1994 AMENDED AND EXTENDED

              LOAN PURCHASE AND ADMINISTRATIVE SERVICES AGREEMENT



               THIS AGREEMENT is made as of May 15, 1994, by and between
Countrywide Mortgage Investments, Inc., a Delaware corporation (the "Company"),
and Countrywide Funding Corporation, a New York corporation ("CFC").

                                  WITNESSETH:

               WHEREAS, the Company has elected to qualify for the tax benefits
accorded by Sections 856 to 860 of the Internal Revenue Code of 1986, as
amended; and

               WHEREAS, the Company, directly or through Subsidiaries, in the
conduct of its business primarily operates a mortgage loan conduit, engages in
warehouse lending and invests in mortgage loans and mortgage-related securities
meeting the investment criteria established from time to time by the Board of
Directors; and

               WHEREAS, the Company may desire to purchase mortgage loans
originated or purchased by CFC and may want CFC to cause the issuance of Agency
Securities supported by pools of such mortgage loans on its behalf; and

               WHEREAS, the Company may desire to appoint CFC to service
mortgage loans originated by others and purchased by the Company through its
mortgage loan conduit operations; and

               WHEREAS, the Company and CFC desire to amend and extend the Loan
Purchase and Administrative Services Agreement originally entered into as of
September 3, 1985, for a one-year period through May 14, 1995, upon the terms
and subject to the conditions set forth in this Agreement.

               NOW THEREFORE, in consideration of the mutual agreements herein
set forth, the parties hereto agree as follows:

               Section 1. Definitions. Whenever used in this Agreement, the
               ---------   -----------
following terms, unless the context otherwise requires, shall have the following
meanings:


               (a) "Affiliate" shall have the meaning attributed to such term in
the Management Agreement.

               (b) "Agency Securities" shall mean GNMA Certificates, FHLMC
Certificates and/or FNMA Certificates.

               (c) "Agreement" shall mean this 1994 Amended and Extended Loan
Purchase and Administrative Services Agreement.

               (d) "Board of Directors" shall mean the Board of Directors of the
Company.

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<PAGE>
 
               (e) "Conforming Loan" shall mean an FHA Loan, a VA Loan or a
conventional mortgage loan eligible for sale to FNMA or FHLMC.

               (f) "FHA Loan" shall mean any mortgage loan insured by the
Federal Housing Administration under the National Housing Act.

               (g) "FHLMC" shall mean the Federal Home Loan Mortgage
Corporation, a corporation organized and existing under the laws of the United
States, or any successor thereto.

               (h) "FHLMC Certificate" shall mean a mortgage participation
certificate, guaranteed as to payment of interest and principal by FHLMC and
backed by a pool of conventional mortgage loans.

               (i) "FNMA" shall mean the Federal National Mortgage Association,
a corporation organized and existing under the laws of the United States, or any
successor thereto.

               (j) "FNMA Certificate" shall mean a guaranteed mortgage pass-
through certificate, guaranteed as to timely payment of interest and principal
by FNMA and backed by a pool of FHA Loans, VA Loans, and/or conventional
mortgage loans.

               (k) "GNMA" shall mean the Government National Mortgage
Association, a wholly owned corporate instrumentality of the United States
within the Department of Housing and Urban Development, or any successor
thereto.

               (l) "GNMA Certificate" shall mean a fully modified pass-through
mortgage-backed certificate guaranteed as to timely payment of interest and
principal by GNMA and backed by a pool of FHA Loans or VA Loans.

               (m) "Jumbo Loan" shall mean any mortgage loan which is not a
Conforming Loan.

               (n) "Management Agreement" shall mean that certain agreement
dated as of May 15, 1994 between the Company and the Manager governing the
management of the Company's investments and day-to-day operations.

               (o) "Manager" shall mean Countrywide Asset Management
Corporation, or any successor thereto, under a Management Agreement with the
Company.

               (p) "Mortgage Backed Securities" shall have the meaning
attributed to such term in the Management Agreement.

               (q) "Subsidiary" shall have the meaning attributed to such term
in the Management Agreement.

               (r) "Unaffiliated Directors" shall mean those members of the
Board of Directors who are not Affiliates of the Manager.

               (s) "VA Loan" shall mean any mortgage loan guaranteed by the
Veterans Administration under the Servicemen's Readjustment Act of 1944, as
amended, or Chapter 37 of Title 38, United States Code.

               Section 2. Purchase of Mortgage Loans and Agency Securities from
               ---------  -----------------------------------------------------
CFC by the Company. (a) CFC may sell to the Company mortgage loans, Agency
------------------
Securities and other mortgage-related assets meeting the Company's investment
criteria. CFC agrees that all such

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<PAGE>
 
sales shall be made in accordance with the normal and customary industry
practices with respect to the sale of mortgage loans, Agency Securities and
other mortgage-related assets. CFC agrees 

                                       3
<PAGE>
 
that all mortgage loans or other investments sold by it to the Company will meet
the investment criteria of the Company in effect at the time of sales.

               (b) CFC agrees that, any sale of mortgage loans, Agency
Securities and other mortgage-related assets from CFC to the Company will be
made at prices no less favorable to the Company than are available to CFC from
other purchasers.

               (c) The Company agrees that prior to the delivery of each
mortgage loan purchased, it shall have no interest in such mortgage loan. CFC
shall bear all expenses and costs associated with the mortgage loans prior to
delivery, including the costs associated with mortgage loans that are not sold.
Upon the delivery of such mortgage loan, the Company shall be the sole
beneficial owner of such mortgage loan although legal title to the mortgage and
the mortgage note will be held by CFC if so directed by the Company to permit
the issuance of Agency Securities under Section 3.

               (d) Notwithstanding the fact that the Company is the beneficial
owner of the mortgage loans it purchases, the Company and CFC agree that from
and after the date first written above, the Conforming Loans sold to the Company
under this Agreement shall be sold "servicing retained" and the servicing rights
therefor shall remain with CFC or the other holder thereof. Notwithstanding the
foregoing, neither CFC nor such holder may assign its servicing rights to such
Conforming Loans without the consent of the Company prior to the issuance of
Agency Securities backed by such Conforming Loans. The Company agrees that it
will not unreasonably withhold its consent to such an assignment of servicing
rights. CFC's rights to assign the servicing rights to Conforming Loans that
have been pooled and exchanged for Agency Securities shall be subject to
Subsection 3(c).

               (e) CFC hereby represents and warrants that at the time of sale
of mortgage loans to the Company such mortgage loans will meet the
representations and warranties required to be made by sellers of mortgage loans
to the Company or any Subsidiary pursuant to the Seller/Servicer Guide
incorporated by reference into the Seller/Servicer Contract executed by CFC.

               (f) CFC shall act as an independent contractor and not as an
agent of the Company for purposes of originating and purchasing mortgage loans
and selling to the Company mortgage loans and Agency Securities and other
investments.

               Section 3. Pooling of Mortgage Loans; Issuance of Agency
               ---------  ---------------------------------------------
Securities; Payments of Certain Amounts to Company. (a) If directed by the
--------------------------------------------------
Company, CFC on behalf of the Company will pool any FHA Loans and VA Loans
purchased by the Company in accordance with the requirements of FNMA and will
use its best efforts to have GNMA Certificates issued backed by such FHA Loans
and VA Loans. In connection therewith, CFC will (i) apply to GNMA for a
commitment to guarantee mortgage-backed securities by the issuance of such GNMA
Certificates; (ii) once such a commitment has been issued by GNMA, deliver the
pool of mortgage loans to a custodian (selected by CFC and acceptable to the
Company, subject to GNMA requirements) to be held for the benefit of the holder
of the Certificates; and (iii) once the custodian verifies to GNMA that it has
custody of the pool, enter into or cause to be created an appropriate GNMA
guaranty pursuant to which CFC will issue a GNMA Certificate owned by and
registered in the name of or deposited into a depository institution for the
account of the Company. After the issuance of such GNMA Certificates, CFC will
retain all responsibilities and duties to GNMA, including the payment of all
GNMA guaranty fees, with respect to such FHA Loans, VA Loans and GNMA
Certificates and will service such FHA Loans and VA Loans after the issuance of
the GNMA Certificates in accordance with GNMA requirements.

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<PAGE>
 
               (b) If directed by the Company, CFC on behalf of the Company will
pool any conventional mortgage loans and/or FHA Loans and VA Loans purchased by
the Company in accordance with the requirements of FNMA and/or the requirements
of FHLMC and will use its best efforts to have FNMA Certificates and/or FHLMC
Certificates issued backed by such conventional mortgage loans, FHA Loans and VA
Loans, but only if CFC in its sole discretion determines that such conventional
mortgage loans, FHA Loans and VA Loans meet all FNMA or FHLMC underwriting and
other requirements for such issuance. In connection therewith, CFC will (i)
apply to FNMA or FHLMC for a commitment to issue FNMA Certificates or FHLMC
Certificates and (ii) once such commitment has been approved, CFC will contract
with FNMA or FHLMC to pool such conventional mortgage loans, FHA Loans and VA
Loans and cause to be issued FNMA Certificates or FHLMC Certificates backed by
such loans, which FNMA Certificates or FHLMC Certificates will be owned by and
will be registered in the name of or deposited into a depository institution for
the account of the Company. After the issuance of such FNMA Certificates and
FHLMC Certificates, CFC will retain all responsibilities and duties to FNMA and
FHLMC, including the payment of all FNMA or FHLMC guaranty fees, with respect to
such conventional mortgage loans, FHA Loans, VA Loans, FNMA Certificates and
FHLMC Certificates and will service such conventional mortgage loans, FHA Loans
and VA Loans after the issuance of the FNMA or FHLMC Certificates which they
back, in accordance with FNMA and FHLMC requirements.

               (c) If Agency Securities are issued to the Company pursuant to
this Section, CFC agrees that for such time as it is servicing the mortgage
loans underlying each Agency Security on behalf of the Company, in addition to
all duties and obligations imposed on CFC by the servicing agreement which
incorporates the appropriate GNMA, FNMA or FHLMC requirements, CFC shall remit
to the Company at the same time it remits each periodic installment of principal
and interest on the Agency Security, the amount, if any, representing the
difference between (i) the schedules installment of principal and interest on
the mortgage loans underlying the Agency Security, less the applicable GNMA,
FNMA or FHLMC guaranty fee and CFC's servicing fee as agreed to between the
Company and CFC, and (ii) the scheduled installment of principal and interest on
the Agency Security. The obligation of CFC to remit such amounts to the Company
shall arise upon receipt from the mortgagor by CFC of the scheduled installment
of principal and interest on the underlying mortgage loan. CFC agrees that in
the event it assigns its right to service the mortgage loans underlying Agency
Securities, either the successor servicer of such mortgage loans will continue
to remit the amounts referred to above to the Company or CFC will remit to the
Company an amount representing the present value of the anticipated amounts
which would otherwise be received by the Company over the life of the mortgage
loans under this Subsection.

               Section 4. Obligation to Assume Servicing. In the event the
               ---------  ------------------------------
Company or any Subsidiary acquires rights to service mortgage loans or
terminates the servicing rights of any entity which has sold mortgage loans to
the Company or any Subsidiary on a servicing retained basis, the Company and CFC
agree to negotiate a servicing agreement pursuant to which CFC will assume the
servicing function.

               Section 5. Additional Activities of CFC. Nothing herein shall
               ---------  ----------------------------
prevent CFC or its Affiliates from engaging in other businesses or from
rendering services of any kind to any other person or entity, including the
performance of monitoring, administering or servicing activities for others
investing in any type of real estate investment.

               Section 6. Bank Accounts. Fidelity Bond. (a) CFC may establish
               ---------  -----------------------------
and maintain in connection with the services performed hereunder one or more
bank accounts in the name of the Company, at the direction of the Company, and
may collect and deposit into any such account or accounts, and disburse from any
such account or accounts, moneys on behalf of the Company, under such terms and
conditions as the Company may approve; and CFC shall from time to time

                                       5
<PAGE>
 
render appropriate accountings of such collections and payments to the Company
and, when requested, to the auditors of the Company.

               (b) CFC shall maintain a fidelity bond with a responsible surety
company in an amount approved by the Board of Directors covering all officers
and employees of CFC handling funds of the Company and any documents or papers,
which bond shall protect the Company against all losses of any such property
from acts of such officers and employees through theft, embezzlement, fraud,
negligent acts, errors and omissions or otherwise, the premium for said bond to
be paid by CFC.

               Section 7. Records; Confidentiality. CFC shall maintain
               ---------  ------------------------
appropriate books of account and records relating to services performed
hereunder, which books of account and records shall be accessible for inspection
and copying by the Company at any time during normal business hours. CFC agrees
to keep confidential any and all information it obtains from time to time in
connection with the services it renders hereunder and shall not disclose any
portion thereof to nonaffiliated third parties except with the prior written
consent of the Company.

               Section 8. Term; Termination. (a) This Agreement shall continue
               ---------  -----------------
in force through May 14, 1995, and thereafter it may be extended only with the
consent of CFC and by the affirmative vote of a majority of the Unaffiliated
Directors. Each extension shall be executed in writing by both parties hereto
before the expiration of this Agreement or of any extension thereof.

               (b) CFC may terminate this Agreement upon 30 days' written notice
if at any time any of the Affiliates of Countrywide Credit Industries, Inc. are
no longer servicing as Manager.

               (c) Notwithstanding any other provision herein to the contrary,
this Agreement, or any extension hereof, may be terminated by the Company with
cause, upon 30 days' written notice, or by either party without cause, upon 60
days' written notice, by majority vote of the Unaffiliated Directors or by vote
of the holders of a majority of the outstanding shares of common stock of the
Company, in the case of termination by the Company, or in the case of
termination by CFC, by majority vote of the Directors of CFC.

               Section 9. Assignment. This Agreement shall not be assignable in
               ---------  ----------
whole or in part by CFC, unless such assignment is to a corporation,
association, trust or other organization which shall acquire the property and
carry on the business of CFC, if at the time of such assignment a majority of
the voting stock of such assignee organization shall be owned, directly or
indirectly, by Countrywide Credit Industries, Inc. or unless such assignment is
consented to in writing by the Company with the consent of a majority of the
Unaffiliated Directors. Such an assignment shall bind the assignee hereunder in
the same manner as CFC is bound hereunder, and, to further evidence its
obligations hereunder, the assignee shall execute and deliver to the Company a
counterpart of this Agreement. This Agreement shall not be assignable by the
Company without the consent of CFC, except in the case of an assignment by the
Company to a corporation or other organization which is a successor (by merger,
consolidation or purchase of assets) to the Company, in which case such
successor organization shall be bound hereunder by the terms of said assignment
in the same manner as the Company is bound hereunder.

               Section 10. Termination by Company for Cause. At the option
               ----------  --------------------------------
solely of the Company, this Agreement may be and become terminated upon receipt
of thirty days' written notice of termination from the Board of Directors to CFC
is any of the following events shall occur:

               (a) If CFC shall violate any provisions of this Agreement and,
after notice of such violation, shall not cure such default within 30 days; or

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<PAGE>
 
               (b) There is entered an order for relief or similar decree or
order with respect to CFC by a court having jurisdiction in the premises in an
involuntary case under the federal bankruptcy laws as now or hereafter
constituted or under any applicable federal or state bankruptcy, insolvency or
other similar laws; or CFC (i) ceases or admits in writing its inability to pay
its debts as they become due and payable, or makes a general assignment for the
benefit of, or enters into any composition or arrangement with, creditors; (ii)
applies for, or consents (by admission of material allegations of a petition or
otherwise) to the appointment of a receiver, trustee, assignee, custodian,
liquidator or sequestrator (or other similar official) of CFC or of any
substantial part of its properties or assets, or authorizes such an application
or consent, or proceedings seeking such appointment are commenced without such
authorization, consent or application against CFC and continue undismissed for
30 days; (iii) authorizes or files a voluntary petition in bankruptcy, or
applies for or consents (by admission of material allegations of a petition or
otherwise) to the application of any bankruptcy, reorganization, arrangement,
readjustment of debt, insolvency, dissolution, liquidation or other similar law
of any jurisdiction, or authorizes such application or consent, or proceedings
to such end are instituted against CFC without such authorization, application
or consent and remain undismissed for 30 days or result in adjudication of
bankruptcy or insolvency; or (iv) permits or suffers all or any substantial part
of its properties or assets to be sequestered or attached by court order and the
order remains undismissed for 30 days.

               (c) CFC agrees that if any of the events specified in paragraph
(b) of this Section 10 shall occur, it will give prompt written notice thereof
to the Board of Directors after the happening of such event.

               Section 11. Action Upon Termination. From and after the effective
               ----------  -----------------------
date of termination of this Agreement, pursuant to Sections 8, 9 or 10 hereof,
CFC shall not be entitled to compensation for further services hereunder, but
shall be paid all compensation accruing to the date of termination. CFC shall
forthwith upon such termination:

               (a) Pay over to the Company any money collected and held for the
account of the Company pursuant to this Agreement or otherwise, after deducting
any accrued compensation to which it is then entitled;

               (b) Deliver to the Board of Directors a full accounting,
including a statement showing any payments collected by it and a statement of
any money held by it, covering the period following the date of the last
accounting furnished to the Board of Directors; and

               (c) Deliver to the Board of Directors all property and documents
of the Company then in the custody of CFC, except to the extent that to do so
would conflict with the terms of its servicing agreement with the Company.

               Section 12. Release of Money or other Property Upon Written
               ----------  -----------------------------------------------
Request. CFC agrees that any money or other property of the Company held by CFC
--------      
under this Agreement shall be held for the Company in a custodial capacity, and
CFC's records shall be appropriately marked to clearly reflect the ownership of
such money or other property of the Company. CFC shall release its custody of
any money or other property only in accordance with written instructions from
the Company.

               Section 13. Notices. Any notice, report or other communication
               ----------  -------
required or permitted to be given hereunder shall be in writing, unless some
other method of giving such notice , report or other communication is accepted
by the party to whom it is given, and shall be given by being delivered at the
following addresses of the parties hereto:

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<PAGE>
 
               The Company:        Countrywide Mortgage Investments, Inc.
                                   35 North Lake Avenue
                                   Pasadena, California  91101-1857
                                   Attention:  General Counsel     

               CFC:                Countrywide Funding Corporation
                                   155 North Lake Avenue          
                                   Post Office 7137               
                                   Pasadena, California  91109-7137
                                   Attention:  General Counsel     

               Either party may at any time give notice in writing to the other
party of a change of its address for the purpose of this Section 13.

               Section 14. No Joint Venture. The Company and CFC are not
               ----------  ----------------
partners or joint venturers with each other and nothing herein shall be
construed to make them such partners or joint venturers or impose any liability
as such on either of them.

               Section 15. Amendments. This Agreement shall not be amended,
               ----------  ----------
changed, modified, terminated or discharged in whole or in part, and the
performance of any obligation hereunder may not be waived, except by an
instrument in writing signed by both parties hereto, or their respective
successors or permitted assigns, or otherwise as provided herein.

               Section 16. Successors and Assigns. This Agreement shall bind any
               ----------  ----------------------
successors or permitted assigns of the parties hereto as herein provided..

               Section 17. Severability. The invalidity or unenforceability of
               ----------  ------------
any provision of this Agreement shall not affect the validity of any other
provision, and all other provisions shall remain in full force and effect.

               Section 18. Entire Agreement. This instrument contains the entire
               ----------  ----------------
agreement between the parties as to the rights granted and the obligations
assumed in this instrument.

               Section 19. Waiver. Any forbearance by a party to this Agreement
               ----------  ------

in exercising any right or remedy under this Agreement or otherwise afforded by
applicable laws shall not be a waiver of or preclude the exercise of that or any
other right or remedy.

               Section 20. Governing Law. This Agreement shall be governed by,
               ----------  -------------
construed under and interpreted in accordance with the laws of the State of
California.

               Section 21. Supplemental Servicing. From and after the date of
               ----------  ----------------------
this Agreement the Supplemental Servicing Agreement dated as of May 15, 1987, by
and among the Company, CFC and the Manager shall be of no further force and
effect.

               Section 22. Headings and Cross-References. The section headings
               ----------  -----------------------------
hereof have been inserted for convenience of reference only and shall not be
construed to affect the meaning, construction or effect of this Agreement. Any
reference in this Agreement to a "Section" or "Subsection" shall be construed,
respectively, as referring to a section of this Agreement or a subsection of a
section of this Agreement in which the reference appears.

               Section 23. Execution in Counterparts. This Agreement may be
               ----------  -------------------------
executed in one or more counterparts, any of which shall constitute an original
as against any party whose

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<PAGE>
 
signature appears on it, and all of which shall together constitute a single
instrument.  This Agreement shall become binding when one or more counterparts,
individually or taken together, bear the signatures of both parties.

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers thereunto duly authorized as of the day and
year first above written.



                           COUNTRYWIDE MORTGAGE INVESTMENTS, INC.



                           By:     /s/ Michael W. Perry
                                   _____________________________
                                   Michael W. Perry
                           Title:  Executive Vice President



                           COUNTRYWIDE FUNDING CORPORATION



                           By:     /s/ Kevin W. Bartlett    
                                   _____________________________
                                   Kevin W. Bartlett
                           Title:  Managing Director


               The undersigned, as Manager, consents to the foregoing terms and
provisions of this Agreement and agrees to be bound by them in performing its
duties as Manager of the Company.



                           COUNTRYWIDE ASSET MANAGEMENT
                           CORPORATION



                           By:    /s/ Stanford L. Kurland
                                  _____________________________
                                  Stanford L. Kurland
                           Title: President

                                       9

Source: OneCLE Business Contracts.