W I T N E S S E T H:

FOURTH MODIFICATION OF CREDIT AGREEMENT
AND CONSENT

THIS FOURTH MODIFICATION OF CREDIT AGREEMENT AND CONSENT (this
"Modification Agreement") is entered into as of August 12, 1999, by and
between AMRESCO, INC., a Delaware corporation ("Borrower"), and BANK OF
AMERICA, N.A., formerly NationsBank, N.A., a national banking association,
as Administrative Agent ("Administrative Agent"), for and on behalf of the
Lenders (defined below).

WHEREAS, reference is made to the credit facilities made pursuant to
and governed by that certain Credit Agreement (as amended, the "Credit
Agreement") dated as of August 12, 1998, executed by and among Borrower,
Administrative Agent, Credit Suisse First Boston, as Syndication Agent, and
the financial institutions, funds and other entities from time to time
designated as "Lenders" therein (the "Lenders"), as amended by (i) First
Modification of Credit Agreement (the "First Modification") dated as of
September 17, 1998, (ii) Second Modification of Credit Agreement (the
"Second Modification") dated as of November 30, 1998, and (iii) Third
Modification of Credit Agreement and Consent (the "Third Modification")
dated as of February 28, 1999 (each capitalized term used but not otherwise
defined herein shall be defined as set forth in the Credit Agreement); and

WHEREAS, Borrower has requested certain consents and modifications to
the Credit Agreement, and Borrower desires to increase the Revolving
Commitment by $30,000,000.00, to a total of $532,500,000.00, pursuant to
Section 2.1(d)(l) of the Credit Agreement; and

WHEREAS, the Lenders, acting through Administrative Agent pursuant to
the Credit Agreement, have agreed to the requested modifications, subject
to and upon the terms and conditions contained herein.

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that, for and in
consideration of the terms and conditions contained herein and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Administrative Agent, for and on behalf of the
Lenders, and Borrower hereby agree as follows:

1. Revolving Commitment Increase. Effective as of August 18, 1999,
after giving effect to the full payment and termination of the Short Term
Revolving Facility and the increase in the Revolving Commitment pursuant to
Section 2.1(b)(1) of the Credit Agreement, the Revolving Commitment (which
now consists solely of the Long Term Revolving Facility), will be
$532,500,000.00, and the respective Revolving Loan Commitment Amounts and
Revolving Loan Percentages of the Revolving Lenders will be as set forth on
the replacement Schedule I to the Credit Agreement which is attached hereto
as Exhibit A and incorporated herein by reference for all purposes. The
Schedule I attached as Exhibit A shall for all purposes be the Schedule I
to the Credit Agreement from and after August 18, 1999, unless and until
further supplemented, modified or replaced in accordance with the Credit
Agreement. As of August 18, 1999 (i) the outstanding Advances under the
Notes shall be reallocated to correspond with the revised Revolving Loan
Percentages of the Revolving Lenders as reflected in the new Schedule I,
and (ii) Borrower will execute and deliver new Notes to those Revolving
Lenders whose Revolving Loan Commitment Amounts have increased in the new
amount of each such Revolving Lender's revised Revolving Loan Commitment
Amount.

2. Limitation on Commitment Increases. Notwithstanding anything to
the contrary in the Credit Agreement or any other Loan Document, in no
event shall the aggregate of the Revolving Commitment and the Term Facility
exceed $775,000,000. Accordingly, the references to an increased facility
in an amount up to $900,000,000 in Preliminary Statement II and in
Section 2.1(d) of the Credit Agreement, and all other such references in
the Loan Documents, shall be amended to reflect the maximum amount of
$775,000,000, any such subsequent increase remaining subject to all terms
and conditions of the Credit Agreement.

3. Limitation on Letter of Credit Facility. In addition to all
other limitations on and conditions to the issuance of Letters of Credit,
the Letter of Credit Exposure shall not at any time exceed $60,000,000.
Accordingly, Section 2.1(b)(ii)(B) is hereby amended to read as follows:

"(B) The Letter of Credit Exposure shall not exceed the lesser of
(1) $60,000,000 or (2) fifteen percent (15%) of the Revolving
Commitment.."

4. Asset Coverage. In order to provide borrowing availability for
100% of Borrower's cash securing the Credit Facilities:

(a) The definition of Asset Coverage Ratio (as defined in the
Third Modification and incorporated into the Credit Agreement) is amended
to read as follows:

"Asset Coverage Ratio means the ratio of the Asset
Coverage Values to the aggregate outstanding balance of
the Revolving Credit Facility (including Swingline
Advances and Competitive Bid Loans), the Term Facility
and the Letter of Credit Exposure, less the amount of
"Cash and Equivalents" shown in the "Pledged Assets"
column on the monthly report delivered pursuant to
Section 7.1(f)."

; and

(b) Schedule IV of the Credit Agreement, setting forth the
schedule for determination of the Asset Coverage Requirement, is hereby
modified, restated and replaced in its entirety by the Schedule IV attached
hereto as Exhibit C.

5. Pricing. (a) To modify the adjustments to the Applicable Rate
that are based on the ratio of retained interests in securitizations to
aggregate asset value for purpose of determining the Asset Coverage
Requirement, the definition of Asset Coverage Values is amended to read in
its entirety as follows:

"Asset Coverage Values at any time of determination means an
amount equal to the aggregate asset values obtained after
applying approved advance rates to certain of Borrower's net
assets (on a consolidated basis and adjusting for liens other
than Lenders' Liens but excluding all assets of Excluded
Subsidiaries and any Foreign Subsidiary or which are located
outside the United States), as shown on, and using the advance
rates shown on, Schedule IV attached hereto, as such schedule may
be changed from time to time by Borrower and Administrative Agent
(except that changes to the advance rates applied shall be
approved by Required Lenders and the addition of new asset
categories shall be subject to a veto of Required Lenders as set
forth in Schedule IV); provided, however, that (i) if and to the
extent that the value of retained interests in securitizations
(including without limitation interest only strips, residuals and
other similar items) is equal to or greater than thirty percent
(30%), but less than or equal to thirty-five percent (35%), of
the aggregate asset values used in determining the Asset Coverage
Requirement, and any such excess value is a necessary component
of the Asset Coverage Requirement to support the aggregate
outstanding principal balances of the Credit Facilities and the
Letter of Credit Exposure (less "Cash and Equivalents" securing
the Credit Facilities in the amount shown in the "Pledged Assets"
column on the monthly report delivered pursuant to
Section 7.1(f)), then, notwithstanding anything to the contrary
in this Agreement or the other Loan Documents, the Applicable
Rate shall automatically be increased by one quarter of one
percent (.25%), and (ii) if and to the extent that the value of
retained interests in securitizations (including without
limitation interest only strips, residuals and other similar
items) is greater than thirty-five percent (35%) of the aggregate
asset values used in determining the Asset Coverage Requirement,
and any such excess value is a necessary component of the Asset
Coverage Requirement to support the aggregate outstanding
principal balances of the Credit Facilities and the Letter of
Credit Exposure (less "Cash and Equivalents" securing the Credit
Facilities in the amount shown in the "Pledged Assets" column on
the monthly report delivered pursuant to Section 7.1(f)), then,
notwithstanding anything to the contrary in this Agreement or the
other Loan Documents, the Applicable Rate shall automatically be
increased by an additional one quarter of one percent (.25%) (for
a total increase of one-half of one percent (.50%)), in each case
such adjustment to remain in effect until such time as the
monthly report calculating the Asset Coverage Requirement
delivered pursuant to Section 7.1(f) indicates that such
circumstances no longer exist; and, provided further, that if and
to the extent that the value of retained interests in
securitizations (including without limitation interest only
strips, residuals and other similar types) equals or exceeds
forty percent (40%) of the aggregate asset values used in
determining the Asset Coverage Requirement, then such excess
value shall not be included in the determination of the Asset
Coverage Requirement."

(b) To reflect the adjustments to the Applicable Rate provided
for in the definition of Asset Coverage Values on Schedule II of the Credit
Agreement, and to delete provision for a decrease in the Applicable Rate
based on Borrower's debt rating as previously set forth therein,
Schedule II of the Credit Agreement is hereby modified, restated and
replaced in its entirety by the Schedule II attached hereto as Exhibit D.

(c) The definition of Applicable Rate is amended to include the
following language at the end of such definition: "and on Schedule II."

6. Warehouse Lines. Debt of Excluded Subsidiaries that meets all
the requirements for a Warehouse Line under and as defined in the Credit
Agreement may be included as a Warehouse Line. Accordingly, the phrase ",
any Excluded Subsidiary" shall be inserted in the first clause of the
definition of Warehouse Lines after the words "any Guarantor."

7. Confidentiality of Borrower Information. To clarify that the
Lenders' agreement with respect to confidentiality of Borrower information
is not limited to financial data, the second sentence of Section 7.3 of the
Credit Agreement, up to the proviso in that sentence, is hereby amended to
read as follows:

"Each Lender covenants and agrees to preserve the confidentiality
of any data or information, financial or otherwise, concerning
Borrower or any Affiliate of Borrower, or related to the
businesses or operations of Borrower or any Affiliate of
Borrower, with respect to which Borrower or any Affiliate of
Borrower has (a) an obligation of confidentiality to a third
party (to the extent such obligation has been disclosed to such
Lender) or (b) informed such Lender of the confidential nature of
the specific information, except to the extent such Lender is
required to disclose such information pursuant to any applicable
law, rule, regulation or order of any Governmental Authority;"

8. Interest/Dividend Coverage Ratio. Section 8.3 of the Credit
Agreement is amended to read in its entirety as follows:

"Section 8.3. Interest/Dividend Coverage Ratio. Borrower
shall not permit the Interest/Dividend Coverage Ratio to be less
than (i) 1.50 to 1.00 from the Closing Date through December 30,
2000, and (ii) 1.75 to 1.00 from and after December 31, 2000."

9. Investments. (a) Section 8.9(c) is amended to read in its
entirety as follows:

"(c) Investments in Excluded Subsidiaries so long as the
aggregate amount of such Investments does not exceed $75,000,000;
provided, however, that if the following requirements with
respect to a particular Excluded Subsidiary are satisfied, then
Investments in such Excluded Subsidiary shall not be included for
purposes of calculating the foregoing limitation:

(i) (A) the applicable Excluded Subsidiary was
established and is serving as a bankruptcy remote special
purpose entity in connection with an asset financing of any
kind (and no matter how such financing is treated under
GAAP), and Borrower shall deliver to Administrative Agent
upon request a copy of the non-consolidation opinion
obtained in connection with the closing of such transaction
evidencing such matter;

(B) such Excluded Subsidiary is not an operating
entity;

(C) Borrower and all Guarantors, as applicable,
have pledged or caused to be pledged to Administrative Agent
on behalf of the Lenders in accordance with the Loan
Documents (1) 100% of the ownership interests in such
Excluded Subsidiary (including without limitation all stock
or other shareholders' equity, partnership interests or
beneficial trust interests) and (2) all retained and/or
residual interests in such Excluded Subsidiary or from such
financing transaction or any other rights to distributions
or payments from such Excluded Subsidiary or such financing
transaction (whether such rights are certificated,
contractual rights to payment, retained ownership rights or
otherwise) held by Borrower or any Guarantor, or held by any
other Subsidiary of Borrower if and to the extent that such
other Subsidiary is not prohibited from pledging the same as
security for the obligations and such interests are not
pledged as security for other Debt that is permitted under
this Agreement, in each case such that Administrative Agent
has a valid first priority perfected security interest
therein on terms and subject to documentation acceptable to
Administrative Agent; and

(D) the structure of the transaction is within
customary market terms and the aggregate amount invested in
such Excluded Subsidiary is limited to a reasonable and
customary amount for the particular type of transaction, as
determined by Administrative Agent in its sole and absolute
discretion, and provided that Borrower has furnished to
Administrative Agent all information regarding the
transaction deemed necessary or appropriate by
Administrative Agent to evaluate in making such
determination, and Administrative Agent shall have five (5)
Business Days from receipt of such information to respond to
Borrower as to its determination regarding such transaction
(Administrative Agent's failure to respond to Borrower
within such response period being deemed satisfaction of the
requirements of this subparagraph (D)); or

(ii) the applicable Excluded Subsidiary is a Partially-
Owned Subsidiary and all of the stock or other ownership
interest of Borrower or any Subsidiary of Borrower in such
Excluded Subsidiary has been pledged to Administrative Agent
on behalf of the Lenders pursuant to a Pledge Agreement,
such stock or other ownership interest gives the holder
thereof a controlling interest in such entity, as determined
by Administrative Agent in its sole and absolute discretion,
and Administrative Agent in its sole and absolute discretion
determines with respect to any Partially-Owned Subsidiary
that Borrower's and each Guarantor's investment therein can
be timely recovered in full by Borrower or such Guarantor or
the loss of such investment will not materially adversely
effect the financial condition of Borrower or such
Guarantor;"

(b) Section 8.9(e) is amended to read in its entirety as
follows:

"(e) Loans to any employees of Borrower or any Subsidiary of
Borrower (i) to facilitate relocations, (ii) who are the former
shareholders of MIC, in an aggregate amount not to exceed
$17,000,000, evidenced by promissory notes that are due and
payable in full on or before September 30, 1999, or, if the
shares of stock to be issued as consideration to such
shareholders pursuant to the MIC Merger Agreement have not been
issued, or cash consideration in lieu thereof has not been paid
to such shareholders, on or before September 30, 1999, then on
the date that such stock or cash consideration is given or paid,
which promissory notes shall be in form and content acceptable to
Administrative Agent, and with respect to which such loans
Borrower or any Subsidiary of Borrower is entitled to an offset
under the MIC Merger Agreement, and (iii) in addition to those
permitted above, so long as the aggregate of such loans pursuant
to this clause (iii) does not exceed $1,500,000."

10. Definition of MIC Merger Agreement. The definition of "MIC
Merger Agreement", as set forth in the Third Modification and incorporated
into the Credit Agreement, is hereby amended to read as follows:

"MIC Merger Agreement means the Agreement and Plan of
Merger, dated July 14, 1998. by and among Borrower, MIC
Acquisition, Inc., Mortgage Investors Corporation, Xxxxxxx
Xxxxxxx and certain other stockholders, as amended by the
Amendment thereto dated March 31, 1999."

11. Definition of Loan Documents. The definition of "Loan
Documents", as defined in the Credit Agreement and as used in the Credit
Agreement, the other Loan Documents and herein, shall be, and is hereby,
modified to include this Modification Agreement and any and all documents
executed in connection herewith.

12. Conditions Precedent to this Modification Agreement. As
conditions precedent to this Modification Agreement and the modifications
to the Credit Agreement pursuant hereto and the consents granted hereunder,
all of the following shall have been satisfied:

(a) Borrower and the Guarantors (including all new Guarantors
listed on any Supplement to Credit Agreement delivered pursuant to in
Section 12(d) below and any prior Supplements) shall have executed and
delivered to Administrative Agent this Modification Agreement;

(b) Borrower shall have delivered to Administrative Agent all
corporate resolutions, consents, powers of attorney, certificates or
documents as Administrative Agent may request relating to (i) the existence
of Borrower, and (ii) the corporate and partnership authority for the
execution and validity of this Modification Agreement, together with all
other documents, instruments and agreements and any other matters relevant
hereto or thereto, all in form and content satisfactory to Administrative
Agent;

(c) Borrower shall have paid all applicable amendment and other
fees as agreed in connection with this Modification Agreement and the
increase in the Revolving Commitment;

(d) Borrower shall have caused to be executed and delivered to
Administrative Agent a Supplement to the Loan Documents to add all
Subsidiaries of Borrower, other than Excluded Subsidiaries, Foreign
Subsidiaries and Investment Advisor Subsidiaries, as Guarantors under the
Guaranty Agreement, and as assigning or pledging parties under the
Collateral Assignment, the Security Agreement and the Pledge Agreement, and
Administrative Agent shall have received all such corporate existence and
authority documentation, resolutions and other agreements, stock
certificates and other equity ownership certificates, stock powers,
financing statements, instruments and certificates as Administrative Agent
shall reasonably require with respect to such additional Guarantors.
Borrower shall also have caused to be executed and/or delivered to
Administrative Agent such modifications to the Stock Pledge Agreement and
such stock certificates of, or other evidences of equity interests in, the
Excluded Subsidiaries (with stock powers as applicable) to effectively
evidence and perfect the Lenders' security interests therein; and

(e) Borrower shall have executed and delivered to Administrative
Agent, for the benefit of the Revolving Lenders, an agreement, in form and
content acceptable to Administrative Agent, pursuant to which Borrower
irrevocably agrees to reduce the Revolving Commitment by an amount equal to
or greater than $30,000,000.00, and to make any payments that may be
required in connection with such reduction as provided in Section 3.6(c) of
the Credit Agreement, on or before August 12, 2000.

13. Reaffirmation of Debt and Liens. Borrower acknowledges and
agrees that it is well and truly indebted to the Lenders pursuant to the
terms of the Notes, the Credit Agreement and the other Loan Documents, as
modified hereby, and that all liens and security interests securing the
Obligations are and remain in full force and effect.

14. Ratification. Except as otherwise expressly modified by this
Modification Agreement, all terms and provisions of the Credit Agreement
(as previously modified), the Notes, and the other Loan Documents shall
remain unchanged and hereby are ratified and confirmed and shall be and
shall remain in full force and effect, enforceable in accordance with their
terms.

15. Payment of Expenses. Borrower shall pay to Administrative Agent,
on behalf of the Lenders, upon demand, the reasonable attorneys' fees and
expenses of Administrative Agent's counsel and all filing and recording
fees and other reasonable expenses incurred by Administrative Agent in
connection with this Modification Agreement.

16. Current Guarantors and Excluded Subsidiaries. Attached hereto as
Exhibit B is a correct and complete list of each of the Subsidiaries of
Borrower that are required to be "Guarantors" under the Credit Agreement
and related Loan Documents as of the date hereof, indicating the initial
Guarantors that executed the Credit Agreement and the additional Guarantors
added by a Supplement to the Loan Documents. Attached hereto as Exhibit E
is a replacement Schedule V to the Credit Agreement which lists all of the
Excluded Subsidiaries as of the date hereof.

17. Further Assurances. Borrower shall execute and deliver to
Administrative Agent such other documents as may be necessary or as may be
required, in the opinion of Administrative Agent and/or counsel to
Administrative Agent, to effect the transactions contemplated hereby and to
protect the Lenders' Liens and security interests, and the rights and
remedies of Administrative Agent and/or the Lenders under the Loan
Documents.

18. Binding Agreement. This Modification Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto, and the
Lenders, and their respective legal representatives, successors and
assigns.

19. Enforceability. In the event the enforceability or validity of
any portion of this Modification Agreement, the Credit Agreement, the
Notes, or any of the other Loan Documents is challenged or questioned, such
provision shall be construed in accordance with, and shall be governed by,
whichever applicable federal or New York law would uphold or would enforce
such challenged or questioned provision.

20. Choice of Law. THIS MODIFICATION AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT FEDERAL LAWS PREEMPT THE
LAWS OF THE STATE OF NEW YORK.

21. Counterparts. This Modification Agreement may be executed in
multiple counterparts, all of which are identical, each of which shall be
deemed an original, and all of which counterparts together shall constitute
one and the same instrument.

22. Entire Agreement. This Modification Agreement, the Credit
Agreement and the Notes, together with the other Loan Documents, contain
the entire agreements between the parties relating to the subject matter
hereof and thereof and all prior agreements relative thereto which are not
contained herein or therein are terminated.

THIS MODIFICATION AGREEMENT AND THE OTHER WRITTEN INSTRUMENTS,
AGREEMENTS AND DOCUMENTS EXECUTED IN CONNECTION WITH THIS MODIFICATION
AGREEMENT, AND THE CREDIT AGREEMENT, THE NOTES, AND THE OTHER LOAN
DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

IN WITNESS WHEREOF, this Agreement is executed effective as of the
date first written above.

BORROWER:

AMRESCO, INC., a Delaware corporation

By:
Xxxxxx X. Xxxxxx,
Senior Vice President and Treasurer

ADMINISTRATIVE AGENT:

BANK OF AMERICA, N.A., formerly NationsBank, N.A.,
a national banking association, as Administrative
Agent for the Lenders

By:
Xxxxxxxxx Xxxxxxxx,
Managing Director

ACKNOWLEDGED AND AGREED TO as of the
12th day of August, 1999, by:

GUARANTORS:

AFC EQUITIES INVESTORS, INC., f/k/a AFC EQUITIES, INC.
AFC EQUITIES MANAGEMENT, INC.
ALPINE, INC.
AMREIT HOLDINGS, INC.
AMREIT MANAGERS GP, INC.
AMRESCO ATLANTA INDUSTRIAL, INC.
AMRESCO BUILDERS GROUP, INC.
AMRESCO CAPITAL CONDUIT CORPORATION
AMRESCO CAPITAL LIMITED, INC.
AMRESCO CAPITAL, L.P.
AMRESCO CMF, INC.
AMRESCO COMMERCIAL FINANCE, INC.
AMRESCO CONSOLIDATION CORP.
AMRESCO EQUITY INVESTMENTS, INC.
AMRESCO EQUITY INVESTMENTS II, INC.
AMRESCO FINANCE AMERICA CORPORATION
AMRESCO FINANCIAL I, INC.
AMRESCO FINANCIAL I, L.P.
AMRESCO FUNDING CORPORATION
AMRESCO INDEPENDENCE FUNDING, INC.
AMRESCO-INSTITUTIONAL, INC.
AMRESCO INVESTMENTS, INC.
AMRESCO MANAGEMENT, INC.
AMRESCO MBS-II, INC.
AMRESCO MORTGAGE CAPITAL LIMITED-I, INC.
AMRESCO MORTGAGE SERVICES LIMITED, INC.
AMRESCO NEW ENGLAND, L.P.
AMRESCO NEW ENGLAND II, L.P.
AMRESCO NEW ENGLAND, INC.
AMRESCO NEW ENGLAND II, INC.
AMRESCO NEW HAMPSHIRE, INC.
AMRESCO NEW HAMPSHIRE, L.P.
AMRESCO OVERSEAS, INC.
AMRESCO PORTFOLIO INVESTMENTS, INC.
AMRESCO PRINCIPAL MANAGERS I, INC.
AMRESCO PRINCIPAL MANAGERS II, INC.
AMRESCO RESIDENTIAL CAPITAL MARKETS, INC.
AMRESCO RESIDENTIAL CREDIT CORPORATION
AMRESCO RESIDENTIAL MORTGAGE CORPORATION
AMRESCO RESIDENTIAL PROPERTIES, INC.
AMRESCO SERVICES, L.P.
AMRESCO VENTURES, INC.
AMRESCO 1994-N2, INC.
ASSET MANAGEMENT RESOLUTION COMPANY
BEI 1992 - N1, INC.
BEI 1993 - N3, INC.
BEI 1994 - N1, INC.
BEI MULTI-POOL, INC.
BEI PORTFOLIO INVESTMENTS, INC.
BEI PORTFOLIO MANAGERS, INC.
BEI REAL ESTATE SERVICES, INC.
BEI SANJAC, INC.
COMMONWEALTH TRUST DEED SERVICES, INC.
ENT MIDWEST, INC.
ENT NEW JERSEY, INC.
ENT SOUTHERN CALIFORNIA, INC.
EXPRESS FUNDING, INC.
FINANCE AMERICA CORPORATION
GRANITE EQUITIES, INC.
XXXXXXXX XXXXXXXX XXXXXX, X.X.
LIFETIME HOMES, INC.
MSPI, INC.
MORTGAGE INVESTORS CORPORATION
OAK CLIFF FINANCIAL, INC.
PRESTON HOLLOW ASSET HOLDINGS, INC.
QUALITY FUNDING, INC.
AMRESCO INSURANCE SERVICES, INC.
AFC EQUITIES, L.P.
AMREIT MANAGERS, L.P.
AMRESCO-MBS I, INC.
AMRESCO MORTGAGE CAPITAL, INC.
HF ACQUISITION SUB, INC.
AMRESCO RECEIVABLES MANAGEMENT CORP.
AMRESCO CONSUMER RECEIVABLES CORPORATION
AMRESCO CONSUMER INVESTMENTS, L.P.
AMRESCO CONSUMER ACQUISITIONS CORP.

By: AMRESCO, INC., a Delaware corporation, as agent
and attorney-in-fact

By:
Xxxxxx X. Xxxxxx,
Senior Vice President and Treasurer

EXHIBIT A

SCHEDULE 1

LENDERS AND BORROWER

I. LENDERS, AGENTS AND ARRANGERS

A. ADMINISTRATIVE AGENT

Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

B. SYNDICATION AGENT

Credit Suisse First Boston
Eleven Madison Avenue, 20th Floor
New York, New York 10010-3629
Attn: Xxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

C. ARRANGERS

Banc of America Securities LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Credit Suisse First Boston
Eleven Madison Avenue, 20th Floor
New York, New York 10010-3629
Attn: Xxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

C. REVOLVING LENDERS:

Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Bank One, Texas, N.A.
c/o First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Bank United
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Comerica Bank - Texas
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Credit Lyonnais, New York Branch
0000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Fleet Bank, N.A.
1185 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

The Bank of New York
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

U.S. Bank National Association
000 0xx Xxxxxx Xxxxx
MPFP 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Credit Suisse First Boston
Eleven Madison Avenue, 20th Floor
New York, New York 10010-3629
Attn: Xxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Bear Xxxxxxx Investment Products, Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Prudential Securities Credit Corp.
One Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Dresdner Bank AG,
New York & Grand Cayman Branches
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: X. Xxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

PNC Bank, N.A.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xx 00000
Attn: Xxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Farallon Debt Investors I, LLC
c/o Farallon Capital Management, LLC
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxx Xxxxx
Xx. Xxxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

ING Baring (U.S.) Capital LLC
000 X. 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

D. TERM LENDERS

The Bank of New York
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Allstate Life Insurance Company
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, XX 00000-0000
Attn: Xxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

KZH III LLC, f/k/a/
KZH Holding Corporation III
c/o The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Tyler Trading
000 Xxxxx Xxxxx Xxxxxx
XXX-000-00-00
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Strata Funding Ltd.
x/x Xxxxxxxx Xxxxxx Xxxxxxxx (Xxxxxx) Xxxxxxx
X.X. 00000 GT, Elizabethan Square
Grand Cayman, Cayman Islands
Attn: Director
Tel: (000) 000-0000
Fax: (000) 000-0000

Ceres Finance Ltd.
x/x Xxxxxxxx Xxxxxx Xxxxxxxx (Xxxxxx) Xxxxxxx
X.X. 00000 GT, Elizabethan Square
Grand Cayman, Cayman Islands
Attn: Director
Tel: (000) 000-0000
Fax: (000) 000-0000

Pacifica Partners I, L.P.
c/o Imperial Credit Asset Management
000 X. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Floating Rate Portfolio
c/o INVESCO Senior Secured Management, Inc.
1166 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000

Revolving Loan Revolving
Commitment Amount Loan Percentage

Revolving Lenders:
Bank of America $75,000,000 14.08450704%
Credit Suisse First Boston 56,250,000 10.00000000%
U.S. Bank 56,250,000 10.00000000%
Bank One 37,500,000 7.00000000%
Bank United 37,500,000 7.00000000%
Fleet Bank 37,500,000 7.04225352%
Prudential Securities 37,500,000 7.00000000%
LaSalle Bank National 45,000,000 8.45070423%
Association
Bank of New York 33,750,000 6.00000000%
Dresdner Bank 26,250,000 4.92957746%
Comerica 22,500,000 4.22535211%
Bear Xxxxxxx 7,500,000 1.40845070%
Credit Lyonnais 18,750,000 3.52112676%
Farallon Debt Investors 14,250,000 2.00000000%
PNC Bank 11,250,000 2.11267606%
ING Baring 15,750,000 2.95774648%
Total $532,500,000 100.00000000%

Term Loan Term Loan
Commitment Amount Percentage
Term Lenders:
Pacifica Partners $10,000,000 14.814815%
Tyler Trading $7,500,000 11.111111%
Allstate Life $7,500,000 11.111111%
Insurance Company
Allstate Life $7,500,000 11.111111%
Insurance Company
KZH III LLC $5,100,000 7.555556%
Bank of New York $5,000,000 7.407407%
Tyler Trading $5,000,000 7.407407%
LaSalle Bank National $5,000,000 7.407407%
Association
Floating Rate Portfolio $5,000,000 7.407407%
Ceres $4,950,000 7.333333%
Strata $4,950,000 7.333333%
Total $67,500,000 100.0%

II. BORROWER with copy to:

AMRESCO, INC. AMRESCO, INC.
000 X. Xxxxx Xxxxxx 000 X. Xxxxx Xxxxxx
Xxxxx 0000 Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000 Xxxxxx, Xxxxx 00000-0000
Attn: Treasurer Attn: General Counsel
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000

EXHIBIT B

GUARANTOR SUBSIDIARIES OF BORROWER
AS OF AUGUST 12, 1999

INITIAL GUARANTORS ON CREDIT AGREEMENT 8/12/98:

ADDITIONAL GUARANTORS BY SUPPLEMENT DATED 2/28/99:

AFC EQUITIES, L.P.
AMREIT MANAGERS, L.P.
AMRESCO-MBS I, INC.
AMRESCO MORTGAGE CAPITAL, INC.
HF ACQUISITION SUB, INC.

ADDITIONAL GUARANTORS BY SUPPLEMENT DATED MAY 31, 1999:

AMRESCO RECEIVABLES MANAGEMENT CORP.
AMRESCO CONSUMER RECEIVABLES CORPORATION
AMRESCO CONSUMER INVESTMENTS, L.P.
AMRESCO CONSUMER ACQUISITIONS CORP.

EXHIBIT C

SCHEDULE IV
ASSET COVERAGE REQUIREMENT

Assets Balance Less Pledged Net
Sheet Assets Advance % Asset Values
(a)-(b)=(c) (d) (c x d=e)

Cash and Equivalents 0%
Accounts Receivable (net of reserves)
Management Contracts 85%
AMRESCO CAPITAL TRUST Stock held 50%(g)
Loans held for sale, net
Residential Mortgage - Originated 100%
Residential Mortgage - Wholesale 95%
Residential Mortgages - Impaired 80%
Residential Mortgage - FHA/VA 98%
Commercial Mortgage 95%
Commercial Mortgage - FNMA 99%
Commercial Finance - Small Business 95%
Commercial Finance - Franchise 98%
Commercial Finance - Construction 95%
Commercial Finance - Guarantied 98%
Commercial Finance - SBA Non-
Guarantied 75%
Commercial Finance - Telecapital 85%
Loans, net
Residential Mortgage 100%
Commercial Mortgage - Servicing
Advances 90%
Commercial Finance - Real Estate 85%
Structure Finance
Commercial Finance - Builders Group 85%
Commercial Finance - BLD 85%
Commercial Finance - SBA Guarantied 98%
Commercial Finance - SBA Non-Guarantied 75%
Commercial Finance - Telecapital 85%
Corporate and Other 85%
CMBS Servicing Strips 0%
Investments in purch. loan and
other asset port.
Loan portfolios
Foreign 0%
Domestic 85%
Real Estate
Foreign 0%
Domestic 85%
Partnerships and joint ventures 70%
Asset backed and other securities
available for sale 75%
Retained interests in
securitizations-trading
Residential Mortgage 70%
Nim 25%
Commercial Lending Corporation 85%
New Asset Pool (f) 50%
Premises and equipment, net of
acc. depreciation 50%
Other Assets 0%
Intangible Assets 0%
Deferred Income Taxes 0%
Total Asset Values

(a) Value of Borrower's assets per balance sheet
(b) Assets pledged under other credit facilities or not subject to prior
perfected security interest securing Credit Facilities
(c) Balance sheet value less assets pledged under other facilities or not
subject to prior perfected security interest securing Credit Facilities
(d) Advance rate applied
(e) Value of assets securing Credit Facilities times Advance Percentage
(f) An advance rate of 50% will be applied to any new asset class;
provided that (i) the total value related to new asset classes included
in the calculation of the Asset Coverage Requirement shall be the lesser
of $100,000,000 or an amount equal to 10% of the total "Pledged Assets"
value included in such calculation, and (ii) Borrower shall be entitled
to add a new class of assets with a higher advance rate than 50%, by
delivering a written request for such approval to Administrative Agent
and the Lenders so long as such request is not refused by the Required
Lenders within thirty (30) days of receipt of such request (the addition
of any new class shall be effective, if no objection is raised, on the
first reporting date after the expiration of such thirty day period)
(g) 0% until 1/1/99

EXHIBIT D

COMMITMENT FEE PERCENTAGE; LIBOR MARGIN; LETTER OF CREDIT FEES

1.If the Asset Coverage Ratio is equal to or greater than 1.40 to 1.00:

Ratio of Total
Consolidated Debt
Less Outstanding Commitment Letter of
Balance of Warehouse LIBOR Fee Credit Fee
TIERS Lines to Borrower's Margin Percentages
Consolidated Net Percentages
Worth*

I Greater than or (a) 237.5 b.p. 37.5 b.p. 237.5 b.p
equal to 2.50X
(b) 337.5 b.p.

II Greater than or (a) 212.5 b.p. 25.0 b.p. 212.5 b.p
equal to 1.50X but
less than 2.50X
(b) 312.5 b.p.

III Greater than or (a) 200.0 b.p. 25.0 b.p. 200.0 b.p
equal to 1.00X but
less than 1.50X
(b) 300.0 b.p.

IV Less than 1.00X (a) 187.5 b.p. 25.0 b.p. 187.5 b.p

(b) 287.5 b.p.

(a) - The LIBOR Margin for the Revolving Credit Facility.
(b) - The LIBOR Margin for the Term Facility.
* - The calculation of the applicable ratio of Total
Consolidated Debt less outstanding balance of Warehouse Lines to
Borrower's Consolidated Net Worth shall be made and effective on
the first day of the calendar month in which Administrative Agent
receives the quarterly financial statements and related officer's
certificate required to be delivered by Borrower pursuant to
Section 7.2 (b) and (c) showing that such adjustment is
appropriate (except that with respect to any Adjusted LIBOR Rate
or Competitive Bid Loan then in effect, such change shall occur
at the end of the applicable Interest Period or maturity as to
the related Advance, LIBOR Rate Portion or Competitive Bid Loan).

2.If the Asset Coverage Ratio is less than 1.40 to 1.00:

Ratio of Total
Consolidated Debt
Less Outstanding Commitment Letter of
Balance of Warehouse LIBOR Fee Credit Fee
TIERS Lines to Borrower's Margin Percentages
Consolidated Net Percentages
Worth*
I Greater than or (a) 275.0 b.p. 37.5 b.p. 275.0 b.p
equal to 2.50X
(b) 375.0 b.p.

II Greater than or (a) 250.0 b.p. 25.0 b.p. 250.0 b.p
equal to 1.50X but
less than 2.50X
(b) 350.0 b.p.

III Greater than or (a) 237.5 b.p. 25.0 b.p. 237.5 b.p
equal to 1.00X but
less than 1.50X
(b) 337.5 b.p.

IV Less than 1.00X (a) 225.0 b.p. 25.0 b.p. 225.0 b.p

(b) 325.0 b.p.

(a) - The LIBOR Margin for the Revolving Credit Facility.
(b) - The LIBOR Margin for the Term Facility.
(c) - The Commitment Fee for the Long Term Revolving Facility
* - The calculation of the applicable ratio of Total
Consolidated Debt less outstanding balance of Warehouse Lines to
Borrower's Consolidated Net Worth shall be made and effective on
the first day of the calendar month in which Administrative Agent
receives the quarterly financial statements and related officer's
certificate required to be delivered by Borrower pursuant to
Section 7.2 (b) and (c) showing that such adjustment is
appropriate (except that with respect to any Adjusted LIBOR Rate
or Competitive Bid Loan then in effect, such change shall occur
at the end of the applicable Interest Period or maturity as to
the related Advance, LIBOR Rate Portion or Competitive Bid Loan).

3.Increase in Applicable Rate. Notwithstanding anything to the contrary in
this Schedule II, the Agreement or any other Loan Document, (i) if and to
the extent that the value of retained interests in securitizations
(including without limitation interest only strips, residuals and other
similar items) is equal to or greater than thirty percent (30%), but less
than or equal to thirty-five percent (35%), of the aggregate asset values
used in determining the Asset Coverage Requirement, and any such excess
value is a necessary component of the Asset Coverage Requirement to
support the aggregate outstanding principal balances of the Credit
Facilities and the Letter of Credit Exposure (less "Cash and Equivalents"
securing the "Credit Facilities" in the amount shown in the Pledged
Assets column on the monthly report delivered pursuant to
Section 7.1(f)), then the Applicable Rate shall automatically be
increased by one quarter of one percent (.25%), and (ii) if and to the
extent that the value of retained interests in securitizations (including
without limitation interest only strips, residuals and other similar
items) is greater than thirty-five percent (35%) of the aggregate asset
values used in determining the Asset Coverage Requirement, and any such
excess value is a necessary component of the Asset Coverage Requirement
to support the aggregate outstanding principal balances of the Credit
Facilities and the Letter of Credit Exposure (less "Cash and Equivalents"
securing the "Credit Facilities" in the amount shown in the Pledged
Assets column on the monthly report delivered pursuant to
Section 7.1(f)), then the Applicable Rate shall automatically be
increased by an additional one quarter of one percent (.25%) (for a total
increase of one-half of one percent (.50%)), in each case such adjustment
to remain in effect until such time as the monthly report calculating the
Asset Coverage Requirement delivered pursuant to Section 7.1(f) indicates
that such circumstances no longer exist.

EXHIBIT E

[As of August 12, 1999]
SCHEDULE V
List of Excluded Subsidiaries

Subsidiary Type Net Total Total
Worth Capital Assets
Invested
AMRESCO Leasing Corporation PO $ $ $
AMRESCO Residential
Securities Corporation SPV
AMRESCO Securities Inc. Broker/
Dealer
AMRESCO Advisors, Inc. Invest-
ment Ad.
AMRESCO - MBS III, Inc. SPV
AFBT - I, LLC PO
AFBT - II, LLC PO
AMRESCO Builders Funding Corp. SPV
00 Xxxxx XxXxxxx, LLC PO
Noble Building Investors, LLC PO
Oakmont Land Three, L.P. PO
ACLC Funding Corp. SPV
CLC Funding Corp. SPV
AMRESCO Securitized Net
Interest Margin Trust 1999-1 SPV
AMRESCO Funding Trust I SPV
Independence Funding Holding
Corporation SPV
Independence Funding Holding
Company, L.L.C. SPV
AMRESCO Commercial Mortgage
Funding I Corporation SPV
AMRESCO Bureaus Investors, L.P. PO
AMRESCO RMBS I, Inc. SPV
AMRESCO LTD Investors, L.P. PO
AMRESCO Builders Financing Corp. SPV
ACFI Funding Corp. SPV ________ _________ _________

Total $ $ $

PO - Partially Owned
SPV - Bankruptcy Remote Special Purpose Entity

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