TMSF Holdings, Inc.

The Mortgage Store Financial, Inc., is a direct mortgage lender established in 1992 to solicit, process, and fund residential mortgage loans throughout the United States. Loan applications are processed and underwritten by TMSF in accordance with established guidelines acceptable to its investors, and are funded directly through its own warehouse credit facility (warehouse). After funding, the mortgages are sold to institutional investors for cash. After the origination of a mortgage note, secured by real properties, TMSF sells the note to investors on a "whole loan" basis for cash. The investors either retain these mortgages for their own portfolio or pool them into mortgagebacked securities to be offered in the financial markets. Beginning in 1996, TMSF engaged in origination of specialty products commonly known as Alt-A mortgages for 1-4 unit family residential mortgages. Recently TMSF expanded its loan programs to include Type-A loans as well as sub-prime mortgages for borrowers with lower credit ratings. (Note: through the third quarter ended September 30, 2002, sub-prime loans accounted for approximately 2.1% of total originations).