  integral
multiples of 1% Percentage Interest in excess thereof.  The Class R and Class LR
Certificates  shall be  issued  in a  minimum  denomination  of 100%  Percentage
Interest. All Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by at least one authorized  officer and  authenticated  by
the  manual  signature  of  an  authorized  officer.  Certificates  bearing  the
signatures  of  individuals  who  were  at  the  time  of the  execution  of the
Certificates  the  authorized  officers of the Trustee  shall bind the  Trustee,
notwithstanding  that such  individuals  or any of them have ceased to hold such
offices prior to the delivery of such  Certificates or did not hold such offices
at the date of such  Certificates.  All  Certificates  issued hereunder shall be
dated the date of their authentication.

     (b) The Class A Certificates,  upon original  issuance,  shall be issued in
the form of a typewritten  Certificate or Certificates  representing  Book-Entry
Certificates, to be delivered to the Depository or, pursuant to the Depository's
instructions on behalf of the


<PAGE>


Depository  to, and deposited  with,  the  Certificate  Custodian.  Such Class A
Certificate or  Certificates  shall  initially be registered on the  Certificate
Register in the name of Cede & Co., the nominee of the initial  Depository,  and
no Certificate  Owner of a Class A Certificate or  Certificates  shall receive a
definitive Class A Certificate representing such Certificate Owner's interest in
such Class A  Certificate,  except as  provided in Section  4.01(c).  Unless and
until  definitive  fully  registered  Class  A  Certificates   (the  "Definitive
Certificates")  shall have been issued to Certificate Owners pursuant to Section
4.01(c):

          (i) the provisions of this Section  4.01(b) shall be in full force and
     effect;

          (ii) the  Certificate  Registrar  and the Trustee shall be entitled to
     deal with the Depository for all purposes of this Agreement  (including the
     payment of principal of and interest on the  Certificates and the giving of
     instructions  or  directions  hereunder)  as the sole Holder of the Class A
     Certificates,  and shall have no obligation to the Certificate  Owners with
     respect thereto;

          (iii)  to the  extent  that the  provisions  of this  Section  4.01(b)
     conflict with any other  provisions of this  Agreement,  the  provisions of
     this Section 4.01(b) shall control;

          (iv) the rights of the Certificate  Owners with respect to the Class A
     Certificates  shall be exercised  only through the  Depository and shall be
     limited to those established by law and agreements between such Certificate
     Owners and the Depository  and/or the Depository  Participants.  Unless and
     until Definitive  Certificates are issued pursuant to Section 4.01(c),  the
     initial  Depository  will make  book-entry  transfers  among the Depository
     Participants and receive and transmit payments of principal of and interest
     on the Class A Certificates to such Depository Participants;

          (v) whenever this  Agreement  requires or permits  actions to be taken
     based upon instructions or directions of Holders of Certificates evidencing
     a specified aggregate Percentage  Interest,  the Depository shall be deemed
     to  represent  such  percentage  only to the  extent  that it has  received
     instructions  to such  effect from  Certificate  Owners  and/or  Depository
     Participants owning or representing,  respectively, such required aggregate
     Percentage  Interest  of Class A  Certificates  (taking  into  account  the
     proviso  contained  in  the  definition  of  "Certificateholder"  contained
     herein) and has delivered such instructions to the Trustee; and

          (vi)  whenever  a  notice  or  other  communication  to  the  Class  A
     Certificateholders  is  required  under  this  Agreement,  unless and until
     Definitive  Certificates  shall  have  been  issued to  Certificate  Owners
     pursuant to Section  4.01(c),  the Trustee  shall give all such notices and
     communications  specified herein to be given to Class A  Certificateholders
     to the Depository and


<PAGE>


     shall have no further  obligation to the Certificate  Owners of the Class A
     Certificates.

provided,  however,  that the  provisions  of this Section  4.01(b) shall not be
applicable  in respect of Class A  Certificates  issued to the  Depositors.  The
Depositors  or the Trustee may set a record date for the purpose of  determining
the identity of Holders of Class A  Certificates  entitled to vote or to consent
to any action by vote as provided in this Agreement;

     (c) The Class X, Class R and Class LR  Certificates  shall be issued in the
form of Definitive  Certificates.  With respect to the Class A Certificates,  if
(i) the Servicer advises the Trustee in writing that the Depository is no longer
willing or able to properly discharge its  responsibilities  with respect to the
Class A  Certificates,  and  the  Servicer  is  unable  to  locate  a  qualified
successor;  (ii) the Servicer at its option  advises the Trustee in writing that
it elects to terminate the book-entry  system through the  Depository;  or (iii)
after the  occurrence  of a Servicer  Default,  a Majority in  Aggregate  Voting
Interest advise the Depository in writing that the  continuation of a book-entry
system  through  the  Depository  is no  longer  in the  best  interests  of the
Certificate Owners of the Class A Certificates, then the Depository shall notify
all  Certificate  Owners and the Trustee of the occurrence of any such event and
of the availability of Definitive  Certificates to Certificate Owners requesting
the same.  Upon  surrender  to the  Trustee of the  typewritten  Certificate  or
Certificates   representing  the  Book-Entry  Certificates  by  the  Depository,
accompanied  by  registration  instructions,   the  Trustee  shall  execute  and
authenticate the Definitive  Certificates in accordance with the instructions of
the  Depository.  Neither the  Certificate  Registrar  nor the Trustee  shall be
liable for any delay in delivery of such  instructions and may conclusively rely
on, and shall be protected in relying on, such  instructions.  Upon the issuance
of  Definitive  Certificates,  the Trustee  shall  recognize  the Holders of the
Definitive Certificates as Certificateholders.

     Section 4.02 Registration of Transfer and Exchange of Certificates.

     (a) The Trustee  shall cause to be kept at its office or agency in Chicago,
Illinois,  or at its designated agent, a Certificate  Register in which, subject
to such  reasonable  regulations as it may  prescribe,  it shall provide for the
registration of  Certificates  and of transfers and exchanges of Certificates as
herein  provided.  The Certificate  Register shall contain the name,  remittance
instructions,  Class and Percentage Interest of each Certificateholder,  as well
as the Series and the number in the Series.

     (b) Except as provided in Section  4.02(c),  no transfer,  sale,  pledge or
other  disposition of a Class X, Class R or Class LR  Certificate  shall be made
unless  such  transfer,  sale,  pledge or other  disposition  is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
and any applicable  state securities laws or is made in accordance with said Act
and  laws.  In the  event  that a  transfer  of a Class  X,  Class R or Class LR
Certificate is to be made under this Section 4.02(b),  the Depositors may direct
the  Trustee to require  an  Opinion  of Counsel  acceptable  to and in form and
substance  satisfactory  to the Trustee and the  Depositors  that such  transfer
shall be made pursuant to an exemption,  describing the applicable exemption and
the basis therefor, from said Act and laws or is being


<PAGE>


made  pursuant to said Act and laws,  which  Opinion of Counsel  shall not be an
expense of the  Trustee,  the  Depositors  or the  Servicer and (ii) the Trustee
shall require the transferee to execute a representation  letter,  substantially
in the form of Exhibit M-2 hereto,  and the Trustee shall require the transferor
to execute a  representation  letter,  substantially  in the form of Exhibit M-3
hereto,  each  acceptable  to and in  form  and  substance  satisfactory  to the
Depositors  and the Trustee  certifying  to the  Depositors  and the Trustee the
facts surrounding such transfer,  which  representation  letters shall not be an
expense of the Trustee,  the  Depositors  or the  Servicer,  provided  that such
representation  letter will not be required in  connection  with any transfer of
any such  Certificate by the Depositors to an affiliate of the  Depositors.  Any
such  Certificateholder  desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositors, the Certificate Insurer and the
Servicer  against any liability that may result if the transfer is not so exempt
or is not made in accordance with such applicable federal and state laws.

     (c) Transfers of Class X, Class R and Class LR Certificates  may be made in
accordance  with  this  Section  4.02(c)  if  the  prospective  transferee  of a
Certificate  provides the Trustee and the Depositors  with an investment  letter
substantially  in the form of Exhibit  M-4  attached  hereto,  which  investment
letter shall not be an expense of the Trustee,  the  Depositors or the Servicer,
and which investment letter states that, among other things,  such transferee is
a "qualified  institutional  buyer" as defined under Rule 144A.  Such  transfers
shall be  deemed to have  complied  with the  requirements  of  Section  4.02(b)
hereof;  provided,  however,  that no Transfer of any of the Certificates may be
made   pursuant  to  this   Section   4.02(c)  by  the   Depositors.   Any  such
Certificateholder  desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Depositors and the Servicer against any liability
that may result if the  transfer  is not so exempt or is not made in  accordance
with such applicable federal and state laws.

     (d)  Each  Person  who has or who  acquires  any  Ownership  Interest  in a
Residual  Certificate  shall be deemed by the  acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
execute all  instruments  of transfer  and to do all other  things  necessary in
connection  with any such sale,  and the  rights of each  Person  acquiring  any
Ownership  Interest  in a  Residual  Certificate  are  expressly  subject to the
following provisions:

     (1) Each Person  holding or acquiring any Ownership  Interest in a Residual
Certificate  shall be a  Permitted  Transferee  and shall  promptly  notify  the
Trustee  of any  change  or  impending  change  in  its  status  as a  Permitted
Transferee.

     (2) In connection with any proposed Transfer of any Ownership Interest in a
Residual  Certificate,  the Trustee shall require  delivery to it, and shall not
register the Transfer of any such Residual  Certificate until its receipt of, an
affidavit and agreement (a "Transfer  Affidavit and Agreement")  attached hereto
as Exhibit M-1 from the proposed Transferee,  in form and substance satisfactory
to the Trustee,  representing  and  warranting,  among other  things,  that such
Transferee  is a Permitted  Transferee,  that it is not  acquiring its Ownership
Interest  in such  Residual  Certificate  that is the  subject  of the  proposed
Transfer as a nominee,


<PAGE>


trustee or agent for any Person that is not a Permitted Transferee,  that for so
long as it retains its Ownership Interest in such Residual Certificate,  it will
endeavor  to  remain  a  Permitted  Transferee,  and  that it has  reviewed  the
provisions of this Section 4.02(d) and agrees to be bound by them.

     (3) Notwithstanding the delivery of a Transfer Affidavit and Agreement by a
proposed  Transferee under clause (2) above, if the Trustee has actual knowledge
that the proposed  Transferee is not a Permitted  Transferee,  no Transfer of an
Ownership Interest in a Residual  Certificate to such proposed  Transferee shall
be effected.

     (4) Each Person  holding or acquiring any Ownership  Interest in a Residual
Certificate  shall agree (x) to require a Transfer  Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its Ownership Interest
in such  Residual  Certificate  and (y) not to transfer its  Ownership  Interest
unless it provides a certificate  (attached  hereto as Exhibit J) to the Trustee
stating that,  among other things,  it has no actual  knowledge  that such other
Person is not a Permitted Transferee.

     (5) The Trustee will register the Transfer of any Residual Certificate only
if it shall have  received the Transfer  Affidavit and Agreement and all of such
other  documents  as shall have been  reasonably  required  by the  Trustee as a
condition  to  such  registration.  In  addition,  no  Transfer  of  a  Residual
Certificate   shall  be  made   unless  the  Trustee   shall  have   received  a
representation letter from the Transferee of such Certificate to the effect that
such  Transferee  is not a  Disqualified  Non-United  States Person and is not a
Disqualified  Organization  or an agent of  either.  Transfers  of the  Residual
Certificates  to  Disqualified   Non-United   States  Persons  and  Disqualified
Organizations or their agents are prohibited.

     (6) Any  attempted or  purported  transfer of any  Ownership  Interest in a
Residual  Certificate  in violation of the provisions of this Section 4.02 shall
be  absolutely  null  and  void  and  shall  vest  no  rights  in the  purported
transferee.  If any  purported  transferee  shall  become a Holder of a Residual
Certificate in violation of the  provisions of this Section 4.02,  then the last
preceding Permitted Transferee shall be restored to all rights as Holder thereof
retroactive  to  the  date  of   registration   of  transfer  of  such  Residual
Certificate.  The Trustee  shall notify the  Depositors  upon receipt of written
notice or discovery by a Responsible  Officer that the  registration of transfer
of a  Residual  Certificate  was not in fact  permitted  by this  Section  4.02.
Knowledge  shall not be imputed to the Trustee with respect to an  impermissible
transfer in the absence of such a written  notice or discovery by a  Responsible
Officer.  The  Trustee  shall  be  under  no  liability  to any  Person  for any
registration of transfer of a Residual Certificate that is in fact not permitted
by this Section 4.02 or for making any payments due on such  Certificate  to the
Holder  thereof or taking any other action with respect to such Holder under the
provisions  of this  Agreement  so long as the  transfer  was  registered  after
receipt of the related Transfer Affidavit and Transfer Certificate.  The Trustee
shall be  entitled,  but not  obligated to recover from any Holder of a Residual
Certificate that was in fact not a Permitted  Transferee at the time it became a
Holder  or,  at  such  subsequent  time  as it  became  other  than a  Permitted
Transferee,  all payments made on such Residual  Certificate at and after either
such time. Any such


<PAGE>


payments so recovered by the Trustee  shall be paid and delivered by the Trustee
to the last preceding Holder of such Certificate.

     (e) The Trustee shall make  available to the Internal  Revenue  Service and
those Persons  specified by the REMIC Provisions,  all information  necessary to
compute any tax imposed as a result of the transfer of an ownership  interest in
a Residual  Certificate to any Person who is a Disqualified  Organization  or an
agent thereof,  including the information  regarding "excess inclusions" of such
Residual  Certificates  required to be provided to the Internal  Revenue Service
and certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5)
and  1.860E-2(a)(5).  The Trustee may charge and shall be entitled to reasonable
compensation  for  providing  such  information  as may be  required  from those
Persons  which  may  have  had a tax  imposed  upon  them as  specified  in this
paragraph for providing such information.

     (f) No  transfer  of a Class  X,  Class R or Class  LR  Certificate  or any
interest  therein shall be made to any employee benefit plan or other retirement
arrangement, including individual retirement accounts and annuities, Keogh plans
and  collective  investment  funds and  separate  accounts  in which such plans,
accounts  or  arrangements  are  invested,  that  is  subject  to  the  Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the Code (each,
an "ERISA Plan"), unless the prospective transferee of such Certificate provides
the  Servicer  and  the  Trustee  with a  certification  of  facts  and,  at the
prospective  transferee's  expense, an Opinion of Counsel which establish to the
satisfaction  of the Servicer and the Trustee that such transfer will not result
in a violation  of Section 406 of ERISA or Section 4975 of the Code or cause the
Servicer or the Trustee to be deemed a fiduciary of such ERISA Plan or result in
the  imposition  of an excise tax under Section 4975 of the Code. In the absence
of their  having  received  the  certification  of facts or  Opinion  of Counsel
contemplated  by the  preceding  sentence,  the Trustee and the  Servicer  shall
require  the  prospective  transferee  of any  Class  X,  Class  R or  Class  LR
Certificate  to certify in the form of Exhibit M-2 or Exhibit M-4 that (A) it is
neither  (i) an  ERISA  Plan nor (ii) a Person  who is  directly  or  indirectly
purchasing such  Certificate on behalf of, as named fiduciary of, as trustee of,
or with assets, of a Plan or (B) in the case of the Class X Certificates, if the
prospective  transferee  is  an  insurance  company,  all  funds  used  by  such
transferee  to  purchase  such  Certificates  will  be  funds  held  by it in an
"insurance  company general account" (as such term is defined in Section V(e) of
Prohibited  Transaction Class Exemption 95-60 ("PTE 95-60"),  60 Fed. Reg. 35925
(July 12,  1995) and there is no Plan with  respect  to which the amount of such
general  account's  reserves and liabilities  for the contract(s)  held by or on
behalf of such Plan and all other  Plans  maintained  by the same  employer  (or
affiliate  thereof as  defined  in Section  V(a)(1) of PTE 95-60) or by the same
employee  organization  exceeds 10% of the total of all reserves and liabilities
of such general  account (as such amounts are  determined  under Section I(a) of
PTE 95-60) at the date of acquisition.

     (g) Subject to the restrictions set forth in this Agreement, upon surrender
for  registration  of transfer of any Certificate at the office or agency of the
Trustee  located in New York,  New York or Chicago  Illinois,  the Trustee shall
execute,  authenticate  and deliver in the name of the designated  transferee or
transferees, a new Certificate of the same Class and


<PAGE>


Percentage  Interest and dated the date of  authentication  by the Trustee.  The
Trustee  shall  notify the Servicer of any such  transfer.  At the option of the
Certificateholders,  Certificates  may be exchanged  for other  Certificates  of
Authorized Denominations of a like aggregate Percentage Interest, upon surrender
of the  Certificates to be exchanged at such office.  Whenever any  Certificates
are so surrendered  for exchange,  the Trustee shall execute,  authenticate  and
deliver the  Certificates  which the  Certificateholder  making the  exchange is
entitled  to  receive.  No  service  charge  shall be made for any  transfer  or
exchange  of  Certificates,  but  the  Trustee  may  require  payment  of a  sum
sufficient  to cover  any tax or  governmental  charge  that may be  imposed  in
connection  with any  transfer  or exchange of  Certificates.  All  Certificates
surrendered for transfer and exchange shall be canceled by the Trustee.

     Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates.

     If (i) any mutilated  Certificate  is  surrendered  to the Trustee,  or the
Trustee receives evidence to its satisfaction of the destruction,  loss or theft
of any Certificate,  and (ii) there is delivered to the Servicer and the Trustee
such security or indemnity, which may include a letter of indemnity delivered by
an insurance company reasonably  acceptable to the Trustee and the Servicer,  as
may be  required  by each of them to save each of them  harmless,  then,  in the
absence of notice to the Servicer and the Trustee that such Certificate has been
acquired by a bona fide purchaser,  the Trustee shall execute,  authenticate and
deliver,  in exchange for or in lieu of any such mutilated,  destroyed,  lost or
stolen Certificate, a new Certificate of like tenor and Percentage Interest, but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate  under this Section  4.03,  the Servicer and the Trustee may require
the payment of a sum  sufficient to cover any tax or other  governmental  charge
that may be  imposed  in  relation  thereto  and any  other  expenses  connected
therewith.  Any duplicate Certificate issued pursuant to this Section 4.03 shall
constitute  complete and  indefeasible  evidence of ownership in the  Upper-Tier
REMIC (or, in the case of a Class LR Certificate,  the Lower-Tier  REMIC), as if
originally  issued,  whether  or not the  mutilated,  destroyed,  lost or stolen
Certificate shall be found at any time.

     Section 4.04 Persons Deemed Owners.

     Prior to due  presentation of a Certificate  for  registration of transfer,
the Servicer,  the Depositors and the Trustee may treat the Person in whose name
any  Certificate is registered as the owner of such  Certificate for the purpose
of receiving  remittances  pursuant to Section  6.05 and for all other  purposes
whatsoever,  and the  Servicer,  the  Depositors  and the  Trustee  shall not be
affected by notice to the contrary.

                                    ARTICLE V

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

     Section 5.01 Duties of the Servicer.


<PAGE>


     (a) It is intended that each Trust REMIC formed hereunder shall constitute,
and that the affairs of each Trust REMIC shall be  conducted so as to qualify it
as a REMIC as  defined  in and in  accordance  with  the  REMIC  Provisions.  In
furtherance of such intention,  the Servicer  covenants and agrees that it shall
not knowingly or  intentionally  take any action or omit to take any action that
would cause the termination of the REMIC status of either Trust REMIC.

     (b) The  Servicer,  as  independent  contract  servicer,  shall service and
administer the Mortgage  Loans and shall have full power and  authority,  acting
alone,  to do  any  and  all  things  in  connection  with  such  servicing  and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this  Agreement.  The  Servicer  may enter  into  Subservicing
Agreements  for any  servicing  and  administration  of Mortgage  Loans with any
entity which is in compliance with the laws of each state necessary to enable it
to perform its obligations  under such  Subservicing  Agreement and (x) has been
designated  an  approved  Seller-Servicer  by FHLMC or FNMA for first and second
mortgage  loans,  or (y) is an  affiliate  or  wholly  owned  subsidiary  of the
Servicer. The Servicer shall give notice to the Depositors,  the Trustee and the
Certificate  Insurer  of  the  appointment  of  any  Subservicer  other  than  a
Subservicer  which is an affiliate or  wholly-owned  subsidiary of the Servicer.
Any such  Subservicing  Agreement  shall be consistent  with and not violate the
provisions of this  Agreement.  The Servicer  shall be entitled to terminate any
Subservicing  Agreement  in  accordance  with the terms and  conditions  of such
Subservicing  Agreement and either itself directly  service the related Mortgage
Loans or enter into a Subservicing  Agreement with a successor subservicer which
qualifies hereunder.

     (c)  Notwithstanding any Subservicing  Agreement,  any of the provisions of
this Agreement  relating to agreements or arrangements  between the Servicer and
Subservicer  or reference to actions taken  through a Subservicer  or otherwise,
the Servicer shall remain obligated and primarily liable to the Depositors,  the
Trustee,  the Certificate Insurer and the  Certificateholders  for the servicing
and  administering  of the Mortgage  Loans in accordance  with the provisions of
this Agreement  without  diminution of such obligation or liability by virtue of
such  Subservicing  Agreements or arrangements  or by virtue of  indemnification
from the  Subservicer  and to the same  extent  and  under  the same  terms  and
conditions  as if the  Servicer  alone  were  servicing  and  administering  the
Mortgage Loans. For purposes of this Agreement,  the Servicer shall be deemed to
have received  payments on Mortgage Loans when the Subservicer has received such
payments.  The  Servicer  shall be entitled to enter into any  agreement  with a
Subservicer for indemnification of the Servicer by such Subservicer, and nothing
contained  in  this   Agreement   shall  be  deemed  to  limit  or  modify  such
indemnification  or limit or modify  indemnification  provided  by the  Servicer
herein.

     (d)  Any   Subservicing   Agreement  that  may  be  entered  into  and  any
transactions or services  relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an  Originator  shall be deemed to be between
the  Subservicer and the Servicer alone,  and the Depositors,  the Trustee,  the
Certificate Insurer and  Certificateholders  shall not be deemed parties thereto
and shall  have no  claims,  rights,  obligations,  duties or  liabilities  with
respect to the Subservicer except as set forth in Section 5.01(e).


<PAGE>


     (e) In the  event  the  Servicer  shall  for any  reason  no  longer be the
Servicer  (including  by reason  of a  Servicer  Default),  the  Trustee  or its
designee  shall,  subject to Section 10.02 hereof,  thereupon  assume all of the
rights and  obligations of the Servicer under each  Subservicing  Agreement that
the Servicer may have entered into,  unless the Trustee  elects to terminate any
Subservicing  Agreement.  If the  Trustee  does  not  terminate  a  Subservicing
Agreement,  the Trustee,  its designee or the successor servicer for the Trustee
shall be deemed to have assumed all of the  Servicer's  interest  therein and to
have replaced the Servicer as a party to each Subservicing Agreement to the same
extent as if the  Subservicing  Agreements  had been  assigned  to the  assuming
party,  except that the Servicer  shall not thereby be relieved of any liability
or obligations  under the Subservicing  Agreements.  The Servicer at its expense
and without right of reimbursement therefor, shall, upon request of the Trustee,
deliver  to the  assuming  party all  documents  and  records  relating  to each
Subservicing  Agreement  and the  Mortgage  Loans  then  being  serviced  and an
accounting  of  amounts  collected  and  held by it and  otherwise  use its best
efforts  to effect  the  orderly  and  efficient  transfer  of the  Subservicing
Agreements to the assuming party.

     (f) Consistent  with the terms of this  Agreement,  the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the  postponement  of
strict  compliance  with any such term or in any manner grant  indulgence to any
Mortgagor  if  in  the  Servicer's  determination  such  waiver,   modification,
postponement  or  indulgence is not  materially  adverse to the interests of the
Depositors,  the  Certificateholders  and  the  Certificate  Insurer;  provided,
however,  that  (unless  (x) the  Mortgagor  is in default  with  respect to the
Mortgage  Loan, or such default is, in the judgment of the Servicer,  reasonably
foreseeable  and (y) with  respect to any  modification  lowering  the  Mortgage
Interest Rate or effecting the forgiveness of any amount owed under the Mortgage
Note,  or  extending  the  final  maturity  date  on  such  Mortgage  Loan,  the
Certificate  Insurer  has  consented  to such  modification  and  notice of such
modification  has been  delivered to the Rating  Agencies)  the Servicer may not
permit any modification  with respect to any Mortgage Loan that would change the
Mortgage  Interest Rate,  defer (except as permitted by Section 5.11) or forgive
the  payment  of any  principal  or  interest  (unless  in  connection  with the
liquidation  of the related  Mortgage  Loan),  extend the final maturity date or
modify  any other  material  term of the  Mortgage  Loan,  unless  such  waiver,
modification,  postponement or indulgence  would not be considered to constitute
the  acquisition by the  Lower-Tier  REMIC of a new mortgage loan under Treasury
Regulations  Section  1.860G-2(b).  No costs  incurred  by the  Servicer  or any
Subservicer  in  respect  of  Servicing  Advances  shall,  for the  purposes  of
distributions to  Certificateholders,  be added to the Principal  Balance of the
related  Mortgage  Loan for  purposes of this  Agreement.  Without  limiting the
generality  of the  foregoing,  and  subject to the  consent of the  Certificate
Insurer, the Servicer shall continue,  and is hereby authorized and empowered to
execute and deliver on behalf of the Trustee, all instruments of satisfaction or
cancellation,  or of partial or full release, discharge and all other comparable
instruments,  with  respect  to the  Mortgage  Loans  and  with  respect  to the
Mortgaged Properties. If reasonably required by the Servicer (as evidenced by an
Officer's  Certificate of the Servicer to such effect delivered to the Trustee),
the Trustee  shall  furnish the  Servicer  with any powers of attorney and other
documents  necessary  or  appropriate  to enable the  Servicer  to carry out its
servicing and administrative duties under this Agreement.


<PAGE>


     Notwithstanding anything to the contrary contained herein, the Servicer, in
servicing  and  administering  the Mortgage  Loans,  shall employ or cause to be
employed  procedures  (including   collection,   foreclosure  and  REO  Property
management  procedures)  and exercise the same care that it customarily  employs
and exercises in servicing and administering mortgage loans for its own account,
in  accordance  with accepted  second  mortgage  servicing  practices of prudent
lending  institutions  and  giving due  consideration  to the  Depositor's,  the
Certificate Insurer's and Certificateholders' reliance on the Servicer.

     Notwithstanding anything to the contrary contained herein, the Servicer may
reimburse itself for Servicing Advances pursuant to Section 5.04 and may pay all
or a portion of any  Servicing  Advance out of excess  amounts on deposit in the
Principal and Interest Account and held for future distribution on the date such
Servicing  Advance is made;  any excess amounts so used shall be replaced by the
Servicer by deposit to the Principal and Interest  Account on or before the next
succeeding Determination Date.

     (g) On and after such time as the Trustee  receives the  resignation of, or
notice of the removal of, the  Servicer  from its rights and  obligations  under
this Agreement,  and with respect to any  resignation  pursuant to Section 9.04,
after receipt of the Opinion of Counsel  required  pursuant to Section 9.04, the
Trustee or its designee  shall assume all of the rights and  obligations  of the
Servicer,  subject to Section 9.02 hereof.  The Servicer shall,  upon request of
the  Trustee  but at the  expense of the  Servicer,  deliver to the  Trustee all
documents  and  records  relating to the  Mortgage  Loans and an  accounting  of
amounts collected and held by the Servicer and otherwise use its best efforts to
effect the orderly and efficient transfer of servicing rights and obligations to
the assuming party.

     (h) The Servicer shall take all actions required to be taken under sections
6050H,  6050J and 6050P of Code in respect of the Mortgage Loans,  the Mortgaged
Property and the REO Property.

     Section 5.02 Liquidation of Mortgage Loans.

     In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 5.01 is not paid when the same  becomes due and payable,  or
in the event the  Mortgagor  fails to perform any other  covenant or  obligation
under the Mortgage Loan and such failure  continues  beyond any applicable grace
period,  the Servicer  shall take such action as it shall deem in its good faith
business judgment to be in the best interest of the Depositors,  the Certificate
Insurer and the Certificateholders and otherwise in accordance with the accepted
second  mortgage  servicing  practices  of  prudent  lending  institutions.  The
Servicer in accordance  with the provisions of Section 5.10 shall foreclose upon
or otherwise  comparably effect the ownership in the name of the Trustee for the
benefit of the  Certificateholders of Mortgaged Properties relating to defaulted
Mortgage  Loans  as to  which  no  satisfactory  arrangements  can be  made  for
collection of delinquent payments;  provided,  however,  that the Servicer shall
not be obligated to foreclose in the event that the Servicer,  in its good faith
reasonable  business  judgment,  determines  that it  would  not be in the  best
interests of the Depositors,  the Certificateholders or the Certificate Insurer,
which judgment shall be


<PAGE>


evidenced  by  an  Officer's  Certificate  delivered  to  the  Trustee  and  the
Certificate  Insurer.  In connection with such foreclosure or other  conversion,
the Servicer shall exercise and use collection and  foreclosure  procedures with
the  same  degree  of care  and  skill as it would  exercise  or use  under  the
circumstances  in the  conduct  of its own  affairs.  Any  amounts  advanced  in
connection  with such  foreclosure or other action shall  constitute  "Servicing
Advances."

     After a Mortgage Loan has become a Liquidated  Mortgage  Loan, the Servicer
shall  promptly  prepare  and  forward to the  Depositors,  the  Trustee and the
Certificate Insurer a Liquidation Report, in the form attached hereto as Exhibit
O, detailing the  Liquidation  Proceeds  received from the  Liquidated  Mortgage
Loan,  expenses  incurred  with  respect  thereto,  and  any  loss  incurred  in
connection therewith.

     Section 5.03 Establishment of Principal and Interest Accounts;  Deposits in
Principal and Interest Accounts.

     The Servicer, for the benefit of the Certificateholders and the Certificate
Insurer,  as their  interests  may  appear,  shall cause to be  established  and
maintained  one or more  Principal  and  Interest  Accounts  in the  name of the
Trustee, which shall be Eligible Accounts, which may be interest-bearing, titled
"EQCC Home Equity Loan Trust 1998-2 Principal and Interest Account",  bearing an
additional  designation  clearly indicating that the funds deposited therein are
held for the benefit of the  Certificateholders.  Such  Principal  and  Interest
Accounts shall be insured by the Bank Insurance Fund or the Savings  Association
Insurance Fund of the FDIC, as the case may be, to the maximum  extent  provided
by law. The creation of any Principal and Interest Account shall be evidenced by
a letter  agreement  in the form of  Exhibit  P  hereto.  A copy of such  letter
agreement shall be furnished by the Servicer to the Depositors,  the Trustee and
the Certificate  Insurer.  The Servicer shall use reasonable  efforts to deposit
(without  duplication)  within one Business  Day, and shall in any event deposit
within two  Business  Days of receipt  thereof,  in the  Principal  and Interest
Account and retain therein:

          (i) all  payments  received on or after the Cut-off Date on account of
     principal  on  the  Mortgage  Loans  and  all  Principal   Prepayments  and
     Curtailments collected on or after the Cut-off Date;

          (ii) (a) all payments received on or after the Cut-off Date on account
     of interest  accrued on the Mortgage Loans on or after the Cut-off Date and
     (b) Pre-Plan Interest Payments;

          (iii) all Net Liquidation Proceeds;

          (iv) all Insurance Proceeds;

          (v) all Released Mortgaged Property Proceeds;


<PAGE>


          (vi) any  amounts  payable  in  connection  with the  purchase  of any
     Mortgage  Loan and the amount of any  Substitution  Adjustment  pursuant to
     Sections 2.06 and 3.03;

          (vii)  any  amount  required  to be  deposited  in the  Principal  and
     Interest Account pursuant to Section 5.04, 5.07, 5.08 or 5.10; and

          (viii)  all  payments  made  by the  Servicer  pursuant  to the  final
     paragraph  of  Section  5.01(f) to replace  any amount  withdrawn  from the
     Principal and Interest Account to make Servicing Advances.

     The  foregoing  requirements  for  deposit in the  Principal  and  Interest
Account  shall be  exclusive,  it being  understood  and  agreed  that,  without
limiting the  generality of the  foregoing,  with respect to each Mortgage Loan,
the  Representative's  Yield,  amounts received on and after the Cut-off Date in
respect of interest  accrued on the  Mortgage  Loans  prior to the Cut-off  Date
(other than amounts referred to in Section 5.03(ii)(b)), the Servicing Fee, late
payment  charges and assumption  fees, to the extent  permitted by Sections 7.01
and  7.03,  Excess  Proceeds,  and  any  amounts  received  after  the  date  of
substitution of a Qualified Substitute Mortgage Loan pursuant to Section 2.06 or
3.03 in respect of interest accrued on such Qualified  Substitute  Mortgage Loan
on or prior to the date of substitution (except to the extent taken into account
in calculating the Substitution  Adjustment with respect  thereto),  need not be
deposited by the Servicer in the Principal and Interest Account.  Any investment
earnings on funds held in the  Principal  and Interest  Account shall be for the
account  of the  Servicer.  Any  reference  herein to  amounts on deposit in the
Principal  and Interest  Account  shall refer to amounts net of such  investment
earnings.

     Section 5.04 Permitted Withdrawals from the Principal and Interest Account.

     The  Servicer  shall  withdraw  or cause  to be  withdrawn  funds  from the
Principal and Interest Account for the following purposes:

          (i)  to  remit  to  the  Trustee  for  deposit  into  the   Lower-Tier
     Distribution  Account on the third  Business Day prior to the Payment Date,
     the sum of the amounts set forth in Section 5.03 deposited in the Principal
     and Interest  Account during the related Due Period  (excluding any amounts
     not required to be deposited in the Principal and Interest Account pursuant
     to  Section  5.03 and  excluding  any  amounts  withdrawn  by the  Servicer
     pursuant to clauses (ii),  (iii),  (v), (vi), (vii) and (x) below as of the
     related Determination Date);

          (ii) to reimburse  itself for any accrued unpaid  Servicing  Fees, for
     unreimbursed  Servicing  Advances  and, with respect to any Advance made by
     the Servicer from its own funds, any unreimbursed Advance;  provided,  that
     any  withdrawal of accrued  unpaid Servicing Fees pursuant to this Section
     5.04(ii)  shall be used first by the Servicer to pay any amounts due to the
     Trustee  pursuant to this Agreement.  The Servicer's right to reimbursement
     for unpaid


<PAGE>


     Servicing Fees and unreimbursed Servicing Advances shall be limited to late
     collections on the related Mortgage Loan, including  Liquidation  Proceeds,
     Released  Mortgaged  Property  Proceeds,  Insurance Proceeds and such other
     amounts as may be collected by the Servicer  from the related  Mortgagor or
     otherwise   relating  to  the  Mortgage  Loan  in  respect  of  which  such
     unreimbursed  Advances are owed. The Servicer's rights to reimbursement for
     any  unreimbursed  Advances  shall be limited to collections of interest on
     any  Mortgage  Loan with  respect to which an Advance was made or from late
     collections  on  such  Mortgage  Loans,   including  Liquidation  Proceeds,
     Released  Mortgaged  Property  Proceeds,  Insurance Proceeds and such other
     amounts as may be collected by the Servicer from the related  Mortgagors or
     otherwise  relating  to  the  Mortgage  Loans  in  respect  of  which  such
     unreimbursed  amounts are owed. It is understood that the Servicer's  right
     to  reimbursement   pursuant  hereto  shall  be  prior  to  the  rights  of
     Certificateholders  unless  the  Representative  is the  Servicer  and  the
     Servicer  or any  Depositor  or  Originator  is  required  to  purchase  or
     substitute  (or cause to be  purchased  or  substituted)  a  Mortgage  Loan
     pursuant to Sections 2.06 and 3.03, in which case the  Servicer's  right to
     such  reimbursement  shall be  subsequent to the deposit into the Principal
     and  Interest  Account of the  purchase  price or  Substitution  Adjustment
     pursuant to such Sections 2.06 and 3.03;

          (iii)  to  withdraw  any  amount  received  from a  Mortgagor  that is
     recoverable  and  sought to be  recovered  as a  voidable  preference  by a
     trustee in  bankruptcy  pursuant to the United  States  Bankruptcy  Code in
     accordance with a final,  nonappealable  order of a court having  competent
     jurisdiction;

          (iv) (a) to make  investments in Permitted  Instruments  and (b) after
     effecting the remittance to the Trustee as provided in Section 5.04(i),  to
     pay to itself  interest  earned in respect of Permitted  Instruments  or on
     funds deposited in the Principal and Interest Account;

          (v) to withdraw  any funds  deposited  in the  Principal  and Interest
     Account that were not required to be deposited  therein  (such as Servicing
     Compensation) or were deposited therein in error;

          (vi) to pay itself  Servicing  Compensation  pursuant to Section  7.03
     hereof to the extent not retained or paid pursuant to Section 5.03;

          (vii) to withdraw funds necessary for the conservation and disposition
     of REO Property  pursuant to the third  paragraph of Section 5.10 hereof to
     the extent such funds were deposited in the Principal and Interest Account;

          (viii) to  utilize  any excess  funds on  deposit to make any  Advance
     pursuant to Section  6.08 or any  Servicing  Advance  pursuant to the final
     paragraph of Section 5.01(f);


<PAGE>


          (ix) to clear and terminate  the  Principal and Interest  Account upon
     the termination of this Agreement and allocate the amounts therein pursuant
     to the priority set forth in Section 6.05(d); and

          (x) to effect,  with respect to a Bankruptcy  Loan,  the remittance to
     the Depositor  transferring such Bankruptcy Loan, of an amount equal to the
     excess,  if  any,  of  (a)  Pre-Plan  Interest  Payments  collected  in the
     preceding  Due Period  with  respect to such  Bankruptcy  Loan over (b) the
     interest  accrued in such preceding Due Period,  but  uncollected as of the
     last day of such Due Period, with respect to such Bankruptcy Loan.

     So long as no Servicer  Default shall have occurred and be continuing,  the
funds held in the Principal and Interest Account may be invested by the Servicer
(to the extent practicable) in Permitted Instruments,  as directed in writing to
the Trustee by the Servicer. In either case, funds in the Principal and Interest
Account must be available  for  withdrawal  without  penalty,  and any Permitted
Instruments  must mature not later than the Business Day  immediately  preceding
the day on which such funds are to be remitted to the Trustee for deposit in the
Lower-Tier  Distribution  Account,  but in no event later than the  Business Day
immediately  preceding the  Determination  Date next  following the date of such
investment  (except,  in each  case,  that if such  Permitted  Instrument  is an
obligation of the institution that maintains the Principal and Interest Account,
then such Permitted  Instrument  shall mature not later than such  Determination
Date) and shall not be sold or disposed of prior to its maturity.  All Permitted
Instruments  in which funds in the Principal  and Interest  Account are invested
must be held by or registered in the name of the Trustee.  All interest or other
earnings  from funds on deposit in the  Principal  and Interest  Account (or any
Permitted  Instruments thereof) shall be the exclusive property of the Servicer,
and may be withdrawn from the Principal and Interest  Account pursuant to clause
(iv) above.  The amount of any losses incurred in connection with the investment
of funds in the Principal and Interest Account in Permitted Instruments shall be
deposited in the  Principal  and Interest  Account by the Servicer  from its own
funds immediately as realized without reimbursement therefor.

     Section 5.05 Payment of Taxes, Insurance and Other Charges.

     With respect to each Mortgage Loan,  the Servicer  shall maintain  accurate
records reflecting fire and hazard insurance coverage.

     With  respect  to each  Mortgage  Loan as to which the  Servicer  maintains
escrow accounts,  the Servicer shall maintain  accurate  records  reflecting the
status of ground rents,  property taxes and  assessments,  water rates and other
charges  which are or may  become a lien  upon the  Mortgaged  Property  and the
status of primary mortgage  guaranty  insurance  premiums,  if any, and fire and
hazard insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges  (including  renewal  premiums) and shall effect payment
thereof  prior  to the  applicable  penalty  or  termination  date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in any escrow  account which shall have been estimated
and accumulated by the


<PAGE>


Servicer in amounts sufficient for such purposes,  as allowed under the terms of
the  Mortgage.  To the  extent  that a  Mortgage  does not  provide  for  escrow
payments, the Servicer shall monitor such payments to determine if they are made
by the Mortgagor at the time they become due and, if not paid by the  Mortgagor,
shall  advance such amounts as Servicing  Advances.  To the extent  ground lease
payments  are not made by the  Mortgagor,  and the  Servicer  has notice of such
failure to pay,  the  Servicer  shall  advance  such  delinquent  payments.  Any
out-of-pocket  expenses  incurred by the Servicer  pursuant to this Section 5.05
shall constitute Servicing Advances.

     Section 5.06 Transfer of Accounts; Monthly Statements.

     The Accounts (other than the Principal and Interest Account, which shall be
established  pursuant to Section 5.03 hereof)  shall be  established,  as of the
Closing Date, in the name of the Trustee as Eligible Accounts pursuant to clause
(B) of the  definition  thereof.  Any Account may, upon written  notice from the
Servicer to the Trustee, be transferred to a different depository institution so
long as (i) such  transfer  (A) is to an Eligible  Account  and the  Certificate
Insurer  receives notice thereof from the Servicer or (B) is approved in writing
by the Certificate  Insurer,  which approval shall not be unreasonably  withheld
and (ii) written  notice of such transfer is sent to Moody's.  The Trustee shall
provide  to the  Certificate  Insurer a monthly  statement  of  activity  in the
Accounts  established  by it, and the Servicer  shall provide to the Trustee and
the  Certificate  Insurer a monthly  statement of activity in the  Principal and
Interest Account from the party holding such account.

     Section 5.07 Maintenance of Hazard Insurance.

     The Servicer shall cause each  Mortgagor to maintain,  and if the Mortgagor
does not so  maintain,  shall  itself  maintain,  subject to the  provisions  of
Section 5.08 hereof,  fire and hazard insurance with extended coverage customary
in the area where the  Mortgaged  Property is located,  in an amount which is at
least equal to the least of (a) the outstanding  principal  balance owing on the
Mortgage  Loan (and any prior lien if the related  Mortgage  Loan is in a junior
lien position),  (b) the full insurable value of the Mortgaged Property securing
the Mortgage Loan and (c) the minimum  amount  required to compensate for damage
or loss on a replacement  cost basis.  If the  Mortgaged  Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
Flood Zone "A", and such flood insurance has been made  available,  the Servicer
will cause to be purchased a flood insurance policy with a generally  acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding  principal  balance of the Mortgage Loan (plus the principal
balance of any lien  having  priority  over the  Mortgage  Loan),  (ii) the full
insurable  value of the  Mortgaged  Property,  or (iii)  the  maximum  amount of
insurance  available under the National Flood Insurance Act of 1968, as amended.
The  Servicer  shall also  maintain on REO  Property,  to the extent  reasonably
available,  on REO Property,  fire and hazard insurance in the amounts described
above,  liability  insurance and, to the extent required and available under the
National Flood  Insurance Act of 1968, as amended,  and the Servicer  determines
that such  insurance is necessary in accordance  with accepted  second  mortgage
servicing  practices  of prudent  lending  institutions,  flood  insurance in an
amount equal to that required above. Any


<PAGE>


amounts collected by the Servicer under any such policies (other than amounts to
be applied to the  restoration  or repair of the  Mortgaged  Property,  or to be
released to the Mortgagor in accordance with customary second mortgage servicing
procedures) shall be deposited in the Principal and Interest Account, subject to
(X)  retention by the Servicer to the extent such amounts  constitute  Servicing
Compensation  or (Y)  withdrawal  pursuant to Section 5.04. It is understood and
agreed that no earthquake or other additional  insurance need be required by the
Servicer of any Mortgagor or maintained on REO Property,  other than pursuant to
such  applicable  laws and  regulations  as shall at any time be in force and as
shall require such additional  insurance.  All policies required hereunder shall
be endorsed with standard mortgagee clauses with losses payable to the Servicer.
Any  out-of-pocket  expenses  incurred by the Servicer  pursuant to this Section
5.07,  including,  without  limitation,  any  advances of premiums on  insurance
policies required by this Section 5.07, shall constitute Servicing Advances.

     Section 5.08 Maintenance of Mortgage Impairment Insurance Policy.

     In the event that the Servicer  shall obtain and maintain a blanket  policy
insuring  against  fire and hazards of extended  coverage on all of the Mortgage
Loans as to which the  Mortgagor  does not maintain the  insurance  described in
Section  5.07,  then, to the extent such policy names the Servicer as loss payee
and  provides  coverage in an amount  equal to the  aggregate  unpaid  principal
balance on the Mortgage Loans without co-insurance,  and otherwise complies with
the  requirements of Section 5.07, the Servicer shall be deemed  conclusively to
have  satisfied  its  obligations  with  respect  to fire and  hazard  insurance
coverage  under Section 5.07, it being  understood  and agreed that such blanket
policy may contain a deductible clause, in which case the Servicer shall, in the
event  that  there  shall  not have been  maintained  on the  related  Mortgaged
Property a policy  complying with Section 5.07, and there shall have been a loss
which  would have been  covered by such  policy,  deposit in the  Principal  and
Interest  Account from the Servicer's own funds the difference,  if any, between
the amount that would have been payable  under a policy  complying  with Section
5.07 and the amount  paid under such  blanket  policy.  Upon the  request of the
Certificate Insurer or the Trustee,  the Servicer shall cause to be delivered to
such requesting Person a certified true copy of such policy.

     Section 5.09 Fidelity Bond.

     The Servicer shall maintain with a responsible company, at its own expense,
a  blanket  fidelity  bond and an errors  and  omissions  insurance  policy in a
minimum  amount  acceptable  to FNMA or FHLMC or  otherwise  as is  commercially
available  at a cost that is not  generally  regarded as  excessive  by industry
standards,  with broad  coverage on all  officers,  employees  or other  persons
acting in any capacity requiring such persons to handle funds, money,  documents
or papers  relating  to the  Mortgage  Loans  ("Servicer  Employees").  Any such
fidelity  bond and errors and omissions  insurance  shall protect and insure the
Servicer  against  losses,  including  losses  resulting  from  forgery,  theft,
embezzlement,  fraud,  errors and omissions and negligent  acts of such Servicer
Employees. Such fidelity bond shall also protect and insure the Servicer against
losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby.


<PAGE>


No provision of this Section 5.09  requiring  such  fidelity bond and errors and
omissions  insurance  shall diminish or relieve the Servicer from its duties and
obligations as set forth in this  Agreement.  Upon the request of the Trustee or
the  Certificate  Insurer,  the  Servicer  shall cause to be  delivered  to such
requesting  Person a certified  true copy of such  fidelity  bond and errors and
omissions  insurance  policy. On the Closing Date, such fidelity bond and errors
and  omissions  insurance  policy is  maintained  with certain  underwriters  at
National Union Fire Insurance Company of Pittsburgh, Pa.

     Section 5.10 Title, Management and Disposition of REO Property.

     In  the  event  that  title  to  the  Mortgaged  Property  is  acquired  in
foreclosure or by deed in lieu of foreclosure (an "REO  Property"),  the deed or
certificate of sale shall be taken in the name of the Trustee for the benefit of
the Certificateholders.

     The Servicer shall manage, conserve,  protect and operate each REO Property
for the Certificateholders and the Certificate Insurer solely for the purpose of
its prudent and prompt  disposition and sale. The Servicer shall,  either itself
or through an agent  selected by the  Servicer,  manage,  conserve,  protect and
operate the REO Property in the same manner that it manages, conserves, protects
and operates for its own account  similar  property in the same  locality as the
REO Property is managed.  The Servicer  shall  attempt to sell the same (and may
temporarily rent the same) on such terms and conditions as the Servicer deems to
be in the best interests of the Certificate Insurer and the  Certificateholders.
Any  out-of-pocket  expenses  incurred by the Servicer  pursuant to this Section
5.10 shall constitute  Servicing Advances.  The Servicer shall cause the Trustee
to be named as a beneficiary  and loss payee under the REO liability  provisions
of the Servicer's general comprehensive liability insurance policy.

     The  Servicer  shall cause to be deposited  in the  Principal  and Interest
Account all revenues  received with respect to the  conservation and disposition
of the  related  REO  Property  and shall  retain or  withdraw  therefrom  funds
necessary  for the  proper  operation,  management  and  maintenance  of the REO
Property and the fees of any managing agent acting on behalf of the Servicer.

     The  disposition  of REO  Property  shall be carried out by the Servicer at
such price,  and upon such terms and conditions,  as the Servicer deems to be in
the best interest of the  Certificateholders and the Certificate Insurer and, as
soon as  practicable  thereafter,  the expenses of such sale shall be paid.  The
proceeds of sale of the REO Property and other  proceeds of any REO  Disposition
shall be  deposited  in the  Principal  and  Interest  Account,  net of  related
liquidation  expenses,  Excess  Proceeds,  any  related  unreimbursed  Servicing
Advances, accrued and unpaid Servicing Fees and unreimbursed Advances payable to
the Servicer in accordance with Section 5.04(ii).

     In the event any  Mortgaged  Property is acquired as aforesaid or otherwise
in  connection  with a default  or  imminent  default on a  Mortgage  Loan,  the
Servicer  shall  dispose of such  Mortgaged  Property  prior to the close of the
third  calender year  following the year of its  acquisition  (the  "Disposition
Period")  unless (i) the Servicer  shall have  received an Opinion of Counsel to
the effect that the holding of such Mortgaged Property subsequent to the


<PAGE>


Disposition  Period will not result in the  imposition  of taxes on  "prohibited
transactions" as defined in Section 860F of the Code or cause either Trust REMIC
to  fail  to  qualify  as a REMIC  at any  time  that  any  Class  A or  Class X
Certificates  are  outstanding  or (ii) the Servicer  shall have applied for, at
least 60 days prior to the  expiration  of such  period,  an  extension  of such
period in the manner  contemplated  by Section  856(e)(3) of the Code,  in which
case  the  original   period  shall  be  extended  by  the  applicable   period.
Notwithstanding any other provision of this Agreement, (i) no Mortgaged Property
acquired by the Servicer pursuant to this Section shall be rented (or allowed to
continue to be rented) or otherwise  used for the  production of income or by or
on behalf of the Trust Fund, and (ii) no  construction  shall take place on such
Mortgaged  Property if such activity as described in the preceding clause (i) or
clause (ii) is conducted or otherwise undertaken in such a manner or pursuant to
any terms  that  would  cause  such  Mortgaged  Property  to fail to  qualify as
"foreclosure  property" within the meaning of Section  860G(a)(8) of the Code or
result in the receipt by either Trust REMIC of any "net income from  foreclosure
property"  which is subject to taxation  within the meaning of Sections  860G(c)
and 857(b)(4)(B) of the Code. If a period greater than the Disposition Period is
permitted  under this  Agreement and is necessary to sell any REO Property,  the
Servicer shall give appropriate notice to the Trustee,  the Certificate  Insurer
and the  Certificateholders  and shall  report  monthly to the Trustee as to the
progress being made in selling such REO Property.

     If the Servicer has actual  knowledge  that a Mortgaged  Property which the
Servicer  is  contemplating  acquiring  in  foreclosure  or by  deed  in lieu of
foreclosure  is  located  within  a 1 mile  radius  of any  site  with  material
environmental or hazardous waste risks known to the Servicer,  the Servicer will
notify the Certificate  Insurer and the Trustee prior to acquiring the Mortgaged
Property and shall not take any action without the prior written approval of the
Certificate Insurer and the Trustee.

     Nothing in this Section shall affect the  Servicer's  right to deem certain
advances proposed to be made  Nonrecoverable  Advances.  For the purpose of this
Section  5.10,  actual  knowledge  of the Servicer  means actual  knowledge of a
Responsible  Officer of the Servicer  involved in the  servicing of the relevant
Mortgage  Loan.  Actual  knowledge  of the Servicer  does not include  knowledge
imputable  by virtue of the  availability  of or  accessibility  to  information
relating to environmental or hazardous waste sites or the locations thereof.

     Section 5.11 Collection of Certain Mortgage Loan Payments.

     The Servicer shall make  reasonable  efforts to collect all payments called
for under the terms and  provisions  of the Mortgage  Loans,  and shall,  to the
extent such procedures shall be consistent with this Agreement,  comply with the
terms and provisions of any applicable hazard insurance policy.  Consistent with
the foregoing,  the Servicer may in its discretion  waive or permit to be waived
any late  payment  charge,  prepayment  charge,  assumption  fee or any  penalty
interest in connection  with the  prepayment of a Mortgage Loan or any other fee
or charge which the Servicer would be entitled to retain  hereunder as Servicing
Compensation  and extend the due date for payments due on a Mortgage  Note for a
period (with  respect to each payment as to which the due date is extended)  not
greater than 125


<PAGE>


days after the initially scheduled due date for such payment, provided that such
extension  may only be made once in any twelve  month  period  without the prior
written  consent  of  the  Certificate  Insurer,  which  consent  shall  not  be
unreasonably  withheld. In the event the Servicer shall consent to the deferment
of the Due Dates  for  payments  due on a  Mortgage  Note,  the  Servicer  shall
nonetheless  remit any required  Advance in accordance  with Section 6.08 hereof
with  respect  to the  payments  so  extended  to the  same  extent  as if  such
installment were due, owing and delinquent and had not been deferred.

     Section 5.12 Access to Certain  Documentation and Information Regarding the
Mortgage Loans.

     The  Servicer  and  the  Depositors  shall  provide  to  the  Trustee,  the
Certificateholders,  the  Certificate  Insurer,  the Federal  Reserve and to the
supervisory  agents  and  examiners  of each  of the  foregoing,  access  to the
documentation  regarding  the  Mortgage  Loans  (such  access in the case of the
supervisory agents and examiners shall be limited to that required by applicable
state and federal  regulations),  such access being afforded  without charge but
only upon reasonable  request and during normal business hours at the offices of
the Servicer designated by it.

     Section 5.13 Superior Liens.

     The  Servicer  shall  file (or cause to be  filed) of record a request  for
notice  of any  action  by a  superior  lienholder  under a First  Lien  for the
protection of the  Depositor's  and the Trustee's  interest,  where permitted by
local  law and  whenever  applicable  state law does not  require  that a junior
lienholder be named as a party defendant in foreclosure  proceedings in order to
foreclose such junior lienholder's equity of redemption.  The Servicer must also
notify any superior  lienholder in writing of the existence of the Mortgage Loan
and request  notification of any action (as described below) to be taken against
the Mortgagor or the Mortgaged Property by the superior lienholder.

     If the Servicer is notified that any superior lienholder has accelerated or
intends to accelerate the obligations secured by the First Lien, or has declared
or  intends to  declare a default  under the  mortgage  or the  promissory  note
secured  thereby,  or has  filed  or  intends  to file an  election  to have the
Mortgaged Property sold or foreclosed,  the Servicer shall advance the necessary
funds to cure the default or reinstate the superior  lien, if such advance is in
the  best  interests  of  the  Depositors,   the  Certificate  Insurer  and  the
Certificateholders.  The Servicer  shall not make such an advance  except to the
extent that it determines in its reasonable good faith judgment that the advance
would be recoverable from Liquidation Proceeds on the related Mortgage Loan. The
Servicer shall thereafter take such action as is necessary to recover the amount
so advanced.


<PAGE>


                                   ARTICLE VI

                       PAYMENTS TO THE CERTIFICATEHOLDERS

     Section  6.01   Establishment  of  Lower-Tier   Distribution   Account  and
Upper-Tier Distribution Account; Deposit in Accounts.

     (a) No later than the Closing  Date,  the  Trustee,  for the benefit of the
Certificateholders  and the Certificate  Insurer, as their interests may appear,
will establish and maintain (i) the Lower-Tier  Distribution Account in the name
of the Trustee, in trust for the benefit of  Certificateholders  and the Trustee
as the  Holder of the  Lower-Tier  Regular  Interests;  and (ii) the  Upper-Tier
Distribution  Account in the name of the  Trustee,  in trust for the  benefit of
Certificateholders.  Notwithstanding  the  foregoing,  however,  the Trustee may
establish a single account (the "Collection  Account"),  of which the Lower-Tier
Distribution  Account and Upper-Tier  Distribution  Account will be deemed to be
subaccounts,  provided that: (i) the Collection Account shall be established and
maintained   in  the  name  of  the  Trustee,   in  trust  for  the  benefit  of
Certificateholders,  (ii)  the  Collection  Account  shall  be  established  and
maintained  as an Eligible  Account  and (iii) the  Trustee  shall for all other
purposes  hereunder  treat the  Lower-Tier  Distribution  Account and Upper-Tier
Distribution Account as separate accounts,  and shall keep accurate records with
respect thereto.

     The  Trustee  shall,  promptly  upon  receipt,  deposit  in the  Lower-Tier
Distribution Account and retain therein:

          (i) the amounts remitted by the Servicer pursuant to Section 5.04(i);

          (ii) the Advances  pursuant to Section 6.08 remitted to the Trustee by
     the Servicer;

          (iii) amounts  transferred from the Spread Account pursuant to Section
     6.09(b)(ii) and Insured Payments pursuant to Section 6.05(c); and

          (iv) amounts  required to be paid by the Servicer  pursuant to Section
     6.04(e)  in  connection  with  losses  on  investments  of  amounts  in the
     Lower-Tier Distribution Account.

     With respect to each Payment Date, on or before such date the Trustee shall
make the withdrawals from the Lower-Tier  Distribution  Account, as set forth in
Section 6.05 hereof,  shall make the deposits into the  Upper-Tier  Distribution
Account,  as set forth in Section  6.05  hereof,  and shall  cause the amount of
Available  Funds and  Insured  Payments  to be  distributed  in  respect  of the
Certificates pursuant to Section 6.05 hereof on such date.

     Section 6.02 Permitted Withdrawals from Lower-Tier Distribution Account and
Upper-Tier Distribution Account.


<PAGE>


     The  Trustee  shall   withdraw   amounts  on  deposit  in  the   Lower-Tier
Distribution  Account and Upper-Tier  Distribution  Account on each Payment Date
(except as set forth in clause (iv) below) in the following order of priority:

          (i) to make  deposits  in the  Insurance  Account  pursuant to Section
     6.03(a) from amounts in the Lower-Tier  Distribution Account (in accordance
     with Section 6.05(d)(i);

          (ii) to make  deposits  in the  Spread  Account  from  the  Upper-Tier
     Distribution  Account  pursuant to Section  6.09(a)(i) (in accordance  with
     Section  6.05(d)(ii)  and Section  6.05(e))  (which for federal  income tax
     purposes will be treated in the manner described in Section 6.09);

          (iii)    to   make   the    distributions    pursuant    to    Section
     6.05(d)(iii)-(viii)  from the Accounts  set forth in Section  6.05(d)(viii)
     and 6.05(e); and

          (iv)  on  any  day  during  the  related  Accrual  Period,  and  in no
     particular order of priority:

               (A) to invest amounts on deposit in the  Lower-Tier  Distribution
          Account in Permitted  Instruments or such other  instruments as may be
          approved in writing by the Certificate Insurer (with written notice to
          Moody's) pursuant to Section 6.04;

               (B) to pay to the Servicer interest paid and earnings realized on
          Permitted   Instruments  with  respect  to  funds  in  the  Lower-Tier
          Distribution Account;

               (C)  to  withdraw  any  amount   deposited   in  the   Lower-Tier
          Distribution  Account or Upper-Tier  Distribution Account not required
          to be deposited therein or deposited therein in error;

               (D) to  withdraw  any  amount  that  constitutes  an  Advance  by
          Servicer of its own funds or a Mortgagor payment previously  deposited
          into the Lower-Tier  Distribution  Account or Upper-Tier  Distribution
          Account that is held to constitute a voidable  preference by a trustee
          in  bankruptcy  pursuant  to the  United  States  Bankruptcy  Code  in
          accordance  with  a  final,  nonappealable  order  of a  court  having
          competent jurisdiction; and

               (E) to clear and terminate the  Lower-Tier  Distribution  Account
          and the Upper-Tier  Distribution  Account upon the termination of this
          Agreement and allocate amounts therein pursuant to Section 6.05(d).


<PAGE>


     In addition,  the Trustee shall keep and maintain a separate accounting for
withdrawals from each of the Lower-Tier  Distribution Account and the Upper-Tier
Distribution Account pursuant to each subclause listed above.

     Section  6.03  Establishment  of Insurance  Account:  Deposits in Insurance
Account: Permitted Withdrawals from Insurance Account.

     (a) No later than the Closing  Date,  the  Trustee,  for the benefit of the
Certificateholders and the Certificate Insurer, shall establish and maintain one
or more  Eligible  Accounts as trust  accounts  with  itself  which shall not be
interest-bearing, titled "EQCC Home Equity Loan Trust 1998-2 Insurance Account".
The Insurance Account shall bear an additional  designation  clearly  indicating
that  the  funds   deposited   therein   are  held  for  the   benefit   of  the
Certificateholders  and the  Certificate  Insurer.  On each  Payment  Date,  the
Trustee, upon receipt (and to the extent received),  promptly shall deposit into
the Insurance  Account in  accordance  with Section 6.02: an amount equal to the
aggregate  Monthly  Premium  with  respect  to the  Certificates  (based  on the
respective  principal balances of the related  Certificates) due on such Payment
Date in accordance with Section 6.05(d).

     If at any time the amount then on deposit in the Insurance Account shall be
insufficient  to pay in full the fees and  expenses of the  Certificate  Insurer
then due, the Trustee shall withdraw such amount from the Spread Account.

     (b) The  Trustee  may make  withdrawals  from  the  Insurance  Account  for
application in the following order:

          (i) to pay the  Certificate  Insurer the aggregate  Monthly Premium on
     each Payment Date;

          (ii) to withdraw amounts not required to be deposited in the Insurance
     Account or deposited therein in error; and

          (iii) to reimburse the Spread  Account for any amounts  withdrawn from
     it pursuant to the last  paragraph of  subclause  (a) above on any previous
     Payment Dates.

     Section 6.04 Investment of Accounts.

     (a) So long as no Servicer  Default shall have occurred and be  continuing,
all or a portion of any Account (other than the Upper-Tier Distribution Account)
held by the Trustee  shall be invested and  reinvested by the Trustee (or remain
uninvested), as directed in writing by the Servicer on its own behalf, in one or
more  Permitted  Instruments  (or,  in the case of the  Lower-Tier  Distribution
Account,  in such other  instruments  approved  in  writing  by the  Certificate
Insurer  (with  written  notice  to  Moody's))  bearing  interest  or  sold at a
discount.  If a Servicer  Default  shall have  occurred and be  continuing,  the
Trustee  shall  invest  all  Accounts  in  Permitted  Instruments  described  in
paragraph (iv) of the definition of Permitted Instruments.  At no time shall any
such investment in any Account mature later than the


<PAGE>


Business Day  immediately  preceding the date on which such amounts are required
by the terms hereof to be withdrawn from such Account,  which (i) in the case of
the Lower-Tier Distribution Account, shall be the next Payment Date, (ii) in the
case of the  Principal  and Interest  Account,  shall be the third  business day
preceding  the next  Payment  Date and (iii) in all other  cases,  until the day
actually withdrawn pursuant to the terms hereof.

     (b) If any amounts are needed for disbursement from any Account held by the
Trustee  and  sufficient  uninvested  funds  are  not  available  to  make  such
disbursement,  the Trustee shall cause to be sold or otherwise converted to cash
a sufficient amount of the investments in such Account. The Trustee shall not be
liable for any investment loss or other charge  resulting  therefrom  unless the
Trustee's  failure to perform in accordance  with this Section 6.04 is the cause
of such loss or charge.

     (c) Subject to Section  12.01  hereof,  the Trustee shall not in any way be
held liable by reason of any  insufficiency  in any Account  held by the Trustee
resulting  from  any  investment  loss on any  Permitted  Instrument  (or  other
instrument  permitted by Section 6.04(a))  included herein (except to the extent
that the Trustee is the obligor and has defaulted thereon).

     (d) The Trustee shall invest and reinvest funds in the Accounts held by it,
to the fullest  extent  practicable,  in such manner as the Servicer  shall from
time to time  direct as set forth in  Section  6.04(a),  but only in one or more
Permitted Instruments (or other instrument permitted by Section 6.04(a)).

     (e) All income or other gain from  investments  in any Account  held by the
Trustee,  or from  amounts on deposit in such  Account and invested in Permitted
Instruments, shall be deposited in such Account, as the case may be, immediately
on receipt, and the Trustee shall notify the Servicer of any loss resulting from
such investments. Upon receipt of such notification, the Servicer shall promptly
remit the  amount of any such loss  from its own  funds,  without  reimbursement
therefor, to the Trustee for deposit in the Account from which the related funds
were withdrawn for investment.

     (f) Any  investment  earnings on funds held in the  Principal  and Interest
Account may be reinvested by the Servicer and the proceeds of such  reinvestment
are for the account of the Servicer.

     (g) Notwithstanding  any of the foregoing  provisions of this Section 6.04,
at the option of the Class X Certificateholders,  exercised by written direction
to the Trustee (such written direction,  the "Holder Discretion Notice"), all or
specified  percentages  (such specified  percentage not to exceed the Percentage
Interest of the Class X Certificates  of such Holder) of the funds on deposit in
the Spread  Account shall be  segregated  into separate  sub-accounts  (each,  a
"Holder   Discretion   Account")  in  a  manner   designated  by  such  Class  X
Certificateholder  which does not impair the Class A Certificateholders'  or the
Certificate  Insurer's  interest in distributions  from the Spread Account or in
any such separate  sub-accounts.  Amounts in any Holder Discretion Account shall
be  invested  in  Permitted   Instruments  at  the  direction  of  the  Class  X
Certificateholder  designated in the Holder Discretion Notice (the percentage of
such funds to be invested at the direction of any one Class


<PAGE>


X  Certificateholder  not to  exceed  the  Percentage  Interest  of the  Class X
Certificates of such Class X  Certificateholder).  The Trustee shall  separately
report   investment  income  on  such  amounts  so  invested  to  such  Class  X
Certificateholder.  The Class X  Certificateholder  directing the investments in
any Holder Discretion  Account shall deposit in such Holder Discretion  Account,
from its own funds,  the amount of any  losses  incurred  in respect of any such
investments no later than the close of business on the Business Day  immediately
preceding the Payment Date  immediately  following  such loss. The Trustee shall
have no  liability  or  responsibility  with  respect to any  Holder  Discretion
Account and the provisions of Sections 6.04(a), (b), (d) and (e) shall no longer
apply thereto.

     Section 6.05 Priority and Subordination of Distributions.

     (a) The rights of the  Certificateholders to receive distributions from the
proceeds   of  the   Trust   Fund,   and   all   ownership   interests   of  the
Certificateholders  in  such  distributions,  shall  be as  set  forth  in  this
Agreement. The rights of the Class X Certificateholders to receive distributions
in respect of the Class X Certificates  shall be subject and  subordinate to the
preferential rights of the Class A Certificateholders  to receive  distributions
in respect of the Class A  Certificates,  to the  extent set forth  herein,  and
distributions  on the Class X  Certificates  are subject and  subordinate to the
maintenance of the Specified Spread Account  Requirement as specified herein. In
accordance with the foregoing,  the interests of the Class X  Certificateholders
in  amounts  deposited  in the Spread  Account  from time to time shall not vest
unless  and  until  such  amounts  are  distributed  in  respect  of the Class X
Certificates  in accordance  with the terms of this  Agreement.  Notwithstanding
anything contained in this Agreement to the contrary, no Certificateholder shall
be required to refund any amount properly  distributed to it pursuant to Section
6.02, 6.05, 6.09(b) or 6.09(d).

     (b) [Reserved];

     (c) As soon as  possible,  and in no event  later than 10:00 a.m.  New York
time on the Business Day  immediately  preceding  each Payment Date, the Trustee
shall furnish the Certificate  Insurer and the Servicer with a completed  notice
in the form set forth as Exhibit Q hereto  (the  "Notice")  in the event that an
Event of Nonpayment will occur, pursuant to the definition thereof, with respect
to such Payment Date. The Notice shall specify the amount of Insured Payment and
shall  constitute  a claim for an Insured  Payment  pursuant to the  Certificate
Insurance Policy.  Upon receipt of Insured Payments for the benefit of the Class
A Certificateholders  under the Certificate  Insurance Policy, the Trustee shall
deposit such Insured Payments in the Collection Account.

     The Trustee shall receive,  as attorney-in-fact of each Holder of a Class A
Certificate,  any Insured Payment from the Certificate  Insurer and disburse the
same to each Holder of a Class A Certificate,  respectively,  in accordance with
the provisions of this Section 6.05.  Insured Payments  disbursed by the Trustee
from  proceeds  of the  Certificate  Insurance  Policy  shall not be  considered
payment by the Trust Fund nor shall such payment discharge the obligation of the
Trust  Fund with  respect  to such  Class A  Certificates,  and the  Certificate
Insurer shall become the owner of such unpaid amounts due from the Trust Fund in
respect of


<PAGE>


Class A  Certificates.  The Trustee  hereby agrees on behalf of each Holder of a
Class  A  Certificate  for  the  benefit  of the  Certificate  Insurer  that  it
recognizes  that to the extent the Certificate  Insurer makes Insured  Payments,
either directly or indirectly (as by paying through the Trustee), to the Class A
Certificateholders,  the Certificate Insurer will be subrogated to the rights of
the Class A  Certificateholders,  as  applicable,  with  respect to such Insured
Payment  and  shall be  deemed to the  extent  of the  payments  so made to be a
registered  Class A  Certificateholder  and shall  receive  all  future  Class A
Remittance  Amounts,  as the case may be, until all such Insured Payments by the
Certificate Insurer have been fully reimbursed together with interest thereon at
the  applicable  Pass-Through  Rate,  subject  to the  following  paragraph.  To
evidence  such  subrogation,  the Trustee shall note the  Certificate  Insurer's
rights as subrogee on the  registration  books  maintained  by the Trustee  upon
receipt from the Certificate Insurer of proof of payment of any Insured Payment.
Except as otherwise  described herein, the Certificate Insurer shall not acquire
any voting rights hereunder as a result of such subrogation.

     It is  understood  and agreed that the intention of the parties is that the
Certificate  Insurer shall not be entitled to  reimbursement on any Payment Date
for  amounts  previously  paid by it  unless  on such  Payment  Date the Class A
Certificateholders  shall  also  have  received  the full  amount of the Class A
Remittance  Amount for such  Payment  Date.  For  purposes of  implementing  the
Certificate  Insurer's  rights as subrogee,  distributions  shall be made to the
Certificate Insurer under priority fourth of subsection (d) of this Section 6.05
after  all  distributions  are  made to the  Class A  Certificateholders  on the
applicable Payment Date as aforesaid.

     (d) Not later than  12:00 p.m.  New York time on each  Payment  Date,  with
respect to the  Certificates,  the  Trustee  shall  withdraw  from the  Accounts
described in Section  6.05(e) and clause (viii) of this Section 6.05(d) from the
amounts available therein as set forth in this Article VI, if any, and shall, to
the  extent  available,  distribute  (without  duplication)  such  amount in the
priority indicated:

          (i) first,  sequentially,  (a) for deposit into the Insurance  Account
     for the  benefit of the  Certificate  Insurer,  the  Monthly  Premium  with
     respect to such Certificates payable to the Certificate Insurer and (b) for
     remittance   of  the   Initial   Premium   Fee   Recovery   Amount  to  the
     Representative;

          (ii) second,  for deposit into the Spread  Account,  the Excess Spread
     (which  for  federal  income  tax  purposes  will be  treated in the manner
     described in Section 6.09);

          (iii) third, to the Class A  Certificateholders,  the Class A Interest
     Remittance Amount;

          (iv) fourth, to the Class A Certificateholders,  the Class A Principal
     Remittance Amount, as follows:


<PAGE>


               to the  Class  A-6F  Certificates  and  then  to the  Class  A-7F
               Certificates,  in that  order,  until  the Class  A-6F  Principal
               Balance  and Class A-7F  Principal  Balance  has been  reduced to
               zero, the Lockout Remittance Amount; and then, to the Class A-1F,
               Class A-2F,  Class A-3F,  Class A-4F, Class A-5F and then, to the
               Class A-6F and Class  A-7F  Certificates  (in each case,  without
               regard to the Lockout Remittance  Amount), in that order, in each
               case  until the Class  Principal  Balance  of each such Class has
               been reduced to zero, the Class A Principal Remittance Amount;

          (v) fifth, to the Trustee, any amounts then due and owing representing
     fees of the Trustee;  provided,  that the Trustee certifies in writing that
     such amount is due and owing and has not been paid by the  Servicer  within
     30 days after written demand therefor;

          (vi) sixth, to the Servicer and/or the Representative,  as applicable,
     any Reimbursable Amount;

          (vii)  seventh,  to the  Servicer  an amount  equal to  Nonrecoverable
     Advances previously made by the Servicer and not previously reimbursed; and

          (viii)  eighth,  to the Class R and Class LR  Certificateholders,  the
     balance if any of amounts remaining in the Upper-Tier  Distribution Account
     and the Lower-Tier Distribution Account, respectively.

     (e) All distributions made pursuant to (d) (ii), (iii) and (iv) above shall
be treated as having  been  distributed  in  respect of the  Lower-Tier  Regular
Interests and deposited in the Upper-Tier  Distribution  Account, then as having
been distributed to Certificateholders from the Upper-Tier Distribution Account.
Interest  shall be  treated  as  having  been  distributed  in  respect  of each
Lower-Tier  Regular Interest at the rate set forth in the applicable  definition
thereof.  Principal  shall be treated as having been  distributed  in respect of
each Lower-Tier  Regular  Interest at the times and in the amounts  principal is
distributed to the Class of Certificates referenced in the applicable definition
thereof.  The amounts  described  pursuant to (d) (i), (v), (vi) and (vii) above
shall be treated as having been  distributed to the respective  recipients  from
the  Lower-Tier  Distribution  Account.  All  distributions  made to the Class A
Certificateholders  or the Class X, Class R and Class LR Certificateholders as a
Class  on  each  Payment  Date  will  be  made on a pro  rata  basis  among  the
Certificateholders  of the  respective  Class of  record  on the next  preceding
Record Date based on the Percentage  Interest  represented  by their  respective
Certificates,  and shall be made by wire transfer of immediately available funds
to the  account  of such  Certificateholder  at a bank or  other  entity  having
appropriate facilities therefor, if such  Certificateholder  shall own of record
Class A Certificates  which have  denominations  aggregating at least $1,000,000
appearing  in the  Certificate  Register,  and in all cases with  respect to the
Class X, Class R and Class LR  Certificates,  and shall have  provided  complete
wiring instructions at least five Business Days prior to the


<PAGE>


Record   Date,   and   otherwise   by  check  mailed  to  the  address  of  such
Certificateholder appearing in the Certificate Register.

     Section 6.06 Certificate Insurer Default.

     If,  as of any  Payment  Date,  the  Certificate  Insurer  fails to make an
Insured Payment,  the amount  available for  distribution to  Certificateholders
pursuant to Section 6.05(d) shall be distributed  among holders of each Class of
Class A  Certificateholders  in the  priority  set forth in  Section  6.05(d) in
proportion  to the  percentage  interests  set forth on each  such  Certificate;
provided that, if as of such Payment Date there are no amounts on deposit in the
Spread  Account,   the  amount   available  for  distribution  to  the  Class  A
Certificateholders  pursuant to Section  6.05(d) shall be distributed  among the
holders of the Class A Certificates on a pro rata basis, based on the respective
Class Principal Balances for each such Class of Class A Certificates.

     Section 6.07 Statements.

     Not later  than 12:00  noon  Chicago,  Illinois  time on the  Business  Day
preceding each Determination Date, the Servicer shall deliver to the Trustee and
the  Certificate  Insurer a  computer  tape or  written  report  containing  the
information  set forth on Exhibit R as to each Mortgage Loan with respect to the
related Due Period and such other information with respect to the Mortgage Loans
in the aggregate as the Trustee shall reasonably  require.  Not later than 12:00
noon Chicago,  Illinois time two Business Days  preceding each Payment Date, the
Trustee shall deliver to the  Depositors,  any Paying Agent,  the Servicer,  the
Certificate Insurer,  Moody's and S&P by telecopy,  by request, a statement (the
"Remittance  Report") containing the information set forth below with respect to
the  succeeding  Payment  Date,  with a hard copy thereof to be delivered on the
immediately succeeding Business Day:

          (i) the  Available  Payment  Amount and any  portion of the  Available
     Payment  Amount  that has been  deposited  in the  Lower-Tier  Distribution
     Account but may not be withdrawn therefrom pursuant to an order of a United
     States bankruptcy court of competent  jurisdiction imposing a stay pursuant
     to Section 362 of the United States Bankruptcy Code;

          (ii) the  Class  A-1F  Principal  Balance,  the Class  A-2F  Principal
     Balance,  the  Class  A-3F  Principal  Balance,  the Class  A-4F  Principal
     Balance, the Class A-5F Principal Balance, the Class A-6F Principal Balance
     and the Class A-7F  Principal  Balance and the Pool Principal  Balance,  as
     reported in the Remittance  Report  provided  pursuant to subclause  (xiii)
     below for the  immediately  preceding  Payment Date, or, in the case of the
     first  Determination  Date, the Original Class A-1F Principal Balance,  the
     Original  Class A-2F Principal  Balance,  the Original Class A-3F Principal
     Balance, the Original Class A-4F Principal Balance, the Original Class A-5F
     Principal Balance,  the Original Class A-6F Principal Balance, the Original
     Class A-7F Principal Balance and the Original Pool Principal Balance;


<PAGE>


          (iii) with  respect to the  Mortgage  Pool,  the number and  Principal
     Balances  of all  Mortgage  Loans  which  were  the  subject  of  Principal
     Prepayments during the related Due Period;

          (iv) with respect to the Mortgage Pool, the amount of all Curtailments
     which were received during the related Due Period;

          (v) with  respect  to the  Mortgage  Pool,  the  aggregate  amount  of
     principal  portion of all Monthly Payments  received during the related Due
     Period;

          (vi) with  respect  to the  Mortgage  Pool,  the  amount  of  interest
     received on the Mortgage Loans during the related Due Period;

          (vii) with respect to the Mortgage Pool,  the aggregate  amount of the
     Advances made and recovered with respect to such Payment Date;

          (viii)  with  respect  to  the  Mortgage  Pool,  the  delinquency  and
     foreclosure  information set forth in the form attached hereto as Exhibit H
     and the amount of Mortgage Loan Losses during the related Due Period;

          (ix) the  Class  A-1F  Principal  Balance,  the Class  A-2F  Principal
     Balance,  the  Class  A-3F  Principal  Balance,  the Class  A-4F  Principal
     Balance, the Class A-5F Principal Balance, the Class A-6F Principal Balance
     and  the  Class  A-7F   Principal   Balance  after  giving  effect  to  the
     distribution to be made on such Payment Date;

          (x) with respect to the Mortgage Pool, the weighted  average  maturity
     and the weighted average Mortgage Interest Rate of the Mortgage Loans as of
     the last day of the related Due Period;

          (xi) the  Servicing  Fees paid and Servicing  Fees accrued  during the
     related Due Period;

          (xii) the amount of all  payments or  reimbursements  to the  Servicer
     pursuant to Section 5.04 (ii), (iv), (v), (vi) and (vii) paid or to be paid
     since the prior  Payment  Date (or in the case of the first  Payment  Date,
     since the Closing Date);

          (xiii) the Pool Principal  Balance and aggregate  Principal Balance of
     the Mortgage Loans as of the last day of the related Due Period;

          (xiv)  such  other  information  as the  Certificate  Insurer  and the
     Certificateholders may reasonably require;

          (xv)  the  amounts  which  are  reimbursable  to  the  Servicer,   the
     Representative or the Depositors, as appropriate, pursuant to Section 6.05;


<PAGE>


          (xvi) the number of Mortgage Loans outstanding at the beginning and at
     the end of the related Due Period;

          (xvii) the aggregate  interest  accrued on the Mortgage Loans at their
     respective Mortgage Interest Rates for the related Due Period;

          (xviii) the Subordinated  Amount,  the amount on deposit in the Spread
     Account,  the Cumulative Excess Spread Receipts,  in each case after giving
     effect to any payments or  withdrawals on such Payment Date, and the Excess
     Spread with respect to such Payment Date; and

          (xix) the aggregate  Mortgage Loan Losses since the Cut-off Date as of
     the end of the related Due Period.

     The Trustee  shall  forward  such report to the  Certificateholders  on the
Payment  Date,  by  telecopy,  with a hard  copy to  follow  (in the case of the
Depository)  or by first class mail.  The  Depositors  and the Trustee may fully
rely upon and shall have no liability  with respect to  information  provided by
the Servicer.

     To the extent that there are  inconsistencies  between the  telecopy of the
Remittance  Report and the hard copy  thereof,  the Servicer and the Trustee may
rely upon the telecopy.

     In the case of information  furnished  pursuant to subclauses (ii) and (ix)
above,  the amounts shall be expressed in a separate  section of the report as a
dollar  amount for each of the Class A  Certificates  for each  $1,000  original
principal amount as of the Cut-off Date.

     (a) Upon reasonable advance notice in writing, the Servicer will provide to
the Trustee access to information and documentation regarding the Mortgage Loans
sufficient to permit any Holder which is a savings and loan association, bank or
insurance  company to comply with  applicable  regulations  of the FDIC or other
regulatory  authorities  with  respect to  investment  in the  Certificates,  as
applicable.

     (b) Not later than 10 days after each  Payment  Date,  the  Servicer  shall
provide the Loss Coverage Ratio to the Trustee and the Certificate Insurer as of
the most recent  Payment  Date. In addition,  the Servicer  shall furnish to the
Trustee and to the Certificate Insurer, during the term of this Agreement,  such
periodic, special, or other reports or information not specifically provided for
herein,  as may be necessary,  reasonable,  or  appropriate  with respect to the
Trustee  or the  Certificate  Insurer,  as the case may be,  or  otherwise  with
respect to the purposes of this Agreement, all such reports or information to be
provided by and in accordance with such applicable  instructions  and directions
as the Trustee or the Certificate Insurer may reasonably require; provided, that
the Servicer shall be entitled to be reimbursed by the requesting party, for the
fees and actual expenses associated with providing such reports, if such reports
are not generally produced in the ordinary course of its business.


<PAGE>


     (c) Reports and computer tapes  furnished by the Servicer  pursuant to this
Agreement shall be deemed  confidential and of proprietary nature, and shall not
be copied or distributed except in connection with the purposes and requirements
of this Agreement;  provided that the Certificate Insurer may copy or distribute
such  information  (A)  pursuant  to a  subpoena  or order  issued by a court of
competent jurisdiction or by a judicial or administrative or legislative body or
committee,  (B)  as may  be  required  in any  report,  statement  or  testimony
submitted  to any Federal,  state,  municipal  or other  regulatory  body having
jurisdiction over the Certificate  Insurer, (C) in order to comply with any law,
ruling, order or regulation applicable to the Certificate Insurer, or (D) as may
be required by any rating  agency or  reinsurer.  No Person  entitled to receive
copies of such  reports  or tapes  shall  use the  information  therein  for the
purpose of soliciting the customers of the  Originators or for any other purpose
except as set forth in this Agreement.

     (d) The Trustee shall  promptly send to the  Certificate  Insurer and, upon
request, to each Certificateholder in writing:

          (i)  notice  of  any  reduction  in  the  Specified   Spread   Account
     Requirement;

          (ii)  notice  of any  reduction  of the  percentages  set forth in the
     definition of "Monthly Excess Spread Amount";

          (iii) notice of the appointment of any Subservicer;

          (iv) notice of any  transfer of any Account to a different  depository
     institution;

          (v) a copy of each Officer's Certificate delivered pursuant to Section
     7.04 and any notice  received  from the  Servicer of a change in the fiscal
     year of the Servicer;

          (vi) a copy of each letter delivered pursuant to Section 7.05; and

          (vii)  notice  of the  receipt  by  the  Trustee  of  any  information
     regarding  the  Servicer's   servicing  activities  pursuant  to  the  last
     paragraph of Section 10.01(c);

provided,  that in each case the  Trustee  shall only be  required  to send such
notices  and other  items to such  Persons to the extent  that the  Trustee  has
itself received the related information.

     The   Depositors,   the   Servicer   and   the   Trustee   on   behalf   of
Certificateholders  (the  "Trust  Parties")  hereby  authorize  the  Certificate
Insurer  to  include  the  information  contained  in  reports  provided  to the
Certificate Insurer hereunder (the  "Information") on The Bloomberg,  an on-line
computer based information  network maintained by Bloomberg L.P.  ("Bloomberg"),
or in other electronic or print  information  services.  The Trust Parties agree
not to commence  any actions or  proceedings,  or  otherwise  assert any claims,
against the


<PAGE>


Certificate Insurer or its affiliates or any of the Certificate Insurer's or its
affiliates' respective agents, representatives, directors, officers or employees
(collectively, the "Certificate Insurer Parties"), arising out of, or related to
or in connection  with the  dissemination  and/or use of any  Information by the
Certificate Insurer,  including, but not limited to, claims based on allegations
of  inaccurate,   incomplete  or  erroneous   transfer  of  information  by  the
Certificate Insurer to Bloomberg or otherwise (other than in connection with the
Certificate Insurer's negligence or willful misconduct). The Trust Parties waive
their rights to assert any such claims against the  Certificate  Insurer Parties
and fully and finally release the  Certificate  Insurer Parties from any and all
such  claims,  demands,  obligations,  actions  and  liabilities  (other than in
connection with the Certificate Insurer's negligence or willful misconduct). The
Certificate  Insurer  makes  no  representations  or  warranties,  expressed  or
implied,  of  any  kind  whatsoever  with  respect  to the  accuracy,  adequacy,
timeliness, completeness,  merchantability or fitness for any particular purpose
of any Information in any form or manner.  The Certificate  Insurer reserves the
right at any time to withdraw or suspend the dissemination of the Information by
the Certificate  Insurer.  The authorizations,  covenants and obligations of the
Trust  Parties  under this section  shall be  irrevocable  and shall survive the
termination of this Agreement.

     Section 6.08 Advances by the Servicer.

     Not later than the close of business on the third  Business  Day  preceding
each Payment Date,  the Servicer shall remit to the Trustee (but solely from and
to the extent of amounts on deposit in the Principal and Interest  Account as of
the related  Determination  Date,  after giving effect to  withdrawals  from the
Principal  and Interest  Account as of the  Determination  Date for such Payment
Date pursuant to Section 5.04(i)), an amount (the "Advance") equal to the sum of
(a) the  interest  accrued in the related Due Period on the  Mortgage  Loans but
uncollected  as of the close of business on the last day of such Due Period (net
of the  Servicing  Fee) and (b) with  respect  to each REO  Property  which  was
acquired  during  or  prior to the  related  Due  Period  and as to which an REO
Disposition did not occur during the related Due Period,  an amount equal to the
excess,  if any,  of  interest  on the  Principal  Balance of such REO  Property
computed  at the  related  Mortgage  Interest  Rate  (net of the  Servicing  Fee
(computed in the manner  described in paragraph (i) or (ii), as  applicable,  of
the  definition  thereof)) for the most  recently  ended Due Period over the net
income from the REO Property  deposited in the  Principal  and Interest  Account
during such Due Period pursuant to Section 5.10.

     Notwithstanding  the provisions in the foregoing  paragraph of this Section
6.08,  with respect to the Payment  Dates  occurring on or before  September 15,
1998 if the  amounts  on deposit  in the  Principal  and  Interest  Account  are
insufficient  to make the full  Advance  (as  defined  herein),  and as a result
thereof an Event of Nonpayment  would occur,  the Servicer shall make an Advance
from its own funds  equal to such  insufficiency  to the  extent  of  delinquent
payments of interest and may reimburse itself for such Advances from collections
on the related Mortgage Loans pursuant to Section 5.04(ii).

     Section 6.09  Establishment of Spread Account;  Deposits in Spread Account;
Permitted Withdrawals from Spread Account.


<PAGE>


     (a) No later than the Closing Date, the Trustee will establish and maintain
in a  non-interest  bearing  trust account with itself,  a Spread  Account which
shall be an Eligible Account,  titled "EQCC Home Equity Loan Trust 1998-2 Spread
Account". The Spread Account shall be an asset of the Trust Fund, in the control
of the Trustee.  No holder of any Certificate shall have any rights with respect
to the assets  contained in the Spread  Account other than as  specifically  set
forth in this Agreement, and the assets contained therein shall not be "property
of the  estate" of any  Certificateholder"  pursuant to 11 U.S.C.  Section  541,
shall not be available to satisfy any obligations of any Certificateholder,  and
shall not be available to the  creditors  of any  Certificateholder.  The Spread
Account  shall be an  "outside  reserve  fund"  within the  meaning of  Treasury
Regulation  1.860G-2(h) and shall not be an asset of either Trust REMIC.  Solely
for  federal  income tax  purposes,  the  Trustee and the Holders of the Class X
Certificates  shall treat amounts  distributed  by the  Upper-Tier  REMIC to the
Spread Account as having been distributed in respect of the Class X Interest and
held in the Spread Account. Distributions on the Class X Certificates out of the
Spread  Account shall not be considered  to be  distributions  from either Trust
REMIC.  The parties hereto intend and agree,  as a condition to ownership of the
Class X  Certificates,  and the  Trustee  agrees to take no action  inconsistent
therewith,  to treat the Spread Account as an arrangement  described in Treasury
Regulations Section 1.61-13(b);  provided,  that if the Internal Revenue Service
does not permit  such  treatment,  the  parties  hereto  intend and agree,  as a
condition of ownership of the Class X  Certificates,  and the Trustee  agrees to
take no action  inconsistent  therewith,  that  solely for  federal  and, to the
extent applicable, state and local tax purposes, (i) if the Class X Certificates
are held by a single  Holder,  that the  assets  and  liabilities  of the Spread
Account  be  treated  solely  for  federal  income  tax  purposes  as assets and
liabilities of the Class X  Certificateholder  pursuant to Treasury  Regulations
Section 301.7701-3(b)(ii), and (ii) if the Class X Certificates are held by more
than one Holder,  the Spread  Account be treated  solely for federal  income tax
purposes   as  a   partnership   pursuant  to   Treasury   Regulations   Section
301.7701-3(b)(ii), in which event each Class X Certificateholder,  including all
successors to the original Class X  Certificateholder,  irrevocably elects under
Section 761 of the Code to exclude the Spread  Account from the  application  of
Subchapter K of the Code.  The Trustee  shall  separately  report to any Class X
Certificateholders  amounts  deposited into, paid to Class X  Certificateholders
from, and released from the Spread Account,  together with  reinvestment  income
thereon.   Notwithstanding   the   foregoing,   the   rights   of  the  Class  X
Certificateholders   are   subject   to  and   subordinate   to  the   Class   A
Certificateholders,  the Servicer and the Representative as described in Section
6.05(a), 6.09(b)(iii) and 6.09(b)(iv).

     After the time of the  issuance of the  Certificates,  the  Trustee  shall,
promptly  upon  receipt,  deposit into the Spread  Account as  distributions  in
respect of the Class X Interest and retain therein:

          (i) on each Payment Date,  the Excess  Spread  remitted by the Trustee
     pursuant to Section 6.05(d)(ii) for the related Payment Date;

          (ii) upon receipt, amounts required to be withdrawn from the Insurance
     Account for deposit in the Spread Account pursuant to Section 6.03(b)(iii);
     and


<PAGE>


          (iii)  upon  receipt,  amounts  required  to be paid  by the  Servicer
     pursuant  to Section  6.04(e) or a Class X  Certificateholder  pursuant  to
     Section 6.04(g);

     provided, however, that the Trustee shall not accept funds for deposit into
the Spread Account from any Person, other than funds constituting Excess Spread,
without the consent of the Certificate Insurer.

     (b) From amounts on deposit in the Spread  Account  (after giving effect to
the  deposits  therein  pursuant  to Section  6.09(a))  the  Trustee  shall make
withdrawals on each Payment Date in the following order of priority:

          (i)  to  deposit  in  the   Insurance   Account   the  amount  of  any
     insufficiency in such Account which the Servicer failed to advance pursuant
     to Section 6.03(a);

          (ii) to deposit in the Lower-Tier Distribution Account, an amount (the
     "Spread Account  Amount") equal to the excess of (x) the Class A Remittance
     Amount over (y) the Available  Payment Amount,  less the amounts  withdrawn
     from the  Lower-Tier  Distribution  Account,  pursuant to Section  6.02(i).
     Amounts on deposit in the Spread  Account shall be available to all Class A
     Certificateholders pursuant to this clause (ii);

          (iii) (1) to pay to the  Servicer  from the  Remainder  Excess  Spread
     Amount (net of any such amounts paid pursuant to clauses (b)(i) and (b)(ii)
     above) with  respect to any Payment Date for any  Reimbursable  Amounts and
     (2) the  remainder of such  Remainder  Excess  Spread Amount to the Class X
     Certificateholders;

          (iv) to the extent  that the  remaining  amount then on deposit in the
     Spread Account then exceeds the Specified Spread Account  Requirement as of
     such Payment Date (such excess, a "Spread Account Excess"), an amount equal
     to such Spread Account  Excess shall be distributed to the Servicer  and/or
     the Representative to the extent of any Reimbursable  Amounts;  then to the
     Holders of the Class X Certificates.

and also, in no particular order of priority:

          (v) to invest  amounts on deposit in the Spread  Account in  Permitted
     Instruments pursuant to Section 6.04;

          (vi) to withdraw any amount not required to be deposited in the Spread
     Account or deposited therein in error; and

          (vii) to clear and terminate the Spread  Account upon the  termination
     of this Agreement.


<PAGE>


     (c) Any amounts which are required to be withdrawn  from the Spread Account
pursuant to paragraph  (b) above shall be withdrawn  from the Spread  Account in
the following order of priority:  (i) first,  from any uninvested  funds therein
and (ii) second, from the proceeds of the liquidation of any investments therein
pursuant to Section 6.04(b).

     (d) Upon the earlier to occur of the Cross-Over Date or the Payment Date on
which  all  amounts  due  have  been  paid to the  Class  A  Certificateholders,
including the Certificate Insurer as subrogee of the Class A Certificateholders,
the Trustee shall:

               (A)  clear  and  terminate  the  Spread  Account,  liquidate  any
          investments therein and distribute any uninvested funds therein or the
          proceeds of such liquidation to the Servicer and/or the Representative
          to the extent of any  Reimbursable  Amounts and the  remainder  to the
          Class X Certificateholders;

               (B)  distribute  future  receipts  of the  Excess  Spread  to the
          Servicer and/or the  Representative  to the extent of any Reimbursable
          Amounts and the remainder to the Class X Certificateholders.

                                   ARTICLE VII

                          GENERAL SERVICING PROCEDURES

     Section 7.01 Assumption Agreements.

     When a  Mortgaged  Property  has  been or is about  to be  conveyed  by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights to accelerate the maturity of the
related  Mortgage Loan under any  "due-on-sale"  clause contained in the related
Mortgage  or Mortgage  Note;  provided,  however,  that the  Servicer  shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the  Servicer,  is not  enforceable  under  applicable  law. In such event,  the
Servicer  shall enter into an assumption  agreement with the person to whom such
property  has been or is about to be  conveyed,  pursuant  to which such  person
becomes liable under the Mortgage Note and, unless  prohibited by applicable law
or the Mortgage Documents, the Mortgagor remains liable thereon. The Servicer is
also authorized with the prior approval of the Certificate Insurer to enter into
a substitution  of liability  agreement with such person,  pursuant to which the
original  Mortgagor is released from liability and such person is substituted as
Mortgagor and becomes  liable under the Mortgage Note. The Servicer shall notify
the  Depositors,   the  Trustee  and  the  Certificate  Insurer  that  any  such
substitution  or assumption  agreement  has been  completed by forwarding to the
Trustee (or to the  Custodian  on behalf of the  Trustee)  the  original of such
substitution or assumption  agreement and a duplicate  thereof to the Depositors
and the Certificate Insurer, which original shall be added by the Trustee (or by
the Custodian on behalf of the Trustee) to the related  Mortgage File and shall,
for all purposes,  be considered a part of such Mortgage File to the same extent
as  all  other  documents  and  instruments  constituting  a  part  thereof.  In
connection with any assumption or substitution  agreement  entered into pursuant
to this Section 7.01, the Servicer shall not change


<PAGE>


the Mortgage Interest Rate or the Monthly Payment,  defer or forgive the payment
of principal or interest,  reduce the outstanding principal amount or extend the
final maturity date on such Mortgage Loan. Any fee collected by the Servicer for
consenting to any such conveyance or entering into an assumption or substitution
agreement  shall be retained by or paid to the Servicer as additional  Servicing
Compensation.

     Notwithstanding  the  foregoing  paragraph  or any other  provision of this
Agreement,  the  Servicer  shall not be deemed to be in  default,  breach or any
other  violation of its  obligations  hereunder by reason of any assumption of a
Mortgage  Loan by operation of law or any  assumption  which the Servicer may be
restricted by law from preventing, for any reason whatsoever.

     With  respect to any  mortgage  loan  secured by an interest in an Illinois
Land  Trust,  if the  Servicer  receives  notice  of the sale of the  beneficial
interest  in a Illinois  Land Trust or the  related  Mortgaged  Property  by the
holder of a First Lien secured thereby to a Person other than the Servicer,  the
Depositors or the Trustee,  then,  prior to distribution of any proceeds of such
sale,  the Servicer shall demand in writing that such holder of a First Lien pay
the amount  necessary to satisfy all  indebtedness  under the Mortgage Loan from
the  proceeds  of such sale.  If such  holder of a First Lien so  requests,  the
Servicer  shall  furnish  reasonable  proof  of the  Depositor's  and  Trustee's
interest  with  respect  to such  proceeds.  Unless and until the  Servicer  has
received  instruction  otherwise from the Majority in Aggregate  Voting Interest
(with the consent of the Certificate  Insurer) or from the Certificate  Insurer,
the Servicer shall, with respect to any such First Lien and the related Mortgage
Loan,  follow  servicing  standards  consistent  with those of  prudent  lending
institutions  in the  geographic  area where the Mortgaged  Property is located,
including the making of any appropriate Servicing Advances with respect thereto.
In any event,  the Servicer shall follow any  instructions  from the Majority in
Aggregate  Voting Interest with the consent of the  Certificate  Insurer or from
the Certificate Insurer as soon as practicable following receipt thereof.

     Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files.

     The  Servicer  shall not grant a  satisfaction  or  release  of a  Mortgage
without  having  obtained  payment  in full of the  indebtedness  secured by the
Mortgage  or  otherwise  prejudice  any  right  the  Certificateholders  or  the
Certificate  Insurer may have under the mortgage  instruments subject to Section
5.01 hereof.  The Servicer  shall  maintain the Fidelity Bond as provided for in
Section 5.09 insuring the Servicer  against any loss it may sustain with respect
to any Mortgage Loan not satisfied in accordance  with the  procedures set forth
herein.

     Upon the  payment  in full of any  Mortgage  Loan,  or the  receipt  by the
Servicer  of a  notification  that  payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Trustee or
the Custodian on behalf of the Trustee by an Officers'  Certificate  in the form
of Exhibit B attached to the  Custodial  Agreement  (which  certification  shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the Principal
and Interest Account pursuant to Section 5.03 have been or will be so deposited)
of a


<PAGE>


Servicing  Officer and shall request  delivery to it of the Mortgage File.  Upon
receipt of such  certification  and  request,  the Trustee or the  Custodian  on
behalf of the Trustee shall  promptly  release the related  Mortgage File to the
Servicer. Expenses incurred in connection with any instrument of satisfaction or
deed  of  reconveyance  shall  be  payable  by the  Servicer  and  shall  not be
reimbursed from the Principal and Interest Account or the Collection Account.

     From time to time and as  appropriate  for the servicing or  foreclosure of
any Mortgage Loan,  including,  for this purpose,  collection  under any primary
mortgage guaranty  insurance  policy,  the Trustee or the Custodian on behalf of
the Trustee  shall,  upon request of the Servicer and delivery to the Trustee or
the Custodian on behalf of the Trustee of a certification in the form of Exhibit
B attached to the Custodial  Agreement signed, by a Servicing Officer,  promptly
release the related Mortgage File to the Servicer, and the Trustee shall execute
such documents as shall be necessary to the prosecution of any such proceedings.
Such  servicing  receipt shall obligate the Servicer to return the Mortgage File
or any document released  therefrom to the Trustee or the Custodian on behalf of
the Trustee when the need therefor by the Servicer no longer exists,  unless the
Mortgage Loan has been liquidated and the Net Liquidation  Proceeds  relating to
the Mortgage Loan have been deposited in the Principal and Interest  Account and
remitted to the Trustee for deposit in the  Collection  Account or the  Mortgage
File has been  delivered to an attorney,  or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other  proceedings  for the  foreclosure  of the  Mortgaged  Property  either
judicially  or  non-judicially,  and the Servicer has delivered to the Trustee a
certificate of a Servicing Officer  certifying as to the name and address of the
Person to which  such  Mortgage  File or such  document  was  delivered  and the
purpose  or  purposes  of such  delivery.  Upon  receipt of a  certificate  of a
Servicing Officer stating that such Mortgage Loan was liquidated,  the servicing
receipt shall be released promptly by the Trustee to the Servicer.

     The Trustee  shall  promptly  execute and deliver to the Servicer any legal
notices, court pleadings,  requests for trustee's sale in respect of a Mortgaged
Property or any legal action brought to obtain judgment against any Mortgagor on
the Mortgage Note or Mortgage or to obtain a deficiency judgment,  or to enforce
any other  remedies  or rights  provided  by the  Mortgage  Note or  Mortgage or
otherwise  available  at law or in  equity.  Together  with  such  documents  or
pleadings,  the  Servicer  shall  deliver  to the  Trustee  a  certificate  of a
Servicing Officer requesting that such pleadings or documents be executed by the
Trustee and certifying as to the reason such documents or pleadings are required
and that the execution and delivery  thereof by the Trustee will not  invalidate
or otherwise affect the lien of the Mortgage, except for the termination of such
a lien upon  completion of the foreclosure or trustee's sale. The Trustee shall,
upon receipt of a written request from a Servicing Officer, execute any document
provided to the Trustee by the  Servicer or take any other  action  requested in
such  request  that is, in the  opinion of the  Servicer  as  evidenced  by such
request,  required by any state or other jurisdiction to discharge the lien of a
Mortgage  upon the  satisfaction  thereof and the Trustee will promptly sign and
deliver,  but will not guarantee receipt of, any such documents to the Servicer,
or such other party as the Servicer may direct,  within five  Business  Days, or
more  promptly  if  needed,  of the  Trustee's  receipt of such  certificate  or
documents.  Such  certificate  or documents  shall  establish  to the  Trustee's
satisfaction that the related


<PAGE>


Mortgage  Loan has been paid in full by or on behalf of the  Mortgagor  and that
such payment has been deposited in the Principal and Interest Account.

     Section 7.03 Servicing Compensation.

     As compensation for its services hereunder,  the Servicer shall be entitled
to withdraw from the  Principal and Interest  Account or to retain from interest
payments  on the  Mortgage  Loans,  the  Servicer's  Servicing  Fee.  Additional
servicing  compensation in the form of assumption and other  administrative fees
(including bad check charges, late payment fees and similar fees), interest paid
on funds on deposit in the  Principal  and Interest  Account,  amounts  remitted
pursuant  to Section  6.03(b)(iv)  and Excess  Proceeds  shall be retained by or
remitted to the Servicer, to the extent not otherwise required to be remitted to
the Trustee  for deposit in the  Collection  Account  and not  constituting  the
Representative's  Yield.  The  Servicer  shall be required  to pay all  expenses
incurred by it in connection with its servicing  activities  hereunder and shall
not be entitled to  reimbursement  therefor except as specifically  provided for
herein. The  Representative's  Yield is the property of the Representative,  and
not the property of the Servicer,  and such  ownership  shall not be affected by
any termination of the Servicer.

     Section 7.04 Annual Statement as to Compliance.

     The Servicer will deliver to the Certificate  Insurer, the Trustee and each
Rating Agency, not later than the last day of the fourth month following the end
of the Servicer's  fiscal year,  which currently ends on December 31,  beginning
with the fiscal year ending December 31, 1998, an Officers'  Certificate stating
that (i) the Servicer has fully  complied with the  provisions of Articles V and
VIII,  (ii) a review of the  activities  of the  Servicer  during the  preceding
fiscal year and of  performance  under this  Agreement  has been made under such
officers' supervision,  and (iii) to the best of such officers' knowledge, based
on such review,  the  Servicer  has  fulfilled  all its  obligations  under this
Agreement  throughout  such  year,  or,  if  there  has  been a  default  in the
fulfillment of any such  obligation,  specifying each such default known to such
officers  and the nature and status  thereof  and the action  being taken by the
Servicer  to  cure  such  default.   The  Servicer  shall  promptly  notify  the
Certificate Insurer, the Trustee and each Rating Agency promptly upon any change
in the basis on which its fiscal year is determined.

     Section 7.05 Annual Independent Public Accountants' Servicing Report.

     Not later than the last day of the fourth  month  following  the end of the
Servicer's fiscal year, beginning with the fiscal year ending December 31, 1998,
the  Servicer,  at its  expense,  shall  cause  a  firm  of  independent  public
accountants  reasonably acceptable to the Trustee and the Certificate Insurer to
furnish a letter or letters to the  Certificate  Insurer,  the  Trustee and each
Rating  Agency to the effect that such firm has with  respect to the  Servicer's
overall  servicing  operations  examined such  operations in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers, and
stating such firm's conclusions relating thereto.


<PAGE>


     Section 7.06 Right to Examine Servicer Records.

     The Trustee or the Trustee at the request of a Majority in Aggregate Voting
Interest (or the representatives thereof) and the Certificate Insurer shall have
the right upon  reasonable  prior notice,  during normal  business  hours and as
often as  reasonably  required,  to examine  and audit any and all of the books,
records or other information of the Servicer, whether held by the Servicer or by
another on behalf of the Servicer,  which may be relevant to the  performance or
observance  by the  Servicer  of the  terms,  covenants  or  conditions  of this
Agreement.

     Section  7.07  Reports  to the  Trustee;  Principal  and  Interest  Account
Statements.

     If the Principal and Interest  Account is not maintained  with the Trustee,
then not later than 25 days after each Payment Date,  the Servicer shall forward
to the Certificate Insurer and the Trustee a statement, certified by a Servicing
Officer,  setting forth the status of the  Principal and Interest  Account as of
the end of the preceding Due Period and showing,  for the period covered by such
statement, the aggregate of deposits into the Principal and Interest Account for
each category of deposit specified in Section 5.03, the aggregate of withdrawals
from the  Principal  and  Interest  Account  for  each  category  of  withdrawal
specified in Section 5.04,  the aggregate  amount of permitted  withdrawals  not
made in the related period, and the amount of Advances,  if any, for the related
period.

                                  ARTICLE VIII

                       REPORTS TO BE PROVIDED BY SERVICER

     Section 8.01 Financial Statements.

     The Servicer will furnish to the Certificate Insurer, the Depositors or the
Trustee on request unaudited financial statements of the Servicer.

     The Servicer  also agrees to make  available  on a reasonable  basis to the
Certificate  Insurer, the Depositor,  the Trustee, any  Certificateholder or any
prospective  Certificateholder  a knowledgeable  financial or accounting officer
for the purpose of answering reasonable questions respecting recent developments
affecting the Servicer or the financial statements of the Servicer.

                                   ARTICLE IX

                                  THE SERVICER

     Section 9.01 Indemnification; Third Party Claims.

     The Servicer  agrees to indemnify and hold the  Depositors,  the Custodian,
the Trustee,  the Certificate  Insurer and each Holder harmless  against any and
all claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees


<PAGE>


and expenses that the Trustee,  the Custodian,  the Certificate  Insurer and any
Holder may sustain in any way related to the failure of the  Servicer to perform
its duties and service the Mortgage  Loans in compliance  with the terms of this
Agreement.  The Servicer shall immediately  notify the Depositors,  the Trustee,
the Custodian, the Certificate Insurer and each Certificateholder, if a claim is
made by a third party with respect to this  Agreement,  and the  Servicer  shall
assume (with the consent of the Trustee and the Certificate Insurer) the defense
of any such claim and advance all expenses in  connection  therewith,  including
reasonable  counsel  fees,  and promptly  advance  funds to pay,  discharge  and
satisfy any judgment or decree which may be entered  against the  Servicer,  the
Trustee, the Certificate Insurer and/or any Certificateholder in respect of such
claim.  The Trustee  may, if  necessary,  reimburse  the  Servicer  from amounts
otherwise  distributable on the Class X Certificates for all amounts advanced by
it pursuant to the preceding  sentence except when the claim relates directly to
the failure of the  Servicer to service and  administer  the  Mortgage  Loans in
compliance with the terms of this Agreement.  The Servicer shall have no lien on
the  assets of the Trust  with  respect to  amounts  advanced  pursuant  to this
Section  9.01  directly  as a  result  of  Servicer's  failure  to  service  and
administer the Mortgage Loans in compliance with the terms of this Agreement.

     Section 9.02 Merger or Consolidation of the Servicer.

     The  Servicer  will each keep in full  effect  its  existence,  rights  and
franchises as a corporation and will obtain and preserve its qualification to do
business as a foreign corporation, in each jurisdiction necessary to protect the
validity and  enforceability  of this Agreement or any of the Mortgage Loans and
to perform its duties under this Agreement.

     Any Person into which the  Servicer may be merged or  consolidated,  or any
corporation resulting from any merger,  conversion or consolidation to which the
Servicer or the Representative shall be a party, or any Person succeeding to the
business  of the  Servicer,  shall be an  established  mortgage  loan  servicing
institution  that  has a net  worth  of at least  $15,000,000  and  shall be the
successor  of the  Servicer  or the  Representative,  as  applicable  hereunder,
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.  The
Servicer shall send notice of any such merger or  consolidation  to the Trustee,
the Certificate Insurer and each Rating Agency.

     Section 9.03 Limitation on Liability of the Servicer and Others.

     The Servicer and any director,  officer,  employee or agent of the Servicer
may rely on any document of any kind which it in good faith reasonably  believes
to be  genuine  and to have been  adopted  or signed by the  proper  authorities
respecting any matters arising  hereunder.  Subject to the terms of Section 9.01
herein,  the  Servicer  shall have no  obligation  to appear  with  respect  to,
prosecute or defend,  any legal action which is not incidental to the Servicer's
duty to service the Mortgage Loans in accordance with this Agreement.

     Section 9.04 Servicer Not to Resign.


<PAGE>


     The  Servicer   shall  not  assign  this  Agreement  nor  resign  from  the
obligations  and duties  hereby  imposed  on it except by mutual  consent of the
Servicer,  the Representative  (if the Representative is not the Servicer),  the
Certificate  Insurer, the Trustee and the Majority in Aggregate Voting Interest,
or upon the  determination  that the Servicer's  duties  hereunder are no longer
permissible  under  applicable  law and such  incapacity  cannot be cured by the
Servicer.  Any such  determination  permitting  the  resignation of the Servicer
shall be evidenced  by a written  Opinion of Counsel (who may be counsel for the
Servicer) to such effect delivered to the Trustee,  the  Representative  (if the
Representative is not the Servicer) and the Certificate  Insurer,  which Opinion
of Counsel shall be in form and substance  acceptable to the Certificate Insurer
and the Trustee.  No such  resignation  shall become effective until a successor
has  assumed  the  Servicer's  responsibilities  and  obligations  hereunder  in
accordance  with Section 9.02. The Servicer  shall  promptly  notify each Rating
Agency promptly of its intention to resign pursuant to this Section 9.04.

     Section 9.05 Removal of Servicer.

     The  Certificate  Insurer or the  Holders of  Certificates  representing  a
Majority in Aggregate Voting Interest may, with the prior written consent of the
Certificate Insurer, remove the Servicer upon the occurrence of and continuation
of a Servicer  Default upon 90 days' prior written  notice to the  Servicer.  No
such removal shall become  effective until a successor  (other than the Trustee,
unless the Trustee agrees to so act) has assumed the Servicer's responsibilities
and  obligations  hereunder in accordance  with Section 9.02. The Servicer shall
promptly notify each Rating Agency of such removal.

                                    ARTICLE X

                                SERVICER DEFAULT

     Section 10.01 Servicer Default.

     (a) In case one or more of the following events (each a "Servicer Default")
by the Servicer shall occur and be continuing:

          (i) (A) an Event of Nonpayment  (subject to paragraph (c) below);  (B)
     the failure by the Servicer to make any required  Servicing  Advance (other
     than a Nonrecoverable  Advance),  to the extent such failure materially and
     adversely  affects  the  interests  of  the  Certificate   Insurer  or  the
     Certificateholders;  (C) the  failure  by the  Servicer  to make a required
     Advance  (other  than a  Nonrecoverable  Advance)  pursuant  to the  second
     paragraph  of Section  6.08;  or (D) any other  failure by the  Servicer to
     remit to the Trustee for the benefit of any Holders,  any payment  required
     to be made under the terms of this Agreement  (other than a  Nonrecoverable
     Advance)  which  continues  unremedied  after the date upon  which  written
     notice of such failure,  requiring the same to be remedied, shall have been
     given to a Servicing  Officer of the Servicer by the  Certificate  Insurer,
     the Trustee or to a Servicing  Officer of the  Servicer  and the Trustee by
     any Holder; or


<PAGE>


          (ii) the failure by the  Servicer  duly to observe or perform,  in any
     material  respect,  any other  covenants,  obligations or agreements of the
     Servicer as set forth in this Agreement, which failure continues unremedied
     for a period  of 30 days  after  the date on which  written  notice of such
     failure,  requiring  the same to be remedied,  shall have been given to the
     Servicer by the  Certificate  Insurer or the Trustee or to the Servicer and
     the Trustee by any Holder or the Certificate Insurer; or

          (iii) a decree or order of a court or agency or supervisory  authority
     having  jurisdiction  for the  appointment  of a conservator or receiver or
     liquidator in any insolvency,  readjustment  of debt,  marshaling of assets
     and  liabilities  or  similar   proceedings,   or  for  the  winding-up  or
     liquidation  of its affairs,  shall have been entered  against the Servicer
     and such decree or order  shall have  remained  in force,  undischarged  or
     unstayed for a period of 60 days; or

          (iv) the Servicer shall consent to the appointment of a conservator or
     receiver or liquidator in any insolvency,  readjustment of debt, marshaling
     of assets and  liabilities  or similar  proceedings  of or  relating to the
     Servicer or of or relating to all or  substantially  all of the  Servicer's
     property; or

          (v) the Servicer shall admit in writing its inability to pay its debts
     as they become due,  file a petition to take  advantage  of any  applicable
     insolvency or reorganization statute, make an assignment for the benefit of
     its creditors, or voluntarily suspend payment of its obligations;

          (vi) the Servicer  shall fail for 60 days to pay, or bond against,  an
     unappealable,  undischarged,  unvacated  and unstayed  final  judgment by a
     court of competent jurisdiction in an aggregate amount of $250,000 or more;

          (vii)  if  (a) on the  sixth  Payment  Date  or on  any  Payment  Date
     thereafter  prior to the twelfth  Payment Date,  the Loss Coverage Ratio is
     greater  than or equal to 25%,  (b) on the twelfth  Payment  Date or on any
     Payment Date  thereafter  prior to the  eighteenth  Payment Date,  the Loss
     Coverage  Ratio is  greater  than or equal  to 40%,  (c) on the  eighteenth
     Payment Date or on any Payment Date thereafter  prior to the  twenty-fourth
     Payment Date,  the Loss Coverage Ratio is greater than or equal to 55%, (d)
     on the  twenty-fourth  Payment Date or on any Payment Date thereafter prior
     to the  thirty-sixth  Payment Date, the Loss Coverage Ratio is greater than
     or equal to 70%, or (e) on the thirty-sixth  Payment Date or on any Payment
     Date thereafter, the Loss Coverage Ratio is greater than or equal to 80%.

     (b) then, and in each and every such case, so long as such Servicer Default
shall not have been  remedied,  and in the case of clause (i) above  (except for
clause  (i)(C)),  if such Servicer  Default shall not have been remedied  within
three  Business  Days after the Servicer has  received  notice of such  Servicer
Default,  (x) with respect solely to clause (i)(C) above, if such Advance is not
made by 4:00 p.m. New York time on the second Business Day


<PAGE>


prior to the applicable  Payment Date, the  Certificate  Insurer or the Trustee,
upon receipt of written  notice or discovery  by a  Responsible  Officer of such
failure,  shall give immediate  telephonic notice of such failure to a Servicing
Officer of the  Servicer,  and the Trustee  shall notify each  Certificateholder
and,  unless such  failure is cured,  either by receipt of payment or receipt of
evidence  satisfactory to the Certificate Insurer (e.g., a wire reference number
communicated  by the sending  bank;  the  Certificate  Insurer  shall notify the
Trustee,  if the Certificate  Insurer receives  satisfactory  evidence that such
funds have been  sent),  by 12:00 noon New York time on the  following  Business
Day, the Trustee,  or a successor  servicer appointed in accordance with Section
10.02,   shall   immediately  make  such  Advance  (unless  such  Advance  is  a
Nonrecoverable Advance) and assume, pursuant to Section 10.02 hereof, the duties
of a successor Servicer;  and (y) in the case of clauses (i)(A), (i)(B), (i)(D),
(ii),  (iii),  (iv), (v), (vi) and (vii) above, the Majority in Aggregate Voting
Interest, subject to the prior written consent of the Certificate Insurer, which
consent may not be unreasonably  withheld, or the Certificate Insurer, by notice
in writing to the  Servicer  and a  Responsible  Officer of the Trustee  may, in
addition  to  whatever  rights  they or it may have at law or equity to damages,
including  injunctive relief and specific  performance,  commence termination of
all the rights and  obligations  of the Servicer under this Agreement and in and
to the Mortgage Loans and the proceeds thereof, as servicer. Upon receipt by the
Servicer of a second  written  notice  (except  relative to clause (i)(C) above)
from the Majority in Aggregate  Voting  Interest,  subject to the prior  written
consent  of the  Certificate  Insurer,  which  consent  may not be  unreasonably
withheld, or the Certificate Insurer stating that they or it intend to terminate
the Servicer as a result of such  Servicer  Default,  all authority and power of
the Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall, subject to Section 10.02, pass to and be vested in the Trustee
or its designee and the Trustee is hereby  authorized  and  empowered to execute
and deliver, on behalf of the Servicer,  as  attorney-in-fact or otherwise,  any
and all  documents  and other  instruments  and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination,  including,  but not limited to, the  transfer and  endorsement  or
assignment of the Mortgage Loans and related documents to the extent required by
this  Agreement.  The Servicer agrees to cooperate with the Trustee in effecting
the  termination  of  the  Servicer's  responsibilities  and  rights  hereunder,
including,  without limitation,  the transfer to the Trustee, for the benefit of
the Holders of the Certificates, or its designee for administration by it of all
amounts which shall at the time be credited by the Servicer to the Principal and
Interest Account or thereafter received with respect to the Mortgage Loans.

     The Trustee  shall not be deemed to have  knowledge  of a Servicer  Default
unless a Responsible Officer thereof has received written notice thereof.

     (c)  Notwithstanding  anything to the contrary contained in this Agreement,
upon the occurrence of an Event of Nonpayment or a Performance  Default of which
the Certificate  Insurer has knowledge,  the Certificate  Insurer shall promptly
notify the Trustee. During any applicable grace period following receipt of such
notice  (or  immediately  following  such  notice  in the case of a  Performance
Default),  the Trustee and the  Certificate  Insurer shall  cooperate  with each
other to determine if the  occurrence  of such Event of  Nonpayment  is in their
reasonable business


<PAGE>


judgment or Performance  Default is in the reasonable  business  judgment of the
Certificate  Insurer (x) the result of the acts or  omissions of the Servicer or
(y) the result of events beyond the control of the Servicer.  If the Trustee and
the  Certificate  Insurer  conclude that such Event of Nonpayment or Performance
Default is the result of the latter, Section 10.01(b) above shall not apply, and
the  Servicer  shall not be  terminated,  unless  and until an Event of  Default
unrelated to such Event of Nonpayment or Performance Default has occurred and is
continuing,  whether or not the Servicer has cured such Event of  Nonpayment  or
Performance  Default.  If the Trustee and the Certificate  Insurer conclude that
the Event of Nonpayment or Performance  Default is the result of the former, the
Certificate  Insurer or the Majority in Aggregate Voting  Interest,  as the case
may be, may terminate the Servicer in accordance  with Section  10.01(b)  above,
provided  that the Trustee  shall have until the 60th day  following the date of
receipt of notice of the Event of  Nonpayment or  Performance  Default to either
assume the servicing or appoint a successor  servicer  pursuant to Section 10.02
hereof.

     If the Trustee and the Certificate  Insurer cannot agree, and the basis for
such disagreement is not arbitrary or unreasonable, as to the cause of the Event
of Nonpayment or Performance  Default,  the decision of the Certificate  Insurer
shall control;  provided,  however,  that if the Certificate  Insurer decides to
terminate  the  Servicer,  the Trustee  shall be relieved of its  obligation  to
assume the  servicing  or to appoint a successor,  which shall be the  exclusive
obligation of the Certificate Insurer.

     The Trustee  shall  promptly  notify each Rating  Agency,  the  Certificate
Insurer, the Trustee and each Certificateholder, of the occurrence of a Servicer
Default.

     Section 10.02 Trustee to Act; Appointment of Successor Servicer.

     On and  after  the time the  Servicer  receives  a  notice  of  termination
pursuant  to Section  10.01,  or the Trustee  receives  the  resignation  of the
Servicer  evidenced by an Opinion of Counsel  pursuant to Section  9.04,  or the
Servicer is removed as servicer  pursuant to this  Article X (in which event the
Trustee shall promptly notify each Rating Agency),  except as otherwise provided
in Section  10.01,  the Trustee  shall be the  successor  in all respects to the
Servicer in its capacity as servicer under this  Agreement and the  transactions
set  forth  or   provided   for   herein   and  shall  be  subject  to  all  the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof;  provided,  however,  that the Trustee shall
not be liable for any actions of any servicer prior to the Trustee  becoming the
Servicer under this  Agreement.  The Trustee shall be obligated to make advances
pursuant  to Sections  5.10,  5.13 and 6.08  unless,  and only to the extent the
Trustee determines reasonably and in good faith that, such advances would not be
recoverable  pursuant  to  Section  5.04(ii)  or  6.05(d)(vi)  and  (vii),  such
determination to be evidenced by a certification of a Responsible Officer of the
Trustee  delivered to the Certificate  Insurer;  provided that the Trustee shall
not be  required  to make an  advance  from  its own  funds if such  advance  is
prohibited  by law. As  compensation  therefor,  the Trustee,  or any  successor
servicer appointed pursuant to the following paragraph, shall be entitled to all
funds relating to the Mortgage Loans which the Servicer would have been entitled
to receive from the Principal and Interest  Account pursuant to Section 5.04 and
from the Collection Account pursuant to Section 6.05 if the Servicer had


<PAGE>


continued  to  act  as  servicer   hereunder,   together  with  other  servicing
compensation  in the form of assumption  fees, late payment charges or otherwise
as provided in Sections 7.01 and 7.03. In no event shall the assets of the Trust
include,  nor the Trustee or any other successor servicer acquire any rights to,
the Representative's Yield.

     Notwithstanding  the above, the Trustee may, if it shall be unwilling to so
act, and shall, if it is unable to so act or if the Majority in Aggregate Voting
Interest  (with the  consent of the  Certificate  Insurer),  or the  Certificate
Insurer so request in writing to the  Trustee,  appoint,  or petition a court of
competent  jurisdiction  to appoint,  any  established  mortgage loan  servicing
institution acceptable to the Certificate Insurer, which acceptance shall not be
unreasonably  withheld,  that has a net worth of not less than  $15,000,000  and
which is  approved  as a  servicer  by FNMA and  FHLMC as the  successor  to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder. Any collections received by the
Servicer after removal or resignation shall be endorsed by it to the Trustee and
remitted  directly to the Trustee or, at the  direction of the  Trustee,  to the
successor  servicer.  The  compensation  of any successor  servicer  (including,
without  limitation,  the Trustee) so appointed shall be the aggregate Servicing
Fees, together with other Servicing Compensation in the form of assumption fees,
late  payment  charges or  otherwise.  In the event the  Trustee is  required to
solicit  bids,  the Trustee shall  solicit,  by public  announcement,  bids from
housing and home finance institutions, banks and mortgage servicing institutions
meeting the  qualifications  set forth  above.  Such public  announcement  shall
specify that the successor  servicer shall be entitled to the full amount of the
aggregate  Servicing  Fees as servicing  compensation,  together  with the other
servicing  compensation in the form of assumption  fees, late payment charges or
otherwise.  Within thirty days after any such public  announcement,  the Trustee
shall  negotiate and effect the sale,  transfer and  assignment of the servicing
rights and  responsibilities  hereunder to the qualified  party  submitting  the
highest  qualifying  bid. The Trustee  shall deduct from any sum received by the
Trustee from the successor to the Servicer in respect of such sale, transfer and
assignment  all costs and expenses of any public  announcement  and of any sale,
transfer and assignment of the servicing rights and  responsibilities  hereunder
and the amount of any unreimbursed  Servicing Advances and Advances.  After such
deductions,  the  remainder  of such  sum  shall be paid by the  Trustee  to the
Servicer at the time of such sale,  transfer and  assignment  to the  Servicer's
successor.  The Trustee and such  successor  shall take such action,  consistent
with this  Agreement,  as shall be necessary to effectuate any such  succession.
The Servicer agrees to cooperate with the Trustee and any successor  servicer in
effecting the  termination  of the  Servicer's  servicing  responsibilities  and
rights  hereunder  and shall  promptly  provide  the  Trustee or such  successor
servicer, as applicable, all documents and records reasonably requested by it to
enable it to assume the Servicer's  functions  hereunder and shall promptly also
transfer to the Trustee or such successor servicer,  as applicable,  all amounts
which then have been or should have been deposited in the Principal and Interest
Account by the  Servicer or which are  thereafter  received  with respect to the
Mortgage Loans.  Neither the Trustee nor any other  successor  servicer shall be
held  liable by reason  of any  failure  to make,  or any delay in  making,  any
distribution  hereunder or any portion  thereof caused by (i) the failure of the
Servicer to deliver, or any delay in delivering,  cash,  documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Servicer


<PAGE>


hereunder.  No appointment of a successor to the Servicer  hereunder (other than
the Trustee) shall be effective  until the Trustee and the  Certificate  Insurer
shall have consented  thereto.  The Trustee shall not resign as servicer until a
successor  servicer  reasonably  acceptable to the Certificate  Insurer has been
appointed.

     Pending appointment of a successor to the Servicer  hereunder,  the Trustee
shall act in such capacity as  hereinabove  provided.  In  connection  with such
appointment  and  assumption,  the  Trustee may make such  arrangements  for the
compensation  of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided,  however, that no such compensation shall be in
excess of that  permitted the Servicer  pursuant to Section 8.03,  together with
other  servicing  compensation  in the form of  assumption  fees,  late  payment
charges or otherwise as provided in this Agreement.  The Servicer,  the Trustee,
any Custodian and such successor  shall take such action,  consistent  with this
Agreement, as shall be necessary to effectuate any such succession.

     Section 10.03 Waiver of Defaults.

     The Certificate  Insurer or a Majority in Aggregate Voting Interest may, on
behalf of all Certificateholders,  and subject to the consent of the Certificate
Insurer,  which  consent  may not be  unreasonably  withheld,  waive any  events
permitting  removal of the Servicer as servicer pursuant to this Article X. Upon
any  waiver of a past  default,  such  default  shall  cease to  exist,  and any
Servicer  Default  arising  therefrom  shall be deemed to have been remedied for
every purpose of this  Agreement.  No such waiver shall extend to any subsequent
or other  default or impair any right  consequent  thereto  except to the extent
expressly so waived.  Notice of any such waiver shall be given by the Trustee to
each Rating Agency.

     Section 10.04 Control by Majority in Aggregate Voting Interest.

     The Certificate  Insurer, or the Majority in Aggregate Voting Interest with
the consent of the  Certificate  Insurer,  which consent may not be unreasonably
withheld,  may direct the time,  method and place of conducting  any  proceeding
relating  to the  assets  of the  Trust or the  Certificates  or for any  remedy
available to the Trustee with respect to the  Certificates,  or  exercising  any
trust or power conferred on the Trustee with respect to the  Certificates or the
assets of the Trust, provided that:

          (i) such  direction  shall not be in conflict  with any rule of law or
     with this Agreement;

          (ii) the Trustee shall have been provided with indemnity  satisfactory
     to it; and

          (iii) the Trustee may take any other action  deemed proper by it which
     is not  inconsistent  with  such  direction;  provided,  however,  that the
     Trustee need not take any action which it  determines  might  involve it in
     liability or may be unjustly  prejudicial  to the Holders not so directing.
     If inconsistent  directions are given, the Certificate Insurer's directions
     shall control.


<PAGE>


                                   ARTICLE XI

                                   TERMINATION

     Section 11.01 Termination.

     Subject to Section 11.03, this Agreement shall terminate upon notice to the
Trustee of either: (a) the collection with respect to the last Mortgage Loan (or
Advances of same by the Servicer),  or the disposition of all funds with respect
to the last Mortgage Loan and the  remittance of all funds due hereunder and the
payment of all  amounts  due and  payable  to the  Certificate  Insurer  and the
Trustee or (b) mutual consent of the Servicer,  the Certificate  Insurer and all
Certificateholders in writing.

     Subject to  Section  11.03,  the  Servicer  may,  at its  option,  elect to
terminate  this  Agreement on any Payment Date on or following the first Payment
Date on which the Pool  Principal  Balance as of the last day of the related Due
Period is less than 10% of the Original  Pool  Principal  Balance  (such Payment
Date being the "Optional  Purchase  Date") by purchasing  from the Trust on such
Payment Date,  all of the  outstanding  Mortgage  Loans and REO  Properties at a
price  (the  "Termination  Price")  equal  to  the  fair  market  value  thereof
(determined  as  provided  below);  provided,  that the Trust shall not sell the
Mortgage  Loans and REO  Properties if the  Termination  Price to be received is
less  than  the  sum of (x)  100%  of the  aggregate  Principal  Balance  of the
outstanding  Mortgage  Loans  and REO  Properties  and (y)  accrued  and  unpaid
interest on each such Mortgage Loan at a rate equal to its  respective  Mortgage
Interest  Rate. In  connection  with any such sale,  the Servicer  shall pay any
outstanding  and unpaid fees and  expenses  of the  Trustee and the  Certificate
Insurer  relating to this Agreement that such parties would  otherwise have been
entitled to pursuant to Section 6.05(d).

     The fair market value of the outstanding  Mortgage Loans and REO Properties
for  purposes of this  Section  11.01 shall be an amount equal to the average of
the bid prices for such assets taken as a whole, provided to the Servicer by two
Independent,  nationally recognized dealers in whole loans substantially similar
to the Mortgage Loans.

     Any such sale  pursuant  to this  Section  11.01 shall be  accomplished  by
depositing  into the Collection  Account,  on the third Business Day immediately
preceding the final  Payment Date on which such purchase is to be effected,  the
amount of the Termination  Price. On the same day that the Termination  Price is
deposited into the Collection Account,  any other amounts then on deposit in the
Principal and Interest  Account shall be transferred  to the Collection  Account
pursuant  to Section  5.04(ii)  for  payment to  Certificateholders  pursuant to
Section  6.05(d)  on the  final  Payment  Date as  specified  in the  notice  to
Certificateholders  described  below;  Any amounts  received with respect to the
Mortgage Loans and REO Properties  subsequent to the last day of the related Due
Period  shall  belong  to the  Person  purchasing  the  Mortgage  Loans  and REO
Properties.  Promptly upon receipt of the Termination  Price,  the Trustee shall
release  (or cause to be  released)  each  related  Mortgage  File to the Person
purchasing the Mortgage Loans and REO Properties as set forth herein.


<PAGE>


     Notice of any  termination,  specifying  the  Payment  Date upon which this
Agreement will terminate shall be given promptly by the Trustee by letter to the
Certificateholders mailed during the month of such final Payment Date before the
Determination  Date in such month,  specifying  (i) the Payment  Date upon which
final payment of the  Certificates  will be made and (ii) the amount of any such
final  payment.  The  obligations of the  Certificate  Insurer  hereunder  shall
terminate upon the deposit by the Servicer with the Trustee for deposit into the
Collection Account of a sum sufficient to purchase all of the Mortgage Loans and
REO Properties as set forth above.

     Each Holder is required,  and hereby  agrees,  to return to the Trustee any
Certificate  with  respect to which the Trustee has made the final  distribution
due  thereon.  Any such  Certificate  as to which the Trustee has made the final
distribution thereon shall be deemed canceled and shall no longer be outstanding
for any  purpose  of this  Agreement,  whether or not such  Certificate  is ever
returned to the Trustee.

     In the event that any amount due to any Class A  Certificateholder  remains
unclaimed,  the Servicer shall,  at the expense of the Trust Fund,  which amount
shall be allocated to the Upper-Tier  REMIC,  cause to be published once, in the
eastern  edition of The Wall  Street  Journal,  notice  that such money  remains
unclaimed. If, within the period then specified in the escheat laws of the State
of New York after such  publication such amount remains  unclaimed,  the Class R
Certificateholders  shall be entitled to all unclaimed  funds,  and other assets
which remain subject hereto and the Trustee upon transfer of such funds shall be
discharged of any responsibility for such funds and the Certificateholders shall
look to the Class R Certificateholders for payment.

     Section 11.02 Additional Termination Requirements.

     In the event the  Servicer  exercises  its  purchase  option as provided in
Section  11.01,  the Trust  Fund  shall be  terminated  in  accordance  with the
following additional requirements, unless the Trustee has been furnished with an
Opinion of Counsel  to the effect  that the  failure of the Trust Fund to comply
with  the  requirements  of  this  Section  11.02  will  not (i)  result  in the
imposition of taxes on prohibited transactions" of either Trust REMIC as defined
in Section 860F of the Code, or (ii) cause either Trust REMIC to fail to qualify
as a REMIC at any time that any Certificates are outstanding:

          (i) Within 89 days prior to the final  Payment Date the Trustee  shall
     designate a date as the date of adoption of a plan of complete  liquidation
     of either Trust REMIC under  Section  860F of the Code and any  regulations
     thereunder  and shall  specify such date in the Trust REMICs' final federal
     income tax returns;

          (ii) At or after the date of such a plan of complete  liquidation  and
     at or prior to the final  Payment  Date,  the Trustee shall sell all of the
     assets of the Trust Fund to the  Servicer  or the  Certificate  Insurer for
     cash;


<PAGE>


          (iii)  At  the  time  of  the  making  of  the  final  payment  on the
     Certificates,  the  Trustee  shall  distribute  or  credit,  or cause to be
     distributed  or  credited  (A)  to  the  Certificateholders,  the  Class  A
     Principal Balance,  plus one month's interest on each Class of Certificates
     at the respective Pass-Through Rate, (B) after such payments to the Class A
     Certificateholders,  to the Class X  Certificateholders,  the amount if any
     accrued but unpaid Excess Spread and (D) to the Class R Certificateholders,
     all  cash  on  hand  after  such  payment  to  the  Class  A  and  Class  X
     Certificateholders  (other  than cash  retained to meet  claims),  and each
     Trust REMIC and the Trust Fund shall terminate at such time; and

          (iv) In no event may the final payment on the Certificates  (except to
     the extent  permitted in Section  11.01 with respect to  Certificateholders
     who fail to surrender their  Certificates)  be made after the 89th day from
     the date of such plan of complete liquidation.

     Section 11.03 Accounting Upon Termination of Servicer.

     Upon  termination  of the  Servicer  under  Article X hereof,  the Servicer
shall:

     (a) deliver to its successor or, if none shall yet have been appointed,  to
the Trustee the funds in any Principal and Interest Account;

     (b) deliver to its successor or, if none shall yet have been appointed,  to
the Trustee,  the Mortgage Files and related documents and statements held by it
hereunder and a Mortgage Loan portfolio computer tape;

     (c) deliver to its successor or, if none shall yet have been appointed,  to
the Trustee and, upon request, to the  Certificateholders,  a full accounting of
all funds,  including a statement  showing the Monthly Payments  collected by it
and a statement  of monies held in trust by it for the  payments or charges with
respect to the Mortgage Loans; and

     (d) execute and deliver such  instruments  and perform all acts  reasonably
requested in order to effect the orderly and efficient  transfer of servicing of
the Mortgage Loans to its successor and to more fully and  definitively  vest in
such successor all rights,  powers,  duties,  responsibilities,  obligations and
liabilities of the Servicer under this Agreement.

     Section 11.04 Representative's Right to Representative's Yield Absolute.

     The  Representative's  right to  receive  the  Representative's  Yield with
respect to each  Mortgage  Loan shall be absolute and  unconditional,  and shall
survive  notwithstanding  the  termination of the rights and  obligations of the
Servicer  hereunder,  the resignation of the Servicer or the termination of this
Agreement.  The  Representative's  right to receive the  Representative's  Yield
shall not be  subject to offset or  counterclaim,  whether or not such right has
been  assigned  in  whole  or  in  part,   notwithstanding  any  breach  of  any
representation or


<PAGE>


warranty of the  Representative  or any  Depositor  under this  Agreement or any
default by the  Representative  or any  Depositor of any of its  obligations  or
covenants  under  this  Agreement.  The  Representative  shall have the right to
assign any or all of its rights in and to the  Representative's  Yield,  without
notice   to  or  the   consent   of  any   party  to  this   Agreement   or  any
Certificateholder.

     Section 11.05 Termination Upon Loss of REMIC Status.

     (a) Following a final  determination by the Internal Revenue Service, or by
a court of competent jurisdiction, in either case, from which no appeal is taken
within the permitted time for such appeal, or if any appeal is taken,  following
a final  determination of such appeal from which no further appeal can be taken,
to the effect that either  Trust REMIC does not and will no longer  qualify as a
REMIC pursuant to Section 860D of the Code (the "Final  Determination"),  at any
time on or after  the date  which  is 30  calendar  days  following  such  Final
Determination  (i) the  Majority  in Voting  Interest  may direct the Trustee on
behalf of each Trust REMIC to adopt a "plan of complete liquidation" (within the
meaning  of  Section  860F(a)(4)(B)(i)  of the  Code)  and (ii) the  Certificate
Insurer may notify the Trustee of the  Certificate  Insurer's  determination  to
purchase  from the Trust Fund all Mortgage  Loans and all  property  theretofore
acquired by foreclosure, deed in lieu of foreclosure, or otherwise in respect of
any  Mortgage  Loan then  remaining  in the Trust  Fund at a price  equal to the
Termination  Price.  Upon receipt of notice from the  Certificate  Insurer,  the
Trustee  shall  notify  the  Class R and  Class  LR  Certificateholders  of such
election to liquidate or such determination to purchase, as the case may be (the
"Termination  Notice").  The Holders of a majority of the Percentage Interest of
the Class R and  Class LR  Certificates,  respectively,  then  outstanding  may,
within 60 days from the date of receipt of the Termination Notice (the "Purchase
Option Period"), at their option, purchase from the Trust all Mortgage Loans and
all property theretofore  acquired by foreclosure,  deed in lieu of foreclosure,
or otherwise in respect of any Mortgage Loan then remaining in the Trust Fund at
a purchase  price equal to the  Termination  Price.  Any such purchase  shall be
accomplished in the manner set forth in Section 11.01.

     (b) If, during the Purchase Option Period, each of the Class R and Class LR
Certificateholders  have not exercised the option  described in the  immediately
preceding paragraph,  then upon the expiration of the Purchase Option Period (i)
in the event that the  Majority  in  Aggregate  Voting  Interest  have given the
Trustee the direction  described in clause (a)(i) above,  the Trustee shall sell
the Mortgage Loans and  distribute the proceeds of the  liquidation of the Trust
Fund, each in accordance with the plan of complete liquidation, such that, if so
directed, the liquidation of the Trust Fund, the distribution of the proceeds of
the  liquidation  and the  termination of this Agreement occur no later than the
close of the 60th day,  or such later day as the  Majority in  Aggregate  Voting
Interest shall permit or direct in writing, after the expiration of the Purchase
Option Period and (ii) in the event that the  Certificate  Insurer has given the
Trustee notice of the Certificate Insurer's  determination to purchase the Trust
Fund described in clause (a)(ii)  preceding,  the  Certificate  Insurer shall so
purchase  the Trust Fund  within 60 days after the  expiration  of the  Purchase
Option Period.


<PAGE>


     (c)  Following  a Final  Determination,  the  Holders of a majority  of the
Percentage  Interest of the Class R and Class LR Certificates  then  outstanding
may,  at  their   option  and  upon   delivery  to  the  Class  A  and  Class  X
Certificateholders  and the  Certificate  Insurer of an  opinion  of  nationally
recognized  tax  counsel  selected  by the  Holders  of the Class R and Class LR
Certificates,  which  opinion  shall  be  reasonably  satisfactory  in form  and
substance  to the  Majority in Aggregate  Voting  Interest  and the  Certificate
Insurer, to the effect that the effect of the Final Determination is to increase
substantially  the probability that the gross income of each Trust REMIC will be
subject to federal taxation, purchase from the Trust Fund all Mortgage Loans and
all property theretofore  acquired by foreclosure,  deed in lieu of foreclosure,
or otherwise in respect of any Mortgage Loan then remaining in the Trust Fund at
a purchase  price equal to the  Termination  Price.  Any such purchase  shall be
accomplished  in the manner set forth in Section  11.01.  The foregoing  opinion
shall be deemed  satisfactory  unless the Majority in Aggregate  Voting Interest
give the  Holders of a majority  of the  Percentage  Interest of the Class R and
Class LR Certificates notice that such opinion is not satisfactory within thirty
days after receipt of such opinion.

                                   ARTICLE XII

                                   THE TRUSTEE

     Section 12.01 Duties of Trustee.

     The Trustee,  prior to the  occurrence of a Servicer  Default and after the
curing of all Servicer  Defaults which may have occurred,  undertakes to perform
such  duties  and  only  such  duties  as are  specifically  set  forth  in this
Agreement.  If a Servicer Default has occurred and has not been cured or waived,
the Trustee  shall  exercise  such of the rights and powers vested in it by this
Agreement,  and use the same  degree  of care and  skill  in its  exercise  as a
prudent person would exercise or use under the  circumstances  in the conduct of
such person's own affairs.

     The Trustee,  upon receipt of all  resolutions,  certificates,  statements,
opinions,  reports,  documents,  orders or other  instruments  furnished  to the
Trustee  which  are  specifically  required  to be  furnished  pursuant  to  any
provision  of this  Agreement,  shall  examine  them to  determine  whether they
conform to the  requirements  of this  Agreement;  provided,  however,  that the
Trustee shall not be responsible  for the accuracy or content of any resolution,
certificate,  statement,  opinion,  report,  document, order or other instrument
furnished by the Servicer or either Depositor hereunder.  If any such instrument
is found not to conform to the requirements of this Agreement, the Trustee shall
notify the Certificate Insurer and request written instructions as to the action
it deems appropriate to have the instrument corrected,  and if the instrument is
not so corrected,  the Trustee will provide  notice  thereof to the  Certificate
Insurer who shall then direct the Trustee as to the action, if any, to be taken.

     No  provision of this  Agreement  shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct; provided, however, that:


<PAGE>


          (i)  Prior to the  occurrence  of a  Servicer  Default,  and after the
     curing of all Servicer  Defaults  which may have  occurred,  the duties and
     obligations  of the  Trustee  shall be  determined  solely  by the  express
     provisions  of this  Agreement,  the Trustee shall not be liable except for
     the  performance  of such duties and  obligations as are  specifically  set
     forth in this Agreement,  no implied covenants or obligations shall be read
     into this Agreement against the Trustee and, in the absence of bad faith on
     the part of the Trustee, the Trustee may conclusively rely, as to the truth
     of the statements and the  correctness of the opinions  expressed  therein,
     upon any  certificates or opinions  furnished to the Trustee and conforming
     to the requirements of this Agreement;

          (ii)  The  Trustee  shall  not be  personally  liable  for an error of
     judgment made in good faith by a Responsible  Officer or other  officers of
     the  Trustee,  unless it shall be proved that the Trustee was  negligent in
     ascertaining the pertinent facts;

          (iii) The Trustee shall not be  personally  liable with respect to any
     action  taken,  suffered  or  omitted  to be taken  by it in good  faith in
     accordance  with the  direction of the  Certificate  Insurer or the Class A
     Certificateholders,  relating to the time,  method and place of  conducting
     any proceeding for any remedy  available to the Trustee,  or exercising any
     trust or power conferred upon the Trustee, under this Agreement;

          (iv) The Trustee  shall not be required to take notice or be deemed to
     have  notice or  knowledge  of any  Default or  Servicer  Default  unless a
     Responsible  Officer of the Trustee shall have received notice thereof.  In
     the absence of receipt of such notice, the Trustee may conclusively  assume
     that there is no default or Servicer Default;

          (v) The Trustee  shall not be required to expend or risk its own funds
     or otherwise  incur  financial  liability for the performance of any of its
     duties hereunder or the exercise of any of its rights or powers if there is
     reasonable  ground  for  believing  that  the  repayment  of such  funds or
     adequate indemnity against such risk or liability is not reasonably assured
     to it, and none of the provisions  contained in this Agreement shall in any
     event require the Trustee to perform,  or be responsible  for the manner of
     performance of, any of the obligations of the Servicer under this Agreement
     except  during such time, if any, as the Trustee shall be the successor to,
     and be vested  with the  rights,  duties,  powers  and  privileges  of, the
     Servicer in accordance with the terms of this Agreement;

          (vi) Subject to the other  provisions  of this  Agreement  and without
     limiting the generality of this Section, the Trustee shall have no duty (A)
     to see to any  recording,  filing,  or depositing of this  Agreement or any
     agreement  referred to herein or any  financing  statement or  continuation
     statement


<PAGE>


     evidencing a security  interest,  or to see to the  maintenance of any such
     recording  or filing  or  depositing  or to any  rerecording,  refiling  or
     redepositing of any thereof, (B) to see to any insurance, (C) to see to the
     payment or discharge of any tax,  assessment,  or other governmental charge
     or any lien or encumbrance  of any kind owing with respect to,  assessed or
     levied  against,  any part of the Trust Fund or either Trust REMIC,  (D) to
     confirm or verify  the  contents  of any  reports  or  certificates  of the
     Servicer  delivered to the Trustee  pursuant to this Agreement  believed by
     the  Trustee  to be genuine  and to have been  signed or  presented  by the
     proper party or parties; and

          (vii) The Trustee shall not be deemed a fiduciary for the  Certificate
     Insurer in its  capacity  as such,  except to the  extent  the  Certificate
     Insurer has made an Insured Payment and is thereby subrogated to the rights
     of the Certificateholders with respect thereto.

     Section 12.02 Certain Matters Affecting the Trustee.

     (a) Except as otherwise provided in Section 12.01:

          (i) The  Trustee  may  rely  and  shall  be  protected  in  acting  or
     refraining from acting upon any resolution,  Officers' Certificate, Opinion
     of Counsel,  certificate of auditors or any other  certificate,  statement,
     instrument,  opinion,  report, notice, request,  consent, order, appraisal,
     bond or other  paper or  document  believed by it to be genuine and to have
     been signed or presented by the proper party or parties;

          (ii) The Trustee may consult  with  counsel and any Opinion of Counsel
     shall be full and complete  authorization  and protection in respect of any
     action  taken or suffered or omitted by it  hereunder  in good faith and in
     accordance with such Opinion of Counsel;

          (iii) The Trustee  shall be under no obligation to exercise any of the
     trusts or powers vested in it by this Agreement or to institute, conduct or
     defend by litigation hereunder or in relation hereto at the request,  order
     or direction of the Certificate  Insurer or any of the  Certificateholders,
     pursuant   to   the   provisions   of   this    Agreement,    unless   such
     Certificateholders  or the Certificate  Insurer, as applicable,  shall have
     offered to the Trustee reasonable  security or indemnity against the costs,
     expenses and liabilities which may be incurred therein or thereby;  nothing
     contained  herein shall,  however,  relieve the Trustee of the  obligation,
     upon the occurrence of a Servicer  Default  (which has not been cured),  to
     exercise such of the rights and powers vested in it by this Agreement,  and
     to use the same  degree  of care and  skill in its  exercise  as a  prudent
     person would exercise or use under the circumstances in the conduct of such
     person's own affairs;


<PAGE>


          (iv) The Trustee shall not be personally  liable for any action taken,
     suffered or omitted by it in good faith and believed by it to be authorized
     or within  the  discretion  or rights or powers  conferred  upon it by this
     Agreement;

          (v) Prior to the occurrence of a Servicer Default  hereunder and after
     the curing of all Defaults which may have  occurred,  the Trustee shall not
     be bound to make any investigation  into the facts or matters stated in any
     resolution,  certificate,  statement,  instrument, opinion, report, notice,
     request,  consent, order, approval, bond or other paper or document, unless
     requested  in  writing  to do so by the  Certificate  Insurer or Holders of
     Class A Certificates evidencing not less than 25% of the sum of the Class A
     Principal  Balance;  provided,  however,  that  if  the  payment  within  a
     reasonable time to the Trustee of the costs, expenses or liabilities likely
     to be incurred by it in the making of such investigation is, in the opinion
     of the  Trustee,  not  reasonably  assured to the  Trustee by the  security
     afforded  to it by the terms of this  Agreement,  the  Trustee  may require
     reasonable  indemnity  against  such expense or liability as a condition to
     taking any such action.  The reasonable  expense of every such  examination
     shall be paid by the Servicer  or, if paid by the Trustee,  shall be repaid
     by the Servicer upon demand from the Servicer's own funds;

          (vi)  The  right of the  Trustee  to  perform  any  discretionary  act
     enumerated  in this  Agreement  shall not be construed  as a duty,  and the
     Trustee  shall not be answerable  for other than its  negligence or willful
     misconduct in the performance of such act;

          (vii) The Trustee  shall not be required to give any bond or surety in
     respect of the execution of the Trust created  hereby or the powers granted
     hereunder; and

          (viii) The Trustee  may execute any of the trusts or powers  hereunder
     or perform  any duties  hereunder,  including,  without  limitation,  under
     Section 2.06 hereof, either directly or by or through agents or attorney.

     (b) Following  the Startup Day, the Trustee shall not knowingly  accept any
contribution  of assets,  including  substitutions,  to the Trust Fund or either
Trust REMIC, unless the Trustee shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund or either Trust REMIC
will not cause either Trust REMIC to fail to qualify as a REMIC at any time that
any  Certificates are outstanding or subject either Trust REMIC to any tax under
the REMIC Provisions or other applicable provisions of federal,  state and local
law or ordinances.

     Section 12.03 Trustee Not Liable for Certificates or Mortgage Loans.

     The  recitals  contained  herein and in the  Certificates  (other  than the
certificate  of  authentication  on the  Certificates)  shall  be  taken  as the
statements of the  Depositors,  and the Trustee  assumes no  responsibility  for
their correctness. The Trustee makes no representations


<PAGE>


as to the validity or sufficiency of this Agreement or of the Certificates or of
any Mortgage Loan or related document.  The Trustee shall not be accountable for
the use or application by the  Depositors of any of the  Certificates  or of the
proceeds of such  Certificates,  or for the use or application of any funds paid
to the  Servicer in respect of the  Mortgage  Loans or deposited in or withdrawn
from the Principal and Interest  Account by the Servicer.  The Trustee shall not
be  responsible  for the legality or validity of the  Agreement or the validity,
priority,  perfection or sufficiency of the security for the Certificates issued
or intended to be issued hereunder.

Section 12.04 Trustee May Own Certificates.

The  Trustee in its  individual  or any other  capacity  may become the owner or
pledgee  of  Certificates  with the  same  rights  it would  have if it were not
Trustee, and may otherwise deal with the parties hereto.

Section 12.05 Servicer to Pay Trustee's Fees and Expenses.

     The Servicer  covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable  compensation  (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by it in the execution of the trusts
hereby  created and in the  exercise  and  performance  of any of the powers and
duties  hereunder of the Trustee,  including the powers and duties  described in
Section 2.07 hereof, and the Servicer will pay or reimburse the Trustee upon its
request,  and, if such amounts are not paid by the Servicer  within  thirty (30)
days of demand  therefor,  with  interest  thereon at the  Trustee's  prime rate
(which prime rate shall not exceed 10% per annum), for all reasonable  expenses,
disbursements  and advances  incurred or made by the Trustee in accordance  with
any of the  provisions of this Agreement  (including,  without  limitation,  the
reasonable  fees,   expenses  and  disbursements  of  its  counsel   (including,
reasonable  compensation of its in-house  counsel on an hourly basis) and of all
persons  not  regularly  in its employ,  including  any  agents,  attorneys  and
accountants  of the Trustee,  as described in Section  2.07(a)  hereof) and such
out-of-pocket  expenses as may be incurred by the Trustee in assuming  servicing
responsibilities  under  Section  10.02  hereof,  such  reimbursable  amounts to
include expenses  incurred due to the Servicer's  failure to properly  discharge
its  responsibilities  hereunder or to the  representations and warranties as to
any Mortgage Loan or Loans being  untrue,  but not to include  general  overhead
incurred  by the Trustee as a result of becoming  successor  Servicer  (provided
however, prior to incurring such expenses, disbursements and advances ("costs"),
the Trustee will give the Servicer an  opportunity  to provide such  services to
render such costs unnecessary), except any such expense, disbursement or advance
as may arise from its  negligence or bad faith,  provided that the Trustee shall
have no lien on the Trust Fund or either Trust REMIC for the payment of its fees
and  expenses.  Failure by the  Servicer to pay any such fees or other  expenses
shall not relieve the Trustee of its obligation  hereunder.  The Trustee and any
director,  officer, employee or agent of the Trustee shall be indemnified by the
Servicer and held harmless  against any loss,  liability or expense (i) incurred
in  connection  with  any  legal  action  relating  to  this  Agreement  or  the
Certificates,  other than any loss,  liability or expense  incurred by reason of
willful  misfeasance,  bad  faith or  negligence  in the  performance  of duties
hereunder or by reason of


<PAGE>


reckless disregard of obligations and duties hereunder,  and (ii) resulting from
any  error  in any tax or  information  return  prepared  by the  Servicer.  The
obligations of the Servicer  under this Section 12.05 shall survive  termination
of the  Servicer  and  payment  of the  Certificates,  and  shall  extend to any
co-trustee  appointed  pursuant to this Article XII. The compensation due to the
Trustee pursuant to this Section 12.05 shall be paid by the Servicer from it own
funds.

     Section 12.06 Eligibility Requirements for Trustee.

     The  Trustee  hereunder  shall at all  times be (i) a  banking  association
organized and doing  business under the laws of any state or the United State of
America,  (ii)  authorized  under such laws to exercise  corporate trust powers,
including   taking   title  to  the   Trust   Fund   asset  on   behalf  of  the
Certificateholders,  (iii)  having a combined  capital  and  surplus of at least
$50,000,000,  (iv) whose  long-term  deposits,  if any,  shall be rated at least
"BBB" by S&P or such lower long-term deposit rating by S&P as may be approved in
writing by the Certificate  Insurer and S&P, and with a long-term deposit rating
of at least  "Baa2"  from  Moody's (or such lower  rating  which would not cause
Moody's to reduce its then current ratings of the Class A Certificates),  (v) is
subject to supervision or examination by federal or state  authority and (vi) is
reasonably  acceptable to the  Certificate  Insurer as evidenced in writing.  If
such banking  association  publishes  reports of  condition  at least  annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority,  then for the purposes of this Section 12.06 its combined capital and
surplus shall be deemed to be as set forth in it most recent report of condition
so  published.  In case at any time the  Trustee  shall  cease to be eligible in
accordance with the provisions of this Section, the Trustee shall give notice of
such ineligibility to the Certificate Insurer and shall resign, upon the request
of the Certificate Insurer or the Majority in Aggregate Voting Interest,  in the
manner and with the effect specified in Section 12.07.

     Section 12.07 Resignation and Removal of the Trustee.

     The Trustee may at any time resign and be discharged from the trusts hereby
created by giving  written  notice  thereof  to the  Servicer,  the  Certificate
Insurer  and  to  all   Certificateholders.   Upon   receiving  such  notice  of
resignation,  the Servicer shall,  with the consent of the Certificate  Insurer,
promptly appoint a successor trustee by written instrument, in duplicate,  which
Instrument  shall be delivered  to the  resigning  Trustee and to the  successor
trustee. A copy of such instrument shall be delivered to the  Certificateholders
by the Servicer.  Unless a successor  trustee shall have been appointed and have
accepted  appointment  within  60  days  after  the  giving  of such  notice  of
resignation,   the  resigning  Trustee  may  petition  any  court  of  competent
jurisdiction for the appointment of a successor trustee.

     If at any time the Trustee  shall cease to be eligible in  accordance  with
the  provisions of Section 12.06 and shall fail to resign after written  request
therefor by the Servicer,  the Certificate  Insurer or the Majority in Aggregate
Voting Interest, or if at any time the Trustee shall become incapable of acting,
or shall be adjudged  bankrupt or insolvent,  or a receiver of the Trustee or of
its property  shall be  appointed,  or any public  officer  shall take charge or
control  of the  Trustee  or of its  property  or  affairs  for the  purpose  of
rehabilitation,


<PAGE>


conservation or liquidation, then the Servicer may remove the Trustee and shall,
within 30 days after such  removal,  appoint,  subject  to the  approval  of the
Certificate  Insurer,  which  approval  shall not be  unreasonably  withheld,  a
successor trustee by written instrument, in duplicate, which instrument shall be
delivered to the Trustee so removed and to the successor trustee. A copy of such
instrument shall be delivered to the Certificateholders by the Servicer.

     The  Majority in  Aggregate  Voting  Interest  or, if the Trustee  fails to
perform in accordance  with this Agreement,  the Certificate  Insurer may remove
the  Trustee  and  appoint  a  successor   trustee  by  written   instrument  or
instruments,  in triplicate,  signed by such Holders or their  attorneys-in-fact
duly authorized, or by the Certificate Insurer, as the case may be, one complete
set of which instruments shall be delivered to the Servicer, one complete set to
the  Trustee  so  removed  and one  complete  set to the  Successor  Trustee  so
appointed.

     Any  resignation  or removal of the Trustee and  appointment of a successor
trustee pursuant to any of the provisions of this Section shall become effective
upon  acceptance of appointment by the successor  trustee as provided in Section
12.08.

     Section 12.08 Successor Trustee.

     Any successor trustee appointed as provided in Section 12.07 shall execute,
acknowledge  and  deliver  to the  Servicer  and to its  predecessor  trustee an
instrument accepting such appointment  hereunder,  and thereupon the resignation
or removal of the predecessor  trustee shall become effective and such successor
trustee, without any further act, deed or conveyance,  shall become fully vested
with  all  the  rights,  powers,  duties  and  obligations  of  its  predecessor
hereunder,  with the like effect as if originally  named as trustee herein.  The
predecessor  trustee  shall  deliver  to the  successor  trustee  all  Trustee's
Mortgage Files and related documents and statement held by it hereunder, and the
Servicer and the predecessor  trustee shall execute and deliver such instruments
and do such  other  things as may  reasonably  be  required  for more  fully and
certainly  vesting and  confirming  in the  successor  trustee all such  rights,
powers duties and obligations.

     No successor  trustee shall accept  appointment as provided in this Section
unless at the time of such acceptance  such successor  trustee shall be eligible
under the provisions of Section 12.06.

     Upon  acceptance of appointment by a successor  trustee as provided in this
Section,  the  Servicer  shall mail  notice of the  succession  of such  trustee
hereunder  to all  Holders  of  Certificates  at  their  addresses  shown in the
Certificate  Register and to Moody's and S&P. If the Servicer fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Servicer.

     Section 12.09 Merger or Consolidation of Trustee.

     Any Person into which the Trustee may be merged or  converted or with which
it may be  consolidated  or any  corporation  or  national  banking  association
resulting from any


<PAGE>


merger,  conversion or  consolidation  to which the Trustee shall be a party, or
any corporation or national  banking  association  succeeding to the business of
the Trustee,  shall be the  successor of the Trustee  hereunder,  provided  such
corporation  or  national  banking  association  shall  be  eligible  under  the
provisions of Section 12.06, without the execution or filing of any paper or any
further act on the part of any of the  parties  hereto,  anything  herein to the
contrary notwithstanding.

     Section 12.10 Appointment of Co-Trustee or Separate Trustee.

     Notwithstanding  any other provisions  hereof, at any time, for the purpose
of meeting any legal  requirements of any  jurisdiction in which any part of the
Trust  Fund or  property  securing  the  same may at the  time be  located,  the
Servicer and the Trustee  acting  jointly shall have the power and shall execute
and  deliver all  instruments  to appoint  one or more  Persons  approved by the
Trustee and the  Certificate  Insurer with  written  notice to Moody's to act as
co-trustee  or  co-trustees,  jointly with the Trustee,  or separate  trustee or
separate  trustees,  of all or any part of the Trust  Fund,  and to vest in such
Person or Persons,  in such capacity,  such title to the Trust Fund, or any part
thereof,  and,  subject to the other  provisions  of this  Section  12.10,  such
powers, duties,  obligations,  rights and trusts as the Servicer and the Trustee
may consider  necessary or desirable.  If the Servicer  shall not have joined in
such  appointment  within 15 days after the receipt by it of a request so to do,
or in case a Servicer Default shall have occurred and be continuing, the Trustee
alone  (with the  consent of the  Certificate  Insurer  with  written  notice to
Moody's)  shall  have the  power to make  such  appointment.  No  co-trustee  or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor  trustee under  Section 12.06  hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 12.08 hereof.

     In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 12.10, all rights,  powers,  duties and obligations conferred or
imposed upon the Trustee  shall be  conferred  or imposed upon and  exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder),  the Trustee shall be incompetent or unqualified to perform
such act or acts,  in which event such rights,  powers,  duties and  obligations
(including the holding of title to the Trust Fund or any portion  thereof in any
such jurisdiction)  shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.

     Any notice,  request or other  writing given to the Trustee shall be deemed
to have been given to each of the then  separate  trustees and  co-trustees,  as
effectively  as if  given  to each of  them.  Every  instrument  appointing  any
separate  trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XII. Each separate  trustee and co-trustee,  upon its acceptance
of the trusts conferred,  shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided  therein,  subject to all the  provisions of this  Agreement,
specifically including


<PAGE>


every  provision of this  Agreement  relating to the conduct of,  affecting  the
liability of, or affording  protection  to, the Trustee.  Every such  instrument
shall be filed with the Trustee.

     Any  separate  trustee  or  co-trustee  may,  at any time,  constitute  the
Trustee,  its agent or attorney-in-fact,  with full power and authority,  to the
extent not  prohibited  by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.  If any separate  trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties,  rights,  remedies  and trusts shall vest in and be exercised by the
Trustee,  to the extent  permitted by law,  without the  appointment of a new or
successor trustee.

     Section 12.11 Appointment of Custodians.

     The Trustee  may,  with the  consent of the  Servicer  and the  Certificate
Insurer and notice to Moody's,  appoint one or more  Custodians to hold all or a
portion of the Trustee's  Mortgage  Files as agent for the Trustee,  by entering
into a Custodial Agreement.  Bank One Trust Company, N.A. is initially appointed
Custodian with respect to all Mortgage Loans and, for so long as it shall be the
Custodian  hereunder,  agrees to  comply  with the  terms of the  provisions  of
Exhibit N hereto  applicable  to the  duties of the  Custodian.  Subject to this
Article  XII,  the  Trustee  agrees to comply  with the terms of each  Custodial
Agreement and to enforce the terms and provisions  thereof against the Custodian
for the  benefit of the  Certificateholders  and the  Certificate  Insurer.  The
Servicer shall be liable for the fees of any Custodian appointed hereunder. Each
Custodian shall be a depository institution subject to supervision by federal or
state  authority  and shall be qualified to do business in the  jurisdiction  in
which it holds any Trustee's  Mortgage  File.  Each  Custodial  Agreement may be
amended only as provided in Section 13.02.

     Section 12.12 Protection of Trust Fund.

     (a) The  Trustee  will hold the Trust Fund in trust for the  benefit of the
Holders  and the  Certificate  Insurer  and,  upon  request  of the  Certificate
Insurer,  or, with the consent of the Certificate Insurer, at the request of the
Depositors,  will from time to time execute and deliver all such supplements and
amendments  hereto  pursuant  to Section  13.02  hereof and all  instruments  of
further  assurance and other  instruments,  and will take such other action upon
such request to:

          (i) more  effectively  hold in trust all or any  portion  of the Trust
     Fund;

          (ii) perfect,  publish notice of, or protect the validity of any grant
     made or to be made by this Agreement;

          (iii) enforce any of the Mortgage Loans; or

          (iv) preserve and defend title to the Trust Fund and the rights of the
     Trustee, and the ownership Interests of the Holders represented thereby, in
     such Trust Fund against the claims of all Persons and parties.


<PAGE>


     The Trustee shall send copies of any request  received from the Certificate
Insurer or the  Depositors to take any action  pursuant to this Section 12.12 to
the others.

     (b)  Subject  to  Article X hereof,  the  Trustee  shall  have the power to
enforce,  and  shall  enforce  the  obligations  of the  other  parties  to this
Agreement and of the Certificate  Insurer,  by action, suit or proceeding at law
or equity, and shall also have the power to enjoin, by action or suit in equity,
any acts or  occurrences  which may be unlawful or in violation of the rights of
the Holders; provided, however, that nothing in this Section 12.12 shall require
any action by the Trustee unless the Trustee shall first (i) have been furnished
indemnity  satisfactory  to it and second (ii) when required by this  Agreement,
have been  requested  to take such action by the  Majority in  Aggregate  Voting
Interest, the Certificate Insurer or the Depositors in accordance with the terms
of this Agreement.

     (c) The Trustee  shall  execute any  instrument  required  pursuant to this
Section so long as such Instrument does not conflict with this Agreement or with
the Trustee's fiduciary duties.

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

     Section 13.01 The Certificate Insurer.

     Any right conferred to the Certificate Insurer hereunder shall be suspended
during any period in which the Certificate  Insurer is in default in its payment
obligations under the Certificate  Insurance Policy,  and its rights during such
period shall vest in the Majority in Aggregate Voting Interest.  At such time as
the  Certificates  are  no  longer  outstanding,  and  no  amounts  owed  to the
Certificate Insurer hereunder remain unpaid and the Certificate Insurance Policy
has expired in  accordance  with its terms,  the  Certificate  Insurer's  rights
hereunder shall terminate.

     Section 13.02 Amendment.

     (a) This Agreement may be amended from time to time by the Depositors,  the
Trustee and the Servicer by written agreement, upon the prior written consent of
the Certificate Insurer, without notice to or consent of the Certificateholders,
to cure any  ambiguity  or  mistake,  to correct or  supplement  any  provisions
herein,  to comply with any changes in the Code, or to make any other provisions
with respect to matters or questions  arising under this  Agreement  which shall
not be  inconsistent  with the  provisions of this  Agreement,  or any Custodial
Agreement;  provided,  however,  that such action shall not adversely affect the
interests of any  Certificateholder  or the Certificate Insurer, as evidenced by
an Opinion of Counsel or written  notification  from each  Rating  Agency to the
effect  that  such  amendment  will not  cause  such  Rating  Agency to lower or
withdraw the then  current  ratings on the  Certificates,  at the expense of the
party requesting the change,  delivered to the Certificate  Insurer, the Trustee
and the Depositors;  and provided,  further, that no such amendment shall reduce
in any manner the amount of, or delay the timing of, payments


<PAGE>


received  on  Mortgage  Loans  which  are  required  to be  distributed  on  any
Certificate without the consent of the Holder of such Certificate, or change the
rights or  obligations  of any other  party  hereto  without the consent of such
party. The Trustee shall give prompt written notice to each Rating Agency of any
amendment made pursuant to this Section 13.02(a).

     (b) This Agreement may be amended from time to time by the Depositors,  the
Trustee and the  Servicer,  with the  consent of the  Certificate  Insurer,  the
Majority  in  Aggregate  Voting  Interest  of the Class A  Certificates  and the
Holders of the majority of the  Percentage  Interest in the Class R and Class LR
Certificates  for the  purpose of adding any  provisions  to or  changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders; provided,  however, that no such amendment
shall  reduce in any manner the amount of, or delay the timing of, any  payments
which are  required to be  distributed  on any Class A  Certificate  without the
consent of the Holder of such  Certificate  or reduce  the  percentage  for each
Class of  Certificates  the Holders of which are required to consent to any such
amendment  without  the  consent  of the  Holders  of  100%  of  each  Class  of
Certificates  affected thereby.  Prior notice of any proposed amendment pursuant
to this Section 13.02(b) shall be given to each Rating Agency.

     (c) It shall not be necessary for the consent of Holders under this Section
to  approve  the  particular  form of any  proposed  amendment,  but it shall be
sufficient if such consent shall approve the substance thereof.

     (d) Notwithstanding  any contrary provision of this Agreement,  the Trustee
shall not consent to any amendment to this Agreement  unless it shall have first
received an Opinion of Counsel to the effect that such amendment or the exercise
of any power granted to the Servicer,  the  Representative,  any Depositor,  the
Certificate  Insurer or the Trustee in accordance  with such  amendment will not
result in the  imposition  of a tax on either  Trust REMIC or cause either Trust
REMIC  to fail to  qualify  as a REMIC  at any  time  that  any  Certificate  is
outstanding.  No amendment  shall have the effect of varying the latest possible
maturity,  principal  amount or  interest  rate of the Trust  unless the Trustee
shall have received an Opinion of Counsel that the amendment  will not cause the
regular interest to lack fixed terms within the meaning of the REMIC provisions.

     (e) An amendment or supplement to the original issue discount  legend shall
not be an amendment or supplement for purposes of this Article 13.

     Section 13.03 Recordation of Agreement.

     To the extent permitted by applicable law, this Agreement,  or a memorandum
thereof if permitted  under  applicable  law, is subject to  recordation  in all
appropriate  public offices for real property  records in all of the counties or
other comparable  jurisdictions in which any or all of the properties subject to
the Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Servicer at the Holders' or
Certificate Insurer's expense on direction and at the expense of the Majority in
Aggregate   Voting   Interest  or  the  Certificate   Insurer   requesting  such
recordation,  but only when  accompanied  by an Opinion of Counsel to the effect
that such recordation


<PAGE>


materially and beneficially affects the interests of the  Certificateholders  or
the Certificate  Insurer or is necessary for the  administration or servicing of
the Mortgage Loans.

     Section 13.04 Duration of Agreement.

     This Agreement  shall continue in existence and effect until  terminated as
herein provided.

     Section 13.05 Governing Law.

     THIS AGREEMENT  SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, AND THE OBLIGATIONS,  RIGHTS AND REMEDIES OF THE PARTIES  HEREUNDER
SHALL BE  DETERMINED  IN  ACCORDANCE  WITH SUCH LAWS,  WITHOUT  GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW (BUT WITH  REFERENCE TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, WHICH BY ITS TERMS APPLIES TO THIS AGREEMENT).

     Section 13.06 Notices.

     All demands,  notices and communications  hereunder shall be in writing and
shall be deemed to have been duly given if personally  delivered at or mailed by
overnight mail,  certified mail or registered mail,  postage prepaid,  to (i) in
the case of the  Servicer  and the  Representative,  EquiCredit  Corporation  of
America,  10401  Deerwood  Park  Boulevard,   Jacksonville,  Florida  32256-0505
Attention:  General  Counsel,  or  such  other  addresses  as may  hereafter  be
furnished to the Trustee in writing by the Representative and the Servicer, (ii)
in the case of each  Depositor,  c/o EquiCredit  Corporation  of America,  10401
Deerwood Park Boulevard,  Jacksonville,  Florida 32256-0505  Attention:  General
Counsel, or such other addresses as may hereafter be furnished to the Trustee in
writing by such Depositor,  (iii) in the case of the Certificateholders,  as set
forth in the Certificate  Register,  (iv) in the case of the Trustee,  U.S. Bank
National  Association,  111 East Wacker  Drive,  Suite 3000,  Chicago,  Illinois
60601,  Attention:  Corporate Trust Department,  (v) in the case of Moody's,  99
Church  Street,  New York,  New York 10007,  Attention:  Home Equity  Monitoring
Group,  (vi) in the  case  of S&P,  26  Broadway,  New  York,  New  York  10004,
Attention:  Ms. Nancy Gigante and (vii) in the case of the Certificate  Insurer,
Ambac Assurance  Corporation,  One State Street Plaza, New York, New York 10004,
Attention: Structured Financed MBS (re: EQCC Home Equity Loan Trust 1998-2). Any
such notices  shall be deemed to be  effective  with respect to any party hereto
upon the  receipt  of such  notice by such  party,  except  that  notices to the
Certificateholders shall be effective upon mailing or personal delivery.

     Section 13.07 Severability of Provisions.

     If any one or more of the  covenants,  agreements,  provisions  or terms of
this  Agreement  shall be held  invalid  for any  reason  whatsoever,  then such
covenants,  agreements,  provisions or terms shall be deemed  severable from the
remaining covenants, agreements,


<PAGE>


provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants,  agreements,  provisions or terms of this
Agreement.

     Section 13.08 No Partnership.

     Except for  federal,  state and local  income,  franchise  or  similar  tax
purposes,  nothing  herein  contained  shall be deemed or  construed to create a
co-partnership  or joint venture  between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
the Certificateholders.

     Section 13.09 Counterparts.

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

     Section 13.10 Successors and Assigns.

     This  Agreement  shall  inure to the  benefit  of and be  binding  upon the
Representative,   the   Servicer,   the   Depositors,   the   Trustee   and  the
Certificateholders and their respective successors and assigns.

     Section 13.11 Headings.

     The headings of the various  Sections of this  Agreement have been inserted
for  convenience  of  reference  only and shall not be deemed to be part of this
Agreement.

     Section 13.12 Limitation of Liability of Trustee.

     Notwithstanding  anything contained herein to the contrary,  this Agreement
has been  executed  by U.S.  Bank  National  Association  not in its  individual
capacity  but  solely  as  Trustee  and in no event  shall  U.S.  Bank  National
Association have any liability for the representations,  warranties,  covenants,
agreements or other  obligations  of the  Depositors  hereunder or in any of the
certificates,  notices or agreements  delivered  pursuant  hereto,  as to all of
which recourse shall be had solely to the assets of the Trust Fund.

     Section 13.13 Limitations on Rights of Others.

     The  provisions  of  this  Agreement  are  solely  for the  benefit  of the
Depositors,   the  Servicer,   the  Trustee,  the   Certificateholders  and  the
Originators and nothing in this Agreement  whether express or implied,  shall be
construed to give to any other Person any legal or  equitable  right,  remedy or
claim in the assets of the Trust or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein. The Certificate Insurer is
an intended third party beneficiary of this Agreement.

     Section 13.14 No Petition.


<PAGE>


     The  Servicer  and the  Trustee  by  entering  into this  Agreement  hereby
covenants and agrees that it shall not,  prior to the date which is one year and
one day after the  termination of this Agreement  pursuant to Article XI hereof,
acquiesce,  petition or otherwise  invoke or cause the  Depositors to invoke the
process of any court or  government  authority  for the purpose of commencing or
sustaining a case against the Depositors under any federal or state  bankruptcy,
insolvency  or similar  law or  appointing  a  receiver,  liquidator,  assignee,
trustee,  custodian,  sequestrator  or  other  similar  official  of each of the
Depositors or any substantial part of its respective  property,  or ordering the
winding up or liquidation of the affairs of each of the Depositors.

     Section 13.15 Third Party Beneficiary .

     This  Agreement  shall  inure to the  benefit  of and be  binding  upon the
parties   hereto   and,   in   addition,   shall   inure  to  the   benefit   of
Certificateholders  and, to the extent provided herein, the Certificate  Insurer
and their  respective  successors  and  permitted  assigns.  Except as otherwise
provided in this  Agreement,  no other Person shall have any right or obligation
hereunder.


<PAGE>


     IN WITNESS  WHEREOF,  the  Servicer,  the Trustee and the  Depositors  have
caused their names to be signed hereto by their  respective  officers  thereunto
duly authorized as of the day and year first above written.

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee

                                        By:_______________________________
                                             Name:
                                             Title:

                                        EQUICREDIT CORPORATION OF AMERICA,
                                        as Representative and Servicer

                                        By:_______________________________
                                             Name:
                                             Title:

                                        THE DEPOSITORS

                                        EQCC RECEIVABLES CORPORATION

                                        By:_______________________________
                                             Name:
                                             Title:

                                        EQCC ASSET BACKED CORPORATION

                                        By:_______________________________
                                             Name:
                                             Title:


<PAGE>


STATE OF NEW YORK                    )
                                     ) ss.:
COUNTY OF NEW YORK                   )

     On the 30th day of June,  1998  before  me, a Notary  Public in and for the
State of New York, personally appeared James B. Dodd, known to me to be the Vice
President of EQCC  Receivables  Corporation,  the corporation  that executed the
within  instrument  and also  known to me to be the person  who  executed  it on
behalf  of  said  corporation,  and  acknowledged  to me that  such  corporation
executed the within instrument.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal the day and year in this certificate first above written.


                                        ___________________________________
                                                  Notary Public


<PAGE>


STATE OF NEW YORK                    )
                                     ) ss.:
COUNTY OF NEW YORK                   )

     On the 30th day of June,  1998  before  me, a Notary  Public in and for the
State of New York, personally appeared James B. Dodd, known to me to be the Vice
President of EQCC Asset Backed  Corporation,  the corporation  that executed the
within  instrument  and also  known to me to be the person  who  executed  it on
behalf  of  said  corporation,  and  acknowledged  to me that  such  corporation
executed the within instrument.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal the day and year in this certificate first above written.


                                        ___________________________________
                                                  Notary Public


<PAGE>


STATE OF NEW YORK                    )
                                     ) ss.:
COUNTY OF NEW YORK                   )

     On the 30th day of June,  1998  before  me, a Notary  Public in and for the
State of New York, personally appeared James B. Dodd, known to me to be the Vice
President of EquiCredit  Corporation of America, a corporation that executed the
within  instrument  and also  known to me to be the person  who  executed  it on
behalf  of  said  corporation,  and  acknowledged  to me that  such  corporation
executed the within instrument.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal the day and year in this certificate first above written.


                                        ___________________________________
                                                  Notary Public


<PAGE>


STATE OF NEW YORK                    )
                                     ) ss.:
COUNTY OF NEW YORK                   )

     On the 30th day of June,  1998  before  me, a Notary  Public in and for the
State of New York,  personally appeared Bud W. Lord, known to me to be Assistant
Vice President of U.S. Bank National Association, a national banking association
that  executed the within  instrument  and also known to me to be the person who
executed  it on behalf of said  corporation,  and  acknowledged  to me that such
corporation executed the within instrument.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal the day and year in this certificate first above written.


                                        ___________________________________
                                                  Notary Public


<PAGE>


                                    EXHIBIT A

                            CONTENTS OF MORTGAGE FILE

     With respect to each Mortgage Loan, the Mortgage File shall include each of
the following  items (copies to the extent the originals  have been delivered to
the Depositors pursuant to Section 2.04 of the Pooling and Servicing Agreement),
all of which shall be available for inspection by the Trustee and the Custodian,
to the extent required by applicable laws:

     1.   The  original  Mortgage  Note,  with  any  intervening   endorsements,
          endorsed*/ "Pay to the - order of U.S. Bank National  Association,  as
          Trustee under the Pooling and Servicing  Agreement dated as of June 1,
          1998,  Series 1998-2,  without  recourse" and signed,  by facsimile or
          manual  signature,  in the  name of the  Originator  by a  Responsible
          Officer,  with  all  prior  and  intervening  endorsements  showing  a
          complete chain of endorsement  from the originator to such Originator,
          if the Originator from whom the Depositor  acquired such Mortgage Loan
          was not the  originator  and,  with  respect to  manufactured  housing
          units, the certificate of title, if any;

     2.   Either: (i) the original Mortgage,  with evidence of recording thereon
          (and,  in the case of a Mortgaged  Property  held in an Illinois  Land
          Trust, signed by the trustee of such Illinois Land Trust), (ii) a copy
          of the Mortgage  certified as a true copy by a Responsible  Officer of
          the applicable  Originator  (provided,  however, that such Responsible
          Officer may complete one or more blanket certificates attaching copies
          of one or more Mortgages relating thereto) or by the closing attorney,
          or by an  officer of the title  insurer or agent of the title  insurer
          which  issued  the  related  title  insurance  policy,  or  commitment
          therefor,  if the original has been  transmitted  for recording  until
          such time as the original is returned by the public  recording  office
          or (iii) a copy of the  Mortgage  certified  by the  public  recording
          office in those  instances  where the original  recorded  Mortgage has
          been lost;

     3.   Except for a Mortgaged Property held in an Illinois Land Trust, either
          (i) the original  Assignment of Mortgage from the Originator to*/ U.S.
          Bank National Association,  as Trustee under the Pooling and Servicing
          Agreement  dated  as of June 1,  1998:  or in  blank  pursuant  to the
          Transfer Agreement;
- --------------------
*/ Upon the occurrence of the Recordation  Trigger,  the Servicer shall promptly
cause each  Assignment  of Mortgage to be recorded in the  applicable  recording
office in the name of the Trustee.


<PAGE>


     4.   The original  policy of title  insurance or a true copy thereof or, if
          such policy has not yet been delivered by the insurer,  the commitment
          or binder to issue same.

     5.   All  intervening  assignments,  if any,  showing a  complete  chain of
          assignment from the originator to the applicable Originator, including
          any  recorded  warehousing  assignments,  with  evidence of  recording
          thereon,   certified  by  a  Responsible  Officer  of  the  applicable
          Originator  as a  true  copy  of  the  original  of  such  intervening
          assignments;

     6.   Originals of all assumption and modification  agreements,  if any or a
          copy  certified  as a  true  copy  by a  Responsible  Officer  of  the
          applicable Originator.

     7.   Except  for a  Mortgaged  Property  held in an  Illinois  Land  Trust,
          either: (i) originals of all intervening assignments, if any showing a
          complete  chain  of  title  from  the  originator  to  the  applicable
          Originator,  including  any  recorded  warehousing  assignments,  with
          evidence of recording  thereon,  or, (ii) if the original  intervening
          assignments  have not yet been returned from the recording  office,  a
          copy of the originals of such intervening  assignments together with a
          certificate of a Responsible  Officer of the Originator or the closing
          attorney or an officer of the title  insurer  which issued the related
          title insurance policy, or commitment therefor, or its duly authorized
          agent  certifying that the copy is a true copy of the original of such
          intervening  assignments or (iii) a copy of the intervening assignment
          certified by the public  recording office in those instances where the
          original recorded intervening assignment has been lost.

     8.   If the  Mortgaged  Property  is held in an Illinois  Land  Trust,  the
          original Assignment of Beneficial Interest, or, if the trustee of such
          Illinois  Land Trust  retains such  original  Assignment of Beneficial
          Interest,  a  certified  true copy of such  Assignment  of  Beneficial
          Interest so certified by such trustee;

     9.   If the  Mortgaged  Property  is held in an  Illinois  Land  Trust,  an
          original  Reassignment  of Assignment of Beneficial  Interest from the
          Originator to*/ U.S. Bank National - Association, as Trustee under the
          Pooling  and  Servicing  Agreement  dated as of June 1,  1998,  Series
          1998-2 or in blank.  In the event that the Mortgage  Loan was acquired
          by the  applicable  Originator in a merger,  the  Reassignment  of the
          Assignment of Beneficial Interest must be by "[Originator],  successor
          by  merger  to "[name  of  predecessor]";  and in the  event  that the
          Mortgage  Loan was acquired or  originated  by such  Originator  while
          doing business under


<PAGE>


          another name, the  Reassignment  of Assignment of Beneficial  Interest
          must be by "[Originator], formerly known as [previous name]";

     10.  If the Mortgaged Property is held in an Illinois Land Trust, originals
          of all intervening Reassignments of Assignment of Beneficial Interest,
          showing a complete chain of assignment from the  beneficiaries of such
          Illinois  Land  Trust  to the  applicable  Originator  of all of  such
          beneficiaries'  right, title, and interest in, to, and under the trust
          agreement with respect to such Illinois Land Trust; and

     11.  If the  Mortgaged  Property is held in an Illinois  Land Trust,  (A) a
          certified copy of the instrument creating the Illinois Land Trust, (B)
          a copy of the UCC-1 Financing  Statement  evidencing the assignment of
          the Mortgagor's  beneficial  interest in the Illinois Land Trust, with
          evidence of filing thereon,  and (C) the original personal guaranty of
          the Mortgage Note,  executed by each  beneficiary of the Illinois Land
          Trust.

     12.  Mortgage Loan closing statement and any other truth-in-lending or real
          estate settlement procedure forms required by law.

     13.  Residential loan application.

     14.  Verification of employment and income, and tax returns, if any.

     15.  Credit report on the mortgagor.

     16.  The full  appraisal  made in connection  with the  origination  of the
          related  Mortgage Loan with photographs of the subject property and of
          comparable  properties,  constituting  evidence sufficient to indicate
          that the Mortgaged Property relates to a Residential Dwelling.

     17.  Copy of the First Lien, if in the Servicer's file.

     18.  All other papers and records developed or originated by the applicable
          Depositor  or others,  required to document  the  Mortgage  Loan or to
          service the Mortgage Loan.*/
- --------------------
*/ Upon the occurrence of the Recordation  Trigger,  the Servicer shall promptly
cause each  Assignment  of Mortgage to be recorded in the  applicable  recording
office in the name of the Trustee.


<PAGE>


                                   EXHIBIT B-1

                        [FORM OF CLASS A-1F CERTIFICATE]


                          [Form of Face of Certificate]

             [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUST
        ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
           CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
       IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
            VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
        THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class A-1F          Original Class A-1F Principal Balance:
No. A-1F-__                        $_________________

Class A-1F Pass-Through Rate:      Original Dollar Amount as of the Cut-off Date
______%                            Represented by this Certificate:
                                   $_________________

Cut-off Date: June 1, 1998         Percentage Interest of this Certificate:
                                   _____%

First Payment Date:                Original Pool Principal Balance:
July 15, 1998                      $_________________

Closing Date:                      Latest Maturity Date:
June 30, 1998                      __________________

CUSIP:___________                  Common Code:_______________
ISIN:_____________

     This certifies that  _________________________  is the registered  owner of
the  percentage   interest  (the  "Percentage   Interest")   evidenced  by  this
Certificate in distributions to the Holders of the Class A-1F  Certificates with
respect to a Trust Fund consisting  primarily of certain residential  fixed-rate
first and second  mortgage  loans (the  "Mortgage  Loans")  master  serviced  by
EquiCredit  Corporation of America  (hereinafter  called the "Servicer",  in its
capacity as Servicer,  and "Representative",  in its capacity as Representative,
which terms include any successor entity under the Agreement referred to below).
The Mortgage Loans were originated or acquired by the Representative and certain
of its wholly-owned subsidiaries


<PAGE>


as set forth in the  Agreement  referred to below (the  Representative  and such
subsidiaries,  the  "Depositors").  The  Mortgage  Loans will be serviced by the
Servicer  pursuant  to the terms and  conditions  of that  certain  Pooling  and
Servicing  Agreement dated as of June 1, 1998 (the "Agreement") by and among the
Representative, the Servicer, the Depositors and U.S. Bank National Association,
as trustee (the "Trustee"), certain of the pertinent provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of the Class A-1F  Certificates  on such  Payment  Date  pursuant  to
Section 6.05 of the Agreement.

     Solely for U.S. federal income tax purposes, this Certificate is a "regular
interest"  in a "real  estate  mortgage  investment  conduit" as those terms are
defined,  respectively, in Section 860G and 860D of the Internal Revenue Code of
1986, as amended.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.


                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class A Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                   EXHIBIT B-2

                        [FORM OF CLASS A-2F CERTIFICATE]


                          [Form of Face of Certificate]

             [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUST
        ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
           CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
       IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
            VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
        THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class A-2F          Original Class A-2F Principal Balance:
No. A-2F-__                        $_________________

Class A-2F Pass-Through Rate:      Original Dollar Amount as of the Cut-off Date
______%                            Represented by this Certificate:
                                   $_________________

Cut-off Date: June 1, 1998         Percentage Interest of this Certificate:
                                   _____%

First Payment Date:                Original Pool Principal Balance:
July 15, 1998                      $_________________

Closing Date:                      Latest Maturity Date:
June 30, 1998                      __________________

CUSIP:___________                  Common Code:_______________
ISIN:_____________

     This certifies that  _________________________  is the registered  owner of
the  percentage   interest  (the  "Percentage   Interest")   evidenced  by  this
Certificate in distributions to the Holders of the Class A-2F  Certificates with
respect to a Trust Fund consisting  primarily of certain residential  fixed-rate
first and second  mortgage  loans (the  "Mortgage  Loans")  master  serviced  by
EquiCredit  Corporation of America  (hereinafter  called the "Servicer",  in its
capacity as Servicer,  and "Representative",  in its capacity as Representative,
which terms include any successor entity under the Agreement referred to below).
The Mortgage Loans were originated or acquired by the Representative and certain
of its wholly-owned subsidiaries


<PAGE>


as set forth in the  Agreement  referred to below (the  Representative  and such
subsidiaries,  the  "Depositors").  The  Mortgage  Loans will be serviced by the
Servicer  pursuant  to the terms and  conditions  of that  certain  Pooling  and
Servicing  Agreement dated as of June 1, 1998 (the "Agreement") by and among the
Representative, the Servicer, the Depositors and U.S. Bank National Association,
as trustee (the "Trustee"), certain of the pertinent provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of the Class A-2F  Certificates  on such  Payment  Date  pursuant  to
Section 6.05 of the Agreement.

     Solely for U.S. federal income tax purposes, this Certificate is a "regular
interest"  in a "real  estate  mortgage  investment  conduit" as those terms are
defined,  respectively, in Section 860G and 860D of the Internal Revenue Code of
1986, as amended.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class A Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                   EXHIBIT B-3

                        [FORM OF CLASS A-3F CERTIFICATE]


                          [Form of Face of Certificate]

             [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUST
        ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
           CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
       IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
            VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
        THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class A-3F          Original Class A-3F Principal Balance:
No. A-3F-__                        $_________________

Class A-3F Pass-Through Rate:      Original Dollar Amount as of the Cut-off Date
______%                            Represented by this Certificate:
                                   $_________________

Cut-off Date: June 1, 1998         Percentage Interest of this Certificate:
                                   _____%

First Payment Date:                Original Pool Principal Balance:
July 15, 1998                      $_________________

Closing Date:                      Latest Maturity Date:
June 30, 1998                      __________________

CUSIP:___________                  Common Code:_______________
ISIN:_____________

     This certifies that  _________________________  is the registered  owner of
the  percentage   interest  (the  "Percentage   Interest")   evidenced  by  this
Certificate in distributions to the Holders of the Class A-3F  Certificates with
respect to a Trust Fund consisting  primarily of certain residential  fixed-rate
first and second  mortgage  loans (the  "Mortgage  Loans")  master  serviced  by
EquiCredit  Corporation of America  (hereinafter  called the "Servicer",  in its
capacity as Servicer,  and "Representative",  in its capacity as Representative,
which terms include any successor entity under the Agreement referred to below).
The Mortgage Loans were originated or acquired by the Representative and certain
of its wholly-owned subsidiaries


<PAGE>


as set forth in the  Agreement  referred to below (the  Representative  and such
subsidiaries,  the  "Depositors").  The  Mortgage  Loans will be serviced by the
Servicer  pursuant  to the terms and  conditions  of that  certain  Pooling  and
Servicing  Agreement dated as of June 1, 1998 (the "Agreement") by and among the
Representative, the Servicer, the Depositors and U.S. Bank National Association,
as trustee (the "Trustee"), certain of the pertinent provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of the Class A-3F  Certificates  on such  Payment  Date  pursuant  to
Section 6.05 of the Agreement.

     Solely for U.S. federal income tax purposes, this Certificate is a "regular
interest"  in a "real  estate  mortgage  investment  conduit" as those terms are
defined,  respectively, in Section 860G and 860D of the Internal Revenue Code of
1986, as amended.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class A Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                   EXHIBIT B-4

                        [FORM OF CLASS A-4F CERTIFICATE]


                          [Form of Face of Certificate]

             [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUST
        ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
           CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
       IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
            VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
        THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class A-4F          Original Class A-4F Principal Balance:
No. A-4F-__                        $_________________

Class A-4F Pass-Through Rate:      Original Dollar Amount as of the Cut-off Date
______%                            Represented by this Certificate:
                                   $_________________

Cut-off Date: June 1, 1998         Percentage Interest of this Certificate:
                                   _____%

First Payment Date:                Original Pool Principal Balance:
July 15, 1998                      $_________________

Closing Date:                      Latest Maturity Date:
June 30, 1998                      __________________

CUSIP:___________                  Common Code:_______________
ISIN:_____________

     This certifies that  _________________________  is the registered  owner of
the  percentage   interest  (the  "Percentage   Interest")   evidenced  by  this
Certificate in distributions to the Holders of the Class A-4F  Certificates with
respect to a Trust Fund consisting  primarily of certain residential  fixed-rate
first and second  mortgage  loans (the  "Mortgage  Loans")  master  serviced  by
EquiCredit  Corporation of America  (hereinafter  called the "Servicer",  in its
capacity as Servicer,  and "Representative",  in its capacity as Representative,
which terms include any successor entity under the Agreement referred to below).
The Mortgage Loans were originated or acquired by the Representative and certain
of its wholly-owned subsidiaries


<PAGE>


as set forth in the  Agreement  referred to below (the  Representative  and such
subsidiaries,  the  "Depositors").  The  Mortgage  Loans will be serviced by the
Servicer  pursuant  to the terms and  conditions  of that  certain  Pooling  and
Servicing  Agreement dated as of June 1, 1998 (the "Agreement") by and among the
Representative, the Servicer, the Depositors and U.S. Bank National Association,
as trustee (the "Trustee"), certain of the pertinent provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of the Class A-4F  Certificates  on such  Payment  Date  pursuant  to
Section 6.05 of the Agreement.

     Solely for U.S. federal income tax purposes, this Certificate is a "regular
interest"  in a "real  estate  mortgage  investment  conduit" as those terms are
defined,  respectively, in Section 860G and 860D of the Internal Revenue Code of
1986, as amended.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class A Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                   EXHIBIT B-5

                        [FORM OF CLASS A-5F CERTIFICATE]


                          [Form of Face of Certificate]

             [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUST
        ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
           CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
       IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
            VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
        THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class A-5F          Original Class A-5F Principal Balance:
No. A-5F-__                        $_________________

Class A-5F Pass-Through Rate:      Original Dollar Amount as of the Cut-off Date
______%                            Represented by this Certificate:
                                   $_________________

Cut-off Date: June 1, 1998         Percentage Interest of this Certificate:
                                   _____%

First Payment Date:                Original Pool Principal Balance:
July 15, 1998                      $_________________

Closing Date:                      Latest Maturity Date:
June 30, 1998                      __________________

CUSIP:___________                  Common Code:_______________
ISIN:_____________

     This certifies that  _________________________  is the registered  owner of
the  percentage   interest  (the  "Percentage   Interest")   evidenced  by  this
Certificate in distributions to the Holders of the Class A-5F  Certificates with
respect to a Trust Fund consisting  primarily of certain residential  fixed-rate
first and second  mortgage  loans (the  "Mortgage  Loans")  master  serviced  by
EquiCredit  Corporation of America  (hereinafter  called the "Servicer",  in its
capacity as Servicer,  and "Representative",  in its capacity as Representative,
which terms include any successor entity under the Agreement referred to below).
The Mortgage Loans were originated or acquired by the Representative and certain
of its wholly-owned subsidiaries


<PAGE>


as set forth in the  Agreement  referred to below (the  Representative  and such
subsidiaries,  the  "Depositors").  The  Mortgage  Loans will be serviced by the
Servicer  pursuant  to the terms and  conditions  of that  certain  Pooling  and
Servicing  Agreement dated as of June 1, 1998 (the "Agreement") by and among the
Representative, the Servicer, the Depositors and U.S. Bank National Association,
as trustee (the "Trustee"), certain of the pertinent provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of the Class A-5F  Certificates  on such  Payment  Date  pursuant  to
Section 6.05 of the Agreement.

     Solely for U.S. federal income tax purposes, this Certificate is a "regular
interest"  in a "real  estate  mortgage  investment  conduit" as those terms are
defined,  respectively, in Section 860G and 860D of the Internal Revenue Code of
1986, as amended.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class A Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                   EXHIBIT B-6

                        [FORM OF CLASS A-6F CERTIFICATE]


                          [Form of Face of Certificate]

             [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUST
        ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
           CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
       IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
            VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
        THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class A-6F          Original Class A-6F Principal Balance:
No. A-6F-__                        $_________________

Class A-6F Pass-Through Rate:      Original Dollar Amount as of the Cut-off Date
______%                            Represented by this Certificate:
                                   $_________________

Cut-off Date: June 1, 1998         Percentage Interest of this Certificate:
                                   _____%

First Payment Date:                Original Pool Principal Balance:
July 15, 1998                      $_________________

Closing Date:                      Latest Maturity Date:
June 30, 1998                      __________________

CUSIP:___________                  Common Code:_______________
ISIN:_____________

     This certifies that  _________________________  is the registered  owner of
the  percentage   interest  (the  "Percentage   Interest")   evidenced  by  this
Certificate in distributions to the Holders of the Class A-6F  Certificates with
respect to a Trust Fund consisting  primarily of certain residential  fixed-rate
first and second  mortgage  loans (the  "Mortgage  Loans")  master  serviced  by
EquiCredit  Corporation of America  (hereinafter  called the "Servicer",  in its
capacity as Servicer,  and "Representative",  in its capacity as Representative,
which terms include any successor entity under the Agreement referred to below).
The Mortgage Loans were originated or acquired by the Representative and certain
of its wholly-owned subsidiaries


<PAGE>


as set forth in the  Agreement  referred to below (the  Representative  and such
subsidiaries,  the  "Depositors").  The  Mortgage  Loans will be serviced by the
Servicer  pursuant  to the terms and  conditions  of that  certain  Pooling  and
Servicing  Agreement dated as of June 1, 1998 (the "Agreement") by and among the
Representative, the Servicer, the Depositors and U.S. Bank National Association,
as trustee (the "Trustee"), certain of the pertinent provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of the Class A-6F  Certificates  on such  Payment  Date  pursuant  to
Section 6.05 of the Agreement.

     Solely for U.S. federal income tax purposes, this Certificate is a "regular
interest"  in a "real  estate  mortgage  investment  conduit" as those terms are
defined,  respectively, in Section 860G and 860D of the Internal Revenue Code of
1986, as amended.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class A Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                   EXHIBIT B-7

                        [FORM OF CLASS A-7F CERTIFICATE]


                          [Form of Face of Certificate]

             [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUST
        ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
           CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
       IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
            VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
        THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class A-7F          Original Class A-7F Principal Balance:
No. A-7F-__                        $_________________

Class A-7F Pass-Through Rate:      Original Dollar Amount as of the Cut-off Date
______%                            Represented by this Certificate:
                                   $_________________

Cut-off Date: June 1, 1998         Percentage Interest of this Certificate:
                                   _____%

First Payment Date:                Original Pool Principal Balance:
July 15, 1998                      $_________________

Closing Date:                      Latest Maturity Date:
June 30, 1998                      __________________

CUSIP:___________                  Common Code:_______________
ISIN:_____________

     This certifies that  _________________________  is the registered  owner of
the  percentage   interest  (the  "Percentage   Interest")   evidenced  by  this
Certificate in distributions to the Holders of the Class A-7F  Certificates with
respect to a Trust Fund consisting  primarily of certain residential  fixed-rate
first and second  mortgage  loans (the  "Mortgage  Loans")  master  serviced  by
EquiCredit  Corporation of America  (hereinafter  called the "Servicer",  in its
capacity as Servicer,  and "Representative",  in its capacity as Representative,
which terms include any successor entity under the Agreement referred to below).
The Mortgage Loans were originated or acquired by the Representative and certain
of its wholly-owned subsidiaries


<PAGE>


as set forth in the  Agreement  referred to below (the  Representative  and such
subsidiaries,  the  "Depositors").  The  Mortgage  Loans will be serviced by the
Servicer  pursuant  to the terms and  conditions  of that  certain  Pooling  and
Servicing  Agreement dated as of June 1, 1998 (the "Agreement") by and among the
Representative, the Servicer, the Depositors and U.S. Bank National Association,
as trustee (the "Trustee"), certain of the pertinent provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of the Class A-7F  Certificates  on such  Payment  Date  pursuant  to
Section 6.05 of the Agreement.

     Solely for U.S. federal income tax purposes, this Certificate is a "regular
interest"  in a "real  estate  mortgage  investment  conduit" as those terms are
defined,  respectively, in Section 860G and 860D of the Internal Revenue Code of
1986, as amended.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class A Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                   EXHIBIT B-8

                          [FORM OF CLASS X CERTIFICATE]

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

THIS  CERTIFICATE  HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (The "1933 ACT"),  OR THE SECURITIES  LAW OF ANY STATE.  ANY
RESALE,   TRANSFER  OR  OTHER  DISPOSITION  OF  THIS  CERTIFICATE  WITHOUT  SUCH
REGISTRATION OR QUALIFICATION  MAY BE MADE ONLY IN A TRANSACTION  WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
PLAN  SUBJECT  TO  THE  FIDUCIARY  RESPONSIBILITY  PROVISIONS  OF  THE  EMPLOYEE
RETIREMENT  INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF
THE CODE (OR  COMPARABLE  PROVISIONS  OF ANY  SUBSEQUENT  ENACTMENTS),  OR TO AN
INVESTMENT  MANAGER,  A NAMED  FIDUCIARY  OR A TRUSTEE OF ANY SUCH PLAN,  OR ANY
OTHER  PERSON  WHO IS USING  "PLAN  ASSETS"  OF ANY  SUCH  PLAN TO  EFFECT  SUCH
ACQUISITION,  UNLESS THE  TRANSFEREE  PROVIDES  THE  SERVICER AND TRUSTEE WITH A
CERTIFICATION  OF FACTS AND AN OPINION OF COUNSEL  SATISFACTORY  TO THE SERVICER
AND THE TRUSTEE  THAT THE PURCHASE OF THIS  CERTIFICATE  BY OR ON BEHALF OF SUCH
PLAN IS PERMISSIBLE  UNDER  APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN ANY
NON-EXEMPT PROHIBITED  TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE SERVICER, THE DEPOSITORS OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY  (INCLUDING  OBLIGATIONS OR  LIABILITIES  UNDER ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.


<PAGE>


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class X             Percentage Interest of this Certificate:
No. X-__                           _____%

Cut-off Date: June 1, 1998         Original Pool Principal Balance:
                                   $____________________

First Payment Date:                Closing Date:
July 15, 1998                      June 30, 1998

     This certifies that  _________________________  is the registered  owner of
the  percentage   interest  (the  "Percentage   Interest")   evidenced  by  this
Certificate  in  certain  monthly  distributions  with  respect  to a Trust Fund
consisting  primarily of residential  fixed-rate first and second mortgage loans
(the  "Mortgage  Loans")  master  serviced by EquiCredit  Corporation of America
(hereinafter   called  the  "Servicer",   in  its  capacity  as  Servicer,   and
"Representative",  in its capacity as  Representative,  which terms  include any
successor entity under the Agreement referred to below). The Mortgage Loans were
originated  or acquired by the  Representative  and certain of its  wholly-owned
subsidiaries as set forth in the Agreement referred to below (the Representative
and such subsidiaries, the "Depositors"). The Mortgage Loans will be serviced by
the Servicer  pursuant to the terms and  conditions of that certain  Pooling and
Servicing  Agreement dated as of June 1, 1998 (the "Agreement") by and among the
Representative, the Servicer, the Depositors and U.S. Bank National Association,
as trustee (the "Trustee"), certain of the pertinent provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and any amount required to be distributed
to the Holders of the Class X Certificates  on such  Remittance Date pursuant to
Section 6.05 and 6.09 of the Agreement.

     No transfer of any Class X  Certificate  shall be made unless that transfer
is made pursuant to an effective  registration  statement under the 1933 Act and
effective  registration or qualification under applicable state securities laws,
or is  made in a  transaction  which  does  not  require  such  registration  or
qualification.  In  the  event  that  a  transfer  is to be  made  without  such
registration or  qualification,  (a) the Trustee shall require the transferee to
execute an investment letter, which investment letter shall not be an expense of
the


<PAGE>


Depositors,  the  Servicer  or the  Trustee  and (b) in the  event  that  such a
transfer is not made  pursuant to Rule 144A under the Act,  the  Depositors  may
direct the Trustee to require an Opinion of Counsel  satisfactory to the Trustee
and the Depositors  that such transfer may be made without such  registration or
qualification,  which  Opinion  of  Counsel  shall  not  be an  expense  of  the
Depositors,  the Trustee or the Servicer. Neither the Depositors nor the Trustee
is  obligated to register or qualify any of the Class X  Certificates  under the
1933  Act or any  other  securities  law or to take  any  action  not  otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or  qualification.  Any such  Certificateholder  desiring to effect
such  transfer  shall,  and does hereby agree to,  indemnify  the  Trustee,  the
Depositors,  the Certificate Insurer and the Servicer against any liability that
may result if the  transfer is not so exempt or is not made in  accordance  with
such federal and state laws. In connection with any such transfer,  the Servicer
and the Trustee will also  require  either (i) a  certification  of facts and an
Opinion of Counsel which  establish to the  satisfaction of the Servicer and the
Trustee  that such  transfer  will not result in a  violation  of Section 406 of
ERISA or Section  4975 of the Code or cause the  Servicer  or the  Trustee to be
deemed a fiduciary of an ERISA Plan or result in the imposition of an excise tax
under Section 4975 of the Code, or (ii) (a) a representation letter, in the form
as described in the Agreement,  stating that the transferee is not an ERISA Plan
and is not  acting on behalf  of an ERISA  Plan or using the  assets of an ERISA
Plan to effect such purchase or (b) if such transferee is an insurance  company,
a  certification  of facts  with  respect to  certain  matters  set forth in the
Agreement.

     This  Certificate is issued on June 30, 1998, at an issue price of 5.36244%
of the initial Class X Notional Amount, including accrued interest, and a stated
redemption price at maturity equal to all interest  distributions hereon, and is
issued with original  issue  discount  ("OID") for federal  income tax purposes.
Assuming that this  Certificate  pays in accordance  with  projected  cash flows
reflecting the  prepayment  assumption of 100% PSA (as defined in the Prospectus
Supplement  dated June 23, 1998 with  respect to the offering of the Class A-1F,
Class A-2F,  Class  A-3F,  Class  A-4F,  Class  A-5F,  Class A-6F and Class A-7F
Certificates)  used  to  price  this  Certificate:  (i) the  amount  of OID as a
percentage of the initial Class X Notional  Amount is  approximately  6.178989%;
(ii) the annual yield to maturity of this Certificate,  compounded  monthly,  is
approximately  37.77%;  and (iii) the amount of OID allocable to the short first
accrual  period (June 30, 1998 to July 15, 1998) as a percentage  of the initial
Class X Notional  Amount,  calculated  using the exact method,  is approximately
0.083747%.

     Solely for U.S. federal income tax purposes,  this  Certificate  represents
(i) a "regular interest" in a "real estate mortgage investment conduit" as those
terms  are  defined,  respectively,  in  Section  860G and 860D of the  Internal
Revenue Code of 1986,  as amended and (ii) the rights  under the Spread  Account
set forth in the Agreement.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class X Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                   EXHIBIT B-9

                          [FORM OF CLASS R CERTIFICATE]

THIS  CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND CLASS X
CERTIFICATES  AS DESCRIBED IN THE POOLING AND  SERVICING  AGREEMENT  REFERRED TO
HEREIN.

THIS  CERTIFICATE  MAY NOT BE HELD BY OR TRANSFERRED TO A DISQUALIFIED  NON-U.S.
PERSON OR A DISQUALIFIED ORGANIZATION OR AGENT THEREOF.

SOLELY FOR U.S.  FEDERAL  INCOME TAX PURPOSES,  THIS  CERTIFICATE IS A "RESIDUAL
INTEREST"  IN A "REAL  ESTATE  MORTGAGE  INVESTMENT  CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").

THIS  CLASS R  CERTIFICATE  HAS NOT  BEEN  REGISTERED  OR  QUALIFIED  UNDER  THE
SECURITIES ACT OF 1933 (THE "1933 ACT") OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE,   TRANSFER  OR  OTHER  DISPOSITION  OF  THIS  CERTIFICATE  WITHOUT  SUCH
REGISTRATION OR QUALIFICATION  MAY BE MADE ONLY IN A TRANSACTION  WHICH DOES NOT
REQUIRE SUCH  REGISTRATION OR QUALIFICATION  AND WHICH IS IN ACCORDANCE WITH THE
PROVISIONS  OF SECTION 4.02 OF THE POOLING AND SERVICING  AGREEMENT  REFERRED TO
HEREIN.

THIS  CERTIFICATE  MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS
NOT  DELIVERED A  REPRESENTATION  LETTER  STATING THAT THE  TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT  ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR
SECTION 4975 OF THE CODE, OR A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF
ERISA,  SUBJECT  TO ANY  FEDERAL,  STATE OR LOCAL LAW  WHICH  IS, TO A  MATERIAL
EXTENT,  SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY,
A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN.

ANY RESALE,  TRANSFER OR OTHER  DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED  TRANSFEREE  PROVIDES A TRANSFER AFFIDAVIT TO THE DEPOSITORS AND
THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT A DISQUALIFIED ORGANIZATION OR AGENT
THEREOF,  (2) NO  PURPOSE  OF SUCH  TRANSFER  IS TO  IMPEDE  THE  ASSESSMENT  OR
COLLECTION  OF  TAX  AND  (3)  SUCH  TRANSFEREE   SATISFIES  CERTAIN  ADDITIONAL
CONDITIONS  RELATING TO THE  FINANCIAL  CONDITION  OF THE  PROPOSED  TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE


<PAGE>


CERTIFICATE  REGISTER  OR ANY  TRANSFER,  SALE  OR  OTHER  DISPOSITION  OF  THIS
CERTIFICATE  TO  A  DISQUALIFIED   ORGANIZATION   OR  AN  AGENT  THEREOF,   SUCH
REGISTRATION  SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT  WHATSOEVER  AND
SUCH  PERSON  SHALL  NOT BE  DEEMED TO BE A  CERTIFICATEHOLDER  FOR ANY  PURPOSE
HEREUNDER,  INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.  EACH HOLDER OF THIS  CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.


<PAGE>


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class R             Percentage Interest of this Certificate:
No. R-__                           _____%

Cut-off Date: June 1, 1998         Original Pool Principal Balance:
                                   $____________________

First Payment Date:                Closing Date:
July 15, 1998                      June 30, 1998

     This certifies that  _________________________  is the registered  owner of
the  interest  (the  "Percentage  Interest")  evidenced by this  Certificate  in
certain  distributions  with  respect to a Trust Fund  consisting  primarily  of
residential  fixed-rate  first and second mortgage loans (the "Mortgage  Loans")
master  serviced by EquiCredit  Corporation of America  (hereinafter  called the
"Servicer",  in its capacity as Servicer, and "Representative",  in its capacity
as Representative,  which terms include any successor entity under the Agreement
referred  to below).  The  Mortgage  Loans were  originated  or  acquired by the
Representative and certain of its wholly-owned  subsidiaries as set forth in the
Agreement  referred  to below (the  Representative  and such  subsidiaries,  the
"Depositors").  The Mortgage Loans will be serviced by the Servicer  pursuant to
the terms and conditions of that certain  Pooling and Servicing  Agreement dated
as of June 1,  1998 (the  "Agreement")  by and  among  the  Representative,  the
Servicer,  the  Depositors and U.S. Bank National  Association,  as trustee (the
"Trustee"),  certain of the pertinent  provisions of which are set forth herein.
To the extent not defined  herein,  the  capitalized  terms used herein have the
meanings  assigned in the  Agreement.  This  Certificate  is issued under and is
subject to the terms,  provisions  and  conditions  of the  Agreement,  to which
Agreement  the holder of this  Certificate  by virtue of the  acceptance  hereof
assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and any amount required to be distributed
to the Holders of the Class R Certificates  on such  Remittance Date pursuant to
Section 6.05 of the Agreement.

     Each Holder of this  Certificate  will be deemed to have agreed to be bound
by the  restrictions  set forth in the  Agreement  to the  effect  that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
Permitted  Transferee,  (ii) the  transfer  of any  Ownership  Interest  in this
Certificate will be conditioned upon the delivery to the Trustee of, among other
things,  an affidavit to the effect that it is a Permitted  Transferee and (iii)
any  attempted  or  purported   transfer  of  any  Ownership  Interest  in  this
Certificate in violation of such  restrictions  will be absolutely null and void
and will vest no rights in the purported  transferee.  The  Percentage  Interest
this Certificate is set forth above.  Notwithstanding  the fact this Certificate
has no principal balance, this Certificate will remain outstanding under the


<PAGE>


Agreement and the Holder hereof may have additional  obligations as set forth in
the Agreement.

     No transfer of any Class R  Certificate  shall be made unless that transfer
is made pursuant to an effective  registration  statement under the 1933 Act and
effective  registration or qualification under applicable state securities laws,
or is  made in a  transaction  which  does  not  require  such  registration  or
qualification.  In  the  event  that  a  transfer  is to be  made  without  such
registration or  qualification,  (a) the Trustee shall require the transferee to
execute an investment letter, which investment letter shall not be an expense of
the  Depositors,  the  Servicer  or the Trustee and (b) in the event that such a
transfer is not made  pursuant to Rule 144A under the Act,  the  Depositors  may
direct the Trustee to require an Opinion of Counsel  satisfactory to the Trustee
and the Depositors  that such transfer may be made without such  registration or
qualification,  which  Opinion  of  Counsel  shall  not  be an  expense  of  the
Depositors,  the Trustee or the Servicer. Neither the Depositors nor the Trustee
is  obligated to register or qualify any of the Class R  Certificates  under the
1933  Act or any  other  securities  law or to take  any  action  not  otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or  qualification.  Any such  Certificateholder  desiring to effect
such  transfer  shall,  and does hereby agree to,  indemnify  the  Trustee,  the
Depositors,  the Certificate Insurer and the Servicer against any liability that
may result if the  transfer is not so exempt or is not made in  accordance  with
such federal and state laws. In connection  with any such transfer,  the Trustee
will also  require a  representation  letter,  in the form as  described  in the
Agreement, stating that the transferee is not an ERISA Plan and is not acting on
behalf of an ERISA  Plan or using the  assets  of an ERISA  Plan to effect  such
purchase.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class R Certificates referred to in the within-mentioned
Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                  EXHIBIT B-10

                         [FORM OF CLASS LR CERTIFICATE]

THIS  CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND CLASS X
CERTIFICATES  AS DESCRIBED IN THE POOLING AND  SERVICING  AGREEMENT  REFERRED TO
HEREIN.

THIS  CERTIFICATE  MAY NOT BE HELD BY OR TRANSFERRED TO A DISQUALIFIED  NON-U.S.
PERSON OR A DISQUALIFIED ORGANIZATION OR AGENT THEREOF.

SOLELY FOR U.S.  FEDERAL  INCOME TAX PURPOSES,  THIS  CERTIFICATE IS A "RESIDUAL
INTEREST"  IN A "REAL  ESTATE  MORTGAGE  INVESTMENT  CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").

THIS  CLASS LR  CERTIFICATE  HAS NOT BEEN  REGISTERED  OR  QUALIFIED  UNDER  THE
SECURITIES ACT OF 1933 (THE "1933 ACT") OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE,   TRANSFER  OR  OTHER  DISPOSITION  OF  THIS  CERTIFICATE  WITHOUT  SUCH
REGISTRATION OR QUALIFICATION  MAY BE MADE ONLY IN A TRANSACTION  WHICH DOES NOT
REQUIRE SUCH  REGISTRATION OR QUALIFICATION  AND WHICH IS IN ACCORDANCE WITH THE
PROVISIONS  OF SECTION 4.02 OF THE POOLING AND SERVICING  AGREEMENT  REFERRED TO
HEREIN.

THIS  CERTIFICATE  MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS
NOT  DELIVERED A  REPRESENTATION  LETTER  STATING THAT THE  TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT  ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR
SECTION 4975 OF THE CODE, OR A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF
ERISA,  SUBJECT  TO ANY  FEDERAL,  STATE OR LOCAL LAW  WHICH  IS, TO A  MATERIAL
EXTENT,  SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY,
A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN.

ANY RESALE,  TRANSFER OR OTHER  DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED  TRANSFEREE  PROVIDES A TRANSFER AFFIDAVIT TO THE DEPOSITORS AND
THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT A DISQUALIFIED ORGANIZATION OR AGENT
THEREOF,  (2) NO  PURPOSE  OF SUCH  TRANSFER  IS TO  IMPEDE  THE  ASSESSMENT  OR
COLLECTION  OF  TAX  AND  (3)  SUCH  TRANSFEREE   SATISFIES  CERTAIN  ADDITIONAL
CONDITIONS  RELATING TO THE  FINANCIAL  CONDITION  OF THE  PROPOSED  TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE


<PAGE>


CERTIFICATE  REGISTER  OR ANY  TRANSFER,  SALE  OR  OTHER  DISPOSITION  OF  THIS
CERTIFICATE  TO  A  DISQUALIFIED   ORGANIZATION   OR  AN  AGENT  THEREOF,   SUCH
REGISTRATION  SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT  WHATSOEVER  AND
SUCH  PERSON  SHALL  NOT BE  DEEMED TO BE A  CERTIFICATEHOLDER  FOR ANY  PURPOSE
HEREUNDER,  INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.  EACH HOLDER OF THIS  CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.


<PAGE>


                 EQCC HOME EQUITY LOAN ASSET BACKED CERTIFICATES

Series 1998-2, Class LR            Percentage Interest of this Certificate:
No. LR-__                          _____%

Cut-off Date: June 1, 1998         Original Pool Principal Balance:
                                   $____________________

First Payment Date:                Closing Date:
July 15, 1998                      June 30, 1998

     This certifies that  _________________________  is the registered  owner of
the  interest  (the  "Percentage  Interest")  evidenced by this  Certificate  in
certain  distributions  with  respect to a Trust Fund  consisting  primarily  of
residential  fixed-rate  first and second mortgage loans (the "Mortgage  Loans")
master  serviced by EquiCredit  Corporation of America  (hereinafter  called the
"Servicer",  in its capacity as Servicer, and "Representative",  in its capacity
as Representative,  which terms include any successor entity under the Agreement
referred  to below).  The  Mortgage  Loans were  originated  or  acquired by the
Representative and certain of its wholly-owned  subsidiaries as set forth in the
Agreement  referred  to below (the  Representative  and such  subsidiaries,  the
"Depositors").  The Mortgage Loans will be serviced by the Servicer  pursuant to
the terms and conditions of that certain  Pooling and Servicing  Agreement dated
as of June 1,  1998 (the  "Agreement")  by and  among  the  Representative,  the
Servicer,  the  Depositors and U.S. Bank National  Association,  as trustee (the
"Trustee"),  certain of the pertinent  provisions of which are set forth herein.
To the extent not defined  herein,  the  capitalized  terms used herein have the
meanings  assigned in the  Agreement.  This  Certificate  is issued under and is
subject to the terms,  provisions  and  conditions  of the  Agreement,  to which
Agreement  the holder of this  Certificate  by virtue of the  acceptance  hereof
assents and by which such holder is bound.

     On each  Payment  Date,  commencing  on July 15,  1998,  the Trustee  shall
distribute  to the Person in whose name this  Certificate  is  registered on the
last  calendar day of the month  preceding  the month in which such Payment Date
occurs (the "Record  Date"),  an amount  equal to the product of the  Percentage
Interest evidenced by this Certificate and any amount required to be distributed
to the Holders of the Class LR  Certificates on such Remittance Date pursuant to
Section 6.05 of the Agreement.

     Each Holder of this  Certificate  will be deemed to have agreed to be bound
by the  restrictions  set forth in the  Agreement  to the  effect  that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
Permitted  Transferee,  (ii) the  transfer  of any  Ownership  Interest  in this
Certificate will be conditioned upon the delivery to the Trustee of, among other
things,  an affidavit to the effect that it is a Permitted  Transferee and (iii)
any  attempted  or  purported   transfer  of  any  Ownership  Interest  in  this
Certificate in violation of such  restrictions  will be absolutely null and void
and will vest no rights in the purported  transferee.  The  Percentage  Interest
this Certificate is set forth above.  Notwithstanding  the fact this Certificate
has no principal balance, this Certificate will remain outstanding under the


<PAGE>


Agreement and the Holder hereof may have additional  obligations as set forth in
the Agreement.

     No transfer of any Class LR Certificate  shall be made unless that transfer
is made pursuant to an effective  registration  statement under the 1933 Act and
effective  registration or qualification under applicable state securities laws,
or is  made in a  transaction  which  does  not  require  such  registration  or
qualification.  In  the  event  that  a  transfer  is to be  made  without  such
registration or  qualification,  (a) the Trustee shall require the transferee to
execute an investment letter, which investment letter shall not be an expense of
the  Depositors,  the  Servicer  or the Trustee and (b) in the event that such a
transfer is not made  pursuant to Rule 144A under the Act,  the  Depositors  may
direct the Trustee to require an Opinion of Counsel  satisfactory to the Trustee
and the Depositors  that such transfer may be made without such  registration or
qualification,  which  Opinion  of  Counsel  shall  not  be an  expense  of  the
Depositors,  the Trustee or the Servicer. Neither the Depositors nor the Trustee
is obligated to register or qualify any of the Class LR  Certificates  under the
1933  Act or any  other  securities  law or to take  any  action  not  otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or  qualification.  Any such  Certificateholder  desiring to effect
such  transfer  shall,  and does hereby agree to,  indemnify  the  Trustee,  the
Depositors,  the Certificate Insurer and the Servicer against any liability that
may result if the  transfer is not so exempt or is not made in  accordance  with
such federal and state laws. In connection  with any such transfer,  the Trustee
will also  require a  representation  letter,  in the form as  described  in the
Agreement, stating that the transferee is not an ERISA Plan and is not acting on
behalf of an ERISA  Plan or using the  assets  of an ERISA  Plan to effect  such
purchase.


<PAGE>


     IN WITNESS  WHEREOF,  the  Trustee  on behalf of the Trust has caused  this
Certificate to be duly executed as of the date set forth below.




                                        EQCC HOME EQUITY LOAN TRUST 1998-2

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory

Dated:





                          CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the   Class   LR   Certificates   referred   to  in  the
within-mentioned Agreement.

                                        By:  U.S. Bank National Association,
                                             as Trustee


                                        By:_________________________________
                                             Authorized Signatory


<PAGE>


                                  EXHIBIT B-11
                        [FORM OF REVERSE OF CERTIFICATE]

                          [Form of Reverse Certificate]

     Distributions  on this  Certificate  will be  made by the  Trustee  by wire
transfer of immediately  available  funds to the account of the Person  entitled
thereto as shall appear on the Certificate  Register without the presentation or
surrender of this Certificate or the making of any notation  thereon,  at a bank
or other entity having appropriate facilities therefor, if such Person shall own
of record  Class A  Certificates  of the same  Class  which  have  denominations
aggregating at least $1,000,000 appearing in the Certificate Register and in all
cases to the Class X,  Class R and  Class LR  Certificates,  and  shall  have so
notified  the Trustee at least five  business  days prior to the related  Record
Date,  or by  check  mailed  to the  address  of such  Person  appearing  in the
Certificate Register.

     Upon receiving the final distribution hereon, the Holder hereof is required
to send this  Certificate  to the Trustee.  The Agreement  provides that, in any
event, upon the making of the final  distribution due on this Certificate,  this
Certificate shall be deemed cancelled for all purposes under the Agreement.

     This  Certificate  is  one  of a  duly  authorized  issue  of  Certificates
designated as EQCC Home Equity Loan Asset Backed  Certificates,  Series  1998-2,
Class A-1F,  Class A-2F,  Class A-3F,  Class A-4F, Class A-5F, Class A-6F, Class
A-7F, Class X, Class R and Class LR (herein called the  "Certificates")  and, as
set forth in the Agreement, representing interests in (i) such Mortgage Loans as
from time to time are subject to the Agreement, together with the Mortgage Files
relating  thereto and all  proceeds  thereof  (other  than the  Representative's
Yield),  (ii) such assets as from time to time are identified as REO Property or
are  deposited  in  the  Collection  Account,  Principal  and  Interest  Account
(including  all  earnings  thereon and proceeds  thereof),  Spread  Account,  or
Insurance Account, including amounts on deposit in the Accounts or the Principal
and Interest Account and invested in Permitted Instruments,  (iii) the Trustee's
rights under all insurance  policies with respect to the Mortgage Loans required
to be maintained pursuant to the Agreement and any Insurance Proceeds,  (iv) the
Certificate  Insurance  Policy,  (v)  Liquidation  Proceeds  and  (vi)  Released
Mortgaged Property Proceeds (all of the foregoing being hereinafter collectively
called the "Trust Fund").  The Class X Certificates  are subordinate in right of
payment to the Class A Certificates, to the extent set forth in the Agreement.

     The  Certificates do not represent an obligation of, or an interest in, the
Servicer, the Representative,  the Depositors or the Trustee and are not insured
or guaranteed  by the Federal  Deposit  Insurance  Corporation,  the  Government
National  Mortgage  Association,  the  Federal  Housing  Administration  or  the
Veterans  Administration or any other governmental  agency. The Certificates are
limited in right of payment to certain collections and recoveries respecting the
Mortgage Loans, and amounts  withdrawable  from the Collection  Account,  all as
more specifically set forth herein and in the Agreement.


<PAGE>


     Ambac Assurance  Corporation has issued a certificate  guaranty surety bond
with respect to the Class A Certificates, a copy of which is attached as Exhibit
I to the Agreement.

     As provided in the Agreement,  deposits and withdrawals from the Collection
Account and the  Insurance  Account may be made by the Trustee from time to time
for purposes  other than  distributions  to  Certificateholders,  such  purposes
including  reimbursement  of  certain  expenses  incurred  by the  Servicer  and
investment in Permitted Instruments.

     Subject  to certain  restrictions,  the  Agreement  permits  the  amendment
thereof  with  respect  to  certain  modifications  (a) by the  Depositors,  the
Servicer  and the Trustee,  with the prior  written  consent of the  Certificate
Insurer,  without  the  consent  of  the  Certificateholders,  and  (b)  by  the
Depositors,  the  Representative,  the  Servicer,  the  Trustee,  with the prior
written consent of the  Certificate  Insurer,  the Majority in Aggregate  Voting
Interest and the holders of a majority of the Percentage Interest in the Class R
and Class LR  Certificates.  The  Agreement  permits the  Majority in  Aggregate
Voting  Interest to waive, on behalf of all  Certificateholders,  any default by
the Servicer in the performance of its  obligations  under the Agreement and its
consequences,  except in a default  in making  any  required  distribution  on a
Certificate.  Any such  consent or waiver by the  Majority in  Aggregate  Voting
Interest shall be conclusive and binding on the holder of this  Certificate  and
upon all future holders of this  Certificate and of any Certificate  issued upon
the  transfer  hereof or in  exchange  hereof or in lieu  hereof  whether or not
notation of such consent is made upon this Certificate.

     As provided in the Agreement and subject to certain limitations therein set
forth,  the  transfer of this  Certificate  is  registrable  in the  Certificate
Register upon surrender of this  Certificate for registration of transfer at the
offices or agencies  maintained by the Trustee in New York, New York or Chicago,
Illinois duly endorsed by, or accompanied by a written instrument of transfer in
form  satisfactory  to, the Trustee,  duly executed by the holder hereof or such
holder's  attorney  duly  authorized  in writing,  and thereupon one or more new
Certificates of authorized denominations evidencing the same aggregate undivided
Percentage Interest will be issued to the designated transferee or transferees.

     The Certificates are issuable only as registered Certificates.  As provided
in the  Agreement  and subject to certain  limitations  therein  set forth,  the
Certificate is exchangeable for a new Certificate  evidencing the same undivided
ownership interest, as requested by the holder surrendering the same.

     No service  charge  will be made for any such  registration  of transfer or
exchange,  but the Trustee may require  payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Servicer,  the  Representative,  the Depositors and the Trustee and any
agent  of any of the  foregoing,  may  treat  the  person  in  whose  name  this
Certificate is registered as the owner hereof for all purposes,  and none of the
foregoing shall be affected by notice to the contrary.


<PAGE>


     The obligations created by the Agreement shall terminate upon notice to the
Trustee of: (i) the later of the distribution to Certificateholders of the final
payment or collection with respect to the last Mortgage Loan, or the disposition
of all funds with respect to the last  Mortgage  Loan and the  remittance of all
funds due under the  Agreement and the payment of all amounts due and payable to
the  Certificate  Insurer and the Trustee,  (ii) the purchase by the Servicer of
all  outstanding  Mortgage  Loans and REO  Properties  at a price  determined as
provided in the Agreement (the exercise of the right of the Servicer to purchase
all the Mortgage  Loans and property in respect of Mortgage Loans will result in
early  retirement  of the  Certificates),  the right of the Servicer to purchase
being  subject  to the Pool  Principal  Balance  of the  Mortgage  Loans and REO
Properties  at the time of  purchase  being less than ten  percent  (10%) of the
Original Pool  Principal  Balance,  (iii) by the mutual consent of the Servicer,
the Certificate Insurer and all  Certificateholders  in writing or (iv) upon the
failure of the Trust to  qualify as two  separate  REMICs,  pursuant  to Section
11.05  of  the   Agreement.   By  its  acceptance  of  this   Certificate,   the
Certificateholder  hereby appoints the Servicer as its attorney-in-fact to adopt
a plan of liquidation of the Trust Fund in accordance  with Section 11.02 of the
Agreement.

     Unless the  certificate of  authentication  hereon has been executed by the
Trustee by manual  signature,  this  Certificate  shall not be  entitled  to any
benefit under the Agreement or be valid for any purpose.


<PAGE>


                                    EXHIBIT C

                          DTC LETTER OF REPRESENTATIONS


<PAGE>


                                    EXHIBIT D

                             MORTGAGE LOAN SCHEDULE


<PAGE>


                                    EXHIBIT E

                      FORM OF TRUSTEE INITIAL CERTIFICATION


                                                                   June 30, 1998

[Representative]

[Insurer]

[Servicer]

[Depositors]

               Re:  Pooling and Servicing  Agreement (the "Pooling and Servicing
                    Agreement"),    EQCC   Home   Equity   Loan   Asset   Backed
                    Certificates,  Series 1998-2,  Class A-1F, Class A-2F, Class
                    A-3F,  Class A-4F, Class A-5F, Class A-6F, Class A-7F, Class
                    X,  Class R and  Class LR,  dated as of June 1,  1998  among
                    EquiCredit   Corporation  of  America,   as  Servicer,   the
                    Depositors   listed   therein   and   U.S.   Bank   National
                    Association, as Trustee


Ladies and Gentlemen:

     In  accordance  with Section 2.06 of the  Agreement,  the  undersigned,  as
Trustee,  hereby certifies that,  except as noted on the Master Exception Report
dated [], 1998 and made a part  hereof,  it or the  Custodian  on its behalf has
received,  with  respect to each  Mortgage  Loan,  the  documents  specified  in
Sections 2.04(a),  (b), (c), (g) and (h) of the Pooling and Servicing Agreement,
as applicable, a Mortgage, or a certified copy thereof,  Assignment of Mortgage,
or a certified  copy thereof,  and a Mortgage Note with respect to each Mortgage
Loan listed in the Mortgage Loan Schedule and the  documents  contained  therein
appear to bear original  signatures or copies of originals if the originals have
not yet been delivered.

     Neither  the  Trustee  nor  the  Custodian  on  its  behalf  has  made  any
independent  examination  of any such documents  beyond the review  specifically
required in the above-referenced  Pooling and Servicing  Agreement.  The Trustee
makes  no  representations  as to:  (i)  the  validity,  legality,  sufficiency,
enforceability or genuineness of any such documents or any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) collectability,  insurability,
effectiveness or suitability of any such Mortgage Loan.


<PAGE>


     Capitalized  words  and  phrases  used  herein  shall  have the  respective
meanings  assigned  to  them  in  the  above-captioned   Pooling  and  Servicing
Agreement.


                                        U.S. BANK NATIONAL ASSOCIATION


                                        By:___________________________
                                             Name:
                                             Title:


<PAGE>


                                   EXHIBIT F-1

                      FORM OF TRUSTEE INTERIM CERTIFICATION


                                                                          , 19__

[Representative]

[Insurer]

[Depositors]

[Servicer]


               Re:  Pooling and Servicing  Agreement (the "Pooling and Servicing
                    Agreement"),    EQCC   Home   Equity   Loan   Asset   Backed
                    Certificates,  Series 1998-2,  Class A-1F, Class A-2F, Class
                    A-3F,  Class A-4F, Class A-5F, Class A-6F, Class A-7F, Class
                    X,  Class R and Class LR,  dated as of June 1,  1998,  among
                    EquiCredit   Corporation  of  America,   as  Servicer,   the
                    Depositors   listed   therein   and   U.S.   Bank   National
                    Association, as Trustee


Ladies and Gentlemen:

     In accordance  with the provisions of Section 2.06 of the  above-referenced
Pooling and Servicing Agreement,  the undersigned,  as Trustee, hereby certifies
that as to each Mortgage  Loan listed in the Mortgage Loan Schedule  (other than
any  Mortgage  Loan paid in full or any Mortgage  Loan listed on the  attachment
hereto),  it or the Custodian on its behalf has reviewed the documents delivered
to it or the Custodian on its behalf pursuant to Section 2.04 of the Pooling and
Servicing  Agreement and has  determined  that (i) all such documents are in its
possession or in the possession of the Custodian on its behalf (other than those
listed in Section 2.04(f)),  (ii) such documents have been reviewed by it or the
Custodian on its behalf and have not been mutilated,  damaged, torn or otherwise
physically  altered  and  relate  to such  Mortgage  Loan,  (iii)  based  on its
examination,  or the examination of the Custodian on its behalf,  and only as to
the foregoing documents, the information set forth in the Mortgage Loan Schedule
(other than items (i), (iv) and (x) of the definition of Mortgage Loan Schedule)
respecting such Mortgage Loan  accurately  reflects the information set forth in
the Mortgage  File and (iv) each  Mortgage Note has been endorsed as provided in
Section 2.04 of the Pooling and Servicing Agreement.

     Neither  the  Trustee  nor  the  Custodian  on  its  behalf  has  made  any
independent  examination  of  such  documents  beyond  the  review  specifically
required in the above-referenced  Pooling and Servicing  Agreement.  The Trustee
makes no  representations as to: (i) the validity,  legality,  enforceability or
genuineness of any such documents contained in each or any of the Mortgage Loans
identified  on  the  Mortgage  Loan  Schedule,   or  (ii)  the   collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.


<PAGE>


     Capitalized  words  and  phrases  used  herein  shall  have the  respective
meanings  assigned  to  them  in  the  above-captioned   Pooling  and  servicing
Agreement.


                                        ==============================,
                                        as Trustee


                                        By:___________________________
                                             Name:
                                             Title:


<PAGE>


                                   EXHIBIT F-2

                       FORM OF TRUSTEE FINAL CERTIFICATION


                                                                          , 19__

[Representative]

[Insurer]

[Depositors]

[Servicer]


               Re:  Pooling and Servicing  Agreement (the "Pooling and Servicing
                    Agreement"),    EQCC   Home   Equity   Loan   Asset   Backed
                    Certificates,  Series 1998-2,  Class A-1F, Class A-2F, Class
                    A-3F,  Class A-4F, Class A-5F, Class A-6F, Class A-7F, Class
                    X,  Class R and  Class LR,  dated as of June 1,  1998  among
                    EquiCredit   Corporation  of  America,   as  Servicer,   the
                    Depositors   listed   therein   and   U.S.   Bank   National
                    Association, as Trustee


Ladies and Gentlemen:

     In  accordance  with  Section  2.06  of  the  above-captioned  Pooling  and
Servicing Agreement, the undersigned,  as Trustee, hereby certifies that, except
as noted on the  attachment  hereto,  as to each  Mortgage  Loan  listed  in the
Mortgage Loan  Schedule  (other than any Mortgage Loan paid in full or listed on
the  attachment  hereto) it or to the  Custodian  on its behalf has reviewed the
documents  delivered to it or to the Custodian on its behalf pursuant to Section
2.04 of the Pooling and Servicing Agreement and has determined that (i) all such
documents  are in its  possession  or in the  possession of the Custodian on its
behalf (other than those listed in Section  2.04(f)),  (ii) such  documents have
been  reviewed by it and have not been  mutilated,  damaged,  torn or  otherwise
physically  altered  and  relate  to such  Mortgage  loan,  (iii)  based  on its
examination,  and only as to the foregoing documents,  the information set forth
in the  Mortgage  Loan  Schedule  (other  than  items  (i),  (iv) and (x) of the
definition of Mortgage Loan Schedule)  respecting  such Mortgage Loan accurately
reflects the information set forth in the Trustee's  Mortgage File and (iv) each
Mortgage  Note has been  endorsed as provided in Section 2.04 of the Pooling and
Servicing  Agreement.  Neither the Trustee nor the  Custodian  on its behalf has
made  any   independent   examination  of  such  documents   beyond  the  review
specifically  required in the above-referenced  Pooling and Servicing Agreement.
The  Trustee  makes  no  representations  as to:  (i)  the  validity,  legality,
enforceability or genuineness of any such documents  contained in each or any of
the  Mortgage  Loans  identified  on the  Mortgage  Loan  Schedule,  or (ii) the
collectability,  insurability, effectiveness or suitability of any such Mortgage
Loan.


<PAGE>


     Capitalized  words  and  phrases  used  herein  shall  have the  respective
meanings  assigned  to  them  in  the  above-captioned   Pooling  and  Servicing
Agreement.


                                        ==============================,
                                        as Trustee


                                        By:___________________________
                                             Name:
                                             Title:


<PAGE>


                                    EXHIBIT G

                            LIST OF BANKRUPTCY LOANS


<PAGE>


                                    EXHIBIT H

                           FORM OF DELINQUENCY REPORT

                                  Mortgage Pool

                                                                       % of
                                   Number of       Principal        Aggregate
                                   Accounts         Balance         Principal
                                   --------         -------         ---------

Potentially Delinquent                              $                       %

30 Days Delinquent

60 Days Delinquent

90 or More Days
      Delinquent
__________________

In Foreclosure

In Bankruptcy

     30 Days Delinquent

     60 Days Delinquent

     90 or More Days
     Delinquent

In REO


<PAGE>


                                    EXHIBIT I

                          CERTIFICATE INSURANCE POLICY


<PAGE>


                                    EXHIBIT J

                         FORM OF TRANSFEROR CERTIFICATE

                            __________________, 19__


EQCC Receivables Corporation
EQCC Asset Backed Corporation
[ADDRESS]


U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota  55101

               Re:  EQCC Home  Equity  Loan Asset  Backed  Certificates,  Series
                    1998-2, Class [R][LR]

Ladies and Gentlemen:

     This  letter  is  delivered  to you in  connection  with  the  transfer  by
_______________________________  (the  "Seller")  to  __________________________
(the "Purchaser") of a ____% Percentage  Interest of EQCC Home Equity Loan Asset
Backed Certificates, Series 1998-2, Class [R][LR] (the "Certificates"), pursuant
to Section  4.02 of the  Pooling  and  Servicing  Agreement  (the  "Pooling  and
Servicing  Agreement"),  dated  as of  dated  as of  June 1,  1998 by and  among
EquiCredit   Corporation  of  America,  as  Representative  and  Servicer,   the
Depositors listed therein ("Depositors") and U.S. Bank National Association,  as
trustee ("Trustee").  All terms used herein and not otherwise defined shall have
the meanings set forth in the Pooling and Servicing Agreement. The Seller hereby
certifies,  represents and warrants to, and covenants  with, the Company and the
Trustee that:

     1. No purpose of the Seller relating to the transfer of the Certificates by
the Seller to the Purchaser is or will be to impede the assessment or collection
of any tax.

     2. The Seller  understands  that the Purchaser has delivered to the Trustee
and the Servicer a transfer  affidavit and agreement in the form attached to the
Pooling  and  Servicing  Agreement  as Exhibit  I. The  Seller  does not know or
believe that any representation contained therein is false.

     3.  The  Seller  has at the time of the  transfer  conducted  a  reasonable
investigation  of the financial  condition of the Purchaser as  contemplated  by
Treasury  Regulations  Section  1.860E-1(c)(4)(i)  and,  as  a  result  of  that
investigation,  the Seller has  determined  that the Purchaser has  historically
paid its debts as they  become  due and has  found no  significant  evidence  to
indicate  that the  Purchaser  will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class [R][LR]


<PAGE>


Certificate  may not be respected for United States income tax purposes (and the
Seller may  continue  to be liable for United  States  income  taxes  associated
therewith) unless the Seller has conducted such an investigation.

     4. The Seller has no actual  knowledge  that the proposed  Purchaser is not
both a United States Person and a Permitted Transferee.

                                        Very truly yours,

                                        ______________________________
                                        (Seller)

                                        By:___________________________
                                             Name:
                                             Title:


<PAGE>


                                    EXHIBIT K

                               LIST OF ORIGINATORS


                        EquiCredit Corporation of America

                       EquiCredit Corporation/Ala. & Miss.

                        California/EquiCredit Corporation

                          EquiCredit Corporation of In.

                          EquiCredit Corporation of Pa.

                          EquiCredit Corporation of SC


<PAGE>


                                    EXHIBIT L


                                   [RESERVED]


<PAGE>


                                   EXHIBIT M-1

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

State of ___________      )
                          )  ss.:
County of __________      )

          [NAME OF OFFICER], being first duly sworn, deposes and says:

     1. That he is [Title of Officer] of [Name of Owner]  (record or  beneficial
owner of the EQCC Home Equity Loan Asset  Backed  Certificates,  Series  1998-2,
Class  [R][LR]  (the  "Owner")),  a  [savings  institution]  [corporation]  duly
organized and existing under the laws of [the State of __________________]  [the
United States], on behalf of which he makes this affidavit and agreement.

     2. That the Owner (i) is not and will not be a "disqualified  organization"
as of [date of  transfer]  within  the  meaning  of  Section  860E(e)(5)  of the
Internal  Revenue Code of 1986, as amended (the  "Code"),  (ii) will endeavor to
remain  other than a  disqualified  organization  for so long as it retains  its
ownership interest in the Class [R][LR] Certificates, and (iii) is acquiring the
Class  [R][LR]  Certificates  for its own  account or for the account of another
Owner from which it has received an affidavit and agreement in substantially the
same form as this affidavit and agreement.  (For this purpose,  a  "disqualified
organization"  means  the  United  States,  any state or  political  subdivision
thereof,  any agency or  instrumentality  of any of the foregoing (other than an
instrumentality  all of the  activities of which are subject to tax and,  except
for the Federal  Home Loan  Mortgage  Corporation,  a majority of whose board of
directors  is not  selected  by any such  governmental  entity)  or any  foreign
government,  international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).

     3.  That the  Owner  is aware  (i) of the tax  that  would  be  imposed  on
transfers of Class [R][LR] Certificates to disqualified  organizations under the
Code;  (ii) that such tax would be on the  transferor,  or, if such  transfer is
through an agent (which person  includes a broker,  nominee or middleman)  for a
disqualified organization,  on the agent; (iii) that the person otherwise liable
for the  tax  shall  be  relieved  of  liability  for the tax if the  transferee
furnishes to such person an affidavit  that the transferee is not a disqualified
organization  and,  at the time of  transfer,  such  person does not have actual
knowledge  that the  affidavit  is  false;  and  (iv)  that  the  Class  [R][LR]
Certificates  may be  "noneconomic  residual  interests"  within the  meaning of
Treasury regulations promulgated pursuant to the Code and that the transferor of
a  noneconomic  residual  interest  will  remain  liable  for any taxes due with
respect to the income on such residual interest,  unless no significant  purpose
of the transfer was to impede the assessment or collection of tax.


<PAGE>


     4. That the Owner is aware that the Trustee  will not register the transfer
of any Class [R][LR]  Certificates  unless the transferee,  or the  transferee's
agent,  delivers  to it an  affidavit  and  agreement,  among other  things,  in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees  that it will not  consummate  any such  transfer if it knows or believes
that any of the  representations  contained in such  affidavit and agreement are
false.

     5. That the Owner has  reviewed the  restrictions  set forth on the face of
the Class [R][LR]  Certificates  and the  provisions  of Section  4.02(d) of the
Pooling and Servicing Agreement under which the Class [R][LR]  Certificates were
issued (in particular, clause (6) of Section 4.02(d) which authorize the Trustee
to  deliver  payments  to a person  other  than the Owner in the event the Owner
holds such  Certificates in violation of Section  4.02(c)).  The Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.

     6. That the Owner consents to any additional  restrictions  or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement  to ensure that the Class [R][LR]  Certificates  will only be owned,
directly or indirectly, by an Owner that is not a disqualified organization.

     7. The Owner's Taxpayer Identification Number is ___________.

     8.  This  affidavit  and  agreement  relates  only  to  the  Class  [R][LR]
Certificates  held by the Owner and not to any other holder of the Class [R][LR]
Certificates. The Owner understands that the liabilities described herein relate
only to the Class [R][LR] Certificates.

     9. That no  purpose of the Owner  relating  to the  transfer  of any of the
Class [R][LR]  Certificates  by the Owner is or will be to impede the assessment
or collection of any tax.

     10. That the Owner has no present  knowledge or expectation that it will be
unable  to  pay  any  United  States  taxes  owed  by it so  long  as any of the
Certificates remain outstanding.  In this regard, the Owner hereby represents to
and for the  benefit  of the  person  from whom it  acquired  the Class  [R][LR]
Certificate  that the Owner  intends to pay taxes  associated  with holding such
Class [R][LR]  Certificate as they become due, fully  understanding  that it may
incur tax liabilities in excess of any cash flows generated by the Class [R][LR]
Certificate.

     11. That the Owner has no present  knowledge  or  expectation  that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class [R][LR] Certificates remain outstanding.

     12.  That the Owner (i) is a U.S.  Person or (ii) is a person  other than a
U.S.  Person (a "Non-U.S.  Person") that holds the Class [R][LR]  Certificate in
connection  with the conduct of a trade or business within the United States and
has furnished the transferor and the Trustee with an effective  Internal Revenue
Service Form 4224 or successor form at the time


<PAGE>


and in the manner  required  by the Code or (iii) is a Non-U.S.  Person that has
delivered  to both the  transferor  and the  Trustee an opinion of a  nationally
recognized  tax  counsel to the effect that the  transfer  of the Class  [R][LR]
Certificate  to it is in accordance  with the  requirements  of the Code and the
regulations  promulgated  thereunder  and  that  such  transfer  of the  [R][LR]
Certificate  will not be  disregarded  for federal  income tax  purposes.  "U.S.
Person"  means a citizen  or  resident  of the  United  States,  a  corporation,
partnership (except to the extent provided in applicable  Treasury  regulations)
or other entity  created or organized in or under the laws of the United  States
or any political  subdivision thereof, an estate that is subject to U.S. federal
income tax  regardless  of the source of its income or a trust if a court within
the  United   States  is  able  to  exercise   primary   supervision   over  the
administration  of such  trust,  and one or more  such  U.S.  Persons  have  the
authority to control all substantial  decisions of such trust (or, to the extent
provided in  applicable  Treasury  regulations,  certain  trusts in existence on
August 20, 1996 which are eligible to elect to be treated as U.S. Persons).


<PAGE>


     IN WITNESS WHEREOF,  the Owner has caused this instrument to be executed on
its behalf,  pursuant to the authority of its Board of Directors,  by its [Title
of Officer]  and its  corporate  seal to be hereunto  attached,  attested by its
[Assistant] Secretary, this ____ day of _______________, 199__.

                                        [NAME OF OWNER]

                                        By:___________________________
                                             [Name of Officer]
                                             [Title of Officer]

[Corporate Seal]

ATTEST:



______________________________
[Assistant] Secretary



     Personally  appeared before me the above-named [Name of Officer],  known or
proved to me to be the same person who executed the foregoing  instrument and to
be the [Title of Officer] of the Owner,  and acknowledged to me that he executed
the same as his free act and deed and the free act and deed of the Owner.

     Subscribed and sworn before me this ____ day of ________________, 199__.

                                        ______________________________
                                                  NOTARY PUBLIC

                                        COUNTY OF_____________________
                                        STATE OF______________________
                                        My  Commission  expires the ____ day of
                                        _______________, 19__.


<PAGE>


                                   EXHIBIT M-2

                     FORM OF INVESTOR REPRESENTATION LETTER

                               ____________,_____

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota  55101

               Re:  EQCC Home  Equity  Loan Asset  Backed  Certificates,  Series
                    1998-2

Ladies and Gentlemen:

     _______________________   (the   "Purchaser")   intends  to  purchase  from
____________________  (the "Seller"),  a ____% Percentage  Interest of EQCC Home
Equity Loan Asset Backed  Certificates,  Series 1998-2,  Class  [X][R][LR]  (the
"Certificates"),  issued  pursuant to the Pooling and Servicing  Agreement  (the
"Pooling and Servicing  Agreement"),  dated as of June 1, 1998,  among U.S. Bank
National  Association,  as trustee (the  "Trustee"),  Equicredit  Corporation of
America,  EQCC  Receivables   Corporation  and  EQCC  Asset  Backed  Corporation
(collectively with EQCC Receivables  Corporation,  the "Depositors").  All terms
used herein and not  otherwise  defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies,  represents and
warrants to, and covenants with, the Company and the Trustee that:

          1. The Purchaser  understands that (a) the Certificates  have not been
     and will not be registered or qualified  under the  Securities Act of 1933,
     as amended (the "Act") or any state  securities law, (b) the Company is not
     required to so register or qualify the  Certificates,  (c) the Certificates
     may be resold only if registered  and qualified  pursuant to the provisions
     of the Act or any  state  securities  law,  or if an  exemption  from  such
     registration and qualification is available,  (d) the Pooling and Servicing
     Agreement contains restrictions  regarding the transfer of the Certificates
     and (e) the Certificates will bear a legend to the foregoing effect.

          2. The Purchaser is acquiring the Certificates for its own account for
     investment  only and not with a view to or for sale in connection  with any
     distribution  thereof  in any  manner  that  would  violate  the Act or any
     applicable state securities laws.

          3. The  Purchaser is (a) a  substantial,  sophisticated  institutional
     investor  having such  knowledge  and  experience in financial and business
     matters, and, in particular,  in such matters related to securities similar
     to the  Certificates,  such that it is capable of evaluating the merits and
     risks of


<PAGE>


     investment in the Certificates, (b) able to bear the economic risks of such
     an investment and (c) an "accredited  investor"  within the meaning of Rule
     501(a) promulgated pursuant to the Act.

          4. The Purchaser has been  furnished  with, and has had an opportunity
     to review a copy of the Private  Placement  Memorandum  dated  ___________,
     _____,  relating to the Certificates,  the Pooling and Servicing  Agreement
     and such other information concerning the Certificates,  the Mortgage Loans
     and the Company as has been  requested by the Purchaser from the Company or
     the Seller and is relevant  to the  Purchaser's  decision  to purchase  the
     Certificates.  The Purchaser has had any questions arising from such review
     answered by the Company or the Seller to the satisfaction of the Purchaser.

          5. The Purchaser has not and will not nor has it authorized or will it
     authorize any person to (a) offer,  pledge,  sell,  dispose of or otherwise
     transfer  any  Certificate,  any interest in any  Certificate  or any other
     similar security to any person in any manner,  (b) solicit any offer to buy
     or to accept a pledge,  disposition of other  transfer of any  Certificate,
     any interest in any  Certificate  or any other  similar  security  from any
     person in any manner,  (c) otherwise  approach or negotiate with respect to
     any  Certificate,  any  interest in any  Certificate  or any other  similar
     security with any person in any manner,  (d) make any general  solicitation
     by means of  general  advertising  or in any  other  manner or (e) take any
     other action,  that (as to any of (a) through (e) above) would constitute a
     distribution  of any  Certificate  under the Act,  that  would  render  the
     disposition  of any  Certificate a violation of Section 5 of the Act or any
     state  securities law, or that would require  registration or qualification
     pursuant thereto.  The Purchaser will not sell or otherwise transfer any of
     the  Certificates,  except in compliance with the provisions of the Pooling
     and Servicing Agreement.

          [6.  For Class X  Certificates]  Either  (A) the  Purchaser  is not an
     employee benefit plan or other retirement arrangement subject to Title I of
     the Employee  Retirement Income Security Act of 1974, as amended ("ERISA"),
     or Section  4975 of the  Internal  Revenue  Code of 1986,  as amended  (the
     "Code"),  or a  governmental  plan,  as defined in Section  3(32) of ERISA,
     subject to any federal,  state or local law which is, to a material extent,
     similar to the foregoing  provisions of ERISA or the Code (collectively,  a
     "Plan"),  and is not acting on behalf of or investing the assets of a Plan,
     (B) if the Purchaser is an insurance  company,  the source of funds used to
     purchase the Class X Certificates is an "insurance company general account"
     is an  "insurance  company  general  account"  (as such term is  defined in
     Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTE 95-60"),
     60 Fed.  Reg.  35925 (July 12,  1995) and there is no Plan with  respect to
     which the amount of such general account's reserves and liabilities for the
     contract(s)  held  by or on  behalf  of  such  Plan  and


<PAGE>


     all other Plans  maintained by the same  employer (or affiliate  thereof as
     defined  in  Section  V(a)(1)  of  PTE  95-60)  or  by  the  same  employee
     organization  exceeds 10% of the total of all reserves and  liabilities  of
     such general account (as such amounts are determined  under Section I(a) of
     PTE 95-60) at the date of  acquisition  or (C) the Purchaser has provided a
     certification  of facts and an opinion of counsel  which  establish  to the
     satisfaction  of the Company and the Trustee  that such  transfer  will not
     result in a violation  of Section 406 of ERISA or Section  4975 of the Code
     or cause the  Servicer or the Trustee to be deemed a fiduciary of such Plan
     or result in the imposition of an excise tax under Section 4975 of the Code
     and will not subject the Trustee, the Company or the Master Servicer to any
     obligation  in addition to those  undertaken  in the Pooling and  Servicing
     Agreement  (including  any  liability  for civil  penalties or excise taxes
     imposed pursuant to ERISA, Section 4975 of the Code or a similar law.

          [6. For Class [R][LR]  Certificates]  The Purchaser is not an employee
     benefit  plan or other  retirement  arrangement  subject  to Title I of the
     Employee  Retirement Income Security Act of 1974, as amended ("ERISA"),  or
     Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"),
     or a  governmental  plan, as defined in Section 3(32) of ERISA,  subject to
     any federal,  state or local law which is, to a material extent, similar to
     the foregoing provisions of ERISA or the Code (collectively, a "Plan"), and
     is not acting on behalf of or investing the assets of a Plan.

                                        Very truly yours,


                                        By:___________________________
                                             Name:
                                             Title:


<PAGE>


                                   EXHIBIT M-3

                    Form of Transferor Representation Letter

                               ___________, 199__

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota  55101

               Re:  EQCC Home  Equity  Loan Asset  Backed  Certificates,  Series
                    1998-2

Ladies and Gentlemen:

     In  connection   with  the  sale  by   _____________   (the   "Seller")  to
__________________   (the  "Purchaser")  of  [$___________  initial  Certificate
Principal  Balance][_____%  Percentage  Interest] of EQCC Home Equity Loan Asset
Backed  Certificates,  Series 1998-2,  Class  [X][R][LR]  (the  "Certificates"),
issued  pursuant  to the Pooling  and  Servicing  Agreement  (the  "Pooling  and
Servicing  Agreement"),  dated as of June 1,  1998,  among  U.S.  Bank  National
Association, as trustee (the "Trustee"), Equicredit Corporation of America, EQCC
Receivables  Corporation and EQCC Asset Backed  Corporation  (collectively,  the
"Company").  The  Seller  hereby  certifies,  represents  and  warrants  to, and
covenants with, the Company and the Trustee that:

     Neither  the  Seller  nor  anyone  acting on its  behalf  has (a)  offered,
pledged,  sold,  disposed  of or  otherwise  transferred  any  Certificate,  any
interest in any  Certificate or any other similar  security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate,  any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise  approached or
negotiated with respect to any  Certificate,  any interest in any Certificate or
any other  similar  security  with any  person in any  manner,  (d) has made any
general  solicitation by means of general advertising or in any other manner, or
(e) has taken any other action,  that (as to any of (a) through (e) above) would
constitute a distribution of the  Certificates  under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section  5 of the  Act or any  state  securities  law,  or  that  would  require
registration or qualification  pursuant thereto.  The Seller will not act in any
manner set forth in the foregoing sentence with respect to any Certificate.  The
Seller has not and will not sell or otherwise  transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.


<PAGE>


                                        Very truly yours,


                                        ==============================
                                        (Seller)


                                        By:___________________________
                                             Name:
                                             Title:


<PAGE>


                                   EXHIBIT M-4

                  [FORM OF RULE 144A INVESTMENT REPRESENTATION]

             Description of Rule 144A Securities, including numbers:
                              EQCC Home Equity Loan
                            Asset Backed Certificates
                        Series 1998-2, Class ___, No. ___

     The undersigned Seller, as registered holder (the "Transferor"), intends to
transfer the Rule 144A Securities  described above to the undersigned buyer (the
"Buyer").

     1. In connection  with such transfer and in accordance  with the agreements
pursuant to which the Rule 144A  Securities were issued,  the Transferor  hereby
certifies the following  facts:  Neither the Transferor nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A  Securities,  any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities,  or otherwise  approached or negotiated
with  respect  to the Rule  144A  Securities,  any  interest  in the  Rule  144A
Securities or any other similar security with, any person in any manner, or made
any general solicitation by means of general advertising or in any other manner,
or taken any other action,  which would  constitute a  distribution  of the Rule
144A  Securities  under the Securities Act of 1933, as amended (the "1933 Act"),
or which would render the disposition of the Rule 144A Securities a violation of
Section 5 of the 1933 Act or require registration pursuant thereto, and that the
Transferor has not offered the Rule 144A Securities to any person other than the
Buyer or another "qualified  institutional  buyer" as defined in Rule 144A under
the 1933 Act.

     2.  The  Buyer  warrants  and  represents  to,  and  covenants   with,  the
Transferor, the Trustee and the Servicer pursuant to Section 4.02 of the Pooling
and Servicing Agreement as follows:

          a. The Buyer  understands  that the Rule 144A Securities have not been
     registered under the 1933 Act or the securities laws of any state.

          b.  The   Buyer   considers   itself  a   substantial,   sophisticated
     institutional  investor  having such  knowledge and experience in financial
     and business  matters that it is capable of evaluating the merits and risks
     of investment in the Rule 144A Securities.

          c. The Buyer has been  furnished  with all  information  regarding the
     Rule 144A Securities that it has requested from the Transferor, the Trustee
     or the Servicer.

          d.  Neither  the Buyer nor anyone  acting on its  behalf has  offered,
     transferred,   pledged,  sold  or  otherwise  disposed  of  the  Rule  144A
     Securities,  any interest in the Rule 144A  Securities or any other similar
     security to, or solicited any


<PAGE>


     offer to buy or accept a transfer,  pledge or other disposition of the Rule
     144A  Securities,  any  interest in the Rule 144A  Securities  or any other
     similar  security from, or otherwise  approached or negotiated with respect
     to the Rule 144A  Securities,  any interest in the Rule 144A  Securities or
     any other  similar  security  with,  any person in any manner,  or made any
     general  solicitation  by  means of  general  advertising  or in any  other
     manner, or taken any other action,  that would constitute a distribution of
     the Rule  144A  Securities  under  the 1933 Act or that  would  render  the
     disposition  of the Rule 144A  Securities  a violation  of Section 5 of the
     1933 Act or require registration pursuant thereto, nor will it act, nor has
     it  authorized  or will it authorize any person to act, in such manner with
     respect to the Rule 144A Securities.

          e. The  Buyer is a  "qualified  institutional  buyer"  as that term is
     defined in Rule 144A  under the 1933 Act.  The Buyer is aware that the sale
     to it is being made in reliance on Rule 144A.  The Buyer is  acquiring  the
     Rule 144A  Securities for its own account or the account of other qualified
     institutional  buyers,  understands  that such Rule 144A  Securities may be
     resold,  pledged or transferred only (i) to a person reasonably believed to
     be a qualified  institutional  buyer that  purchases for its own account or
     for the account of a qualified  institutional buyer to whom notice is given
     that the resale, pledge or transfer is being made in reliance on Rule 144A,
     or (ii) pursuant to another exemption from registration under the 1933 Act.

     3.  The  Buyer  warrants  and  represents  to,  and  covenants   with,  the
Transferor,  the  Servicer  and the Company  that either (1) the Buyer is not an
employee  benefit  plan  within  the  meaning of  Section  3(3) of the  Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section  4975(e)(1)  of the Internal  Revenue Code of 1986
(the  "Code")  (also a  "Plan"),  and the Buyer is not  directly  or  indirectly
purchasing the Rule 144A  Securities on behalf of, as investment  manager of, as
named  fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer's
purchase of the Rule 144A Securities will not result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code.

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


<PAGE>


     IN WITNESS  WHEREOF,  each of the parties has executed  this document as of
the date set forth below.

______________________________          ______________________________
  Print Name of Transferor                    Print Name of Buyer

By:___________________________          By:___________________________
     Name:                                   Name:
     Title                                   Title

Taxpayer Identification:                Taxpayer Identification:
No. __________________________          No. __________________________

Date:_________________________          Date:_________________________


<PAGE>


                                    EXHIBIT N

                           FORM OF CUSTODIAL AGREEMENT

                                  (See Item 4)


<PAGE>


                                    EXHIBIT O

                           FORM OF LIQUIDATION REPORT


Customer Name:
Account Number:
Original Principal Balance:

1.       Liquidation Proceeds

              Principal Prepayment               $ ________
              Property Sale Proceeds               ________
              Insurance Proceeds                   ________
              Other (Itemize)                      ________

              Total Proceeds                                     $_______

2.       Servicing Advances                      $ ________
              Monthly Advances                     ________
              Servicing Fees                       ________

              Total Advances                                     $_______

3.       Net Liquidation Proceeds                                $_______
         (Line 1 minus Line 2)

4.       Principal Balance of the Mortgage                       $_______
         Loan on date of liquidation

5.       Loss, if any                                            $_______
         (Line 4 minus Line 3)


<PAGE>


                                    EXHIBIT P

                 PRINCIPAL AND INTEREST ACCOUNT LETTER AGREEMENT


                                                                          (date)


To:      (the "Account Depository")



     As "Servicer" under the Pooling and Servicing  Agreement,  dated as of June
1, 1998 (the  "Agreement")  with  respect to EQCC Home Equity Loan Asset  Backed
Certificates,  Series 1998-2,  Class A-1F,  Class A-2F,  Class A-3F, Class A-4F,
Class A-5F, Class A-6F, Class A-7F, Class X, Class R and Class LR (collectively,
the  "Certificates"),  we hereby  authorize  and  request  you to  establish  an
account,  as a Principal  and Interest  Account  pursuant to Section 5.03 of the
Agreement,  in the name of U.S. Bank National Association and to be titled "EQCC
Home Equity Loan Trust,  Series  1998-2  Principal  and Interest  Account".  The
Principal  and Interest  Account shall bear an  additional  designation  clearly
indicating  that the funds  deposited  therein  are held for the Trustee for the
benefit of the holders of the Certificates. All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Servicer.  You may refuse
any deposit which would result in violation of the requirement  that the account
be fully  insured  as  described  below.  This  letter  is  submitted  to you in
duplicate. Please execute and return one original to us.

                                        EQUICREDIT CORPORATION OF AMERICA


                                        By:______________________________
                                             Name:
                                             Title:

     The  undersigned,  as Account  Depository,  hereby certifies that the above
described account has been established under Account Number ___________,  at the
office of the depository  indicated  above,  and agrees to honor  withdrawals on
such account as provided above. The amounts deposited at any time in the account
will be insured to the maximum  amount  provided by  applicable  law by the Bank
Insurance Fund or the Savings Association  Insurance Fund of the Federal Deposit
Insurance Corporation.

                                        (Name of Account Depository)


                                        By:______________________________
                                             Name:
                                             Title:


<PAGE>


                                    EXHIBIT Q

                                 FORM OF NOTICE


TO:      Ambac Assurance Corporation
         One State Street Plaza
         New York, New York 10004
         Attention:  General Counsel
         Telephone: (212) 668-0340
         Telecopier: (212) 363-1459

RE:      EQCC Home Equity Loan Asset Backed  Certificates,  Series 1998-2, Class
         A-1F,  Class A-2F,  Class A-3F,  Class A-4F, Class A-5F, Class A-6F and
         Class A-7F

Policy No. __________

Determination Date:

Payment Date:

We  refer  to  that  certain  Pooling  and  Servicing   Agreement  among  Credit
Corporation  of America,  the  Depositors  listed therein and U.S. Bank National
Association,  as  trustee,  relating  to EQCC  Home  Equity  Loan  Asset  Backed
Certificates,  Series 1998-2,  Class A-1F,  Class A-2F,  Class A-3F, Class A-4F,
Class A-5F,  Class A-6F, Class A-7F, Class X, Class R and Class LR (the "Pooling
and Servicing  Agreement")  dated as of June 1, 1998; all capitalized  terms not
otherwise defined herein shall have the same respective meanings as set forth in
such Pooling and Servicing Agreement.

As of the  Determination  Date, the Trustee has determined under the Pooling and
Servicing  Agreement and hereby certifies that in respect of the related Payment
Date:

(i)  The  Class  A  Remittance   Amount   ($__________)   exclusive  of  amounts
     attributable to clause (iv) of the definition of "Basic Principal  Amount,"
     to the extent  such amount is due but not paid by the  Representative,  the
     Depositors or the Originators.

(ii) The Available  Payment Amount is  $______________  and the amount of Excess
     Spread  on  deposit  in the  Collection  Account  is  $_____________  (less
     $_____________,  the amounts to be withdrawn for deposit into the Insurance
     Account or Spread  Account  pursuant to  Sections  6.02(i) and (iii) of the
     Pooling and Servicing Agreement).

(iii)$_____________,  amounts previously paid to Class A  Certificateholders  as
     Insured Payments.

(iv) The amount that has been deposited in the Collection Account but may not be
     withdrawn  therefrom  pursuant  to an order of a United  States  bankruptcy
     court of


<PAGE>


     competent  jurisdiction  imposing a stay  pursuant  to  Section  362 of the
     United States Bankruptcy Code and would otherwise have constituted all or a
     portion of the amount described in Item (ii) above is $_______________.

(v)  The excess of the amount  stated in (i),  above,  over the amount stated in
     (ii),  above,  less the amount described in (iii),  above,  less the amount
     stated in (iv) above is $_________________.

(vi) Monthly  installments  of principal and interest on the Mortgage Loans that
     were due during the Due Period  related to this  Payment  Date and were not
     received prior to this Payment Date equal $_____________.

(vii)In  accordance  with the above and the  Agreement,  the Insured  Payment is
     $_________________.

[Attached  hereto is a copy of the court  order in  connection  with a  voidable
preference  that  constitutes  a component  of the Class A Principal  Remittance
Amount in the amount set forth therein.]

Accordingly,  an Event of Nonpayment has occurred and,  pursuant to Section 6.05
of the Pooling and Servicing Agreement,  this statement  constitutes a claim for
an Insured Payment in the amount of $__________ under the Insurance Policy.

Any person who  knowingly  and with intent to defraud any  insurance  company or
other person files an application for insurance or statement of claim containing
any  materially  false  information,  or conceals for the purpose of misleading,
information concerning any fact material thereto, commits a fraudulent insurance
act,  which is a crime,  and shall  also be subject  to a civil  penalty  not to
exceed Five Thousand  ($5,000.00)  Dollars and the stated value of the claim for
each such violation.

The amount claimed should be paid as follows:

                                        ____________________________
                                        ____________________________
                                        ________________, as Trustee

                                        By: ________________________
                                        Name:_______________________
                                        Title:______________________
                                        Telephone #:________________

For Ambac Assurance Corporation Use Only

                             Wire Transfer Sent On:


<PAGE>


                                        By:_________________________
                                        Confirmation Number:


<PAGE>


                                    EXHIBIT R

                    MONTHLY INFORMATION DELIVERED BY SERVICER


1.   With respect to the Mortgage Pool, the number and Principal Balances of all
     Mortgage Loans which were the subject of Principal  Prepayments  during the
     related Due Period.

2.   With respect to the Mortgage  Pool,  the amount of all  Curtailments  which
     were received during the related Due Period.

3.   With  respect to the  Mortgage  Pool,  the  aggregate  amount of  principal
     portion of all Monthly Payments received during the related Due Period.

4.   With respect to the Mortgage Pool,  the amount of interest  received on the
     Mortgage Loans during the related Due Period.

5.   With respect to the Mortgage  Pool,  the  aggregate  amount of the Advances
     made and recovered with respect to such Payment Date.

6.   With  respect  to  the  Mortgage  Pool,  the  delinquency  and  foreclosure
     information  set forth in Exhibit H to the Pooling and Servicing  Agreement
     and the amount of Mortgage Loan Losses during the related Due Period.

7.   With  respect to the Mortgage  Pool,  the weighted  average  maturity,  the
     weighted  average  Mortgage  Interest  Rate and the  weighted  average  Net
     Mortgage  Interest  Rate as of the last day of the Due Period  preceding of
     the related Accrual Period.

8.   The Servicing  Fees paid and Servicing  Fees accrued during the related Due
     Period.

9.   The amount of all payments or  reimbursements  to the Servicer  pursuant to
     Section 5.04 (ii),  (iv),  (v), (vi) and (vii) paid or to be paid since the
     prior  Payment Date (or in the case of the first  Payment  Date,  since the
     Closing Date).

10.  The Pool Principal Balance and aggregate Principal Balance.

11.  Such other information as the Certificate  Insurer,  each Account Party and
     the Certificateholders may reasonably require.

12.  The amounts which are reimbursable to the Servicer,  the  Representative or
     the Depositors, as appropriate, pursuant to Section 6.05.

13.  With respect to the Mortgage Pool, the number of Mortgage Loans outstanding
     at the beginning and at the end of the related Due Period.


<PAGE>


14.  The aggregate  interest  accrued on the Mortgage Loans at their  respective
     Mortgage Interest Rates for the related Due Period.

15.  The amount  deposited in the Collection  Account which may not be withdrawn
     therefrom  pursuant  to an  Order of a United  States  Bankruptcy  Court of
     competent  jurisdiction  imposing a stay  pursuant  to Section  362 of U.S.
     Bankruptcy Code.

16.  The Principal  Balance of Mortgage Loans with Mortgage  Interest Rates less
     than [___]% per annum.

17.  The aggregate  Mortgage Loan Losses since the Cut-off Date as of the end of
     the related Due Period.


<PAGE>


                                    EXHIBIT S

                            LIST OF DELINQUENT LOANS



              [No Delinquent Mortgage Loans as of the Closing Date]


<PAGE>


                                    EXHIBIT T

                      SCHEDULE OF MORTGAGE LOANS SUBJECT TO
              THE HOME OWNERSHIP AND EQUITY PROTECTION ACT OF 1994

NOTICE:  Each  Mortgage Loan listed on this Mortgage Loan Schedule is subject to
special rules under the federal Truth in Lending Act. Purchasers or assignees of
a Mortgage Loan listed on this  Mortgage  Loan Schedule  could be liable for all
claims  and  defenses  with  respect  to such  Mortgage  Loan  that the  related
Mortgagor could assert against the original lender.


<PAGE>


                                    EXHIBIT U

                LOST NOTE AND/OR MORTGAGE/DEED OF TRUST AFFIDAVIT

State of ___________________                      Account #_______________
County of __________________


                                     TO WIT:


Comes the affiant, _____________________________________________ (Name/Title) of
__________________________________________________________________________,
after being duly sworn by me, _________________________________________________,
and in my presence,  a Notary  Public in and for the county and state  aforesaid
states                                                                      that
___________________________________________________________________________   is
the Noteholder or lien  creditor,  under a certain  Mortgage/Deed  of Trust from
___________________________________  to   _____________________________________,
dated  ____________________________  and  recorded in the Clerk's  Office of the
Circuit    Court   of   the   County   of    ____________________,    State   of
____________________  in Deed Book No.  _________________ at Page _____________,
as Instrument Number  __________________  to secure $ _______________,  and that
said  _____________  Note  __________  Mortgage  evidencing  the  debt  has been
inadvertently lost or destroyed and cannot be produced.


                                        ___________________________________


                                        By:________________________________
                                        Name:
                                        Title:


State of ___________________
County of __________________

The foregoing  instrument  was  acknowledged  before me this  __________  day of
________________, 19__ By________________________________________.



                                        ===================================
                                        Notary Public


<PAGE>


                                    EXHIBIT V


                     SCHEDULE OF MORTGAGE LOANS THAT DO NOT
                          HAVE TITLE INSURANCE POLICIES



       [No Mortgage Loans without Title Insurance as of the Closing Date]




EX-99.1

                                                  Ambac Assurance Corporation
                                                  c/o CT Corporation Systems
                                                  44 East Mifflin Street
                                                  Madison, Wisconsin  53703
                                                  Administrative Office:
                                                  One State Street Plaza
                                                  New York, New York  10004
                                                  Telephone:  (212) 688-0340
Surety Bond


Issuer:  EQCC Home Equity Loan Trust 1998-2       Policy Number:  AB0180BE

Insured Obligations:  $753,082,344
aggregate principal amount of EQCC
Home  Equity  Loan  Asset   Backed
Certificates, Series 1998-1, Class
A-1F,   Class  A-2F,  Class  A-3F,
Class  A-4F,   Class  A-5F,  Class
A-6F,     Class     A-7F,     (the
"Certificates")

Trustee: U.S. Bank National Association

Ambac Assurance Corporation  ("Ambac"),  a Wisconsin stock insurance company, in
consideration  of its receipt of the Deposit Premium and subject to the terms of
this Surety Bond,  hereby  unconditionally  and  irrevocably  agrees to pay each
Insured  Payment to the Trustee name above or its successor,  as trustee for the
Certificates,  to the extent set forth in the Pooling and  Servicing  Agreement,
dated as of June 1, 1998,  by and among EQCC  Receivables  Corporation  and EQCC
Asset Backed Corporation,  as Depositors,  EquiCredit Corporation of America, as
Representative and Servicer, and U.S. Bank National Association, as Trustee (the
"Pooling and Servicing Agreement").

Ambac will make an Insured  Payment out of its own funds by 12:00 noon (New York
City time) in immediately available funds to the Trustee on the later of (i) the
Business Day next  following the day on which Ambac shall have  received  Notice
that an Insured  Payment is due and (ii) the  Payment  Date on which the Insured
Payment is  distributable  to  Certificateholders  pursuant  to the  Pooling and
Service  Agreement,  for  disbursement  to such  Certificateholders  in the same
manner as other  payments  with respect to the  Certificates  are required to be
made.  Any Notice  received  by Ambac  after  12:00 noon New York City time on a
given  Business  Day or on any day that is not a Business Day shall be deemed to
have been received by Ambac on the next succeeding Business Day.

Upon  such  payment,  Ambac  shall  be fully  subrogated  to the  rights  of the
Certificateholders  to receive the amount so paid. Ambac's obligations hereunder
with  respect to each  Payment  Date  shall be  discharged  to the extent  funds
consisting  of the Insured  Payment are received by the Trustee on behalf of the
Certificateholders for distribution of such Certificateholders, as


<PAGE>


                                                  Ambac Assurance Corporation
                                                  c/o CT Corporation Systems
                                                  44 East Mifflin Street
                                                  Madison, Wisconsin  53703
                                                  Administrative Office:
                                                  One State Street Plaza
                                                  New York, New York  10004
                                                  Telephone:  (212) 688-0340
Surety Bond


provided in the Pooling and Servicing Agreement and herein,  whether or not such
funds are properly applied by the Trustee.

This Surety Bond is non-cancelable for any reason,  including  nonpayment of any
premium.  The  premium on this  Surety  Bond is not  refundable  for any reason,
including the payment of the Certificates prior to their respective  maturities.
This Surety Bond shall  expire and  terminate  without any action on the part of
Ambac or any other Person on the date that is one year and one day following the
date on which the Certificates shall have been paid in full.

The "Deposit  Premium" shall be due and payable on the date hereof,  as provided
in a letter agreement of even date herewith among Ambac and the Depositors,  and
a monthly  premium  shall be due and  payable as  provided  in the  Pooling  and
Servicing Agreement.

This Surety Bond is subject to and shall be governed by the laws of the State of
New York.  The insurance  provided by this Surety Bond is not covered by the New
York Property/Casualty  Insurance Security Fund (New York Insurance Law, Article
76).

Capitalized terms used and not defined herein shall have respective meanings set
forth in the Pooling and Servicing  Agreement.  "Notice" means written notice in
the form of Exhibit Q to the Pooling and  Servicing  Agreement by  registered or
certified mail or telephonic or telegraphic  notice,  subsequently  confirmed by
written notice  delivered via telecopy,  telex or hand delivery from the Trustee
to Ambac  specifying  the  information  set forth  therein.  "Certificateholder"
means, as to a particular  Certificate,  the person,  other than the Trust,  the
Servicer,  any  Subservicer or the  Representative  or any Depositor who, on the
applicable  Payment Date,  is entitled  under the terms of such  Certificate  to
payment thereof.

In the event that payments under any Certificate is accelerated,  nothing herein
contained  shall  obligate Ambac to make any payment of principal or interest on
such Certificates on an accelerated  basis,  unless such acceleration of payment
by Ambac is at the sole option of Ambac.

IN WITNESS  WHEREOF,  Ambac has caused this  Surety Bond to be affixed  with its
corporate seal and to be signed by its duly  authorized  officer in facsimile to
become  effective and bind upon Ambac by virtue of the  countersignature  of its
duly authorized representative.


    /s./ Warren Tong                              /s./ Laura L Kegg
- ------------------------------                    -------------------------
First Vice President                              Authorized Representative
Effective Date:  June 30, 1998




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