Delta Financial Corp, et al. – ‘S-4/A’ on 8/13/01

On:  Monday, 8/13/01, at 5:13pm ET   ·   Accession #:  1125282-1-501549   ·   File #s:  333-60188, -02, -03   ·   Correction:  This Filing was Corrected by the SEC on 11/27/02. ®

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Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction   —   Form S-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-4/A       Amendment No. 5 to Registration Statement            247   1.37M 

Document Table of Contents

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As filed with the Securities and Exchange Commission on August 13, 2001 

                                                    Registration No. 333-60188
=============================================================================== 

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------

AMENDMENT NO. 5 
FORM S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 
----------------
DELTA FINANCIAL CORPORATION 
(Exact name of registrant as specified in its charter)

                                                        [Enlarge/Download Table]

        DELAWARE                      6163                        11-3336165           
                                                                                       
(State of incorporation)  (Primary standard industrial  (I.R.S. employer classification
                             identification number)              code number)          

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

1000 Woodbury Road
Woodbury, New York 11797
(516) 364-8500
(Address, including zip code, and telephone number, 
including area code, of registrant's principal executive offices) 
----------------
DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC
(Exact name of registrant as specified in its charter)

                                                        [Enlarge/Download Table]

        DELAWARE                      6189                        52-2325327           
                                                                                       
(State of incorporation)  (Primary standard industrial  (I.R.S. employer classification
                             identification number)              code number)          

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

1000 Woodbury Road
Woodbury, New York 11797
(516) 364-8500
(Address, including zip code, and telephone number, 
including area code, of registrant's principal executive offices) 
----------------
DELTA FUNDING RESIDUAL MANAGEMENT, INC. 
(Exact name of registrant as specified in its charter)

                                                        [Enlarge/Download Table]

        DELAWARE                      6189                        52-2325326           
                                                                                       
(State of incorporation)  (Primary standard industrial  (I.R.S. employer classification
                             identification number)              code number)          

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

1000 Woodbury Road
Woodbury, New York 11797
(516) 364-8500
(Address, including zip code, and telephone number, 
including area code, of registrant's principal executive offices) 
----------------

Marc E. Miller, Esq.
Delta Financial Corporation 
1000 Woodbury Road
Woodbury, New York 11797
(516) 364-8500
(Name, address, including zip code, and telephone number, including area code,
of agent for service) 
----------------

Copy to:
James R. Tanenbaum, Esq.
Anna T. Pinedo, Esq.
Stroock & Stroock & Lavan LLP 
180 Maiden Lane 
New York, New York 10038
(212) 806-5400
----------------

 Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.            

  If the securities being registered on this form are being offered in
connection with the formation of a holding company, and there is compliance 
with General Instruction G, check the following box. [ ]                        

If the form is filed to register additional securities for an offering    
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the       
"Securities Act"), check the following box and list the Securities Act          
registration statement number of the earlier effective registration statement   
for the same offering. [ ]                                                      

If this form is a post-effective amendment filed pursuant to Rule 462(d)  
under the Securities Act, check the following box and list the Securities Act   
registration statement number of the earlier effective registration statement   
for the same offering. [ ]                                                      
----------------

THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR  
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS     
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS              
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH     
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE            
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,   
ACTING PURSUANT TO SECTION 8(A) MAY DETERMINE.                                  
=============================================================================== 

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PROSPECTUS                                                                      

                                                            [DELTA LOGO]

DELTA FINANCIAL CORPORATION,
DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC, AND 
DELTA FUNDING RESIDUAL MANAGEMENT, INC. 

OFFER TO EXCHANGE DELTA FINANCIAL CORPORATION'S 
9 1/2% SENIOR NOTES DUE 2004
AND 
9 1/2% SENIOR SECURED NOTES DUE 2004
FOR 
SERIES A PREFERRED STOCK OF DELTA FINANCIAL CORPORATION,
CLASS A VOTING MEMBERSHIP INTERESTS IN DELTA FUNDING RESIDUAL 
EXCHANGE COMPANY, LLC, AND COMMON STOCK OF
DELTA FUNDING RESIDUAL MANAGEMENT, INC. 

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

THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, 
ON AUGUST 20, 2001

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

We are offering the holders of our 9 1/2% Senior Notes due 2004 and the   
holders of our 9 1/2% Senior Secured Notes due 2004 an opportunity to exchange  
their notes for:                                                                

o shares of our newly issued preferred stock;                             

o newly issued voting membership interests of Delta Funding Residual      
Exchange Company, LLC, a                                              
recently organized Delaware limited liability company; and            

 o shares of newly issued common stock of Delta Funding Residual Management,
Inc., a recently created Delaware corporation.                        

We will not pay noteholders any cash in connection with exchanging their  
notes.                                                                          

  Delta Funding Residual Exchange Company, LLC's only assets will be comprised
of mortgage-related securities that we or our affiliates currently hold. If     
you exchange your notes, you will no longer receive regular interest payments   
or a return of your principal. Instead, if you exchange your notes,             

 o as a holder of shares of our preferred stock, you will receive dividends,
only if declared and paid by our board of directors, beginning in July
2003;                                                                 

o as a holder of membership interests of Delta Funding Residual Exchange  
Company, LLC, you will receive cash payments, if any, produced by the 
mortgage-related securities held by Delta Funding Residual Exchange   
Company, LLC after Delta Funding Residual Exchange Company, LLC makes 
required payments of fees, expenses and taxes as well as preferential 
returns to us; and                                                    

o as a holder of shares of common stock of Delta Funding Residual         
Management, Inc., you will receive                                    
an ownership interest in the managing member of Delta Funding Residual
Exchange Company, LLC.                                                

 In connection with exchanging your notes, we urge you to read this document
in its entirety, including the section describing risks relating to the         
exchange offer, our business, Delta Funding Residual Exchange Company LLC, and  
Delta Funding Residual Management, Inc. See "Risk Factors" beginning on page    
13.                                                                             

  As part of the exchange offer, we also are asking the noteholders to consent
to certain proposed amendments to the indentures which govern the notes. We     
describe these proposed amendments under "The Exchange Offer--The Proposed      
Amendments" beginning on page 34. If you tender your notes and the exchange     
offer is consummated you will not receive the interest payment due to you on    
August 1, 2001.                                                                 

 We will keep the exchange offer open until 5:00 p.m., New York City time on
August 20, 2001.                                                                

Our offer to exchange your notes is conditioned upon receiving at least   
ninety-five percent in aggregate principal amount of the outstanding notes for  
exchange.                                                                       

We describe the procedure for tendering your notes for exchange under "The
Exchange Offer" beginning on page 34.                                           

 NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES AND
EXCHANGE COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED   
UPON THE ADEQUACY OR THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO     
THE CONTRARY IS A CRIMINAL OFFENSE.                                             

 The date of this Prospectus is August 13, 2001.

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TABLE OF CONTENTS 

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QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER ...........................     1
PROSPECTUS SUMMARY .......................................................     4
 Structure of the Exchange Offer .........................................     4
 Delta Financial Corporation .............................................     5
 Delta Funding Residual Exchange Company, LLC ............................     6
 Delta Funding Residual Management, Inc. .................................     7
 Risk Factors ............................................................     7
DELTA FINANCIAL CORPORATION SUMMARY HISTORICAL FINANCIAL DATA ............     9
SUMMARY PRO FORMA FINANCIAL DATA FOR DELTA FUNDING RESIDUAL EXCHANGE            
  COMPANY, LLC............................................................    10
SUMMARY PRO FORMA FINANCIAL DATA FOR DELTA FUNDING RESIDUAL                     
  MANAGEMENT, INC.........................................................    12
RISK FACTORS .............................................................    13
 Risks Associated with the Exchange Offer ................................    13
 Risks Affecting Us and Our Business .....................................    16
 Risks Associated with Delta Funding Residual Exchange Company, LLC ......    23
 Risks Associated with the Mortgage-Related Securities ...................    26
 Risks Associated with Delta Funding Residual Management, Inc. ...........    31
USE OF PROCEEDS ..........................................................    32
DELTA FINANCIAL CORPORATION CAPITALIZATION ...............................    32
DELTA FINANCIAL CORPORATION SELECTED HISTORICAL                                 
  FINANCIAL DATA..........................................................    33
THE EXCHANGE OFFER .......................................................    34
 Terms of the Exchange Offer; Period for Tendering Notes .................    34
 The Proposed Amendments .................................................    34
 Expiration Date; Extensions; Amendments .................................    35
 Release of Legal Claims by Tendering Noteholders ........................    35
 Procedures for Tendering Notes ..........................................    35
 Acceptance of Notes for Exchange; Delivery of Shares of our                    
   Preferred Stock, the Membership Interests of Delta Funding                   
   Residual Exchange Company, LLC and the Shares of Common                      
   Stock of Delta Funding Residual Management, Inc. ......................    37
 Book-Entry Transfers ....................................................    37
 Guaranteed Delivery Procedures ..........................................    38
 Withdrawal Rights .......................................................    38
 Conditions to the Exchange Offer ........................................    39

                                                                [Download Table]

                                                                                
 Exchange Agent ..........................................................    40
 Information Agent; Assistance ...........................................    40
 Fees and Expenses .......................................................    40
 Transfer Taxes ..........................................................    41
 Consequences of Failure to Exchange .....................................    41
BACKGROUND OF THE EXCHANGE OFFER .........................................    42
CONSIDERATIONS FOR NOTEHOLDERS WHO ELECT NOT TO PARTICIPATE IN THE              
  EXCHANGE OFFER..........................................................    43
 Effect of the Proposed Amendments .......................................    43
 Adverse Effects on Trading Market for the Notes .........................    44
 Liquidation Value of the Assets Securing the Senior Secured Notes .......    44
DELTA FINANCIAL CORPORATION ..............................................    47
DESCRIPTION OF OUR PREFERRED STOCK .......................................    53
 General .................................................................    53
 Rank ....................................................................    53
 Dividends ...............................................................    53
 Voting Rights--General ..................................................    54
 Election of Additional Directors ........................................    54
 Optional Redemption .....................................................    55
 Mandatory Redemption ....................................................    55
 Liquidation Rights ......................................................    56
 Amendment ...............................................................    56
 Reacquired Shares .......................................................    56
 Preemptive Rights; Sinking Fund .........................................    56
 Restrictions on Transfer ................................................    56
DESCRIPTION OF DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC ..............    57
 General .................................................................    57
 Terms of Delta Funding Residual Exchange Company, LLC's Operating              
   Agreement .............................................................    57
 Management Agreement ....................................................    59
 Assets of Delta Funding Residual Exchange Company, LLC ..................    60
 Description of the Mortgage-Related Securities ..........................    60
DESCRIPTION OF DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC MEMBERSHIP          
  INTERESTS...............................................................    75
 Restrictions On Transfer ................................................    75
 Withdrawal ..............................................................    76
 Voting Rights ...........................................................    76
 Rights Upon Liquidation .................................................    76
DESCRIPTION OF DELTA FUNDING RESIDUAL MANAGEMENT, INC. ...................    76

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DESCRIPTION OF DELTA FUNDING RESIDUAL MANAGEMENT, INC. COMMON STOCK ......    78
 Dividends ...............................................................    78
 Voting Rights ...........................................................    78
 Rights Upon Liquidation .................................................    79
COMPARISON OF RIGHTS OF HOLDERS OF THE NOTES AND OUR PREFERRED STOCK,           
  THE MEMBERSHIP INTERESTS OF DELTA FUNDING RESIDUAL EXCHANGE COMPANY,          
  LLC AND THE COMMON STOCK OF DELTA FUNDING RESIDUAL MANAGEMENT, INC......    79
FEDERAL AND STATE REGULATORY REQUIREMENTS ................................    81
ERISA CONSIDERATIONS .....................................................    81
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER ......    83
 Tax Consequences of the Exchange Offer ..................................    83
 Taxation of Holders of Our Preferred Stock ..............................    86
 Taxation of Delta Funding Residual Exchange Company, LLC and Holders of        
   its Membership Interests ..............................................    87
 Taxation of Holders of Shares of Common Stock of Delta Funding Residual        
   Management, Inc. ......................................................    91
 Tax Consequences to Us ..................................................    92
 Retention of Notes; Adoption of Proposed Amendments .....................    93
 Backup Withholding ......................................................    93
LEGAL MATTERS ............................................................    93
EXPERTS ..................................................................    93
WHERE YOU CAN FIND MORE INFORMATION ......................................    93
INCORPORATION OF DOCUMENTS BY REFERENCE ..................................    94
FORWARD-LOOKING STATEMENTS ...............................................    95
ANNEX A -- THE PROPOSED AMENDMENTS .......................................   A-1
EXHIBITS A through V -- STATEMENT OF CERTIFICATEHOLDERS INFORMATION ......     B

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QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER

Q:   Why are we proposing the exchange offer?                                   

A:   Based on our current estimates, it is unlikely that we will have           
   sufficient funds to make the interest payments due on the notes in August
2001 and thereafter, and at the same time comply with the restrictive 
covenants in our warehouse line of credit, and otherwise operate our  
 business. If the exchange offer is not consummated, we will not be able
to continue as a going concern.                                       

We would like to continue improving our operating efficiencies and    
reducing our negative cashflow from operations. If we are able to     
   complete the exchange offer, we will no longer have an obligation to make
   regular interest payments on the notes. In addition, we will have greater
   operating and financial flexibility because we will not be subject to the
covenants in the senior secured notes indenture.                      

Q:   Which noteholders may participate in the exchange offer?                   

A:   Holders of Delta Financial Corporation's 9 1/2% Senior Notes due 2004 and  
9 1/2% Senior Secured Notes due 2004 may participate in the exchange  
offer.                                                                

Q:   What will you receive in the exchange offer?                               

A:   For each $1,000 principal amount of notes you tender you will receive:     

o one share of our preferred stock;                                   
o one voting membership interest of Delta Funding Residual Exchange   
Company, LLC; and                                                 
o one share of common stock of Delta Funding Residual Management, Inc.

You will not receive any cash.                                        

Q:   If the exchange offer is consummated but you did not tender your notes,    
how will your rights be affected?                                     

A:   Non-tendering holders of the senior secured notes no longer will have      
collateral securing their notes and no longer will be protected by the
restrictive covenants in the senior secured notes indenture.          

Q:   What is Delta Funding Residual Exchange Company, LLC?                      

A:   Delta Funding Residual Exchange Company, LLC is a Delaware limited         
liability company that we organized to facilitate completion of this  
exchange offer. Delta Funding Residual Exchange Company, LLC will not 
conduct any business or operations; it will exist solely to hold      
   mortgage-related securities primarily for the benefit of the noteholders.

Q:   What are the assets of Delta Funding Residual Exchange Company, LLC?       

A:   Delta Funding Residual Exchange Company, LLC will hold mortgage-related    
securities, which currently are held by us or by our affiliates. These
mortgage-related securities currently serve as collateral securing our
   obligations under the senior secured notes. All of these mortgage-related
   securities were issued in connection with our securitization transactions
 and represent the right to receive payments from securitization trusts.

  We describe the securities in more detail beginning on page 57 under the
section "Description of Delta Funding Residual Exchange Company, LLC--
Assets of Delta Funding Residual Exchange Company, LLC."              

Q:   What is Delta Funding Residual Management, Inc.?                           

A:   Delta Funding Residual Management, Inc. is a Delaware corporation and a    
  wholly owned subsidiary of Delta Funding Residual Exchange Company, LLC.
   We organized it to facilitate the exchange offer and to manage the assets
 held by Delta Funding Residual Exchange Company, LLC upon completion of
the exchange offer. Delta Funding Residual Management, Inc. will not  
 conduct any business or operations other than those associated with its
management of Delta Funding Residual Exchange Company, LLC.           

Q:   What are the assets of Delta Funding Residual Management, Inc.?            

A:   Delta Funding Residual Management, Inc. will not have substantial assets.  
It will have minimal capitalization and it will hold a non-voting     
membership interest in Delta Funding Residual Exchange Company, LLC.  

Q:   What payments do you currently have a right to receive as a holder of the  
notes?                                                                

A:   The notes entitle you to receive regular interest payments from us and to  
 receive, at maturity in 2004, the return of your principal. However, we
may not have the cash required to continue to make regular interest   
payments on the notes. If we are unable to make the required interest 
payments on the notes, we will have defaulted on our obligations under
the indentures governing the notes. The noteholders may declare the   
 entire amount then due on the notes immediately payable. The holders of
   the senior secured notes would then have their right to payment satisfied
 by looking to the collateral securing our obligations to them under the

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  senior secured notes. The senior secured notes are secured indirectly by
  pledges of mortgage-related securities which had an approximate value in
our view of $152.8 million as of March 31, 2001.                      

Q:   What payments would you receive following the exchange offer as a holder   
   of shares of our preferred stock, the membership interests, and shares of
the common stock?                                                     

A:   If you tender your notes and the exchange offer is consummated, you will   
not receive regular interest payments and you will not be entitled to 
receive a return of your principal. You will not receive the interest 
payment due to you on August 1, 2001.                                 

As a holder of our preferred stock, beginning in July 2003, you will  
   receive dividend payments if, and only if, declared and paid by our board
 of directors out of funds which are legally available for this purpose.
The preferred stock will not be convertible into shares of our capital
   stock. We describe the terms of our preferred stock in more detail in the
   section titled "Description of Our Preferred Stock" beginning on page 53.

As a holder of membership interests in Delta Funding Residual Exchange
 Company, LLC, you will receive quarterly cash distributions only to the
extent that Delta Funding Residual Exchange Company, LLC receives cash
  from its mortgage-related securities in an amount that exceeds the fees,
   expenses, taxes and distributions to us that are payable by Delta Funding
  Residual Exchange Company, LLC. Delta Funding Residual Exchange Company,
LLC's expenses will include paying income tax liabilities arising in  
connection with the mortgage-related securities, portions of our      
 settlement with the New York Department of Banking, and between ten and
 fifteen percent of the net after tax cashflow of Delta Funding Residual
Exchange Company, LLC to us. Only once all of Delta Funding Residual  
  Exchange Company, LLC's expenses are paid will you, as a holder of Delta
  Funding Residual Exchange Company, LLC's membership interest receive any
 cash distribution. We describe Delta Funding Residual Exchange Company,
LLC's membership interests in more detail in the section titled       
 "Description of Delta Funding Residual Exchange Company, LLC Membership
Interests" beginning on page 75.                                      

As a holder of Delta Funding Residual Management, Inc.'s common stock,
you will receive an equity interest in the managing member of Delta   
Funding Residual Exchange Company, LLC. Delta Funding Residual        
 Management, Inc. does not intend to make dividend payments. We describe
the terms of this common stock in more detail in the section titled   
"Description of Delta Funding Residual Management, Inc. Common Stock" 
beginning on page 78.                                                 

Q:   Will you be able to transfer shares of our preferred stock, the            
membership interests, and shares of the common stock?                 

A:   You only will be able to transfer Delta Funding Residual Exchange          
  Company, LLC's membership interests and shares of Delta Funding Residual
Management, Inc.'s common stock on a corresponding pro rata basis to a
qualified institutional buyer as defined under Rule 144A of the       
Securities Act who is a qualified purchaser as defined under          
   Section 2(a)(51)(a) of the Investment Company Act and the transferee must
   agree in writing to be bound by the terms and conditions of Delta Funding
 Residual Exchange Company, LLC's operating agreement. The shares of our
preferred stock will be subject to limited restrictions on transfer.  

   None of these securities will be listed on a national securities exchange
  and we do not expect that a trading market will develop for any of these
securities.                                                           

Q:   How should you evaluate an investment in the preferred stock, the          
membership interests and the shares of common stock?                  

A:   As discussed above, beginning in July 2003, holders of the preferred       
   stock are entitled to receive dividend payments if, and only if, declared
and paid by our board of directors, out of funds legally available for
this purpose.                                                         

As for an investment in the membership interests of Delta Funding     
Residual Exchange Company, LLC, we provide information about the      
mortgage-related securities which will be held by it, including our   
 analysis of the projected cashflows from these securities over the next
  thirty years, beginning on page 57 under the section titled "Description
 of Delta Funding Residual Exchange Company, LLC." Our analysis is based
on a number of assumptions concerning future events. There            
can be no assurance that the actual cash flows will approximate the   
projected cash flows.                                                 

Holders of shares of Delta Funding Residual Management, Inc.'s common 
stock will not receive any dividends.                                 

Q:   What are the conditions to the exchange offer?                             

A:   We will complete the exchange offer if the holders of at least ninety-     
five percent aggregate                                                

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   outstanding principal amount of notes tender their notes for exchange. If
the holders of at least 90% aggregate outstanding principal amount of 
notes tender their notes for exchange, we will have the option to     
complete the exchange offer.                                          

Each noteholder who tenders its senior secured notes in the exchange  
offer also must consent to several amendments to the indenture which  
govern the senior secured notes. If you tender your notes and the     
  exchange offer is consummated, you will not receive the interest payment
due to you on August 1, 2001.                                         

By tendering your notes, you also will be deemed to have released and 
   waived legal claims (except claims arising under federal securities laws)
  against us and our affiliates. We describe these releases in the section
titled "The Exchange Offer--Release of Legal Claims by Tendering      
Noteholders" on page 35.                                              

Q:   What are the proposed amendments?                                          

A:   The indenture governing the senior secured notes will be amended to        
   conform with the terms of this exchange offer. The amendments will remove
all of the collateral currently securing the notes. In addition, the  
amendments will remove from the indenture governing the senior secured
notes most of the restrictive covenants that currently limit (for the 
  benefit of the noteholders) our ability to engage in certain activities,
like incurring additional debt or disposing of our assets. We describe
these amendments in detail under "The Exchange Offer--The Proposed    
Amendments" beginning on page 34. The indenture governing the senior  
notes does not contain these restrictive covenants as a result of     
  amendments made to it in connection with the exchange offer we completed
in December 2000.                                                     

Q:   How do you participate in the exchange offer?                              

A:   To participate in the exchange offer, a noteholder must deliver:           

o    a consent to the proposed amendments to the indentures;          

   o    a completed letter of transmittal or an agent's message if the notes
       are tendered through DTC's Automated Tender Offer Program, or ATOP;
and                                                         

 o    the notes or a notice of guaranteed delivery, unless the notes are
tendered through ATOP.                                      

   All of these documents must be delivered to the exchange agent before the
  expiration date for the exchange offer. Please see "The Exchange Offer--
Procedures for Tendering Notes" beginning on page 35.                 

Q:   When does the exchange offer expire?                                       

A:   The exchange offer will expire at 5:00 p.m., New York City time, on        
August 20, 2001.                                                      

Q:   Can you withdraw your tender of notes?                                     

A:   You may withdraw any tendered notes at any time prior to the expiration    
time.                                                                 

Q:   Who will pay the fees and expenses associated with the exchange?           

A:   We will bear all fees and expenses incurred in connection with             
consummating the exchange offer. See "The Exchange Offer--Fees and    
Expenses" on page 40.                                                 

Q:   Who can answer my questions concerning the exchange offer?                 

A:   If you have any questions about the exchange offer or how to submit your   
letter of transmittal, or if you need additional copies of this       
prospectus or of our Annual Report on                                 
 Form 10-K/A or our Quarterly Report on Form 10-Q/A, you should contact:

Richard Blass                                                         
Executive Vice President and Chief                                    
Financial Officer                                                 
Delta Financial Corporation                                           
Telephone: 516-812-8200                                               
e-mail: rblass@deltafinancial.com                                     

You also may contact the exchange agent or the information agent. U.S.
   Bank Trust National Association is the exchange agent. Its address is 180
East Fifth Street, 4th Floor, St. Paul, Minnesota, 55101 Attention:   
Default Processing. Its toll-free number is 1-800-934-6802.           

  D.F. King & Co., Inc. is the information agent. Its address is D.F. King
& Co., Inc., 77 Water Street, New York, New York 10005. Its toll-free 
number is 1-800-488-8095.                                             

We have scheduled the following two conference calls to answer any of 
 your questions about the exchange offer and we urge you to participate:

Date:  Thursday, July 26, 2001 at 10 a.m., New York City time. Dial-in
number: 1-888-869-0374.                                 

Date:  Tuesday, July 31, 2001 at 10 a.m., New York City time. Dial-in 
number 1-800-720-5850.                                  

 If you intend to participate, please contact us at the number above, or
the information agent, D.F. King, at 1-800-488-8095 for the password, 
which you will need in order to join the conference call.             

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PROSPECTUS SUMMARY

Structure of the Exchange Offer                                                 

The diagram below illustrates the structure of the exchange offer.        

The three participants in the exchange offer are: Delta Financial         
Corporation, Delta Funding Residual Exchange Company, LLC, and Delta Funding    
Residual Management, Inc. We describe each of these entities in more detail     
under the following sections: "Delta Financial Corporation" on page 47,         
"Description of Delta Funding Residual Exchange Company, LLC" on page 57, and   
"Description of Delta Funding Residual Management, Inc." on page 76.            

Upon receipt of the required percentage of senior notes and senior secured
notes tendered in the exchange offer, Delta Funding Residual Exchange Company,  
LLC will transfer all notes tendered to us for cancellation. In turn, we will   
transfer our newly issued preferred stock and all of the mortgage-related       
securities that currently comprise the collateral for the senior secured notes  
to Delta Funding Residual Exchange Company, LLC. Delta Funding Residual         
Exchange Company, LLC will distribute to the tendering noteholders shares of    
the preferred stock of Delta Financial Corporation, membership interests of     
Delta Funding Residual Exchange Company, LLC, and common stock of Delta         
Funding Residual Management, Inc.                                               

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Delta Financial Corporation                                                     

 We are a Delaware corporation that was organized in August 1996. On October
31, 1996, in connection with our initial public offering, we acquired all of    
the outstanding common stock of Delta Funding Corporation, a New York           
corporation that had been organized on January 8, 1982, to originate, sell,     
service and invest in residential first and second mortgages. On November 1,    
1996, we completed our initial public offering of 4,600,000 shares of common    
stock, par value $.01 per share.                                                

  We are a specialty consumer finance company that has engaged in originating,
acquiring, selling and servicing non-conforming home equity loans through our   
subsidiaries since 1982. Throughout our operating history, we have focused on   
lending to individuals who generally do not qualify for conforming credit.      
Generally, these borrowers do not qualify for conforming credit because they    
have imperfect credit histories, including past delinquencies or personal       
bankruptcies, or they have difficulty providing income or employment            
verification. Our management believes that these borrowers have largely been    
dissatisfied by more traditional providers of mortgage credit, which            
underwrite loans in accordance with conventional, or conforming, loan           
guidelines established by the Federal National Mortgage Association and the     
Federal Home Loan Mortgage Corporation. We make loans to these borrowers for    
such purposes as debt consolidation, home improvement, refinancing or           
education, and these loans are primarily secured by first mortgages on one- to  
four-family residential properties.                                             

There are two major components to our business. First, we make mortgage   
loans, which is a cash and expense outlay for us, because our cost to           
originate a loan exceeds the fees we collect at the time of origination for     
that loan. At the time we originate a loan, and prior to the time we sell that  
loan, we finance that loan using a warehouse line of credit. Second, we sell    
loans, either through securitization or on a whole loan basis, to generate      
revenues and cash. We use the proceeds from the sales to repay our warehouse    
line of credit and for working capital.                                         

 Recent Developments. In August 2000, we announced a corporate restructuring
as part of our continuing efforts to improve operating efficiencies and to      
address our negative cash flow from operations. Prior to the restructuring, we  
had approximately $150 million aggregate principal amount of senior notes       
outstanding. As part of this restructuring, we sought and obtained the consent  
of the holders of greater than fifty percent of the senior notes to modify a    
negative pledge covenant contained in the senior notes indenture, which         
previously prevented us from selling or otherwise obtaining financing against   
any of our excess cashflow certificates. In consideration for the consent of    
the holders of the senior notes, we agreed, in the senior notes exchange        
offer, to offer the holders of the senior notes the option to exchange their    
then existing senior notes for (a) the senior secured notes, and (b) ten-year   
warrants to buy approximately 1.6 million shares of our common stock, at an     
initial exercise price of $9.10 per share, subject to upward or downward        
adjustment in certain circumstances. The senior secured notes have the same     
coupon, face amount, and maturity date as the old notes and initially were      
secured by at least $165 million of our excess cashflow certificates.           

The senior notes exchange offer was consummated on December 21, 2000. As a
result of the notes exchange, we have outstanding approximately $1.8 million    
aggregate principal amount of senior notes, approximately $148.2 million        
aggregate principal amount of senior secured notes, and warrants exercisable    
for approximately 1.6 million shares of our common stock. The warrants will     
remain outstanding following this exchange offer.                               

  This exchange offer is being offered to the remaining senior noteholders who
did not participate in the August 2000 transaction and to the existing holders  
of the senior secured notes.                                                    

Following consummation of the senior notes exchange offer, management     
believed that additional steps were necessary to permit us to continue as a     
going concern. Management's principal concerns were:                            

o the cash drain created by its ongoing monthly delinquency and servicing 
advance requirements as servicer, or securitization advances;         

o the high cost of servicing a seasoned loan portfolio, including the     
capital charges associated with making securitization advances;       

o our ability to make timely interest payments on the notes and ultimately
repay the $150 million of notes; and                                  

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o our ability to effectuate a successful business model given the overhang
of corporate ratings of "Caa2" by Moody's and "CC" by Fitch.          

 Therefore in the first quarter of 2001, management embarked upon a business
plan aimed at alleviating some of these concerns and issues.                    

In January 2001, we entered into an agreement with Ocwen Federal Bank, FSB
to transfer the servicing of our existing loan portfolio to Ocwen. Ocwen has    
taken over servicing responsibilities, including making securitization          
advances, and in return Ocwen will earn all servicing related fees. The         
transfer was completed on May 2, 2001.                                          

In February 2001, we entered into a letter of intent with the beneficial  
holders of over fifty percent of the senior secured notes to restructure, and   
ultimately extinguish, the senior secured notes. In March 2001, we obtained     
the formal consent of these beneficial holders of the senior secured notes      
through a consent solicitation that modified certain provisions of the senior   
secured notes indenture to, among other things, allow for the release of two    
excess cashflow certificates then securing the senior secured notes. In         
consideration for their consent, we have agreed to make this make exchange      
offer.                                                                          

Former Servicing Platform. Historically, we had serviced virtually all of 
the mortgage loans we originated. However, in May 2001, we transferred all of   
our servicing rights to Ocwen and, as such, no longer have a servicing          
platform. With the disposition of our servicing operations to Ocwen, we         
eliminated the cashflow drain associated with making monthly delinquency and    
servicing related advances. At the same time, we expect this transfer of        
servicing to improve our profitability as we will no longer bear the high       
costs of servicing a seasoned portfolio, nor will we incur the additional       
capital charges associated with making advances.                                

  Our principal executive offices are located at 1000 Woodbury Road, Woodbury,
New York 11797, and our telephone number is (516) 364-8500.                     

Delta Funding Residual Exchange Company, LLC                                    

Delta Funding Residual Exchange Company, LLC is a newly formed Delaware   
limited liability company. We formed Delta Funding Residual Exchange Company,   
LLC to facilitate the completion of this exchange offer. Delta Funding          
Residual Exchange Company, LLC will deliver to the noteholders who exchange     
their notes membership interests in Delta Funding Residual Exchange Company,    
LLC, shares of our preferred stock and shares of common stock of Delta Funding  
Residual Management Inc.                                                        

Delta Funding Residual Exchange Company, LLC's Assets. Delta Funding      
Residual Exchange Company, LLC's assets will include mortgage-related           
securities that are owned by us or by one of our affiliates. These mortgage-    
related securities, which will be transferred to Delta Funding Residual         
Exchange Company, LLC upon consummation of the exchange offer, include:         

o excess cashflow certificates now held by two special purpose vehicles,  
Delta Funding Residual Holding Trust 2000-1 and Delta Funding Residual
Holding Trust 2000-2, both of which are our affiliates, and any assets
generated by the excess cashflow certificates;                        

o a net interest margin owner trust certificate now held by Delta Funding 
Residual Holding Trust                                                
2000-1; and                                                           

o an owner trust certificate representing ownership of Delta Funding Non- 
Performing Loan Trust 2000-1, owning certain non-performing loan      
receivables.                                                          

We currently own all of the outstanding membership interests of Delta     
Funding Residual Exchange Company, LLC. Upon consummation of the exchange       
offer, our voting membership interests in Delta Funding Residual Exchange       
Company, LLC will be converted automatically into a non-voting membership       
interest. At the same time, we will transfer to Delta Funding Residual          
Exchange Company, LLC all of the mortgage-related securities and any cash held  
by the Delta Funding Residual Holding Trust 2000-1 and Delta Funding Residual   
Holding Trust 2000-2.                                                           

Membership Interests. All of the voting membership interests in Delta     
Funding Residual Exchange Company, LLC will be held by the noteholders          
directly. Delta Funding Residual Management, Inc. will be the managing member   
of Delta Funding Residual Exchange Company, LLC and will hold one non-voting    
membership interest of Delta Funding Residual Exchange Company, LLC.            

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Delta Funding Residual Exchange Company, LLC Distributions. Delta Funding 
Residual Exchange Company, LLC will distribute the cash generated by the        
mortgage-related securities (after payment of its expenses) in the following    
order of priority:                                                              

o to Delta Funding Residual Management, Inc. to permit it to pay any      
expenses it incurs as the managing member;                            

 o to Delta Funding Residual Management, Inc. to permit it to pay income tax
liabilities related to the mortgage-related securities (all of which  
income tax liabilities relating to excess inclusion income will be    
allocated to it for income tax purposes);                             

o to us to permit us to pay a portion of our settlement obligations to the
New York State Department of Banking;                                 

o to us fifteen percent of the remaining cash after all of the            
   distributions made above, except that after three years this distribution
   will be reduced to ten percent. However, these amounts may be reduced and
   retained by Delta Funding Residual Exchange Company, LLC if we do not pay
the tax liabilities allocated to us or that tax allocation is not     
respected by the Internal Revenue Service;                            

o to us to permit us to pay the balance of our settlement obligations to  
the New York State Department of Banking; and                         

o the balance of Delta Funding Residual Exchange Company, LLC's available 
cash will be distributed to the holders of its voting membership      
 interests, within eighty-five business days following each of April 30,
June 30, September 30, and December 31.                               

We describe the terms of Delta Funding Residual Exchange Company, LLC's   
operating agreement in the section titled "Description of Delta Funding         
Residual Exchange Company, LLC" beginning on page 57.                           

Delta Funding Residual Exchange Company, LLC's principal executive offices
are located at 1000 Woodbury Road, Woodbury, New York 11797, and its telephone  
number is (516) 364-8500.                                                       

Delta Funding Residual Management, Inc.                                         

Delta Funding Residual Management, Inc. is a newly formed Delaware        
corporation organized by Delta Funding Residual Exchange Company, LLC.          
Initially, Delta Funding Residual Exchange Company, LLC will hold all the       
common stock of Delta Funding Residual Management, Inc., par value $.01 per     
share. At the completion of the exchange offer, Delta Funding Residual          
Exchange Company, LLC will distribute the shares of common stock of Delta       
Funding Residual Management, Inc. to the tendering noteholders.                 

 Delta Funding Residual Management, Inc.'s sole purpose is to serve as Delta
Funding Residual Exchange Company, LLC's managing member. It will not own       
substantial assets and will not conduct any business outside of its role as     
managing member. Delta Funding Residual Management, Inc. will hold a non-       
voting membership interest in Delta Funding Residual Exchange Company, LLC.     
Through their ownership of Delta Funding Residual Management, Inc.'s common     
stock, the tendering noteholders will have an additional indirect non-voting    
membership interest in Delta Funding Residual Exchange Company, LLC and will    
control its managing member.                                                    

 Delta Funding Residual Management, Inc.'s certificate of incorporation will
limit its purpose and will prevent Delta Funding Residual Management, Inc.      
from engaging in various activities including incurring debt outside the        
ordinary course of business activity, issuing additional securities and         
merging. We describe the capital stock of Delta Funding Residual Management,    
Inc. in the section titled "Description of Delta Funding Residual Management,   
Inc. Common Stock" beginning on page 78.                                        

Delta Funding Residual Management, Inc.'s principal executive offices are 
located at 1000 Woodbury Road, Woodbury, New York 11797, and its telephone      
number is (516) 364-8500.                                                       

Risk Factors                                                                    

The risks relating to the exchange offer include:                         

o if the exchange offer fails we may not be able to pay interest on the   
notes;                                                                

 o if the exchange offer is consummated, non-tendering holders of the senior
secured notes no longer will have collateral securing the notes and no
longer will receive the protection of restrictive covenants;          

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 o noteholders who tender their notes in the exchange offer will not receive
guaranteed payment amounts. Instead, the holders will receive cash    
distributions in respect of their membership interest in Delta Funding
Residual Exchange Company, LLC and, after July 2003, dividends on the 
preferred stock;                                                      

 o the amount of distributions to be paid by Delta Funding Residual Exchange
Company, LLC will depend on the future cashflows generated by the     
mortgage-related securities comprising the assets of Delta Funding    
Residual Exchange Company, LLC;                                       

o there is no independent appraisal or valuation of the mortgage-related  
securities and these securities are difficult to value; and           

o we will require additional financing to operate our business, either    
through warehouse financing, securitizations, whole loan sales or the 
issuance of additional indebtedness.                                  

  See "Risk Factors" beginning on page 13 for a complete discussion of factors
that should be considered by holders of outstanding notes before tendering      
their notes in the exchange offer.                                              

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DELTA FINANCIAL CORPORATION SUMMARY HISTORICAL FINANCIAL DATA 

The summary historical financial data for each of the years in the three- 
year period ended December 31, 2000, has been derived from our audited          
consolidated financial statements. In connection with the exchange offer,       
notes held by nonaffiliates may be exchanged for shares of our preferred        
stock, membership interests of Delta Funding Residual Exchange Company, LLC     
and the shares of common stock of Delta Funding Residual Management, Inc.       

 The summary historical financial data for the quarters ended March 31, 2000
and 2001 has been derived from our unaudited interim consolidated financial     
statements for such periods. Our results for interim periods may not be         
indicative of our results for the full year.                                    

You also should read "Management's Discussion and Analysis of Financial   
Condition and Results of Operations;" the consolidated financial statements     
and related notes; the report of our independent auditors included in our       
annual report on Form 10-K/A for the fiscal year ended December 31, 2000; and   
our quarterly report on Form 10-Q/A for the quarter ended March 31, 2001,       
incorporated by reference herein.                                               

                                                        [Enlarge/Download Table]

                                                                                                          Three Months Ended    
                                                                   Year Ended December 31,                     March 31,        
                                                                   -----------------------            ------------------------- 
                                                              1998           1999           2000         2000           2001    
                                                              ----           ----           ----         ----           ----    
                                                              (Dollars in thousands, except for                                 
                                                                           shares)                           (unaudited)        
                                                                                                                                
Revenues:                                                                                                                       
  Net gain on sale of mortgage loans...................... $    91,380   $    78,663    $    47,550   $    14,654   $     5,377 
  Interest................................................      12,458        31,041         32,287        10,537       (14,789)
  Servicing fees..........................................      10,464        16,341         14,190         4,066         2,213 
  Origination fees .......................................      25,273        28,774         24,944         6,688         4,162 
                                                           -----------   -----------    -----------   -----------   ----------- 
  Total revenues..........................................     139,575       154,819        118,971        35,945        (3,037)
                                                           -----------   -----------    -----------   -----------   ----------- 
Expenses:                                                                                                                       
  Payroll and related costs...............................      56,709        65,116         56,525        15,561        11,324 
  Interest................................................      30,019        26,656         30,386         7,803         5,829 
  General & administrative................................      34,351        55,318         94,685         9,456        13,090 
                                                           -----------   -----------    -----------   -----------   ----------- 
   Total expenses.........................................     121,079       147,090        181,596        32,820        30,243 
                                                           -----------   -----------    -----------   -----------   ----------- 
Income (loss) before income tax expense (benefit) and                                                                           
  extraordinary item......................................      18,496         7,729        (62,625)        3,125       (33,280)
Provision for income tax expense (benefit) ...............       7,168         3,053        (13,208)        1,299           472 
                                                           -----------   -----------    -----------   -----------   ----------- 
Net income (loss)......................................... $    11,328   $     4,676    $   (49,417)  $     1,826   $   (33,752)
                                                           -----------   -----------    -----------   -----------   ----------- 
Per share data:                                                                                                                 
Earnings (loss) per common share - basic and diluted...... $      0.74   $      0.30    $     (3.10)  $      0.11   $     (2.12)
Weighted average number of shares outstanding.............  15,382,161    15,511,214     15,920,869    15,920,869    15,920,869 
Selected Balance Sheet Data:                                                                                                    
Loans held for sale, net.................................. $    87,170   $    89,036    $    82,698   $    92,426   $   101,360 
Capitalized mortgage servicing rights.....................      33,490        45,927             --        45,144            -- 
Interest-only and residual certificates...................     203,803       224,659        216,907       233,111       196,070 
Total assets..............................................     481,907       556,835        452,697       558,474       437,374 
Senior notes, warehouse financing and other borrowings....     229,660       258,493        238,203       271,565       256,411 
Investor payable..........................................      63,790        82,204         69,489        73,825        73,068 
Total liabilities.........................................     344,219       409,694        354,973       409,507       373,402 
Stockholders' equity......................................     137,688       147,141         97,724       148,967        63,972 

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SUMMARY PRO FORMA FINANCIAL DATA FOR DELTA FUNDING
RESIDUAL EXCHANGE COMPANY, LLC

The following table presents our projected pro forma financial data for   
Delta Funding Residual Exchange Company, LLC at the time the exchange offer is  
consummated.                                                                    

                                                                [Download Table]


                                                          (Dollars in thousands)
                                                                                
Assets:                                                                         
Residual certificates .................................          $152,799       
Non-performing assets .................................             2,381       
Investment in Delta Funding Residual Management, Inc. .                 2       
                                                                 --------       
  Total assets.........................................          $155,182       
                                                                 ========       
Liabilities & Membership Interest Liabilities:                                  
Accounts payable ......................................                 2       
                                                                 --------       
  Total liabilities....................................          $      2       
                                                                 ========       
Membership Interest:                                                            
Membership interest ...................................          $150,000       
Donated surplus .......................................             5,180       
                                                                 --------       
  Total membership interest............................           155,180       
                                                                 --------       
  Total liabilities and membership interest............          $155,182       
                                                                 ========       

Delta Funding Residual Exchange Company, LLC will hold mortgage-related   
securities. We have estimated the projected annual cashflows that will be       
produced by the mortgage-related securities. Our estimates are based on         
assumptions which we believe are reasonable concerning mortgage prepayment      
rates on the underlying mortgage loans, default rates on the underlying         
mortgage loans, prevailing interest rates and other matters, at March 31,       
2001. There can be no assurance that our estimates were accurate or that our    
assumptions were reasonable.                                                    

We are providing you this information so you can evaluate possible        
distributions to be made by Delta Funding Residual Exchange Company, LLC to     
the holders of its membership interests. However, the table below does not      
take into account                                                               

o expenses to be paid by Delta Funding Residual Exchange Company, LLC,    

o taxes to be paid by the holders of Delta Funding Residual Exchange      
Company, LLC's membership interests,                                  

 o distributions to us to pay a portion of our settlement obligations to the
New York State Department of Banking,                                 

o distributions to us, or,                                                

o distributions to us to pay the balance of our settlement obligations to 
the New York State Department of Banking.                             

We describe the priority of payments to be made by Delta Funding Residual 
Exchange Company, LLC in the section titled "Description of Delta Funding       
Residual Exchange Company, LLC" beginning on page 57. You should read the       
information we provide here together with the information concerning Delta      
Funding Residual Exchange Company, LLC beginning on page 57.                    

Actual cashflows may vary significantly from these projections due to a   
variety of factors, including changes in interest rates, economic conditions,   
servicer defaults, loan losses, prepayments, and delinquency triggers           
resulting in changes in the level of cash used by the securitization trust to   
prepay the holders of its asset-backed pass-through certificates. See "Assets   
of Delta Funding Residual Exchange Company, LLC--Credit Enhancement Structure   
of Related Securitization Trusts for Excess Cashflow Certificates."             

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Projected Gross Excess Cashflows

                                                        [Enlarge/Download Table]


                                                                                                            Cumulative       
                                                                                                         Present Value of    
                                                                     Annual Gross  Cumulative Gross   Gross Cashflows by Year
Year Ended                                                             Cashflows      Cashflows      (at beginning of period)
  ----------                                                           ---------      ---------      ------------------------
                                                                                                                             
December-01 (1).....................................................  $ 6,031,199    $  6,031,199          $152,799,000      
December-02 (2).....................................................   34,565,171      40,596,370           155,957,335      
December-03.........................................................   38,223,025      78,819,395           141,666,618      
December-04.........................................................   35,122,374     113,941,769           121,860,253      
December-05.........................................................   31,185,402     145,127,171           102,579,712      
December-06.........................................................   26,614,099     171,741,270            84,729,673      
December-07.........................................................   22,149,609     193,890,879            69,130,432      
December-08.........................................................   17,728,666     211,619,545            55,967,778      
December-09.........................................................   13,784,490     225,404,035            45,514,924      
December-10.........................................................   10,184,435     235,588,470            37,647,374      
December-11.........................................................    8,230,394     243,818,864            32,357,097      
December-12.........................................................    6,920,854     250,739,718            28,333,126      
December-13.........................................................    5,533,869     256,273,587            25,095,579      
December-14.........................................................    4,470,411     260,743,998            22,824,135      
December-15.........................................................    3,678,917     264,422,915            21,320,861      
December-16.........................................................    3,263,846     267,686,761            20,413,656      
December-17.........................................................    3,257,948     270,944,709            19,803,586      
December-18.........................................................    2,919,790     273,864,499            19,120,104      
December-19.........................................................    3,396,309     277,260,808            18,685,927      
December-20.........................................................    6,941,028     284,201,836            17,718,788      
December-21.........................................................    6,173,446     290,375,282            13,081,203      
December-22.........................................................    4,441,007     294,816,289             8,608,314      
December-23.........................................................    3,079,977     297,896,266             5,286,387      
December-24.........................................................    1,978,856     299,875,122             2,893,640      
December-25.........................................................    1,079,818     300,954,940             1,290,958      
December-26.........................................................      335,907     301,290,847               378,964      
December-27.........................................................       74,470     301,365,317                92,323      
December-28.........................................................       27,218     301,392,535                29,855      
December-29.........................................................        6,665     301,399,200                 6,518      
December-30.........................................................          792     301,399,991                   700      

---------------                                                                 
(1) Represents excess cashflows from July 1, 2001 to December 31, 2001.         
(2) Our estimates assume that the net interest margin securities issued to      
  investors by the net interest margin securitization trust will be paid off
in 2002. At such time, cashflow from the excess cashflow certificates   
   underlying the net interest margin owner trust certificate will begin to be
received by Delta Funding Residual Exchange Company, LLC.               

The excess cashflows above are based upon our current assumptions at March
31, 2001. Actual results could vary significantly from the projections due to   
a variety of facts, including changes in interest rates, economic conditions,   
servicer defaults, loan defaults, prepayments, and delinquency triggers         
resulting in changes in the level of cash held by the securitization trust to   
prepay the holders of its asset backed pass-through certificates.               

 These projected gross excess cashflows, even if they were to be received by
Delta Funding Residual Exchange Company, LLC will first be used by it to pay    
its expenses and fees and to make preferential payments to us. It is difficult  
to estimate the annual expenses and other amounts that will be paid prior to    
making any distribution to the holders of its membership interests. However,    
you may use some estimates we provide. Using these estimates, you may deduct    
from the projected gross excess cashflows:                                      

o total annual expenses that will be incurred by Delta Funding Residual   
Exchange Company, LLC of approximately $250,000;                      

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o payments to us to permit us to pay a portion of our settlement          
  obligations to the New York State Department of Banking. The amounts may
  vary subject to prepayments by the borrowers on the mortgages underlying
the excess cashflow certificates. If prepayments by the borrowers are 
 higher than anticipated the actual expenses will be higher than what we
project. For the year ended December 2001, we project that the payment
will equal $258,600;                                                  

o additional amounts would be deducted to pay taxes associated with the   
excess cashflows. It is difficult to calculate the tax liability which
  would be associated with the excess cashflows; however, we estimate that
from July 2001 through December 2002, the tax liability will be       
  approximately sixty-eight percent of the projected cashflows on average;

o Then, we will receive distributions equal to fifteen percent for the    
first three years, and ten percent thereafter of the excess cashflow  
remaining after deducting the expenses, the settlement payments to the
New York State Department of Banking, and the tax payments.           

We provide additional estimates under the section "Description of Delta   
Funding Residual Exchange Company, LLC--The Mortgage-Related                    
Securities--Projected Gross Excess Cashflows" beginning on page 68.             

SUMMARY PRO FORMA FINANCIAL DATA FOR
DELTA FUNDING RESIDUAL MANAGEMENT, INC. 

The following table presents our projected pro forma financial data for   
Delta Funding Residual Management, Inc. at the time the exchange offer is       
consummated. As indicated below, Delta Funding Residual Management, Inc. will   
have minimal assets and will limit its future business and operations to        
managing Delta Funding Residual Exchange Company, LLC.                          

                                                                [Download Table]


                                                          (Dollars in thousands)
                                                                                
Assets:                                                                         
Accounts receivable ...................................            $  2         
                                                                   ----         
  Total assets.........................................            $  2         
                                                                   ====         
Stockholders' Equity:                                                           
Common stock, $.01 par value ..........................            $  2         
                                                                   ----         
  Total stockholders' equity...........................            $  2         
                                                                   ====         

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RISK FACTORS

  You should consider carefully the following risks and all of the information
set forth in this prospectus before tendering your notes for exchange. Your     
agreement to participate in the exchange offer means that you will receive the  
following securities: shares of our preferred stock, membership interests in    
Delta Funding Residual Exchange Company, LLC and shares of common stock of      
Delta Funding Residual Management, Inc. An investment in these securities       
involves a high degree of risk.                                                 

Risks Associated with the Exchange Offer                                        

 If the exchange offer does not take place we will be unable to pay interest
on the notes.                                                                   

 Based on our current estimates, it is unlikely that we will have sufficient
funds to make the interest payments due on the notes in August 2001 and         
thereafter, and at the same time comply with certain covenants in our           
warehouse line of credit, and otherwise operate our business. If we are unable  
to make the interest payment on August 1, 2001, we will be in default under     
the indenture governing the senior secured notes, which could result in the     
senior secured notes becoming immediately due and payable. In this event, with  
insufficient assets available to repay the senior secured notes, holders of     
the senior secured notes would have to attempt to realize on their collateral   
for repayment. We may be forced to seek, or may be forced into, protection      
under Chapter 11 of the United States Bankruptcy Code. The expense of any such  
proceeding will reduce the assets available for payment or distribution to our  
creditors, including the holders of the notes.                                  

The collateral underlying the senior secured notes may be inadequate to   
satisfy the amounts due under the senior secured notes.                         

 Although the secured notes are secured by perfected first priority liens on
the beneficial interests in the trusts that hold the mortgage-related           
securities, including excess cashflow certificates and a net interest margin    
owner trust certificate, the proceeds from the sale of the collateral,          
especially in a forced sale or liquidation scenario, are likely to be           
insufficient to satisfy the amounts due under the senior secured notes. The     
fair value of these mortgage-related securities is determined based on various  
economic factors, including loan types, balances, interest rates, dates of      
origination, terms and geographic locations. The market value of the mortgage-  
related securities depends on a variety of factors outside of our control,      
including interest rates, prepayment rates and economic conditions generally.   
We believe that there is no active market for the sale of these mortgage-       
related securities. No assurance can be given that these mortgage-related       
securities could be sold at their stated value on our balance sheet, if at      
all.                                                                            

If we default on the senior secured notes, the remaining holders of the   
senior notes may not receive any payments.                                      

If we default on our obligations to the senior secured noteholders, it is 
unlikely that the senior noteholders will receive any additional payments in    
respect of their notes. The collateral underlying the senior secured notes is   
not likely to be sufficient to repay the senior secured noteholders. It is      
unlikely that the senior noteholders will receive any payments unless, and      
until, the senior secured noteholders are paid in full.                         

  There will be a limited trading market for senior secured notes that are not
tendered in the exchange offer. The market for the senior notes remaining       
outstanding after the exchange will continue to be limited.                     

  The trading market for outstanding senior secured notes not exchanged in the
exchange offer is likely to be significantly more limited than it is at         
present. By way of example, following the December 2000 exchange offer, the     
trading market for the remaining outstanding senior notes became significantly  
more limited. Therefore, if your senior secured notes are not tendered in the   
exchange offer, it may become more difficult for you to sell or transfer your   
unexchanged senior secured notes.                                               

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If the exchange offer is consummated, non-tendering holders of senior     
secured notes will no longer have any collateral securing their notes nor the   
benefits of substantially all of the restrictive covenants in the indenture     
governing the senior secured notes.                                             

 If the exchange offer is consummated, any senior secured notes that are not
tendered in the exchange offer will no longer have any collateral securing      
their notes, nor will they have the benefits of substantially all of the        
restrictive covenants in the indenture governing the senior secured notes,      
which covenants will be removed from the senior secured notes indenture in      
connection with the exchange offer. While we anticipate that we will be         
subject to certain restrictive covenants contained in other debt agreements,    
holders, if any, who do not tender their senior secured notes will be unable    
to enforce those covenants and they will be subject to change without the       
consent of the remaining holders of the senior secured notes.                   

 The distribution of shares of our preferred stock, the membership interests
of Delta Funding Residual Exchange Company, LLC, and shares of Delta Funding    
Residual Management, Inc.'s common stock in connection with the exchange offer  
could be found to be a fraudulent conveyance and could be voided.               

Under applicable provisions of federal bankruptcy law or comparable       
provisions of state fraudulent conveyance law, if, among other things, we or    
any of our subsidiaries, at the time we or such subsidiary transferred or       
caused to be transferred the mortgage-related securities, as the case may be,   
(1) (a) were or are insolvent or rendered insolvent by reason of such           
occurrence, (b) were or are engaged in a business or transaction for which the  
assets remaining with us constitutes unreasonably small capital, or (c) were    
or are intending to incur debts that would be beyond our ability to pay as      
they mature, and (2) we or such subsidiary received or receives less than the   
reasonably equivalent value of fair consideration for the transfer of such      
assets, the distribution of securities in the exchange offer could be voided,   
or claims in respect of the securities issued in the exchange offer (or the     
assets underlying such securities) could be eliminated or subordinated to all   
of our or such subsidiary's other debts, as the case may be.                    

 If such transfers are voided under Section 550(a) of the Bankruptcy Code, a
trustee in bankruptcy or debtor in possession could seek to recover either the  
property transferred or the value of such property from the transferees. In     
addition, payments made in connection with, or transfers of mortgage-related    
securities to, Delta Funding Residual Exchange Company, LLC could be voided     
and required to be returned to the person making such payment, or to a fund     
for the benefit of our or such subsidiary's creditors, as the case may be.      
Moreover, under applicable provisions of federal bankruptcy law, a security     
interest granted by us or any of our subsidiaries may be subject to avoidance   
by the debtor-in-possession or a trustee in bankruptcy under Section 547(b) of  
the Bankruptcy Code, if the following is established by a preponderance of the  
evidence:                                                                       

 o the transfer of an interest of the debtor in property, was made while the
debtor was insolvent on or within 90 days prior to the filing of the  
  debtor's bankruptcy petition or, if the creditor was determined to be an
insider (as defined in Section 101(31) of the Bankruptcy Code) of the 
 debtor at the time the transfer was made, within one year, prior to the
filing of the debtor's bankruptcy petition;                           

o to or for the benefit of the creditor;                                  

o for or on account of an antecedent debt owed by the debtor to the       
creditor before the transfer was made; and                            

o which transfer enables the creditor to receive more than it would have  
had the transfer not been made and had the debtor's case been         
administered under Chapter 7 of the Bankruptcy Code, and the creditor 
received distribution on its claim thereunder.                        

The debtor is presumed to be insolvent on and during the 90 days prior to 
filing its bankruptcy petition, pursuant to Section 547(f) of the Bankruptcy    
Code.                                                                           

The measures of insolvency for purposes of the above considerations will  
vary depending upon the law applied in any proceeding. Generally, however, we   
or a subsidiary would be considered insolvent if (a) the sum of our or its      
debts, as the case may be, including contingent liabilities, were greater than  
the saleable value of all of our or its, as the case may be, assets at a fair   
valuation or if the present saleable value of our or its assets were less than  
the amount of our or its probable liability on its existing debts, including    

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contingent liabilities, as they become absolute and mature, or (b) we or such   
subsidiary could not pay our or its debts as they become due, as the case may   
be.                                                                             

On the basis of our historical financial information, our recent operating
history included in "Management's Discussion and Analysis of Financial          
Condition and Results of Operations" in our Annual Report on Form 10-K/A and    
other factors, we believe and each of our subsidiaries believes that, after     
giving effect to the exchange offer, we and each such subsidiary:               

o will not be insolvent, will not have unreasonably small capital for the 
businesses in which we are or such subsidiary is engaged and will not 
  incur debts beyond our or such subsidiary's ability to pay such debts as
they mature, and                                                      

o will have sufficient assets to satisfy any probable money judgment      
against us or such subsidiary in any pending action. There can be no  
assurance, however, as to what standard a court would apply in making 
such determinations.                                                  

The contribution of the notes to Delta Funding Residual Exchange Company, 
LLC followed by the distribution of our preferred stock and shares of common    
stock of Delta Funding Residual Management, Inc. may be treated, for tax        
purposes, as a disguised sale to the extent of the fair market value of the     
property distributed.                                                           

The contribution of the notes to Delta Funding Residual Exchange Company, 
LLC is intended to qualify as a tax-free contribution of assets to a            
partnership. Similarly, the distribution of our preferred stock and the shares  
of common stock of Delta Funding Residual Management, Inc. is intended to       
constitute a tax-free distribution under Section 731 of the Internal Revenue    
Code of 1986, as amended. However, if the contribution and distribution are     
recharacterized as a disguised sale, noteholders that tender their notes will   
be required to recognize either gain or loss on the portion of their notes      
deemed sold.                                                                    

  The receipt by Delta Funding Residual Exchange Company, LLC of shares of our
preferred stock and mortgage-related assets in exchange for the tendered notes  
may not be treated as a reorganization under the Internal Revenue Code and may  
result in a greater tax liability for you through your ownership of Delta       
Funding Residual Exchange Company, LLC's membership interests.                  

  The exchange by Delta Funding Residual Exchange Company, LLC of the tendered
notes for shares of our preferred stock and various other assets is intended    
to qualify as a reorganization within the meaning of Section 368(a) of the      
Internal Revenue Code of 1986, as amended. If the exchange offer does so        
qualify under the Code, Delta Funding Residual Exchange Company, LLC generally  
will recognize a capital gain (but not a loss) in an amount equal to the        
lesser of (a) the sum of the cash and the fair market value of the shares of    
preferred stock and other assets received pursuant to the exchange offer        
(other than any cash, preferred stock or other assets that are attributable to  
accrued but unpaid interest), less Delta Funding Residual Exchange Company,     
LLC's adjusted tax basis in the notes, and (b) the sum of the cash and fair     
market value of the other assets (other than any cash or other assets that are  
attributable to accrued but unpaid interest) received in the exchange.          
Conversely, if the exchange offer fails to qualify as a recapitalization,       
Delta Funding Residual Exchange Company, LLC generally would be required to     
recognize capital gain or loss in an amount equal to the difference between     
(a) the sum of the cash and the fair market value of the preferred stock and    
other assets received in the exchange, and (b) Delta Funding Residual Exchange  
Company, LLC's adjusted tax basis in the notes. For a further discussion see    
"United States Federal Income Tax Consequences of the Exchange Offer." In       
addition, it is possible that Delta Funding Residual Exchange Company, LLC      
might not distribute cash at times or in amounts sufficient to satisfy any      
such tax liability.                                                             

  If you exchange your notes, you may never receive a return of your principal
amount, and the timing of payments you will receive will be difficult to        
predict.                                                                        

As a noteholder you are entitled to receive regular interest payments and 
the return of your principal amount. However, if you exchange your notes, you   
are not guaranteed the return of your principal amount. The timing of payments  
you will receive in the form of limited liability company distributions is      
uncertain. Distributions in turn will depend on cashflows received on the       
mortgage-backed securities. You will not begin to receive dividend payments on  
the shares of our preferred stock until July 2003. We cannot accurately         
predict the full amount of payments you will receive nor the timing of any      
such payments.                                                                  

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Risks Affecting Us and Our Business                                             

Following the exchange offer, we will be subject only to limited covenant 
restrictions contained in our warehouse and other financing facilities.         

Following the exchange offer, there will be no covenants in the indentures
limiting our activities, including the incurrence of additional debt or the     
issuance of additional stock, or the activities of our subsidiaries. Rather,    
we will be subject only to those covenant restrictions contained in our         
warehouse and other financing facilities and the covenants contained in our     
newly issued preferred stock, which are generally less encompassing than those  
currently contained in the indentures. See "Description of Our Preferred        
Stock" beginning on page 53.                                                    

 As a result, we may incur debt, encumber our assets or engage in any number
of activities currently prohibited by the indentures. The degree to which we    
are leveraged following the exchange offer could have important consequences    
to you, including:                                                              

o we may be more vulnerable to adverse general economic and industry      
conditions;                                                           

o we may find it more difficult to obtain additional financing for future 
working capital, capital expenditures, acquisitions, general corporate
purposes or other purposes; and                                       

o we may have to dedicate a substantial portion of our cashflows from     
operations to the payment of principal and interest on indebtedness we
may incur in the future, thereby reducing the funds available for     
operations and future business opportunities.                         

Our ability to grow our business and sustain our growth will depend on our
future operating performance, and our ability to effect additional              
securitizations and/or whole loan sales and debt and/or equity financing,       
which, to a certain extent, is subject to economic, financial, competitive and  
other factors beyond our control. If we are unable to generate sufficient       
cashflow to support our operations, we may be required to obtain additional     
financing or to issue additional securities, including additional preferred     
stock. There can be no assurance that we can obtain any additional financing    
on terms reasonably satisfactory to us. The inability to obtain additional      
financing could have a material adverse effect on our ability to continue our   
business.                                                                       

 Following the exchange offer we may not be able to declare dividends on our
preferred stock or, if declared out of funds legally available therefor, we     
may not be able to pay the declared dividends.                                  

 Under the terms of the preferred stock, holders will be entitled to receive
dividends at the rate of ten percent per annum, payable semi-annually,          
beginning in July 2003. There can be no assurance that in July 2003 our         
business and financial condition will have improved and that we will have the   
funds required to authorize the payment of dividends. Even if the funds were    
legally available for the declaration of dividends, there can be no assurance   
that we will have the required funds to make such dividends payments when due.  

We have operated on a negative cashflow basis in the past and anticipate  
that we will continue to do so in the foreseeable future.                       

We require substantial amounts of cash to fund our loan origination and   
securitization activities. In the past, we have operated generally on a         
negative cashflow basis. If we can increase loan originations to a sufficient   
level so as to bring down our overall cost to originate loans, we believe that  
we can generate positive cashflow within approximately twelve months. To do     
so, we must generate sufficient cash from (1) securitizing and selling whole    
loans, (2) origination fees on newly closed loans, and (3) cashflow from the    
excess cashflow certificates we retain in connection with our securitizations.  
However, there can be no assurance that we will begin generating positive       
cashflow within twelve months or at all.                                        

We must be able to sell loans and obtain adequate credit facilities to    
continue to originate loans.                                                    

Currently, our primary cash requirements include the funding of:          

o loan originations pending their pooling and sale, net of warehouse      
financing;                                                            

o interest expense on warehouse and other financings;                     

o fees, expenses, and tax payments incurred in connection with our        
securitization program; and                                           

o general ongoing administrative and operating expenses.                  

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  Historically, we have utilized various financing facilities, the issuance of
debt, like the senior notes, and an equity financing to offset negative         
operating cashflow and support our loan originations, securitizations,          
servicing and general operating expenses. Our primary sources of liquidity      
continue to be warehouse, residual and other financing facilities (e.g.,        
capital leasing), securitizations of mortgage loans, and, subject to market     
conditions, sales of whole loans, proceeds from excess cashflow certificates    
and the issuance of debt and equity securities. We also anticipate, subject to  
market conditions, utilizing net interest margin securitizations and/or other   
financing against our residual assets. If we are not able to obtain financing,  
we will not be able to originate new loans and our business and results of      
operations will be materially and adversely affected.                           

  If the value of the collateral securing our indebtedness declines, we may be
required to post additional collateral or reduce our borrowings.                

 We currently have substantial outstanding indebtedness. With respect to our
subsidiaries' existing warehouse debt, if the value of the collateral securing  
any such indebtedness were insufficient to repay such indebtedness in full,     
the lender may be entitled to seek payment of the shortfall, if any, from us    
and our subsidiaries. We may not have the funds necessary to meet such          
payments. If we are not able to make such additional payments, we may be        
required to reduce our borrowings or reduce our originations. This would have   
a material adverse effect on our business and result of operations.             

We depend on financing to originate new loans; our failure to obtain and  
maintain adequate financing could have a material adverse effect on our         
business and results of operations.                                             

We fund substantially all of the loans which we originate and purchase    
through borrowings under warehouse financing facilities and through repurchase  
agreements. In turn, we repay our borrowings with the proceeds we receive from  
selling such loans through securitizations or whole loan sales. We have relied  
upon a few lenders to provide the primary credit facilities for our loan        
originations and purchases. We currently have one warehouse facility for this   
purpose. This warehouse facility is a $200 million credit facility that has a   
variable rate of interest and expires on August 31, 2001. There can be no       
assurance that we will be able to renew this warehouse facility at its          
maturity on terms satisfactory to us or at all. Any failure to renew or obtain  
adequate funding under this warehouse financing facility or other financing     
arrangements, or any substantial reduction in the size of or increase in the    
cost of such facilities, could have a material adverse effect on our business.  
To the extent that we are not successful in maintaining adequate financing, we  
would not be able to hold a large volume of loans pending securitization and,   
therefore, we would have to curtail our loan origination activities or sell     
loans either through whole loan sales or in smaller securitizations, which      
would have a material adverse effect on our business and results of             
operations.                                                                     

We are required to comply with various operating and financial covenants  
included in the financing agreements we described above which are customary     
for agreements of their type. The continued availability of funds under these   
financing agreements is subject to, among other conditions, our continued       
compliance with these covenants. We believe we are in compliance with all such  
covenants under these financing agreements, although there can be no assurance  
that we will continue to remain in compliance therewith.                        

If we cannot complete securitizations, or complete them on an attractive  
basis, we may not be able to continue our operations.                           

We rely significantly upon securitizations to generate cash proceeds to   
repay our warehouse facilities and to provide funds to originate new loans. In  
addition, we rely on our continued ability to sell interest-only certificates   
to generate additional cash proceeds. Further, gains on sale of loans           
generated by our securitizations represent a significant portion of our         
revenues. Several factors affect our ability to complete securitizations,       
including                                                                       

o conditions in the securities markets generally;                         

o conditions in the asset-backed securities market specifically;          

o the credit quality of our portfolio of loans; and                       

o our ability to obtain credit enhancement.                               

  If we were unable to securitize profitably a sufficient number of loans in a
particular financial reporting period, then our revenue, representing gain on   
sale, for such period would decline and could result in lower income or a loss  
for such period. In addition, unanticipated delays in closing securitizations   
could increase                                                                  

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our costs associated with financing our mortgage loans during the warehousing   
period, including hedging costs. Any impairment of, or delay in, our ability    
to complete securitizations would have a material adverse effect on our         
business and results of operations.                                             

We have relied on credit enhancements provided by senior/subordinate      
structures and by monoline insurance carriers to guarantee certain outstanding  
investor certificates in the related trusts to enable us to obtain an AAA/Aaa   
rating for such investor certificates. Any substantial reductions in the size   
or availability of such insurance policies, or increases in the price charged   
by, or increases in the overcollateralization limits required by, the           
insurance companies issuing such policies, could impair our ability to          
complete a securitization. Similarly, any decrease in investor demand for our   
subordinate securities, or increases in the spreads required by such asset-     
backed investors, could impair our ability to complete a securitization. There  
is no assurance that we will be able to procure insurance policies, or to       
attract asset-backed investors to purchase subordinate securities from our      
securitization, or to otherwise provide the necessary credit enhancement, at    
prices and terms reasonably satisfactory to us. Our failure to satisfy any of   
these requirements will impair our ability to complete a securitization.        

Potential changes in valuation of excess cashflow certificates will       
adversely affect our business and results of operations.                        

We determine the fair value of our retained excess cashflow certificates  
based on various economic factors, including loan types, balances, interest     
rates, dates of origination, terms and geographic locations. We also use other  
available information applicable to the types of loans we originate and         
purchase, such as reports on prepayment rates, interest rates, collateral       
value, economic forecasts and historical default and prepayment rates of the    
portfolio under review. We estimate the expected cashflow that we will receive  
over the life of a portfolio of loans. The expected cashflow constitutes the    
excess of the interest rate payable by the obligors of the mortgage loans over  
the interest rate paid to the purchasers of the related asset-backed            
securities, or the pass-through rate, less applicable recurring fees and        
credit losses. We then discount the expected cashflow using a discount rate     
that we believe market participants would use for similar financial             
instruments. As of December 31, 2000 and March 31, 2001, respectively, our      
balance sheet reflected the fair value of excess cashflow certificates of $217  
million and $196 million. (The decrease at March 31, 2001 was due to the sale   
of five excess cashflow certificates and a $25.7 million write-down related to  
this sale. See "Liquidation Value of the Assets Securing the Senior Secured     
Notes" beginning on page 44).                                                   

Realization of the estimated fair value of these excess cashflow          
certificates is subject to the prepayment and loss characteristics of the       
underlying loans and to the timing and ultimate realization of the stream of    
cashflow associated with such loans. Significant prepayment or loss experience  
would impair the future cashflow of the excess cashflow certificates. If        
actual experience differs from the assumptions we used to determine the asset   
values, future cashflow and earnings could be negatively impacted and we could  
be required to write down the value of our excess cashflow certificates. No     
assurance can be given that our excess cashflow certificates will not           
experience significant prepayments or losses or as to whether, and in what      
amounts, we, in the future, may have to write down the value of the excess      
cashflow certificates from our securitization transactions. In addition, if     
the prevailing interest rate rose, the required discount rate might also rise,  
resulting in impairment of the value of the excess cashflow certificates. We    
believe that there is no active market for the sale of our excess cashflow      
certificates. No assurance can be given that these assets could be sold at      
their stated value on our balance sheet, if at all.                             

 We are exposed to contingent risks in respect of all the loans we originate
and purchase.                                                                   

Although we sell substantially all of the loans that we originate and     
purchase on a non-recourse basis, meaning that we generally do not retain the   
liabilities associated with the loans, we retain some degree of credit risk on  
all loans we originate or purchase. During the period of time that we hold      
loans pending sale, we are subject to the business risks associated with        
lending, including the risk of borrower default, the risk of foreclosure and    
the risk that an increase in interest rates would result in a decline in the    
value of loans to potential purchasers. Our securitizations generally require   
the use of the excess cashflow distributions related to the excess cashflow     
certificates to accelerate the amortization of certificate holders' principal   
balances relative to the amortization of the mortgage loans held by the trust   
up to certain overcollateralization limits. The resulting                       
overcollateralization serves as credit enhancement for the related              
securitization trust and therefore is available to absorb losses realized on    
loans held by such securitization trust. Generally, the form                    

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of credit enhancement agreement entered into in connection with securitization  
transactions contains specified limits on the delinquency, default and loss     
rates on the receivables included in each securitization trust. If, at any      
measuring date, the delinquency, default or loss rate with respect to any       
trust were to exceed the specified delinquency, default and loss rates, excess  
cashflow from the securitization trust, if any, would be used to fund the       
increased overcollateralization limit instead of being distributed to us as     
holders of the excess cashflow certificate, which would have a material         
adverse effect on our cashflow. Lastly, agreements governing whole loan sales   
and securitizations require the seller to commit to repurchase or replace       
loans that do not conform to the representations and warranties made by the     
seller at the time of sale.                                                     

We also have sold loans and/or pools of loans directly to a network of    
commercial banks, savings and loans, insurance companies, pension funds and     
accredited investors. We generally sold these pools or individual loans with    
recourse whereby we are obligated to repurchase any loan if it defaults and     
the related mortgaged property becomes a REO (real estate owned) property.      
This obligation is subject to various terms and conditions, including, in some  
instances, a time limit. At December 31, 2000, $6.2 million, or 0.2%, of our    
$3.3 billion servicing portfolio was subject to be repurchased in the future    
should such loans become REO properties. At March 31, 2001, $5.4 million, or    
0.2%, of our $3.1 billion servicing portfolio was subject to be repurchased in  
the future should such loans become REO properties.                             

 Our business and results of operations may be adversely affected by periods
of economic slowdowns and fluctuating interest rates.                           

General                                                                         

 Our business and results of operations may be affected adversely by periods
of economic slowdown or recession which may be accompanied by decreased demand  
for consumer credit and declining real estate values. In the mortgage           
business, any material decline in real estate values reduces the ability of     
borrowers to use the equity in their homes to support borrowings and increases  
the loan-to-value ratios of loans we previously made, thereby weakening         
collateral coverage and increasing the possibility of a loss in the event of    
default. Delinquencies, foreclosures and losses generally increase during       
economic slowdowns or recessions, however, delinquencies, foreclosures and      
losses also have increased during recent periods of economic growth and there   
can be no assurance that delinquencies, foreclosures and losses will not        
increase in the future during periods of continued economic growth.             

Because of our focus on credit-impaired borrowers in the home equity loan 
market, the actual rates of delinquencies, foreclosures and losses on such      
loans could be higher under adverse economic conditions than delinquencies,     
foreclosures and losses currently experienced in the mortgage lending industry  
in general. Any sustained period of increased delinquencies, foreclosures,      
losses or increased costs could adversely affect our ability to sell, and       
could increase the cost of selling, loans through securitization or on a whole  
loan basis, which could adversely affect our business and results of            
operations.                                                                     

Interest Rates                                                                  

 Our profitability may be directly affected by the level of, and fluctuation
in, interest rates, which affect our ability to earn a spread between interest  
received on our loans and the cost of our borrowings, which are tied to         
various United States Treasury maturities, commercial paper rates and LIBOR.    
Our profitability is likely to be adversely affected during any period of       
unexpected or rapid changes in interest rates.                                  

Rapid changes, either upward or downward, in interest rates may adversely 
affect our profits. Any future rise in interest rates may:                      

o reduce customer demand for our products;                                

o widen investor spread requirements for securities issued in             
   securitizations and increase overcollateralization requirements in future
securitizations;                                                      

o increase our cost of funds;                                             

o reduce the spread between the rate of interest we receive on loans and  
interest rates we must pay under our outstanding credit facilities and
debt securities;                                                      

o reduce the profit we will realize in securitizations or other sales of  
loans; and                                                            

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o limit our access to borrowings in the capital market.                   

Gain on sale of loans may be impacted unfavorably if we hold fixed rate   
mortgages prior to securitization. A change in interest rates would reduce the  
spread between the average coupon rate on fixed rate loans and the weighted     
average pass-through rate paid to investors for interests issued in connection  
with a securitization. Although the average loan coupon rate is fixed at the    
time the loan is originated, the pass-through rate to investors in a            
securitization is not fixed until the pricing of the securitization which       
occurs just prior to the sale of the loans by Delta to the securitization       
trust. Therefore, if the market rates required by investors increase prior to   
securitization of the loans, the spread between the average coupon rate on the  
loans and the pass-through rate to investors may be reduced or eliminated       
which would reduce or eliminate our profit on the sale of the loans. In         
addition, an increase in interest rates could increase our financing costs and  
reduce spreads on securitized loans which could negatively impact our           
liquidity and capital resources by reducing cashflows which would decrease our  
profitability. Since a portion of the certificates issued to investors by       
securitization trusts are floating rate certificates, the interest rates on     
these certificates adjust based on an established index plus a spread. The      
fair value of the excess cashflow we will receive from these trusts would be    
reduced as a result of any changes in interest rates paid on the floating       
certificates.                                                                   

Prepayment Risk                                                                 

If loan prepayment rates are higher than anticipated, our profits could be
reduced. A significant decline in market interest rates could increase the      
level of loan prepayments, which would decrease the size of the pools of        
securitized loans underlying our excess cashflow certificates and the related   
projected cashflows to us from those excess cashflow certificates. Higher than  
anticipated loan prepayment rates could require us to write down, or reduce,    
on our balance sheet the fair value of the related excess cashflow              
certificates. This would adversely impact our earnings during that period       
which would reduce our profitability.                                           

Loss Risk                                                                       

A decline in real estate values could reduce mortgage loan originations,  
which, in turn, could reduce our revenues.                                      

A decline in the value of the collateral securing mortgage loans in       
securitizations could result in an increase in mortgage loan losses on          
foreclosure which could reduce our profitability. Declining real estate values  
also will increase the loan-to-value ratios of loans we previously made, which  
in turn, increases the probability of a loss in the event the borrower          
defaults and we have to sell the mortgaged property. In addition,               
delinquencies and foreclosures generally increase during economic slowdowns or  
recessions. As a result, the market value of the real estate or other           
collateral underlying our loans in securitizations may not, at any given time,  
be sufficient to satisfy the outstanding principal amount of the loans.         

Competitive Risk                                                                

  Competition from other lenders could adversely affect our profitability. The
lending markets that we compete in are highly competitive. Some competing       
lenders have substantially greater resources, greater experience, lower cost    
of funds, and a more established market presence than we have. If our           
competitors increase their marketing efforts to include our market niche of     
borrowers, we may be forced to reduce the rates and fees we currently charge    
in order to maintain and expand our market share. Any reduction in our rates    
or fees could have an adverse impact on our profitability. Our profitability    
and the profitability of other similar lenders may attract additional           
competitors into this market.                                                   

Geographic Concentration Risk                                                   

An economic downturn in the eastern half of the United States could result
in reduced revenues for us. We currently originate loans primarily in the       
eastern half of the United States. The concentration of loans in a specific     
geographic region subjects us to the risk that a downturn in the economy in     
the eastern half of the country would more greatly affect us than if our        
lending business were more geographically diversified.                          

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  Our business is subject to extensive regulation; failure to comply with such
regulation may prevent us from operating or subject us to legal proceedings.    

Our lending business is subject to extensive government regulation,       
supervision and licensing requirements by various state departments of banking  
or financial services which may hinder our ability to operate profitably. Our   
lending business also is subject to various laws and judicial and               
administrative decisions imposing requirements and restrictions on all or part  
of our lending activities. We also are subject to examinations by state         
departments of banking or financial services in each of the states where we     
are licensed with respect to originating, processing, underwriting, selling     
and servicing home equity loans. We also are subject to Federal Reserve Board   
regulations related to residential mortgage lending and servicing and the       
Department of Housing and Urban Development regulation and reporting            
requirements. Failure to comply with these requirements can lead to, among      
other remedies, termination or suspension of our licenses, rights of            
rescission for mortgage loans, class action lawsuits and administrative         
enforcement actions.                                                            

Federal, state and local government agencies and/or legislators have      
recently begun to consider, and in some instances have adopted, legislation to  
restrict lenders' ability to charge rates and fees in connection with subprime  
residential mortgage loans and loans to borrowers with problem credit           
histories. This legislation also imposes various loan term restrictions, e.g.,  
limits on balloon loan features. Frequently referred to generally as            
"predatory lending" legislation, such legislation may limit our ability to      
impose certain fees, charge certain interest rates on certain consumer loans    
and may impose additional regulatory restrictions on our business.              

Although we believe that we have implemented systems and procedures to    
facilitate compliance with these requirements, more restrictive laws, rules     
and regulations may be adopted in the future that could make compliance more    
difficult or expensive and hinder our ability to operate profitably.            

The Truth in Lending Act and Regulation Z contain disclosure requirements 
designed to provide consumers with uniform, understandable information about    
the terms and conditions of loans and credit transactions so that consumers     
may compare credit terms. The Truth in Lending Act also guarantees consumers a  
three-day right to cancel transactions described in the act and imposes         
specific loan feature restrictions on some loans including the same type        
originated by us. We believe that we are in compliance with the Truth in        
Lending Act in all material respects. If we were found not to be in compliance  
with the Truth in Lending Act, some aggrieved borrowers could have the right    
to rescind their loans and/or to demand, among other things, the return of      
finance charges and fees paid at loan origination. Other fines and penalties    
also can be imposed under the Truth in Lending Act and Regulation Z.            

We also are subject to the Real Estate Settlement Procedures Act and      
Regulation X. These laws and regulations, which are administered by the         
Department of Housing and Urban Development, impose limits on the amount of     
funds a borrower can be required to deposit with us in any escrow account for   
the payment of taxes, insurance premiums or other charges; limits the fees      
which may be paid to third parties; and imposes various disclosure              
requirements. We are subject to various other federal and state laws, rules     
and regulations governing the licensing of mortgage lenders and servicers,      
procedures that must be followed by mortgage lenders and servicers, and         
disclosures that must be made to consumer borrowers. Failure to comply with     
these laws, as well as with the laws described above, may result in civil and   
criminal liability.                                                             

We currently are, and in the future may be, subject to various settlement 
agreements that may have a material adverse effect on our financial condition.  

The subprime mortgage market in which we operate has been the subject of  
significant scrutiny by various federal and state governmental agencies and     
legislators. Our lending practices, in particular, have been the subject of     
investigations by the New York State Banking Department, the Office of the      
Attorney General of the State of New York and the United States Department of   
Justice. The investigations centered on our compliance with various federal     
and state laws discussed above. We entered into a series of related settlement  
agreements with the above regulatory agencies, joined by HUD and the Federal    
Trade Commission, which provided for changes to our lending practices on a      
prospective basis, and retrospective relief to certain borrowers.               

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The settlement agreements arose from allegations by the New York State    
Banking Department and a lawsuit filed by the New York State Office of the      
Attorney General, alleging that we had violated various state and federal       
lending laws. In September 1999, we settled the claims with the New York State  
Banking Department and the New York State Office of the Attorney General. As    
part of the settlement, we have implemented certain agreed upon changes to our  
lending practices; have provided reduced loan payments aggregating $7.25        
million to certain borrowers identified by the New York State Banking           
Department; and have created a fund financed by the grant of 525,000 shares of  
our common stock. The proceeds of the fund will be used to, among other         
things, compensate certain borrowers and for a variety of consumer educational  
and counseling programs. The subsidy payments are being made on behalf of       
several hundred borrowers who have, to date, been identified by the Banking     
Department. The majority of these borrowers are currently receiving subsidy     
payments of $50 per month, with a lesser amount receiving subsidies totaling    
between $75-125 per month, for so long as their loans remain outstanding. These 
subsidy payments will be paid out of cashflows generated by the assets of       
Delta Funding Residual Exchange Company, LLC. In March 2000, we finalized an    
agreement with the United States Department of Justice, the Federal Trade       
Commission and HUD to complete the global settlement that we had reached with   
the New York State Banking Department and New York Office of the Attorney       
General. This agreement mandates some additional compliance efforts for us,     
but does not require any additional financial commitments from us.              

Legal actions are pending against us, which if successful, would have a   
material adverse effect on our financial condition.                             

Because the nature of our business involves the collection of numerous    
accounts, the validity of liens and compliance with state and federal lending   
laws, we are subject to numerous claims and legal actions in the ordinary       
course of its business. Generally, we are subject to claims made against us by  
borrowers and investors arising from, among other things:                       

o losses that are claimed to have been incurred as a result of alleged    
  breaches of fiduciary obligations, misrepresentation, error and omission
by our employees, officers and agents;                                

o incomplete documentation; and                                           

o failure to comply with various laws and regulations applicable to our   
business.                                                             

While it is impossible to estimate with certainty the ultimate legal and  
financial liability with respect to claims and actions, an adverse judgment in  
a claim or action may have a significant adverse effect on our financial        
condition.                                                                      

We have been named in several lawsuits brought as class actions, alleging 
violations of various federal and state consumer protection laws, and have      
entered into settlement agreements with various governmental agencies           
following investigations of our lending practices. Defending these claims and   
any claims asserted in the future may result in significant legal expenses,     
which will reduce our revenues, if any. A finding against us may result in the  
payment by us of damages which may be material to our business and results of   
operations.                                                                     

We depend on key personnel and the loss of any such key personnel could   
disrupt our operations and result in reduced revenues.                          

The success of our operations depends on the continued employment of our  
senior level management. If key members of the senior level management were     
for some reason unable to perform their duties or were to leave us for any      
reason, we may not be able to find capable replacements which could disrupt     
operations and result in reduced revenues.                                      

We are controlled by principal stockholders who have the ability to effect
fundamental corporate changes if they acted in concert.                         

As of December 31, 2000, our principal stockholders, members of the Miller
family, beneficially own an aggregate of sixty-six percent of our outstanding   
shares of common stock. Accordingly, such persons, if they were to act in       
concert, would have majority control of us with the ability to approve certain  
fundamental corporate transactions (including mergers, consolidations and       
asset sales), to elect all members of our board                                 

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of directors and to appoint new management. As long as the Millers are our      
controlling stockholders, third parties will not be able to gain control of us  
through purchases of common stock not beneficially owned or otherwise           
controlled by the Millers. The directors elected by the Millers will have the   
authority to effect decisions affecting our capital structure, including the    
issuance of additional capital stock, the implementation of stock repurchase    
programs and the declaration of dividends.                                      

Risks Associated with Delta Funding Residual Exchange Company, LLC              

There is no public market for the membership interests of Delta Funding   
Residual Exchange Company, LLC; the membership interests will be subject to     
restrictions on transfer; and holders of the membership interests may not be    
able to sell their interests.                                                   

 Under the terms of Delta Funding Residual Exchange Company, LLC's operating
agreement, the membership interests may not be sold or transferred except       
under limited circumstances. The membership interests of Delta Funding          
Residual Exchange Company, LLC will not be transferable except to affiliates    
of the noteholders and to transferees who are qualified institutional buyers    
as defined under Rule 144A promulgated under the Securities Act, who also are   
qualified purchasers as defined under Section 2(a)(51)(a) of the Investment     
Company Act, and in each case, in private transactions exempt from              
registration under the Securities Act. The membership interests of Delta        
Funding Residual Exchange Company, LLC will not be listed on any securities     
exchange. Thus, there will be no market for the membership interests and you    
will have to bear the risk of ownership for an indefinite period of time.       

  The market value of the mortgage-related securities comprising the assets of
Delta Funding Residual Exchange Company, LLC is difficult to ascertain and the  
value of these assets may decline over time.                                    

  The assets that will be held by Delta Funding Residual Exchange Company, LLC
include:                                                                        

o the excess cashflow certificates irrevocably transferred from Delta     
Residual Holding Trust 2000-1 and Delta Residual Holding Trust 2000-2;

o a net interest margin owner trust certificate irrevocably transferred   
from Delta Residual Holding Trust 2000-1;                             

 o all cash and other property generated by the excess cashflow certificates
   and net interest margin certificates held by Delta Residual Holding Trust
2000-1 and Delta Residual Holding Trust 2000-2 at the time of the     
consummation of the exchange offer; and                               

o the owner trust certificate representing ownership in Delta Non-        
Performing Loan Trust 2000-1, owning certain non-performing loan      
receivables.                                                          

  We believe that the current market value of the excess cashflow certificates
is approximately $73 million and of the excess cashflow certificates            
underlying the net interest margin owner trust certificate is approximately     
$79 million; however, this market value calculation is based only on            
management estimates. Our estimates may be wrong or inaccurate or based on      
incomplete information. The value of these securities generally depends on a    
variety of factors which we describe below. There can be no assurance that the  
value of these assets will not decline due to economic factors outside of our   
and Delta Funding Residual Exchange Company, LLC's control. There is no active  
market for the sale of these mortgage-related securities.                       

  We have not requested a third-party report or appraisal as to the fair value
of the mortgage-related securities comprising the assets of Delta Funding       
Residual Exchange Company, LLC.                                                 

  We have not requested a third-party report or appraisal as to the fair value
of the mortgage-related securities, so you will not have the benefit of a       
third-party valuation in making your investment decision concerning mortgage-   
related securities. There is no organized market for the trading of these       
mortgage-related securities. An analysis of the fair value of these securities  
requires an analysis of the underlying securitizations; an understanding of     
the historical performance of the underlying mortgage loan pools; and           
knowledge of the factors affecting the valuation of mortgage-related            
securities. There are only a limited                                            

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number of investment banks with the resources to undertake this analysis. As a  
result, a report or appraisal is costly and time-consuming.                     

Management has not made any determination concerning the fairness of the  
transaction.                                                                    

Management has not made any determination concerning the fairness of the  
transaction from a financial point of view. Holders of the notes must make      
their own judgment concerning the fairness to them of the transaction.          

Management's estimates concerning fair value may prove to be incorrect or 
incomplete.                                                                     

  Management regularly estimates the fair value of mortgage-related securities
like those which will comprise the assets of Delta Funding Residual Exchange    
Company, LLC. Management's estimates are based on a number of assumptions,      
including assumptions concerning:                                               

o prepayment rate speeds;                                                 

o loan losses on the underlying mortgage pools;                           

o interest rates generally;                                               

o industry trends; and                                                    

o economic conditions generally.                                          

 Management's assumptions may be incorrect or inaccurate. Actual performance
of the underlying mortgage pools may vary from its projected performance. The   
performance of the mortgage pools may be affected by circumstances outside of   
management's control, like a recession or changing market conditions which      
affect interest rates. The value of these assets also depends largely on the    
structure of the related securitization transaction. We have described the      
assumptions we use to determine the value of these securities in the section    
titled "Summary Pro Forma Financial Data for Delta Funding Residual Exchange    
Company, LLC" on page 10 and in the section titled "Description of Delta        
Funding Residual Exchange Company, LLC--Fair Value of Excess Cashflow           
Certificates" on page 63.                                                       

The amount of distributions made on the membership interests of Delta     
Funding Residual Exchange Company, LLC will be extremely sensitive to the rate  
and the timing of principal payments and realized losses on the underlying      
mortgage-related securities.                                                    

The amount of distributions which Delta Funding Residual Exchange Company,
LLC will make to the holders of its membership interests will depend upon the   
cashflows received by Delta Funding Residual Exchange Company, LLC from its     
mortgage-related securities. In turn, the cashflows produced by the mortgage-   
related securities will depend upon the rate and timing of principal payments   
and realized losses on the mortgage loans underlying the mortgage-related       
securities. The average life of the excess cashflow certificates held by Delta  
Funding Residual Exchange Company, LLC and the yields realized on the excess    
cashflow certificates will be sensitive to levels of payments, including        
prepayments, on the underlying mortgage loans. The yield to maturity on the     
excess cashflow certificates may be affected adversely by a higher than         
expected rate of principal payments (including prepayments and collections      
upon defaults, liquidations and repurchases) and realized losses on the         
underlying mortgage loans. The amount of distributions on the excess cashflow   
certificates will be affected negatively by a rapid rate of principal payments  
and greater than expected realized losses on the related mortgage loans. The    
amount of distributions on the excess cashflow certificates will decrease more  
significantly as a result of principal payments and realized losses on the      
mortgage loans with relatively high rates of interest. In addition,             
subordination triggers on the underlying securitization trusts delay and/or     
reduce the amount of distributions on the excess cashflow certificates.         

The membership interests of Delta Funding Residual Exchange Company, LLC  
represent equity interests in Delta Funding Residual Exchange Company, LLC and  
are not guaranteed by any other entity nor secured or collateralized by any     
assets.                                                                         

The membership interests of Delta Funding Residual Exchange Company, LLC  
represent equity interests in Delta Funding Residual Exchange Company, LLC.     
The membership interests do not represent a general                             

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corporate obligation of, nor do they represent an interest in, or any           
obligation of ours or of any of our affiliates, or of any other person. Delta   
Funding Residual Exchange Company,  LLC is not required to make any             
distributions and it may not have the funds required to make distributions.     

  The membership interests of Delta Funding Residual Exchange Company, LLC are
subject to restrictions on transfer, limited liquidity, and no secondary        
market may exist for them.                                                      

  The membership interests of Delta Funding Residual Exchange Company, LLC may
be assigned only under the following conditions:                                

o if the assignee is a qualified institutional buyer as defined under Rule
144A promulgated under the Securities Act who also is a qualified     
  purchaser as defined under Section 2(a)(51)(a) of the Investment Company
Act;                                                                  

 o if the assignee agrees in writing to be bound by the terms and conditions
  of Delta Funding Residual Exchange Company, LLC's operating agreement or
any other document acceptable to the managing member; and             

o the holder of the membership interest of Delta Funding Residual Exchange
   Company, LLC also assigns or transfers a corresponding pro rata number of
shares of the common stock of Delta Funding Residual Management, Inc. 
owned by the holder to the assignee.                                  

  Benefit plan investors are subject to special considerations with respect to
their acquisition of the membership interests of Delta Funding Residual         
Exchange Company, LLC and the shares of common stock of Delta Funding Residual  
Management, Inc. See "ERISA Considerations" on page 81.                         

  There is currently no secondary market for the membership interests of Delta
Funding Residual Exchange Company, LLC. As a result of the foregoing            
restrictions on transfer and other factors, it is doubtful that a secondary     
market for the membership interests of Delta Funding Residual Exchange          
Company, LLC will develop or, if a secondary market does develop with respect   
to the membership interests of Delta Funding Residual Exchange Company, LLC,    
that it will provide you with liquidity of investment or that it will continue  
for the life of the membership interests of Delta Funding Residual Exchange     
Company, LLC. If a trading market does not develop, you may be unable to        
resell the membership interests of Delta Funding Residual Exchange Company,     
LLC for an extended period of time, if at all. Future trading prices for the    
membership interests of Delta Funding Residual Exchange Company, LLC will       
depend upon many factors including, among others, prevailing interest rates,    
payment and loss experience with respect to the underlying mortgage-related     
securities, the likelihood of the exercise of the clean-up calls and the        
market for similar securities, each of which is subject to various general      
economic pressures outside of our control or the control of Delta Funding       
Residual Exchange Company, LLC.                                                 

Holders of the membership interests of Delta Funding Residual Exchange    
Company, LLC will not receive any distributions from Delta Funding Residual     
Exchange Company, LLC until Delta Funding Residual Exchange Company, LLC has    
made all required payments pursuant to Delta Funding Residual Exchange          
Company, LLC's operating agreement.                                             

Delta Funding Residual Exchange Company, LLC will distribute the cash     
generated by the mortgage-related securities in the following order of          
priority:                                                                       

o to Delta Funding Residual Management, Inc. to permit it to pay any      
expenses it incurs as Delta Funding Residual Exchange Company, LLC's  
managing member;                                                      

 o to Delta Funding Residual Management, Inc. to permit it to pay income tax
liabilities arising in connection with the mortgage-related securities
  (all of which income tax liabilities relating to excess inclusion income
will be allocated to it for income tax purposes under Delta Funding   
Residual Exchange Company, LLC's operating agreement);                

o to us to permit us to pay a portion of our settlement obligations to the
New York State Department of Banking;                                 

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o to us fifteen percent of the remaining cash after all of distributions  
described above have been made, except that after three years this    
distribution amount will be reduced to ten percent. However, these    
amounts may be reduced and retained by Delta Funding Residual Exchange
   Company, LLC if we do not pay the tax liabilities allocated to us or that
allocation is not respected by the Internal Revenue Service;          

o to us to permit us to pay the balance of our settlement obligations to  
the New York State Department of Banking; and                         

o to the holders of the voting membership interest of Delta Funding       
Residual Exchange Company, LLC, the balance if any, of Delta Funding  
Residual Exchange Company, LLC's available cash, within five business 
  days following each of April 30, June 30, September 30, and December 31.

Delta Funding Residual Exchange Company, LLC may not have sufficient funds
to make all of the above distributions or it may not have funds remaining       
after making the priority distributions. In either event, holders of the        
membership interests of Delta Funding Residual Exchange Company, LLC will not   
receive any payments.                                                           

Holders of the membership interest of Delta Funding Residual Exchange     
Company, LLC may be allocated income that exceeds the amounts of cash they      
receive.                                                                        

Delta Funding Residual Exchange Company, LLC will be treated as a         
partnership for federal income tax purposes. Accordingly, Delta Funding         
Residual Exchange Company, LLC will not be subject to federal income tax;       
rather, each owner of a membership interest of Delta Funding Residual Exchange  
Company, LLC will be required to take into account separately its allocable     
share of income, gains, losses, deductions and credits accrued by Delta         
Funding Residual Exchange Company, LLC, whether or not there is a               
corresponding cash distribution and whether or not Delta Funding Residual       
Exchange Company, LLC has received any cash. Thus, cash basis holders will in   
effect be required to report their allocable share of income from Delta         
Funding Residual Exchange Company, LLC on the accrual basis and thus may        
become liable for the taxes on their allocable share of limited liability       
company income even if they have not received cash from Delta Funding Residual  
Exchange Company, LLC to pay the taxes.                                         

Risks Associated with the Mortgage-Related Securities                           

 Payments on the mortgage-related securities will be made only after certain
fees and expenses have been paid by each securitization trust.                  

  With respect to each of the securitization trusts, payments of principal and
interest on any of the related mortgage loans will be available to make         
payments on the related underlying mortgage-backed certificates only after      
payment of related servicing fees, trustee fees and any insurer premiums,       
payment of other related specified expenses and reimbursements and payment of   
required distributions to holders of all other classes of the related series    
of certificates. Consequently, the amount of excess cashflow distributable on   
the excess cashflow certificates is extremely sensitive to losses on the        
related mortgage loans (and the timing and severity of those losses), because   
the entire amount of realized losses will be allocated directly or indirectly   
to the related excess cashflow certificates, either by reduction in amounts     
otherwise payable on those excess cashflow certificates or by a reduction in    
the amount of overcollateralization provided to the related publicly offered    
certificates, called the senior certificates, by the related mortgage loans.    

 Any reduction in the amount of overcollateralization provided to the senior
certificates of any series by the related mortgage loans to a level below the   
related required overcollateralization amount will be borne by the related      
excess cashflow certificates, because any amounts otherwise available for       
distribution on these excess cashflow certificates will be distributed instead  
on the related senior certificates to restore the reduced amount of             
overcollateralization to the required overcollateralization amount. In          
addition, certain securitization trusts include a cross-collateralization       
feature in which excess cashflow from one mortgage group is used to cover       
shortfalls in available funds from the other mortgage group, including          
shortfalls in amounts necessary to create or maintain the                       
overcollateralization amount for that other mortgage group at the related       
required overcollateralization amount.                                          

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Excess cashflow certificates absorb all losses suffered by the            
securitization trust and are paid out only after payment is made on senior      
certificates.                                                                   

With respect to the excess cashflow certificates relating to each         
securitization trust, the order of priority for monthly distribution of all     
collected funds, including scheduled payments and unscheduled recoveries on     
mortgage loans, plus advances, less servicing fees, trustee fees and any        
insurer premiums, in respect of the related mortgage loans generally results    
in the following amounts being paid prior to any distributions on those excess  
cashflow certificates:                                                          

o numerous permitted fees and reimbursements from the related             
 securitization trust to the trustee thereof and to the related servicer
and to the certificate insurer where applicable; and                  

o principal, including amounts necessary to meet and maintain the related 
   required overcollateralization amount, and interest on the related senior
certificates.                                                         

Realized losses with respect to the underlying mortgage loans will likely 
result in a reduction of the amount of overcollateralization available to the   
related senior certificates and accordingly, with respect to the related        
excess cashflow certificates, losses on the mortgage loans will be allocated    
to the related excess cashflow certificates and will reduce the excess          
cashflow to which those excess cashflow certificates might otherwise be         
entitled. If the prepayment, default, delinquency and/or loss severity          
experience with respect to the mortgage loans is higher than that assumed by    
investors, you may experience a lower than anticipated yield or may fail to     
recoup the value of the exchanged notes.                                        

Decisions made by the servicer may affect adversely the holders of the    
excess cashflow certificates.                                                   

  Numerous decisions by the servicer, including, but not limited to, decisions
regarding the optional purchase of defaulted mortgage loans and decisions       
regarding whether or not certain interest advances or servicing advances are    
nonrecoverable, also may affect the availability of cashflow with respect to    
the excess cashflow certificates, which are comprised of the excess cashflow    
certificates, the net interest margin owner trust certificate and the non-      
performing owner trust certificate. In addition, the servicer has the right to  
purchase all of the mortgage loans and terminate the related securitization     
trust when the principal balance of the mortgage loans falls below a specified  
level. Any optional termination also will terminate the related excess          
cashflow certificates.                                                          

The senior certificates issued and sold by the securitization trusts are  
subject to different pass-through rates which may result in amounts             
distributable to the excess cashflow certificates being substantially reduced.  

  Senior certificates issued and sold by the securitization trusts are subject
to a ceiling or cap on their pass-through rates. These pass-through rates       
affect both the timing and the likelihood of payment on the excess cashflow     
certificates associated with the applicable securitization trusts. The pass-    
through rate ceiling applicable to any class of the senior certificates         
subject to a ceiling generally is calculated with reference to the weighted     
average of the mortgage rates of the related mortgage loans, net of servicing   
fees, trustee fees, insurer premiums, if applicable, and interest payable to    
the related interest-only classes of senior certificates. Many senior           
certificates have pass-through rates based upon the value of one-month London   
Interbank Offered Rate, or LIBOR, while the mortgage rates on the related       
mortgage loans either do not adjust or are adjustable mortgage loans based on   
a different index, subject to periodic adjustments and limitations on           
adjustments. Other classes of senior certificates have variable pass-through    
rates, and the related mortgage loans have fixed mortgage rates.                

In a rising interest rate environment, the pass-through rates on any class
of adjustable rate senior certificates may rise while the mortgage rates of     
the related mortgage loans may rise more slowly or not at all. As a             
consequence, cashflow resulting from excess interest on the mortgage loans,     
and accordingly, amounts distributable to the excess cashflow certificates,     
may be substantially reduced. In addition, prepayments, including prepayments   
and collections upon defaults, liquidations and repurchases, on mortgage loans  
with relatively high mortgage rates, may reduce the pass-through rate ceiling.  
If the pass-through rate on any class of senior certificates equals the         
applicable pass-through rate ceiling, then none or only a minimal               

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amount of excess interest will be generated by the portion of the related       
securitization trust represented by the class principal balance of that class   
of senior certificates.                                                         

Classes of senior certificates that are subject to these basis risk       
shortfalls will be entitled to recover the amount of any basis risk             
shortfalls, with interest, on any distribution date on which related excess     
cashflow or other amounts are available to fund a recovery. Any amounts paid    
on any distribution date directly or indirectly from excess cashflow to any     
class of senior certificates in respect of any basis risk shortfalls will       
reduce the excess cashflow amounts that would otherwise be distributable on     
the related excess cashflow certificates.                                       

The mortgage pools are subject to overcollateralization requirements which
may limit when distributions will be made on the excess cashflow certificates.  

Each of the mortgage pools and, in some cases, each mortgage group, is    
subject to an overcollateralization requirement--called the "required           
overcollateralization amount". The required overcollateralization amount with   
respect to each mortgage pool will be determined for any distribution date as   
set forth in the pooling and servicing agreement relating to that               
securitization transaction. On each distribution date, no payments will be      
made in respect of the related excess cashflow certificates until after the     
then-applicable required overcollateralization amount is met.                   

After a specified date for each mortgage pool set forth in the related    
pooling and servicing agreement, the required overcollateralization amount      
with respect to that mortgage pool may decrease, subject to certain specified   
conditions. If at any time certain delinquency and/or loss levels are exceeded  
with respect to a mortgage pool, there will be a delay in the reduction of, or  
in some cases, an increase in, the related required overcollateralization       
amount. You bear the risk that there may be significant periods during which    
no or limited distributions will be made on the excess cashflow certificates.   

For some securitizations, distributions to the holders of the senior      
certificates are insured by an insurer that is given rights and benefits which  
may negatively affect your distributions on the excess cashflow certificates.   

With respect to the senior certificates relating to some securitization   
trusts, distributions to the holders of those senior certificates are insured   
by a bond insurer in exchange for which the bond insurer receives a premium to  
be paid by the related securitization trust fund on each distribution date.     
With respect to those securitization trusts, the insurer is afforded rights     
and benefits under the pooling and servicing agreement or other underlying      
transaction documents, including the right to exercise powers of the holders    
of the senior certificates, the right to terminate or allow to be terminated    
the servicer under specified conditions and the right to direct certain of the  
actions of the trustee. In addition, the insurer generally will be entitled to  
recover any amounts paid for the benefit of the holders of the related senior   
certificates under the related insurance policy and any other amounts due the   
insurer under the pooling and servicing agreement, together with interest       
thereon, from the cashflow of the mortgage loans in either mortgage group       
distributed on any distribution date, prior to any cashflow being distributed   
on the related excess cashflow certificates.                                    

Excess cashflow certificates are subject to credit risks relating to the  
quality of the underlying mortgage loans.                                       

Each mortgage pool relating to the excess cashflow certificates contains  
mortgage loans originated by us pursuant to our underwriting standards and      
serviced by a servicer under the terms of the related pooling and servicing     
agreement. Accordingly, any benefits arising from the diversification of        
holdings of Delta Funding Residual Exchange Company, LLC will be limited.       

In light of the nature of the excess cashflow certificates and the        
complexity of analyzing the credit risks associated with these certificates,    
excess cashflow certificates are an appropriate investment only for persons     
familiar with subprime mortgage loan performance and asset-backed securities    
structures.                                                                     

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Features of the underlying mortgage loans may result in losses or cashflow
shortfalls which will impair the value of the excess cashflow certificates      
held by Delta Funding Residual Exchange                                         
Company, LLC.                                                                   

 There are a number of features of the mortgage loans relating to the excess
cashflow certificates which will affect the timing and the realization of the   
cashflows associated with those certificates. These characteristics include     
the following:                                                                  

o The borrowers have less than perfect credit and may be more likely to   
default. Our underwriting standards are less restrictive than those of
   Fannie Mae or Freddie Mac with respect to a borrower's credit history and
other factors. A derogatory credit history or a lack of credit history
will not necessarily prevent us from making a loan but may reduce the 
   size and the loan-to-value ratio of the loan we will make. As a result of
these less restrictive standards, the securitization trusts may       
   experience higher rates of delinquencies, defaults and losses than if the
mortgage loans were underwritten in a more traditional manner.        

o Balloon loans may have higher rates of default which may cause losses.  
  Securitization trusts containing balloon loans may suffer higher losses.
  A balloon loan has monthly payments that will not fully pay off the loan
   balance by the maturity date. As a result, the borrower usually will have
to refinance the balloon loan in order to pay the amount due. The     
  borrower may not be able to refinance the balloon loan for any number of
reasons, including the level of available mortgage rates, the value of
the property or the borrower's payment or credit history. The         
   securitization trust will not have any funds to refinance a balloon loan,
   and we are not obligated to do so. If the borrower is unable to refinance
the balloon loan, the securitization trust may suffer a loss.         

o Defaults on second lien mortgage loans may result in more severe losses.
Securitization trusts containing second lien mortgage loans may suffer
  more severe losses. If a borrower on a mortgage loan secured by a second
lien defaults, the trust's rights to proceeds on liquidation of the   
   related property are subordinate to the rights of the holder of the first
lien on the related property. There may not be enough proceeds to pay 
both the holder of the first lien and the second lien, and the        
securitization trust would suffer a loss.                             

o The concentration of mortgage loans in specific geographic areas may    
increase the risk of loss. Economic conditions in the states where    
borrowers reside may affect the delinquency, loss and foreclosure     
experience of the securitization trust with respect to the related    
   mortgage loans. Certain states may suffer economic problems or reductions
 in market values for residential properties that are not experienced in
   other states. If there is a geographic concentration of mortgage loans in
those states, these problems may have a greater effect on the mortgage
loans in a securitization trust if borrowers and properties were more 
spread out in different geographic areas.                             

A substantial portion of the mortgage loans in each mortgage pool are 
secured by mortgaged properties located in the State of New York. If  
   areas in New York suffer natural disasters or if the New York residential
real estate market should experience an overall decline in property   
values after the mortgage loans are originated, the rates of          
delinquencies, foreclosures, bankruptcies and losses on the mortgage  
loans may be expected to increase, and may increase substantially.    

o Higher loan-to-value mortgage loans may suffer greater risks of loss. A 
 portion of the mortgage loans in each mortgage pool had a loan-to-value
ratio at origination in excess of eighty percent. Mortgage loans with 
   higher loan-to-value ratios may present a greater risk of loss. There can
be no assurance that the loan-to-value ratio of any mortgage loan     
determined at any time after origination is less than or equal to its 
original loan-to-value ratio.                                         

Payments on the excess cashflow certificates are not fixed.               

Unlike standard corporate bonds, the timing and amount of cashflows on the
excess cashflow certificates will depend on the rate and timing of principal    
payments on the underlying mortgage loans, including prepayments and            
collections upon defaults, liquidations and repurchases, by the rate and        
timing of realized                                                              

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losses on the mortgage loans, by adjustments of the pass-through rates of the   
related senior certificates and adjustments of the mortgage rates of the        
adjustable-rate mortgage loans.                                                 

The voting rights under the excess cashflow certificates provide no       
effective remedies to the holder of the excess cashflow certificates.           

The voting rights evidenced by the excess cashflow certificates are       
insufficient to cause or prevent the exercise of any remedies under any         
pooling and servicing agreement, including removal of the servicer if it        
defaults in its obligations under a pooling and servicing agreement.            

Environmental conditions affecting the mortgaged properties may result in 
losses.                                                                         

Real property pledged as security to a lender may be subject to           
environmental risks. Under the laws of some states, contamination of a          
property may give rise to a lien on the property to assure the costs of clean-  
up. In several states, this type of lien has priority over the lien of an       
existing mortgage or owner's interest against real property. In addition,       
under the laws of some states and under the federal Comprehensive               
Environmental Response, Compensation, and Liability Act of 1980, a lender may   
be liable, as an owner or operator, for costs of addressing releases or         
threatened releases of hazardous substances that require remedy at a property,  
if agents or employees of the lender have become sufficiently involved in the   
operations of the borrower, regardless of whether or not the environmental      
damage or threat was caused by a prior owner. A lender also risks liability on  
foreclosure of the mortgaged property.                                          

  Violations of consumer protection laws may result in losses which may impair
the value of the excess cashflow certificates held by Delta Funding Residual    
Exchange Company, LLC.                                                          

Applicable state laws generally regulate interest rates and other charges 
and require specific disclosures. In addition, other state laws, public policy  
and general principles of equity relating to the protection of consumers,       
unfair and deceptive practices and debt collection practices may apply to the   
origination, servicing and collection of the mortgage loans.                    

The mortgage loans also are subject to federal laws, including:           

o the federal Truth in Lending Act and Regulation Z promulgated under the 
Truth in Lending Act, which require particular disclosures to the     
borrowers regarding the terms of the mortgage loans;                  

o the Equal Credit Opportunity Act and Regulation B promulgated under the 
  Equal Credit Opportunity Act, which prohibit discrimination on the basis
of age, race, color, sex, religion, marital status, national origin,  
receipt of public assistance or the exercise of any right under the   
Consumer Credit Protection Act, in the extension of credit;           

o the Real Estate Settlement Procedures Act, which requires, among other  
things, particular disclosures to the borrowers regarding lender      
servicing and escrow account practices and regulates certain types of 
referral fees;                                                        

 o the Americans with Disabilities Act, which, among other things, prohibits
   discrimination on the basis of disability in the full and equal enjoyment
of the goods, services, facilities, privileges, advantages or         
accommodations of any place of public accommodation;                  

o the Fair Housing Act which, among other things, prohibits discrimination
 on the basis of race or color, national origin, religion, sex, familial
status or handicap in housing; and                                    

o the Fair Credit Reporting Act, which regulates the use and reporting of 
information related to the borrower's credit experience.              

The mortgage loans may be subject to the Home Ownership and Equity        
Protection Act of 1994 which amended the Truth in Lending Act as it applies to  
mortgages subject to the Home Ownership and Equity Protection Act of 1994. The  
Home Ownership and Equity Protection Act of 1994 requires additional            
disclosures, specifies the timing of these disclosures, and limits or           
prohibits inclusion of some provisions in mortgages subject to the Home         
Ownership and Equity Protection Act 1994. The Home Ownership and Equity         
Protection Act 1994 also provides that any purchaser or assignee of a mortgage  
covered by the Home Ownership and Equity Protection Act 1994, including the     
securitization trust, is subject to all of the claims                           

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and defenses which the borrower could assert against the original lender. The   
maximum damages that may be recovered under the Home Ownership and Equity       
Protection Act 1994 from an assignee is the remaining amount of indebtedness    
plus the total amount paid by the borrower in connection with the loans.        
Depending on the provisions of the applicable law and the specific facts and    
circumstances involved, violations of these laws, policies and principles may   
limit the ability of the servicer to collect all or part of the principal of    
or interest on the mortgage loans, may entitle the borrower to a refund of      
amounts previously paid and, in addition, could subject the trust, as owner of  
the mortgage loans, to damages and administrative enforcement. Under the        
documents governing the securitizations, we are required to repurchase or       
replace loans that do not conform to the representations and warranties         
(including a representation that the loans were made in compliance with         
applicable lending laws) made by us as seller of the securitization. If we      
fail to repurchase or replace any such loans, the holders of the excess cash    
flow certificates may suffer losses.                                            

Our lending practices, in particular, have been the subject of            
investigations by various regulatory agencies including the New York State      
Banking Department, the Office of the Attorney General of the State of New      
York, and the United States Department of Justice. The investigations centered  
on our compliance with various federal and state laws discussed above. We       
entered into a series of related settlement agreements with the above           
regulatory agencies, joined by HUD and the Federal Trade Commission, which      
provided for changes to our lending practices on a prospective basis, and       
retrospective relief to certain borrowers.                                      

Risks Associated with Delta Funding Residual Management, Inc.                   

Delta Funding Residual Management, Inc. has minimal assets and no         
operations.                                                                     

Delta Funding Residual Management, Inc. was created to effect the exchange
offer and to serve as the managing member of Delta Funding Residual Exchange    
Company, LLC. As a result, it has no operating history. It will limit its       
future operations to holding a non-voting membership interest of Delta Funding  
Residual Exchange Company, LLC and managing the mortgage-related securities     
held by Delta Funding Residual Exchange Company, LLC. Delta Funding Residual    
Management, Inc.'s only asset will be its non-voting membership interest in     
Delta Funding Residual Exchange Company, and, in the future, we do not expect   
that it will have significant assets. Noteholders making an investment          
decision concerning Delta Funding Residual Management, Inc. and its common      
stock may not have much information on which to base their investment           
decision.                                                                       

  Delta Funding Residual Management, Inc. does not intend to declare dividends
on its common stock.                                                            

 Noteholders who exchange their notes will receive shares of common stock of
Delta Funding Residual Management, Inc. in addition to other securities. Delta  
Funding Residual Management, Inc. does not intend to declare any dividends      
with respect to its common stock because its only source of income will be      
distributions from Delta Funding Residual Exchange Company, LLC to pay taxes    
and expenses and those distributions should not result in Delta Funding         
Residual Management, Inc. receiving funds sufficient to permit it to pay        
dividends. You should not expect to receive any additional income as a result   
of your ownership of the common stock of Delta Funding Residual Management,     
Inc.                                                                            

 The common stock of Delta Funding Residual Management, Inc. will be subject
to restrictions on transfer.                                                    

The common stock of Delta Funding Residual Management, Inc. will not be   
listed on any securities market; and we do not expect that there will be any    
trading market for the common stock. Generally, the common stock will be        
transferable only in connection with a transfer by a holder of a membership     
interest of Delta Funding Residual Exchange Company, LLC and, then, only in     
the same pro rata proportions as the transferred membership interest. The       
common stock of Delta Funding Residual Management, Inc. and the membership      
interests of Delta Funding Residual Exchange Company, LLC will be transferable  
only to qualified institutional buyers, as such term is defined under the       
Securities Act, who also are qualified purchasers as defined under Section      
2(a)(51)(a) of the Investment Company Act.                                      

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USE OF PROCEEDS 

We will not receive any cash proceeds from the exchange offer.            

DELTA FINANCIAL CORPORATION CAPITALIZATION

The following table sets forth:                                           

o our actual capitalization at March 31, 2001; and                        

o our pro forma capitalization assuming that the exchange offer had been  
completed at March 31, 2001.                                          

The information presented below should be read in conjunction with the    
information included under "Delta Financial Corporation Selected Historical     
Financial Data" in this prospectus and our interim unaudited financial data     
for the quarter ended March 31, 2001 incorporated by reference herein from our  
Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2001.           

                                                                [Download Table]


                                                            Three Months Ended  
                                                              March 31, 2001    
                                                          ----------------------
                                                                      Pro Forma 
                                                           Actual    As Adjusted
                                                           ------    -----------
                                                          (Dollars in thousands)
                                                                                
Debt:                                                                           
Warehouse financing and other borrowings .............    $106,815     $106,815 
Bank payable .........................................       2,696        2,696 
Notes due 2004 .......................................     149,596           -- 
                                                          --------     -------- 
Total debt ...........................................    $259,107     $109,511 
                                                          --------     -------- 
Stockholders' equity:                                                           
Common stock, $.01 par value: 49,000,000 shares                                 
  authorized; 16,000,549 shares outstanding, actual                             
  and pro forma.......................................    $    160     $    160 
Preferred stock, $.01 par value; 1,000,000 shares                               
  authorized; no shares outstanding actual and 150,000                          
  shares outstanding pro forma........................          --       15,000 
Additional paid-in capital ...........................      99,472       99,472 
Retained earnings ....................................     (34,342)     (55,255)
Treasury stock .......................................      (1,318)      (1,318)
                                                          --------     -------- 
 Total stockholders' equity ..........................      63,972       58,059 
                                                          --------     -------- 
   Total capitalization...............................    $323,079     $167,570 
                                                          ========     ======== 

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DELTA FINANCIAL CORPORATION SELECTED HISTORICAL FINANCIAL DATA

 The following table presents our selected historical financial data for the
periods indicated. The financial data for the period from the five fiscal       
years ended 1996, 1997, 1998, 1999 and 2000 have been derived from our audited  
consolidated financial statements for such periods. The financial data for the  
quarters ended March 31, 2000 and March 31, 2001 have been derived from our     
unaudited interim consolidated financial statements for such periods. Interim   
results may not be indicative of results for the full year. The data should be  
read in conjunction with our consolidated financial statements, related notes   
and other financial information incorporated by reference in this prospectus    
from our public filings with the SEC.                                           

                                                        [Enlarge/Download Table]

                                                                                                              (unaudited)        
                                                                                                          Three Months Ended     
                                                      Year Ended December 31,                                  March 31,         
                               ---------------------------------------------------------------------   ------------------------- 
                                  1996           1997          1998           1999           2000         2000           2001    
                                  ----           ----          ----           ----           ----         ----           ----    
                                                            (Dollars in thousands except per share)                              
                                                                                                                                 
Income Statement Data                                                                                                            
Revenues:                                                                                                                        
  Net gain on sale of                                                                                                            
   mortgage loans............  $    46,525   $    85,890    $    91,380   $    78,663    $    47,550   $    14,654   $     5,377 
  Interest...................       16,372        22,341         12,458        31,041         32,287        10,537       (14,789)
  Servicing fees.............        5,368         7,511         10,464        16,341         14,190         4,066         2,213 
  Origination fees...........        5,266        18,108         25,273        28,774         24,944         6,688         4,162 
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
   Total revenues............       73,531       133,850        139,575       154,819        118,971        35,945        (3,037)
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
Expenses:                                                                                                                        
  Payroll and related costs .       17,633        41,214         56,709        65,116         56,525        15,561        11,324 
  Interest...................       11,298        19,964         30,019        26,656         30,386         7,803         5,829 
  General & administrative...       11,112        21,522         34,351        55,318         94,685         9,456        13,090 
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
   Total expenses............       40,043        82,700        121,079       147,090        181,596        32,820        30,243 
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
Income (loss) before income                                                                                                      
  tax expense (benefit) and                                                                                                      
  extraordinary item.........       33,488        51,150         18,496         7,729        (62,625)        3,125       (33,280)
Provision for income tax                                                                                                         
  expense (benefit)..........        9,466        20,739          7,168         3,053        (13,208)        1,299           472 
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
Income (loss) before                                                                                                             
  extraordinary item.........       24,022        30,411         11,328         4,676        (49,417)        1,826       (33,752)
Extraordinary item:                                                                                                              
 Gain on extinguishments of                                                                                                      
  debt.......................        3,168            --             --            --             --            --            -- 
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
Net income (loss)............  $    27,190   $    30,411    $    11,328   $     4,676    $   (49,417)  $     1,826   $   (33,752)
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
Pro forma information (1)(2):                                                                                                    
Provision for pro forma                                                                                                          
  income tax expense before                                                                                                      
  extraordinary item.........       14,400            --             --            --             --            --            -- 
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
Pro forma income (loss)                                                                                                          
  before extraordinary item..  $    19,088   $    30,411    $    11,328   $     4,676    $   (49,417)  $     1,826   $   (33,752)
                               -----------   -----------    -----------   -----------    -----------   -----------   ----------- 
Per share data(1)(3):                                                                                                            
Earnings (loss) per common                                                                                                       
  share - basic and diluted..        $1.46         $1.98          $0.74         $0.30         $(3.10)        $0.11        $(2.12)
Weighted average number of                                                                                                       
  shares                                                                                                                         
  outstanding................   13,066,485    15,359,280     15,382,161    15,511,214     15,920,869    15,920,869    15,920,869 
Selected Balance Sheet Data:                                                                                                     
Loans held for sale, net.....     $ 82,411      $ 79,247       $ 87,170      $ 89,036       $ 82,698      $ 92,426      $101,360 
Capitalized mortgage                                                                                                             
  servicing rights...........       11,412        22,862         33,490        45,927             --        45,144            -- 
Interest-only and residual                                                                                                       
  certificates...............       83,073       167,809        203,803       224,659        216,907       233,111       196,070 
Total assets.................      231,616       393,232        481,907       556,835        452,697       558,474       437,374 
Senior notes, warehouse                                                                                                          
  financing and other                                                                                                            
  borrowings.................       95,482       177,540        229,660       258,493        238,203       271,565       256,411 
Investor payable.............       20,869        40,852         63,790        82,204         69,489        73,825        73,068 
Total liabilities............      138,098       266,779        344,219       409,694        354,973       409,507       373,402 
Stockholders' equity.........       93,518       126,453        137,688       147,141         97,724       148,967        63,972 

---------------                                                                 
(1) Figures for December 31, 1997, 1998, 1999 and 2000 are actual; pro forma    
presentation for the year 1996.                                         
(2) Prior to October 31, 1996, Delta Funding Corporation (a wholly-owned        
subsidiary) was treated as an S corporation for federal and state income
tax purposes. The pro forma presentation reflects a provision for income
 taxes as if we have always been a C corporation at an assumed tax rate of
43%.                                                                    
(3) Pro forma earnings per common share has been computed by dividing pro forma 
   net income by the sum of (a) 10,653,000 shares of our common stock received
 by the former shareholders in exchange for their shares of Delta Funding,
  and (b) the effect of the issuance of 1,976,182 shares of our common stock
issued in our initial public offering to generate sufficient cash for   
  certain S corporation distributions paid to the former shareholders, which
shares are treated as if they had always been outstanding.              

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THE EXCHANGE OFFER

Terms of the Exchange Offer; Period for Tendering Notes                         

Upon the terms and conditions set forth in this prospectus and in the     
accompanying letter of transmittal and consent, we will accept for exchange     
notes that are properly tendered on or prior to the expiration date and not     
withdrawn.                                                                      

As of March 31, 2001, $148.2 million aggregate principal amount of senior 
secured notes were outstanding and $1.8 million aggregate principal amount of   
senior notes were outstanding. We are offering to exchange for each $1,000      
principal amount of notes tendered:                                             

o one share of our preferred stock;                                       

o one voting membership interest of Delta Funding Residual Exchange       
Company, LLC; and                                                     

o one share of common stock of Delta Funding Residual Management, Inc.    

  This prospectus, together with a letter of transmittal and consent, is being
sent on or about the date hereof to all noteholders known to us. Your delivery  
to us of the letter of transmittal and consent will satisfy the letter of       
transmittal and consent delivery requirements for tendering notes pursuant to   
this prospectus. Our obligation to accept your notes for exchange pursuant to   
the exchange offer is subject to certain conditions we describe under           
"Conditions to the Exchange Offer."                                             

Notes tendered in the exchange offer must be in denominations of principal
amount of $1,000 and any integral multiple thereof.                             

As part of the exchange offer, we are soliciting consents from the        
noteholders to the proposed amendments to the indenture governing the senior    
secured notes described below.                                                  

The Proposed Amendments                                                         

  As a part of the exchange offer, we are soliciting consents from the holders
of senior secured notes to the proposed amendments to the indenture governing   
those notes and other related documents entered into in connection with the     
issuance of the notes. The purpose of the proposed amendments is to amend the   
senior secured notes indenture to (1) remove all of the collateral securing     
the senior secured notes, and (2) modify or remove restrictive covenants or     
agreements which limit our business activities, including removing covenants    
which prevent the issuance of liens, encumbrances or debt, the issuance of      
additional shares, or other similar matters.                                    

To tender your notes for exchange, you must deliver an executed consent to
the proposed amendments.                                                        

Holders who tender their notes in the exchange offer will not receive the 
interest payment due to them on August 1, 2001.                                 

Senior Secured Notes Indenture. In connection with this exchange offer we 
are seeking the consent of senior secured noteholders to certain proposed       
amendments to the senior secured indenture.                                     

  If they become effective, the proposed amendments would, among other things:

o delete substantially all covenants in the indenture that governs the    
senior secured notes relating to our or our subsidiaries' business or 
operations;                                                           

 o delete the covenants in the indenture restricting mergers, consolidations
and sales of all or substantially all of our assets;                  

o delete all events of default, other than defaults in payment of interest
and principal;                                                        

o delete in their entirety the provisions of the indenture that create for
the benefit of the holders of the senior secured notes a security     
interest in the excess cashflow certificates and other assets of ours;
and                                                                   

o make certain other conforming and related changes to the indenture.     

The proposed amendments also will release all of the collateral currently 
held by the Delta Funding Residual Holding Trust 2000-1 and Delta Funding       
Residual Holding Trust 2000-2 securing the senior secured                       

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notes. Under the terms of this exchange offer, all of the mortgage-related      
securities currently held by these residual holding trusts, as well as          
securities of our subsidiaries, will be transferred out of these trusts. All    
of the mortgage-related securities will be transferred to Delta Funding         
Residual Exchange Company, LLC upon consummation of the exchange offer.         

Any holder who does not participate in the exchange offer pursuant to the 
terms and conditions of this prospectus will not be deemed to have granted its  
consent to the proposed amendments. Notes that are not validly tendered for     
exchange will remain outstanding as our obligations. To be effective, valid     
consents to the proposed amendments must be received from holders of a          
majority of the outstanding principal amount of the notes. Consents will not    
be counted toward the approval of the proposed amendments unless we are         
prepared, subject to the terms and conditions set forth in this prospectus, to  
accept the tender of the notes to which such consents relate for exchange or    
to waive any defects in such tender. Consents of a holder will not be counted   
if the tender of such holder's secured notes does not conform to the            
requirements set forth in "Procedures for Tendering Notes" below and the        
defect is not cured prior to 5:00 p.m., New York City time, on the Expiration   
Date, or waived by us in our sole discretion. Please also see "Considerations   
for Noteholders who Elect Not to Participate in the Exchange Offer--Effect of   
the Proposed Amendments."                                                       

The transfer of notes on our register will not revoke any consent to the  
proposed amendments previously given by the holder of such notes. See           
"Withdrawal Rights," below. Pursuant to the terms of the exchange offer, the    
completion, execution and delivery of a letter of transmittal and consent by a  
holder of secured notes in connection with the delivery of notes for exchange   
will constitute the delivery of a consent to the proposed amendments.           

 Under the senior secured notes indenture most terms of the indenture may be
modified with the written consent of a majority of the noteholders. Thus, if    
ninety-five percent of the notes are tendered and accepted for exchange, the    
restrictive covenants in the senior secured notes indenture will be removed.    
However, if the exchange offer is consummated, senior secured noteholders who   
do not tender their notes will still be entitled to principal and interest      
payments, because the provisions governing these payments cannot be amended     
without the consent of each noteholder affected.                                

Expiration Date; Extensions; Amendments                                         

The "expiration date" means 5:00 p.m., New York City time, on August 20,  
2001.                                                                           

  We expressly reserve the right to amend or terminate the exchange offer, and
not to accept for exchange any notes, upon the occurrence of any of the         
conditions of the exchange offer specified under "Conditions to the Exchange    
Offer." We will give oral or written notice of any amendment, non-acceptance    
or termination to the noteholders as promptly as practicable.                   

Release of Legal Claims by Tendering Noteholders                                

By tendering your notes in the exchange offer, you will be deemed to have 
released and waived any and all claims or causes of action of any kind          
whatsoever (including the right to payment of principal and accrued interest    
under the secured notes), whether known or unknown, that, directly or           
indirectly, arise out of, are based upon or are in any manner connected with    
your or your successors' and assigns' ownership or acquisition of the notes,    
including any related transaction, event, circumstance, action, failure to act  
or occurrence of any sort or type, whether known or unknown, including without  
limitation any approval or acceptance given or denied, which occurred,          
existed, was taken, permitted or begun prior to the date of such release, in    
each case, that you, your successors and your assigns have or may have had      
against (a) us, our subsidiaries, our affiliates and our stockholders, and (b)  
directors, officers, employees, attorneys, accountants, advisors, agents and    
representatives, in each case whether current or former, of us, our             
subsidiaries, or our affiliates. This release of legal claims does not apply    
to any rights or claims which may be made under federal securities laws. Any    
release of rights under the federal securities laws is void.                    

Procedures for Tendering Notes                                                  

Your tender of notes to us as set forth below and our acceptance of the   
tendered notes will constitute a consent to the proposed amendments to the      
indentures governing the notes and a binding agreement between us and you upon  
the terms and subject to the conditions set forth in this prospectus and in     
the accompanying                                                                

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letter of transmittal and consent. Except as set forth below, to tender notes   
for exchange pursuant to the exchange offer, you must transmit a properly       
completed and duly executed letter of transmittal and consent, including all    
other documents required by such letter of transmittal and consent or, in the   
case of a book-entry transfer, an agent's message in lieu of such letter of     
transmittal and consent, to U.S. Bank Trust National Association, as exchange   
agent, at the address set forth below under "Exchange Agent" on or prior to     
the expiration date. In addition, either:                                       

o a timely confirmation of a book-entry transfer (a "book-entry           
confirmation") of such notes, if such procedure is available, into the
exchange agent's account at the Depository Trust Company, or DTC,     
  pursuant to the procedure for book-entry transfer described beginning on
page 37 must be received by the exchange agent, or, if notes are held 
through DTC, ATOP procedures described below under the caption "Book- 
Entry Transfers" are followed, prior to the expiration date, with the 
 letter of transmittal and consent or an agent's message in lieu of such
letter of transmittal and consent, or                                 

o the holder must comply with the guaranteed delivery procedures described
below, or                                                             

o certificates for the notes must be received by the exchange agent along 
with the letter of transmittal and consent.                           

The term "agent's message" means a message, transmitted by DTC to and     
received by the exchange agent and forming a part of a book-entry               
confirmation, which states that DTC has received an express acknowledgement     
from you that you have received and agreed to be bound by the letter of         
transmittal and consent and that we may enforce such letter of transmittal and  
consent against you.                                                            

 The method of delivery of notes, letters of transmittal and consent and all
other required documents is at your election and risk. If such delivery is by   
mail, we recommend that you use registered mail, properly insured, with return  
receipt requested. In all cases, you should allow sufficient time to assure     
timely delivery. Please send all certificates for notes, letters of             
transmittal and consent and agent's messages to U.S. Bank Trust National        
Association, the exchange agent for the exchange offer at the address set       
forth under "Exchange Agent". No letter of transmittal and consent or notes     
should be sent to us.                                                           

  Signatures on a letter of transmittal and consent or a notice of withdrawal,
as the case may be, must be guaranteed unless the notes surrendered for         
exchange are tendered:                                                          

o by a holder of the notes who has not completed the box entitled "Special
 Issuance Instructions" or "Special Delivery Instructions" on the letter
of transmittal and consent, or                                        

o for the account of an eligible institution (as defined below).          

If signatures on a letter of transmittal and consent or a notice of       
withdrawal are required to be guaranteed, such guarantees must be by a firm     
which is a member of the Securities Transfer Agent Medallion Program, the       
Stock Exchange Medallion Program or the New York Stock Exchange Medallion       
Program (each such entity being hereinafter referred to as an eligible          
institution). If notes are registered in the name of a person other than the    
signer of the letter of transmittal and consent, the notes surrendered for      
exchange must be endorsed by, or be accompanied by a written instrument or      
instruments of transfer or exchange, in satisfactory form as we or the          
exchange agent determine in our sole discretion, duly executed by the           
registered holders with the signature thereon guaranteed by an eligible         
institution.                                                                    

We or the exchange agent in our sole discretion will make a final and     
binding determination on all questions as to the validity, form, eligibility    
(including time of receipt) and acceptance of notes tendered for exchange. We   
reserve the absolute right to reject any and all tenders of any particular      
note not properly tendered or to not accept any particular note which           
acceptance might, in our judgment or our counsel's, be unlawful. We also        
reserve the absolute right to waive any defects or irregularities or            
conditions of the exchange offer as to any particular note either before or     
after the expiration date (including the right to waive the ineligibility of    
any holder who seeks to tender notes in the exchange offer). Our or the         
exchange agent's interpretation of the terms and conditions of the exchange     
offer as to any particular note either before or after the expiration date      
(including the letter of transmittal and consent and the instructions thereto)  
will be final and binding on all parties. Unless waived, any effects or         
irregularities in connection with tenders of notes for exchange must be cured   
within a reasonable period of time, as we determine. We are not, nor is the     
exchange                                                                        

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agent or any other person, under any duty to notify you of any defect or        
irregularity with respect to your tender of notes exchange, and no one will be  
liable for failing to provide such notification.                                

If the letter of transmittal and consent is signed by a person or persons 
other than the registered holder or holders of notes, such notes must be        
endorsed or accompanied by powers of attorney signed exactly as the name(s) of  
the registered holder(s) that appear on the notes.                              

  If the letter of transmittal and consent or any notes or powers of attorneys
are signed by trustees, executors, administrators, guardians, attorneys-in-     
fact, officers of corporations or others acting in a fiduciary or               
representative capacity, such persons should so indicate when signing. Unless   
waived by us or the exchange agent, proper evidence satisfactory to us of       
their authority to so act must be submitted with the letter of transmittal and  
consent.                                                                        

Acceptance of Notes for Exchange; Delivery of Shares of our Preferred Stock,    
the Membership  Interests of Delta Funding Residual Exchange Company, LLC and   
the Shares of Common Stock of Delta Funding Residual Management, Inc.           

 Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will accept, promptly after the expiration date, all notes which are         
properly tendered and will issue the securities promptly after acceptance of    
the notes. See "Conditions to the Exchange Offer." For purposes of the          
exchange offer, we shall be deemed to have accepted properly tendered notes     
for exchange if and when we give oral (confirmed in writing) or written notice  
to the exchange agent.                                                          

 The holder of each note accepted for exchange will receive, for each $1,000
principal amount of surrendered notes,                                          

o one share of our preferred stock,                                       

o one membership interest of Delta Funding Residual Exchange Company, LLC,
and                                                                   

o one share of common stock of Delta Funding Residual Management, Inc.    

In all cases, issuance of the above securities for notes that are accepted
for exchange will be made only after timely receipt by the exchange agent of:   

o certificates for such notes or a timely book-entry confirmation of such 
notes into the exchange agent's account at DTC,                       

o a properly completed and duly executed letter of transmittal and consent
or an agent's message in lieu thereof, and                            

o all other required documents.                                           

  If any tendered notes are not accepted for any reason set forth in the terms
and conditions of the exchange offer or if notes are submitted for a greater    
principal amount than the holder desires to exchange, such unaccepted or non-   
exchanged notes will be returned without expense to the tendering holder (or,   
in the case of notes tendered by book-entry transfer into the exchange agent's  
account at DTC pursuant to the book-entry procedures described below, such      
non-exchanged notes will be credited to an account maintained with DTC) as      
promptly as practicable after the expiration or termination of the exchange     
offer.                                                                          

Book-Entry Transfers                                                            

 For purposes of the exchange offer, the exchange agent will request that an
account be established with respect to the notes at DTC within two business     
days after the date of this prospectus, unless the exchange agent already has   
established an account with DTC suitable for the exchange offer. Any financial  
institution that is a participant in DTC may make a book-entry delivery of      
notes by causing DTC to transfer such notes into the exchange agent's account   
at DTC in accordance with DTC's procedures for transfer. Although delivery of   
notes may be effected through book-entry transfer at DTC, the letter of         
transmittal and consent or facsimile thereof or an agent's message in lieu      
thereof, with any required signature guarantees and any other required          
documents, must, in any case, be transmitted to and received by the exchange    
agent at the address set forth under "Exchange Agent" on or prior to the        
expiration date or the guaranteed delivery procedures described below must be   
complied with. If you cannot comply with these procedures, you may be able to   
use the guaranteed delivery procedures described below.                         

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You may tender your notes in accordance with DTC's Automated Tender Offer 
Program, or ATOP, to the extent it is available to you for the notes you wish   
to tender. Under ATOP you may electronically transmit you acceptance of the     
exchange offer by causing DTC to transfer the notes to the exchange agent in    
accordance with DTC's ATOP procedures for transfer. DTC will then send an       
agent's message to the exchange agent for its acceptance. If you are tendering  
through ATOP, you must expressly acknowledge that you have received and agreed  
to be bound by the letter of transmittal and consent and that the letter of     
transmittal and consent may be enforced against you. This also applies to       
stockbrokers.                                                                   

Guaranteed Delivery Procedures                                                  

If you desire to tender your notes and your notes are not immediately     
available, or time will not permit your notes or other required documents to    
reach the exchange agent before the expiration date, you may effect a tender    
of your notes if:                                                               

o the tender is made through an eligible institution,                     

o prior to the expiration date, the exchange agent received from such     
eligible institution a notice of guaranteed delivery, substantially in
  the form we provide (by telegram, telex, facsimile transmission, mail or
  hand delivery), setting forth your name and address, the amount of notes
you are tendering, and stating that the tender is being made thereby, 

o you guarantee that within three New York Stock Exchange trading days    
after the date of execution of the notice of guaranteed delivery, the 
certificates for all physically tendered notes, in proper form for    
  transfer, or a book-entry confirmation of transfer of the notes into the
   exchange agent's account at DTC, including the agent's message that forms
  a part of the book-entry confirmation, as the case may be, together with
  a properly completed and duly executed appropriate letter of transmittal
   and consent or facsimile thereof or agent's message in lieu thereof, with
   any required signature guarantees and any other documents required by the
letter of transmittal and consent will be deposited by such eligible  
institution with the exchange agent, and                              

o the certificates for all physically tendered notes, in proper form for  
  transfer, or a book-entry confirmation of transfer of the notes into the
exchange agent's account at DTC, as the case may be, together with a  
properly completed and duly executed appropriate letter of transmittal
   and consent or facsimile thereof or agent's message in lieu thereof, with
   any required signature guarantees and all other documents required by the
letter of transmittal and consent, are received by the exchange agent 
  within three NYSE trading days after the date of execution of the notice
of guaranteed delivery.                                               

Withdrawal Rights                                                               

You may withdraw your tender of notes at any time prior to the expiration 
date. To be effective, a written notice of withdrawal must be received by the   
exchange agent at one of the addresses set forth under "Exchange Agent." This   
notice must specify:                                                            

o the name of the person having tendered the notes to be withdrawn,       

 o the notes to be withdrawn (including the principal amount of such notes),
and                                                                   

o where certificates for notes have been transmitted, the name in which   
such notes are registered, if different from that of the withdrawing  
holder.                                                               

  If certificates for notes have been delivered or otherwise identified to the
exchange agent, then, prior to the release of such certificates, the            
withdrawing holder also must submit the serial numbers of the particular        
certificates to be withdrawn and a signed notice of withdrawal with signatures  
guaranteed by an eligible institution, unless such holder is an eligible        
institution. If notes have been tendered pursuant to the procedure for book-    
entry transfer described above, any notice of withdrawal must specify the name  
and number of the account at DTC to be credited with the withdrawn secured      
notes and otherwise comply with the procedures of DTC. If notes have been       
tendered pursuant to the ATOP procedure set forth under the caption above       
"Book-Entry Transfers," the notice of withdrawal also must specify the name     
and the number of the account at DTC to be credited with the withdrawn shares   
and must otherwise comply with the procedures of DTC.                           

 We or the exchange agent will make a final and binding determination on all
questions as to the validity, form and eligibility (including time of receipt)  
of such notices. Any notes so withdrawn will be deemed not                      

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to have been validly tendered for exchange for purposes of the exchange offer.  
Any notes tendered for exchange but not exchanged for any reason will be        
returned to the holder without cost to such holder (or, in the case of notes    
tendered by book-entry transfer into the exchange agent's account at DTC        
pursuant to the book-entry transfer procedures described above, such notes      
will be credited to an account maintained with DTC for the notes) as soon as    
practicable after withdrawal, rejection of tender or termination of the         
exchange offer. IF YOU HAVE PREVIOUSLY VALIDLY TENDERED YOUR NOTES, THEN YOU    
MAY EXERCISE YOUR WITHDRAWAL RIGHTS AT ANY TIME PRIOR TO THE EXPIRATION DATE.   
Properly withdrawn notes may be re-tendered by following one of the procedures  
we describe above under "Procedures for Tendering Notes" at any time on or      
prior to the expiration date.                                                   

Conditions to the Exchange Offer                                                

Notwithstanding any other provision of the exchange offer, we are not     
required to accept for exchange, or to issue the securities in exchange for,    
any notes and may terminate or amend the exchange offer, if any of the          
following events occur prior to acceptance of such notes:                       

 o there shall be threatened, instituted or pending any action or proceeding
   before, or any injunction, order or decree shall have been issued by, any
court or governmental agency or other governmental regulatory or      
administrative agency or commission,                                  

 (1) seeking to restrain or prohibit the making or consummation of the
        exchange offer or any other transaction contemplated by the exchange
      offer, or assessing or seeking any damages as a result thereof; or

   (2) resulting in a material delay in our ability to accept for exchange
        or exchange some or all of the notes pursuant to the exchange offer;
or                                                          

   (3) any statute, rule, regulation, order or injunction shall be sought,
      proposed, introduced, enacted, promulgated or deemed applicable to
     the exchange offer or any of the transactions contemplated by the
        exchange offer by any government or governmental authority, domestic
or foreign, or any action shall have been taken, proposed or
    threatened, by any government; governmental authority, agency or
         court, domestic or foreign, that in our sole judgment might, directly
   or indirectly, result in any of the consequences referred to in
clauses (1) or (2) above.                                   

o there shall have occurred:                                              

(1) any limitation by a governmental agency or authority which may  
adversely affect our ability to complete the transactions   
contemplated by the exchange offer; or                      

   (2) a declaration of a banking moratorium or any suspension of payments
     in respect of banks in the United States or any limitation by any
governmental agency or authority which adversely affects the
extension of credit; or                                     

(3) a commencement of a war, armed hostilities or other similar     
      international calamity directly or indirectly involving the United
        States, or, in the case of any of the foregoing existing at the time
         of the commencement of the exchange offer, a material acceleration or
worsening thereof; or                                       

 o any change (or any development involving a prospective change) shall have
occurred or be threatened in our business, properties, assets,        
liabilities, financial condition, operations, results of operations or
 prospects and our subsidiaries taken as a whole that, in our reasonable
judgment, is or may be adverse to us, or we have become aware of facts
 that, in our reasonable judgment, have or may have adverse significance
with respect to the notes or the securities;                          

in any case, and regardless of the circumstances (including any action by us)   
giving rise to any such condition, makes it inadvisable to proceed with the     
exchange offer and/or with such acceptance for exchange or with such exchange.  

In addition to the foregoing, the consummation of the exchange offer is   
conditioned upon greater than ninety-five percent in principal amount of the    
outstanding notes being validly tendered for exchange and not properly          
withdrawn, and we and the trustee having executed a supplemental indenture to   
the indenture governing the senior secured notes implementing the proposed      
amendments after obtaining the requisite                                        

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consents from the holders of notes. In addition, if greater than ninety         
percent, but ninety-five percent or less, in principal amount of the            
outstanding notes are validly tendered for exchange and not properly            
withdrawn, and we and the trustee have executed a supplemental indenture to     
the indenture governing the senior secured notes implementing the proposed      
amendments after we have obtained the requisite consents from the noteholders,  
then we will have the option to complete the exchange offer.                    

 The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any condition or may be waived   
by us in whole or in part at any time in our reasonable discretion. Our         
failure at any time to exercise any of the foregoing rights shall not be        
deemed a waiver of any such right and each such right shall be deemed an        
ongoing right which we may assert at any time.                                  

In addition, we will not accept for exchange any notes tendered, and no   
securities will be issued in exchange for any such notes, if at such time any   
stop order shall be threatened or in effect with respect to the registration    
statement of which this prospectus constitutes a part.                          

Exchange Agent                                                                  

  We have appointed U.S. Bank Trust National Association as the exchange agent
for the exchange offer. All executed letters of transmittal should be directed  
to the exchange agent at the address set forth below. Questions and requests    
for assistance, requests for additional copies of this prospectus or of the     
letter of transmittal and consent and requests for notices of guaranteed        
delivery should be directed to the exchange agent at the following address:     

U.S. Bank Trust National Association
180 East Fifth Street, 4th Floor
St. Paul, Minnesota 55101 
1-800-934-6802
Attention: Default Processing 

DELIVERY OF THE LETTER OF TRANSMITTAL AND CONSENT TO AN ADDRESS OTHER THAN
AS SET FORTH ABOVE OR TRANSMISSIONS OF SUCH LETTER OF TRANSMITTAL AND CONSENT   
VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID         
DELIVERY OF THE LETTER OF TRANSMITTAL AND CONSENT.                              

Information Agent; Assistance                                                   

 Questions and requests for assistance and requests for additional copies of
this prospectus, the letter of transmittal and consent, or our Annual Report    
on Form 10-K/A or Quarterly Report on Form 10-Q/A for the quarter ended March   
31, 2001, should be directed to the information agent as follows:               

By hand or overnight courier: 

D.F. King & Co., Inc. 
77 Water Street 
New York, New York 10005
1-800-488-8095

We have scheduled the following two conference calls to answer your       
questions about the exchange offer and we urge you to participate:              

Date: Thursday, July 26, 2001 at 10 a.m. New York City time. Dial-in      
number: 1-888-869-0374.                                       

 Date: Tuesday, July 31, 2001 at 10 a.m. New York City time. Dial-in number:
1-800-720-5850.                                               

If you intend to participate please contact either us, or the information 
agent at 1-800-488-8095 for the password, which you will need in order to join  
the conference call.                                                            

Fees and Expenses                                                               

  The principal solicitation is being made by mail by U.S. Bank Trust National
Association, as exchange agent. We will pay the exchange agent customary fees   
for its services, reimburse the exchange agent for its reasonable out-of-       
pocket expenses incurred in connection with providing these services and we     
will pay other                                                                  

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registration expenses, including fees and expenses of the trustees under the    
indentures relating to the notes, filing fees, blue sky fees and printing and   
distribution expenses. We may pay brokers, dealers or others soliciting         
acceptances of the exchange offer.                                              

 Additional solicitation may be made by telephone, facsimile or in person by
our and our affiliates' officers and regular employees and by persons so        
engaged by the exchange agent.                                                  

Transfer Taxes                                                                  

You will not be obligated to pay any transfer taxes in connection with the
tender of notes in the exchange offer unless you instruct us to register the    
securities in the name of, or request that notes not tendered or not accepted   
in the exchange offer be returned to, a person other than the registered        
tendering holder. In those cases, you will be responsible for the payment of    
any applicable transfer tax.                                                    

Consequences of Failure to Exchange                                             

There are no dissenters' rights of appraisal in connection with the       
exchange. If you do not exchange your notes, they will remain outstanding, but  
will have substantially fewer rights under the applicable indenture.            

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BACKGROUND OF THE EXCHANGE OFFER

On December 21, 2000 we consummated the consent and exchange offer of our 
then outstanding senior notes for our senior secured notes and warrants to      
purchase shares of our common stock. Holders of greater than $148 million of    
senior notes tendered their senior notes in exchange for which they received    
senior secured notes and warrants. As a result of the senior notes exchange     
offer, we had outstanding approximately $1.8 million aggregate principal        
amount of senior notes, approximately $148.2 million aggregate principal        
amount of senior secured notes, and warrants exercisable to purchase            
approximately 1.6 million shares of our common stock. In connection with the    
closing of the senior notes exchange offer, we placed in escrow funds equal to  
the interest payment due on February 1, 2001. Such interest payment was timely  
made.                                                                           

In or about mid-January, we commenced discussions with certain holders of 
our senior secured notes constituting the Informal Committee of Noteholders     
regarding the senior secured notes. The noteholders comprising the Informal     
Committee include Putnam Investment Management, Fidelity Investment and         
Prudential Investments. The Informal Committee is represented on legal matters  
by Ropes & Gray and on financial matters by Houlihan Lokey Howard & Zukin       
Capital. During these initial discussions, we informed the Informal Committee   
that it was possible that we might not be able to make the interest payment on  
the senior secured notes that would come due on August 1, 2001. Over the next   
several weeks we and representatives of the Informal Committee participated in  
several telephone conference calls to formulate a workable interest payment     
structure for the senior secured notes that would allow us to meet our ongoing  
cashflow needs (and thereby maximize our the value for all of our investors,    
including the holders of the senior secured notes) and avoid an interest        
payment default on the senior secured notes. During the conference calls in     
late January and early February, we discussed with the Informal Committee the   
possibility of filing for bankruptcy protection under Title 11 of the           
Bankruptcy Code. It was ultimately decided after consultation with the          
Informal Committee and our insolvency counsel that we would seek to             
restructure our interest payment obligations without filing for bankruptcy.     

 On February 23, 2001, we and the members of the Informal Committee executed
a non-binding letter of intent setting forth the basic terms of a new exchange  
offer. The letter of intent provided, inter alia, that we would offer to        
exchange equity interests in a newly formed liquidating trust in exchange for   
all of the outstanding senior secured notes. The corpus of the liquidating      
trust would include (1) certain excess cashflow certificates presently          
securing our obligations under the senior secured notes, (2) newly issued       
shares of our preferred stock, (3) cash generated by the excess cashflow        
certificates starting in July 2001, and (4) interests in a non-performing loan  
trust. The letter of intent also provided that we would meet our immediate      
cashflow needs by obtaining interim financing from a third-party funding        
source. As security for the interim funding, we would pledge certain mortgage-  
related securities that had been pledged to the holders of the senior secured   
notes to secure our obligations. The holders of the senior secured notes        
consented to the release of some of the collateral securing the senior secured  
notes in order to make the interim funding possible.                            

During the weeks between February 23 and March 16, 2001, we and the       
representatives of the Informal Committee participated in numerous telephone    
conference calls for the purpose of negotiating a third supplemental indenture  
to the indenture governing the senior secured notes. The third supplemental     
indenture effectuated and/or facilitated many of the transactions described in  
the letter of intent.                                                           

On March 16, 2001, we executed the third supplemental indenture and closed
the interim financing referred to in the letter of intent.                      

In the ensuing months we and the representatives of the Informal Committee
continued to negotiate the specific terms and structure of the proposed         
exchange offer. These continued discussions resulted in a number of successive  
changes. Thus, on May 4, 2001 we filed our registration statement on Form S-4,  
on July 3, 2001 we filed amendment number 1 to our registration statement on    
Form S-4, on July 18, 2001 we filed amendment number 2, and on July 23, 2001    
we filed amendment number 3.                                                    

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CONSIDERATIONS FOR NOTEHOLDERS
WHO ELECT NOT TO PARTICIPATE IN THE EXCHANGE OFFER

In addition to the other information set forth in this prospectus, the    
following considerations, should be reviewed carefully prior to determining     
whether to tender your notes and consent to the proposed amendments.            

Effect of the Proposed Amendments                                               

 Senior Secured Notes. If the exchange offer is consummated and the proposed
amendments become effective, holders of senior secured notes that are not       
properly tendered for exchange for any reason will no longer be entitled to     
the benefits of substantially all of the restrictive covenants of the senior    
secured notes indenture. All of these provisions will have been eliminated or   
modified by the proposed amendments. In addition, the holders of non-tendered   
senior secured notes will no longer have any collateral securing their notes.   
Holders who tender their notes for exchange will not receive the interest       
payment due on August 1, 2001.                                                  

The proposed amendments would amend the indenture governing the senior    
secured notes to delete most restrictive provisions, including covenants        
relating to:                                                                    

o our ability to incur indebtedness,                                      

o our ability to pay dividends,                                           

o our ability to engage in asset sales,                                   

o our ability to merge or consolidate with another entity,                

o our ability to incur liens,                                             

o our ability to make payments or other distributions to affiliates,      

o our ability to enter into business relationships with affiliates, and   

o our ability to take other actions that would otherwise be restricted    
under the senior secured notes indenture.                             

 The elimination or modification of those provisions would permit us to take
actions that could increase the credit risks faced by the holders of any        
remaining senior secured notes, adversely affect the market price of any        
remaining senior secured notes or otherwise be adverse to the interests of the  
holders of any remaining senior secured notes. While we anticipate that we      
will be subject to restrictive covenants contained in other debt agreements,    
holders of senior secured notes, if any, will not be able to enforce those      
covenants and those covenants will be subject to change without the consent of  
holders, if any, of senior secured notes.                                       

We may manage our business in a manner that otherwise might have been     
prohibited under the senior secured notes indenture prior to the effectiveness  
of the proposed amendments. The proposed amendments might have a material       
adverse effect on the value of the senior secured notes resulting from, among   
other things, our increased ability to incur debt, incur liens, pay dividends,  
make transfers of funds or other assets, or merge or consolidate with another   
entity.                                                                         

The proposed amendments also will release all of the collateral currently 
held by the Delta Funding Residual Holding Trust 2000-1 and Delta Funding       
Residual Holding Trust 2000-2 securing the senior secured notes. Under the      
terms of this exchange offer, all of the mortgage-related securities currently  
held by these two residual holding trusts, as well as securities of our         
subsidiaries, will be transferred out of these trusts and released. All of the  
mortgage-related securities will be transferred to Delta Funding Residual       
Exchange Company, LLC upon consummation of the exchange offer. Thus, holders    
of the senior secured notes who do not tender their notes in the exchange       
offer will no longer be able to look to the collateral securing their notes     
for payment in the event that we default on our obligations to pay principal    
interest under the senior secured notes.                                        

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 Based on our current estimates, it is unlikely that we will have sufficient
funds to both make the interest payments due on the notes in August 2001 and    
thereafter, and at the same time comply with restrictive covenants in our       
warehouse line of credit, and otherwise operate our business. If the exchange   
offer is not consummated, we will not be able to continue as a going concern.   

Senior Notes. In connection with our August 2000 consent and exchange     
offer, the holders of the senior notes who tendered their notes for exchange    
and received the senior secured notes consented to amendments to the indenture  
governing the senior notes.                                                     

The proposed amendments to be entered into with Delta Funding Residual    
Exchange Company, LLC will not relieve us from our obligation to make           
scheduled payments of principal and accrued interest in accordance with the     
terms of the senior notes and the senior secured notes indentures (as amended   
by the proposed amendments, assuming we consummate the exchange offer), on the  
notes, if any, that are not exchanged pursuant to the exchange offer.           

Adverse Effects on Trading Market for the Notes                                 

An issue of debt securities with a smaller outstanding principal amount   
available for trading (a smaller "float") may command a lower price than would  
comparable debt securities with a greater float. Therefore, the market price    
for any notes not tendered for exchange may be adversely affected because of    
reduced float. The reduced float also may tend to make the trading price of     
the notes more volatile. We cannot assure you that a trading market will exist  
for the notes, if any, following consummation of the exchange offer. The        
extent of the market for notes following consummation of the exchange offer     
will depend upon, among other things, the remaining outstanding principal       
amount of the notes after the exchange offer and the number of remaining        
holders, if any.                                                                

Liquidation Value of the Assets Securing the Senior Secured Notes               

If we do not consummate the exchange offer, we are unlikely to have the   
funds necessary to continue making timely interest payments on the notes. As a  
result, we would be in default of our obligations under the indentures          
governing the notes. The senior secured noteholders might then be required to   
look to the collateral for payment which is comprised principally of mortgage-  
related securities. If we should be in default of our obligations under the     
indenture governing the senior notes, those noteholders might then be required  
to look for payment to our assets, which, like the collateral for the senior    
secured notes, are comprised principally of mortgage-related securities.        

There is no ready market for our mortgage-related securities and,         
consequently, it is difficult for us to value these securities accurately.      
However, the value of these securities may diminish in a liquidation where the  
securities would be sold all at once to bidders at a discount.                  

In the section titled "Summary Pro Forma Financial Data for Delta Funding 
Residual Exchange Company, LLC" on page 10, we describe the projected           
cashflows to be received over the next thirty years from the mortgage-related   
assets which will be held by Delta Funding Residual Exchange Company, LLC. The  
projected cashflows are based on a number of assumptions, including             
assumptions concerning projected prepayment rates and loan losses. The          
estimates also assume that the mortgage-related securities will be held by      
Delta Funding Residual Exchange Company, LLC and not sold. The mortgage-        
related securities held by Delta Funding Residual Exchange Company, LLC will    
be managed by Delta Funding Residual Management, Inc.                           

If we were asked to assess the liquidation value for the mortgage-related 
securities, we would first assume that a market exists for these securities.    
Currently, there are only a handful of buyers for these types of assets--       
mainly opportunistic buyers. We believe that any assessment of the purchase     
price would depend on a number of factors such as:                              

o the conditions under which these mortgage-related securities would be   
sold, e.g., fire sale;                                                

o whether Delta Funding Corporation, our subsidiary, as the seller under  
the respective securitization trusts, would be able to continue, on a 
going-forward basis, to satisfy any claims due to breach of           

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representations and the warranties made concerning the underlying     
mortgages sold to the securitization trust that issued the excess     
cashflow certificates;                                                

o the servicer of the mortgage loans that currently services the majority 
of our securitized loans, Ocwen Federal Bank, FSB, will receive       
   significant termination fees if any securitization mortgage pool which it
purchased from us is transferred to another servicer;                 

o the actual mortgage pool performance and the collateral characteristics 
of each pool of mortgages                                             
underlying the excess cashflow certificates (e.g., first liens versus 
second liens, credit grades of the underlying borrowers, the loan-to- 
value ratios of the mortgage loans, geographic concentration of the   
underlying properties, property type, etc.);                          

o type of asset-backed securitization structure (e.g., bond insured or    
senior subordinate structure);                                        

o changes in the level of cash required to be used by the securitization  
  trust to prepay holders of its asset backed pass-through certificates to
   support the securitization if the mortgage pool performance deteriorates,
which will have an adverse impact on timing of excess cashflows; and  

o costs and expenses for due diligence on the mortgage pool, accounting   
  fees to model cashflows, significant investment banking fees (up to five
  percent of purchase price) to facilitate the sale of such a transaction,
bond insurer and trustee consent fees and legal fees.                 

We have some idea of the maximum potential liquidation value for the      
mortgage-related securities based upon the pricing we have obtained in two of   
our recent transactions, which are the only transactions of this type that we   
have completed since our inception. These two transactions are as follows:      

 o in November 2000, we sold a basket of six excess cashflow certificates to
 a securitization trust and issued a senior net interest margin security
  backed by a subordinate net interest margin owner trust certificate. The
   sale of the senior net interest margin security, which was rated "BB-" by
Fitch, yielded a purchase price of $30 million. This purchase price   
 represented approximately twenty-seven percent of the carrying value on
our balance sheet for the excess cashflow certificates. The senior net
interest margin security was a more protected security than the excess
  cashflow certificates themselves, because the senior net interest margin
security is supported by a subordinate certificate (the net interest  
   margin owner trust certificate), whereas the excess cashflow certificates
  are the most subordinate securities issued by the securitization trusts.
 As a result, the senior net interest margin security commanded a higher
 price than the price we would expect to receive for the excess cashflow
certificates. The liquidation value for the subordinate net interest  
margin owner trust certificate which is being transferred to Delta    
Funding Residual Exchange Company, LLC as part of the exchange offer, 
 however, would be significantly less than the liquidation value for the
excess cashflow certificates; and                                     

o the sale of five excess cashflow certificates for $15 million. This     
purchase price represented approximately thirty-seven percent of the  
carrying value on our balance sheet for these five excess cashflow    
certificates.                                                         

Therefore, taking into consideration the pricing factors and our recent   
transaction experience, we estimate that the liquidation value of the           
mortgage-related securities to be held by Delta Funding Residual Exchange       
Company, LLC is as follows:                                                     

o all of the excess cashflow certificates, approximately $10-20 million,  
representing approximately                                            
fourteen percent to twenty-seven percent of the carrying value on our 
balance sheet for these securities; and                               

 o the excess cashflow certificates underlying the net interest margin owner
  trust certificate, approximately $10 million, representing approximately
thirteen percent of the carrying value on our balance sheet for these 
securities.                                                           

This aggregate total of between $20 to $30 million does not take into     
account expenses we would expect to incur for investment banking assistance,    
due diligence, accounting fees, possible termination fees if the current        
servicer does not continue on as the servicer, consent fees from the bond       
insurer and trustees, legal and other expenses. Thus, we cannot be certain      
that $20 to $30 million is a fair liquidation value for the                     

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securities. Moreover, the potential buyers for these assets will be             
opportunistic and, therefore, the price at which the mortgage-related           
securities held by Delta Funding Residual Exchange Company, LLC may be sold     
will likely be much lower than the purchase prices we received in recent        
transactions.                                                                   

By contrast, we estimate that the present value of the aggregate expected 
future cashflows from the excess cashflow certificates is $73 million, and the  
present value of the expected future cashflows from the excess cashflow         
certificates underlying the net interest margin owner trust certificate is $79  
million, in total $152 million. These estimates are based on management's       
assumptions concerning a number of factors that we describe more fully in the   
section titled "Underlying Assumptions for Fair Value Analysis" on page 64.     
However, there can be no assurance that these estimates will prove correct.     

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DELTA FINANCIAL CORPORATION 

Delta Financial Corporation has two principal components to its mortgage  
business. First, we make mortgage loans, which is a cash and expense outlay     
for us, because our cost to originate a loan exceeds the fees we collect at     
the time of origination for that loan. At the time we originate a loan, and     
prior to the time we sell that loan, we finance that loan using a warehouse     
line of credit. Second, we sell loans, either through securitization or on a    
whole loan basis, to generate revenues and cash. We use the proceeds from the   
sales to repay our warehouse line of credit and for working capital.            

Origination of Mortgage Loans. We receive loan applications both directly 
from borrowers and from licensed independent third party mortgage brokers who   
submit applications on a borrower's behalf. We process and underwrite the       
submission and, if the loan comports with our underwriting criteria, approve    
the loan and lend the money to the borrower. While we generally collect points  
and fees from the borrower when a loan closes, our cost to originate a loan     
typically far outweighs any fees we may collect from the borrower.              

  Through our wholly-owned subsidiary, Delta Funding Corporation, we primarily
originate home equity loans indirectly through independent licensed mortgage    
brokers who submit loan applications on behalf of borrowers. Prior to July      
2000, through Delta Funding Corporation, we purchased loans from mortgage       
bankers and smaller financial institutions that satisfied our underwriting      
guidelines. We discontinued these correspondent operations in July 2000 to      
focus on our less cash intensive broker and retail channels. Delta Funding      
Corporation currently originates the majority of its loans in 20 states,        
through its network of approximately 1,500 brokers.                             

Through our wholly-owned retail subsidiary, Fidelity Mortgage Inc., we    
develop retail loan leads primarily through a telemarketing system and a        
network of 10 retail offices located in Illinois, Indiana, Missouri, North      
Carolina, Ohio (3), Pennsylvania (2), Tennessee, and a call center in New       
York. During 2000, we closed two under-performing retail offices in Georgia     
and Florida, and opened a new retail origination call center at its             
headquarters in Woodbury, New York. In the first two quarters of 2001, we       
closed two additional under-performing retail offices in Florida and one in     
Ohio.                                                                           

For the three months ended March 31, 2001, we originated $171 million of  
loans, of which $105 million were brokered loans and $66 million were retail    
loans. For the year ended December 31, 2000, we originated or purchased $933    
million of loans, of which $604 million were brokered loans, $260 million were  
retail loans and $69 million were correspondent loans from mortgage bankers     
and smaller financial institutions.                                             

Our business strategy includes increasing our loan origination platform by
focusing our efforts on our broker and retail channels of originations by:      

o continuing to provide top quality service to our network of brokers, and
retail clients;                                                       

o maintaining our underwriting standards;                                 

o penetrating further our established and recently-entered markets and    
expanding into new geographic markets;                                

o expanding our retail origination capabilities; and                      

o leveraging and continuing our investment in information and processing  
technologies.                                                         

 Pooling of Loans Prior to Sale. After we close or fund a loan, we typically
pledge the loan as collateral under a warehouse line of credit to obtain        
financing against that loan. By doing so, we replenish our capital so we can    
make new loans. Loans are typically financed on a warehouse line of credit for  
only a limited time, until such time as we can "pool" enough loans and sell     
the pool of loans either through securitization or on a whole-loan basis.       
During this time, we earn interest paid by the borrower as income, but this     
income is offset in part by the interest we pay to the warehouse creditor for   
providing us with financing.                                                    

  Sale of Loans. We generally sell loans in one of two manners--either through
securitization or on a whole loan basis.                                        

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Through the first three quarters of 2000, we sold substantially all of the
loans originated and purchased by us in securitizations--$725 million           
securitized, and $12 million sold on a whole loan basis. In the fourth quarter  
of 2000, however, we sold a considerably larger amount of our loan production   
for a cash premium on a whole loan basis--$46 million of whole loan sales and   
$115 million securitized. In all, for the year ended December 31, 2000, we      
sold a total of $840 million of loans through four real estate mortgage         
investment conduit securitizations and $58 million loans on a whole loan        
basis.                                                                          

In the first quarter of 2001, we did not complete a securitization, but   
instead sold $144 million in whole loan sales for a cash premium. In the        
second quarter of 2001, we already have completed a $165 million                
securitization and have sold $21 million of whole loans. We plan to continue    
to utilize a combination of securitization and whole loan sales in the          
foreseeable future.                                                             

Securitization. Securitizations effectively provide us with a source of   
long-term financing.                                                            

In a securitization, we pool together loans, typically each quarter, and  
sell these loans to a securitization trust. The securitization trust raises     
money to purchase the mortgage loans from us by selling securities to the       
public--known as "asset-backed pass-through securities" that are secured by     
the pool of mortgage loans held by the securitization trust. These asset-       
backed securities, which are usually purchased by insurance companies, mutual   
and/or money market funds and other institutional investors, are typically      
sold for a "par" purchase price, or a slight discount to "par"--with "par"      
representing the aggregate principal balance of the mortgage loans backing the  
asset-backed securities. For example, if a securitization trust contains        
collateral of $100 million of mortgage loans, we typically receive close to     
$100 million in proceeds from the sale of the asset-backed securities to the    
securitization trust, depending upon the structure that we utilize for the      
securitization. The asset-backed securities entitle the holder to receive       
interest, referred to as the "pass-through rate," on the declining balance of   
mortgage loans in the pool, in addition to all principal paid by the borrowers  
on the underlying mortgage loans.                                               

As an issuer, we typically derive the following economic interests from a 
securitization:                                                                 

o we retain interest-only and residual certificates, referred to as excess
   cashflow certificates, from the securitization trust, which entitle us to
receive the difference between the interest payments due on the loans 
sold to the securitization trust and the interest payments due, at the
 pass-through rates, to the holders of the pass-through securities, less
the contractual servicing fee and other costs and expenses of         
 administering the securitization trust. For any monthly distribution, a
holder of an excess cashflow certificate receives payments only after 
payments have been made on all the other securities issued by the     
 securitization trust. These cashflows are received over time, but under
existing accounting rules, we must report at the time of the          
  securitization as income the present value of all projected cashflows we
 expect to receive from these excess cashflow certificates based upon an
assumed discount rate. Our valuation of these excess cashflow         
certificates is based on (1) our estimate of the amount of expected   
  losses or defaults that will take place on the underlying mortgage loans
over the life of the mortgage loans because the excess cashflow       
  certificates are subordinate in right of payment to all other securities
   issued by the securitization trust. Consequently, any losses sustained on
mortgage loans comprising a particular securitization trust are first 
   absorbed by the excess cashflow certificates, and (2) the expected amount
 of prepayments on the mortgage loans due to the underlying borrowers of
the mortgage loans paying off their mortgage loan prior to the loan's 
expected maturity.                                                    

o we receive a cash purchase price from the sale of an interest-only      
  certificate sold in connection with a securitization, which entitles the
  holder to a recurring interest payment over a guaranteed period of time,
   typically 36 months, and reduces the cashflows we would otherwise receive
as owner of the excess cashflow certificates.                         

o we receive a cash premium from selling the right to service the loans   
   being securitized, which entitles the contractual servicer to service the
loans on behalf of the securitization trust, and earn a contractual   
servicing fee, and ancillary servicing fees in such capacity.         

At the time we complete the securitization, we recognize as revenue       
(recorded under "net gain on sale of mortgage loans" on our balance sheet)      
each of the three economic interests we described above.                        

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The diagram below illustrates the steps involved in a hypothetical
securitization of $100 million of our mortgage loans. 

[graphic] 

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 Securitization Economics. The majority of our revenues and cashflows result
from the sale of newly originated pools of mortgage loans through               
securitization (including the sale of related servicing rights) and on a whole  
loan basis. The excess cashflow certificates, which we retain after a           
securitization, are subordinated in right of payment to the other securities    
issued and sold to investors by the securitization trust.                       

The excess cashflow certificates entitle us to receive any remaining      
cashflows collected by the securitization trust from principal and interest     
payments on the underlying mortgage loans after the securitization trust has    
first paid                                                                      

o all principal and interest required to be passed through to holders of  
the trust's publicly offered securities,                              

o all contractual servicing fees, and                                     

 o other recurring fees and costs of administering the securitization trust.

Upon securitizing a pool of loans, we recognize a gain on sale of loans   
equal to the difference between cash we receive from the securitization trust   
when it sells asset-backed pass-through certificates to investors and the       
investment in the loans remaining after allocating portions of that investment  
to record the value of the sale of servicing rights, and the value of the       
excess cashflow certificates received by us in the securitization. The          
majority of the gain on the sale of mortgage loans results from, and is         
realized initially in the form of, the excess cashflow certificates, the sale   
of the interest-only certificate, and the sale of the mortgage servicing        
rights.                                                                         

To further illustrate the example we gave above, we have provided below a 
hypothetical example to demonstrate the income, expenses and fees associated    
with the excess cashflow certificate retained by us in connection with a        
securitization of $100 million in principal amount of mortgage loans.           

                                                                [Download Table]


Excess Cashflow Certificate:                                        
  ----------------------------                                      
                                                                    
Borrowers' interest rate on the pool of mortgage                    
  loans sold:                                          11.00%       
Less: pass-through interest rate paid to investor                   
  buying the securitization trust securities........   (6.50%)      
    Sale of interest-only certificate...............   (1.00%)      
    Service fee to servicer.........................   (0.65%)      
    Bond insurer and trustee fees...................   (0.10%)      
    Loss reserve....................................   (1.10%)      
                                                       -------      
Pre-tax excess cashflow per annum to holder of the                  
  excess cashflow certificate...........    1.65% net spread (yield)

We will continue to earn 1.65% per annum of income as a percentage of the 
mortgage pool outstanding. Based upon our current gain on sale assumptions the  
excess cashflow certificate has a duration of 2.65 years. This means that if    
we took the product of (1) the 1.65% yield, and (2) the duration of 2.65        
years, the present value of the excess cashflow certificate equals 4.37% of     
the $100 million in principal amount of mortgage loans sold, resulting in a     
present value for the excess cashflow certificate of $4.37 million.             

Using the example above, we project the future expected excess cashflow   
produced by the excess cashflow certificate to be $4.37 million, assuming       

o a specific prepayment speed on the underlying mortgage loans (see "Fair 
Value Determination" below). A higher prepayment speed means that the 
  mortgage loans prepay faster than anticipated and, as such, we will earn
   less income in connection with the mortgage loans and receive less excess
cashflow in the future because the mortgage loans have paid off;      
conversely, if we have slower prepayment speeds, the mortgage loans   
   remain outstanding for longer than anticipated and, as such, we earn more
income and receive more excess cashflow in the future;                

o a default or loss rate on the underlying mortgage loans.  The excess    
cashflow certificate is the "first-loss" piece and is subordinated in 
right of payment to all other securities issued by the securitization 
trust. Any defaults or losses on the underlying mortgage loans are    
   absorbed by the excess cashflow certificates. If defaults are higher than
  we anticipate, we will receive less income and less excess cashflow than
expected in the future; conversely, if defaults are lower than we     
expected, we will receive more income and more excess cashflow than   
expected in the future; and                                           

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o the present value of the monthly excess cashflows at an assumed discount
rate which management believes to be reasonable (see "Fair Value      
Determination" below) (if the expected receipt (timing) of the future 
excess cashflows is either extended or shortened due to prepayments or
   defaults, or if the amount of excess cashflow that was expected increases
  or decreases due to changes in prepayment and default rates, the present
value of the excess cashflow certificate may increase or decrease).   

Using the example above, the present value of the future expected excess  
cashflows, or $4.37 million, is recorded initially on our balance sheet as an   
interest-only and a residual certificate asset, based upon its fair value and   
recorded initially on our income statement as revenue under net gain on         
mortgage loans sold.                                                            

The excess cashflow certificates are reflected on our balance sheet as    
trading securities. As such we are required to mark-to-market the excess        
cashflow certificates on a regular basis by making an adjustment to our         
interest income.                                                                

Although we initially recognize income from retaining excess cashflow     
certificates immediately upon completion of a securitization, we receive        
cashflows from these assets over the life of the transferred loans. We          
typically begin to receive cashflows from the excess cashflow certificates      
retained upon securitization approximately eighteen to twenty-four months       
after a securitization is completed with the specific timing depending on the   
structure and performance of the securitization. Initially, securitization      
trusts utilize the excess cashflows to make additional payments of principal    
on the publicly offered securitization trust certificates in order to           
establish a spread between the principal amount of the trust's outstanding      
loans and the amount of outstanding publicly offered certificates. Once a       
spread, or overcollateralization, of between 1.50% and 3% of the initial        
securitization principal is established, the excess cashflows are distributed   
to the holder of the excess cashflow certificates unless any excess cashflows   
are needed to cover mortgage loan losses or to replenish or maintain the        
required level of overcollateralization.                                        

Fair Value Determination. The fair values of the excess cashflow          
certificates are significantly affected by, among other factors, prepayments    
of loans and estimates of future prepayment rates. We continually review our    
prepayment assumptions in light of our own and industry experience and make     
adjustments to those assumptions as needed.                                     

 The underlying assumptions we use to determine the fair value of our excess
cashflow certificates are as follows:                                           

o We base our prepayment rate assumptions upon the performance of mortgage
  pools we previously securitized, and the performance of similar pools of
  mortgage loans securitized by others in the industry. We apply different
 prepayment speed assumptions to different loan product types because it
has been our experience that different loan product types exhibit     
 different prepayment patterns. Generally, our loans can be grouped into
two loan products--fixed-rate loans and hybrid loans. With fixed-rate 
loans, an underlying borrower's interest rate remains fixed throughout
the life of the loan.  With a hybrid loan, the rate generally remains 
 fixed for typically the first three years of the loan, and then adjusts
typically every six months thereafter. We had previously originated   
adjustable rate loans.  However, we stopped originating these loans in
1998. Currently, these loans represent less than five percent of the  
total loans outstanding underlying the pool of mortgages in           
securitization trusts which have issued excess cashflow certificates. 
With adjustable rate loans, the borrower's interest rate adjusts      
  throughout the life of the loan, typically every six months. We adjusted
our prepayment rate assumptions in the third quarter of 2000 and the  
  fourth quarter of 1999. The following table shows the changes we made to
  the prepayment assumptions at each of these dates and the assumptions we
used prior to the 1999 fourth quarter change:                         

                                                        [Enlarge/Download Table]

                                                                     Month One Speed                Peak Speed *       
                                                                     ---------------                ------------       
                                                               9/30/00    12/31/99   Prior   9/30/00   12/31/99   Prior
                                                               -------    --------   -----   -------   --------   -----
                                                                                                                       
Loan Type                                                                                                              
Fixed-Rate Loans .............................................    4.0%       4.0%      4.8%    23%        31%      31% 
Six-Month LIBOR ARMS .........................................   10.0%      10.0%     10.0%    50%        50%      50% 
Hybrid ARMS ..................................................    4.0%       4.0%      6.0%    50%        50%      50% 

---------------                                                                 
* Since the second quarter of 1998, we have utilized a "vector" curve, instead  
of a "ramp" curve, which we believe will be more representative of future   
loan prepayments.                                                           

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o a default reserve for both fixed- and adjustable-rate loans sold to the 
securitization trusts of 3.50% of the amount initially securitized at 
  December 31, 2000 compared to 3.10% at December 31, 1999 and two percent
at December 31, 1998; and                                             

o an annual discount rate of thirteen percent was used to determine the   
  present value of cash flows from the excess cashflow certificates, which
represent the predominant form of retained interest, at March 31, 2001
and December 31, 2000, up from twelve percent prior thereto. An annual
  discount rate of eighteen percent is used during the duration of the net
interest margin transaction on a portion of our excess cashflow       
certificates.                                                         

In the third quarter of 2000, we lowered our prepayment speed assumptions 
mainly by reducing the peak speed on our fixed rate product, which comprises    
the majority of securitized loans underlying our excess cashflow certificates.  
In the fourth quarter of 1999, we lowered our prepayment speed assumption       
along parts of the prepayment rate vector curve while leaving the peak speeds   
intact. We revised the prepayment rate assumption primarily to reflect our      
actual loan performance experience over the past several quarters.              

We revised our loan loss reserve assumption to reflect management's belief
that (1) slower prepayment speeds, (2) anticipated flat to slightly moderate    
rise in home values as compared to the past few years, and (3) the inability    
of borrowers to refinance their mortgages to avoid default because of industry  
consolidation may have an adverse effect on our non-performing loans.           

In the third and fourth quarters of 2000, we changed the discount rate we 
use to determine the present value of cash flows from residual certificates,    
as follows:                                                                     

o in the third quarter of 2000, we increased the discount rate we use on  
those excess cashflow certificates included in the net interest margin
transaction to eighteen percent (from twelve percent) and recorded an 
 $8.8 million valuation adjustment. This adjustment reflects a reduction
in the present value of those excess cashflow certificates sold in    
connection with our net interest margin transaction completed in the  
fourth quarter of 2000. We increased the discount rate on these excess
cashflow certificates, during the period that the senior net interest 
margin securities will be outstanding, to account for the potentially 
higher risk associated with the excess cashflows we retained from a   
certificated interest in the net interest margin trust, which is      
   subordinated to the senior security sold to investors in the net interest
margin transaction.                                                   

o in the fourth quarter of 2000, we raised the annual discount rate we use
to determine the present value of cash flows from "senior" excess     
  cashflow certificates (i.e., those excess cashflow certificates that are
 not subject to the net interest margin transaction) to thirteen percent
from twelve percent, and recorded a $7.1 million valuation adjustment.
This adjustment reflects what management believes is an increase in   
   volatility concerning the other underlying assumptions used in estimating
   expected future cash flows due to greater uncertainty surrounding current
and future market conditions, including without limitation, inflation,
recession, home prices, interest rates and equity markets.            

  Whole Loan Sales. We also sell loans, without retaining the right to service
the loans, in exchange for a cash premium. This is recorded as income under     
net gain on sale of mortgage loans at the time of sale. The cash premiums have  
ranged recently between 3.5% to 5.75% of the principal amount of mortgage       
loans sold.                                                                     

 In addition to the income and cashflows earned from our securitizations and
whole loan sales, we also earn income and generate cashflows from the net       
interest spread earned on loans (the difference between the interest rate on    
the mortgage loan paid by the underlying borrower less the financing costs to   
our warehouse lender to fund our loans) while they are held for sale and from   
loan origination fees on brokered loans and retail loans.                       

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DESCRIPTION OF OUR PREFERRED STOCK

  The following summary, which sets forth the material terms and provisions of
our preferred stock, does not purport to be complete and is qualified in its    
entirety by reference to the terms and provisions of the Certificate of         
Designations, Voting Powers, Preferences and Rights of the Series A Preferred   
Stock, or the certificate of designations, a copy of which has been filed as    
an exhibit to the registration statement of which this prospectus forms a       
part.                                                                           

General                                                                         

 Our board of directors will authorize and create the preferred stock, up to
150,000 shares of which will be issued to tendering holders of our senior       
secured notes and senior notes.                                                 

The holders of the preferred stock will have no preemptive rights with    
respect to any shares of our capital stock or any of our other securities       
convertible into or carrying rights or options to purchase shares of our        
capital stock. The preferred stock is perpetual and will not be convertible     
into shares of common stock or any other class or series of capital stock and   
will not be subject to any sinking fund.                                        

Rank                                                                            

  Compared to our other securities, with respect to dividend rights and rights
upon our liquidation, winding-up or dissolution, the preferred stock will       
rank:                                                                           

o senior to all classes of our common stock and to each other class of    
capital stock or series of preferred stock; and                       

o on parity with any additional shares of preferred stock issued by us.   

We will not issue any securities that are senior to or on parity with the 
preferred stock, in respect of our liquidation, dividends, winding-up or        
dissolution, except upon the occurrence of a special funding event, in which    
case we may issue securities having rights senior to or on parity with our      
preferred stock. A special funding event shall mean a transaction in which we   
issue equity securities to one or more investors in one or more related         
transactions which result in net cash or cash equivalents proceeds to us. If    
we receive net cash proceeds of at least $5 million in cash or cash             
equivalents in a special funding event, we may issue to the investor            
securities that rank on parity with our preferred stock. If we receive net      
cash proceeds of at least $25 million in cash or cash equivalents in a special  
funding event, we may issue to the investor securities that rank senior to our  
preferred stock.                                                                

Dividends                                                                       

The holders of preferred stock will be entitled to receive, if declared by
our board of directors out of our funds legally available for dividends,        
cumulative preferential dividends accruing at the rate per share of 10% per     
annum of the liquidation preference of $100, payable in cash semi-annually in   
arrears on each of the first days of January and July, or, if any such date is  
not a business day, on the next succeeding business day, each a dividend        
payment date. Dividends payable on the preferred stock will be computed on the  
basis of a 360-day year of twelve 30-day months, and will be deemed to accrue   
on a daily basis from January 1, 2003. Dividends will be payable beginning on   
July 1, 2003. For a discussion of certain federal income tax considerations     
relevant to the payments of dividends on the preferred stock, see "United       
States Federal Income Tax Consequences of the Exchange Offer."                  

  Dividends on the preferred stock will accrue whether or not we have earnings
or profits, whether or not there are funds legally available for the payment    
of dividends and whether or not dividends are declared. Dividends will          
accumulate to the extent they are not paid when due for the period to which     
they relate.                                                                    

If at any time cash dividends on the preferred stock are then unpaid for a
total of five dividend periods with respect to which cash dividends are         
required, holders of the preferred stock, together with the holders of any      
other class or series of capital stock with similar voting rights, will be      
entitled to elect two directors to our board of directors. See "Description of  
the Preferred Stock--Election of Additional Directors."                         

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 For so long as we fail to pay any required dividends on the preferred stock
for any dividend period:                                                        

 o no dividends or other distributions will be declared or paid or set apart
for payment upon shares ranking junior to or equal to the preferred   
stock;                                                                

o no shares ranking junior to or equal with the preferred stock (including
 shares held by our affiliates) will be redeemed, purchased or otherwise
acquired for any consideration and no monies will be paid or made     
available for a sinking fund for our redemption of those shares;      

o no distributions on our shares ranking junior to or equal with the      
preferred stock will be made until such time as full dividends on all 
 outstanding preferred stock have been paid for two consecutive dividend
periods; and                                                          

o we will not declare or pay any dividend or make any other payment or    
distribution on account of any of our or our subsidiaries' equity     
interests, other than dividends payable to us by our subsidiaries or  
dividends payable in equity interests ranking junior to the preferred 
stock.                                                                

No dividends on the preferred stock shall be paid by us if the payment of 
dividends is restricted or prohibited by law. We are not a party to and will    
not enter into any agreement that restricts our compliance with the             
certificate of designations.                                                    

The above restrictions will not apply to any mandatory redemption of the  
preferred stock.                                                                

For a discussion of the tax treatment of distributions to holders, see    
"United States Federal Income Tax Consequences of the Exchange Offer."          

Voting Rights--General                                                          

Holders of the preferred stock will have no voting rights, except as      
required by law and as provided in the certificate of designations.             

Election of Additional Directors                                                

To the extent permitted by law, if at any time cash dividends on the      
preferred stock are then unpaid for a total of five dividend periods with       
respect to which cash dividends are required, the holders of the preferred      
stock, will have the right, voting separately as one class, and until           
terminated as provided below, to elect two directors for newly created          
directorships on our board of directors. At no time will the number of          
directors on the board exceed ten during the time that the preferred shares     
are outstanding, unless we have received approval from the holders of at least  
a majority of the preferred stock to increase such number.                      

  At any time when the right to elect these additional directors is vested but
has not yet terminated, we will call a special meeting of the holders of the    
preferred stock to fill these directorships. When dividends on the preferred    
stock have been paid in full for four consecutive dividend periods, the voting  
rights of the holders of the preferred stock to elect two directors as          
described above will terminate, subject to revesting in the event of each and   
every one of our subsequent failures to pay dividends for a total of five       
dividend periods as described above. Any vacancies with respect to these        
additional directors, if the right to elect the directors is vested, shall be   
filled by an affirmative vote of the holders of at least a majority of the      
preferred stock.                                                                

Any directors who will have been elected by the holders of the preferred  
stock and holders of capital stock whose voting rights have vested, as          
described above, may be removed at any time, either with or without cause, by   
the affirmative vote of the holders of record of a majority of the outstanding  
shares of preferred stock and capital stock whose voting rights are vested as   
described above, voting separately as one class, at a duly held meeting of the  
holders of the preferred stock and the holders of the capital stock. Upon       
termination of the voting rights described above, the term of office of all     
directors elected by the holders of the preferred stock then in office will     
terminate unless otherwise required by law. Upon termination, the number of     
directors constituting the board of directors will be reduced by two, subject   
always to the increase in number of directors pursuant to the above described   
provisions in case of the future vesting of the right of holders of the         
preferred stock to elect directors.                                             

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 The directors elected in the manner described above will be entitled to one
vote each on any and all matters on which the other directors are entitled to   
vote. The other directors are also entitled to one vote on all such matters.    

Optional Redemption                                                             

  The preferred stock may be redeemed at our option on a pro rata basis at any
time after the date of issuance, at the liquidation preference plus             
accumulated and unpaid dividends to the date of redemption, upon not less than  
30 or more than 60 days' prior written notice.                                  

Mandatory Redemption                                                            

The holders of the preferred stock will have the right to mandatory       
redemption which must be exercised or forfeited within five business days upon  
the occurrence of any of the following:                                         

o our dissolution or liquidation,                                         

o a change of control, including, but not limited to, the sale of         
substantially all of our assets to one or more entities that are not  
affiliates of ours in one transaction or in a series of related       
transactions, except for a sale pursuant to a securitization or a     
  financing facility or any other arrangement entered into in the ordinary
course of our business,                                               

 o commencement by or against us of a case, proceeding or other action under
 any law relating to bankruptcy, insolvency, reorganization or relief of
debtors,                                                              

o the sale of our company through the exercise of creditors' remedies, or 

 o our breach of any term of the certificate of designations that materially
and adversely affects the rights of the holders of preferred stock.   

 Upon the occurrence of a mandatory redemption, the holders of the preferred
stock shall be entitled to receive the liquidation preference of their stock,   
plus all accrued and unpaid dividends, except that upon the occurrence of a     
change of control, the holders will not have a right to mandatory redemption:   

o if in such transaction, the holders of the preferred stock receive cash 
  or receive securities in an amount equal to their liquidation preference
plus accrued and unpaid dividends; and                                

o if the holders of the preferred stock are to receive or will hold       
securities of the buyer in the transaction, then the holders must have
  received an opinion from a nationally recognized investment banking firm
   satisfactory to the holders that the buyer's financial condition is equal
to or better than ours; and                                           

o if in exchange for their junior securities, the Millers and the holders 
of all other capital stock junior to the preferred stock, receive only
   securities in the transaction which are junior to the securities received
by the holders of the preferred stock in such transaction.            

Upon the occurrence of a change of control resulting from (1) a change,   
directly or indirectly, of more than fifty percent of our voting stock, (2) a   
merger as a result of which we are the surviving entity, or (3) the first day   
on which a majority of the members of our board of directors no longer          
continues to serve as board members, excluding the directors, if any, elected   
by the holders of the preferred stock, the holders will not have a right to a   
mandatory redemption:                                                           

o if in such transaction, the holders of the preferred stock will continue
   to hold the preferred stock, and all dividend payments payable in respect
  of the preferred stock, including any accrued dividends, shall have been
made, and                                                             

o if in such transaction, holders of junior securities receive only       
securities which are junior to the preferred stock.                   

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Liquidation Rights                                                              

If our voluntary or involuntary liquidation, dissolution or winding up    
occurs, the holders of the preferred stock will be entitled to receive out of   
assets available for distribution to shareholders, after any distribution of    
assets to which holders of stock senior to the preferred stock are entitled,    
but before any distribution of assets is made to holders of shares junior to    
the preferred stock, a liquidation distribution in the amount of $100 per       
share, plus accrued and unpaid dividends for the then-current dividend period   
whether or not declared to the date fixed for liquidation.                      

If, upon (a) our voluntary or involuntary liquidation, dissolution or     
winding up or merger with or into any other entity that is not an affiliate of  
ours, the consolidation or merger of any other entity that is not an affiliate  
of ours with or into us, or the sale of all or substantially all of our         
property or business to an entity that is not an affiliate of ours, amounts     
payable with respect to the preferred stock and any shares ranking equal to     
the preferred stock are not paid in full, then the holders of the preferred     
stock and any other equal shares will share ratably in any distribution of      
assets in proportion to the full liquidation preference to which they would     
otherwise be entitled. After payment of the full amount of the liquidating      
distributions to which they are entitled, the holders of preferred stock will   
have no right or claim to any of our remaining assets.                          

Amendment                                                                       

  Other than in connection with a special funding event as described above, we
will not amend our certificate of incorporation, bylaws or other charter        
documents so as to adversely affect the rights of the holders of the preferred  
stock without obtaining the written consent of the holders of at least a        
majority of the preferred stock. In connection with the consummation of a       
special funding event, we may amend our certificate of incorporation to create  
a new class of securities having powers, preferences or special rights senior   
to or equal with the preferred stock.                                           

Reacquired Shares                                                               

 Any preferred stock purchased, redeemed or otherwise acquired by us will be
retired and cancelled. The shares will become authorized but unissued shares    
of preferred stock, no longer designated as preferred stock and subject to      
reissuance as part of a new series or class of preferred stock if so            
designated by our board of directors.                                           

Preemptive Rights; Sinking Fund                                                 

The holders of the preferred stock will have no preemptive rights with    
respect to the issuance of any shares of our capital stock or any of our        
securities convertible into, exercisable or exchangeable for, or carrying       
rights or options to purchase shares of our capital stock. The shares of        
preferred stock are perpetual and are not convertible into shares of our        
common stock or any other class or series or our capital stock and will not be  
subject to any sinking fund.                                                    

Restrictions on Transfer                                                        

  Holders of preferred stock may not assign all or any part of their shares of
preferred stock unless the assignee is a qualified institutional buyer, as      
defined in Rule 144A promulgated under the Securities Act of 1933, as amended,  
who also is a qualified purchaser as defined in Section 2(a)(51)(A) under the   
Investment Company Act.                                                         

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DESCRIPTION OF DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC 

General                                                                         

 Delta Funding Residual Exchange Company, LLC has been created to facilitate
the exchange offer. It will not conduct any business and its sole purpose will  
be to hold mortgage-related securities now held by us or by our affiliates. At  
the conclusion of the exchange offer, the noteholders will own all of the       
voting membership interests of Delta Funding Residual Exchange Company, LLC.    
Delta Funding Residual Management, Inc. will hold a non-voting membership       
interest. We will hold a non-voting membership interest. As holders of the      
membership interests of Delta Funding Residual Exchange Company, LLC, the       
noteholders will be able to receive, in the form of limited liability company   
distributions, cashflows generated by the mortgage-related securities so long   
as these cashflows exceed the expenses and other payments to be made by Delta   
Funding Residual Exchange Company, LLC.                                         

Terms of Delta Funding Residual Exchange Company, LLC's Operating Agreement     

 The following summary sets forth the material terms and provisions of Delta
Funding Residual Exchange Company, LLC's operating agreement. It does not       
purport to be a complete summary of Delta Funding Residual Exchange Company,    
LLC's operating agreement. A copy of the operating agreement has been filed as  
an exhibit to the registration statement of which this prospectus forms a       
part.                                                                           

Manager:                       Delta Funding Residual Management, Inc. will     
                           serve as the managing member of Delta Funding
                          Residual Exchange Company, LLC. The managing
                      member will have sole responsibility for
                        managing the business and affairs of Delta
                              Funding Residual Exchange Company, LLC and shall
                    have full power to do any and all acts
                            necessary, incidental or convenient to, or for
                           the furtherance of, the purposes described in
                            Delta Funding Residual Exchange Company, LLC's
  operating agreement.

Allocation of Profits:         Profits for any fiscal year or other period      
                           shall be allocated among the holders of Delta
                      Funding Residual Exchange Company, LLC's
              membership interests as follows:

                                 First, excess inclusion income in respect
                                   to the mortgage-related securities shall be
                           allocated to Delta Funding Residual
         Management, Inc.;

                              Second, any remaining profits shall be
                          allocated to holders of the voting
                              membership interests  of Delta Funding
                         Residual Exchange Company, LLC in
                                proportion to, and to the extent of, any
                                  losses allocated to them pursuant to Delta
                                Funding Residual Exchange Company, LLC's
            operating agreement;

                             Third, any remaining profits shall be
                             allocated to us to permit us to pay a
                                portion of our settlement obligations to
                                 the New York State Department of Banking;

                                Fourth, fifteen percent of any remaining
                                  profits in respect of any period ending on
                                   or before the end of the 36th full calendar
                               month following the consummation of the
                                   exchange offer, and ten percent of any such
                                  remaining profits in respect of any period
                             thereafter, shall be allocated to us;

                                  Fifth, until such time as the net interest
                                   margin securityholders are paid in full, to
                                 us an amount equal to the income from the
                                   excess cashflow certificates that relate to
                                  and underlie the net interest margin owner
                           trust certificate other than excess
         inclusion income;

                             Sixth, any remaining profits shall be
                                 allocated to us to pay the balance of our
                              settlement obligations to the New York
                        State Department of Banking; and

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                               Seventh, any remaining profits shall be
                              allocated to the holders of the voting
                             membership interests of Delta Funding
                         Residual Exchange Company, LLC in
                                 proportion to their percentage interests.

Allocation of Losses:          Losses for any fiscal year or other period shall 
                              be allocated among the holders of the membership
                          interests of Delta Funding Residual Exchange
      Company, LLC as follows:

                               First, excess inclusion losses, if any,
                                  from the mortgage-related securities shall
                              be allocated to Delta Funding Residual
                             Management, Inc. to the extent of the
                                positive balance, if any, in its capital
account.

                                  Second, losses shall be allocated to us to
                         the extent of our excess profits.

                            o Our excess profits shall equal the
                                excess, if any, of (x) the aggregate
                                  amount of profits allocated to us over
                                   (y) the sum of (1) the aggregate amount
                                 of losses allocated to us pursuant to
                                    Delta Funding Residual Exchange Company,
                                   LLC's operating agreement for all prior
                                  periods, plus (2) the aggregate amount
                           of available cash that has been
              distributed to us.

                            Third, any remaining losses shall be
                              allocated to the holders of the voting
                             membership interests of Delta Funding
                         Residual Exchange Company, LLC in
                                 proportion to their percentage interests.

Distributions:                 Delta Funding Residual Exchange Company, LLC     
                             will distribute the cash generated by mortgage-
                          related securities in the following order of
priority:         

                             o to Delta Funding Residual Management, Inc. to
                            permit it to pay any expenses it incurs as
                          Delta Funding Residual Exchange Company,
        LLC's managing member;

                             o to Delta Funding Residual Management, Inc. to
                              permit it to pay excess inclusion income tax
                             liabilities related to the mortgage-related
                     securities (all of which income tax
                          liabilities relating to excess inclusion
                              income will be allocated under Delta Funding
                            Residual Exchange Company, LLC's operating
                           agreement to it for income tax purposes);

                          o to us to permit us to pay a portion of our
                              settlement obligations to the New York State
        Department of Banking;

                           o to us fifteen percent of the remaining cash
                          after all of the distributions described
                               above have been made, except that after three
                        years this distribution amount will be
                        reduced to ten percent. However, these
                              amounts may be reduced and retained by Delta
                              Funding Residual Exchange Company, LLC if we
                             do not pay the tax liabilities allocated to
                               us or that allocation is not respected by the
           Internal Revenue Service;

                            o to us to permit us to pay the balance of our
                              settlement obligations to the New York State
            Department of Banking; and

                       o to the holders of the voting membership
                              interests of Delta Funding Residual Exchange
                            Company, LLC, the balance of Delta Funding
                        Residual Exchange Company, LLC's cash.

Timing of Distributions:       Delta Funding Residual Exchange Company, LLC     
          will make cash distributions
                             within eighty-five business days following each
                     of April 30, June 30, September 30, and
December 31.      

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Dissolution:                   Subject to the Delaware Limited Liability Act,   
                          Delta Funding Residual Exchange Company, LLC
                         shall be dissolved and its affairs shall be
                     wound up upon the earliest to occur of:

                           o the expiration of the term of Delta Funding
                               Residual Exchange Company, LLC as provided in
          its operating agreement;

                         o the sale or distribution by Delta Funding
                          Residual Exchange Company, LLC of all or
                     substantially all of its assets; or

                            o the written consent of holders of the voting
                       membership interests of Delta Funding
                             Residual Exchange Company, LLC representing
                            not less than two-thirds of all holders of
                          the voting membership interests of Delta
                            Funding Residual Exchange Company, LLC and
us.           

                           Any other provision of Delta Funding Residual
                            Exchange Company, LLC's operating agreement to
                          the contrary notwithstanding, no withdrawal,
                          assignment, removal, bankruptcy, insolvency,
                              death, incompetency, termination, dissolution or
                            distribution with respect to any member or any
                              membership interest will effect a dissolution of
                           Delta Funding Residual Exchange Company, LLC.

Amendments:                    Delta Funding Residual Exchange Company, LLC's   
                          operating agreement may be amended with (but
                             only with) our written consent, and the consent
                             of a majority in interest of the holders of the
                          voting membership interests of Delta Funding
                              Residual Exchange Company, LLC and a majority in
                              interest of the holders of common stock of Delta
                            Funding Residual Management, Inc. The managing
                         member shall send each member a copy of any
        amendment that is adopted.

Management Agreement                                                            

Delta Funding Residual Exchange Company, LLC and Delta Funding Residual   
Management, Inc. will enter into a management agreement on the date of the      
exchange offer which shall provide that Delta Funding Residual Management,      
Inc. will manage Delta Funding Residual Exchange Company, LLC for an initial    
period of three years, automatically renewable for successive three-year        
terms, while we own a non-voting membership interest in Delta Funding Residual  
Management, Inc.                                                                

Delta Funding Residual Management, Inc. or in collaboration with any      
employees of Delta Funding Residual Exchange Company, LLC, will perform the     
following responsibilities as Delta Funding Residual Exchange Company, LLC's    
managing member:                                                                

 o make all of the distributions for, and pay all expenses of, Delta Funding
Residual Exchange Company, LLC;                                       

 o work with legal and accounting advisors to make all tax filings for Delta
Funding Residual Exchange Company, LLC, including those required to be
made as holder of the excess cashflow certificates;                   

o handle all administrative functions, including processing of information
and requests, and handling of all inquiries from related parties;     

o portfolio retention on the mortgage loans in the securitization trusts  
underlying the excess cashflow certificates; and                      

o loss mitigation on the mortgage loans in the securitization trusts      
underlying the excess cashflow certificates.                          

Delta Financial Corporation will incur approximately $550,000 per annum in
custodial fees relating to the safekeeping and administration performed by the  
custodians on the mortgage loans in the securitization trusts underlying the    
excess cashflow certificates (these fees decrease each year as the underlying   
mortgage loans are prepaid). This amount will be payable by us for so long as   
we are entitled to receive distributions from Delta Funding Residual Exchange   
Company, LLC.                                                                   

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Assets of Delta Funding Residual Exchange Company, LLC                          

Upon consummation of the exchange offer, the assets of Delta Funding      
Residual Exchange Company, LLC will be comprised of:                            

o excess cashflow certificates now held by two special purpose vehicles,  
Delta Funding Residual Holding Trust 2000-1 and Delta Funding Residual
Holding Trust 2000-2;                                                 

o a net interest margin owner trust certificate now held by Delta Funding 
Residual Holding Trust 2000-1;                                        

 o all cash and other property generated by the excess cashflow certificates
   and net interest margin certificates held by Delta Residual Holding Trust
2000-1 and Delta Residual Holding Trust 2000-2; and                   

o the owner trust certificate representing ownership of Delta Funding Non-
Performing Loan Trust                                                 
  2000-1, a business trust owning certain non-performing loan receivables.

The mortgage-related assets which are being transferred to Delta Funding  
Residual Exchange Company, LLC are all of the assets that currently secure the  
senior secured notes. The only mortgage-related securities which previously     
secured the senior secured notes which are not being transferred to Delta       
Funding Exchange Company, LLC are certain excess cashflow certificates, the     
release of which was approved expressly by the holders of the senior secured    
notes. Management responded to the requests of its creditors, including the     
holders of the senior secured notes in determining which assets to allocate to  
Delta Funding Residual Exchange Company, LLC.                                   

The assets held by Delta Funding Residual Exchange Company, LLC are       
difficult to value. There is no ready market for these mortgage-related         
securities. As a result, there are no available market rates or market prices   
for these securities.                                                           

We have not asked an independent third party to value these securities.   
Below, we describe how we determine the value of these assets. We believe our   
calculation of fair value is reasonable; however, our estimates may prove not   
to be accurate or complete. The fair value of these assets is based on a        
number of assumptions concerning factors which are outside of our control. Our  
assumptions may not be correct. We have described the assumptions we use to     
determine the fair value of these securities in the section titled "Underlying  
Assumptions for Fair Value Analysis" starting on on page 64. The fair value of  
these assets also depends largely on the structure of the related               
securitization transaction. We have described below under                       
"--Credit Enhancement Structure of Related Securitization Trusts for Excess     
Cashflow Certificates," the types of securitization structures we use and we    
provide you with information concerning each of these securitization trusts.    

 You may obtain additional information concerning each of the securitization
trusts by referring to Exhibits A through V included in this prospectus.        

Description of the Mortgage-Related Securities                                  

Excess Cashflow Certificates                                                  

The excess cashflow certificates represent an ownership interest in a     
securitization trust. The assets of each securitization trust consist           
primarily of two groups of mortgage loans: a group of fixed rate mortgage       
loans and a group of hybrid/adjustable rate mortgage loans. We refer to the     
loans included in each securitization trust as the related mortgage pool. The   
mortgage loans in each mortgage pool consist of fully amortizing and balloon    
mortgage loans secured by first or second liens primarily on one- to four-      
family residential real properties having original terms to stated maturity of  
not greater than 30 years.                                                      

  Excess cashflow certificates represent a subordinate right to receive excess
cashflow, if any, generated by the related mortgage pool. Excess cashflow       
certificates represent the difference between the interest payments due on the  
mortgage loans sold to the securitization trust and the interest payments due,  
at the pass-through rates, to the holders of the pass-through certificates of   
the same series, less contractual servicing fees, trustee fees and any insurer  
premiums, reimbursements and other costs and expenses of administering the      

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securitization trust. The holder of an excess cashflow certificate will         
receive cash only if there are any amounts remaining following payment of all   
amounts owing on all other securities of the securitization and the payment of  
expenses.                                                                       

The excess cashflow of a securitization trust in any month is applied:    

o first, to cover any losses on the mortgage loans in the related mortgage
pool,                                                                 

o second, to reimburse the insurer, if any, of the related series of pass-
through certificates for amounts paid by or otherwise owing to that   
insurer,                                                              

o third, to build or maintain the overcollateralization for that          
securitization trust at the required level by being applied as an     
accelerated payment of principal to the holders of the pass-through   
certificates of the related series,                                   

o fourth, to reimburse holders of the subordinated certificates of the    
 related series of pass-through certificates for unpaid interest and for
any losses previously allocated to those certificates,                

 o fifth, to pay interest on the related pass-through certificates which was
   not paid because of the imposition of a cap on their pass-through rates--
these payments being called basis risk shortfall amounts, and         

o sixth, to the related excess cashflow certificates.                     

In addition, if the required level of overcollateralization for a         
securitization trust is allowed to step down, or decrease in amount, pursuant   
to the terms of the related pooling and servicing agreement, the related        
excess cashflow certificates will receive a portion of the principal payments   
on the mortgage loans in the related mortgage pool.                             

Typically, the excess cashflow certificates begin to receive cashflow     
approximately eighteen to twenty-four months after the completion of a          
securitization, with the specific timing of the cashflows depending on the      
structure and performance of the securitization. Initially, securitization      
trusts utilize any available excess cashflows to make additional payments of    
principal on the pass-through certificates in order to establish a spread       
between the principal amount of the securitization trust's outstanding loans    
and the amount of outstanding pass-through certificates.                        

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Set forth below is a list of the mortgage-related securities that Delta   
Funding Residual Holding Trust 2000-1 and Delta Funding Residual Holding Trust  
2000-2 will transfer to Delta Funding Residual Exchange Company, LLC at the     
time of the consummation of the exchange offer.                                 

                                                        [Enlarge/Download Table]


Name and Series of the                                                      Percentage Interest             
Securitization Trust                               Classes of Certificates     in the Class                 
--------------------                               -----------------------     ------------                 
                                                                                                            
Delta Funding Non-Performing                                                                                
 Loan Trust 2000-1(1) ............................ owner trust certificate  100%                            
CTS Home Equity Loan Trust 1994-2................. R                        75%                             
Delta Residual Interest Trust 1995-1.............. B                        100% (represents 62.5% of       
                                                                            Delta Funding Home Equity Loan  
                                                                            Trust 1995-1, Class R-1 and R-2)
Delta Funding Home Equity Loan Trust 1995-2....... R                        99.999999%                      
Delta Funding Home Equity Loan Trust 1995-2....... R                        0.000001%                       
Delta Funding Home Equity Loan Trust 1997-3....... R-1; R-2                 0.000001%                       
Delta Funding Home Equity Loan Trust 1997-4....... R-1; R-2                 0.000001%                       
Delta Funding Home Equity Loan Trust 1998-1....... R-1; R-2                 0.000001%                       
Delta Funding Home Equity Loan Trust 1998-2....... R-1; R-2                 99.999999%                      
Delta Funding Home Equity Loan Trust 1998-2....... R-1; R-2                 0.000001%                       
Delta Funding Home Equity Loan Trust 1998-3....... R-1; R-2; R-3            99.99999%                       
Delta Funding Home Equity Loan Trust 1998-3....... R-1; R-2; R-3            0.000001%                       
Delta Funding Home Equity Loan Trust 1998-4....... R-1; R-2; R-3            99.99999%                       
Delta Funding Home Equity Loan Trust 1998-4....... R-1; R-2; R-3            0.000001%                       
Delta Funding Home Equity Loan Trust 1999-1....... R-1; R-2; R-3            99.99999%                       
Delta Funding Home Equity Loan Trust 1999-1....... R-1; R-2; R-3            0.000001%                       
Delta Funding Home Equity Loan Trust 1999-2....... BIO                      100%                            
Delta Funding Home Equity Loan Trust 1999-2....... R-1; R-2; R-3            99.999999%                      
Delta Funding Home Equity Loan Trust 1999-2....... R-1; R-2; R-3            0.000001%                       
Delta Funding Home Equity Loan Trust 2000-1....... BIO                      100%                            
Delta Funding Home Equity Loan Trust 2000-1....... R-1; R-2; R-3            99.999999%                      
Delta Funding Home Equity Loan Trust 2000-1....... R-1; R-2; R-3            0.000001%                       
Delta Funding Home Equity Loan Trust 2000-2....... BIO                      100%                            
Delta Funding Home Equity Loan Trust 2000-2....... R-1; R-2; R-3            99.999999%                      
Delta Funding Home Equity Loan Trust 2000-2....... R-1; R-2; R-3            0.000001%                       
Delta Funding Home Equity Loan Trust 2000-3....... BIO                      100%                            
Delta Funding Home Equity Loan Trust 2000-3....... R-1; R-2; R-3            99.999999%                      
Delta Funding Home Equity Loan Trust 2000-3....... R-1; R-2; R-3            0.000001%                       
Delta Funding Home Equity Loan Trust 2000-4....... BIO                      100%                            
Delta Funding Home Equity Loan Trust 2000-4....... R-1; R-2; R-3            99.999999%                      
Delta Funding Home Equity Loan Trust 2000-4....... R-1; R-2; R-3            0.000001%                       
Delta Funding NIM Trust 2000-1(2)................. owner trust certificate  100%                            

---------------                                                                 
(1) We provide a description of the Delta Funding Non-Performing Loan Trust     
2000-1 on page 74.                                                      

(2) The following excess cashflow certificates underlie the Delta Funding NIM   
  Trust 2000-1 owner trust certificate: Delta Funding Home Equity Loan Trust
1997-3, Class R-1 and R-2; Delta Funding Home Equity Loan Trust 1997-4, 
 Class R-1 and R-2; Delta Funding Home Equity Loan Trust 1998-1, Class R-1
and R-2; Delta Funding Home Equity Loan Trust 1998-3, Class BIO; Delta  
Funding Home Equity Loan Trust 1998-4, Class BIO; and Delta Funding Home
Equity Loan Trust 1999-1, Class BIO. These excess cashflow certificates 
 will be released once the net interest margin securityholders are paid in
full and the net interest margin trust is dissolved.                    

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Set forth below is a list of the excess cashflow certificates that will   
revert back to Delta Funding Residual Exchange Company, LLC once the net        
interest margin trust security holders are paid in full.                        

                                                        [Enlarge/Download Table]


Name and Series of the                                                      Percentage Interest
Securitization Trust                               Classes of Certificates      in the Class   
--------------------                               -----------------------      ------------   
                                                                                               
Delta Funding Home Equity Loan Trust 1997-3....... R-1, R-2                 99.999999%         
Delta Funding Home Equity Loan Trust 1997-4....... R-1; R-2                 99.999999%         
Delta Funding Home Equity Loan Trust 1998-1....... R-1, R-2                 99.999999%         
Delta Funding Home Equity Loan Trust 1998-3....... BIO                      100%               
Delta Funding Home Equity Loan Trust 1998-4....... BIO                      100%               
Delta Funding Home Equity Loan Trust 1999-1....... BIO                      100%               

The Certificates. Each excess cashflow certificate is an excess cashflow  
certificate that we or one of our affiliates retained in connection with one    
of our securitizations.                                                         

With respect to each securitization trust, we made one or more separate   
elections to treat portions of that securitization trust as a real estate       
mortgage investment conduit, or REMIC, for federal income tax purposes. Each    
Class BIO certificate is a "regular interest" in a REMIC and each Class R       
certificate is a "residual interest" in a REMIC. REMICs are groups of           
mortgages or mortgage related assets, generally included in a trust, that make  
a special election to be treated as a REMIC under the Internal Revenue Code.    
Being treated as a REMIC provides certain tax benefits.                         

There are two types of interests in REMICs, residual interests and regular
interests. The residual interests usually are called Class R certificates.      
Some residual interests may generate cash flow as well as taxable income.       
Other residual interests generate no cash flow, but they do generate taxable    
income (generally in the early years of the REMIC) which may be offset by       
taxable losses in later years. All taxable income from residual interests that  
do not generate cash flow, and all or some of the taxable income from residual  
interests that may generate cash flow, are subject to special tax rules. This   
income is called "excess inclusion income," and, among other disadvantages,     
may not be offset by a taxpayer's losses (including net operating loss          
carryover) and is subject to tax in the hands of pension plans and other        
usually tax-exempt entities.                                                    

The other type of interest in a REMIC is a regular interest. Regular      
interests are taxed as if they were debt instruments, even if, as is the case   
with the BIO Classes, they economically resemble residual certificates.         
Regular interests do not create excess inclusion income.                        

 Residuals that may generate cash and residuals that will not generate cash,
as well as BIO interests, will be held by the Delta Funding Residual Exchange   
Company, LLC.                                                                   

 A net interest margin certificate is an interest in a securitization trust,
in this case, a net interest margin trust. The net interest margin trust will   
contain Class R interests and BIO interests. The net interest margin trust has  
issued debt securities to public investors. All cash flow from the net          
interest margin trust will be used to pay off the debt securities. Before the   
debt securities are paid off, the owner of the net interest margin owner trust  
certificate is treated for federal income tax purposes as if it owned the       
Class R and BIO interests held by the net interest margin trust and was liable  
on the debt securities. Once the debt securities are paid off, the net          
interest margin owner trust certificate becomes for federal income tax          
purposes an undivided interest in the Class R and BIO interests held by the     
net interest margin trust.                                                      

Fair Value of Excess Cashflow Certificates. We record the values of the   
excess cashflow certificates on our balance sheet, and corresponding amounts    
on our statement of operations based upon their fair value. We estimate the     
fair value at the date of the applicable securitization based on the stated     
terms of the transferred loans adjusted for estimates of future prepayments     
and defaults that may occur among those loans. The fair value of the excess     
cashflow certificates is reduced for distributions which are received from the  
related securitization trust, and is adjusted for subsequent changes in the     
fair value of these certificates. We have determined the fair value of the      
excess cashflow certificates based on various economic factors, including loan  
type, sizes, interest rates, dates of origination, terms and geographic         
locations. We also use other available information such as reports on           
prepayment rates, interest rates, collateral values, economic forecasts, and    
historical default and prepayment rates of the loan portfolio.                  

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Although we believe our fair value estimates for the excess cashflow      
certificates are reasonable and may be realized, the prepayment rate, loan      
losses and the discount rate we used are estimates. Actual experience may       
vary. For instance, actual prepayment rates may vary from the assumed           
prepayment rate because of a change in interest rates (lower interest rates     
may motivate borrowers to refinance their loans, thereby increasing             
prepayments), a change in the economy (in times of economic prosperity,         
borrowers' credit profiles may improve, which may provide them access to        
credit at lower interest rates, thereby increasing prepayments), or simply      
from increased competition (which could drive down the interest rates charged   
to borrowers, thereby increasing prepayments). Higher than anticipated          
prepayment or loss rates would require the fair value of the excess cashflow    
certificates to be written down. Similarly, if delinquencies, liquidations or   
interest rates were greater than initially assumed, the fair value of the       
excess cashflow certificates would be negatively impacted. Our prepayment and   
default assumptions are based upon the "seasoning" of the loan portfolio, i.e.  
the period of time since we originally securitized the loan portfolio.          

Underlying Assumptions for Fair Value Analysis. The underlying assumptions
we used to determine the fair value of the excess cashflow certificates are as  
follows:                                                                        

o an annual discount rate of thirteen percent;                            

 o a loan loss reserve for both fixed- and adjustable-rate loans sold to the
securitization trusts of 3.50%; and                                   

o prepayment rate assumptions are based upon our ongoing analysis of      
industry and specific mortgage pool trends.                           

Discount Rate. We use a discount rate which we believe reflects the risks 
associated with our securitization assets. While quoted market prices on        
comparable interest-only strips are not available, we have performed            
comparisons of our valuation assumptions and performance experience to our      
competitors' in the non-conventional mortgage industry. Our thirteen percent    
discount rate takes into account the asset quality and the performance of our   
securitized assets compared to industry asset quality and the performance and   
other characteristics of our securitized loans that we describe below. We       
quantify the risks associated with our securitization assets by comparing the   
asset quality and payment and loss performance experience of the underlying     
securitized mortgage pools to comparable industry performance. We believe that  
the practice of many companies in the non-conventional mortgage industry has    
been to add a spread for risk to the all-in cost of securitizations to          
determine their discount rate. From these comparisons, we have identified a     
spread which we add to the all-in cost of our mortgage loan securitization      
trusts' investor certificates.                                                  

We believe the following data supports our thirteen percent discount rate:

o public data on other lenders with similar collateral who are servicing  
their own loan portfolio use an average discount rate between ten to  
fifteen percent;                                                      

o we have underlying loan collateral with fixed yields higher than others 
in the non-conventional mortgage industry. The average coupons of our 
securitized mortgage loans exceed the industry average by 100 basis   
points or more. Approximately seventy to seventy-five percent of our  
   loans have fixed interest rates which generally are more predictable than
loans with adjustable rates;                                          

o we have a portfolio mix of first and second mortgage loans of ninety to 
   ninety-five percent and five to ten percent, respectively. We believe our
high proportion of first mortgages results in lower delinquencies and 
losses; and                                                           

o we have a portfolio credit grade mix comprised of eighty-one percent A  
  and B credit, and nineteen percent C and D credit. In addition, our loss
experience generally is below that experienced by others in the non-  
conventional mortgage industry.                                       

The discount rate we use to determine the present value of cashflows from 
excess cashflow certificates reflects increased uncertainty surrounding         
current and future market conditions, including without limitation,             
uncertainty concerning inflation, recession, home prices, interest rates and    
equity markets.                                                                 

 Some of the excess cashflow certificates support floating rate pass-through
certificates, which are susceptible to interest rate risk, positive or          
negative, associated with a movement in short-term interest rates.              

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Loan Loss Rate. Our loan loss assumption reflects our belief that:        

o prepayment speeds generally will be slower in the future than in the    
past;                                                                 

o the rise in home values will be flat or slightly moderate as compared to
the past few years; and                                               

o borrowers will therefore be less able to refinance their mortgages to   
avoid default which may have an adverse effect on our non-performing  
loans in the underlying securitizations trust.                        

Prepayment Rates. We base our prepayment rate assumptions upon the        
performance of mortgage pools we previously securitized, and the performance    
of similar pools of mortgage loans securitized by others in the industry. We    
apply different prepayment speed assumptions to different loan product types    
because it has been our experience that different loan product types exhibit    
different prepayment patterns. Generally, our loans can be grouped into two     
loan products - fixed rate loans and hybrid loans. With fixed rate loans, an    
underlying borrower's interest rate remains fixed throughout the life of the    
loan. With a hybrid loan, the rate generally remains fixed for typically the    
first three years of the loan, and then adjusts typically every six months      
thereafter. We had previously originated adjustable rate loans. However, we     
stopped originating these loans in 1998. Currently, these loans represent less  
than five percent of the total loans outstanding underlying the pool of         
mortgages in securitization trusts which have issued excess cashflow            
certificates. With adjustable rate loans, the borrower's interest rate adjusts  
throughout the life of the loan, typically every six months.                    

The table below shows a prepayment rate comparison between fixed-rate and 
adjustable-rate mortgage loans.                                                 

Fixed-Rate Mortgages/Hybrid-Rate Mortgages Prepayment Comparison
Historical vs. Assumption as of December 31, 2000 

                                                        [Enlarge/Download Table]

                                                                                                            Historical as a %
                                                                                    Historical  Assumption    of Assumption  
                                                                                    ----------  ----------    -------------  
                                                                                                                             
Fixed-Rate Mortgage Loan                                                                                                     
 prior three-month weighted average rate                                                                                     
  (based upon an annualized percentage)............................................   15.20%      19.20%           79%       
 prior six-month weighted average rate                                                                                       
  (based upon an annualized percentage)............................................   15.30%      19.60%           78%       
Hybrid-Rate Mortgage Loan                                                                                                    
 prior three-month weighted average rate                                                                                     
  (based upon an annualized percentage)............................................   21.60%      23.20%           93%       
 prior six-month weighted average rate                                                                                       
  (based upon an annualized percentage)............................................   23.10%      24.80%           93%       

Within each product type, other factors can affect prepayment rate        
assumptions. Some of these factors, for instance, include:                      

o whether or not a loan contains a prepayment penalty - an amount that a  
borrower must pay to a lender if he or she prepays the loan within a  
 certain time after the loan was originated. Loans containing prepayment
penalty typically do not prepay as quickly as those without such a    
penalty.                                                              

o as is customary with hybrid and adjustable rate mortgage loans, the     
   introductory interest rate charged to the borrower is artificially lower,
 between one and two full percentage points, than the rate for which the
borrower would have otherwise qualified. Generally, once the hybrid or
 adjustable rate mortgage begins adjusting on the first adjustment date,
the interest rate payable on that loan increases, at times fairly     
   substantially. This interest rate increase can be exacerbated if there is
an absolute increase in interest rates. As a result of these increases
and the potential for future increases, hybrid and adjustable rate    
mortgage loans typically are more susceptible to early prepayments.   

There are several reasons why a loan will prepay prior to its maturity,   
including (but not limited to):                                                 

o a decrease in interest rates,                                           

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o improvement in the borrower's credit profile, which may allow them to   
qualify for a lower interest rate loan,                               

o competition in the mortgage market, which may result in lower interest  
rates being offered,                                                  

o the borrower's sale of their home, and                                  

o a default by the borrower, resulting in foreclosure by the lender.      

 It is unusual for a borrower to prepay a mortgage loan during the first few
months because                                                                  

o it typically takes at least several months after the mortgage loans are 
originated for any of the above events to occur,                      

o there are costs involved with refinancing a loan, and                   

o the borrower does not want to incur prepayment penalties.               

Thereafter, we have found that the rate at which loans prepay will slowly 
increase and stabilize, then decrease and eventually level off. Historically,   
we used a "ramp" prepayment curve, in which we projected that a loan would      
initially begin prepaying at a certain rate, and that rate would incrementally  
increase (or "ramp up") over its first 12 months, and level off thereafter.     
Commencing in 1998, we began using a "vector" curve, which is similar to a      
"ramp curve" in that prepayment rates incrementally increase over a longer      
period of time and then stabilize. However, as opposed to a ramp curve (which   
remains constant once prepayments stabilize), we believe that a vector curve    
is more representative of projected future loan prepayment experience, as it    
thereafter decreases and then eventually levels off.                            

  The following table shows the changes to prepayment assumptions we have made
since 1998 when we adopted the vector curve:                                    

                                                        [Enlarge/Download Table]

                                                                             Month One Speed                 Peak Speed        
                                                                       ---------------------------  ---------------------------
Loan type                                                              9/30/00    12/31/99   Prior  9/30/00    12/31/99   Prior
                                                                       -------    --------   -----  -------    --------   -----
                                                                                                                               
Fixed-Rate Loans .....................................................   4.0%       4.0%      4.8%    23%        31%       31% 
Six-Month LIBOR ARMS .................................................  10.0%      10.0%     10.0%    50%        50%       50% 
Hybrid ARMS ..........................................................   4.0%       4.0%       60%    50%        50%       50% 

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The following graphs illustrate our prepayment assumptions.               

[graphic] 

[graphic] 

The fair value of the projected excess cashflows depends principally upon 
prepayment and default rate assumptions. Any changes to these two assumptions   
will change the future expected excess cashflows significantly. However, other  
factors can influence or change the value of the expected excess cashflows      
such as reserve triggers on the underlying securitization which can increase    
the overcollateralization (cash reserve requirements) of the securitization     
transaction. Typically, an increase in the reserve requirements will defer the  
receipt of the excess cashflows because these cashflows are being used to meet  
the higher reserve amounts. Below, we show the projected excess cashflows       
resulting from the excess cashflow certificates which we are transferring to    
Delta Funding Residual Exchange Company, LLC. After applying a thirteen         
percent annualized discount rate, the calculated value should approximate our   
estimate of the fair value of the excess cashflow certificates shown below.     

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Projected Gross Excess Cashflows

The table below shows projected gross excess cashflows (includes cashflows
on excess cashflow certificates underlying the net interest margin owner trust  
certificate once the net interest margin trust is dissolved and the excess      
cashflow certificates are transferred to Delta Funding Residual Exchange        
Company, LLC). The excess cashflows shown are projected gross cashflows before  
deducting any expenses or taxes or the distributions being made to us by Delta  
Funding Residual Exchange Company, LLC. However, holders of the membership      
interests of Delta Funding Residual Exchange Company, LLC will receive          
distributions only after Delta Funding Residual Exchange Company, LLC pays its  
expenses and makes distributions to us.                                         

                                                        [Enlarge/Download Table]


                                                                                          Cumulative Present Value of
                                                          Annual Gross  Cumulative Gross    Gross Cashflows by Year  
Year Ended                                                 Cashflows        Cashflows      (at beginning of period)  
----------                                                 ---------        ---------      ------------------------  
                                                                                                                     
December-01 (1).......................................... $ 6,031,199     $  6,031,199           $152,799,000        
December-02 (2)..........................................  34,565,171       40,596,370            155,957,335        
December-03..............................................  38,223,025       78,819,395            141,666,618        
December-04..............................................  35,122,374      113,941,769            121,860,253        
December-05..............................................  31,185,402      145,127,171            102,579,712        
December-06..............................................  26,614,099      171,741,270             84,729,673        
December-07..............................................  22,149,609      193,890,879             69,130,432        
December-08..............................................  17,728,666      211,619,545             55,967,778        
December-09..............................................  13,784,490      225,404,035             45,514,924        
December-10..............................................  10,184,435      235,588,470             37,647,374        
December-11..............................................   8,230,394      243,818,864             32,357,097        
December-12..............................................   6,920,854      250,739,718             28,333,126        
December-13..............................................   5,533,869      256,273,587             25,095,579        
December-14..............................................   4,470,411      260,743,998             22,824,135        
December-15..............................................   3,678,917      264,422,915             21,320,861        
December-16..............................................   3,263,846      267,686,761             20,413,656        
December-17..............................................   3,257,948      270,944,709             19,803,586        
December-18..............................................   2,919,790      273,864,499             19,120,104        
December-19..............................................   3,396,309      277,260,808             18,685,927        
December-20..............................................   6,941,028      284,201,836             17,718,788        
December-21..............................................   6,173,446      290,375,282             13,081,203        
December-22..............................................   4,441,007      294,816,289              8,608,314        
December-23..............................................   3,079,977      297,896,266              5,286,387        
December-24..............................................   1,978,856      299,875,122              2,893,640        
December-25..............................................   1,079,818      300,954,940              1,290,958        
December-26..............................................     335,907      301,290,847                378,964        
December-27..............................................      74,470      301,365,317                 92,323        
December-28..............................................      27,218      301,392,535                 29,855        
December-29..............................................       6,665      301,399,200                  6,518        
December-30..............................................         792      301,399,991                    700        

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

(1) Represents projected gross excess cashflows beginning July 2001 through     
December 2001.                                                                  

(2) Our estimates provide for the net interest margin securities issued to      
investors to be paid in full in 2002. At such time, cashflow from the   
   excess cashflow certificates underlying the net interest margin owner trust
certificate will begin to be received by Delta Funding Residual Exchange
Company, LLC.                                                           

The excess cashflows above are based upon our current assumptions at March
31, 2001. Actual results could vary significantly from the projections due to   
a variety of facts, including changes in interest rates, economic conditions,   
servicer defaults, loan defaults, prepayments, and delinquency triggers         
resulting in changes in the level of cash held by the securitization trust to   
prepay the holders of its asset backed pass-through certificates. See the       
section titled "Credit Enhancement Structure of Related Securitization Trusts   
for Excess Cashflow Certificates" below.                                        

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 These projected gross excess cashflows, even if they were to be received by
Delta Funding Residual Exchange Company, LLC will first be used by it to pay    
its expenses and fees and to make preferential payments to us. It is difficult  
to estimate the annual expenses and other amounts that will be paid prior to    
making any distribution to the holders of its membership interests. However,    
you may use some estimates we provide below. Using these estimates, you may     
deduct from the projected gross excess cashflow shown above (1) projected       
expenses of Delta Funding Residual Exchange Company, LLC, (2) New York State    
Banking Department Settlement Payments, (3) tax payments; and (4)               
distributions to be made to us.                                                 

Projected Expenses of Delta Funding Residual Exchange Company, LLC. The   
expected annual expenses that will be incurred by Delta Funding Residual        
Exchange Company, LLC include the following:                                    

                                                                [Download Table]

                                                                                
REMIC and LLC tax work (1)..........................................    $155,000
Paying Agent and other fees (2).....................................      50,000
                                                                        --------
 Total estimated annual expenses....................................    $205,000

---------------                                                                 
(1) Does not include an initial $100,000 expense for KPMG LLC arising in        
connection with fees to be paid for delivery of a tax opinion.                  
(2) Bank fees and other charges in connection with paying cash distributions to 
Delta Funding Residual Exchange Company, LLC members, in addition to            
miscellaneous expenses such as administration fees and overhead costs.          

The expenses above do not include unusual or unexpected fees that may be  
incurred from time to time by Delta Funding Residual Exchange Company, LLC for  
such matters as legal or accounting services. The type and amounts of these     
unusual or unexpected expenses cannot be predicted.                             

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New York State Banking Department Settlement Payments. Additionally, Delta
Funding Residual Exchange Company, LLC will be responsible for making payments  
to us to permit us to pay a portion of our settlement obligations to the New    
York State Department of Banking. The amounts below may vary subject to         
prepayments by the borrowers on the mortgages underlying the excess cashflow    
certificates. If prepayments by the borrowers are higher than anticipated the   
actual expenses will be lower than what we project below. If prepayments by     
the borrowers are lower than anticipated the actual expenses will be higher     
than what we project below.                                                     

                                                                [Download Table]

                                                                Annual Banking  
Year Ended                                                    Department Payment
 ----------                                                   ------------------
                                                                                
December-01(1)............................................         $258,600     
December-02...............................................          477,150     
December-03...............................................          438,400     
December-04...............................................          398,150     
December-05...............................................          357,150     
December-06...............................................          313,400     
December-07...............................................          273,900     
December-08...............................................          222,150     
December-09...............................................          197,600     
December-10...............................................          197,500     
December-11...............................................          197,250     
December-12...............................................          197,000     
December-13...............................................          194,000     
December-14...............................................          192,750     
December-15...............................................          188,750     
December-16...............................................          188,750     
December-17...............................................          188,750     
December-18...............................................          187,500     
December-19...............................................          185,750     
December-20...............................................          184,000     
December-21...............................................          169,500     
December-22...............................................          166,110     
December-23...............................................          162,788     
December-24...............................................          159,532     
December-25...............................................          156,341     
December-26...............................................          153,215     
December-27...............................................          150,150     
December-28...............................................          147,147     

---------------                                                                 
(1) Represents only six months -- July 2001 through December 2001.              

Tax Payments. It is extremely complicated to calculate or predict the tax 
liability that will be associated with the excess cashflows, because of the     
variability in default rates, recoveries, and prepayment speeds. In our         
typical securitization, the tax liability as a percentage of cashflow we        
receive is generally greater in the earlier years of the transaction (first     
five years), compared to the later years of the transaction (years six through  
30). This is due primarily to two factors:                                      

1. "Cashless" or "phantom" income generated by the excess cashflow  
certificates, which results in taxable liability without the benefit of   
actual cashflows to pay for the tax liability. The cash may be generated, 
but it is used by the securitization trust to make payments to other      
securityholders. This phantom income is generated typically when the      
cashflows from the excess cashflow certificates are used to create        
  overcollateralization -- pay the principal of the asset-backed securities --
rather than being used to pay the excess cashflow certificate holder. It  
 also may arise when excess cashflow certificates are used as collateral for
 debt (such as in the net interest margin securitization), in which case the
cashflows are used to pay the debt even though no overcollateralization is
created. Cashflows from excess cashflow certificates typically are used to
build overcollaterization either in the first 18-24 months of a           
securitization or at a later time when a delinquency trigger has been     
 exceeded, requiring the overcollateralization amount to be increased. While
some of the excess cashflow certificates are likely to generate phantom   
income over much of their lives, the majority of this phantom income is   
projected to                                                              

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occur within the first few years of the securitization, when the initial  
overcollaterization is created with cashflows that otherwise would be paid
  to the holders of the excess cashflow certificates. It may also occur later,
however, if cashflows that otherwise would be paid to the excess cashflow 
certificates are used to cover losses on the underlying mortgage loans.   

2. We generally have used a securitization structure that issues    
securities with different durations, in which the securities receive      
principal payments sequentially. In most interest rate environments, the  
shorter duration instruments have lower interest rates than the longer    
  duration instruments. This means that over time, as payments are made on the
shorter duration instruments, the average interest expense of the         
securitization trust increases while the average interest income on the   
mortgage loans may stay constant, thereby reducing the issuer's taxable   
  income as a percentage of the principal amount of the mortgage loans. As the
holder of the excess cashflow certificates, or residual interests in the  
 securitizations, we pay tax on the taxable income of the issuer, so our tax
 as a percentage of the principal balance of the mortgage loans in the early
years is generally greater than the percentage in later years. Since the  
cashflow we receive as a holder of the excess cashflow certificate is     
  determined in large part by the principal balance of the mortgage loans that
  are paying (though it is also affected by the weighted average interest rate
  of those mortgage loans), our taxable income as a percentage of our cashflow
  will generally be greater in the earlier years and lower in the later years.
  All or a portion of our taxable income (so-called "excess inclusion income")
is subject to special tax rules that do not allow us to offset the income 
from one residual interest with other losses we may have.                 

  For illustration purposes only, assume we complete a securitization in which
we anticipate (using our current gain on sale assumptions) receiving $10        
million in taxable income over the life of the securitization (i.e., 30         
years). Assuming a tax rate of thirty-five percent, we would incur, over the    
life of the securitization, $3.5 million in taxes (thirty-five percent of $10   
million). However, due to the phantom income and the interest rate structure    
of the issued securities, we would expect to incur tax liability equal to       
sixty percent to seventy percent of the cash revenue generated from the excess  
cashflow certificates during approximately the first five years. Thereafter,    
we would expect the tax liability to be between only 10-20% of the cash         
revenue generated by the excess cashflow certificates. In total, however, the   
federal income taxes we would owe over the life of the securitization would be  
$3.5 million.                                                                   

The excess cashflow certificates being transferred to the Delta Funding   
Residual Exchange Company, LLC were issued in securitizations that were         
completed between six months to seven years ago. We expect the tax liability    
in respect of Delta Funding Residual Exchange Company, LLC's excess cashflow    
certificates to reflect the following:                                          

o from July 2001 through December 2002, approximately sixty-eight percent 
of the projected cashflows on average; and                            

o January 2003 and thereafter, approximately seventeen percent of the     
projected cashflows on average.                                       

These estimates, however, are based on many assumptions, which may or may 
not be accurate. Higher than expected mortgage loan losses can reduce           
substantially the cash revenue generated by the excess cashflow certificates,   
causing the tax liability to be higher than we have projected. Furthermore,     
there can be no assurance that the tax liability does not exceed the cash       
revenues generated by the excess cashflow certificates in any period.           

 Distributions to Us. We will receive distributions equal to fifteen percent
for the first three years, and ten percent thereafter, of the excess cashflow   
after deducting the expenses, settlement payments, and tax payments.            

Sample Calculation of Projected Net Excess Cashflows. Below we provide a  
sample of the projected net excess cashflows. Above, we have shown projected    
gross excess cashflows. However, even if Delta Funding Residual Exchange        
Company, LLC were to receive the projected gross excess cashflows, these        
amounts will first be used by it to pay its expenses and fees and to make       
preferential payments to us. The expenses and fees are difficult to calculate.  
The tax liability associated with the excess cashflows is especially difficult  
to calculate as we explain above. The table is based on management's            
assumptions which we have described. We are providing you with this example     
for illustrative purposes only. We cannot assure you that you will actually     
receive these amounts.                                                          

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                                                        [Enlarge/Download Table]

                                                                               Annual                      Cumulative Present
                 Cashless or       Annual                                   Projected Net  Cumulative Net    Value Net Cash  
Year Ended        "Phantom"    Projected Gross                              Cash Flows to  Cash Flows to    Flows by Year to 
  ----------     Income/Loss      Cash Flow     Expenses(3)     Taxes      be Distributed  be Distributed    be Distributed  
                 -----------     -----------     ---------   -----------     -----------    ------------      ------------   
                                                                                                                             
December-01 (1)    5,766,334     $ 6,031,199     $(361,100)  $(4,002,752)    $ 2,655,433    $  2,655,433      $126,758,105   
December-02 (2)  (14,942,322)    $34,565,171     $(682,150)  $(6,629,245)    $27,739,851    $ 30,395,284      $132,341,949   
December-03      (23,929,257)    $38,223,025     $(643,400)  $(4,777,629)    $32,801,996    $ 63,197,280      $121,806,551   
December-04      (24,332,755)    $35,122,374     $(603,150)  $(3,565,264)    $30,953,960    $ 94,151,240      $104,839,407   
December-05      (20,925,544)    $31,185,402     $(562,150)  $(3,394,198)    $27,229,054    $121,380,294      $ 87,514,570   
December-06      (17,511,319)    $26,614,099     $(518,400)  $(3,004,533)    $23,091,166    $144,471,460      $ 71,662,410   
December-07      (14,326,119)    $22,149,609     $(478,900)  $(2,570,607)    $19,100,103    $163,571,563      $ 57,887,358   
December-08      (11,435,580)    $17,728,666     $(427,150)  $(2,053,077)    $15,248,438    $178,820,001      $ 46,312,611   
December-09       (8,672,885)    $13,784,490     $(402,600)  $(1,648,152)    $11,733,739    $190,553,740      $ 37,084,813   
December-10       (5,924,504)    $10,184,435     $(402,500)  $(1,350,101)    $ 8,431,834    $198,985,573      $ 30,172,100   

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

(1) Represents projected gross excess cashflows beginning July 2001 through     
December 2001.                                                          

(2) Our estimates provide for the net interest margin securities issued to      
  investors to be paid in full in 2002. At such time, Delta Funding Residual
Exchange Company, LLC will begin to receive cashflows from the excess   
cashflow certificates underlying the net interest margin owner trust    
certificate.                                                            

(3) Includes NYS Banking Department payments, plus projected expenses of Delta  
Funding Residual Exchange Company, LLC.                                 

The table above shows the projected gross cash flow, net of cashless or   
"phantom" income/loss, projected expenses of Delta Funding Residual Exchange    
Company, LLC (including payments to the New York State Banking Department), and 
projected taxes. However, the table does not show the preferential 10% or 15%   
distribution payable to us.                                                     

Credit Enhancement Structure of Related Securitization Trusts for Excess  
Cashflow Certificates. The table set forth on the next page provides            
information with respect to the excess cashflow certificates. We separated the  
information based upon the type of credit enhancement structure of the related  
securitization trust. The credit enhancement structure of a securitization      
affects both the timing and the amount of cashflow that might be received on    
the related excess cashflow certificates. The credit enhancement structures of  
securitization trusts generally fall into three categories which we refer to    
as bond insured, senior-sub or modified wrap.                                   

"Bond insured" refers to a securitization trust where all of the pass-    
through certificates issued by that securitization trust and sold to investors  
are insured as to timely payment of interest and ultimate payment of principal  
under a financial guaranty insurance policy issued by a monoline insurance      
company. The insurer relies on the excess cashflow and the                      
overcollateralization feature to limit the likelihood that a claim will be      
made on the insurance policy. In this type of transaction, the required level   
of overcollateralization may increase as well as decrease based on the          
delinquency and loss performance of the related mortgage pool.                  

 "Senior-sub" refers to a securitization trust where payments on one or more
classes of the pass-through certificates are subordinated to other classes of   
that series. This means that classes with a relatively higher payment priority  
receive their payments before, and are allocated losses after, the class or     
classes that are subordinated to those higher priority classes. A senior-sub    
transaction uses excess cashflow to cover losses and to build and maintain      
overcollateralization to provide protection for the lowest payment priority     
class of pass-through certificates. In most cases, the required level of        
overcollateralization will not increase but may be prevented from reducing or   
stepping down based on the delinquency and loss performance of the mortgage     
pool. In addition, if the overcollateralization is reduced to zero due to       
losses on the mortgage pool, any additional losses will be allocated to the     
subordinated certificates. In subsequent periods, any excess cashflow not used  
to cover new losses or to restore the overcollateralization to the required     
level will be used to reimburse the holders of the subordinated certificates    
for unpaid interest and losses previously allocated to those certificates       
before any amounts are paid on the related excess cashflow certificates.        

 "Modified wrap" refers to a securitization trust which includes a financial
guaranty insurance policy for some but not all of the related pass-through      
certificates and one or more classes of subordinated certificates. If there is  
only a single class of subordinated certificates, the transaction more closely  
resembles a bond insured transaction. If more than one class of subordinated    
certificates were issued, the transaction more closely resembles a senior-sub   
transaction.                                                                    

None of the securitizations had a reserve fund.                           

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As of the April 2001 Distribution Date                                          

                                                        [Enlarge/Download Table]

                                                                                                         Ending Mortgage 
Structure/Deal                                                                                           Weighted Average
  --------------       Mortgage Balance   Certificate Balance    Target OC Level(1)  Actual OC Level(2)  Coupon (WAC)(3) 
                       ----------------   -------------------    ------------------  ------------------  ----------------
                                                                                                                         
Bond Insured                                                                                                             
Delta 1994-2           $  7,560,276.51      $  6,981,549.42        $   578,727.09      $   578,727.09         11.49%     
Delta 1995-1             10,524,064.27         9,714,444.07          1,286,497.58          809,620.20         11.92%     
Delta 1995-2             27,938,622.98        24,396,610.91          3,542,012.07        3,542,012.07         11.31%     
Delta 1998-3 Group I    288,595,774.85       273,465,774.85         15,130,000.00       15,130,000.00          9.95%     
Delta 1998-3 Group II    11,586,037.98         9,861,037.98          1,725,000.00        1,725,000.00         12.41%     
Senior-sub                                                                                                               
Delta 1997-3 Group I   $103,545,035.12      $101,701,494.88        $ 2,649,972.56      $ 1,843,540.24         10.84%     
Delta 1997-3 Group II    14,151,241.92        13,411,544.30            749,995.59          739,697.62         13.03%     
Delta 1997-4 Group I    143,146,567.67       139,570,456.47          3,578,664.19        3,576,111.20         10.52%     
Delta 1997-4 Group II    17,341,739.83        16,491,755.64            849,984.19          849,984.19         12.95%     
Delta 1998-1 Group I    164,615,233.69       155,375,233.69          9,240,000.00        9,240,000.00         10.25%     
Delta 1998-1 Group II    20,748,771.69        19,343,282.94          1,167,118.41        1,405,488.75         12.95%     
Delta 1998-2 Group I    218,100,072.25       213,281,694.98          5,040,000.00        4,818,377.27         10.04%     
Delta 1998-2 Group II    23,660,697.03        22,998,341.72            850,000.00          662,355.31         13.13%     
Delta 1999-2            316,794,931.50       311,964,931.50          4,830,000.00        4,830,000.00          9.91%     
Modified Wrap                                                                                                            
Delta 1998-4           $267,374,970.72      $261,374,970.72        $ 6,000,000.00      $ 6,000,000.00          9.97%     
Delta 1999-1            261,297,268.29       255,297,268.29          6,000,000.00        6,000,000.00         10.19%     
Delta 2000-1            222,592,531.79       219,357,789.47          4,625,000.00        3,234,742.33         10.85%     
Delta 2000-2            248,218,279.27       245,613,733.64          4,537,500.00        2,604,545.63         11.00%     
Delta 2000-3            188,516,111.05       187,317,280.94          4,500,044.45        1,198,830.11         11.74%     
Delta 2000-4            112,138,586.06       111,502,606.09          2,587,489.12          635,979.97         12.32%     


                           Current                                                                                       
                         Certificate                                                                                     
                          Weighted                                                                                       
Structure/Deal             Average         Servicer      Public/                                                         
  --------------       Coupon (WAC)(4)     --------     Private(5)                                                       
                       ---------------                  ----------                                                       
                                                                                                                         
Bond Insured                                                                                                             
Delta 1994-2                8.31%           Ocwen        Private                                                         
Delta 1995-1                8.62%           Ocwen        Private                                                         
Delta 1995-2                8.30%           Ocwen         Public                                                         
Delta 1998-3 Group I        6.84%           Ocwen         Public                                                         
Delta 1998-3 Group II       5.81%           Ocwen         Public                                                         
Senior-sub                                                                                                               
Delta 1997-3 Group I        7.11%           Ocwen         Public                                                         
Delta 1997-3 Group II       5.67%           Ocwen         Public                                                         
Delta 1997-4 Group I        6.89%           Ocwen         Public                                                         
Delta 1997-4 Group II       5.77%           Ocwen         Public                                                         
Delta 1998-1 Group I        6.36%           Ocwen         Public                                                         
Delta 1998-1 Group II       5.83%           Ocwen         Public                                                         
Delta 1998-2 Group I        7.89%           Ocwen         Public                                                         
Delta 1998-2 Group II       5.64%           Ocwen         Public                                                         
Delta 1999-2                7.80%           Ocwen         Public                                                         
Modified Wrap                                                                                                            
Delta 1998-4                7.74%           Ocwen         Public                                                         
Delta 1999-1                7.44%           Ocwen         Public                                                         
Delta 2000-1                8.99%           Ocwen         Public                                                         
Delta 2000-2                9.52%        Countrywide      Public                                                         
Delta 2000-3               10.02%        Countrywide      Public                                                         
Delta 2000-4                9.80%        Countrywide      Public                                                         

(1) Target OC is the required level of overcollateralization for the related    
  securitization trust. Once the target overcollateralization level has been
  reached, any excess cashflow will be paid out to the holders of the excess
cashflow certificate.                                                   
(2) Actual OC is the actual or current level of overcollateralization for the   
related securitization trust.                                           
(3) Mortgage WAC is the weighted average interest rate, or coupon, of the       
applicable mortgage loans in the related securitization trust.          
(4) Certificate WAC is the weighted average pass-through rate of the series of  
   pass-through certificates issued by the related securitization trust to the
public.                                                                 
(5) For public transactions, you may obtain copies of the underlying            
transaction documents for the securitization, or of the prospectus which
describes the asset-backed securities issued in the securitization      
transaction. Please refer to page B for the applicable SEC file numbers.

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  We have attached to this prospectus as Exhibits A through V the Statement of
Certificateholders furnished by the trustee of each securitization trust for    
the distribution date in either March or April for each underlying              
securitization. Each statement is comprised of multiple schedules which         
provide information about, among other things,                                  

o payments made to the holders of the related series of pass-through      
certificates on that distribution date,                               

o the stratification of the related mortgage pool by various              
characteristics,                                                      

o credit enhancement levels, and                                          

o the delinquency and loss experience of the related mortgage pool.       

We encourage you to review carefully the related exhibits for information 
about the excess cashflow certificates. We have not prepared the information    
included in the exhibits. We have not verified any of the information included  
in these exhibits, nor do we make any representation as to the accuracy of the  
information.                                                                    

A Net Interest Margin Owner Trust Certificate                                 

  A net interest margin owner trust certificate is generated in a net interest
margin transaction, whereby several excess cashflow certificates are sold to a  
Delaware business trust and that trust then issues and sells notes to           
investors. The notes issued by the trust are secured by a pledge of, and        
payments due on the notes are made from the cashflows received from, those      
excess cashflow certificates. Amounts received on those pledged excess          
cashflow certificates are applied to pay:                                       

o first, the administrative expenses of the transaction,                  

o second, interest on the notes,                                          

o third, principal of the notes until the notes are paid in full, and     

o fourth, the holder of the owner trust certificate which evidences the   
ownership interest in the Delaware business trust.                    

 In November 2000, we securitized the following excess cashflow certificates
from six securitization trusts in a net interest margin transaction: 1997-3,    
1997-4, 1998-1, 1998-3, 1998-4, and 1999-1. Delta Funding NIM Trust 2000-1,     
the issuer of the notes, issued and sold $30 million of notes to investors.     
The notes bear interest at 12.5% per annum and are rated "BB-" by Fitch. The    
net interest margin owner trust certificate evidences an over-75% subordinated  
interest in the net interest margin trust. Once the net interest margin         
securityholders are paid in full, the net interest margin trust will be         
dissolved and the net interest margin owner trust certificate will be           
cancelled. At such time, Delta Funding Residual Exchange, LLC will become the   
holder of the excess cashflow certificates underlying the cancelled net margin  
owner trust certificate, and all cashflow on these excess cashflow              
certificates will be paid to Delta Funding Residual Exchange Company, LLC.      

We determined the fair value of the net interest margin owner trust       
certificate based on the fair value of the underlying pledged excess cashflow   
certificates. We calculated the fair value of the pledged excess cashflow       
certificates in the same manner as we calculated the fair value of the other    
excess cashflow certificates being transferred to Delta Funding Residual        
Exchange Company, LLC. We calculated the fair value at March 31, 2001 of the    
net interest margin certificate to be $79 million.                              

Based upon our gain-on-sale assumptions at March 31, 2001, we project that
the net interest margin security holders will be paid in full in or about       
April 2002. However, we can give no assurance that the net interest margin      
security holders will be paid in full at such time.                             

Non-Performing Owner Trust Certificate                                        

  In February 2000, Delta Funding Non-Performing Loan Trust 2000-1, as issuer,
issued $3 million of 9.50% Delta Funding Non-Performing Loan Trust Notes,       
Series 2000-1, or the non-performing loan trust notes, pursuant to an           
indenture, dated as of February 11, 2000, between the issuer and Wells Fargo    
Bank                                                                            

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Minnesota, National Association, as indenture trustee. The issuer is a          
Delaware business trust formed pursuant to an amended and restated trust        
agreement, dated February 11, 2000, between Delta Funding Corporation, as       
depositor, and Wilmington Trust Company, as owner trustee. The trust is not a   
REMIC for tax purposes. The structure of this transaction is similar to that    
of the net interest margin transaction. The non-performing loan trust notes     
are secured by, and payable from, the cashflow from a pool of non-performing    
mortgage loans sold to the issuer by Delta Funding Corporation pursuant to a    
sale agreement, dated as of February 11, 2000, among Delta Funding              
Corporation, the issuer, the indenture trustee and Clayton National, Inc., as   
servicer. The servicer is servicing the mortgage loans on behalf of the issuer  
and the noteholders. DF Special Holdings Corporation, our subsidiary, owns one  
hundred percent of the owner trust certificates representing the non-           
performing loan receivables issued by the issuer and is entitled to any         
cashflow and other assets remaining after the non-performing loan trust notes   
have been paid in full. The notes were not rated by any rating agency.          

 We determined the value of the non-performing owner trust certificate based
on an analysis similar to the analysis we used to value the excess cashflow     
certificates described above.                                                   

DESCRIPTION OF DELTA FUNDING RESIDUAL 
EXCHANGE COMPANY, LLC MEMBERSHIP INTERESTS

 As of the date of this prospectus, Delta Funding Residual Exchange Company,
LLC is authorized to issue 150,002 interests, to be allocated in the following  
manner: 150,000 Class A voting membership interests, one Class B non-voting     
membership interest, and one Class C non-voting membership interest. The        
voting membership interests will be owned initially by the holders of the       
notes who successfully tender their notes in the exchange offer. The Class B    
non-voting membership interest will be owned by Delta Funding Residual          
Management, Inc. and the Class C non-voting membership interest will be owned   
by us.                                                                          

Restrictions On Transfer                                                        

  The membership interests of Delta Funding Residual Exchange Company, LLC may
be assigned only under the following conditions:                                

o the assignee is a qualified institutional buyer as defined under Rule   
144A promulgated under the Securities Act who also is a qualified     
  purchaser as defined under Section 2(a)(51)(a) of the Investment Company
Act;                                                                  

 o the assignee agrees in writing to be bound by the terms and conditions of
   Delta Funding Residual Exchange Company, LLC's operating agreement or any
other document acceptable to the managing member;                     

o the holder of the membership of Delta Funding Residual Exchange Company,
LLC interest also assigns a corresponding pro rata number of shares of
  the common stock of Delta Funding Residual Management, Inc. owned by the
holder to the assignee;                                               

o the assignor furnishes evidence to the managing member that (1) the     
    assignment would not affect Delta Funding Residual Exchange Company, LLC's
existence or qualification as a limited liability company under the   
Delaware Limited Liability Company Act or any other law or regulation 
    applicable to Delta Funding Residual Exchange Company, LLC and (2) (a) the
assignment would not jeopardize the classification of Delta Funding   
Residual Exchange Company, LLC as a partnership for federal income tax
    consequences or (b) otherwise have an adverse effect on federal income tax
     consequences on Delta Funding Residual Exchange Company, LLC or any member;

o in the opinion of the assignor's counsel, the assignment would not (1)  
subject Delta Funding Residual Exchange Company, LLC or its members to
any additional regulatory requirements, (2) result in the violation of
any law or regulation that is or might be applicable to Delta Funding 
Residual Exchange Company, LLC or its members, or (3) otherwise       
 materially and adversely affect the interests of Delta Funding Residual
Exchange Company, LLC and its members, as such; and                   

o the assignee executes and delivers a counterpart to Delta Funding       
Residual Exchange Company, LLC's operating agreement.                 

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The Class B non-voting membership interest may not be assigned to any     
person, in whole or in part. However, the holders of a majority of the Class A  
voting membership interests may require the holder of the Class B non-voting    
membership interest to assign all of its interest to another person, who will   
then become the managing member, subject to the limitations set forth in Delta  
Funding Residual Exchange Company, LLC's operating agreement. We may not        
assign the Class C non-voting membership interest.                              

Withdrawal                                                                      

 No member may withdraw as a member, be required to withdraw as a member, be
required to withdraw its membership interest, or borrow or withdraw any         
portion of its capital contribution or capital account of Delta Funding         
Residual Exchange Company, LLC.                                                 

Voting Rights                                                                   

The holders of the Class A voting membership interests are entitled to one
vote per membership interest on all matters submitted to a vote of members.     
The holders of the Class B and Class C non-voting membership interests are not  
entitled to vote.                                                               

Rights Upon Liquidation                                                         

In the event of a dissolution of Delta Funding Residual Exchange Company, 
LLC and the liquidation of its assets and properties, there will be a final     
allocation and distribution. Proceeds from the liquidation will be applied in   
the following order and priority:                                               

o first, to the setting up of a reserve for our New York State Banking    
Department settlement and any other reserves that may be deemed       
reasonably necessary for any contingent liabilities or obligations of 
Delta Funding Residual Exchange Company, LLC,                         

 o second, for the payment of Delta Funding Residual Exchange Company, LLC's
   liabilities and obligations to its creditors who are not members of Delta
Funding Residual Exchange Company, LLC,                               

o third, for the payment of the Delta Funding Residual Exchange Company,  
LLC's liabilities and obligations to its creditors who are members of 
Delta Funding Residual Exchange Company, LLC                          

o fourth, to us an amount between ten and fifteen percent of the net after
tax cashflow of Delta Funding Residual Exchange Company, LLC, and     

o finally, the balance will be paid to the members pro rata in accordance 
with their balances in their capital accounts.                        

DESCRIPTION OF DELTA FUNDING RESIDUAL MANAGEMENT, INC.

Delta Funding Residual Management, Inc. is a newly formed Delaware limited
purpose corporation that was organized by Delta Funding Residual Exchange       
Company, LLC. Initially, Delta Funding Residual Exchange Company, LLC will      
hold all the common stock of Delta Funding Residual Management, Inc., par       
value $.01 per share. Upon consummation of the exchange offer, Delta Funding    
Residual Exchange Company, LLC will distribute the shares of common stock of    
Delta Funding Residual Management, Inc. to the noteholders who participated in  
the exchange offer.                                                             

 Delta Funding Residual Management, Inc. will engage solely in the following
activities:                                                                     

o manage the assets of Delta Funding Residual Exchange Company, LLC; and  

o engage in only those other activities necessary, advisable or incidental
to accomplishing the purposes set forth above.                        

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In addition to its limited purpose, and in order to preserve its separate 
and distinct identity, Delta Funding Residual Management, Inc. will not own     
any assets other than those necessary for it to carry out its purpose and, at   
all times conducting its affairs, shall:                                        

o maintain its books and records separate from any other person or entity;

o maintain its bank accounts separate from any other person or entity;    

o not commingle its assets with those of any other person or entity and   
hold all of its assets in its own name;                               

o conduct its own business in its own name;                               

o maintain separate financial statements, showing its assets and          
  liabilities separate and apart from those of any other person or entity;

 o file its tax returns separate from those of any other entity and not file
a consolidated tax return with any other entity;                      

o pay its own liabilities and expenses only out of its own funds;         

o observe all corporate and other organizational formalities;             

o maintain an arm's length relationship with its affiliates and enter into
transactions with affiliates only on a commercially reasonable basis; 

o not incur any indebtedness other than in the ordinary course of its     
business;                                                             

o not guarantee or become obligated for the debts of any other person or  
entity;                                                               

o not hold out its credit as being available to satisfy the obligations of
any other person or entity;                                           

o allocate fairly and on terms which are commercially reasonable any      
   overhead expenses that are shared with an affiliate, including paying for
office space and services performed by any employee of an affiliate;  

o use separate stationery, invoices and checks bearing its own name;      

o not pledge its assets for the benefit of any other person or entity to  
secure any of its debt obligations;                                   

o hold itself out as a separate entity;                                   

o correct any known misunderstanding regarding its separate identity;     

o not identify itself as a division of any other person or entity;        

o maintain adequate capital in light of its contemplated business         
operations; and                                                       

o not form, or caused to be formed, any subsidiaries.                     

Delta Funding Residual Management, Inc. will hold a non-voting membership 
interest in Delta Funding Residual Exchange Company, LLC. Through their         
ownership of Delta Funding Residual Management, Inc. common stock, the          
noteholders will have an additional indirect non-voting membership interest in  
Delta Funding Residual Exchange Company, LLC.                                   

Delta Funding Residual Management, Inc. shall at all times be required to 
have at least one independent director. A director shall be independent so      
long as he or she is not, and never was,                                        

o a stockholder, customer or supplier of, or any person that has received 
any benefit (excluding, however, any compensation received by the     
 director in such individual's capacity as such an independent director)
  in any form whatsoever from, or any person that has provided any service
(excluding, however, any service provided by the director, in such    
person's capacity as such a director) in any form whatsoever to, Delta
   Funding Residual Management, Inc. or any of its affiliates or associates;
or                                                                    

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o a director, officer, employee, affiliate or associate of Delta Funding  
   Residual Exchange Company, LLC or any of its affiliates (other than Delta
Funding Residual Management, Inc.) or associates; or                  

o a person related to any person referred to in the two clauses above; and
is not a trustee, conservator or receiver for Delta Funding Residual  
 Exchange Company, LLC or any of its affiliates, provided, however, that
any person who serves as an independent director for any of our       
   affiliates which affiliates are special purpose entities, may serve as an
independent director of Delta Funding Residual Management, Inc. No    
director serving in the capacity of an independent director may be    
 removed unless his or her successor (who shall satisfy the requirements
set forth above) has first been elected to the board of directors;    
 provided, however, that in the event of the resignation or the death or
incapacity of an independent director, the board of directors shall   
promptly appoint a replacement independent director and the board of  
directors shall not vote on any matter requiring the vote of the      
 independent director unless and until at least one independent director
has been duly appointed to serve on the board.                        

DESCRIPTION OF DELTA FUNDING RESIDUAL 
MANAGEMENT, INC. COMMON STOCK 

As of the date of this prospectus, Delta Funding Residual Management, Inc.
is authorized to issue up to 150,000 shares of common stock, par value $.01,    
none of which are outstanding.                                                  

  Shares of common stock issued in connection with this exchange offer will be
fully paid and nonassessable. The holders of the common stock will not be       
entitled to preemptive or redemption rights. Shares of the common stock are     
not convertible into shares of any other class of capital stock. Mellon         
Shareholder Services LLC is the transfer agent and registrar for the common     
stock.                                                                          

Delta Funding Residual Management, Inc. is a Delaware corporation and is  
subject to Section 203 of the Delaware General Corporation Law. In general,     
Section 203 prevents an interested stockholder (defined generally as a person   
owning fifteen percent or more of Delta Funding Residual Management, Inc.'s     
outstanding voting stock) from engaging in a business combination with Delta    
Funding Residual Management, Inc. for three years following the date that       
person became an interested stockholder unless:                                 

o before that person became an interested stockholder, the board of       
directors of Delta Funding Residual Management, Inc. approved the     
transaction in which the interested stockholder became an interested  
stockholder or approved the business combination;                     

o upon completion of the transaction that resulted in the interested      
stockholder becoming an interested stockholder, the interested        
stockholder owned at least eighty-five percent of the voting stock of 
Delta Funding Residual Management, Inc. outstanding at the time the   
transaction commenced (excluding stock held by persons who are both   
 directors and officers of Delta Funding Residual Management, Inc. or by
certain employee stock plans); or                                     

o on or following the date on which that person became an interested      
stockholder, the business combination is approved by Delta Funding    
Residual Management, Inc.'s board of directors and authorized at a    
   meeting of stockholders by the affirmative vote of the holders of a least
66 2/3% of the outstanding voting stock of Delta Funding Residual     
 Management, Inc. (excluding shares held by the interested stockholder).

 A business combination includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder.                 

Dividends                                                                       

Delta Funding Residual Management, Inc. does not intend to declare any    
dividends.                                                                      

Voting Rights                                                                   

The holders of the common stock are entitled to one vote per share on all 
matters submitted to a vote of stockholders.                                    

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Rights Upon Liquidation                                                         

In the event of Delta Funding Residual Management, Inc.'s voluntary or    
involuntary liquidation, dissolution, or winding up, the holders of Delta       
Funding Residual Management, Inc.'s common stock will be entitled to share      
equally in any assets available for distribution after the payment in full of   
all debts and distributions and after the holders of all series of outstanding  
preferred stock, if any, have received their liquidation preferences in full.   

COMPARISON OF RIGHTS OF HOLDERS OF THE NOTES AND OUR
PREFERRED STOCK, THE MEMBERSHIP INTERESTS OF
DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC AND THE
COMMON STOCK OF DELTA FUNDING RESIDUAL MANAGEMENT, INC. 

This section of the prospectus describes certain differences between the  
rights of holders of the notes and holders of our preferred stock, Delta        
Funding Residual Exchange Company, LLC's membership interest and Delta Funding  
Residual Management, Inc.'s common stock. While we believe that the             
description covers the material differences between the two, this summary may   
not contain all of the information that is important to you. You should         
carefully read this entire document and the other documents we refer to for a   
more complete understanding of the differences between being a holder of notes  
and being a holder of our preferred stock, membership interests of Delta        
Funding Residual Exchange Company, LLC and the common stock of Delta Funding    
Residual Management, Inc.                                                       

  Our preferred stock, membership interests of Delta Funding Residual Exchange
Company, LLC, and the common stock of Delta Funding Residual Management, Inc.   
differ from the notes in the following material ways:                           

Governing Document                                                        

As a holder of notes, your rights currently are set forth in, and you may 
enforce your rights under, the notes indentures. After completion of the        
exchange offer, you will become a holder of our preferred stock, Delta Funding  
Residual Exchange Company, LLC interests, and the common stock. Your rights     
will be governed by the certificate of designations for our preferred stock,    
the Delta Funding Residual Exchange Company, LLC's operating agreement, and     
Delta Funding Residual Management, Inc.'s charter documents, respectively.      

Voting Rights                                                             

o holders of the preferred stock will have voting rights with respect to  
  all matters on which holders of our preferred stock are entitled to vote
in accordance with our certificate of designations;                   

o holders of the membership interests will have voting rights with respect
to all matters on which members of Delta Funding Residual Exchange    
Company, LLC are entitled to vote, in accordance with its operating   
agreement;                                                            

o holders of the shares of common stock will have voting rights with      
  respect to all matters on which the common stockholders of Delta Funding
Residual Management, Inc. are entitled to vote, in accordance with its
charter documents; and                                                

o the noteholders have no voting rights.                                  

Collateral                                                                

o the senior secured notes are secured by a pledge of all of the capital  
stock of seven of our direct and indirect subsidiaries and a first    
   priority lien on the beneficial interests of two Delaware business trusts
that hold mortgage-related securities, including the excess cashflow  
certificates and the net interest margin owner trust certificate; by  
 contrast, the preferred stock, the membership interests, and the shares
of common stock are not "secured" or "collateralized" by any assets.  

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Equity compared to Debt                                                   

o the holders of senior secured notes are our creditors. If the holders of
the senior secured notes were to force a liquidation of the collateral
securing their notes and the liquidation proceeds were insufficient to
  pay the amounts owing under the senior secured notes, the holders of the
senior secured notes would have recourse against us. The membership   
 interests, the shares of preferred stock, and the common shares, on the
   other hand, represent equity interests in Delta Funding Residual Exchange
Company, LLC, Delta Financial Corporation, and Delta Funding Residual 
   Management, Inc., respectively. Furthermore, the membership interests and
shares of common stock are not our obligations.                       

Payments                                                                  

 o after the exchange, you will not receive regular payments and you may not
receive a return of your principal amount;                            

o it will be difficult to predict the timing and amount of any            
distributions made by Delta Funding Residual Exchange Company, LLC;   

o the holders of the notes were entitled to receive interest and principal
 payments on the notes; whereas, the holders of our preferred stock will
   be entitled to receive dividends, the holders of the membership interests
will be entitled to receive distributions from Delta Funding Residual 
Exchange Company, LLC, following the payment by Delta Funding Residual
Exchange Company, LLC of its expenses and fees, representing a        
 proportionate share of the cashflow, if any, generated by the assets of
  Delta Funding Residual Exchange Company, LLC, having an initial value as
of March 31, 2001 of $152.8 million; and                              

 o we will receive certain amounts from the assets of Delta Funding Residual
  Exchange Company, LLC prior to the payment of any amounts to the holders
of the membership interests;                                          

Rank                                                                      

o the senior secured notes are secured by the mortgage-related securities 
and are senior to other indebtedness only to the extent of their      
collateral;                                                           

 o the senior notes are not secured by any collateral and are on parity with
all other unsecured indebtedness;                                     

o holders of the membership interest are entitled to payment under the    
  operating agreement only after certain expenses and priority payments to
us are paid;                                                          

o we may, under certain circumstances issue additional shares of preferred
stock which will rank on parity with or senior to, the preferred stock
being issued to the noteholders in the exchange offer; and            

o the shares of common stock of Delta Funding Residual Management, Inc.   
will not receive any dividends.                                       

Restrictive Covenants                                                     

o the note indentures have numerous restrictive covenants that prohibit us
from taking certain actions. For example, we are prohibited from      
incurring a significant amount of debt or merging with another entity 
without the consent of the noteholders. Generally, these covenants    
   benefit the noteholders because the covenants limit our ability to engage
 in these and other types of activities. The certificate of designations
 for the preferred stock, Delta Funding Residual Exchange Company, LLC's
operating agreement, and Delta Funding Residual Management, Inc.'s    
  charter documents contain few covenants in place. Delta Funding Residual
Exchange Company, LLC and Delta Funding Residual Management, Inc. both
 are special purpose entities. As such, they will be subject to numerous
restrictions, including prohibitions against incurring debt outside of
the ordinary course of business and merging with other entities;      

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Liquidation Preference                                                    

o the preferred stock will have an aggregate liquidation preference of $15
million and will pay a ten percent dividend semi-annually beginning on
July 1, 2003. The dividends on the preferred stock will be non-       
cumulative. If we fail to make five or more cash dividend payments the
holders of the preferred stock will have the right to appoint two     
directors to our board of directors. We have the right at any time to 
 redeem the preferred stock on a pro rata basis by paying to the holders
of the preferred stock the liquidation preference and all accrued     
interest at the time of redemption; and                               

o in the event of our bankruptcy, holders of our preferred stock will     
 receive their liquidation preference following any payments made to our
creditors, but prior to any payments made to other equity holders of  
junior securities.                                                    

Defaults                                                                  

o the note indentures contained numerous "Events of Default". For example,
 we would be in default under the indentures if we fail to pay principal
  and interest when due, file for protection under the bankruptcy code, or
dispose of the collateral. Whereas, there will be no such events of   
default under the terms of the preferred stock, Delta Funding Residual
Exchange Company, LLC's operating agreement or Delta Funding Residual 
Management, Inc.'s charter documents.                                 

FEDERAL AND STATE REGULATORY REQUIREMENTS 

  There are no federal or state regulatory requirements or approvals that must
be obtained in connection with this exchange.                                   

ERISA CONSIDERATIONS

Before authorizing an investment in our preferred stock, the membership   
interests of Delta Funding Residual Exchange Company, LLC, and the shares of    
common stock of Delta Funding Residual Management, Inc., fiduciaries of         
pension, profit-sharing or other employee benefit plans subject to ERISA        
should consider                                                                 

o the fiduciary standards under ERISA,                                    

o whether the investment satisfies the prudence and diversification       
 requirements of ERISA, including whether the investment is prudent, and

o whether such fiduciaries have the authority to make the investment under
the appropriate plan investment policies and governing instruments and
 under Title I of ERISA. Fiduciaries of an individual retirement account
  also should consider that the account may make only investments that are
authorized by the appropriate governing instrument.                   

  In addition, employee benefit plans or other retirement arrangements subject
to ERISA, as well as individual retirement accounts or certain types of Keogh   
plans not subject to ERISA but subject to Section 4975 of the Internal Revenue  
Code of 1986, as amended (as well as any entity whose underlying assets are     
deemed to be plan assets by reason of such plan, arrangement or account         
investing in such entity), each, a "Plan," should also consider (1)             
prohibitions in ERISA relating to improper delegation of control over, or       
responsibility for, "plan assets," (2) prohibitions in ERISA and in the Code    
relating to a Plan engaging in certain transactions involving "plan assets"     
with persons who are "parties in interest" under ERISA or "disqualified         
persons" under the Code with respect to the Plan, and (3) other provisions in   
ERISA dealing with plan assets.                                                 

These prohibited transaction provisions are complex and may prohibit an   
investment by Plans in our preferred stock, Delta Funding Residual Exchange     
Company, LLC membership interests, and the shares of common stock of Delta      
Funding Residual Management, Inc.                                               

ERISA and the Code do not define plan assets. The Department of Labor has 
published regulations relating to the definition of plan assets, pursuant to    
which the assets of an entity in which Plans acquire an equity interest would   
be deemed plan assets under certain circumstances. The regulation generally     
provides that when a Plan acquires an equity interest in an entity that is      
neither a "publicly-offered security" nor a                                     

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security issued by an investment company registered under the Investment        
Company Act, the Plan's assets include both the equity interest and an          
undivided interest in each of the underlying assets of the entity unless it is  
established that either the entity is an "operating company" or the equity      
participation in the entity by benefit plan investors is not "significant," in  
each case as defined in the Regulation.                                         

 We believe that we should be treated as an "operating company" for purposes
of the regulation and therefore an investment by Plans in our preferred stock   
will not cause our assets to be deemed plan assets of such Plans. However,      
neither Delta Funding Residual Exchange Company, LLC nor Delta Funding          
Residual Management, Inc. will qualify as an "operating company" under the      
Regulation.                                                                     

  For purposes of the Regulation, equity participation in an entity by benefit
plan investors is not significant if their aggregate interests are less than    
twenty-five percent of the value of any class of equity interests in the        
entity. Benefit plan investors, for these purposes, include Plans, and certain  
other types of plans, such as governmental plans, church plans and plans        
maintained outside of the United States primarily for the benefit of            
nonresident aliens, which are not ordinarily subject to Title I of ERISA.       

If the assets of Delta Funding Residual Exchange Company, LLC or Delta    
Funding Residual Management, Inc. were deemed to be plan assets of Plans that   
invest in the membership interests of Delta Funding Residual Exchange Company,  
LLC and shares of the common stock whether as a result of the application of    
the Regulation or otherwise, Title I of ERISA and Section 4975 of the Code      
would extend to investments made by the Plans. This would result, among other   
things, in (1) the application of the fiduciary standards of ERISA to           
investments made by the Plan, and (2) the possibility that certain              
transactions that Delta Funding Residual Exchange Company, LLC and Delta        
Funding Residual Management, Inc. might enter into in the ordinary course of    
their business and operation might constitute "prohibited transactions" under   
ERISA and the Code. A prohibited transaction, in addition to imposing           
potential personal liability upon fiduciaries with respect to Plans, may also   
result in the imposition of an excise tax under the Code upon a party in        
interest or disqualified person with respect to a Plan. In addition, the        
mortgage-related securities, including the net interest margin owner trust      
certificate, have existing transfer restrictions applicable to them which       
prohibit them being beneficially owned directly or indirectly by Plans. As a    
result, if the assets of Delta Funding Residual Exchange Company, LLC were      
deemed to be plan assets this could prevent the transfer of these securities    
to Delta Funding Residual Exchange Company, LLC, and could cause the Plans      
holding the membership interests of Delta Funding Residual Exchange Company,    
LLC to be deemed to have engaged in prohibited transactions with respect to     
the securitization trusts issuing such securities.                              

  The membership interests of Delta Funding Residual Exchange Company, LLC and
the shares of common stock will most likely be deemed "equity interests" for    
purposes of the Regulation. Therefore, if equity participation in Delta         
Funding Residual Exchange Company, LLC and Delta Funding Residual Management,   
Inc. by benefit plan investors is "significant" within the meaning of the       
Regulation, their assets could be deemed to be assets of investing Plans with   
the possible consequences just discussed. Accordingly, the manager of Delta     
Funding Residual Exchange Company, LLC will use its reasonable best efforts to  
adopt procedures in order to determine whether or not equity participation by   
or on behalf of benefit plan investors in Delta Funding Residual Exchange       
Company, LLC and Delta Funding Residual Management, Inc. will be significant.   

 In order to determine whether equity participation in Delta Funding Residal
Exchange Company, LLC and Delta Funding Residual Management Inc. by benefit     
plan investors is less than twenty-five percent after consummation of the       
exchange offer, each investor acquiring membership interests of Delta Funding   
Residual Exchange Company, LLC and the shares of common stock of Delta Funding  
Residual Management, Inc. will be required to represent whether or not it is a  
"benefit plan investor" within the meaning of the Regulation. Without limiting  
the generality of the foregoing, to the extent that the investor is an          
insurance company acting on behalf of its general account, such investor must   
represent that, as of the date it acquires its membership interests and shares  
of common stock and for so long as it holds such membership interests and       
common stock, the assets of such general account (as determined in accordance   
with the methodology set forth in PTE 95-60) that constitute plan assets for    
purposes of Title I of ERISA and Section 4975 of the Code will not exceed a     
specified percentage represented by the investor in the subscription booklet.   

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  If we determine that equity participation in Delta Funding Residual Exchange
Company, LLC and Delta Funding Residual Management, Inc. by Plans               
participating in this exchange offer is significant or we are unable to         
determine that it is not significant, we intend to apply to the U.S.            
Department of Labor for a prohibited transaction exemption which will allow     
Plans to acquire the membership interests and the shares of common stock.       
Although, the Department of Labor's granting such an exemption is not           
guaranteed, we believe that one would be attainable if necessary based on       
informal discussions we have had with representatives of the Department. To     
the extent that we determine after consummation of the exchange offer the       
equity participation by benefit plan investors is not significant, the Delta    
Funding Residual Exchange LLC's operating agreement will provide that no        
membership interests or shares of common stock may be transferred to a Plan     
investor if such transfer would result in benefit plan investor participation   
being significant.                                                              

Potential employee benefit plan investors should consult with their       
respective counsel regarding the consequences under ERISA, the Code or other    
similar statutes of their acquisition and ownership of our preferred stock,     
the membership interests and shares of the common stock.                        

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES 
OF THE EXCHANGE OFFER 

Holders of the notes are urged to consult their tax advisors as to the    
specific tax consequences to them of the transactions we describe in this       
prospectus, including the applicable federal, state, local and foreign tax      
consequences of such transactions in their particular circumstances.            

  The following discussion under the heading "United States Federal Income Tax
Consequences of the Exchange Offer" discusses the material federal income tax   
issues of the noteholders that are not subject to special tax treatment under   
the Code. The statements contained in this section are, to the extent we have   
noted in this section, the opinion of Stroock & Stroock & Lavan LLP. Their      
opinion, and this discussion, is based upon existing statutes, as well as       
judicial and administrative interpretations thereof, all of which are subject to
change, including changes which may be retroactive. Moreover, substantial       
uncertainties exist with respect to various federal income tax consequences of  
the exchange offer. We will not request a ruling from the Internal Revenue      
Service on any tax issue connected with the exchange offer. Accordingly, we can 
give no assurance that the IRS will not challenge any of the tax positions      
described herein or that, if made, such a challenge will not be successful.     

The discussion below does not address the foreign, state or local tax     
consequences of the exchange offer, nor does it specifically address the tax    
consequences to taxpayers subject to special treatment under the federal        
income tax laws (including dealers in securities or currencies, pass-through    
entities, life insurance companies, tax-exempt organizations, financial         
institutions, regulated investment companies, taxpayers subject to the          
alternative minimum tax, persons that hold the notes as part of an integrated   
investment (including a "straddle") consisting of the notes and one or more     
other positions, foreign corporations, foreign partnerships, foreign trusts,    
foreign estates, persons who, for federal income tax purposes, are not          
citizens or residents of the United States, or persons whose functional         
currency is other than the United States dollar).                               

The discussion below assumes the notes, the membership interests of Delta 
Funding Residual Exchange Company, LLC, the shares of common stock of Delta     
Funding Residual Management, Inc. and the newly issued shares of our preferred  
stock are or will be held as capital assets within the meaning of Section 1221  
of the Internal Revenue Code of 1986, as amended.                               

Tax Consequences of the Exchange Offer                                          

In the exchange offer, (1) the noteholders will transfer their tendered   
notes to Delta Funding Residual Exchange Company, LLC in exchange for voting    
membership interests, (2) Delta Funding Residual Exchange Company, LLC will     
transfer the tendered notes to us and receive in return:                        

o the excess cashflow certificates now held by Delta Funding Residual     
Holding Trust 2000-1 and Delta Funding Residual Holding Trust 2000-2; 

o a net interest margin owner trust certificate now held by Delta Funding 
Residual Holding Trust 2000-1;                                        

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 o all cash and other property generated by the excess cash certificates and
net interest margin owner trust certificate held by Delta Residual    
  Holding Trust 2000-1 and Delta Residual Holding Trust 2000-2 at the time
of the consummation of the exchange offer;                            

o the owner trust certificate representing ownership in Delta Funding Non-
Performing Loan Trust 2000-1, a business trust owning certain non-    
performing loan receivables; and                                      

o shares of our preferred stock,                                          

and (3) Delta Funding Residual Exchange Company, LLC will distribute to the     
holders of its voting membership interests (i.e., former noteholders) the       
shares of common stock of Delta Funding Residual Management, Inc. and the       
shares of our preferred stock received in the exchange offer.                   

Consistent in form with the terms of the exchange offer, and under general
United States federal income tax principles, the transaction described in (1)   
above should be characterized for United States federal income tax purposes as  
a tax-free contribution of one hundred percent of the notes by the holders of   
the notes to Delta Funding Residual Exchange Company, LLC in exchange for       
Delta Funding Residual Exchange Company, LLC membership interests. As such, a   
noteholder will not recognize any gain or loss on the contribution of the       
notes in exchange for Delta Funding Residual Exchange Company, LLC's            
membership interests, will receive an initial tax basis in the membership       
interests equal to the holder's adjusted tax basis in the notes surrendered     
and a holding period in the membership interests that includes the holder's     
holding period in the notes. The adjusted tax basis of a note to a particular   
holder will equal the holder's cost for the note, increased by any original     
issue discount, market discount and gain previously included by such holder in  
income with respect to the note and decreased by the amount of bond premium     
(if any) previously amortized and by the amount of principal payments           
previously received by such holder with respect to the note.                    

  In (2) above, Delta Funding Residual Exchange Company, LLC will exchange the
tendered notes for shares of our preferred stock and certain mortgage-related   
securities. We believe that under general United States federal income tax      
principles, these transactions should be characterized as an exchange of the    
notes for shares of our preferred stock and other assets. In certain            
circumstances, a transaction which includes the exchange of notes of a          
corporation for preferred stock of the same corporation qualifies for special   
tax treatment as a recapitalization. Accordingly, the United States federal     
income tax consequences of these transactions to Delta Funding Residual         
Exchange Company, LLC will depend on whether the exchange of the notes for our  
preferred stock and other assets, pursuant to the exchange offer, constitutes   
a recapitalization within the meaning of the Code.                              

Whether the exchange of the notes for our preferred stock and other assets
constitutes a recapitalization will depend on whether the notes qualify as      
"securities" for United States federal income tax purposes. The term            
"securities" is not defined in the Code or the applicable Treasury              
regulations. Whether a debt instrument qualifies as a security is a question    
of fact and depends upon an overall evaluation of the nature of the debt        
instrument. The term of a debt instrument is usually the most significant       
factor in determining whether it qualifies as a security. Generally, a debt     
instrument with a term of ten years or more is treated as a security. Debt      
instruments with maturities ranging between five and ten years are often held   
to be securities. Debt instruments with a five year term or less rarely         
qualify as securities.                                                          

 The notes initially were issued with a term of seven years. Thus, given the
nature and term of the notes, including the fact that the notes were issued to  
the public and secured by collateral, we believe that the notes should qualify  
as securities and that the exchange of the notes for our preferred stock and    
other assets should constitute a recapitalization. However, because the notes   
were issued with a term of less than ten years and were the subject of an       
exchange offer in December 2000, Stroock & Stroock & Lavan LLP is unable to     
provide us with an opinion on this matter. Assuming we are correct, Delta       
Funding Residual Exchange Company, LLC will recognize gain (but not loss) in    
an amount equal to the lesser of (a) the sum of the cash and the fair market    
value of our preferred stock and other assets received pursuant to the          
exchange offer (other than any cash, preferred stock or other assets that are   
attributable to accrued but unpaid interest as described below), less Delta     
Funding Residual Exchange Company, LLC's adjusted tax basis in the notes and    
(b) the sum of the cash and fair market value of the other assets (other than   
any cash or other assets that are                                               

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attributable to accrued but unpaid interest) received pursuant to the exchange  
offer. Any such gain will be allocated to the holders of Delta Funding          
Residual Exchange Company, LLC's membership interests that surrendered notes    
with a fair market value in excess of basis in accordance with Section 704(c)   
of the Code. Delta Funding Residual Exchange Company, LLC's adjusted tax basis  
in the notes will equal the aggregate adjusted tax basis of the notes in the    
hands of the former holders of the notes at the time of the exchange.           

Generally, any gain recognized by Delta Funding Residual Exchange Company,
LLC pursuant to the exchange offer will be capital gain unless the notes have   
accrued market discount, in which case, such gain will be taxable as ordinary   
income to the extent of such accrued market discount. If the gain or loss is    
capital gain or loss, such gain or loss will be long-term capital gain or loss  
if, and to the extent, the former holders of the notes had held the notes for   
more than one year. In addition, Delta Funding Residual Exchange Company,       
LLC's aggregate tax basis in the preferred stock generally will equal Delta     
Funding Residual Exchange Company, LLC's adjusted tax basis in the notes        
surrendered, increased by the amount of capital gain recognized in the          
exchange and reduced by the sum of the amount of cash and the fair market       
value of the other assets received in the exchange. Delta Funding Residual      
Exchange Company, LLC's aggregate tax basis in the other assets will equal the  
aggregate fair market value of such assets. Delta Funding Residual Exchange     
Company, LLC's holding period of the preferred stock will include the former    
noteholders' holding period in the notes. However, Delta Funding Residual       
Exchange Company, LLC's holding period in the preferred stock will not be       
uniform to the extent the former holders of the notes did not all have the      
same holding period in their notes. The holding period of the other assets      
will begin the day after the exchange offer is consummated.                     

  If the exchange fails to qualify as a recapitalization because the notes are
not securities for United States federal income tax purposes, Delta Funding     
Residual Exchange Company, LLC would be required to recognize capital gain or   
loss (except Delta Funding Residual Exchange Company, LLC would be required to  
recognize ordinary income to the extent of any accrued market discount) in an   
amount equal to the difference between (a) the sum of the cash and the fair     
market value of the preferred stock and other assets received in the exchange   
and (b) Delta Funding Residual Exchange Company, LLC's adjusted tax basis in    
the notes and allocate such gain or loss in accordance with Section 704(c) of   
the Code. Any such capital gain or loss would be long-term capital gain or      
loss if, and to the extent, the former holders of the notes had held the notes  
for more than one year at the time of the exchange. Delta Funding Residual      
Exchange Company, LLC's tax basis in the preferred stock and the other assets   
would equal the fair market value of the preferred stock and other assets,      
respectively, and the holder's holding period for the preferred stock and       
other assets would begin on the day following the day of the exchange.          

A portion of the consideration received by Delta Funding Residual Exchange
Company, LLC in exchange for the notes may be attributable to accrued but       
unpaid interest. Such portion will result in ordinary income to Delta Funding   
Residual Exchange Company, LLC.                                                 

The remaining discussion assumes that the exchange of notes for our       
preferred stock and other assets will constitute a recapitalization for United  
States federal income tax purposes.                                             

Following the exchange, Delta Funding Residual Exchange Company, LLC will 
distribute to the holders of the voting membership interests of Delta Funding   
Residual Exchange Company, LLC (i.e., former noteholders) the shares of common  
stock of Delta Funding Residual Management, Inc. and the shares of our          
preferred stock received in the exchange. We believe that this distribution     
should be governed by Section 731 of the Code. Assuming we are correct,         
neither the holders of the voting membership interests nor Delta Funding        
Residual Exchange Company, LLC will recognize any gain as a result of the       
distribution. Rather, each holder of a voting membership interest will reduce   
the basis in its Delta Funding Residual Exchange Company, LLC's membership      
interest by an amount equal to the lesser of (A) Delta Funding Residual         
Exchange Company, LLC's basis in the shares of preferred stock and common       
stock of Delta Funding Residual Management, Inc. distributed to such holder     
and (B) such holder's basis in its membership interest and receive a            
commensurate aggregate tax basis in the shares of preferred stock and common    
stock received in the distribution. We understand that Delta Funding Residual   
Exchange Company, LLC's aggregate tax basis in the shares of common stock of    
Delta Funding Management, Inc. is nominal.                                      

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 The IRS could recharacterize the contribution of the notes to Delta Funding
Residual Exchange Company, LLC followed by the distribution of shares of our    
preferred stock and shares of common stock of Delta Funding Residual            
Management, Inc. to the noteholders as a disguised sale of the notes to the     
extent of the fair market value of property distributed. If so, the             
noteholders would recognize gain or loss on the portion of the notes deemed     
sold. Any notes not deemed sold would be treated as contributed to Delta        
Funding Residual Exchange Company, LLC. The remaining discussion assumes that   
the contribution of notes to Delta Funding Residual Exchange Company, LLC       
followed by the distribution of our preferred stock and the common stock of     
Delta Funding Residual Management, Inc. will not constitute a disguised sale.   
However, because the determination of whether or not the contribution of the    
notes to Delta Funding Residual Exchange Company, LLC followed by the           
distribution of our preferred stock and shares of common stock of Delta         
Funding Residual Management, Inc. is a disguised sale is a factual one,         
Stroock & Stroock & Lavan LLP is not able to provide us with an opinion with    
respect to this matter.                                                         

Taxation of Holders of Our Preferred Stock                                      

Dividends on Our Preferred Stock                                              

Dividends on our preferred stock, whether paid in cash, in property or in 
kind with additional shares of our preferred stock, that are paid out of our    
current or accumulated earnings and profits (as determined for United States    
federal income tax purposes) will be includable as ordinary income by a holder  
when received or accrued in accordance with such holder's method of             
accounting. The amount of each such dividend will equal the amount of cash or   
the fair market value of the property or preferred stock received by the        
holder. To the extent a holder receives a dividend that exceeds our current or  
accumulated earnings and profits, the dividend will be treated first as a non-  
taxable return of capital that reduces the holder's adjusted tax basis in its   
preferred stock to the extent of such basis and thereafter as taxable gain      
from the sale or exchange of the preferred stock.                               

  Subject to certain limitations, dividends received by corporate shareholders
taxable as ordinary income as described above will be eligible for the seventy  
percent (eighty percent for certain corporate shareholders) dividends-received  
deduction under Section 243 of the Code. Pursuant to Section 1059 of the Code,  
in the event of an "extraordinary dividend," a corporate shareholder will, in   
certain circumstances, be required to reduce its basis (but not below zero) in  
an amount equal to the amount excluded from income pursuant to the dividends-   
received deduction under Section 243 of the Code. Any such amount in excess of  
the shareholder's basis will be treated as gain from the sale or exchange of    
the preferred stock. Corporate shareholders should consult their own tax        
advisors as to the availability of the dividends received deduction and the     
application of Section 1059 of the Code to their receipt of dividends.          

Disposition of Preferred Stock                                                

In the opinion of Stroock & Stroock & Lavan LLP, any sale, exchange,      
redemption (except as discussed below) or other disposition of the preferred    
stock generally will result in a holder recognizing taxable gain or loss in an  
amount equal to the difference between the amount of cash or fair market value  
of other property received in exchange for the preferred stock and the          
holder's adjusted tax basis in the preferred stock. The aggregate adjusted tax  
basis of the preferred stock in the hands of a holder generally will equal the  
holder's adjusted tax basis in the notes surrendered, increased by the amount   
of its share of the capital gain recognized by Delta Funding Residual Exchange  
Company, LLC in the exchange and reduced by the sum of the amount of cash and   
the fair market value of the other assets received in the exchange. Any gain    
or loss recognized on a disposition of the preferred stock will be capital      
gain or loss unless the notes for which the preferred stock was received had    
accrued market discount not otherwise taken into account in the exchange, in    
which case such gain should be taxable as ordinary income to the extent of      
such accrued market discount. Any capital gain or loss will be long-term        
capital gain or loss if the holder's holding period with respect to such        
preferred stock is more than one year. For this purpose, each holder's holding  
period in the preferred stock should include such holder's holding period in    
the notes. In addition, any cash received in payment of declared but unpaid     
dividends will be taxed as a dividend in accordance with the treatment          
described above in "Dividends on Our Preferred Stock."                          

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In certain cases, if we redeem our preferred stock the redemption proceeds
may be treated as a dividend, rather than as a payment in exchange for such     
stock. In such event, the redemption payment will be treated as ordinary        
dividend income to the extent such payment is made out of our current and       
accumulated earnings and profits. The determination of whether a redemption     
payment is properly treated as a dividend rather than as a payment in exchange  
for preferred stock will depend on whether and to what extent the holder's      
percentage stock ownership interest in us is reduced (taking into account       
certain constructive ownership rules).                                          

Taxation of Delta Funding Residual Exchange Company, LLC and Holders of its     
Membership Interests                                                            

Partnership Taxation                                                          

As a partnership for federal income tax purposes, Delta Funding Residual  
Exchange Company, LLC generally will not be subject to federal income tax.      
Rather, each owner of a membership interest of Delta Funding Residual Exchange  
Company, LLC will be required to take into account separately its allocable     
share of income, gains, losses, deductions and credits accrued by Delta         
Funding Residual Exchange Company, LLC, whether or not there is a               
corresponding cash distribution and whether or not Delta Funding Residual       
Exchange Company, LLC has received any cash. Thus, cash basis holders will in   
effect be required to report their allocable share of income from Delta         
Funding Residual Exchange Company, LLC on the accrual basis and thus may        
become liable for taxes on their allocable share of Delta Funding Residual      
Exchange Company, LLC income even if they have not received cash from Delta     
Funding Residual Exchange Company, LLC to pay the taxes.                        

  Delta Funding Residual Exchange Company, LLC's income will consist primarily
of "excess inclusion income" and interest income on the mortgage-related        
securities owned by Delta Funding Residual Exchange Company, LLC and any gain   
upon the collection or disposition of Delta Funding Residual Exchange Company,  
LLC's assets. Delta Funding Residual Exchange Company, LLC's deductions will    
consist primarily of servicing and other fees, and losses or deductions upon    
collection or disposition of Delta Funding Residual Exchange Company, LLC's     
assets.                                                                         

The tax items of a partnership are allocable to the partners in accordance
with the Code, Treasury regulations and the partnership agreement (i.e., Delta  
Funding Residual Exchange Company, LLC's operating agreement and related        
documents). Delta Funding Residual Exchange Company, LLC's operating agreement  
will provide, in general, that its taxable income will be allocated in the      
following manner:                                                               

o first, to Delta Funding Residual Management, Inc. to the extent of any  
excess inclusion income;                                              

o second, to the holders of the voting membership interests of Delta      
Funding Residual Exchange Company, LLC in proportion to, and to the   
extent of, any previously allocated losses;                           

o third, to us to the extent of any cash previously distributed to us (or 
   paid on our behalf) for the payment of a portion of our obligation to the
New York State Department of Banking;                                 

o fourth, to us fifteen percent of any remaining income in each of the    
first three years after the effective date and ten percent thereafter;

o fifth, until such time as the net interest margin securityholders are   
paid in full, to us an amount equal to the income from the excess     
   cashflow certificates that relate to and underlie the net interest margin
owner trust certificate other than excess inclusion income;           

o sixth, to us to the extent of any cash previously distributed to us (or 
   paid on our behalf) for the payment of the remainder of our obligation to
the New York State Department of Banking; and                         

o seventh, to the holders of the voting membership interests of Delta     
 Funding Residual Exchange Company, LLC in proportion to their interests
in Delta Funding Residual Exchange Company, LLC.                      

 In addition, as stated above, any gain recognized by Delta Funding Residual
Exchange Company, LLC in the exchange will be allocated to the holders of its   
voting membership interests that surrendered notes with a fair market value in  
excess of basis in accordance with Section 704(c) of the Code.                  

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  Based on the economic arrangement of the parties, the foregoing approach for
allocating the income of Delta Funding Residual Exchange Company, LLC should    
be permissible under applicable Treasury regulations. However, even under this  
method of allocation, holders of voting membership interests of Delta Funding   
Residual Exchange Company, LLC may be allocated income in excess of the amount  
of cash available for current distribution. In addition, because tax            
allocations and tax reporting will be done on a uniform basis for all holders   
of the membership interests, but such holders may be receiving their            
membership interests at different times and at different prices, holders of     
the membership interests may be required to report on their tax returns         
taxable income that is greater or less than the amount reported to them by      
Delta Funding Residual Exchange Company, LLC.                                   

Moreover, due to the dearth of authority in this area, Stroock & Stroock &
Lavan LLP is unable to provide us with an opinion that such an allocation       
would be respected and no assurance can be given that the IRS would not         
disagree with the foregoing allocation. In particular, the IRS could assert     
that the allocation of excess inclusion income to Delta Funding Residual        
Management, Inc. lacks "substantial economic effect" and require a portion of   
the excess inclusion income to be allocated to holders of the voting            
membership interests. If excess inclusion income were to be allocated to        
holders of the voting membership interests, Delta Funding Residual Exchange     
Company, LLC would be required to pay tax on the excess inclusion income        
allocated to "disqualified organizations" at the highest corporate tax rate.    
Moreover, holders of Delta Funding Residual Exchange Company, LLC's membership  
interests that are not disqualified organizations would not be able to offset   
their allocable share of the excess inclusion income with losses from other     
activities and any income allocated to a tax-exempt entity would be treated as  
unrelated business taxable income.                                              

An individual taxpayer's share of expenses of Delta Funding Residual      
Exchange Company, LLC, including its share of the owner trusts' fees to the     
servicer, but not interest expense, will be characterized as miscellaneous      
itemized deductions and thus deductible only to the extent such expenses plus   
all other miscellaneous itemized deductions exceed two percent of the           
individual's adjusted gross income. An individual taxpayer will be allowed no   
deduction for his share of expenses of Delta Funding Residual Exchange          
Company, LLC, other than interest, in determining his liability for             
alternative minimum tax. In addition, Section 68 of the Code provides that the  
amount of itemized deductions otherwise allowable for the taxable year for an   
individual whose adjusted gross income exceeds a prescribed threshold amount    
will be reduced by the lesser of (1) three percent of the excess of adjusted    
gross income over the specified threshold amount, or (2) eighty percent of the  
amount of itemized deductions otherwise allowable for the applicable taxable    
year. Accordingly, deductions might be disallowed to the individual in whole    
or in part and might result in the holder of Delta Funding Residual Exchange    
Company, LLC's membership interests being taxed on an amount of income that     
exceeds the amount of cash actually distributed to the holder over the life of  
Delta Funding Residual Exchange Company, LLC. In the case of a partnership      
that has one hundred or more partners and elects to be treated as an "electing  
large partnership," seventy percent of that partnership's miscellaneous         
itemized deductions will be disallowed, although the remaining deductions will  
generally be allowed at the partnership level and will not be subject to the    
two percent floor that would otherwise be applicable to individual partners.    
Delta Funding Residual Exchange Company, LLC does not intend to make such an    
election.                                                                       

Delta Funding Residual Exchange Company, LLC may make certain tax         
calculations relating to income and allocations to holders of Delta Funding     
Residual Exchange Company, LLC interests on an aggregate basis to the extent    
relevant. If the IRS were to require that the calculations be made separately   
for each asset of Delta Funding Residual Exchange Company, LLC the              
calculations may result in some timing and character differences under some     
circumstances.                                                                  

Section 708 Termination                                                       

 Under Section 708 of the Code, Delta Funding Residual Exchange Company, LLC
will be deemed to terminate for federal income tax purposes if fifty percent    
or more of the capital and profits interests in Delta Funding Residual          
Exchange Company, LLC are sold or exchanged within a twelve-month period. If a  
termination occurs under Section 708 of the Code, Delta Funding Residual        
Exchange Company, LLC will be considered to contribute its assets to a new      
Delta Funding Residual Exchange Company, LLC, which would be treated as a new   
partnership, in exchange for membership interests in the new Delta Funding      
Residual                                                                        

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Exchange Company, LLC. The original Delta Funding Residual Exchange Company,    
LLC will then be deemed to distribute the membership interests in the new       
Delta Funding Residual Exchange Company, LLC to each of the owners of the       
original Delta Funding Residual Exchange Company, LLC in liquidation of the     
original Delta Funding Residual Exchange Company, LLC. Delta Funding Residual   
Exchange Company, LLC will not comply with particular technical requirements    
that might apply when a constructive termination occurs. As a result, Delta     
Funding Residual Exchange Company, LLC may be subject to some tax penalties     
and may incur additional expenses if it is required to comply with those        
requirements. Furthermore, Delta Funding Residual Exchange Company, LLC might   
not be able to comply with these requirements due to lack of data.              

Disposition of Delta Funding Residual Exchange Company, LLC Membership        
Interests                                                                       

In the opinion of Stroock & Stroock & Lavan LLP, capital gain or loss,    
generally, will be recognized on a sale of the membership interests of Delta    
Funding Residual Exchange Company, in an amount equal to the difference         
between the amount realized and the seller's tax basis in the membership        
interests sold. Any gain or loss would be long-term capital gain or loss if     
the holder of the membership interests has held such interests for more than    
one year. A holder's tax basis in the membership interests of Delta Funding     
Residual Exchange Company, LLC generally will equal such holder's tax basis in  
the notes surrendered in the exchange, decreased by an amount equal to the      
lesser of (A) Delta Funding Residual Exchange Company, LLC's basis in the       
shares of preferred stock and common stock of Delta Funding Residual            
Management, Inc. distributed to such holder and (B) such holder's basis in the  
notes surrendered and further decreased by any distributions received by or     
losses allocated to such holder with respect to the membership interests and    
increased by the holder's allocable share of Delta Funding Residual Exchange    
Company, LLC income. In addition, both the holder's tax basis in Delta Funding  
Residual Exchange Company, LLC interests and the calculation of the amount      
realized on a sale of such membership interests would include such holder's     
share, determined under Treasury Regulations, of any notes and other            
liabilities of Delta Funding Residual Exchange Company, LLC. A holder           
acquiring membership interests at different prices will generally be required   
to maintain a single aggregate adjusted tax basis in its membership interests   
and, upon a sale or other disposition of some of the such membership            
interests, allocate a portion of the aggregate tax basis to the membership      
interests sold, rather than maintaining a separate tax basis in each            
membership interest for purposes of computing gain or loss on a sale of that    
membership interest.                                                            

If a holder is required to recognize an aggregate amount of income (not   
including income attributable to disallowed itemized deductions described       
above) over the life of Delta Funding Residual Exchange Company, LLC that       
exceeds the aggregate cash distributions received with respect to Delta         
Funding Residual Exchange Company, LLC, the excess will generally give rise to  
a capital loss upon the retirement of the membership interests.                 

Allocations Between Transferors and Transferees                               

In general, Delta Funding Residual Exchange Company, LLC's taxable income 
and losses will be determined quarterly and the tax items for a particular      
calendar month will be apportioned among the holders of voting membership       
interests of Delta Funding Residual Exchange Company, LLC in proportion to      
their capital accounts as of the close of the last day of the applicable        
month. As a result, a holder purchasing voting membership interests may be      
allocated tax items, which will affect the purchaser's tax liability and tax    
basis, attributable to periods before the actual transaction.                   

The use of a monthly convention may not be permitted by existing Treasury 
regulations. If a monthly convention is not allowed, or only applies to         
transfers of less than all of the partner's interest, taxable income or losses  
of Delta Funding Residual Exchange Company, LLC might be reallocated among the  
holders of its voting membership interests. Delta Funding Residual Exchange     
Company, LLC's method of allocation between transferors and transferees may be  
revised to conform to a method permitted by future laws, regulations or other   
IRS guidance.                                                                   

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Section 731 Distributions                                                     

In the case of any distribution to a holder of Delta Funding Residual     
Exchange Company, LLC's membership interests, no gain will be recognized by     
that holder provided that the amount of money distributed to such holder does   
not exceed the holder's adjusted tax basis in its membership interests. To the  
extent that the amount of money distributed exceeds that holder's adjusted tax  
basis, gain will be currently recognized. In the case of any distribution to a  
holder, no loss will be recognized except in certain cases upon a distribution  
in liquidation of a holder's membership interests. Any gain or loss recognized  
by a holder on a distribution generally will be capital gain or loss.           

Section 754 Election                                                          

If a holder sells its membership interests of Delta Funding Residual      
Exchange Company, LLC at a profit (or loss), the purchaser will have a higher   
(or lower) basis in the membership interests than the seller had. The tax       
basis of Delta Funding Residual Exchange Company, LLC's assets will not be      
adjusted to reflect that higher (or lower) basis unless Delta Funding Residual  
Exchange Company, LLC were to file an election under Section 754 of the Code.   
In order to avoid the administrative complexities that would be involved in     
keeping accurate accounting records, as well as potentially onerous             
information reporting requirements, Delta Funding Residual Exchange Company,    
LLC currently does not intend to make an election under Section 754 of the      
Code. As a result, purchasers of its membership interests might be allocated a  
greater or lesser amount of Delta Funding Residual Exchange Company, LLC        
income than would be appropriate based on their purchase price.                 

Administrative Matters                                                        

Delta Funding Residual Management, Inc. is required to keep or cause to be
kept complete and accurate books of Delta Funding Residual Exchange Company,    
LLC. Delta Funding Residual Management, Inc. will file a partnership            
information return (IRS Form 1065) with the IRS for each taxable year of Delta  
Funding Residual Exchange Company, LLC and will report each holder's allocable  
share of items of Delta Funding Residual Exchange Company, LLC income and       
expense to the holders and the IRS on Schedule K-1. Delta Funding Residual      
Management, Inc. will provide the Schedule K-1 information to nominees that     
fail to provide Delta Funding Residual Exchange Company, LLC with the           
information statement described below and the nominees will be required to      
forward this information to the beneficial owners of the membership interests   
of Delta Funding Residual Exchange Company, LLC. Generally, holders must        
timely file tax returns that are consistent with the information return filed   
by Delta Funding Residual Exchange Company, LLC or be subject to penalties      
unless the holder notifies the IRS of all the inconsistencies.                  

Under Section 6031 of the Code, any person that holds membership interests
of Delta Funding Residual Exchange Company, LLC as a nominee at any time        
during a calendar year is required to furnish Delta Funding Residual Exchange   
Company, LLC with a statement containing specific information on the nominee,   
the beneficial owners and the membership interests so held. The information     
includes (1) the name, address and taxpayer identification number of the        
nominee and (2) as to each beneficial owner                                     

o the name, address and identification number of such person,             

o whether such person is a United States person, a tax-exempt entity or a 
foreign government, an international organization, or any wholly owned
agency or instrumentality of either of the foregoing, and             

o particular information on membership interests that were held, bought or
sold on behalf of the person throughout the year.                     

In addition, brokers and financial institutions that hold membership      
interests through a nominee are required to furnish directly to Delta Funding   
Residual Exchange Company, LLC information as to themselves and their           
ownership of the membership interests. A clearing agency registered under       
Section 17A of the Exchange Act is not required to furnish any information      
statement to Delta Funding Residual Exchange Company, LLC. The information      
referred to above for any calendar year must be furnished to Delta Funding      
Residual Exchange Company, LLC on or before the following January 31.           
Nominees, brokers and financial                                                 

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institutions that fail to provide Delta Funding Residual Exchange Company, LLC  
with the information described above may be subject to penalties.               

Delta Funding Residual Management, Inc. will be designated as the tax     
matters partner for Delta Funding Residual Exchange Company, LLC and, as such,  
will be responsible for representing the holders of Delta Funding Residual      
Exchange Company, LLC's membership interests in some specific disputes with     
the IRS. The Code provides for administrative examination of a partnership as   
if the partnership were a separate and distinct taxpayer. Generally, the        
statute of limitations for partnership items does not expire before the later   
of three years after the date on which the partnership information return is    
filed or the last day for filing the return for the applicable year,            
determined without regard to extensions. Any adverse determination following    
an audit of the return of Delta Funding Residual Exchange Company, LLC's        
membership interests by the appropriate taxing authorities could result in an   
adjustment of the returns of the holders of the membership interests, and,      
under some circumstances, a holder may be precluded from separately litigating  
a proposed adjustment to the items of Delta Funding Residual Exchange Company,  
LLC. An adjustment could also result in an audit of a holder's returns and      
adjustments of items not related to the income and losses of Delta Funding      
Residual Exchange Company, LLC.                                                 

A special audit system exists for qualifying large partnerships that have 
elected to apply a simplified flow-through reporting system under Sections 771  
through 777 of the Code. Delta Funding Residual Exchange Company, LLC will not  
elect to apply the simplified flow-through reporting system.                    

Taxation of Holders of Shares of Common Stock of Delta Funding Residual         
Management, Inc.                                                                

Dividends on the Shares of Common Stock                                       

In the opinion of Stroock & Stroock & Lavan LLP, the tax consequences     
associated with receiving dividends on the shares of common stock are           
substantially similar to those described above in "Dividends on Our Preferred   
Stock." Thus, dividends, whether paid in cash or in property (other than with   
additional shares of common stock), that are paid out of the current or         
accumulated earnings and profits (as determined for United States federal       
income tax purposes) of Delta Funding Residual Management, Inc. will be         
includable as ordinary income by a holder of the shares of the common stock     
when received or accrued in accordance with such holder's method of             
accounting. The amount of each such dividend will equal the amount of cash or   
the fair market value of the property received by the holder. To the extent a   
holder receives a dividend that exceeds current or accumulated earnings and     
profits, the dividend will be treated first as a non-taxable return of capital  
that reduces the holder's adjusted tax basis in the shares of common stock to   
the extent of such basis and thereafter as taxable gain from the sale or        
exchange of the shares of common stock.                                         

For rules relating to the availability of the dividends received deduction
and the application Code Section 1059 see "Dividends on Our Preferred Stock"    
above.                                                                          

Disposition of the Shares of Common Stock                                     

In the opinion of Stroock & Stroock & Lavan LLP, any sale, exchange,      
redemption (except as discussed below) or other disposition of the shares of    
common stock generally will result in a holder of such shares recognizing       
taxable gain or loss in an amount equal to the difference between the amount    
of cash or the fair market value of other property received in exchange for     
the shares and the holder's adjusted tax basis in the shares of common stock.   
The aggregate adjusted tax basis of the shares of common stock in the hands of  
a holder generally will equal the adjusted tax basis of such shares in the      
hands of Delta Funding Residual Exchange Company, LLC at the time of the        
exchange. Any gain or loss recognized on a disposition of the shares of common  
stock will be a capital gain or loss and will be a long-term capital gain or    
loss if the holder's holding period with respect to such shares of common       
stock is more than one year. In addition, any cash received in payment of       
declared but unpaid dividends will be taxed as a dividend in accordance with    
the treatment described above in "Dividends on the Shares of Common Stock."     

 In certain cases, a redemption of the shares of common stock may be treated
as a dividend, rather than as a payment in exchange for such stock. In such     
event, the redemption payment will be treated as ordinary dividend income to    
the extent such payment is made out of current or accumulated earnings and      
profits. The                                                                    

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determination of whether a redemption payment is properly treated as a          
dividend rather than as a payment in exchange for the shares of common stock    
will depend on whether and to what extent the holder's percentage stock         
ownership interest in Delta Funding Residual Management, Inc. is reduced        
(taking into account certain constructive ownership rules).                     

Tax Consequences to Us                                                          

COD and Potential Gain Recognition                                            

We will be required to realize cancellation of debt, or COD, income as a  
result of the exchange offer if, and to the extent, the outstanding balance     
(principal plus accrued but unpaid interest) of the notes exceeds the sum of    
the cash and the fair market value of the preferred stock and other assets      
delivered in exchange. Because we expect that the cash and the fair market      
value of the preferred stock and other assets received in the exchange will     
approximately equal the outstanding balance of the notes surrendered, we do     
not expect to realize significant COD income, if any. However, because of the   
factual nature of this issue, Stroock & Stroock & Lavan LLP is not able to      
provide us with an opinion to this effect.                                      

If we realize any COD income, unless the exchange occurs in a proceeding  
under Chapter 11 or unless we can establish that we are "insolvent" (i.e., our  
liabilities exceed the fair market value of our assets), we will be required    
to include such income in our gross income for federal income tax purposes. In  
that case, subject to the alternative minimum tax, or AMT, and potential        
Section 382 limitations, discussion below, such income will be offset by any    
available net operating loss carryovers or by losses incurred in the taxable    
year of the exchange.                                                           

In addition, in the opinion of Stroock & Stroock & Lavan LLP, we will     
recognize the gain or loss, if any, in the mortgage related assets upon their   
exchange. Such gain or loss will be equal to the difference between our tax     
basis in the mortgage related assets and their fair market values. However,     
any such gain will be offset by any available net operating loss carryovers     
(except for any AMT) or by losses incurred in the taxable year of the           
exchange, subject to potential Section 382 limitations.                         

AMT                                                                           

  For any taxable year, our federal income tax liability equals the greater of
(a) the regular tax computed at standard corporate rates on taxable income and  
(b) the AMT computed at a 20 percent rate on alternative minimum taxable        
income, or AMTI, (as defined in Section 55 of the Code). In computing our       
regular federal income tax liability, all of the income recognized in a         
taxable year may be offset by net operating loss carryovers (to the extent      
permitted under Section 382 of the Code). Conversely, for purposes of           
computing AMTI, net operating loss carryovers (as determined for AMT purposes)  
may not offset more than ninety percent of our pre-net operating loss AMTI.     
Thus, we will be required to pay federal income tax at an effective rate of at  
least two percent on our pre-net operating loss AMTI, if any, regardless of     
the amount of our net operating loss carryovers. To the extent our AMT          
liability exceeds our regular tax liability for any taxable year, the excess    
may be carried forward as a credit against our regular tax liability in         
subsequent years.                                                               

Section 382                                                                   

 We estimate that our net operating loss carryovers for regular tax purposes
were approximately $63 million as of December 31, 2000. These net operating     
loss carryovers remain subject to examination by the IRS, and will be reduced   
if and to the extent we realize any COD income as a result of the exchange. In  
addition, these net operating loss carryovers may be subject to limitation      
under Section 382 of the Code.                                                  

Under Section 382 of the Code, if the exchange results in an "ownership   
change," our use of our net operating loss and certain other tax attribute      
carryovers and certain built-in losses and deductions (collectively, "tax       
attributes") generally will be limited to an amount equal to the fair market    
value of our capital stock immediately prior to the ownership change (i.e.,     
prior to the issuance of the preferred stock in the exchange) multiplied by     
the "long-term tax exempt rate" (5.01% for the month of July) for the month     
the exchange occurs. We believe it is unlikely that the exchange will result    
in an ownership change. However,                                                

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such a determination is a factual question and, therefore, Stroock & Stroock &  
Lavan LLP is unable to provide us with an opinion to this effect and there can  
be no assurances that the IRS will agree that no ownership change has           
occurred. If it is determined that an ownership change did, in fact, occur,     
our ability to use our net operating loss carryovers and certain other tax      
attributes will be significantly limited.                                       

Retention of Notes; Adoption of Proposed Amendments                             

The United States federal income tax consequences of the adoption of the  
proposed amendments to the indenture governing the senior secured note to a     
noteholder that does not participate in the exchange offer and chooses to       
retain its notes depends on whether the adoption of the proposed amendments     
will cause a significant modification of the retained notes under Treasury      
regulations relating to the modification of debt instruments. In the opinion    
of Stroock & Stroock & Lavan LLP, the adoption of the proposed amendments       
would be treated as a significant modification of the notes, and accordingly,   
the retention of the notes as modified by the proposed amendments should        
constitute a taxable event. Accordingly, a noteholder that does not             
participate in the exchange offer will recognize gain or loss in an amount      
equal to the difference between the issue price of the modified notes and such  
holder's adjusted tax basis in the old notes.                                   

Backup Withholding                                                              

Payments received in the exchange offer and dividends paid on, or the     
proceeds of a sale, exchange, or redemption of, our preferred stock, the        
membership interest of Delta Funding Residual Exchange Company, LLC or the      
shares of common stock of Delta Funding Residual Management, Inc. may be        
subject to backup withholding at a rate of thirty-one percent unless, in        
general, such holder is an exempt recipient or provides the payor with a        
taxpayer identification number. (This rate will be reduced to 30.5% effective   
August 7, 2001, and further reduced gradually to twenty-eight percent by the    
year 2006). Backup withholding is not an additional tax. Any amount so          
withheld may be credited against the holder's United States federal income tax  
liability or refunded by the IRS.                                               

LEGAL MATTERS 

Certain legal matters with respect to the validity of the issuance of our 
preferred stock, the membership interests of Delta Funding Residual Exchange    
Company, LLC and the shares of common stock of Delta Funding Residual           
Management, Inc. and tax matters will be passed upon for us by Stroock &        
Stroock & Lavan LLP, New York, New York. Stroock & Stroock & Lavan LLP has      
acted as counsel for us in connection with the exchange offer. Stroock &        
Stroock & Lavan LLP has from time to time represented, and may continue to      
represent, us and certain of our affiliates in connection with certain legal    
matters.                                                                        

EXPERTS 

 Our consolidated financial statements as of December 31, 2000 and 1999, and
for each of the years in the three-year period ended December 31, 2000, have    
been incorporated by reference herein and in the registration statement in      
reliance upon the report of KPMG LLP, independent certified public              
accountants, incorporated by reference herein, and upon the authority of said   
firm as experts in accounting and auditing.                                     

You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone to provide you with      
information that is different. This prospectus is not an offer to sell, or a    
solicitation of an offer to buy, any of the notes to any person or by anyone    
in any jurisdiction where it is unlawful. Neither the delivery of this          
prospectus nor any sale using the prospectus shall, under any circumstances,    
create any implication that the information contained in this document or that  
we have referred you to is correct after the date hereof or that there has      
been no change in our affairs since the date hereof.                            

WHERE YOU CAN FIND MORE INFORMATION 

 We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. In accordance with the Exchange Act, we file reports   
and other information with the Securities and Exchange Commission. Such         
reports and other information can be read and copies obtained at the SEC's      
Public                                                                          

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Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the    
SEC's regional offices located at 7 World Trade Center, 13th Floor, New York,   
New York 10048, and Suite 1400, Northwestern Atrium Center, 500 West Madison    
Street, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for      
further information on the Public Reference Room. The SEC maintains an          
internet site at http://www.sec.gov that contains reports and information       
statements and other information regarding issuers that file electronically     
with the SEC, ourselves included.                                               

We have filed with the SEC a registration statement on Form S-4 under the 
Securities Act with respect to the offering of our preferred stock, the         
membership interests of Delta Funding Residual Exchange Company, LLC and the    
shares of common stock of Delta Funding Residual Management, Inc. This          
prospectus does not contain all of the information in the registration          
statement. You will find additional information about us, our preferred stock,  
Delta Funding Residual Exchange Company, LLC, its membership interests, Delta   
Funding Residual Management, Inc. and its common stock in the registration      
statement. Any statements made in this prospectus concerning the provisions of  
legal documents are not necessarily complete and you should read the documents  
which are filed as exhibits to the registration statement or otherwise filed    
with the SEC.                                                                   

  This prospectus is accompanied by a copy of our latest annual report on Form
10-K/A for the period ended December 31, 2000 and a copy of our Quarterly       
Report on Form 10-Q/A for the quarter ended March 31, 2001 which contain        
additional information about us.                                                

Delta Funding Residual Exchange Company, LLC has not issued any securities
prior to the exchange offer, except to us in exchange for shares of our         
preferred stock, which will convert into a non-voting membership interest upon  
completion of the exchange offer.                                               

 Delta Funding Residual Management, Inc. has not issued any securities prior
to the exchange offer, except to us in exchange for shares of our preferred     
stock, which will convert into a non-voting membership interest upon            
completion of the exchange offer.                                               

Prior to or following completion of the exchange offer, we will file a    
request for no-action relief for each of Delta Funding Residual Exchange        
Company, LLC and Delta Funding Residual Management, Inc. seeking an exemption   
from the reporting requirements of the Exchange Act. If our request for no-     
action relief is granted, Delta Funding Residual Exchange Company, LLC and      
Delta Funding Residual Management, Inc. each will covenant to provide all       
information to securityholders required pursuant to Rule 144A(d)(4) as in       
effect on the date of this prospectus.                                          

INCORPORATION OF DOCUMENTS BY REFERENCE 

This prospectus incorporates documents, including important business and  
financial information, by reference that are not part of this prospectus or     
delivered with this prospectus. This means that we are disclosing important     
information to you by referring you to those documents. You should be aware     
that information in a document incorporated by reference may have been          
modified or superseded by information that is included in other documents that  
were filed at a later date and which are also incorporated by reference or      
included in this prospectus.                                                    

  We have filed the following documents with the SEC and they are incorporated
herein by reference:                                                            

o our Registration Statement on Form-8-A (SEC File No. 001-12109)         
containing a description of our common stock;                         

o our annual report on Form 10-K/A for the year ended December 31, 2000   
(SEC File No. 001-12109);                                             

o our quarterly report on Form 10-Q/A for the quarterly period ended March
31, 2001 (SEC File No. 001-12109); and                                

o our current reports on Form 8-K filed January 10, 2001, March 2, 2001,  
and March 22, 2001 (SEC File No. 001-12109).                          

All documents and reports filed by us with the SEC after the date of this 
prospectus and before the termination of the offering of our preferred stock,   
the membership interests of Delta Funding Residual                              

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Exchange Company, LLC and the shares of common stock of Delta Funding Residual  
Management, Inc. shall be deemed incorporated herein by reference and shall be  
deemed to be a part hereof from the date of filing of such documents and        
reports. Any statement contained in a document incorporated or deemed to be     
incorporated by reference herein shall be deemed to be modified or superseded   
for purposes of this prospectus to the extent that a statement contained        
herein or in any subsequently filed document or report that also is or is       
deemed to be incorporated by reference herein modifies or supersedes such       
statement. Any such statement so modified or superseded shall not be deemed,    
except as so modified or superseded, to constitute a part of this prospectus.   

  We will provide without charge, upon written or oral request, to each person
to whom a copy of this prospectus is delivered, a copy of any of our documents  
(other than exhibits to such documents unless such exhibits are specifically    
incorporated by reference) incorporated by reference herein.                    

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of 
Section 27A of the Securities Act of 1933, as amended and Section 21E of the    
Securities Exchange Act of 1934, as amended. These statements are based on      
management's beliefs and assumptions, based on information currently available  
to management and are subject to risks and uncertainties. Forward-looking       
statements include, but are not limited to, the information concerning our      
possible or assumed future results of operations set forth under:               

o "Risk Factors;"                                                         

o "The Exchange Offer;"                                                   

o "Considerations for Noteholders Who Elect Not to Participate in the     
Exchange Offer;" and                                                  

o "United States Federal Income Tax Consequences of the Exchange Offer"   

preceded by, followed by, or that include, the words "believes," "expects,"     
"anticipates," "intends," "plans," "estimates" or similar expressions.          

Forward-looking statements are not guarantees of performance. Our future  
results may differ materially from those expressed in the forward-looking       
statements. Many of the factors that will determine these results are beyond    
our ability to control or predict. Holders of the notes are cautioned not to    
put undue reliance on any forward-looking statement.                            

  Holders of the notes should understand that the following important factors,
in addition to those discussed, could affect our future operating results and   
could cause results to differ materially from those expressed in such forward-  
looking statements:                                                             

o changes in economic conditions and increases in interest rates;         

o increased competition in the sub-prime lending industry;                

o our substantial leverage and our ability to service our debt; and       

o changes in laws or regulations, third party relations and approvals and 
decisions of courts, regulations and governmental bodies.             

Further, we operate in an industry sector where security values, like the 
values of the excess cashflow certificates, which are comprised of the excess   
cashflow certificates, the net interest margin owner trust certificate and the  
non-performing owner trust certificate, may be volatile and may be influenced   
by economic and other factors beyond our control.                               

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ANNEX A 
THE PROPOSED AMENDMENTS 

Holders of senior secured notes who desire to participate in the exchange 
offer must tender their senior secured notes and deliver their letter of        
transmittal and consent to the proposed amendments prior to 5:00 p.m. New York  
City time on the expiration date. No holder of senior secured notes may         
participate in the exchange offer without consenting to the proposed            
amendments, either affirmatively or in the form of a consent to the proposed    
amendments contained in the letter of transmittal and consent. The proposed     
amendments, if approved, will be contained and reflected in a supplemental      
indenture.                                                                      

1. Senior Secured Note Indenture.                                               

The following is a description of the proposed amendments to certain      
restrictive covenants, certain of the event of default provisions and certain   
other provisions of the indenture governing the senior secured notes, as        
amended to be made effective in accordance with Article Nine of the indenture.  

  If the proposed amendments become effective, the provisions set forth in the
form of italicized clauses below will be deleted from the indenture. The        
proposed amendments also would delete those definitions from the indenture      
that are used only in provisions that would be eliminated as a result of the    
elimination or modification of the following provisions, and cross-references   
to provisions in the indenture that have been deleted as a result of the        
proposed amendments will be revised to reflect such deletions.                  

The provisions of the indenture, reprinted below, are qualified in their  
entirety by reference to the indenture. Capitalized terms that are used but     
not otherwise defined in this paragraph 1 of Annex A have the same meanings as  
set forth in the indenture.                                                     

If the proposed amendments become effective, the following sections of the
indenture will be eliminated:                                                   

A. From the Indenture:                                                          

PREAMBLE                                                                  

  The Company has duly authorized the creation of an issue of the Senior Notes
(as defined) and the Subsidiary Guarantees (as defined), and, to provide        
therefor, the Company has duly authorized the execution and delivery of this    
Indenture. [delete: The Senior Notes and certain of the Subsidiary Guarantees   
will be secured by a lien and security interest in the Collateral (as defined)  
maintained with the Collateral Agent (as defined) pursuant to the terms of the  
Collateral Agreements (as defined).] The Senior Notes will be jointly and       
severally guaranteed, on an unconditional senior secured basis, by the          
Subsidiary Guarantors (as defined). All things necessary to make the Senior     
Notes, when duly issued and executed by the Company, and authenticated and      
delivered hereunder, the valid obligations of the Company and the Subsidiary    
Guarantors and to make this Indenture a valid and binding agreement of the      
Company and the Subsidiary Guarantors, have been done.                          

SECTION 4.02  Maintenance Of Office Or Agency                                 

  [delete: The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee,           
Registrar or co-Registrar) where Senior Notes may be surrendered for            
registration of transfer or exchange and where notices and demands to or upon   
the Company in respect of the Senior Notes and this Indenture may be served.    
The Company shall give prompt written notice to the Trustee of the location,    
and any change in the location, of such office or agency. If at any time the    
Company shall fail to maintain any such required office or agency or shall      
fail to furnish the Trustee with the address thereof, such presentations,       
surrenders, notices and demands may be made or served at the Corporate Trust    
Office of the Trustee.                                                          

The Company may also from time to time designate one or more other offices
or agencies where the Senior Notes may be presented or surrendered for any or   
all such purposes and may from time to time rescind such designations;          
provided, however, that no such designation or rescission shall in any manner   
relieve the Company of its obligation to maintain an office or agency in the    
Borough of Manhattan, The City                                                  

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of New York for such purposes. The Company shall give prompt written notice to  
the Trustee of any such designation or rescission and of any change in the      
location of any such other office or agency.                                    

The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.]      

SECTION 4.03  Reports.                                                        

  [delete: Whether or not required by the rules and regulations of the SEC, so
long as any of the Senior Notes are outstanding, the Company will furnish to    
the Holders of the Senior Notes (i) all quarterly and annual financial          
information that would be required to be contained in a filing with the SEC on  
Forms 10-Q and 10-K if the Company were required to file such Forms, including  
a "Management's Discussion and Analysis of Financial Condition and Results of   
Operations" that describes the financial condition and results of operations    
of the Company and the consolidated Subsidiaries of the Company (showing in     
reasonable detail, either on the face of the financial statements or in the     
notes thereto and in Management's Discussion and Analysis of Financial          
Condition and Results of Operations, if applicable, the financial condition     
and results of operations of the Company and its Restricted Subsidiaries        
separately from the financial condition and results of operations of the        
Unrestricted Subsidiaries of the Company) and, with respect to the annual       
information only, a report thereon by the Company's certified independent       
accountants and (ii) all current reports that would be required to be filed     
with the SEC on Form 8-K if the Company were required to file such reports. In  
addition, whether or not required by the rules and regulations of the SEC, the  
Company will file a copy of all such information and reports with the SEC for   
public availability (unless the SEC will not accept such a filing) and make     
such information available to securities analysts and prospective investors     
upon request. Delivery of quarterly information shall be made within 45 days    
of the end of each quarter. Delivery of annual information shall be made        
within 90 days of the end of each fiscal year.                                  

With respect to the delivery of the annual information only and within 90 
days of the end of each fiscal year, the Company shall cause KPMG LLP (or such  
other firm of internationally recognized accountants as is then retained by     
the Company as its independent auditors) to issue an agreed-upon procedures     
report comparing the methodology and assumptions utilized by the Company and    
its Subsidiaries in determining the book value of the Residual Receivables      
owned by the Company or any of its Subsidiaries to the requirements of Section  
4.17 of this Indenture and to historical and available industry data during     
the audit period.                                                               

Delivery of such reports, information and documents to the Trustee is for 
informational purposes only and the Trustee's receipt of such shall not         
constitute constructive notice of any information contained therein or          
determinable from information contained therein, including the Company's        
compliance with any of its covenants hereunder (as to which the Trustee is      
entitled to rely exclusively on Officers' Certificates).]                       

SECTION 4.04  Compliance Certificate.                                         

 [delete: (a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company (which ends on December 31 of each   
year), commencing December 31, 2000, an Officers' Certificate stating that a    
review of the activities of the Company and its Subsidiaries during the         
preceding fiscal year has been made under the supervision of the signing        
Officers with a view to determining whether the Company and its Subsidiaries    
have kept, observed, performed and fulfilled their obligations under this       
Indenture, and further stating, as to each such Officer signing such            
certificate, that to the best of his or her knowledge the Company and each of   
its Subsidiaries has kept, observed, performed and fulfilled each and every     
covenant contained in this Indenture and is not in default in the performance   
or observance of any of the terms, provisions and conditions hereof (or, if a   
Default or Event of Default shall have occurred, describing all such Defaults   
or Events of Default of which he may have knowledge and what action the         
Company is taking or proposes to take with respect thereto) and that, to the    
best of his knowledge, no event has occurred and remains in existence by        
reason of which payments on account of the principal of or interest, if any,    
on the Senior Notes are prohibited or if such event has occurred, a             
description of the event and what action the Company is taking or proposes to   
take with respect thereto.                                                      

(b) So long as not contrary to the then current recommendations of the    
American Institute of Certified Public Accountants, and so long as the          
Company's independent public accountants agree, the year-end                    

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financial statements delivered pursuant to Section 4.03 above shall be          
accompanied by a written statement of the Company's independent public          
accountants (who shall be a firm of established national reputation) that in    
making the examination necessary for certification of such financial            
statements nothing has come to their attention that would lead them to believe  
that the Company has violated any provisions of Article 4 or Article 5 of this  
Indenture or, if any such violation has occurred, specifying the nature and     
period of existence thereof, it being understood that such accountants shall    
not be liable directly or indirectly to any person for any failure to obtain    
knowledge of any such violation.                                                

(c) The Company shall, so long as any of the Senior Notes are outstanding,
deliver to the Trustee, as soon as possible and in any event within five days   
after any Officer of the Company becoming aware of any Default or Event of      
Default an Officers' Certificate specifying such Default or Event of Default    
what action the Company is taking or proposes to take with respect thereto.]    

SECTION 4.05  Taxes.                                                          

 [delete: The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental    
levies, except such as are contested in good faith and by appropriate           
proceedings or where the failure to effect such payment is not reasonably       
expected to be adverse in any material respect to the Holders of the Senior     
Notes.]                                                                         

SECTION 4.06  Stay, Extension And Usury Laws.                                 

  [delete: The Company and each of the Subsidiary Guarantors covenants (to the
extent that they may lawfully do so) that it shall not at any time insist       
upon, plead, or in any manner whatsoever claim or take the benefit or           
advantage of, any stay, extension or usury law wherever enacted, now or at any  
time hereafter in force, that may affect the covenants or the performance of    
this Indenture; and the Company and each of the Subsidiary Guarantors (to the   
extent that they may lawfully do so) hereby expressly waives all benefit or     
advantage of any such law, and covenants that it shall not, by resort to any    
such law, hinder, delay or impede the execution of any power herein granted to  
the Trustee, but shall suffer and permit the execution of every such power as   
though no such law has been enacted. The Company and each of the Subsidiary     
Guarantors hereby agree that this Indenture contains the terms and provisions   
of a workout agreement. The Company and each of the Subsidiary Guarantors also  
agrees that the Collateral, consisting primarily of the pledge to the           
Collateral Agent of the ownership interest in the Residual Collateral Trusts,   
the principal assets of which are Residual Receivables, will rapidly and        
materially diminish in value in the event of a bankruptcy filing unless         
servicing of such Residual Receivables previously has been or is implemented    
immediately by the Back-Up Servicer under the Back-Up Servicing Agreements. As  
a material incentive for the Holders and Beneficial Holders, the Company and    
each of the Subsidiary Guarantors hereby agree that they consent to and will    
not contest or seek to delay the grant of relief (including the request for     
immediate relief on an emergency basis) requested in any motion for relief      
from stay, filed by the Holders, the Beneficial Holders, the Collateral Agent   
or the Trustee, in a bankruptcy case (whether under Chapters 7 or 11 of the     
Bankruptcy Code and whether a voluntary or involuntary case) of any of The      
Company or the Subsidiary Guarantors, seeking relief from the automatic stays   
under Section 362(a) of the Bankruptcy Code to the extent necessary to          
foreclose upon and sell the ownership interest in the Residual Collateral       
Trusts or either of them or to put in place a new servicer, whether under the   
Back-Up Servicing Agreements or otherwise, and for any related relief, or any   
similar request for relief in any other insolvency proceeding. The Holders,     
the Beneficial Holders, the Collateral Agent and the Trustee shall have the     
right to specific performance of this provision from the bankruptcy court or    
other court supervising such an insolvency proceeding.]                         

SECTION 4.07  Restricted Payments.                                            

[delete: The Company and each Restricted Subsidiary shall not, and the    
Company shall not permit any of its Restricted Subsidiaries to, directly or     
indirectly: (i) declare or pay any dividend or make any other payment or        
distribution on account of the Company's or any of its Restricted               
Subsidiaries' Owner Trust Certificates (including, without limitation, any      
payment in connection with any merger or consolidation involving the Company)   
other than dividends or other payments or distributions payable in Owner Trust  
Certificates (other than Disqualified Stock) of the Company or dividends or     
other payments or distributions                                                 

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payable to the Company or any Wholly-Owned Restricted Subsidiary of the         
Company; (ii) purchase, redeem or otherwise acquire or retire for value         
(including, without limitation, any payment in connection with any merger or    
consolidation involving the Company) any Owner Trust Certificates of the        
Company (other than any such Owner Trust Certificates owned by any Wholly-      
Owned Restricted Subsidiary of the Company) or any direct or indirect parent    
of the Company; (iii) make any principal payment on or with respect to,         
purchase, redeem, defease or otherwise acquire or retire for value any          
Indebtedness that is subordinated to the Senior Notes or any Subsidiary         
Guarantee (other than intercompany Indebtedness payable to the Company or a     
Restricted Subsidiary by any Restricted Subsidiary), except at its stated       
maturity; or (iv) make any Restricted Investment (all such payments and other   
actions set forth in clauses (i) through (iv) above being collectively          
referred to as "Restricted Payments"), unless, at the time of and after giving  
effect to such Restricted Payment:                                              

    (a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;                                  

   (b) the Company would, at the time of such Restricted Payment and after
  giving pro forma effect thereto, have been permitted to incur at least $1.00
  of additional Indebtedness pursuant to the test set forth in Section 4.09(a)
hereof; and                                                               

  (c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted          
Subsidiaries after the Issue Date is less than the sum of (i) 100% of the 
aggregate net cash proceeds received by the Company from the issue or sale
 since the Issue Date of Owner Trust Certificates of the Company (other than
 Disqualified Stock) or of Disqualified Stock or Indebtedness represented by
securities of the Company that have been converted into such Owner Trust  
 Certificates (other than Owner Trust Certificates (or Disqualified Stock or
convertible debt securities) sold to a Subsidiary of the Company and other
  than Disqualified Stock or other Indebtedness represented by securities that
have been converted into Disqualified Stock); plus (ii) to the extent that
any Restricted Investment that was made after the Issue Date is sold for  
cash or otherwise liquidated or repaid for cash the cash return of capital
 with respect to such Restricted Investment (less the sum of (x) the cost of
disposition, if any, plus (y), if a portion of such Restricted Investment 
included a Permitted Investment, the amount of such Permitted Investment).

     Notwithstanding the foregoing, the Company and each Restricted Subsidiary
shall not, and the Company shall not permit any of its Restricted         
 Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or
  make any other payment or distribution on account of the Company's or any of
its Restricted Subsidiaries' Owner Trust Certificates that are issued and 
  outstanding as of the Issue Date (including, without limitation, any payment
 in connection with any merger or consolidation involving the Company or any
of its Restricted Subsidiaries) other than dividends or other payments or 
distributions payable in Owner Trust Certificates (other than Disqualified
Stock) of the Company or dividends or other payments or distributions     
payable to the Company or any Wholly-Owned Restricted Subsidiary of the   
Company; (ii) purchase, redeem or otherwise acquire or retire for value   
  (including, without limitation, any payment in connection with any merger or
consolidation involving the Company) any Owner Trust Certificates of the  
  Company that are issued and outstanding as of the Issue Date (other than any
such Owner Trust Certificates owned by any Wholly-Owned Restricted        
Subsidiary of the Company) or any direct or indirect parent of the Company
 issued and outstanding as of the date of this Indenture; and (iii) take any
of the actions specified in clauses (i) or (ii) of this paragraph with    
  respect to Owner Trust Certificates issued after the Issue Date and owned by
the Miller Stockholders unless the issuance and terms of such Owner Trust 
Certificates and such action have been approved by a majority of the      
independent members of the Board of Directors, whose resolution shall be  
delivered to the Trustee.                                                 

The provisions of this Section 4.07 shall not prohibit the following
Restricted Payments:                                                      

(i) the payment of any dividend not prohibited by the immediately   
preceding paragraph, within 60 days after the date of declaration thereof,
if at said date of declaration such payment would have complied with the  
provisions of this Indenture (including this Section 4.07);               

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    (ii) the payment of principal on, or purchase, redemption, defeasance or
 other acquisition or retirement for value of Indebtedness with the net cash
proceeds from an incurrence of, Permitted Refinancing Indebtedness or the 
  substantially concurrent sale (other than to a Subsidiary of the Company) of
Owner Trust Certificates of the Company (other than Disqualified Stock);  
provided, that the amount of any such net cash proceeds from any such sale
of Owner Trust Certificates that are utilized for such redemption,        
repurchase, retirement or other acquisition shall be excluded from clause 
(c)(ii) of the preceding paragraph;                                       

(iii) advances to a Securitization Trust required to be made by the 
Company or any Restricted Subsidiary (in its capacity as the holder of the
residual interest in such trust) if such advances rank senior in right of 
payment to all other interests in, and Indebtedness of, such trust; and   

(iv) the making and consummation of any offer to repurchase any     
  Indebtedness upon the occurrence of a change of control under and as defined
in the documents governing such Indebtedness; provided, that in connection
 with Indebtedness incurred after the Original Issue Date, the definition of
"change of control" is the same in all material respects as the definition
of "Change of Control" set forth in this Indenture and payments pursuant  
  thereto are not required to be made prior to the date on which the Change of
Control Payment is required to be made under this Indenture and, with     
respect to any Indebtedness subordinated in right of payment to the Senior
  Notes, no sooner than 30 days after the date such Change of Control Offer is
required to be made.                                                      

The Board of Directors may designate any Restricted Subsidiary not in     
existence on the Issue Date to be an Unrestricted Subsidiary if such            
designation would not cause a Default. For purposes of making such              
determination, all outstanding Investments by the Company and its Restricted    
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so         
designated will be deemed to be Restricted Payments at the time of such         
designation and will reduce the amount available for Restricted Payments under  
the first paragraph of this Section 4.07. All such outstanding Investments      
will be deemed to constitute Investments in an amount equal to the Fair Market  
Value of such Investments at the time of such designation. Such designation     
will only be permitted if such Restricted Payment would be permitted at such    
time and if such Restricted Subsidiary otherwise meets the definition of an     
Unrestricted Subsidiary.                                                        

The amount of all Restricted Payments other than cash shall be the Fair   
Market Value (evidenced by an Officers' Certificate on the date of the          
Restricted Payment) of the asset(s) or securities proposed to be transferred    
or issued by the Company or such Restricted Subsidiary, as the case may be,     
pursuant to the Restricted Payment. The Fair Market Value of any non-cash       
Restricted Payment in excess of $1.0 million shall be determined by the Board   
of Directors in good faith whose resolution with respect thereto shall be       
delivered to the Trustee, such determination to be based upon an opinion or     
appraisal issued by an accounting, appraisal or investment banking firm of      
national standing if such Fair Market Value exceeds $10.0 million. In           
addition, in the case of any non-cash Restricted Payment which will be          
received in whole or in part by the Miller Stockholders, the Board Resolution   
determining the Fair Market Value thereof shall require the approval of a       
majority of the independent members of the Board of Directors, whose            
Resolution shall be delivered to the Trustee. Not later than the date of        
making any Restricted Payment, the Company shall deliver to the Trustee an      
Officers' Certificate stating that such Restricted Payment is permitted and     
setting forth the basis upon which the calculations required by this Section    
4.07 were computed.]                                                            

SECTION 4.08  Dividend And Other Payment Restrictions Affecting Subsidiaries. 

[delete: The Company and each Restricted Subsidiary shall not, and the    
Company shall not permit any of its Restricted Subsidiaries to, directly or     
indirectly, create or otherwise cause or suffer to exist or become effective    
any encumbrance or restriction on the ability of any Restricted Subsidiary to   
(i)(A) pay dividends or make any other distributions to the Company or any of   
its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to     
any other interest or participation in, or measured by, its profits, or (B)     
pay any indebtedness owed to the Company or any of its Restricted               
Subsidiaries, (ii) make loans or advances to the Company or any of its          
Restricted Subsidiaries or (iii) transfer any of its properties or assets to    
the Company or any of its Restricted Subsidiaries, except for such              
encumbrances or restrictions existing under or by reason of (a) agreements      
relating to Indebtedness as in effect as of the Original Issue Date, and any    
amendments,                                                                     

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modifications, restatements, renewals, increases, supplements, refundings,      
additions (including additional Warehouse Facilities), replacements or          
refinancings thereof, provided that such amendments, modifications,             
restatements, renewals, increases, supplements, refundings, additions,          
replacements or refinancings are no more restrictive with respect to such       
dividend and other payment restrictions than those contained in the agreements  
relating to Indebtedness as in effect on the Original Issue Date, (b)           
applicable law, (c) any instrument governing Acquired Debt or Capital Stock of  
a Person acquired by the Company or any of its Restricted Subsidiaries as in    
effect at the time of such acquisition (except to the extent such Acquired      
Debt was incurred or such Capital Stock was issued or its terms amended in      
connection with or in contemplation of such acquisition), which encumbrance or  
restriction is not applicable to any Person, or the property or assets of any   
Person, other than the Person or the property or assets of the Person, so       
acquired, provided that such Person is not taken into account in determining    
on a pro forma basis whether such acquisition subject to such Acquired Debt     
was permitted by the terms of this Indenture, (d) customary non-assignment      
provisions in leases entered into in the ordinary course of business and        
consistent with past practices, (e) purchase money obligations for property     
acquired in the ordinary course of business that impose restrictions of the     
nature described in clause (iii) above on the property so acquired, (f)         
Permitted Refinancing Indebtedness; provided that the restrictions contained    
in the agreements governing such Permitted Refinancing Indebtedness are no      
more restrictive than those contained in the agreements governing the           
Indebtedness being refinanced, and (g) this Indenture, the Subsidiary           
Guarantees, the Collateral Agreements and the Related Agreements.]              

SECTION 4.09  Incurrence Of Indebtedness And Issuance Of Preferred Stock.     

[delete: (a) The Company and each Restricted Subsidiary shall not, and the
Company shall not permit any of its Subsidiaries to, directly or indirectly,    
create, incur, issue, assume, guaranty or otherwise become directly or          
indirectly liable, contingently or otherwise, with respect to (collectively,    
"incur") any Indebtedness (including Acquired Debt) or issue Disqualified       
Stock, the Company shall not permit any of its Restricted Subsidiaries to       
issue any shares of preferred stock except for preferred stock issued to and    
held by the Company or any Wholly-Owned Restricted Subsidiary of the Company    
and each Residual Collateral Trust shall not, and the Company shall not permit  
any Residual Collateral Trust to issue any shares of preferred stock;           
provided, however, that the Company or any Subsidiary Guarantor (other than     
the Residual Collateral Trusts) may incur Indebtedness (including Acquired      
Debt) or issue Disqualified Stock and any Subsidiary Guarantor (other than the  
Residual Collateral Trusts) may issue preferred stock if, on the date of such   
incurrence or issuance and after giving effect thereto, the Consolidated        
Leverage Ratio does not exceed 2.0 to 1.0.                                      

(b) The foregoing provisions will not apply to:                           

 (i) the incurrence by the Company or any Restricted Subsidiary (other
 than the Residual Collateral Trusts) of Indebtedness represented by Capital
Lease Obligations, mortgage financings or purchase money obligations, in  
each case incurred for the purpose of financing all or any part of the    
purchase price or cost of construction or improvement of property used in 
the business of the Company or such Restricted Subsidiary, in an aggregate
principal amount not to exceed $15.0 million in the aggregate since the   
Original Issue Date;                                                      

     (ii) the existence of Warehouse Facilities, regardless of amount, and the
incurrence of Permitted Warehouse Debt by the Company or any of its       
Restricted Subsidiaries (other than the Residual Collateral Trusts);      
provided, however, that to the extent any such Indebtedness of the Company
or a Restricted Subsidiary of the Company ceases to constitute Permitted  
Warehouse Debt, to such extent such Indebtedness shall be deemed to be    
  incurred by the Company or such Restricted Subsidiary of the Company, as the
case may be, at such time;                                                

     (iii) the incurrence by the Company or any of its Restricted Subsidiaries
(other than the Residual Collateral Trusts) of intercompany Indebtedness  
owing to the Company or any of its Restricted Subsidiaries; provided,     
however, that any Indebtedness of the Company to any Restricted Subsidiary
is permitted by Section 4.07 hereof;                                      

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 (iv) the incurrence by the Company of Indebtedness represented by the
Senior Notes and the incurrence by the Subsidiary Guarantors of the       
Subsidiary Guarantees;                                                    

  (v) Indebtedness of the Company and its Restricted Subsidiaries (other
  than the Residual Collateral Trusts) outstanding on the Original Issue Date;

    (vi) the incurrence by the Company or any of its Restricted Subsidiaries
(other than the Residual Collateral Trusts) of Permitted Refinancing      
Indebtedness with respect to Indebtedness that was permitted by this      
  Indenture to be incurred or that was outstanding at the Original Issue Date;

     (vii) the incurrence by the Company or any of its Restricted Subsidiaries
 (other than the Residual Collateral Trusts) of Hedging Obligations directly
  related to (w) Indebtedness of the Company or a Restricted Subsidiary of the
  Company that was permitted by this Indenture to be incurred, (x) Receivables
held by the Company or a Restricted Subsidiary pending sale in a          
Securitization, (y) Receivables of the Company or a Restricted Subsidiary 
that have been sold pursuant to a Warehouse Facility; or (z) Receivables  
that the Company or a Restricted Subsidiary reasonably expects to purchase
or commit to purchase, finance or accept as collateral; provided, however,
that, in the case of each of the foregoing clauses (w) through (z), such  
Hedging Obligations are eligible to receive hedge accounting treatment in 
accordance with GAAP as applied by the Company and its Restricted         
Subsidiaries on the Original Issue Date;                                  

   (viii) the incurrence of Acquired Debt by the Company or any Subsidiary
 Guarantor (other than the Residual Collateral Trusts) in a principal amount
not to exceed $15.0 million in the aggregate since the Original Issue Date
that is without recourse to the Company or any of its Restricted          
Subsidiaries or any of their respective assets (other than the Subsidiary 
 Guarantor acquired subject to such Acquired Debt), and is not guaranteed by
any such Person;                                                          

 (ix) the Guarantee by the Company or any of the Subsidiary Guarantors
(other than the Residual Collateral Trusts) of the Indebtedness of the    
  Company or another Subsidiary Guarantor that was permitted to be incurred by
another provision of this Section 4.09;                                   

(x) the incurrence by the Company and the Subsidiary Guarantors of  
Indebtedness (other than the Residual Collateral Trusts) secured by (A)   
Servicing Receivables (other than those on deposit in the Residual        
  Collateral Trusts), (B) Residual Receivables (other than those on deposit in
the Residual Collateral Trusts) or (C) the Capital Stock of Subsidiaries  
(other than the Residual Collateral Trusts or the other Subsidiary        
Guarantors) substantially all of the assets of which are Residual         
Receivables and/or Servicing Receivables;                                 

   (xi) the incurrence by the Company and the Subsidiary Guarantors (other
than the Residual Collateral Trusts) of Indebtedness in an aggregate      
principal amount at any time outstanding not to exceed $10.0 million;     

    (xii) (A) the incurrence by an Unrestricted Subsidiary of the Company of
Non-Recourse Debt (including, without limitation, Non-Recourse Debt that  
would constitute Permitted Warehouse Debt if incurred by a Restricted     
  Subsidiary of the Company); provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of the Unrestricted Subsidiary, such event 
 shall be deemed to constitute an incurrence of Indebtedness by a Restricted
  Subsidiary and (B) the issuance by an Unrestricted Subsidiary of the Company
of preferred stock; and                                                   

   (xiii) the Guaranteed Obligations and the Collateral securing the same.

(c) The Company shall not, and shall not permit any Subsidiary Guarantor  
to, incur any Indebtedness that is contractually subordinated to any            
Indebtedness of the Company or any such Subsidiary Guarantor unless such        
Indebtedness is also contractually subordinated to the Senior Notes, or the     
Subsidiary Guarantee of such Subsidiary Guarantor (as applicable), on           
substantially identical terms; provided, however, that no Indebtedness shall    
be deemed to be contractually subordinated to any other Indebtedness solely by  
virtue of being unsecured or of limited recourse.                               

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 (d) For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the         
categories of Indebtedness described in clauses (i) through (xii) of Section    
4.09(b) above or is entitled to be incurred pursuant to Section 4.09(a), the    
Company shall, in its sole discretion, classify such item of Indebtedness in    
any manner than complies with this covenant and such item of Indebtedness will  
be treated as having been incurred pursuant to only one of such clauses or      
pursuant to Section 4.09(a).]                                                   

SECTION 4.10  Transactions With Affiliates.                                   

[delete: The Company and each Restricted Subsidiary shall not, and the    
Company shall not permit any of its Restricted Subsidiaries to, sell, lease,    
transfer or otherwise dispose of any of its properties or assets to, or         
purchase any property or assets from, or enter into or make or amend any        
transaction, contract, agreement, understanding, loan, advance or guarantee     
with, or for the benefit of, any Affiliate (each of the foregoing an            
"Affiliate Transaction"); provided that Affiliate Transactions shall not        
include (A) any employment agreement, stock option, employee benefit,           
indemnification, compensation (including the payment of reasonable fees to      
Directors of the Company or its Restricted Subsidiaries who are not employees   
of the Company or its Restricted Subsidiaries), business expense reimbursement  
or other employment-related agreement, arrangement or plan entered into by the  
Company or any of its Restricted Subsidiaries in the ordinary course of         
business of the Company or such Restricted Subsidiary and consistent with past  
practice, or if not consistent with past practice, approved by a majority of    
the independent members of the Board of Directors whose resolution shall be     
delivered to the Trustee, (B) transactions between or among the Company and/or  
its Restricted Subsidiaries (other than the Canadian Subsidiaries) not          
otherwise prohibited by this Indenture, (C) transactions constituting a         
Permitted Investment in the Canadian Subsidiaries permitted by clause (a) of    
the definition of Permitted Investments and transactions between the Canadian   
Subsidiaries not otherwise prohibited by this Indenture, (D) loans or advances  
to employees in the ordinary course of business of the Company or its           
Restricted Subsidiaries or for advance payment of employee benefits             
(including, without limitation, prefunding of any severance obligations), but   
in any event not to exceed $500,000 in aggregate principal amount outstanding   
to all such persons at any one time, (E) Restricted Payments other than         
Restricted Investments that are permitted by Section 4.07 hereof, (F)           
Securitizations and (G) sales, transfers and other dispositions of Residual     
Receivables and Servicing Receivables, provided that after the consummation     
thereof, the Company is in compliance with Section 4.17.]                       

SECTION 4.11  Liens.                                                          

[delete: The Company and each Restricted Subsidiary shall not, and the    
Company shall not permit any of its Restricted Subsidiaries to, directly or     
indirectly, create, incur, assume or suffer to exist any Lien on any asset now  
owned or hereafter acquired, or any income or profits therefrom or assign or    
convey any right to receive income therefrom, except Permitted Liens.           
Notwithstanding any provision in this Indenture to the contrary, the entry      
from time to time by the Company or one or more of the Subsidiary Guarantors    
with Ocwen Federal Bank, FSB, or its affiliates, successors or assigns (the     
"Sub-Servicer") into one or more sub-servicing agreements pursuant to which     
the Sub-Servicer will act as servicer of Receivables and which will be          
terminable at the election of the Company or a Subsidiary Guarantors for any    
reason (with payment of specified fees and penalties) on not more than 90       
days' prior written notice shall not be deemed a breach of this Section 4.11    
or any other provision of this Indenture.]                                      

SECTION 4.12  Business Activities.                                            

[delete: The Company and each Restricted Subsidiary shall not, and the    
Company shall not permit any Restricted Subsidiary to, engage in any business   
other than Permitted Businesses.]                                               

SECTION 4.13  Payments For Consent.                                           

 [delete: Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of        
interest, fee or otherwise, to any Holder of any of the Senior Notes for or as  
an inducement to any consent, waiver or amendment of any of the terms or        
provisions of this Indenture, the Senior Notes or any Subsidiary Guarantee      
unless such consideration is offered to be paid or is                           

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paid to all Holders of Senior Notes that consent, waive or agree to amend in    
the time frame set forth in the solicitation documents relating to such         
consent, waiver or agreement.]                                                  

SECTION 4.14  Corporate Existence.                                            

[delete: Subject to Article 5 hereof, the Company shall do or cause to be 
done all things necessary to preserve and keep in full force and effect (i)     
its corporate existence, and the corporate, partnership or other existence of   
each of its Subsidiaries, in accordance with the respective organizational      
documents (as the same may be amended from time to time) of the Company or any  
such Subsidiary and (ii) the rights (charter and statutory), licenses and       
franchises of the Company and its Subsidiaries; provided, however, that the     
Company shall not be required to preserve any such right, license or            
franchise, or the corporate, partnership or other existence of any of its       
Subsidiaries, if the Board of Directors shall determine that the preservation   
thereof is no longer desirable in the conduct of the business of the Company    
and its Subsidiaries, taken as a whole, and that the loss thereof is not        
adverse in any material respect to the Holders of the Senior Notes.]            

SECTION 4.15  Offer To Repurchase Upon Change Of Control.                     

 [delete: (a) Upon the occurrence of a Change of Control, each Holder of the
Senior Notes will have the right to require the Company to repurchase all or    
any part (equal to $1,000 or an integral multiple thereof) of such Holder's     
Senior Notes pursuant to the offer described below (the "Change of Control      
Offer") at an offer price in cash equal to 101% of the aggregate principal      
amount thereof plus accrued and unpaid interest thereon, if any, to the date    
of purchase (the "Change of Control Payment"). Within ten days following any    
Change of Control, the Company shall mail a notice to each Holder describing    
the transaction or transactions that constitute the Change of Control and       
offering to repurchase the Senior Notes on the date specified in such notice,   
which date shall be no earlier than the earliest date permitted under Rule      
14e-1 and no later than 60 days from the date such notice is mailed (the        
"Change of Control Payment Date"), pursuant to the procedures required by this  
Indenture and described in such notice. The Company shall comply with the       
requirements of Rule 14e-1 and any other securities laws and regulations        
thereunder to the extent such laws and regulations are applicable in            
connection with the repurchase of the Senior Notes as a result of a Change of   
Control. To the extent that the provisions of any securities laws or            
regulations conflict with the provisions of this Section 4.15, the Company      
shall comply with the applicable securities laws and regulations and shall not  
be deemed to have breached its obligations under this Section 4.15 by virtue    
thereof.                                                                        

 (b) On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment all the Senior Notes or portions thereof         
properly tendered pursuant to the Change of Control Offer, (2) deposit with     
the Paying Agent an amount equal to the Change of Control Payment in respect    
of all the Senior Notes or portions thereof so tendered and (3) deliver or      
cause to be delivered to the Trustee the Senior Notes so accepted together      
with an Officers' Certificate stating the aggregate principal amount of the     
Senior Notes or portions thereof being purchased by the Company. The Paying     
Agent shall promptly mail to each Holder of the Senior Notes so tendered the    
Change of Control Payment for such Senior Notes, and the Trustee shall          
promptly authenticate and mail (or cause to be transferred by book entry) to    
each Holder a new Senior Note equal in principal amount to any unpurchased      
portion of the Senior Notes surrendered, if any; provided that each such new    
Senior Note will be in a principal amount of $1,000 or an integral multiple     
thereof. The Company shall publicly announce the results of the Change of       
Control Offer on or as soon as practicable after the Change of Control Payment  
Date.                                                                           

(c) The Company shall not be required to make a Change of Control Offer   
upon a Change of Control if a third party makes the Change of Control Offer in  
the manner, at the times and otherwise in compliance with the requirements set  
forth in this Indenture applicable to a Change of Control Offer and purchases   
all the Senior Notes validly tendered and not withdrawn under such Change of    
Control Offer.]                                                                 

SECTION 4.16  Additional Subsidiary Guarantees.                               

[delete: If the Company or any of its Subsidiaries shall acquire or create
another Subsidiary after the date of this Indenture, then the Company shall     
cause such newly acquired or created Subsidiary to execute a Subsidiary         
Guarantee and deliver an Opinion of Counsel, in accordance with the terms of    
this Indenture,                                                                 

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except this Section 4.16 shall not apply to any Subsidiaries that have          
properly been designated as Unrestricted Subsidiaries in accordance with this   
Indenture and are prohibited by contract or by their organizational documents   
from executing a Subsidiary Guaranty for so long as they continue to            
constitute Unrestricted Subsidiaries and remain subject to such prohibitions.   
In addition, the Company or its Subsidiary, as applicable, shall enter into a   
Pledge Agreement with respect to all of the Owner Trust Certificates of any     
such newly formed or acquired Subsidiary which is required to execute a         
Subsidiary Guarantee in accordance with this Section. Without limiting the      
foregoing, Securitization Trusts shall not be obligated to enter into a         
Subsidiary Guaranty.]                                                           

SECTION 4.17  Maintenance of Residual Receivables Pending Exchange Offer.     

 [delete: The Company, Delta Funding and DF Special Holdings shall cause all
Residual Receivables owned as of March 15, 2001 by the 2000-1 Trust and the     
2000-2 Trust to remain owned by such Trusts until the consummation of the       
Exchange Offer (other than (i) the release and transfer to DF Special Holdings  
from the 2000-1 Trust of the Residual Receivables set forth on Schedule         
4.17(A) and the deposit by DF Special Holdings into the 2000-1 Trust of the     
Residual Receivables set forth on Schedule 4.17(B) and (ii) the release and     
transfer to Delta Funding from the 2000-2 Trust of the Residual Receivables     
set forth on Schedule 4.17(C) and the deposit by Delta Funding into the 2000-2  
Trust of the Residual Receivables set forth on Schedule 4.17(D). Schedule       
4.17(E) lists the underlying certificates for all Residual Receivables          
required to be maintained on deposit with the Residual Collateral Trusts in     
order to satisfy the requirements of the foregoing sentence.                    

After giving effect to (i) the release and transfer to DF Special Holdings
from the 2000-1 Trust of the Residual Receivables set forth on Schedule         
4.17(A) and the deposit by DF Special Holdings into the 2000-1 Trust of the     
Residual Receivables set forth on Schedule 4.17(B) and (ii) the release and     
transfer to Delta Funding from the 2000-2 Trust of the Residual Receivables     
set forth on Schedule 4.17(C) and the deposit by Delta Funding into the 2000-2  
Trust of the Residual Receivables set forth on Schedule 4.17(D), the Residual   
Receivables then remaining in the 2000-1 Trust and the 2000-2 Trust are and     
were free and clear of liens and had an aggregate unaudited book value of       
approximately $152 million as of December 31, 2000; included in such Residual   
Receivables are Senior Residual Receivables which had an aggregate book value   
of approximately $75 million as of December 31, 2000.                           

For the purposes of this Section 4.17, the Company valued (i) Senior      
Residual Receivables using a discount rate of 12% and (ii) all other Residual   
Receivables using a discount rate of 18%. The other assumptions and             
methodology used by the Company in valuing Senior Residual Receivables and      
other Residual Receivables were those which are used by the Company in          
establishing the book value of such Senior Residual Receivables and other       
Residual Receivables in its annual audited consolidated financial statements    
prepared in accordance with GAAP consistently applied.                          

The foregoing is collectively referred to as the Residual Receivable      
Maintenance Requirement.]                                                       

SECTION 4.18  Liquidity Maintenance.                                          

  [delete: The Company shall cause the amount of Unencumbered Liquid Assets to
be equal to or greater than the amount of Unencumbered Liquid Assets required   
to be maintained by the Company pursuant to the then effective Warehouse        
Facilities.]                                                                    

SECTION 4.19  Back-Up Servicing Agreements.                                   

 [delete: No later than March 15, 2001, Delta Funding will, at its own cost,
enter into and thereafter at all times maintain in full force and effect the    
Back-Up Servicing Agreements with the Back-Up Servicer and satisfy on a timely  
basis all conditions with respect to the transfer of servicing thereunder when  
such conditions are capable of being satisfied. The Back-Up Servicing           
Agreements shall provide for mapping and monthly back-up of information         
relating to the mortgage loans underlying Residual Receivables created after    
1996 for which Delta Funding or any Affiliate is the primary servicer. Delta    
Funding may cease such Back-Up Servicing Agreements at any time that the value  
of Unencumbered Liquid Assets equals or exceeds $40,000,000, as of the          
conclusion of any Business Day; provided, further, that if Delta Funding has    
ceased                                                                          

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such Back-Up Servicing Agreements in accordance with the foregoing, Delta       
Funding shall reinstate such Back-Up Servicing Agreements as soon as            
practicable and in any event within thirty (30) days if Unencumbered Liquid     
Assets are less than $32,500,000 at the conclusion of any Business Day.]        

SECTION 4.20  Registration Rights.                                            

[delete: Upon the written request of the Holders holding a majority in    
interest of the Senior Notes then outstanding, the Company shall use            
reasonable commercial efforts to cause a registration statement covering the    
Senior Notes to be filed under the Exchange Act and to have such registration   
statement declared effective by the SEC.]                                       

SECTION 4.21  Leverage Ratio (Total Liabilities).                             

  [delete: The Company and the Subsidiary Guarantors, on a consolidated basis,
will not permit the ratio of Total Adjusted Liabilities (excluding              
Subordinated Indebtedness) to Adjusted Tangible Net Worth to exceed the         
greater of (A) 7.0 to 1.0 and (B) the ratio of Total Adjusted Liabilities to    
Adjusted Tangible Net Worth (if any) set forth in the then-effective Warehouse  
Facilities, as of any day.]                                                     

SECTION 4.22  Leverage Ratio.                                                 

  [delete: The Company and the Subsidiary Guarantors, on a consolidated basis,
will not permit the ratio of Adjusted Senior Indebtedness of the Company and    
the Subsidiary Guarantors as of the end of any fiscal quarter, to Tangible Net  
Worth as of the end of such fiscal quarter to exceed the greater of (A) 1.5 to  
1.0 and (B) the ratio of Adjusted Senior Indebtedness to Tangible Net Worth     
(if any) set forth in the then-effective Warehouse Facilities.]                 

SECTION 4.23  Net Worth.                                                      

  [delete: The Company and the Subsidiary Guarantors, on a consolidated basis,
will not, at any time, permit their consolidated Tangible Net Worth to be less  
than the greater of (A) $45,000,000 and (B) the Tangible Net Worth requirement  
(if any) set forth in the then-effective Warehouse Facilities.]                 

SECTION 4.25  No Pledge or Sale of Residual Receivables or Other Assets after 
Default or Event of Default.                                                    

 [delete: From the date a Default or Event of Default has occurred until the
date the Default or Event of Default is cured or waived, the Company shall not  
and shall not permit any of its Restricted Subsidiaries to sell, lease,         
securitize, transfer or assign or grant any new security interests or           
otherwise permit any new Liens (collectively, a "Disposition") to be placed on  
any of its Residual Receivables, Servicing Receivables, intellectual property,  
equipment, leasehold interests, real property or capitalized mortgage           
servicing rights, other than, following a Default and prior to the occurrence   
of an Event of Default, a Disposition of Residual Receivables, Servicing        
Receivables or other assets in the ordinary course of business which does not   
result in any additional Defaults and provided that the proceeds of such        
Disposition are used simultaneous with such Disposition to either cure the      
Default or for payment of the Senior Notes or other Guaranteed Obligations      
arising under the Senior Notes, this Indenture or the Collateral Agreements.]   

SECTION 4.26  Limitations on Asset Sales.                                     

[delete: The Company and each Restricted Subsidiary shall not, and the    
Company shall not permit any of its Restricted Subsidiaries to, consummate an   
Asset Sale unless the Company (or the Restricted Subsidiary, as the case may    
be) receives consideration at the time of such Asset Sale at least equal to     
the Fair Market Value of the assets or Owner Trust Certificates issued or sold  
or otherwise disposed of.                                                       

 The Company or the Restricted Subsidiary, as the case shall be, shall apply
an amount equal to 100% of such Net Proceeds in the permitted Business of the   
Company and the Restricted Subsidiaries or to payment of the Senior Notes or    
other Guaranteed Obligations. Pending the final application of any such Net     
Proceeds,                                                                       

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the Company or such Restricted Subsidiary may temporarily invest such Net       
Proceeds in items permitted under (a) or (b) in the definition of Permitted     
Investments.                                                                    

Notwithstanding the foregoing, the Company and each Restricted Subsidiary 
shall not and the Company shall not permit its Restricted Subsidiaries to       
consummate an Asset Sale which includes any Collateral or Capital Stock of the  
Canadian Subsidiaries not constituting Collateral.]                             

SECTION 4.27  Flow of Residual Receivables.                                   

[delete: (a) DELETED.                                                     

 (b) On the Issue Date, Delta Funding shall deposit all Residual Receivables
owned by it in the Delta Funding Residual Holding Trust 2000-2 Residual         
Collateral Trust.                                                               

(c) On the Issue Date, DF Special Holdings shall deposit all Residual     
Receivables owned by it in the Delta Funding Residual Holding Trust 2000-1      
Residual Collateral Trust.]                                                     

SECTION 4.28  Notice of Default.                                              

  [delete: If a Default or an Event of Default occurs and is continuing and if
it is known to the Company or any Subsidiary Guarantor, the Company shall mail  
or cause to be mailed to each Holder notice of the uncured Default or Event of  
Default within five (5) Business Days after such Default or Event of Default    
first becomes known to the Company or any Subsidiary Guarantor.]                

SECTION 5.01  Merger, Consolidation Or Sale Of Assets.                        

[delete: (a) The Company shall not consolidate, or merge with or into     
(whether or not the Company is the surviving corporation) or sell, assign,      
transfer, lease, convey or otherwise dispose of all or substantially all of     
its properties or assets in one or more related transactions, to another        
corporation, Person or entity unless (i) the Company is the surviving           
corporation or the entity or the Person formed by or surviving any such         
consolidation, or merger (if other than the Company) or to which such sale,     
assignment, transfer, lease, conveyance or other disposition shall have been    
made is a corporation organized or existing under the laws of the United        
States, any state thereof or the District of Columbia; (ii) the entity or       
Person formed by or surviving any such consolidation or merger (if other than   
the Company) or the entity or Person to which such sale, assignment, transfer,  
lease, conveyance or other disposition shall have been made assumes all the     
obligations of the Company under the Notes, this Indenture, the Collateral      
Agreements and the Related Agreements pursuant to a supplemental indenture and  
other agreements in forms reasonably satisfactory to the Trustee; (iii)         
immediately after such transaction, no Default or Event of Default exists;      
(iv) each of the Subsidiary Guarantors confirms its obligations under the       
Subsidiary Guarantees, this Indenture, the Collateral Agreements and the        
Related Agreements pursuant to a supplemental indenture and other agreements    
in forms reasonably satisfactory to the Trustee; (v) the Trustee has received   
an Opinion of Counsel to the effect that all actions required to perfect any    
pledges or security interest on the Collateral have been taken and the          
requirements of clauses (i), (ii) and (iv) have been satisfied (assuming the    
Trustee's satisfaction); (vi) the Trustee has received an Officers'             
Certificate to the effect that all requirements of the Section have been        
satisfied; and (vii) except in the case of a merger of the Company with or      
into a Wholly Owned Subsidiary of the Company, the Company or the entity or     
Person formed by or surviving any such consolidation or merger (if other than   
the Company), or to which such sale, assignment, transfer, lease, conveyance    
or other disposition shall have been made (A) will have Consolidated Net Worth  
immediately after the transaction equal to or greater than the Consolidated     
Net Worth of the Company immediately preceding the transaction and (B) will,    
at the time of such transaction and after giving pro forma effect thereto as    
if such transaction had occurred at the beginning of the applicable four-       
quarter period, be permitted to incur at least $1.00 of additional              
Indebtedness pursuant to the Consolidated Leverage Ratio test set forth in the  
first paragraph of Section 4.09(a).                                             

 (b) Notwithstanding Section 5.01(a), but subject to compliance with Section
5.01(a)(ii) (with respect to the Wholly-Owned Restricted Subsidiaries           
obligations), (iii), (iv), (v) and (vi), a Wholly-Owned Restricted Subsidiary   
of the Company may merge into the Company or another Wholly-Owned Restricted    
Subsidiary of                                                                   

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the Company that is a Subsidiary Guarantor, provided that the Capital Stock of  
such surviving Person constitutes Collateral. Notwithstanding the foregoing,    
no Residual Collateral Trust may be sold, merged or otherwise consolidated      
with any other entity.]                                                         

SECTION 5.02  Successor Corporation Substituted.                              

 Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of    
the Company [delete: in accordance with Section 5.01 hereof], the successor     
corporation formed by such consolidation or into or with which the Company is   
merged or to which such sale, assignment, transfer, lease, conveyance or other  
disposition is made shall succeed to, and be substituted for (so that from and  
after the date of such consolidation, merger, sale, lease, conveyance or other  
disposition, the provisions of this Indenture referring to the "Company" shall  
refer instead to the successor corporation and not to the Company) and may      
exercise every right and power of the Company under this Indenture with the     
same effect as if such successor Person had been named as the Company herein;   
provided, however, that the predecessor Company shall not be relieved from the  
obligation to pay the principal of and interest on the Notes [delete: except    
in the case of a sale of all of the Company's assets that meet the              
requirements of Section 5.01 hereof.]                                           

SECTION 6.01  Events Of Default.                                              

[delete: (c) the Company on any Restricted Subsidiary defaults in the     
payment of interest or principal under any of the Warehouse Facility (whether   
due at maturity, by acceleration or otherwise) and such default continues       
beyond the grace period (if any) provided in the applicable Warehouse           
Facility;                                                                       

 (d) the Company fails to comply with any of the provisions of Section 4.07,
4.09, 4.11, 4.15, 4.17, 4.18, 4.21, 4.22, 4.23, 4.24, 4.25, 4.26, 4.27 or 5.01  
hereof;                                                                         

(e) the Company fails to observe or perform any other covenant,           
representation, warranty or other agreement in this Indenture or the Senior     
Notes and such failure to observe or perform remains uncured for 30 days (or,   
if the Company has failed to notify the Holders of a Default or an Event of     
Default as required by Section 4.28, that number of days equal to 30 days       
minus the number of days during which the Company is in Default of its          
obligation under Section 4.28) after notice to the Company by the Trustee or    
the Holders or Beneficial Holders of at least 25% in aggregate principal        
amount of the Senior Notes then outstanding;                                    

(f) a default occurs under any mortgage, indenture or instrument under    
which there may be issued or by which there may be secured or evidenced any     
Indebtedness for money borrowed by the Company or any of its Subsidiaries (or   
the payment of which is guaranteed by the Company or any of its Subsidiaries),  
whether such Indebtedness or Guarantee now exists, or is created after the      
date of this Indenture, which default (a) is caused by a failure to pay         
principal of or premium, if any, or interest on such Indebtedness prior to the  
expiration of the grace period provided in such Indebtedness on the date of     
such default (a "Payment Default") or (b) results in the acceleration of such   
Indebtedness prior to its express maturity and, in each case, the principal     
amount of any such Indebtedness under which there has been a Payment Default    
or, together with the principal amount of any other such Indebtedness the       
maturity of which has been so accelerated, aggregates $5.0 million or more;     

(g) a final judgment or final judgments for the payment of money are      
entered by a court or courts of competent jurisdiction against the Company,     
any of its Restricted Subsidiaries (other than Continental Property Management  
Corp.), any Significant Subsidiary or any group of Subsidiaries that, taken as  
a whole, would constitute a Significant Subsidiary and such judgment or         
judgments remain undischarged for a period (during which execution shall not    
be effectively stayed) of 60 days, provided that the aggregate of all such      
undischarged judgments exceeds $5.0 million;                                    

 (h) the Company, any of its Restricted Subsidiaries (other than Continental
Property Management Corp.), any of its Significant Subsidiaries or any group    
of Subsidiaries that, taken as a whole, would constitute a Significant          
Subsidiary pursuant to or within the meaning of Bankruptcy Law:                 

(i) commences a voluntary case,                                     

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(ii) consents to the entry of an order for relief against it in an  
involuntary case,                                                         

(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or                                     

(iv) makes a general assignment for the benefit of its creditors,   

(i) a court of competent jurisdiction enters an order or decree under any 
Bankruptcy Law that:                                                            

    (1) grants relief in an involuntary case against the Company, any of its
  Restricted Subsidiaries, any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant       
Subsidiary that results in such entity or entities becoming a debtor or   
debtors under the Bankruptcy Law;                                         

(2) appoints a Custodian of the Company, any of its Restricted      
Subsidiaries, any of its Significant Subsidiaries or any group of         
Subsidiaries that, taken as a whole, would constitute a Significant       
  Subsidiary or for all or substantially all of the property of the Company or
  any of its Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary; or                 

(3) orders the liquidation of the Company, any of its Restricted    
Subsidiaries, any of its Significant Subsidiaries or any group of         
Subsidiaries that, taken as a whole, would constitute a Significant       
Subsidiary;                                                               

(j) any Subsidiary Guarantee, Collateral Agreement or Related Agreement   
shall be held in any judicial proceeding to be invalid or unenforceable or      
shall cease for any reason to be in full force and effect or the Company or     
any Subsidiary Guarantor or any Person acting on behalf of the Company or any   
Subsidiary Guarantor shall deny or disaffirm its obligations under its          
Subsidiary Guarantee, any Collateral Agreement or Related Agreement; or         

(k) the Company or any Restricted Subsidiary fails to observe or perform  
any material covenant, representation, warranty or agreement in any Collateral  
Agreement or any Related Agreement for 15 days after notice to the Company by   
the Trustee, the Collateral Agent, the Warrant Agent, the Owner Trustee, the    
Administrator, the Back-Up Servicer, or Holders or Beneficial Holders of at     
least 25% in aggregate principal amount of the Senior Notes then outstanding;   
or                                                                              

 (l) the Company or any of its affiliates fails in a material way to perform
any of the undertakings set forth in the Letter of Intent on or before          
August 31, 2001; or                                                             

(m) the Company fails to conclude the Exchange Offer described in the     
Letter of Intent on or before August 31, 2001; or                               

(n) Delta Funding fails to conclude the transfer of actual servicing for  
the entirety of the mortgage loans underlying Residual Receivables listed on    
Schedule 4.17(E) to Ocwen Federal Bank, FSB on or before July 31, 2001.]        

SECTION 6.02  Acceleration.                                                   

If any Event of Default [delete: (other than an Event of Default specified
in clause (h) or (i) of Section 6.01 hereof)] occurs and is continuing, the     
Trustee or the Holders of at least 25% in principal amount of the then          
outstanding Senior Notes may declare all the Senior Notes to be due and         
payable immediately. Upon any such declaration, the Senior Notes shall become   
due and payable immediately. [delete: Notwithstanding the foregoing, if an      
Event of Default specified in clause (h) or (i) of Section 6.01 hereof occurs,  
all outstanding Senior Notes shall be due and payable immediately without       
further action or notice. The Holders of a majority in aggregate principal      
amount of the then outstanding Senior Notes by written notice to the Trustee    
may on behalf of all of the Holders rescind an acceleration and its             
consequences if the rescission would not conflict with any judgment or decree   
and if all existing Events of Default (except nonpayment of principal,          
interest or premium that has become due solely because of the acceleration)     
have been cured or waived.]                                                     

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  [delete: If an Event of Default occurs on or after August 1, 2001, by reason
of any willful action (or inaction) taken (or not taken) by or on behalf of     
the Company with the intention of avoiding payment of the premium that the      
Company would have had to pay if the Company then had elected to redeem the     
Senior Notes pursuant to Section 3.07 hereof, then, upon acceleration of the    
Senior Notes, an equivalent premium shall also become and be immediately due    
and payable, to the extent permitted by law, anything in this Indenture or in   
the Senior Notes to the contrary notwithstanding. If an Event of Default        
occurs prior to August 1, 2001, by reason of any willful action (or inaction)   
taken (or not taken) by or on behalf of the Company with the intention of       
avoiding the prohibition on redemption of the Senior Notes prior to such date,  
then, upon acceleration of the Senior Notes, an additional premium shall also   
become and be immediately due and payable in an amount equal to 5.750% of the   
principal amount to the date of payment that would otherwise be due but for     
the provisions of this sentence.]                                               

SECTION 10.01  Purposes for Which Meetings May Be Called.                     

[delete: A meeting of Holders may be called at any time and from time to  
time pursuant to the provisions of this Article Ten for any of the following    
purposes:                                                                       

(a) to give any notice to the Company or to the Trustee, or to give any   
directions to the Trustee, or to waive or to consent to the waiving of any      
Default or Event of Default hereunder and its consequences, or to take any      
other action authorized to be taken by Holders pursuant to any of the           
provisions of Article Six;                                                      

(b) to remove the Trustee or appoint a successor Trustee pursuant to the  
provisions of Article Seven;                                                    

(c) to consent to an amendment, supplement or waiver pursuant to the      
provisions of Section 9.02; or                                                  

(d) to take any other action (i) authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the Senior Notes     
under any other provision of this Indenture, or authorized or permitted by law  
or (ii) which the Trustee deems necessary or appropriate in connection with     
the administration of this Indenture.]                                          

SECTION 10.02  Manner of Calling Meetings.                                    

[delete: The Trustee may at any time call a meeting of Holders to take any
action specified in Section 10.01, to be held at such time and at such place    
in The City of New York, New York or elsewhere as the Trustee shall determine.  
Notice of every meeting of Holders, setting forth the time and place of such    
meeting and in general terms the action proposed to be taken at such meeting,   
shall be mailed by the Trustee, first-class postage prepaid, to the Company     
and to the Holders at their last addresses as they shall appear on the          
registration books of the Registrar not less than 10 nor more than 60 days      
prior to the date fixed for a meeting.                                          

Any meeting of Holders shall be valid without notice if the Holders of all
Senior Notes then outstanding are present in Person or by proxy, or if notice   
is waived before or after the meeting by the Holders of all Senior Notes        
outstanding, and if the Company, the Subsidiary Guarantors and the Trustee are  
either present by duly authorized representatives or have, before or after the  
meeting, waived notice.]                                                        

SECTION 10.03  Call of Meetings by the Company or Holders.                    

 [delete: In case at any time the Company, pursuant to a Board Resolution or
the Holders of not less than 10% in aggregate principal amount of the Senior    
Notes then outstanding shall have requested the Trustee to call a meeting of    
Holders to take any action specified in Section 10.01, by written request       
setting forth in reasonable detail the action proposed to be taken at the       
meeting, and the Trustee shall not have mailed the notice of such meeting       
within 20 days after receipt of such request, then the Company or the Holders   
of Senior Notes in the amount above specified may determine the time and place  
in The City of New York, New York or elsewhere for such meeting and may call    
such meeting for the purpose of taking such action, by mailing or causing to    
be mailed notice thereof as provided in Section 10.02.]                         

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SECTION 10.04  Who May Attend and Vote at Meetings.                           

[delete: To be entitled to vote at any meeting of Holders, a Person shall 
(a) be a registered Holder of one or more Senior Notes, or (b) be a Person      
appointed by an instrument in writing as proxy for the registered Holder or     
Holders of Senior Notes. The only Persons who shall be entitled to be present   
or to speak at any meeting of Holders shall be the Persons entitled to vote at  
such meeting and their counsel and any representatives of the Trustee and its   
counsel and any representatives of the Company, the Subsidiary Guarantors and   
their respective counsel.]                                                      

SECTION 10.05  Regulations May Be Made by Trustee; Conduct of the Meeting;    
Voting Rights; Adjournment.                                                     

 [delete: Notwithstanding any other provision of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any action    
by or any meeting of Holders, in regard to proof of the holding of Senior       
Notes and of the appointment of proxies, and in regard to the appointment and   
duties of inspectors of votes, and submission and examination of proxies,       
certificates and other evidence of the right to vote, and such other matters    
concerning the conduct of the meeting as it shall think appropriate. Such       
regulations may fix a record date and time for determining the Holders of       
record of Senior Notes entitled to vote at such meeting, in which case those    
and only those Persons who are Holders of Senior Notes at the record date and   
time so fixed, or their proxies, shall be entitled to vote at such meeting      
whether or not they shall be such Holders at the time of the meeting.           

  The Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by Holders as         
provided in Section 10.03, in which case the Holders calling the meeting, as    
the case may be, shall in like manner appoint a temporary chairman. A           
permanent chairman and a permanent secretary of the meeting shall be elected    
by vote of the Holders of a majority in principal amount of the Senior Notes    
represented at the meeting and entitled to vote.                                

At any meeting each Holder or proxy shall be entitled to one vote for each
$1,000 principal amount of Senior Notes held or represented by him; provided,   
however, that no vote shall be cast or counted at any meeting in respect of     
any Senior Notes challenged as not outstanding and ruled by the Trustee to be   
not outstanding. The chairman may adjourn any such meeting if he is unable to   
determine whether any Holder or proxy shall be entitled to vote at such         
meeting. The chairman of the meeting shall have no right to vote other than by  
virtue of Senior Notes held by him or instruments in writing as aforesaid duly  
designating him as the proxy to vote on behalf of other Holders. Any meeting    
of Holders duly called pursuant to the provisions of Section 10.02 or Section   
10.03 may be adjourned from time to time by vote of the Holders of a majority   
in aggregate principal amount of the Senior Notes represented at the meeting    
and entitled to vote, and the meeting may be held as so adjourned without       
further notice.]                                                                

SECTION 10.06  Voting at the Meeting and Record to Be Kept.                   

[delete: The vote upon any resolution submitted to any meeting of Holders 
shall be by written ballots on which shall be subscribed the signatures of the  
Holders of Senior Notes or of their representatives by proxy and the principal  
amount of the Senior Notes voted by the ballot. The permanent chairman of the   
meeting shall appoint two inspectors of votes, who cast proxies at the meeting  
for or against any resolution and who shall make and file with the secretary    
of the meeting their verified written reports in duplicate of all votes cast    
at the meeting. A record in duplicate of the proceedings of each meeting of     
the Holders shall be prepared by the secretary of the meeting and there shall   
be attached to such record the original reports of the inspectors of votes on   
any vote by ballot taken thereat and affidavits by one or more Persons having   
knowledge of the facts, setting forth a copy of the notice of the meeting and   
showing that such notice was mailed as provided in Section 10.02 or Section     
10.03. The record shall be signed and verified by the affidavits of the         
permanent chairman and the secretary of the meeting and one of the duplicates   
shall be delivered to the Company and the other to the Trustee to be preserved  
by the Trustee, the latter to have attached thereto the ballots voted at the    
meeting.                                                                        

Any record so signed and verified shall be conclusive evidence of the     
matters therein stated.]                                                        

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SECTION 10.07  Exercise of Rights of Trustee or Holders May Not Be Hindered or
Delayed by Call of Meeting.                                                     

 [delete: Nothing contained in this Article Ten shall be deemed or construed
to authorize or permit, by reason of any call of a meeting of Holders or any    
rights expressly or impliedly conferred hereunder to make such call, any        
hindrance or delay in the exercise of any right or rights conferred upon or     
reserved to the Trustee or to the Holders under any of the provisions of this   
Indenture or of the Senior Notes.]                                              

SECTION 12.01  Collateral Agreements.                                         

[delete: The due and punctual payment of the principal of and interest on 
the Senior Notes when and as the same shall be due and payable, whether on an   
Interest Payment Date, at maturity, by acceleration, repurchase, redemption or  
otherwise, and interest on the overdue principal of and interest (to the        
extent permitted by law), if any, on the Senior Notes and performance of all    
other obligations of the Company and the Subsidiary Guarantors to the Holders   
of Senior Notes or the Trustee under this Indenture, the Senior Notes, the      
Subsidiary Guarantees and the Related Agreements, according to the terms        
hereunder or thereunder, shall be secured as provided in the Collateral         
Agreements which the Company and certain Subsidiaries have entered into         
simultaneously with the execution of this Indenture. Each Holder of Senior      
Notes, by its acceptance thereof, consents and agrees to the terms of the       
Collateral Agreements as the same may be in effect or may be amended from time  
to time in accordance with its terms and authorizes and directs the Collateral  
Agent to enter into the Collateral Agreements and to perform its obligations    
and exercise its rights thereunder in accordance therewith. The Collateral      
Agent agrees that it will not consent to any action or proposed action under    
any of the Related Agreements (except with respect to the release of the        
Remaining Interest as provided in Section 12.03) without obtaining the prior    
consent of the Holders or Beneficial Holders of a majority of the principal     
amount of the then outstanding Senior Notes. The Company shall deliver to the   
Trustee copies of all documents delivered to the Collateral Agent pursuant to   
the Collateral Agreements, and shall do or cause to be done all such acts and   
things as may be necessary or proper, or as may be required by the provisions   
of the Collateral Agreements, to assure and confirm to the Trustee and the      
Collateral Agent the security interest in the Collateral, by the Collateral     
Agreements or any part thereof, as from time to time constituted, so as to      
render the same available for the security and benefit of this Indenture and    
of the Senior Notes secured hereby, according to the intent and purposes        
herein expressed. The Company and the Subsidiary Guarantors shall take, and     
the Company shall cause its Subsidiaries to take, upon request of the Trustee   
or Collateral Agent, any and all actions reasonably required to cause the       
Collateral Agreements to create and maintain, as security for the Guaranteed    
Obligations of the Company and the Subsidiary Guarantors hereunder, a valid     
and enforceable perfected first priority Lien in and on all the Collateral, in  
favor of the Collateral Agent for the benefit of the Holders of Senior Notes,   
superior to and prior to the rights of all third Persons and subject to no      
other Liens.]                                                                   

SECTION 12.02  Recording and Opinions.                                        

[delete: (a) The Company shall furnish to the Trustee simultaneously with 
the execution and delivery of this Indenture an Opinion of Counsel either (i)   
stating that in the opinion of such counsel all action has been taken with      
respect to the recording, registering, filing and perfection of this            
Indenture, financing statements or other instruments necessary to make          
effective the Liens intended to be created by the Collateral Agreements, or     
(ii) stating that, in the opinion of such counsel, no such action is necessary  
to make such Liens effective and (iii) the due execution and enforceability     
(subject to customary exceptions) of this Indenture, the Senior Notes, the      
Subsidiary Guarantees, the Collateral Agreements and the Related Agreements.    

(b) The Company shall furnish to the Collateral Agent and the Trustee on  
September 30 in each year beginning with 2001, an Opinion of Counsel, dated as  
of such date, either (i) (A) stating that, in the opinion of such counsel,      
action has been taken with respect to the recording, registering, filing,       
perfecting, re-recording, re-registering and refiling of all supplemental       
indentures, financing statements, continuation statements or other instruments  
of further assurance as is necessary to maintain the Liens of the Collateral    
Agreements, and (B) stating that, based on relevant laws as in effect on the    
date of such Opinion of Counsel, all financing statements and continuation      
statements have been executed and filed that are necessary as of such date and  
during the succeeding 12 months fully to preserve and protect, to the extent    
such protection                                                                 

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and preservation are possible by filing, the rights of the Holders of Senior    
Notes and the Collateral Agent and the Trustee hereunder and under the          
Collateral Agreements with respect to the security interests in the             
Collateral, or (ii) stating that, in the opinion of such counsel, no such       
action is necessary to maintain such Lien and assignment.                       

 (c) The Subsidiary Guarantors shall otherwise comply with the provisions of
TIA Section 314(b).]                                                            

SECTION 12.04  Certificates of the Company.                                   

 [delete: The Company shall furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Collateral in accordance with the terms       
hereof (i) all documents required by TIA Section 314(d) and (ii) an Opinion of  
Counsel, which may be rendered by internal counsel to the Company, to the       
effect that such accompanying documents constitute all documents required by    
TIA Section 314(d). The Trustee may, to the extent permitted by Sections 7.01   
and 7.02 hereof, accept as conclusive evidence of compliance with the           
foregoing provisions the appropriate statements contained in such documents     
and such Opinion of Counsel.]                                                   

SECTION 12.05  Certificates of the Trustee.                                   

 [delete: In the event that the Company wishes to release Collateral and has
obtained the consent of the Holders of a majority in aggregate principal        
amount of the outstanding Senior Notes (other than the Remaining Earnings in    
accordance with the Escrow Agreement as to which no consent is required) and    
has delivered the certificates and documents required by such Collateral        
Agreements and Sections 12.03 and 12.04 hereof, the Trustee shall determine     
whether it has received all documentation required by TIA Section 314(d) in     
connection with such release and, based on such determination and the Opinion   
of Counsel delivered pursuant to Section 12.04(ii), shall deliver a             
certificate to the Collateral Agent setting forth such determination.]          

SECTION 12.06  Authorization of Receipt of Funds by the Trustee Under the     
Collateral Agreements.                                                          

[delete: The Trustee is authorized to receive any funds for the benefit of
the Holders of Senior Notes distributed under the Collateral Agreements, and    
to make further distributions of such funds to the Holders of Senior Notes      
according to the provisions of this Indenture.]                                 

SECTION 12.07.  Termination of Security Interest.                             

[delete: Upon the payment in full of all Obligations of the Company under 
this Indenture and the Senior Notes, or upon Legal Defeasance in accordance     
with Section 8.02, the Trustee shall, at the request of the Company, deliver a  
certificate to the Collateral Agent stating that such Obligations have been     
paid in full, and instruct the Collateral Agent to release the Liens pursuant   
to this Indenture and the Collateral Agreements.]                               

If the proposed amendments become effective, certain defined terms and other    
provisions contained in the indentures and the guarantees undertaken by         
certain subsidiaries of Delta will be amended, deleted or renumbered as is      
appropriate in light of the deletions and amendments described above.           

2. Pledge Agreements, Security Agreement and Escrow Agreement.                  

If the proposed amendments become effective, each of the following pledge 
agreements entered into in connection with the issuance of the senior secured   
notes will be terminated, and the security interest created by the pledge       
agreements will be terminated:                                                  

 Pledge Agreement to be made by Delta Financial Corporation in favor of U.S.
Bank Trust National Association, as trustee and collateral agent under the
  indenture, pursuant to which the Company pledged 100% of its holdings of the
 capital stock of Delta Funding Corporation, Fidelity Mortgage, Inc. and DFC
Financial Corporation.                                                    

Pledge Agreement to be made by Delta Funding Corporation in favor of U.S. 
Bank Trust National Association, as trustee and collateral agent under the
indenture, pursuant to which the Delta Funding Corporation pledged 100% of
its holdings of the capital stock of DF Special Holdings Corporation and  

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  Continental Property Management Corp. and 66% of its holdings of the capital
stock of DFC Financial of Canada Limited.                                 

 Pledge Agreement to be made by DFC Financial of Canada Limited, an Ontario,
Canada corporation, in favor of U.S. Bank Trust National Association, as  
 trustee and collateral agent under the indenture, pursuant to which the DFC
  Financial of Canada Limited pledged 66% of its holdings of the capital stock
of DFC Funding of Canada Limited.                                         

Pledge Agreement to be made by DF Special Holdings Corporation, a Delaware
   corporation, in favor of U.S. Bank Trust National Association, as trustee and
 collateral agent under the indenture, pursuant to which DF Special Holdings
Corporation pledged 100% of its holdings of the owner trust certificates  
Delta Funding Residual Holding Trust 2000-1.                              

Pledge Agreement to be made by Delta Funding Corporation, a New York      
   corporation, in favor of U.S. Bank Trust National Association, as trustee and
collateral agent under the indenture, pursuant to which Delta Funding     
Corporation pledged 100% of its holdings of the owner trust certificates  
Delta Funding Residual Holding Trust 2000-2.                              

If the proposed amendments become effective, the following security       
agreement entered into in connection with the issuance of the senior secured    
notes will be terminated, and the security interest created by the security     
agreement will be terminated:                                                   

   The Security Agreement entered into by and among Delta Financial Corporation,
Delta Funding Corporation, DF Special Holdings Corporation, Fidelity      
 Mortgage, Inc., DFC Financial Corporation, DFC Financial of Canada Limited,
DFC Funding of Canada Limited and Continental Property Management Corp. in
favor of U.S. Bank Trust National Association, as collateral agent.       

 If the proposed amendments become effective, the following escrow agreement
entered into in connection with the issuance of the senior secured notes will   
be terminated, and the security interest created by the escrow agreement will   
be terminated:                                                                  

 The Escrow Agreement entered into by and among Delta Financial Corporation,
U.S. Bank Trust National Association, as trustee, and U.S. Bank Trust     
National Association, as escrow agent.                                    

3. Deposit Trust Agreements.                                                    

If the proposed amendments become effective, each of the following deposit
trust agreements entered into in connection with the issuance of the senior     
secured notes will be amended and/or terminated in connection with the          
consummation of the exchange offer to allow for the release of excess cashflow  
certificates from the Delaware business trust created thereby:                  

Deposit Trust Agreement dated as of December 22, 2000 between DF Special  
Holdings Corporation, as depositor, and Wilmington Trust Company, as Owner
Trustee.                                                                  

 Deposit Trust Agreement dated as of December 22, 2000 between Delta Funding
Corporation, as depositor, and Wilmington Trust Company, as Owner Trustee.

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STATEMENT OF CERTIFICATEHOLDERS INFORMATION 

The following tables in Exhibits A through V of this prospectus set forth 
information for each of the underlying securitization trusts and the related    
underlying mortgage loans. The tables and the information included in the       
tables are subject to and qualified by reference to the provisions of the       
underlying agreements and the prospectuses, prospectus supplements or other     
final offering documents related to the underlying securitizations or the       
related securities issued to public investors by the securitization trusts, as  
well as any subsequent information related thereto filed on a current report    
on Form 8-K with the Securities and Exchange Commission following the closing   
of the securitization transactions.                                             

The information set forth in the tables has been produced by the trustees,
paying agents, or servicers for the securitization trusts. These statements     
are derived from data requested from and provided by them, including regular    
periodic reports provided to holders of the securities issued in connection     
with the securitizations, loan-by-loan information provided in tape form from   
the related servicers and information from outside sources such as Bloomberg    
L.P. We have not verified the accuracy of any of this information.              

Unless otherwise noted, all of the information that is given in these     
exhibits is given as of, or through, July 13, 2001.                             

This information comprises all of the material information concerning the 
securitization trusts and the publicly issued securities. Copies of the         
offering documents generally are available from the SEC. Below we provide for   
each public securitization transaction, the registration file number for the    
registration statement relating to the offering of the publicly issued related  
securities.                                                                     

                                                                [Download Table]

Structure/Deal         Registration Statement File No.                             
                                                                                   
Delta 1994-2           Private transaction. No registration statement is available.
Delta 1995-1           Private transaction. No registration statement is available.
Delta 1995-2           33-98594                                                    
Delta 1998-3 Group I   333-03418                                                   
Delta 1998-3 Group II  333-03418                                                   
Delta 1997-3 Group I   333-03418                                                   
Delta 1997-3 Group II  333-03418                                                   
Delta 1997-4 Group I   333-03418                                                   
Delta 1997-4 Group II  333-03418                                                   
Delta 1998-1 Group I   333-03418                                                   
Delta 1998-1 Group II  333-03418                                                   
Delta 1998-2 Group I   333-03418                                                   
Delta 1998-2 Group II  333-03418                                                   
Delta 1999-2           333-51545                                                   
Delta 1998-4           333-51545                                                   
Delta 1999-1           333-51545                                                   
Delta 2000-1           333-96001                                                   
Delta 2000-2           333-03418                                                   
Delta 2000-3           333-03418                                                   
Delta 2000-4           333-03418                                                   

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                                                        [Enlarge/Download Table]

                                                                       EXHIBIT A                                                    

CTS Home Equity Loan Trust                                                                                                          
Mortgage Pass-Through Certificates                                                                                                  
Series 94-2                                                                                                                         

Principal Collected                           $23,452.55                                                                            
Interest Net of Serving Fees                  $67,566.50                                Distribution Date      06/25/2001           
--------------------------------------------------------                                                                            
Total Available Funds                         $91,019.05                                                                            

------------------------------------------------------------------------------------------------------------------------------------
    Class            Original                  Beginning             Certificate         INTEREST       PRINCIPAL     Ending Balance
                     Amount                    Balance               Rate                AMOUNT          AMOUNT          BALANCE    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
   Class-A       $60,000,000.00            $6,909,363.13              8.31%            $47,847.34     $41,901.31     $6,867,461.82  
   Class-S           $0.00                     $0.00                   NA                 $0.00          $0.00           $0.00      
   Class-R           $0.00                     $0.00                   NA                 $0.00          $0.00           $0.00      
------------------------------------------------------------------------------------------------------------------------------------
    Total        $60,000,000.00            $6,909,363.13                               $47,847.34     $41,901.31     $6,867,461.82  

                 TRUSTEE FEE                                                                                               $234.00  
                 CERTIFICATE INSURER                                                                                     $1,036.40  
 4.05(a)         The amount of the distribution with respect to such                          PER                          TOTAL    
                 Holder's Certificate:                                                      $1,000                         AMOUNT   
                                           CLASS  A                                         299.16%                     $89,748.64  

                                                                                              PER                          TOTAL    
 4.05(b)         Amount of Holder's distribution allocable to principal                     $1,000                         AMOUNT   
                                           CLASS  A                                         139.67%                      $41,901.31 

                 Amount of principal from Prepayments or recoveries.                                                     $23,253.25 
                 Overcollateralization Increase Amount                                                                    18,648.06 

                                                                                              PER                          TOTAL    
 4.05(c)         Amount of Holder's distribution allocable to interest                      $1,000                         AMOUNT   
                                           CLASS  A                                          79.75%                      $47,847.34 

 4.05(d)         The amount of any Insured Payment in the amount                                                                    
                 distributed to such Class                                                                                          
                                           CLASS  A                                                                                 
                                                                                                                              $0.00 

 4.05(e)         Class A Certificate Principal Balance                                                                $6,867,461.82 
                 Class A Certificate Ending Principal Balance Factor.                                                      114.4577 

 4.05 (f)        Overcollateralization Reduction Amount                                                                       $0.00 

 4.05 (g)        Overcollateralization Deficit                                                                                $0.00 

 4.05 (h)        Overcollateralization Deficiency Amount                                                                 $82,198.97 

 4.05 (i)        Amount of any Realized Losses for the related Due Period                                                     $0.00 
                 Non-Recoverable Loss Adjustment for related Due Period                                                    ($199.30)

 4.05 (j)        Overcollateralization Amount remaining after giving effect to all distribution                         $597,367.44 
                 on such Distribution Date.                                                                                         

 4.05 (l)        The total of any Substitution Shortfall Amount or Purchase                                                   $0.00 
                 Price amounts paid/received by the Master Servicer                                                                 

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                                                        [Enlarge/Download Table]
                                                                                                                       
CTS Home Equity Loan Trust                                                                                             
Mortgage Pass-Through Certificates                                                                                     
Series 94-2                                                                                                            

 4.05 (m)        The weighted average Mortgage Rate of the Mortgage                                             11.48% 
                 Loans                                                                                                 

 4.05 (o)        The current weighted average of the remaining terms of                                            122 
                 the Mortgage Loans                                                                                    

                 The Beginning number of Mortgage Loans outstanding                                                129 
                 Beginning Collateral Balance outstanding                                                $7,488,082.51 
 4.05 (p)                                                                                                              
                 The number of Mortgage Loans outstanding                                                          129 
                 Ending Collateral Balance outstanding                                                   $7,464,829.26 

                                                                                       Number               Balance    
 4.05 (q)        The cumulative number and principal balances of liquidated              49              $3,423,380.91 
                 Mortgage Loans                                                                                        

 4.05 (r)        The cumulative Realized Losses as a percentage of the original principal                        2.70% 
                 balance.                                                                                              

 4.05 (s)        Pre-Funding Account Balance on April 25, 1994.                                           ############ 

                                                                      Number       Percent            Principal Balance
 4.02 (a)        Delinquent Mortgage Loans :                                                                           
                 30 TO 59 DAYS                                           3          1.54%                $115,021.38   
                 60 TO 89 DAYS                                           2          2.93%                $218,891.73   
                 90+ DAYS                                               10         11.45%                $854,362.95   
                 BANKRUPTCY                                              9         10.47%                $781,741.53   
                 Note: 30, 60, AND 90+ DAYS MAY INCLUDE FORECLOSURE BUT DOES NOT INCLUDE BANKRUPTCY                    

                                                                                         Number       Principal Balance
 4.05 (b)        Mortgage Loans in foreclosure                                             8             $586,649.21   

                                                                                         Number       Principal Balance
 4.05 (c)        Mortgage Loans in bankruptcy proceedings                                  9             $781,741.53   

                                                                                         Number       Principal Balance
 4.05 (d)        REO Properties                                                            3             $247,167.64   

 4.05 (e)                                                                                            N/A               

 4.05 (f)                                                                                            N/A               

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                                                                       EXHIBIT B

Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 95-1                                                                     

Principal Collected               $221,212.77                                   
Interest Net of Serving Fees      $ 96,575.20    Distribution Date    06/25/2001
----------------------------------------------                                  
Total Available Funds             $317,787.97                                   

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
                    Original                  Beginning                   Interest               Principal                          
   Class             Amount                    Balance                     Amount                  Amount           Ending Balance  
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1       $27,000,000.00                      $0.00                  $0.00                   $0.00                      $0.00 
Class A-2       $28,000,000.00                      $0.00                  $0.00                   $0.00                      $0.00 
Class A-3        $6,000,000.00                      $0.00                  $0.00                   $0.00                      $0.00 
Class A-4       $12,000,000.00              $2,467,002.66             $15,891.61             $247,908.46              $2,219,094.20 
Class A-5        $7,000,000.00              $6,999,783.33             $45,381.93                   $0.00              $6,999,783.33 
Class S (*)     $58,044,331.00             $10,295,123.60              $7,226.65                      NA             $10,295,123.60 
Class R                  $0.00                      $0.00                  $0.00                   $0.00                      $0.00 
------------------------------------------------------------------------------------------------------------------------------------
                $80,000,000.00              $9,466,785.99             $68,500.19             $247,908.46              $9,218,878.00 
------------------------------------------------------------------------------------------------------------------------------------

(*) Class S balances are notional                                               

                                                        [Enlarge/Download Table]

                                                                                        
4.05(a)  The amount of the distribution with respect to such          PER        TOTAL  
         Holder's Certificate:                                      $1,000      AMOUNT  
                           CLASS  A-1                                     -        $0.00
                           CLASS  A-2                                     -        $0.00
                           CLASS  A-3                                     -        $0.00
                           CLASS  A-4                            21.9833391  $263,800.07
                           CLASS  A-5                             6.4831327   $45,381.93
                           CLASS  S                               0.2676538    $7,226.65
                           CLASS  R                                       -        $0.00

                                                                      PER        TOTAL  
4.05(b)  Amount of Holder's distribution allocable to principal     $1,000      AMOUNT  
                           CLASS  A-1                                     -        $0.00
                           CLASS  A-2                                     -        $0.00
                           CLASS  A-3                                     -        $0.00
                           CLASS  A-4                            20.6590383  $247,908.46
                           CLASS  A-5                                     -        $0.00
                           CLASS  S                                     N/A          N/A
                           CLASS  R                                     N/A          N/A

         Amount of principal from Prepayments or recoveries                  $158,325.95
         Overcollateralization Increase Amount                                $10,023.53

                                                                      PER        TOTAL  
4.05(c)  Amount of Holder's distribution allocable to interest      $1,000      AMOUNT  
                           CLASS  A-1                                     -        $0.00
                           CLASS  A-2                                     -        $0.00
                           CLASS  A-3                                     -        $0.00
                           CLASS  A-4                             1.3243007   $15,891.61
                           CLASS  A-5                             6.4831327   $45,381.93
                           CLASS  S                               0.1245023    $7,226.65
                           CLASS  R                                       -        $0.00

4.05(d)  The amount of any Insured Payment in the amount                                
         distributed to such Class                                                      
                           CLASS A                                                 $0.00
                           CLASS S                                                 $0.00


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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 95-1                                                                     

                                                        [Enlarge/Download Table]

                                                                                                           
                                                                       PER                          TOTAL  
4.05(e)  Class A Certificate Principal Balance Remaining             $1,000                        AMOUNT  
                           CLASS  A-1                                      -                          $0.00
                           CLASS  A-2                                      -                          $0.00
                           CLASS  A-3                                      -                          $0.00
                           CLASS  A-4                            184.9245163                  $2,219,094.20
                           CLASS  A-5                            999.9690476                  $6,999,783.33
                           CLASS  S                              173.2682333                 $10,057,238.67

         TRUSTEE FEE                                                                                $150.14
         CERTIFICATE INSURER                                                                      $1,229.18
4.05(f)  Overcollateralization Reduction Amount                                                       $0.00

4.05(g)  Overcollateralization Deficit                                                                $0.00

4.05(h)  Overcollateralization Deficiency Amount before Distribution                            $408,480.37
         Overcollateralization Deficiency Amount after Distribution                             $344,585.04
4.05(i)  Amount of any Realized Losses for the related Due Period                               $ 16,672.16

4.05(j)  Overcollateralization Amount remaining after giving effect to all distributions        $838,361.13
         on such Distribution Date                                                                         
         Specified Overcollateralization Amount                                               $1,182,946.18

4.05(k)  Beginning Collateral Balances                                                       $10,295,123.60
         Ending Collateral Balances                                                          $10,057,238.67

4.05(l)  The total of any Substitution Shortfall Amount or Purchase                                   $0.00
         Price amounts paid/received by the Master Servicer                                                

4.05(m)  The weighted average Mortgage Rate of the Mortgage                                         11.907%
         Loans                                                                                             

4.05(n)  The amount of any remaining Pre-Funded Amount that has not                                        
         been used to fund the purchase of Subsequent Mortgage Loans and                              $0.00
         be distributed to the Class A Certificates as principal                                           

4.05(o)  The current weighted average of the remaining terms of                                         171
         the Mortgage Loans                                                                                

4.05(p)  The number of Mortgage Loans outstanding                                                       168

                                                                                     Number      Balance   
4.05(q)  The cumulative number and principal balances of liquidated                    79     $6,178,490.83
         Mortgage Loans                                                                                    

         Amount of any Realized Losses for the related Due Period                                $16,672.16
         Non-Recoverable Loss Adjustment for related Due Period                                       $0.00

4.05(r)  The cumulative Realized Losses and its percentage of the original      $3,591,570.67         4.49%
         principal balance                                                                                 

4.05(s)  Amount remaining in the Pre-Funding Account on this Distribution Date                        $0.00

4.05(t)  The sum of the Loan Balances of the three Largest Mortgage Loans                       $600,737.74

4.05(u)  The amount of the Monthly Excess Spread for such Distribution Date                      $10,023.53

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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 95-1                                                                     

                                                        [Enlarge/Download Table]

                                                                                                   
                                                                 Number  Percent  Principal Balance
4.05(A)  Delinquent Mortgage Loans:                                                                
         30 TO 59 DAYS                                             6      2.913%      $293,011.23  
         60 TO 89 DAYS                                             4      2.469%      $248,312.90  
         90 OR MORE DAYS                                           6      5.347%      $537,747.09  
         (*)NOTE: 30, 60, and 90 Days DOES NOT include Foreclosure                                 
                                                                 Number  Percent  Principal Balance
4.05(B)  Mortgage Loans in foreclosure                             7      5.873%      $590,641.89  

                                                                 Number  Percent  Principal Balance
4.05(C)  Mortgage Loans in bankruptcy proceedings                  13     9.713%      $976,810.37  

                                                                 Number  Percent  Principal Balance
4.05(D)  REO Properties                                            4      3.231%      $324,983.33  

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Delta Funding Corporation                                                                                              EXHIBIT C    
Home Equity Loan Trust                                                                                                              
Series 95-2                                                                                                                         

                                                                               Distribution Date         06/25/2001                 
               The Available Funds                                                                                                  
               -------------------                                                                                                  
5.05 (i)       Principal                                                                                                $866,187.84 

               Interest                                                                                                 $245,069.58 
5.05 (ii)                                                                                                                           
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                      Interest       Principal                                      
  Class      Cusip 24763L  Beginning Balance    Certificate Rate    Distribution    Distribution    Ending Balance                  
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                                                                                    
Class A-1         AA8           $0.00                 6.64%             $0.00           $0.00             $0.00                     
Class A-2         AB6           $0.00                 6.57%             $0.00           $0.00             $0.00                     
Class A-3         AC4        $919,732.55              6.81%           $5,219.48      $693,717.20       $226,015.36                  
Class A-4         AD2      $11,297,000.00             7.21%          $67,876.14         $0.00        $11,297,000.00                 
Class A-5         AE0      $12,083,176.63             7.10%          $71,492.13      $106,725.72     $11,976,450.91                 
 Class S                   $24,299,909.19             1.16%          $23,486.62           N/A        $23,499,466.27                 
----------------------------------------------------------------------------------------------------------------------------------- 
TOTALS                     $24,299,909.19                           $168,074.37      $800,442.92     $23,499,466.27                 
----------------------------------------------------------------------------------------------------------------------------------- 

5.05 (iii)      The number and Principal Balances of all Mortgage Loans                                                           7 
                that were subject to Principal Prepayments during the Due Period                                        $412,306.88 
                Net Liquidation Proceeds                                                                                $398,935.28 

5.05 (iv)       The amount of all Curtailments that were received during the                                               ($553.13)
                Due Period                                                                                                          

5.05 (v)        The principal portion of all Monthly Payments received                                                   $50,992.80 
                during the Due Period                                                                                               

5.05 (vi)       The interest portion of all Monthly Payments received on                                                $111,684.77 
                the Mortgage Loans during the Due Period                                                                            

5.05 (vii)      The amount of the Monthly Advances and the Compensating Interest                                        $138,312.56 
                payments to be made on the Determination Date                                                             $1,774.95 

                                                                     Number             Percent       Principal Balance             
                                                                     ------             -------       -----------------             
5.05 (viii)     Delinquent Mortgage Loans:                                                                                          
                                                   30 TO 59 DAYS       34              8.991380%         $2,393,375.37              
                                                   60 TO 89 DAYS       14              3.202014%           $852,329.79              
                                                    90 PLUS DAYS       15              4.563894%         $1,214,842.55              
                                                     FORECLOSURE       29              6.065251%         $1,614,482.23              
                                                             REO       16              3.948757%         $1,051,101.93              

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------------------------
                            (*)NOTE THAT 30, 60, AND 90 DAYS DOES NOT INCLUDE REO OR FORECLOSURE                                   
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
5.05 (x)        The amount of any Insured Payments                                                                            $0.00

5.05 (xi)       The amount distributed to the Class R Certificateholder                                                 $139,682.97

5.05 (xii)      The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)                          $27,539,453.82
                The Aggregate Principal Balance of the Mortgage Loans (After Distribution)                           $26,618,555.01

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------------------------
                           Beginning Balance                          Interest         Principal      Ending Balance               
  Class      Cusip 24763L   Factor per 1000    Certificate Rate   Factor per 1000   Factor per 1000   Factor per 1000              
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
Class A-1         AA8         0.000000000             6.64%          0.000000000      0.000000000        0.0000000                 
Class A-2         AB6         0.000000000             6.57%          0.000000000      0.000000000        0.0000000                 
Class A-3         AC4         0.057987047             6.81%          0.329076351     43.737292561        0.0142498                 
Class A-4         AD2         1.000000000             7.21%          6.008333186      0.000000000        1.0000000                 
Class A-5         AE0         0.345016750             7.10%          2.041349152      3.047390850        0.3419694                 
 Class S                      0.161999395             1.16%          0.156577467      0.000000000        0.1566631                 
-----------------------------------------------------------------------------------------------------------------------------------

5.05 (xiii)     The weighted average remaining term to maturity                                                                 161
                The weighted average Loan Rate                                                                             11.2973%

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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 95-2                                                                     

                                                        [Enlarge/Download Table]


                                                                                                                    
5.05 (xiv)    Servicing Fee                                                                               $6,702.70 
              Trustee Fee                                                                                   $315.56 
              Premium Amount                                                                              $2,741.60 
              Reimbursement Amount to Certificate Insurer                                                     $0.00 

5.05 (xv)     The amount of all payments or reimbursements to the Servicer                                    $0.00 

5.05 (xvi)    Overcollateralization Amount                                                            $3,119,088.74 
              Specified Overcollateralization Amount                                                  $3,119,088.74 
              Overcollateralization Increase Amount                                                     ($65,744.92)
              Monthly Excess Spread                                                                      $73,938.05 

5.05 (xvii)   Amounts reimbursable to the Servicer or Seller                                                  $0.00 
              Amount paid to Class R pursuant to Section 5.01(a) (v)                                    $139,682.97 

5.05 (xviii)  The number of Mortgage Loans outstanding prior to distribution                                    418 
              The number of Mortgage Loans outstanding after distribution                                       411 

5.05 (xx)     The amount on deposit in the Pre-Funding Account after this Distribution Date                   $0.00 
              The amount on deposit in the Capitalized Interest Account after this Distribution Date          $0.00 

5.05 (xxi)    The Amount of Liquidation Losses/(Gain)                                                    $59,216.98 
              Cumulative Liquidation Losses                                                           $4,479,931.67 
              Cumulative Net Losses as percentage of the Initial Collateral Balance                         2.9866% 
              Non-Recoverable Loss Adjustment                                                            ($4,506.01)
              Sum of the Three Largest Loan Balances                                                    $742,995.74 

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                                                                       EXHIBIT D

Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 96-1                                                                     

                                            Distribution Date   06/25/2001

                                              Principal         Interest
                                              ---------         --------
5.03 (i)       The Available Funds              $1,948,293.59      $431,857.23  
             Interest Advance Recovery                           $310,692.74
             Servicing Advance Recovery                          $133,610.34

5.03 (ii)                                                                       

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
                                                                              Interest           Principal                          
  Class         Cusip 24763L         Beginning Balance         Rate         Distribution       Distribution       Ending Balance    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1           AF7                        $0.00         4.19875%             $0.00               $0.00                $0.00    
Class A-2           AG5                        $0.00            6.81%             $0.00               $0.00                $0.00    
Class A-3           AH3                        $0.00            7.03%             $0.00               $0.00                $0.00    
Class A-4           AJ9                        $0.00            7.23%             $0.00               $0.00                $0.00    
Class A-5           AK6                $5,625,401.47            7.40%        $34,689.98       $1,860,809.09        $3,764,592.38    
Class A-6           AL4               $24,110,000.00            7.72%       $155,107.67               $0.00       $24,110,000.00    
Class A-7           AM2               $15,140,000.00            7.95%       $100,302.50               $0.00       $15,140,000.00    
------------------------------------------------------------------------------------------------------------------------------------
  TOTALS                              $44,875,401.47                        $290,100.15       $1,860,809.09       $43,014,592.38    
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-1 Certificate rate is a variable rate.                              

                                                        [Enlarge/Download Table]

                                                                                                                       
5.03 (xii)   The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)                $49,296,101.92 
             The Aggregate Principal Balance of the Mortgage Loans (After Distribution)                 $47,029,300.24 

5.03 (iii)   The number and Principal Balances of all Mortgage Loans                                                32 
             that were subject to Principal Prepayments during the Due Period                            $1,632,180.26 
             Net Recovery Proceeds on Liquidated Loans                                                     $195,758.33 

5.03 (iv)    The amount of all Curtailments that were received during the                                   ($2,854.62)
             Due Period                                                                                                

5.03 (v)     The principal portion of all Monthly Payments received                                        $121,309.26 
             during the Due Period                                                                                     

5.03 (vi)    The interest portion of all Monthly Payments received on                                      $271,805.10 
             the Mortgage Loans during the Due Period                                                                  

5.03 (vii)   The amount of the Monthly Advances and the Compensating Interest                              $172,358.68 
             payments to be made on the Determination Date                                                   $4,054.99 

                                                                         Number             Percent   Principal Balance
                                                                         ------             -------   -----------------
5.03 (viii)     Delinquent Mortgage Loans:                                                                             
                                                30 TO 59 DAYS              71             10.821519%     $5,089,284.55 
                                                60 TO 89 DAYS              29              4.021711%     $1,891,382.72 
                                                 90 PLUS DAYS              30              3.614825%     $1,700,026.81 
                                                  FORECLOSURE              55              9.881375%     $4,647,141.71 
                                               REO PROPERTIES              24              3.577019%     $1,682,247.21 

--------------------------------------------------------------------------------
(*)NOTE THAT 30, 60, AND 90 DAYS DOES NOT INCLUDE REO OR FORECLOSURE
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                                               
5.03 (ix)  The amount of any Insured Payments                             $0.00

5.03 (x)   The amount distributed to the Class R Certificateholder  $224,529.32

5.03 (xi)                                                                      

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
                                Beginning Balance                              Interest            Principal          Ending Balance
   Class      Cusip 24763L       Factor per 1000      Certificate Rate     Factor per 1000      Factor per 1000      Factor per 1000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
 Class A-1        AF7              0.000000000            4.19875%           0.000000000           0.000000000            0.0000000 
 Class A-2        AG5              0.000000000               6.81%           0.000000000           0.000000000            0.0000000 
 Class A-3        AH3              0.000000000               7.03%           0.000000000           0.000000000            0.0000000 
 Class A-4        AJ9              0.000000000               7.23%           0.000000000           0.000000000            0.0000000 
 Class A-5        AK6              0.409417865               7.40%           2.524743503         135.430065138          273.9878002 
 Class A-6        AL4              1.000000000               7.72%           6.433333333           0.000000000         1000.0000000 
 Class A-7        AM2              1.000000000               7.95%           6.625000000           0.000000000         1000.0000000 
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-1 Certificate rate is a variable rate.                              

5.03 (xii)  The weighted average remaining term to maturity                 159 
            The weighted average Loan Rate                              11.0867%

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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 96-1                                                                     

                                                        [Enlarge/Download Table]

                                                                                                                       
5.03 (xiii)  Servicing Fee                                                                                  $16,361.54 
             Trustee Fee                                                                                       $410.80 
             Premium Amount                                                                                  $4,301.46 
             Reimbursement Amount to Certificate Insurer                                                         $0.00 
             Monthly Excess Spread                                                                         $137,044.83 

5.03 (xiv)   The amount of all payments or reimbursements to the Servicer                                        $0.00 

5.03 (xv)    Overcollateralization Amount                                                                $4,014,707.86 
             Overcollateralization  Increase Amount                                                        ($87,484.50)
             Specified Overcollateralization Amount                                                      $4,014,707.87 
             Sum of Three Largest Loan Balances                                                            $896,314.54 

5.03 (xvi)   Amounts reimbursable to the Servicer or Seller                                                      $0.00 
             Amount paid to Class R pursuant to Section 5.01(a) (v)                                        $224,529.32 

5.03 (xvii)  The number of Mortgage Loans outstanding prior to distribution                                        790 
             The number of Mortgage Loans outstanding after distribution                                           758 

5.03 (xviii) The amount on deposit in the Initial Interest Coverage Account after the Distribution Date          $0.00 

5.03 (xix)   The Amount of Liquidation Losses/(Gain)                                                       $320,408.45 
             Cumulative Net Losses as percentage of the Initial Collateral Balance                              3.0067%
             Non-Recoverable Loss Adjustment                                                                ($1,900.36)


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                                                        [Enlarge/Download Table]

                                                                                            EXHIBIT E 
Delta Funding Corporation                                                                             
Home Equity Loan Trust                                                                                
Series 96-2                                                                                           

                                                            Distribution Date               06/25/2001
                                                                                                      
                                                                Principal       Interest              
5.03 (i)       The Available Funds for Certificate Group 1     $1,829,768.49   $376,161.98            
               The Available Funds for Certificate Group 2     $  151,658.66    $21,051.20            
               Interest Advance Recovery                                       $323,236.88            
               Servicing Advance Recovery                                       $98,797.26            

5.03 (ii)                                                                       
Certificate Group 1                                                             

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Interest           Principal                     
     Class        Cusip 24763L      Beginning Balance     Certificate Rate       Distribution       Distribution   Ending Balance   
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
   Class A-1           AN0                 $0.00              0.00000%              $0.00              $0.00            $0.00       
   Class A-2           AP5                 $0.00                0.00%               $0.00              $0.00            $0.00       
   Class A-3           AQ3             $5,623,041.38            7.54%             $35,331.44       $1,936,704.25    $3,686,337.13   
   Class A-4           AR1            $14,764,000.00            7.88%             $96,950.27           $0.00       $14,764,000.00   
   Class A-5           AS9            $14,259,000.00            8.01%             $95,178.83           $0.00       $14,259,000.00   
------------------------------------------------------------------------------------------------------------------------------------
    TOTALS                            $34,646,041.38                             $227,460.54       $1,936,704.25   $32,709,337.13   
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-1 Certificate rate is a variable rate.                              

Certificate Group 2                                                             

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Interest          Principal                      
   Class          Cusip 24763L      Beginning Balance     Certificate Rate       Distribution       Distribution   Ending Balance   
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
   Class A-6           AT7             $1,324,469.60          4.39875%           $5,016.84          $205,714.77    $1,118,754.83    
------------------------------------------------------------------------------------------------------------------------------------
    TOTALS                            $35,970,510.98                            $232,477.38       $2,142,419.02   $33,828,091.96    
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-6 Certificate rate is a variable rate.                              

                                                        [Enlarge/Download Table]

                                                                                             GROUP 1       GROUP 2    
                                                                                             -------       -------    
                                                                                                                      
            The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)  $40,782,469.14  $1,994,671.24
            The Aggregate Principal Balance of the Mortgage Loans(After Distribution)    $38,845,764.89  $1,780,634.15

5.03 (iii)  The number and Principal Balances of all Mortgage Loans                            22              1      
            that were subject to Principal Prepayments during the Due Period              $1,635,491.64     $85,676.27
            Net Liquidation Proceeds                                                          $0.00           $0.00   

5.03 (iv)   The amount of all Curtailments that were received during the                    ($439.40)         $0.00   
            Due Period                                                                                                

5.03 (v)    The principal portion of all Monthly Payments received                          $77,061.30       $1,996.68
            during the Due Period                                                                                     

5.03 (vi)   The interest portion of all Monthly Payments received on                       $221,266.68       $6,214.58
            the Mortgage Loans during the Due Period                                                                  

5.03 (vii)  The amount of the Monthly Advances and the Compensating Interest               $164,543.52      $15,078.06
            payments to be made on the Determination Date                                    $3,194.82        $0.00   

5.03 (ix)   The amount of any Insured Payments                                                $0.00           $0.00   

5.03 (x)    The amount distributed to the Class R Certificateholder                           $0.00           $0.00   

5.03 (xi)                                                                                                             

Certificate Group 1                                                             

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
                                     Beginning Balance                           Interest            Principal       Ending Balance 
     Class        Cusip 24763L       Factor per 1000     Certificate Rate     Factor per 1000      Factor per 1000   Factor per 1000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
   Class A-1          AN0               0.000000000          0.00000%          0.000000000           0.000000000       0.0000000    
   Class A-2          AP5               0.000000000            0.00%           0.000000000           0.000000000       0.0000000    
   Class A-3          AQ3               0.264315191            7.54%           1.660780295          91.036206167     173.2789852    
   Class A-4          AR1               1.000000000            7.88%           6.566666892           0.000000000    1000.0000000    
   Class A-5          AS9               1.000000000            8.01%           6.675000351           0.000000000    1000.0000000    
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-1 Certificate rate is a variable rate.                              

Certificate Group 2                                                             

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
                                     Beginning Balance                           Interest            Principal       Ending Balance 
     Class        Cusip 24763L       Factor per 1000     Certificate Rate     Factor per 1000      Factor per 1000   Factor per 1000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
   Class A-6          AT7               0.088297973          4.39875%          0.334456000          13.714318000      74.5836552    
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-6 Certificate rate is a variable rate.                              

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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 96-2                                                                     

                                                        [Enlarge/Download Table]

                                                                                       GROUP 1       GROUP 2   
                                                                                       -------       -------   
                                                                                                               
5.03 (xii)    The weighted average remaining term to maturity                             165           277    
              The weighted average Loan Rate                                            11.5194%      12.9634% 

5.03 (xiii)   Servicing Fee                                                            $9,777.76      $241.44  
              Trustee Fee                                                                $339.85       $16.62  
              Premium Amount                                                           $3,276.41      $111.04  
              Reimbursement Amount to Certificate Insurer                                $0.00          $0.00  

5.03 (xiv)    The amount of all payments or reimbursements to the Servicer               $0.00          $0.00  

5.03 (xv)     Overcollateralization Amount                                           $6,136,427.76  $661,879.32
              Specified Overcollateralization Amount                                 $7,493,094.34  $766,180.18
              Overcollateralization Increase Amount                                      $0.00          $0.00  
              Monthly Excess Spread                                                      $0.00          $0.00  
              Sum of the Three Largest Loans                                           $940,481.08  $600,704.29

5.03 (xvi)    Amounts reimbursable to the Servicer or Seller                             $0.00          $0.00  
              Amount paid to Class R pursuant to Section 5.01(a) (vi) (6)                $0.00          $0.00  

5.03 (xvii)   The number of Mortgage Loans outstanding prior to distribution              552             22   
              The number of Mortgage Loans outstanding after distribution                 527             20   

5.03 (xviii)  The Amount of Liquidation Loan Losses                                    $131,285.55  $62,378.43 
              Current Loan Losses as percentage of the Initial Collateral Balance       0.0796%        0.4159% 
              Cumulative Net Losses as percentage of the Initial Collateral Balance      2.3504%       1.7574% 
              Non-Recoverable Loss Adjustment                                         ($24,349.79)     $0.00   

5.03 (xix)    Delinquent Mortgage Loans:  Group 1                                                              

                                                        [Enlarge/Download Table]

                                                                   Number                    Percent               Principal Balance
                                                                   ------                    -------               -----------------
                                                                                                                                    
                             30 TO 59 DAYS                           58                    11.044528%                 $4,290,331.45 
                             60 TO 89 DAYS                           15                     3.621160%                 $1,406,667.33 
                              90 PLUS DAYS                           26                     4.975227%                 $1,932,664.92 
                               FORECLOSURE                           54                    12.028705%                 $4,672,642.44 
                                       REO                           34                     6.538267%                 $2,539,839.84 
------------------------------------------------------------------------------------------------------------------------------------
                              (*)NOTE THAT 30, 60, AND 90 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE                             
------------------------------------------------------------------------------------------------------------------------------------
                Delinquent Mortgage Loans :  Group 2                                                                                
                                                                   Number                    Percent               Principal Balance
                                                                   ------                    -------               -----------------

                             30 TO 59 DAYS                           2                      7.413608%                   $132,009.24 
                             60 TO 89 DAYS                           0                      0.000000%                         $0.00 
                              90 PLUS DAYS                           3                      6.755891%                   $120,297.70 
                               FORECLOSURE                           3                     28.721294%                   $511,421.17 
                                       REO                           4                     22.203010%                   $395,354.37 
------------------------------------------------------------------------------------------------------------------------------------
                       (*)NOTE THAT 30, 60, AND 90 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE                                    
------------------------------------------------------------------------------------------------------------------------------------

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                                                                       EXHIBIT F
Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 96-3                                                                     

                                                        [Enlarge/Download Table]


                                                                   Distribution Date               06/25/2001

                                                          Principal                     Interest             
                                                          ---------                     --------             
                                                                                                             
5.03 (i)   The Available Funds for Certificate Group 1  $1,099,142.66                 $443,679.90            
           The Available Funds for Certificate Group 2     $80,770.08                  $35,444.40            
           Interest Advance Recovery                                                  $342,026.69            
           Sevicing Advance Recovery                                                  $127,648.68            

5.03 (ii)                                                                                                    

                                                        [Enlarge/Download Table]

Certificate Group 1                                                                                                               
----------------------------------------------------------------------------------------------------------------------------------
                                                                              Interest          Principal                         
 Class         Cusip 24763L      Beginning Balance     Certificate Rate     Distribution       Distribution       Ending Balance  
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  
Class A-1          AU4                 $0.00                4.169%             $0.00              $0.00               $0.00       
Class A-2          AV2                 $0.00                6.525%             $0.00              $0.00               $0.00       
Class A-3          AW0            $4,046,003.13             6.825%           $23,011.64        $1,274,153.75       $2,771,849.38  
Class A-4          AX8            $22,400,000.00            7.075%           $132,066.67          $0.00            $22,400,000.00 
Class A-5          AY6            $14,500,000.00            7.250%           $87,604.17           $0.00            $14,500,000.00 
 Class S                          $40,946,003.13            0.634%           $21,636.00            n/a             $39,671,849.38 
----------------------------------------------------------------------------------------------------------------------------------
TOTALS                            $40,946,003.13                             $264,318.48       $1,274,153.75       $39,671,849.38 
----------------------------------------------------------------------------------------------------------------------------------

(**)Class A-1 Certificate rate is a variable rate.                              

                                                        [Enlarge/Download Table]

Certificate Group 2                                                                                                               
----------------------------------------------------------------------------------------------------------------------------------
                                                                              Interest          Principal                         
 Class         Cusip 24763L      Beginning Balance     Certificate Rate     Distribution       Distribution       Ending Balance  
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  
Class A-6          AZ3            $2,672,981.00             4.30875%         $9,917.59         $106,013.95         $2,566,967.05  
----------------------------------------------------------------------------------------------------------------------------------
TOTALS                            $43,618,984.13                            $274,236.07       $1,380,167.70       $42,238,816.43  
----------------------------------------------------------------------------------------------------------------------------------

(**)Class A-6 Certificate rate is a variable rate.                              

                                                        [Enlarge/Download Table]


                                                                                             GROUP 1        GROUP 2   
                                                                                             -------        -------   
                                                                                                                      

            The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)  $48,397,606.33  $3,313,803.71
            The Aggregate Principal Balance of the Mortgage Loans (After Distribution)   $47,097,374.63  $3,148,974.60

5.03 (iii)  The number and Principal Balances of all Mortgage Loans                           15               2      
            that were subject to Principal Prepayments during the Due Period              $763,961.80     $98,385.54  
            Net Liquidation Proceeds                                                         $0.00           $0.00    

5.03 (iv)   The amount of all Curtailments that were received during the                  ($1,337.08)        $0.00    
            Due Period                                                                                                

5.03 (v)    The principal portion of all Monthly Payments received                        $73,826.69       $2,843.25  
            during the Due Period                                                                                     

5.03 (vi)   The interest portion of all Monthly Payments received on                      $246,958.68      $17,108.91 
            the Mortgage Loans during the Due Period                                                                  

5.03 (vii)  The amount of the Monthly Advances and the Compensating Interest              $207,646.32      $18,998.16 
            payments to be made on the Determination Date                                  $1,645.91         $0.00    

5.03 (ix)   The amount of any Insured Payments                                               $0.00           $0.00    

5.03 (x)    The amount distributed to the Class R Certificateholder                          $0.00           $0.00    

5.03 (xi)                                                                                                             

                                                        [Enlarge/Download Table]


Certificate Group 1                                                                                                                 
                               Beginning Balance                                  Interest           Principal       Ending Balance 
------------------------------------------------------------------------------------------------------------------------------------
 Class         Cusip 24763L     Factor per 1000       Certificate Rate        Factor per 1000     Factor per 1000   Factor per 1000 
Class A-1          AU4                  0                 4.17%                      0                   0                 0        
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-2          AV2             0.000000000           7.2200%                0.000000000         0.000000000        0.0000000    
Class A-3          AW0             0.251304542           7.5400%                1.429294582        79.139984472      172.1645575    
Class A-4          AX8             1.000000000           7.8800%                5.895833333         0.000000000     1000.0000000    
Class A-5          AY6             1.000000000           8.0100%                6.041666667         0.000000000     1000.0000000    
Class S                            0.227477795        109914266.0000%           0.120200010             n/a          220.3991632    

Certificate rate is a variable rate.                                            
------------------------------------------------------------------------------- 

Certificate Group 2                                                             

                                                        [Enlarge/Download Table]


                               Beginning Balance                                  Interest           Principal       Ending Balance 
 Class         Cusip 24763L     Factor per 1000       Certificate Rate        Factor per 1000     Factor per 1000   Factor per 1000 
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-6          AZ3             0.089099367            4.31%                 0.330586494         3.533798315       85.5655685    
Certificate rate is a variable rate.                                                                                                
------------------------------------------------------------------------------------------------------------------------------------

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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 96-3                                                                     

                                                        [Enlarge/Download Table]

                                                                                         GROUP 1       GROUP 2  
                                                                                         -------       -------  
                                                                                                                
5.03 (xii)    The weighted average remaining term to maturity                              174           300    
              The weighted average Loan  Rate                                             11.45%        13.21%  

5.03 (xiii)   Servicing Fee                                                            $11,025.78      $662.67  
              Trustee Fee                                                                $383.15        $26.23  
              Premium Amount                                                            $3,967.18      $256.70  
              Reimbursement Amount to Certificate Insurer                                 $0.00         $0.00   

5.03 (xiv)    The amount of all payments or reimbursements to the Servicer                $0.00         $0.00   

5.03 (xv)     Overcollateralization Amount                                            $7,425,525.25  $582,007.55
              Specified Overcollateralization Amount                                 $10,790,445.86  $693,895.39
              Overcollateralization Increase Amount                                    $175,011.09    $25,243.87
              Monthly Excess Spread                                                    $175,011.09    $25,243.87

5.03 (xvi)    Amounts reimbursable to the Servicer or Seller                              $0.00         $0.00   
              Amount paid to Class R pursuant to Section 5.01(a) (vi) (3)                 $0.00         $0.00   

5.03 (xvii)   The number of Mortgage Loans outstanding prior to distribution               694            40    
              The number of Mortgage Loans outstanding after distribution                  679            38    

5.03 (xviii)  The Amount of Liquidation Loan Losses                                    $209,114.73    $84,059.03
              Loan Losses as percentage of the Initial Collateral Balance                 0.12%         0.28%   
              Cumulative Net Losses as percentage of the Initial Collateral Balance       2.60%         2.61%   
              Non-Recoverable Loss Adjustment                                          ($8,025.69)      $0.00   
                                                        [Enlarge/Download Table]


5.03 (xix)      Delinquent Mortgage Loans :  Group 1                                                                                
                                                                                  Number    Percent        Principal Balance        
                                                                                                                                    

                                                            30 TO 59 DAYS           73     9.375639%          4,415,679.73          
                                                            60 TO 89 DAYS           24     3.635214%         $1,712,090.21          
                                                             90 PLUS DAYS           37     6.327417%         $2,980,047.17          
                                                              FORECLOSURE           62     11.191134%        $5,270,730.54          
                                                                      REO           43     6.825048%         $3,214,418.50          
------------------------------------------------------------------------------------------------------------------------------------
                              (*)NOTE THAT 30, 60, AND 90 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE                             
------------------------------------------------------------------------------------------------------------------------------------

                Delinquent Mortgage Loans :  Group 2                                                                                

                                                                                  Number    Percent        Principal Balance        

                                                            30 TO 59 DAYS            6    13.036966%           $410,530.75          
                                                            60 TO 89 DAYS            0     0.000000%              $0.00             
                                                             90 PLUS DAYS            1     1.629593%            $51,315.47          
                                                              FORECLOSURE            3    14.159451%           $445,877.52          
                                                                      REO            4     8.264749%           $260,254.86          
------------------------------------------------------------------------------------------------------------------------------------
                              (*)NOTE THAT 30, 60, AND 90 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE                             
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                                           

5.03 (xx)   The amount of Class A-6 Basis Risk Carryover Amount distributed on                             
            such Distribution Date and any remaining Class A-6 Basis Risk Carryover Amount                 

                                                                                          This Distribution
5.03 (xxi)  Class A-1 Formula Rate for related and following Interest Period                   4.17%       
            Class A-6 Formula Rate for related and following Interest Period                   4.31%       

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                                                                       EXHIBIT G
Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 97-1                                                                     

                                               Distribution Date      06/25/2001

                                                                [Download Table]

                                                          Principal     Interest 
                                                          ---------     -------- 
                                                                                 
5.03 (i)  The Available Funds for Certificate Group 1  $1,974,453.33  $519,518.35
          The Available Funds for Certificate Group 2    $135,024.88   $56,771.24
          Interest Advance Recovery                                   $556,102.32
          Servicing Advance Recovery                                  $256,872.95

                                                        [Enlarge/Download Table]


5.03 (ii)                                                                                                                           
Certificate Group 1                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                   CUSIP                                                       Interest          Principal                          
    Class        US24863LB      Beginning Balance      Certificate Rate      Distribution      Distribution      Ending Balance     
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
  Class A-1         A70                    $0.00             6.600%               $0.00               $0.00               $0.00     
  Class A-2         B53                    $0.00             6.920%               $0.00               $0.00               $0.00     
  Class A-3         C37            $7,828,606.82             7.260%          $47,363.07       $1,769,464.42       $6,059,142.40     
  Class A-4         D10           $10,374,000.00             7.460%          $64,491.70               $0.00      $10,374,000.00     
  Class A-5         E92           $11,966,000.00             7.740%          $77,180.70               $0.00      $11,966,000.00     
  Class A-6         F76           $20,413,244.28             7.210%         $122,649.58         $392,653.20      $20,020,591.08     
  Class S                         $50,581,851.10          0.376000%          $15,832.44                 n/a      $48,419,733.48     
------------------------------------------------------------------------------------------------------------------------------------
  TOTALS                          $50,581,851.10                            $327,517.49       $2,162,117.62      $48,419,733.48     
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

Certificate Group 2                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                   CUSIP                                                       Interest          Principal                          
    Class        US24863LB      Beginning Balance      Certificate Rate      Distribution      Distribution      Ending Balance     
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
  Class A-7         G41            $3,869,333.47           4.28875%          $14,289.80         $176,956.22       $3,692,377.25     
------------------------------------------------------------------------------------------------------------------------------------
  TOTALS                          $54,451,184.57                            $341,807.28       $2,339,073.84      $52,112,110.73     
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-7 Certificate rate is a variable rate.                              

                                                        [Enlarge/Download Table]

                                                                                             GROUP 1         GROUP 2   
                                                                                             -------         -------   
                                                                                                                       
            The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)  $57,906,393.87   $5,187,119.01
            The Aggregate Principal Balance of the Mortgage Loans (After Distribution)   $55,568,769.77   $4,920,161.85

5.03 (iii)  The number and Principal Balances of all Mortgage Loans                                  32               1
            that were subject to Principal Prepayments during the Due Period              $1,583,857.93       $2,432.38

5.03 (iv)   The amount of all Curtailments that were received during the                     ($2,500.53)          $0.00
            Due Period                                                                                                 

5.03 (v)    The principal portion of all Monthly Payments received                           $65,327.98       $2,024.78
            during the Due Period                                                                                      

5.03 (vi)   The interest portion of all Monthly Payments received on                        $306,042.58      $20,264.01
            the Mortgage Loans during the Due Period                                                                   

5.03 (vii)  The amount of the Monthly Advances and the Compensating Interest                $227,319.78      $37,273.45
            payments to be made on the Determination Date                                     $2,520.32           $0.00

5.03 (ix)   The amount of any Insured Payments                                                    $0.00           $0.00

5.03 (x)    The amount distributed to the Class R Certificateholder                               $0.00           $0.00

5.03 (xi)                                                                                                              

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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 97-1                                                                     

                                                        [Enlarge/Download Table]

Certificate Group 1                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                 CUSIP        Beginning Balance                               Interest             Principal          Ending Balance
  Class        US24863LB       Factor per 1000       Certificate Rate      Factor per 1000      Factor per 1000      Factor per 1000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1         A70            0.000000000              6.600%             0.000000000          0.000000000             0.0000000 
Class A-2         B53            0.000000000              6.920%             0.000000000          0.000000000             0.0000000 
Class A-3         C37            0.555851095              7.260%             3.362899123        125.636496615           430.2145980 
Class A-4         D10            1.000000000              7.460%             6.216666667          0.000000000          1000.0000000 
Class A-5         E92            1.000000000              7.740%             6.450000000          0.000000000          1000.0000000 
Class A-6         F76            0.864967978              7.210%             5.197015935         16.637847565           848.3301306 
Class S                          0.255463894             0.3756%             0.079961811                  n/a           244.5441085 
------------------------------------------------------------------------------------------------------------------------------------

Certificate Group 2                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                             Beginning Balance                               Interest             Principal          Ending Balance 
  Class          CUSIP        Factor per 1000       Certificate Rate      Factor per 1000      Factor per 1000      Factor per 1000 
------------------------------------------------------------------------------------------------------------------------------------
Class A-7                        0.104576580             4.28875%           0.386210752          4.782600611           99.7939798   
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-7 Certificate rate is a variable rate.                              

                                                        [Enlarge/Download Table]

                                                                                           GROUP 1         GROUP 2 
                                                                                           -------         ------- 
                                                                                                                   
5.03 (xii)   The weighted average remaining term to maturity                                   176             303 
             The weighted average Loan  Rate                                               11.2172%        13.5461%
             One Month LIBOR rate                                                                            4.089%

5.03 (xiii)  Servicing Fee                                                              $13,844.01         $766.22 
             Trustee Fee                                                                   $301.60          $27.02 
             Premium Amount                                                              $4,034.98         $523.09 
             Reimbursement Amount to Certificate Insurer                                     $0.00           $0.00 

5.03 (xiv)   The amount of all payments or reimbursements to the Servicer                    $0.00           $0.00 

5.03 (xv)    Overcollateralization Amount                                            $7,149,036.29   $1,227,784.60 
             Specified Overcollateralization Amount                                 $11,035,665.63   $1,799,712.79 

5.03 (xvi)   Amounts reimbursable to the Servicer or Seller                                  $0.00           $0.00 
             Amount paid to Class R pursuant to Section 5.01(a) (vi) (3)                     $0.00           $0.00 

5.03 (xvii)  The number of Mortgage Loans outstanding prior to distribution                    851              56 
             The number of Mortgage Loans outstanding after distribution                       819              55 

5.03 (xviii) The Amount of Liquidation Loan Losses                                     $383,943.46     $131,932.28 
             Loan Losses as percentage of the Initial Collateral Balance                    0.1939%         0.3566%
             Cumulative Net Losses as percentage of the Initial Collateral Balance          2.5722%         3.1657%
             Non-Recoverable Loss Adjustment                                           ($20,772.69)          $0.00 

                                                        [Enlarge/Download Table]

5.03 (xix)  Delinquent Mortgage Loans:  Group 1                                                      
                                                                Number    Percent   Principal Balance
                                                                ------    -------   -----------------
                                                                                                     

                                                 30 TO 59 DAYS    90     9.828303%     $5,461,466.84 
                                                 60 TO 89 DAYS    29     3.477798%     $1,932,569.45 
                                                  90 PLUS DAYS    47     6.577381%     $3,654,969.83 
                                                   FORECLOSURE    81    11.534408%     $6,409,528.87 
                                                           REO    30     3.776210%     $2,098,393.34 

--------------------------------------------------------------------------------
 (*)NOTE THAT 30, 60, AND 90 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE
--------------------------------------------------------------------------------

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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 97-1                                                                     

Delinquent Mortgage Loans:  Group 2                   

                                                                [Download Table]

                   Number      Percent     Principal Balance
                   ------      -------     -----------------
                                                            
30 TO 59 DAYS         7      16.851737%         $829,132.73 
60 TO 89 DAYS         2       4.042982%         $198,921.26 
 90 PLUS DAYS         6       8.790930%         $432,527.98 
  FORECLOSURE         9      16.582621%         $815,891.77 
          REO         8      14.311890%         $704,168.14 

--------------------------------------------------------------------------------
 (*)NOTE THAT 30, 60, AND 90 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                               
                                                                              This Distribution
5.03 (xxi)  Class A-7 Formula Rate for related and following Interest Period       4.288750%   


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                                                                       EXHIBIT H

Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 97-2                                                                     

                                                        [Enlarge/Download Table]


                                                       Distribution Date  06/25/2001 
                                                           Principal       Interest  
                                                           ---------       --------  
                                                                                     
5.03 (i)  The Available Funds for Certificate Group 1    $1,548,521.43    $622,742.68
          The Available Funds for Certificate Group 2       $994.78       $74,862.18 
          Interest Advance Recovery                                       $244,781.61
          Servicing Advance Recovery                                      $69,022.57 

5.03 (ii)                                                                       
Certificate Group 1                                                             

                                                        [Enlarge/Download Table]

----------------------------------------------------------------------------------------
                                                                            Interest    
              CUSIP        Beginning      Certificate      Interest         Carryover   
  Class      24763LB        Balance           Rate       Distribution       Shortfall   
----------------------------------------------------------------------------------------
                                                                                        
Class A-1       H2           $0.00           6.620%        $0.00              $0.00     
Class A-2       J8           $0.00           6.640%        $0.00              $0.00     
Class A-3       K5           $0.00           6.770%        $0.00              $0.00     
Class A-4       L3      $13,969,855.46       7.030%      $81,840.07           $0.00     
Class A-5       M1      $16,625,000.00       7.370%     $102,105.21           $0.00     
Class A-6       N9      $16,978,263.24       7.040%      $99,605.81           $0.00     
Class M-1       Q2       $8,829,469.41       7.240%      $53,271.13           $0.00     
Class M-2       R0       $4,624,960.17       7.490%      $28,867.46           $0.00     
Class B-3       S8       $5,739,920.33       7.800%      $37,309.48           $0.00     
Class I/O       T6      $20,373,915.89       6.500%           $0.00           $0.00     
----------------------------------------------------------------------------------------
TOTALS                  $66,767,468.61                  $402,999.16           $0.00     
----------------------------------------------------------------------------------------

                                                                [Download Table]

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

               Principal       Principal Carryover     Ending      
  Class       Distribution          Shortfall          Balance     
-------------------------------------------------------------------
                                                                   
Class A-1        $0.00                $0.00             $0.00      
Class A-2        $0.00                $0.00             $0.00      
Class A-3        $0.00                $0.00             $0.00      
Class A-4    $1,212,185.31            $0.00         $12,757,670.15 
Class A-5        $0.00                $0.00         $16,625,000.00 
Class A-6      $196,183.31            $0.00         $16,782,079.93 
Class M-1        $0.00                $0.00          $8,829,469.41 
Class M-2        $0.00                $0.00          $4,624,960.17 
Class B-3        $0.00                $0.00          $5,739,920.33 
Class I/O         n/a                  n/a         $20,138,495.92  
-------------------------------------------------------------------
TOTALS       $1,408,368.62            $0.00         $65,359,099.99 
-------------------------------------------------------------------

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Certificate Group 2                                                             

                                                        [Enlarge/Download Table]

-------------------------------------------------------------------------------------
                                                                            Interest 
              CUSIP        Beginning      Certificate      Interest         Carryover
  Class      24763LB        Balance           Rate       Distribution       Shortfall
-------------------------------------------------------------------------------------
                                                                                     
 Class A-7      P4       $7,274,787.78      4.29900%      $ 26,929.09           $0.00
-------------------------------------------------------------------------------------
 TOTALS                 $74,042,256.39                    $429,928.25                
-------------------------------------------------------------------------------------

                                                                [Download Table]


               Principal       Principal Carryover     Ending      
  Class       Distribution          Shortfall          Balance     
-------------------------------------------------------------------
                                                                   
 Class A-7    $215,364.96            $0.00          $7,059,422.82  
-------------------------------------------------------------------
             $1,623,733.58                         $72,418,522.81  
-------------------------------------------------------------------

(**)Class A-7 Certificate rate is a variable rate.                              

                                                        [Enlarge/Download Table]

                                                                                                                          
5.03 (v)     The Amount of Excess Interest paid as Principal Group I                                              $0.00   
             The Amount of Excess Interest paid as Principal Group II                                          $214,370.18

5.03 (vi)    Servicing Fee Group I                                                                             $14,750.66 
             Servicing Fee Group II                                                                              $810.95  
             Trustee Fee                                                                                         $403.92  

5.03 (vii)                                                                                       Group I        Group II  
             The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)     $70,277,468.61  $7,274,787.78
             The Aggregate Principal Balance of the Mortgage Loans (After Distribution)      $68,654,729.81  $7,273,793.00

5.03 (ix)    Overcollateralization Amount                                                                    $3,510,000.00
             Required Overcollateralization Amount                                                           $3,510,000.00

5.03 (x)     Trigger Event (Yes/No)                                                                               Yes     

5.03 (xi)    The number and Principal Balances of all Mortgage Loans               Group I         24        $1,472,552.65
             that were subject to Principal Prepayments during the Due Period      Group II         0             $0.00   

5.03 (xii)   The amount of all Curtailments that were received during the Due Period Group I                  ($1,216.84) 
             The amount of all Curtailments that were received during the Due Period Group II                     $0.00   

5.03 (xiii)  The principal portion of all Monthly Payments received                Group I                     $72,549.40 
             during the Due Period                                                 Group II                      $994.78  

5.03 (xiv)   The interest portion of all Monthly Payments received on              Group I                     $637,493.34
             the Mortgage Loans during the Due Period                              Group II                    $75,673.13 

5.03 (xv)    The amount of the Monthly Advances and the Compensating Interest      Group I      $317,271.70     $1,872.88 
             payments to be made on the Determination Date                         Group II      $55,078.70       $0.00   

                                                        [Enlarge/Download Table]

Certificate Group 1                                                                                                           
------------------------------------------------------------------------------------------------------------------------------
                CUSIP        Beginning Balance      Certificate           Interest          Principal         Ending Balance  
  Class        24763LB        Factor per 1000           Rate         Factor per 1000     Factor per 1000      Factor per 1000 
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
Class A-1         H2            0.000000000            6.620%          0.000000000         0.000000000           0.0000000    
Class A-2         J8            0.000000000            6.640%          0.000000000         0.000000000           0.0000000    
Class A-3         K5            0.000000000            6.770%          0.000000000         0.000000000           0.0000000    
Class A-4         L3            0.760264242            7.030%          4.453881361        65.969268466         694.2949740    
Class A-5         M1            1.000000000            7.370%          6.141666767         0.000000000        1000.0000000    
Class A-6         N9            0.970186471            7.040%          5.691760571        11.210474946         958.9759960    
Class M-1         Q2            0.646847576            7.240%          3.902646886         0.000000000         646.8475758    
Class M-2         R0            0.646847576            7.490%          4.037406993         0.000000000         646.8475758    
Class B-3         S8            0.490591481            7.800%          3.188844628         0.000000000         490.5914813    
Class I/O         T6            0.970186471            6.500%          0.000000000              n/a            958.9759960    
------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

Certificate Group 1                                                                                                           
------------------------------------------------------------------------------------------------------------------------------
                CUSIP        Beginning Balance      Certificate           Interest          Principal         Ending Balance  
  Class        24763LB        Factor per 1000           Rate         Factor per 1000     Factor per 1000      Factor per 1000 
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
Class A-7         P4            0.145495756          4.29875%          0.538581800         4.307299208          141.1884564   
------------------------------------------------------------------------------------------------------------------------------


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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 97-2                                                                     

(**)Class A-7 Certificate rate is a variable rate.                              

                                                        [Enlarge/Download Table]

                                                                                                             
5.03 (xvi)   The amount distributed to the Class R Certificateholder                             $193,055.32 

                                                                                       Group I       Group II
                                                                                       -------       --------
5.03 (xvii)  The weighted average remaining term to maturity                             184           310   
             The weighted average Loan  Rate                                           11.2172%      12.8438%

5.03 (xviii) The amount of all payments or reimbursements to the Servicer               $0.00         $0.00  

5.03 (xix)   The number of Mortgage Loans outstanding prior to distribution              1040           93   
             The number of Mortgage Loans outstanding after distribution                 1016           93   

5.03 (xx)    The Amount of Liquidation Loan Losses                                  $82,288.73        $0.00  
             Loan Losses as percentage of the Initial Collateral Balance              0.0392%        0.0000% 
             Cumulative Net Losses as percentage of the Initial Collateral Balance    1.8251%       2.6846%  
             Non-Recoverable Loss Adjustment                                        ($8,071.36)      $0.00   

             Group I                                                                                         

                                                        [Enlarge/Download Table]


5.03 (xxi)  Delinquent Mortgage Loans:                                                   
                                                       Number  Percent  Principal Balance
                                                       ------  -------  -----------------
                                                                                         
                                        30 TO 59 DAYS    99     9.199%    $6,315,819.28  
                                        60 TO 89 DAYS    36     4.132%    $2,836,691.13  
                                         90 PLUS DAYS    66     7.093%    $4,869,553.20  
                                          FORECLOSURE    93    11.002%    $7,553,470.30  
                                                  REO    40     3.501%    $2,403,766.70  

--------------------------------------------------------------------------------
 (*)NOTE THAT 30, 60, AND 90 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE
--------------------------------------------------------------------------------

Group II                                                  
5.03 (xxi) Delinquent Mortgage Loans :                                          

                                                                [Download Table]

                 Number      Percent      Principal Balance
                 ------      -------      -----------------
                                                           
30 TO 59 DAYS       6         6.693%         $486,864.66   
60 TO 89 DAYS       5         9.006%         $655,072.58   
 90 PLUS DAYS       9         8.779%         $638,602.12   
  FORECLOSURE      16        16.890%        $1,228,559.69  
          REO       9         7.767%         $564,922.88   

--------------------------------------------------------------------------------
 (*)NOTE THAT 30, 60, AND 90 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE
--------------------------------------------------------------------------------

                                                                [Download Table]

                                        
5.03 (xxi) Cumulative Loss Event      No
           Servicer Termination Test  No

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                                                                       EXHIBIT I
Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 97-3                                                                     

                                                        [Enlarge/Download Table]

                                                                    Distribution Date                                    06/25/2001 

                                                                                                  Principal              Interest   
                                                                                                  ---------              --------   
5.03 (i)       The Available Funds for Certificate Group 1                                     $2,277,178.34           $853,435.23  
               The Available Funds for Certificate Group                                        $370,198.30            $140,179.83  
               Interest Advance Recovery                                                                               $454,455.25  
               Servicing Advance Recovery                                                                              $159,681.39  

Certificate Group 1                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Interest                                                     
                CUSIP     Beginning     Certificate      Interest      Carryover    Principal     Principal Carryover    Ending     
   Class       24763L      Balance         Rate        Distribution    Shortfall   Distribution       Shortfall          Balance    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
  Class A-1F     BU3        $0.00         4.17875%         $0.00         $0.00        $0.00             $0.00            $0.00      
  Class A-2F     BV1        $0.00          6.590%          $0.00         $0.00        $0.00             $0.00            $0.00      
  Class A-3F     BW9     $781,964.59       6.630%        $4,320.35       $0.00     $781,964.59          $0.00            $0.00      
  Class A-4F     BX7    $14,014,000.00     6.930%       $80,930.85       $0.00    $1,302,590.56         $0.00        $12,711,409.44 
  Class A-5F     BY5    $20,643,000.00     7.250%       $124,718.13      $0.00        $0.00             $0.00        $20,643,000.00 
  Class A-6F     BZ2    $23,664,123.91     6.860%       $135,279.91      $0.00     $458,125.65          $0.00        $23,205,998.26 
Class A-6 I/O    CA6    $23,664,123.91     6.500%          $0.00         $0.00         n/a               n/a         $23,205,998.26 
  Class M-1F     CB4    $16,562,000.00     7.080%        $97,715.80      $0.00        $0.00             $0.00        $16,562,000.00 
  Class M-2F     CC2    $12,588,000.00     7.330%        $76,891.70      $0.00        $0.00             $0.00        $12,588,000.00 
  Class B-1F     CD0    $10,600,000.00     7.650%        $67,575.00      $0.00        $0.00             $0.00        $10,600,000.00 
------------------------------------------------------------------------------------------------------------------------------------
 TOTALS                 $98,853,088.50                  $587,431.74      $0.00    $2,542,680.79         $0.00        $96,310,407.70 
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]


Certificate Group 2                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Interest                                                     
                CUSIP     Beginning     Certificate      Interest      Carryover    Principal     Principal Carryover    Ending     
   Class       24763L      Balance         Rate        Distribution    Shortfall   Distribution       Shortfall          Balance    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1A       CE8       $0.00          4.28875%        $0.00          $0.00        $0.00             $0.00             $0.00     
Class M-1A       CF5    $3,764,754.92     4.45875%      $14,454.70       $0.00     $458,362.01          $0.00         $3,306,392.91 
Class M-2A       CG3    $5,250,000.00     4.65875%      $21,061.43       $0.00        $0.00             $0.00         $5,250,000.00 
Class B-1A       CH1    $3,750,000.00     5.08875%      $16,432.42       $0.00        $0.00             $0.00         $3,750,000.00 
------------------------------------------------------------------------------------------------------------------------------------
 TOTALS                $111,617,843.42                  $639,380.29      $0.00    $3,001,042.80         $0.00        $108,616,800.62
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                                                                 
5.03 (v)     The Amount of Excess Interest paid as Principal Group I                                                $265,502.45  
             The Amount of Excess Interest paid as Principal Group II                                               $88,163.71   

5.03 (vi)    Servicing Fee Group I                                                                                  $23,379.75   
             Servicing Fee Group II                                                                                  $1,737.13   
             Trustee Fee                                                                                              $568.61    

5.03 (vii)                                                                                                                       
                                                                                                     Group I          Group II   
                                                                                                     -------          --------   
             The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)          $100,208,240.66  $13,514,750.51
             The Aggregate Principal Balance of the Mortgage Loans (After Distribution)           $97,769,611.83   $13,052,199.83

                                                                                                     Group I          Group II   
                                                                                                     -------          --------   
5.03 (ix)    Overcollateralization Amount                                                         $1,459,204.13      $745,806.92 
             Required Overcollateralization Amount                                                $2,649,972.56      $749,995.59 

5.03 (x)     Trigger Event (Yes/No)                                                                    YES               YES     

5.03 (xi)    The number and Principal Balances of all Mortgage Loans                       Group I     31          $2,155,946.29 
             that were subject to Principal Prepayments during the Due Period             Group II      4           $232,706.10  

5.03 (xii)   The amount of all Curtailments that were received during the Due Period       Group I                    ($78.52)   
             The amount of all Curtailments that were received during the Due Period      Group II                      $0.00    

5.03 (xiii)  The principal portion of all Monthly Payments received                        Group I                  $103,561.06  
             during the Due Period                                                        Group II                   $5,507.73   

5.03 (xiv)   The interest portion of all Monthly Payments received on                      Group I                   $876,814.98 
             the Mortgage Loans during the Due Period                                     Group II                   $141,916.96 

5.03 (xv)    The amount of the Monthly Advances and the Compensating Interest              Group I  $390,019.64       $1,963.29  
             payments to be made on the Determination Date                                Group II   $97,686.30        $125.90   

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Delta Funding Corporation                                                       
Home Equity Loan Trust                                                          
Series 97-3                                                                     

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-----------------------------------------------------------------------------------------------------------------------------------
Certificate Group 1                                                                                                                
-----------------------------------------------------------------------------------------------------------------------------------
                   CUSIP         Beginning Balance         Certificate         Interest          Principal       Ending Balance    
    Class          24763L         Factor per 1000             Rate          Factor per 1000   Factor per 1000    Factor per 1000   
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
  Class A-1         BU3             0.000000000              4.179%           0.000000000        0.000000000         0.0000000     
  Class A-2         BV1             0.000000000              6.590%           0.000000000        0.000000000         0.0000000     
  Class A-3         BW9             0.014115903              6.630%           0.077990288       14.115903409         0.0000000     
  Class A-4         BX7             1.000000000              6.930%           5.775000000       92.949233297       907.0507667     
  Class A-5         BY5             1.000000000              7.250%           6.041666909        0.000000000      1000.0000000     
  Class A-6         BZ2             0.892985808              6.860%           5.104902264       17.287760494       875.6980475     
Class A-6 I/O       CA6             0.892985808              6.500%           0.000000000        0.000000000       875.6980475     
 Class M-1F         CB4             1.000000000              7.080%           5.900000000        0.000000000      1000.0000000     
 Class M-2F         CC2             1.000000000              7.330%           6.108333333        0.000000000      1000.0000000     
 Class B-1F         CD0             1.000000000              7.650%           6.375000000        0.000000000      1000.0000000     
-----------------------------------------------------------------------------------------------------------------------------------

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-----------------------------------------------------------------------------------------------------------------------------------
Certificate Group 2                                                                                                                
-----------------------------------------------------------------------------------------------------------------------------------
                   CUSIP         Beginning Balance         Certificate         Interest          Principal       Ending Balance    
    Class          24763L         Factor per 1000             Rate          Factor per 1000   Factor per 1000    Factor per 1000   
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
Class A-1A          CE8             0.000000000             4.2888%           0.000000000        0.000000000         0.0000000     
Class M-1A          CF5             0.557741470             4.4588%           2.141436753       67.905482232       489.8359874     
Class M-2A          CG3             1.000000000             4.6588%           4.011701389        0.000000000      1000.0000000     
Class B-1A          CH1             1.000000000             5.0888%           4.381979167        0.000000000      1000.0000000     
-----------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                                             
5.03 (xvi)    The amount distributed to the Class R Certificateholder                                $0.00   

                                                                                       Group I      Group II 
                                                                                       -------      -------- 
5.03 (xvii)   The weighted average remaining term to maturity                            232           314   
              The weighted average Loan Rate                                           10.8112%     12.9614% 

5.03 (xviii)  The amount of all payments or reimbursements to the Servicer              $0.00         $0.00  

5.03 (xix)    The number of Mortgage Loans outstanding prior to distribution             1392          151   
              The number of Mortgage Loans outstanding after distribution                1361          147   

5.03 (xx)     The Amount of Liquidation Loan Losses                                  $166,675.26   $92,352.38
              Loan Losses as percentage of the Initial Collateral Balance               0.0629%      0.1231% 
              Cumulative Net Losses as percentage of the Initial Collateral Balance     2.4036%      2.0643% 
              Non-Recoverable Loss Adjustment                                         ($5,224.77)     $0.00  
              Group I                                                                                        

                                                        [Enlarge/Download Table]

5.03 (xxi)     Delinquent Mortgage Loans:                                                                                       
                                                                     Number             Percent        Principal Balance        
                                                                     ------             -------        -----------------        
                                                                                                                                
                                              30 TO 59 DAYS            113                8.396%          $8,208,743.74         
                                              60 TO 89 DAYS             59                4.121%          $4,029,539.25         
                                                  90 TO 119             20                1.668%          $1,630,599.04         
                                              120 PLUS DAYS             58                4.896%          $4,787,107.96         
                                                FORECLOSURE             89                8.314%          $8,128,346.23         
                                                        REO             61                4.311%          $4,214,373.07         
--------------------------------------------------------------------------------------------------------------------------------
                                      (*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE             
--------------------------------------------------------------------------------------------------------------------------------

Group II                                            

                                                        [Enlarge/Download Table]

5.03 (xxi)    Delinquent Mortgage Loans:                                                                                        

                                                                      Number             Percent        Principal Balance       
                                                                      ------             -------        -----------------       
                                                                                                                                
                                               30 TO 59 DAYS            16               10.277%          $1,341,424.65         
                                               60 TO 89 DAYS             6                4.947%            $645,735.03         
                                                   90 TO 119             6                3.647%            $475,956.11         
                                               120 PLUS DAYS            16               10.604%          $1,384,095.20         
                                                 FORECLOSURE            17               12.217%          $1,594,602.88         
                                                         REO            11                9.232%          $1,204,978.26         
--------------------------------------------------------------------------------------------------------------------------------
                                       (*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE            
--------------------------------------------------------------------------------------------------------------------------------

                                                                [Download Table]


                                                                
                                         Group I     Group II   
5.03 (xxi)  Cumulative Loss Event          YES          NO      
            Servicer Termination Test                   NO      
            Group I Delinquency Amount            $20,367,546.17
            Group II Delinquency Amount            $4,863,510.94

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Delta Funding Corporation                                                        EXHIBIT J      
Home Equity Loan Trust                                                                          
Series 97-4                                                                                     
                                                            Distribution Date         06/25/2001
                                                                    Principal        Interest   
                                                                    ---------        --------   
                                                                                                
5.03 (i)       The Available Funds for Certificate Group 1        $2,678,874.31   $1,157,910.36 
               The Available Funds for Certificate Group 2          $435,243.39     $160,978.05 
               Interest Advance Recovery                                            $545,952.51 
               Servicing Advance Recovey                                            $157,621.15 

                                                        [Enlarge/Download Table]

5.03 (ii)                                                                                                                          
Certificate Group 1                                                                                                                
-----------------------------------------------------------------------------------------------------------------------------------
                                                                      Interest                                                     
              CUSIP      Beginning    Certificate     Interest        Carryover      Principal     Principal Carryover    Ending   
Class         24763L      Balance         Rate      Distribution      Shortfall     Distribution       Shortfall          Balance  
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
Class A-1F     CJ7         $0.00        4.23875%       $0.00            $0.00          $0.00             $0.00            $0.00    
Class A-2F     CK4    $22,466,317.04     6.670%    $124,875.28          $0.00      $2,554,268.43         $0.00       $19,912,048.61
Class A-3F     CL2    $18,000,000.00     6.710%    $100,650.00          $0.00          $0.00             $0.00       $18,000,000.00
Class A-4F     CM0    $25,225,000.00     7.070%    $148,617.29          $0.00          $0.00             $0.00       $25,225,000.00
Class A-5F     CN8    $30,079,155.01     6.670%    $167,189.97          $0.00       $420,425.22          $0.00       $29,658,729.78
Class A-5 I/O  CW8         $0.00         6.500%        $0.00            $0.00           N/A               N/A             $0.00    
Class M-1F     CP3    $17,476,362.97     6.970%    $101,508.54          $0.00          $0.00             $0.00       $17,476,362.97
Class M-2F     CQ1    $13,282,035.86     7.170%     $79,360.16          $0.00          $0.00             $0.00       $13,282,035.86
Class B-1F     CR9     $9,867,598.88     7.510%     $61,754.72          $0.00          $0.00             $0.00        $9,867,598.88
-----------------------------------------------------------------------------------------------------------------------------------
  TOTALS             $136,396,469.75               $783,955.96          $0.00      $2,974,693.65         $0.00      $133,421,776.10
-----------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

Certificate Group 2                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                                                                      Interest                                                      
              CUSIP      Beginning    Certificate     Interest        Carryover      Principal     Principal Carryover    Ending    
Class         24763L      Balance         Rate      Distribution      Shortfall     Distribution       Shortfall          Balance   
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1A     CS7         $0.00        4.30875%       $0.00            $0.00          $0.00             $0.00            $0.00     
Class M-1A     CT5     $5,146,707.01    4.56875%    $20,248.18          $0.00       $523,452.07          $0.00        $4,623,254.94 
Class M-2A     CU2     $5,525,000.00    4.76875%    $22,687.99          $0.00          $0.00             $0.00        $5,525,000.00 
Class B-1A     CV0     $4,675,000.00    5.23875%    $21,089.61          $0.00          $0.00             $0.00        $4,675,000.00 
------------------------------------------------------------------------------------------------------------------------------------
  TOTALS              $151,743,176.76              $847,981.74          $0.00      $3,498,145.73         $0.00       $148,245,031.03
------------------------------------------------------------------------------------------------------------------------------------

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5.03 (v)     The Amount of Excess Interest paid as Principal Group I                                              $295,819.34  
             The Amount of Excess Interest paid as Principal Group II                                              $88,208.68  

5.03 (vi)    Servicing Fee Group I                                                                                 $33,224.00  
             Servicing Fee Group II                                                                                 $1,949.60  
             Trustee Fee                                                                                             $779.60   

                                                                                                     Group I        Group II   
                                                                                                     -------        --------   
5.03 (vii)   The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)        $139,810,903.74  $16,108,432.40
             The Aggregate Principal Balance of the Mortgage Loans (After Distribution)         $136,917,048.69  $15,673,239.13

                                                                                                     Group I        Group II   
                                                                                                     -------        --------   
5.03 (ix)    Overcollateralization Amount                                                        $3,495,272.59    $849,984.19  
             Required Overcollateralization Amount                                               $3,495,272.59    $849,984.19  

5.03 (x)     Trigger Event (Yes/No)                                                                    YES             YES     

5.03 (xi)    The number and Principal Balances of all Mortgage Loans                    Group I        33         $2,375,607.17
             that were subject to Principal Prepayments during the Due Period           Group II        5          $432,778.83 

5.03 (xii)   The amount of all Curtailments that were received during the Due Period Group I                        ($1,886.37)
             The amount of all Curtailments that were received during the Due Period Group II                          $0.00   

5.03 (xiii)  The principal portion of all Monthly Payments received                     Group I                    $140,008.85 
             during the Due Period                                                      Group II                    $2,414.44  

5.03 (xiv)   The interest portion of all Monthly Payments received on                   Group I                   $1,191,134.36
             the Mortgage Loans during the Due Period                                   Group II                   $162,927.65 

5.03 (xv)    The amount of the Monthly Advances and the Compensating Interest           Group I    $513,037.29      $3,592.89  
             payments to be made on the Determination Date                             Group II    $115,102.84      $1,156.44  

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Delta Funding Corporation                                                                                                          
Home Equity Loan Trust                                                                                                             
Series 97-4                                                                                                                        

Certificate Group 1                                                                                                                
-----------------------------------------------------------------------------------------------------------------------------------
                     CUSIP        Beginning Balance       Certificate         Interest          Principal         Ending Balance   
Class                24763L        Factor per 1000            Rate        Factor per 1000     Factor per 1000     Factor per 1000  
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
Class A-1             CJ7            0.000000000              4.24%              0             0.000000000           0.000000000   
Class A-2             CK4            0.838295412              6.67%        4.659525373        95.308523533          742.986888600  
Class A-3             CL2            1.000000000              6.71%        5.591666667         0.000000000         1000.000000000  
Class A-4             CM0            1.000000000              7.07%        5.891666601         0.000000000         1000.000000000  
Class A-5             CN8            0.954893810              6.67%        5.307618095        13.346832518          941.546977200  
Class A-5 I/O         CW8            0.000000000              6.50%             0              0.000000000          941.546977200  
Class M-1F            CP3            0.887710823              6.97%        5.156120282         0.000000000          887.710822800  
Class M-2F            CQ1            0.887658615              7.17%        5.303759941         0.000000000          887.658614900  
Class B-1F            CR9            0.895020306              7.51%        5.601335418         0.000000000          895.020306400  
-----------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

Certificate Group 2                                                                                                                

                                  Beginning Balance       Certificate         Interest          Principal         Ending Balance   
Class                CUSIP         Factor per 1000            Rate        Factor per 1000     Factor per 1000     Factor per 1000  
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
Class A-1A            CS7            0.000000000              4.31%              0             0.000000000           0.000000000   
Class M-1A            CT5            0.672772158              4.57%         2.646821158       68.425107488          604.347050400  
Class M-2A            CU2            1.000000000              4.77%         4.106423611        0.000000000         1000.000000000  
Class B-1A            CV0            1.000000000              5.24%         4.511145833        0.000000000         1000.000000000  
-----------------------------------------------------------------------------------------------------------------------------------

5.03 (xvi)     The amount distributed to the Class R Certificateholder                                               $86,099.04    

                                                                                               Group I                Group II     
                                                                                               -------                --------     
5.03 (xvii)    The weighted average remaining term to maturity                                 26100.00%              31700.00%    
               The weighted average Loan  Rate                                                   10.52%                 12.49%     

5.03 (xviii)   The amount of all payments or reimbursements to the Servicer                      $0.00                   $0.00     

5.03 (xix)     The number of Mortgage Loans outstanding prior to distribution                    1927                     174      
               The number of Mortgage Loans outstanding after distribution                       1894                     169      

5.03 (xx)      The Amount of Liquidation Loan Losses                                         $216,606.84                 $0.00     
               Loan Losses as percentage of the Initial Collateral Balance                       0.07%                   0.00%     
               Cumulative Net Losses as percentage of the Initial Collateral Balance             1.56%                   1.49%     
               Non-Recoverable Loss Adjustment                                                ($1,626.10)              ($50.12)    
               Group I                                                                                                             

                                                        [Enlarge/Download Table]


5.03 (xxi)     Delinquent Mortgage Loans:                                                                                           
                                                                                     Number        Percent       Principal Balance  
                                                                                                                                    
                                                                  30 TO 59 DAYS        172           9.43%         $12,914,358.05   
                                                                  60 TO 89 DAYS         85           4.48%          $6,138,956.30   
                                                                 90 TO 119 DAYS         24           1.55%          $2,122,894.05   
                                                                  120 DAYS PLUS         77           3.91%          $5,348,552.43   
                                                                    FORECLOSURE        134           7.31%          10,011,618.43   
                                                                            REO         61          3.200%          $4,380,753.27   
------------------------------------------------------------------------------------------------------------------------------------
                                 (*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE                      
------------------------------------------------------------------------------------------------------------------------------------
               Group II                                                                                                             
5.03 (xxi)     Delinquent Mortgage Loans:                                                                                           
                                                                                     Number        Percent        Principal Balance 

                                                                  30 TO 59 DAYS         13           7.15%         $1,121,034.68    
                                                                  60 TO 89 DAYS         13           3.38%          $529,540.66     
                                                                 90 TO 119 DAYS          9           6.26%          $980,333.35     

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Delta Funding Corporation                                                                                                           
Home Equity Loan Trust                                                                                                              
Series 97-4                                                                                                                         

                                                                                                                                    
                                                                  120 DAYS PLUS        10            6.30%          $986,980.51     
                                                                    FORECLOSURE        22           16.95%         $2,656,992.03    
                                                                            REO         8           5.673%          $889,127.70     
------------------------------------------------------------------------------------------------------------------------------------
                              (*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE                         
------------------------------------------------------------------------------------------------------------------------------------

5.03 (xxi)     Trigger Event                                                                                           YES          
               Subordination Trigger Event                                                                              NO          


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                                                                       EXHIBIT K

Delta Funding Corporation                                                       
DELTA FUNDING HOME EQUITY LOAN TRUST                                            
SERIES 1998-1                                                                   

                                                        [Enlarge/Download Table]

                                                                                                    
                                                       Distribution Date                  06/25/2001

                                                                          Principal       Interest  

5.03 (i)  The Available Funds for Certificate Group 1  Group 1          $3,932,033.24  $1,295,676.01
          The Available Funds for Certificate Group 2  Group 2            $696,270.23    $202,067.39
                                                                        -------------  -------------
                                                       Total            $4,628,303.47  $1,497,743.40

5.03 (ii), (iii), (iv), (viii)                                                  

                                                        [Enlarge/Download Table]

-------------------------------------------------------------------------------------
Certificate Group 1                                                                  
                                                                          Interest   
              CUSIP         Beginning      Certificate      Interest      Carryover  
   Class      24763L         Balance           Rate       Distribution    Shortfall  
-------------------------------------------------------------------------------------
                                                                                     
Class A-1F     CX6                $0.00       4.199%             $0.00      $0.00    
Class A-2F     CY4                $0.00       6.310%             $0.00      $0.00    
Class A-3F     CZ1       $41,418,332.54       6.330%       $218,481.70      $0.00    
Class A-4F     DA5       $10,220,000.00       6.550%        $55,784.17      $0.00    
Class A-5F     DB3       $13,441,000.00       7.040%        $78,853.87      $0.00    
Class A-6F     DC1       $45,195,157.44       6.520%       $245,560.36      $0.00    
Class I/OF     DD9                $0.00       7.000%             $0.00      $0.00    
Class M-1F     DE7       $17,710,000.00       4.639%        $70,742.23      $0.00    
Class M-2F     DF4       $10,010,000.00       4.809%        $41,450.09      $0.00    
Class B-1F     DG2       $13,090,000.00       5.539%        $62,432.48      $0.00    
-------------------------------------------------------------------------------------
 TOTALS                 $151,084,489.98                    $773,304.90      $0.00    
-------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

----------------------------------------------------------------------------------------
Certificate Group 1                                                                     

              LIBOR Carryover      Principal     Principal Carryover         Ending     
   Class         Shortfall       Distribution         Shortfall             Balance     
----------------------------------------------------------------------------------------
                                                                                        
Class A-1F         $0.00                $0.00           $0.00                     $0.00 
Class A-2F         $0.00                $0.00           $0.00                     $0.00 
Class A-3F         $0.00        $3,337,863.95           $0.00            $38,080,468.59 
Class A-4F         $0.00                $0.00           $0.00            $10,220,000.00 
Class A-5F         $0.00                $0.00           $0.00            $13,441,000.00 
Class A-6F         $0.00          $754,807.57           $0.00            $44,440,349.87 
Class I/OF         $0.00                  n/a             n/a                     $0.00 
Class M-1F         $0.00                $0.00           $0.00            $17,710,000.00 
Class M-2F         $0.00                $0.00           $0.00            $10,010,000.00 
Class B-1F         $0.00                $0.00           $0.00            $13,090,000.00 
----------------------------------------------------------------------------------------
 TOTALS            $0.00        $4,092,671.52           $0.00           $146,991,818.46 
----------------------------------------------------------------------------------------

                                                                [Download Table]

------------------------------------------------------------------------------------
Certificate Group 2                                                                 
                                                                          Interest  
              CUSIP         Beginning      Certificate      Interest      Carryover 
   Class      24763L         Balance           Rate       Distribution    Shortfall 
------------------------------------------------------------------------------------
                                                                                    
Class A-1A     DH0                 $0.00     6.28000%            $0.00      $0.00   
Class A-2A     DJ6         $3,013,282.94     4.29875%       $11,154.27      $0.00   
Class IOA      DK3                 $0.00     6.80000%            $0.00      $0.00   
Class M-1A     DL1         $4,232,000.00     4.53875%       $16,540.21      $0.00   
Class M-2A     DM9         $4,094,000.00     4.67875%       $16,494.41      $0.00   
Class B-1A     DN7         $7,031,387.99     5.34875%       $32,385.65      $0.00   
------------------------------------------------------------------------------------
 TOTALS                   $18,370,670.93                    $76,574.55      $0.00   
------------------------------------------------------------------------------------

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---------------------------------------------------------------------------------------
Certificate Group 2                                                                    

              LIBOR Carryover      Principal     Principal Carryover         Ending    
   Class         Shortfall       Distribution         Shortfall             Balance    
---------------------------------------------------------------------------------------
                                                                                       
Class A-1A         $0.00               $0.00             $0.00                    $0.00
Class A-2A         $0.00         $821,717.65             $0.00            $2,191,565.29
Class IOA          $0.00                 n/a             $0.00                    $0.00
Class M-1A         $0.00               $0.00             $0.00            $4,232,000.00
Class M-2A         $0.00               $0.00             $0.00            $4,094,000.00
Class B-1A         $0.00               $0.00             $0.00            $7,031,387.99
---------------------------------------------------------------------------------------
 TOTALS            $0.00         $821,717.65             $0.00           $17,548,953.27
---------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                                                             
             Prepayment Penalty                                                                                    $3,324.16 

5.03 (v)     The Amount of Excess Interest paid as Principal Group I                                             $160,638.28 
             The Amount of Excess Interest paid as Principal Group II                                            $138,574.93 

5.03 (vi)    Servicing Fee Group I                                                                                $40,189.53 
             Servicing Fee Group II                                                                                $2,852.17 
             Trustee Fee                                                                                             $420.42 

5.03 (vii)                                                                                       Group I         Group II    
             The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)     $160,712,613.47  $19,465,611.58 
             The Aggregate Principal Balance of the Mortgage Loans (After Distribution)      $156,374,274.96  $18,630,766.42 

                                                                                                 Group I         Group II    
5.03 (ix)    Overcollateralization Amount                                                      $9,382,456.50   $1,081,813.15 
             Required Overcollateralization Amount                                             $9,382,456.50   $1,094,940.65 

5.03 (x)     Trigger Event (Yes/No)                                                                  NO             YES      

5.03 (xi)    The number and Principal Balances of all Mortgage Loans                Group I               48   $3,452,973.05 
             that were subject to Principal Prepayments during the Due Period       Group II              10     $601,008.86 

5.03 (xii)   The amount of all Curtailments that were received during the Due Period Group I                      ($1,188.57)
             The amount of all Curtailments that were received during the Due Period Group II                          $0.00 

5.03 (xiii)  The principal portion of all Monthly Payments received               Group I                        $162,456.04 
             during the Due Period                                                Group II                         $8,023.34 

5.03 (xiv)   The interest portion of all Monthly Payments received on             Group I                      $1,335,865.54 
             the Mortgage Loans during the Due Period                             Group II                       $204,919.56 

5.03 (xv)    The amount of the Monthly Advances and the Compensating Interest     Group I        $539,026.58       $3,143.77 
             payments to be made on the Determination Date                        Group II       $132,978.39       $1,349.93 


                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Certificate Group 1                                                                                                                 
                 CUSIP        Beginning Balance       Certificate          Interest              Principal           Ending Balance 
   Class         24763L        Factor per 1000           Rate           Factor per 1000       Factor per 1000       Factor per 1000 
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1F        CX6           0.000000000            4.19875%           0.000000000           0.000000000              0.0000000  
Class A-2F        CY4           0.000000000            6.31000%           0.000000000           0.000000000              0.0000000  
Class A-3F        CZ1           0.634491445            6.33000%           3.346942308          51.133060839            583.3583840  
Class A-4F        DA5           1.000000000            6.55000%           5.458333659           0.000000000           1000.0000000  
Class A-5F        DB3           1.000000000            7.04000%           5.866666915           0.000000000           1000.0000000  
Class A-6F        DC1           0.978250161            6.52000%           5.315159307          16.337826253            961.9123348  
Class I/OF        DD9           0.000000000            7.00000%           0.000000000           0.000000000              0.0000000  
Class M-1F        DE7           1.000000000            4.63875%           3.994479390           0.000000000           1000.0000000  
Class M-2F        DF4           1.000000000            4.80875%           4.140868132           0.000000000           1000.0000000  
Class B-1F        DG2           1.000000000            5.53875%           4.769479167           0.000000000           1000.0000000  
------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------
Certificate Group 2                                                                                                                 
                             Beginning Balance       Certificate           Interest             Principal          Ending Balance   
   Class         Cusip        Factor per 1000           Rate           Factor per 1000       Factor per 1000       Factor per 1000  
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1A        DH0           0.000000000           6.28000%           0.000000000           0.000000000            0.0000000     
Class A-2A        DJ6           0.053219409           4.29875%           0.197002361          14.512851546           38.7065575     
Class IOA         DK3           0.000000000           6.80000%           0.000000000           0.000000000            0.0000000     
Class M-1A        DL1           1.000000000           4.53875%           3.908368056           0.000000000         1000.0000000     
Class M-2A        DM9           1.000000000           4.67875%           4.028923611           0.000000000         1000.0000000     
Class B-1A        DN7           0.878484256           5.34875%           4.046182573           0.000000000          878.4842561     
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]


                                                                                                               
5.03 (xvi)    The amount distributed to the Class R Certificateholder                              $361,357.83 

                                                                                        Group I       Group II 

5.03 (xvii)   The weighted average remaining term to maturity                         27600.0000%   32000.0000%
              The weighted average Loan Rate                                               10.25%        12.86%

5.03 (xviii)  The amount of all payments or reimbursements to the Servicer                 $0.00         $0.00 

5.03 (xix)    The number of Mortgage Loans outstanding prior to distribution                2053           243 
              The number of Mortgage Loans outstanding after distribution                   2005       $233.00 

5.03 (xx)     The Amount of Liquidation Loan Losses                                  $409,169.62   $138,674.93 
              Loan Losses as percentage of the Initial Collateral Balance                0.1328%       0.1507% 
              Cumulative Net Losses as percentage of the Initial Collateral Balance        1.00%         1.41% 
              Non-Recoverable Loss Adjustment                                         ($2,864.35)     ($100.00)
              Group I                                                                                          
5.03 (xxi)    Delinquent Mortgage Loans:                                                                       

                                                                [Download Table]

                        Number      Percent      Principal Balance
                                                                  
 30 TO 59 DAYS            171        9.300%        $14,542,385.79 
 60 TO 89 DAYS             84        4.328%         $6,767,575.71 
90 to 119 DAYS             29        1.225%         $1,915,419.48 
     120+ DAYS             50        2.662%         $4,162,963.60 
   FORECLOSURE            120        6.676%        $10,439,848.85 
           REO             65         2.66%         $4,154,736.30 

--------------------------------------------------------------------------------
 (*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

            Group II                                                                       
5.03 (xxi)  Delinquent Mortgage Loans :                                                    

                                                         Number  Percent  Principal Balance
                                                                                           
                                          30 TO 59 DAYS     25   11.408%     $2,125,388.97 
                                          60 TO 89 DAYS     12    3.857%       $718,622.01 
                                         90 to 119 DAYS     11    4.588%       $854,793.99 
                                              120+ DAYS     23   11.203%     $2,087,205.56 
                                            FORECLOSURE     33   13.604%     $2,534,492.13 
                                                    REO     18     7.52%     $1,400,088.10 

--------------------------------------------------------------------------------
 (*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                                       
5.03 (xxi)  Trigger Event                                            NO
            Subordination Trigger Event                              NO

            Amount of Delinquency Reimbursement Amount  $673,868.28    
            Amount of Servicing Advance Reimbursements  $236,815.95    

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                                                                       EXHIBIT L

Delta Funding Corporation                                                      1
Delta Home Equity Loan Trust                                                    
Series 1998-2                                                                   
                                               Distribution Date      06/15/2001

                                                        [Enlarge/Download Table]

                                               Interest       Principal        Total    
                                               --------       ---------        -----    
                                                                                        
The Available Funds for Certificate Group 1  $1,666,142.83  $5,033,077.96  $6,699,220.79
The Available Funds for Certificate Group 2   $225,460.27    $325,543.06    $551,003.33 
Interest advance Recovery                                                   $720,455.21 
Servicing Advance Recovery                                                  $149,237.82 
                                                        [Enlarge/Download Table]

Certificate Group 1                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
            CUSIP       Beginning      Certificate     Interest      Interest Carryover    Principal      Carryover      Ending     
  Class     24763L       Balance          Rate       Distribution        Shortfall        Distribution    Shortfall      Balance    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1F    DP2          $0.00          6.250%          $0.00             $0.00             $0.00          $0.00        $0.00     
Class A-2F    DQ0          $0.00          6.130%          $0.00             $0.00             $0.00          $0.00        $0.00     
Class A-3F    DR8     $74,398,665.64      6.240%       $386,873.06          $0.00         $5,352,468.47      $0.00    $69,046,197.17
Class A-4F    DS6     $21,000,000.00      6.380%       $111,650.00          $0.00             $0.00          $0.00    $21,000,000.00
Class A-5F    DT4     $32,000,000.00      6.750%       $180,000.00          $0.00             $0.00          $0.00    $32,000,000.00
Class A-6F    DU1     $36,000,000.00      6.370%       $191,100.00          $0.00             $0.00          $0.00    $36,000,000.00
Class I/OF    DY3     $36,000,000.00     10.000%       $300,000.00          $0.00               NA             NA     $36,000,000.00
Class M-1F    DV9     $19,800,000.00      4.573%        $77,961.13          $0.00             $0.00          $0.00    $19,800,000.00
Class M-2F    DW7     $10,800,000.00      4.763%        $44,291.25          $0.00             $0.00          $0.00    $10,800,000.00
Class B-1F    DX5     $12,600,000.00      5.373%        $58,291.63          $0.00             $0.00          $0.00    $12,600,000.00
------------------------------------------------------------------------------------------------------------------------------------
Total                $206,598,665.64                  $1,350,167.07         $0.00         $5,352,468.47      $0.00   $201,246,197.17
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

Certificate Group 2                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
            CUSIP       Beginning      Certificate     Interest      Interest Carryover    Principal      Carryover      Ending     
  Class     24763L       Balance          Rate       Distribution        Shortfall        Distribution    Shortfall      Balance    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1A    DZ0           $0.00         6.14000%        $0.00             $0.00            $0.00           $0.00         $0.00    
Class A-2A    EA4       $5,995,591.64     4.28250%     $22,109.99           $0.00         $465,648.85        $0.00     $5,529,942.79
Class M-1A    EB2       $7,012,500.00     4.49250%     $27,128.15           $0.00            $0.00           $0.00     $7,012,500.00
Class M-2A    EC0       $4,887,500.00     4.68250%     $19,707.15           $0.00            $0.00           $0.00     $4,887,500.00
Class B-1A    ED8       $4,037,500.00     5.27250%     $18,331.09           $0.00            $0.00           $0.00     $4,037,500.00
------------------------------------------------------------------------------------------------------------------------------------
Total                  $21,933,091.64                  $87,276.38           $0.00         $465,648.85        $0.00    $21,467,442.79
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
GROUP TOTALS          $228,531,757.29                 $1,437,443.44         $0.00        $5,818,117.33       $0.00   $222,713,639.96
------------------------------------------------------------------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]
                                                                                                                                   
            LIBOR                   4.12250%                                                                                       
5.03 (v)    The Amount of Excess Interest paid as Principal Group I                                                    $315,482.49 
            The Amount of Excess Interest paid as Principal Group II                                                   $138,131.41 

5.03 (vi)   Servicing Fee Group I                                                                                       $52,601.93 
            Servicing Fee Group II                                                                                       $3,611.05 
            Trustee Fee Group 1                                                                                           $493.27  
            Trustee Fee Group 2                                                                                            $52.47  

                                                                                                       Group I          Group II   
5.03 (vii)  The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)             $211,402,121.25  $22,488,702.88
            The Aggregate Principal Balance of the Mortgage Loans (After Distribution)              $206,148,183.81  $22,127,292.80

                                                                                                       Group I          Group II   
5.03 (ix)   Overcollateralization Amount                                                            $4,901,986.64     $659,850.01  
            Required Overcollateralization Amount                                                    $5,040,000.00     $850,000.00 

5.03 (x)    Trigger Event (Yes/No)                                                                        NO               YES     

5.03 (xi)   The number and Principal Balances of all Mortgage Loans                        Group I        52         $4,498,488.54 
            that were subject to Principal Prepayments during the Due Period              Group II         4          $314,258.98  

5.03 (xii)  The amount of all Curtailments that were received during the Due Period Group I                             ($305.75)  
            The amount of all Curtailments that were received during the Due Period Group II                              $0.00    

5.03 (xiii) The principal portion of all Monthly Payments received                         Group I                     $207,453.59 
            during the Due Period                                                         Group II                      $10,397.29 

5.03 (xiv)  The interest portion of all Monthly Payments received on                       Group I                    $1,718,744.76
            the Mortgage Loans during the Due Period                                      Group II                     $229,071.32 

5.03 (xv)   The amount of the Monthly Advances and the Compensating Interest               Group I     $708,927.99        $0.00    

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Delta Funding Corporation                                                      2
Delta Home Equity Loan Trust                                                    
Series 1998-2                                                                   

                                                                [Download Table]

                                                                           
payments to be made on the Determination Date  Group II  $141,302.31  $0.00

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Delta Funding                                                                   
Corporation                                                                    3
Delta Home Equity Loan Trust                                                    
Series 1998-2                                                                   

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
Certificate Group 1                                                                                                                 
              CUSIP     Beginning Balance       Certificate        Interest              Principal           Ending Balance         
------------------------------------------------------------------------------------------------------------------------------------
  Class       24763L     Factor per 1000           Rate        Factor per 1000        Factor per 1000        Factor per 1000        
                                                                                                                                    
Class A-1F     DP2         0.000000000           6.25000%        0.000000000            0.000000000              0.0000000          
Class A-2F     DQ0         0.000000000           6.13000%        0.000000000            0.000000000              0.0000000          
Class A-3F     DR8         0.932314106           6.24000%        4.848033333           67.073539768            865.2405660          
Class A-4F     DS6         1.000000000           6.38000%        5.316666667            0.000000000           1000.0000000          
Class A-5F     DT4         1.000000000           6.75000%        5.625000000            0.000000000           1000.0000000          
Class A-6F     DU1         1.000000000           6.37000%        5.308333333            0.000000000           1000.0000000          
Class I/OF     DY3         1.000000000          10.00000%        8.333333333            0.000000000           1000.0000000          
Class M-1F     DV9         1.000000000           4.57250%        3.937430808            0.000000000           1000.0000000          
Class M-2F     DW7         1.000000000           4.76250%        4.101041667            0.000000000           1000.0000000          
Class B-1F     DX5         1.000000000           5.37250%        4.626319444            0.000000000           1000.0000000          
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
Certificate Group 2                                                                                                                 
                        Beginning Balance       Certificate        Interest              Principal           Ending Balance         
------------------------------------------------------------------------------------------------------------------------------------
  Class        Cusip      Factor per 1000           Rate        Factor per 1000        Factor per 1000        Factor per 1000       
                                                                                                                                    
Class A-1A     DZ0         0.000000000           6.14000%        0.000000000            0.000000000            0.0000000            
Class A-2A     EA4         0.110901117           4.28250%        0.408970974            8.613157993           102.2879591           
Class M-1A     EB2         1.000000000           4.49250%        3.868541667            0.000000000           1000.0000000          
Class M-2A     EC0         1.000000000           4.68250%        4.032152778            0.000000000           1000.0000000          
Class B-1A     ED8         1.000000000           5.27250%        4.540208333            0.000000000           1000.0000000          
------------------------------------------------------------------------------------------------------------------------------------

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5.03 (xvi)    The amount distributed to the Class R Certificateholder                                $0.00    

                                                                                      Group I       Group II  
                                                                                      -------       --------  
5.03 (xvii)   The weighted average remaining term to maturity                           281            323    
              The weighted average Loan Rate                                           10.04%         12.56%  

5.03 (xviii)  The amount of all payments or reimbursements to the Servicer             $0.00          $0.00   

5.03 (xix)    The number of Mortgage Loans outstanding prior to distribution            2600           237    
              The number of Mortgage Loans outstanding after distribution               2548           233    

5.03 (xx)     The Amount of Liquidation Loan Losses                                  $220,859.48    $35,867.02
              Loan Losses as percentage of the Initial Collateral Balance              0.0613%       0.0422%  
              Cumulative Net Losses as percentage of the Initial Collateral Balance     0.75%         1.29%   
              Non-Recoverable Loss Adjustment                                         ($3,908.02)  ($1,974.38)
              Group I                                                                                         

                                                        [Enlarge/Download Table]

5.03 (xxi)  Delinquent Mortgage Loans:                                                                       
            All Delinquencies are exclusive of each other                                                    
                                                                           Number  Percent  Principal Balance
                                                                                                             

                                                            30 TO 59 DAYS   222     9.233%    $19,033,005.78 
                                                            60 TO 89 DAYS    75     2.811%     $5,795,116.01 
                                                           90 TO 119 DAYS    34     1.093%     $2,252,677.67 
                                                                120+ DAYS    54     2.173%     $4,479,727.73 
                                                              FORECLOSURE   178      6.84%    $14,106,123.08 
                                                                      REO    62      1.94%     $3,998,650.43 

--------------------------------------------------------------------------------
(*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE 
--------------------------------------------------------------------------------
(*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS MAY INCLUDE BANKRUPTCY
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

            Group II                                                                                        
5.03 (xxi)  Delinquent Mortgage Loans:                                                                      
            All Delinquencies are exclusive of each other                                                   
                                                                          Number  Percent  Principal Balance
                                                                                                            
                                                           30 TO 59 DAYS    30    11.100%     $2,456,139.81 
                                                           60 TO 89 DAYS    10     4.710%     $1,042,214.95 
                                                            90 DAYS PLUS     8      4.25%       $939,269.98 
                                                               120+ DAYS    12      5.69%     $1,258,400.97 
                                                             FORECLOSURE    23     10.48%     $2,319,510.55 
                                                                     REO    20      8.43%     $1,864,535.92 

--------------------------------------------------------------------------------
(*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS DOES NOT INCLUDE REO OR FORECLOSURE 
--------------------------------------------------------------------------------
(*)NOTE THAT 30, 60, 90, OR 120 PLUS DAYS MAY INCLUDE BANKRUPTCY
--------------------------------------------------------------------------------

                                                                [Download Table]
                                            
5.03 (xxi)  Trigger Event                NO 
            Subordination Trigger Event  NO 

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                                                                       EXHIBIT M

Delta Funding Corporation                                                       
Delta Home Equity Loan Trust                                                    
Series 1998-3                                                                   

                                                        [Enlarge/Download Table]

                                                                                             Distribution Date        06/15/2001    

                                                                                                  Interest             Principal    
                                                                                                                                    
Interest Advance Recovery     $827,393.29     The Available Funds for Certificate Group 1      $2,199,056.33         $7,013,439.42  
Servicing Advance Recovery    $172,018.46     The Available Funds for Certificate Group 2       $109,376.54            $75,156.51   
------------------------------------------------------------------------------------------------------------------------------------
             Total            $999,411.75                          Total                       $2,308,432.86         $7,088,595.93  

                                                        [Enlarge/Download Table]


5.03 (ii,iii)                                                                                                                       

Certificate Group 1                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                  CUSIP                                                    Interest         Principal                               
Class                         Beginning Balance    Certificate Rate      Distribution      Distribution        Ending Balance       
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1      24763LEE6            $0.00                0.000%             $0.00             $0.00                $0.00            
Class A-2      24763LEF3        $62,308,184.52           5.860%          $304,271.63      $7,237,068.55        $55,071,115.97       
Class A-3      24763LEG1        $58,921,000.00           5.960%          $292,640.97          $0.00            $58,921,000.00       
Class A-4      24763LEH9        $68,805,000.00           6.220%          $356,639.25          $0.00            $68,805,000.00       
Class A-5      24763LEJ5        $32,016,000.00           6.410%          $171,018.80          $0.00            $32,016,000.00       
Class A-6      24763LEK2        $44,500,000.00           5.930%          $219,904.17          $0.00            $44,500,000.00       
Class IO       24763LEL0        $38,938,000.00           6.000%          $194,690.00            NA             $38,938,000.00       
Class BIO      F9803101             $0.00                  NA            $485,297.00            NA                 $0.00            
Class R                             $0.00                  NA               $0.00             $0.00                $0.00            
------------------------------------------------------------------------------------------------------------------------------------
 TOTALS                         $266,550,184.52                         $2,024,461.82     $7,237,068.55        $259,313,115.97      
------------------------------------------------------------------------------------------------------------------------------------


                                                        [Enlarge/Download Table]

Certificate Group 2                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                  CUSIP                                                    Interest         Principal                               
  Class         US24863LB     Beginning Balance    Certificate Rate      Distribution      Distribution        Ending Balance       
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1A      24763LEM8        $9,563,511.42          4.55000%          $36,255.67        $75,156.51          $9,488,354.91       
------------------------------------------------------------------------------------------------------------------------------------
 TOTALS                         $276,113,695.94                         $2,060,717.49      $7,312,225.06       $268,801,470.88      
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                             GROUP 1        GROUP 2     
                                                                                             -------        -------     
                                                                                                                        

            One Month LIBOR rate                                                                            4.12250%    
5.03 (iv)   The number and Principal Balances of all Mortgage Loans                             82             1        
            that were subject to Principal Prepayments during the Due Period              $6,560,919.09    $67,535.77   

            The amount of all Curtailments that were received during the                    ($550.02)         $0.00     
            Due Period                                                                                                  

            The principal portion of all Monthly Payments received                         $260,021.14       $7,620.74  
            during the Due Period                                                                                       

5.03 (v)    The Amount of Excess Interest for each Loan Group paid as                      $221,271.64         $0.00    
            principal                                                                                                   

5.03 (vi)   SERVICING FEE                                                                   $70,265.06       $1,896.67  
            Premium Amount                                                                  $24,850.84        $909.30   
            Reimbursement Amount to Certificate Insurer                                       $0.00            $0.00    
            TRUSTEE FEE                                                                      $657.25           $26.34   

5.03 (vii)  The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)  $281,680,184.52  $11,288,511.42
            The Aggregate Principal Balance of the Mortgage Loans (After Distribution)   $274,443,115.97  $11,213,354.91

            The Certificate Principal Balance (Before Distribution)                      $266,550,184.52   $9,563,511.42
            The Certificate Principal Balance (After Distribution)                       $259,313,115.97   $9,488,354.91


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Certificate Group 1                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                  CUSIP       Beginning Balance                            Interest           Principal          Ending Balance     

  Class         US24863LB      Factor per 1000     Certificate Rate     Factor per 1000     Factor per 1000      Factor per 1000    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1          A70           0.000000000            6.600%            0.000000000         0.000000000            0.0000000      
Class A-2          B53           0.656663623            6.920%            3.206707358        76.271194381           580.3924285     
Class A-3          C37           1.000000000            7.260%            4.966666667         0.000000000          1000.0000000     
Class A-4          D10           1.000000000            7.460%            5.183333333         0.000000000          1000.0000000     
Class A-5          E92           1.000000000            7.740%            5.341666667         0.000000000          1000.0000000     
Class A-6          F76           1.000000000            7.210%            4.941666667         0.000000000          1000.0000000     
 Class S                         0.344267223            6.0000%           1.721336115              NA               344.2672231     
------------------------------------------------------------------------------------------------------------------------------------
                                                        [Enlarge/Download Table]


Certificate Group 2                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                              Beginning Balance                            Interest           Principal          Ending Balance     
  Class           Cusip        Factor per 1000     Certificate Rate     Factor per 1000     Factor per 1000      Factor per 1000    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1A                       0.318783714            4.54925%          1.208522342          2.505217000          316.2784970     
------------------------------------------------------------------------------------------------------------------------------------

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Delta Funding Corporation                                                      2
Delta Home Equity Loan Trust                                                    
Series 1998-3                                                                   

                                                        [Enlarge/Download Table]

                                                                                        GROUP 1        GROUP 2    
                                                                                                                  
5.03 (ix)     Overcollateralization Amount                                           $15,130,000.00  $1,725,000.00
              Specified Overcollateralization Amount                                 $15,130,000.00  $1,725,000.00

5.03 (x)      The amount of any Insured Payments                                         $0.00           $0.00    

5.03 (xiv)    The interest portion of all Monthly Payments received on                $1,348,120.58    $43,777.54 
              the Mortgage Loans during the Due Period                                                            

5.03 (xv)     The amount of the Monthly Advances and the Compensating Interest         $921,200.81     $67,495.67 
              payments to be made on the Determination Date                               $0.00          $0.00    

5.03 (xvi)    The amount distributed to the Class R Certificateholder                      0.00          $0.00    

5.03 (xvii)   The weighted average remaining term to maturity                               285           327     
              The weighted average Loan Rate                                               9.94%         12.16%   

5.03 (xviii)  The amount of all payments or reimbursements to the Servicer                $0.00          $0.00    

5.03 (xvii)   The number of Mortgage Loans outstanding prior to distribution               3468            119    
              The number of Mortgage Loans outstanding after distribution                  3386            118    

5.03 (xx)     The Amount of Liquidation Loan Losses                                     223,629.13        0.00    
              Loan Losses as percentage of the Initial Collateral Balance                 0.0503%        0.0000%  
              Cumulative Net Losses as percentage of the Initial Collateral Balance        0.68%          0.84%   
              Non-Recoverable Loss Adjusment                                            (2,357.49)       $0.00    

                                                        [Enlarge/Download Table]

5.03 (xxi)    Delinquent Mortgage Loans:  Group 1                                                                                   
              All Delinquencies are exclusive of each other                             Number        Percent      Principal Balance
                                                                                                                                    

                                                             30 TO 59 DAYS               286         9.113317%       $25,010,869.78 
                                                             60 TO 89 DAYS               101         2.902568%        $7,965,898.51 
                                                             90 PLUS DAYS                 66         1.839725%        $5,048,998.60 
                                                             FORECLOSURE                 211         6.225806%       $17,086,295.41 
                                                             BANKRUPTCY                  199         5.915323%       $16,234,197.99 
                                                                 REO                      78         1.863831%        $5,115,156.30 
------------------------------------------------------------------------------------------------------------------------------------
                           (*)NOTE THAT 30, 60, OR 90 PLUS DAYS DOES NOT INCLUDE REO, FORECLOSURE, OR BANKRUPTCY                    

------------------------------------------------------------------------------------------------------------------------------------
          Delinquent Mortgage Loans:  Group 2                                                                                       
          All Delinquencies are exclusive of each other                                 Number        Percent      Principal Balance
                                                            30 TO 59 DAYS                 14         11.576796%       $1,298,147.17 
                                                            60 TO 89 DAYS                  7          7.183175%        $805,474.93  
                                                            90 PLUS DAYS                   4          2.871202%        $321,958.10  
                                                              FORECLOSURE                 21         17.458294%       $1,957,660.51 
                                                               BANKRUPTCY                  7          4.013944%        $450,097.81  
                                                                      REO                  4          3.613898%        $405,239.23  
------------------------------------------------------------------------------------------------------------------------------------
                           (*)NOTE THAT 30, 60, OR 90 PLUS DAYS DOES NOT INCLUDE REO, FORECLOSURE, OR BANKRUPTCY                    

------------------------------------------------------------------------------------------------------------------------------------
             Prepayment Penalty                                                                      $23,638.48                     


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                                                                       EXHIBIT N

Delta Funding Corporation                                                      1
Home Equity Loan Trust                                                          
Series 1998-4                                                                   

                                                        [Enlarge/Download Table]

                                                                                            Distribution Date         06/15/2001    

                                                                                                Interest               Principal    
                                                                                                                                    
5.03 (i)            The Available Funds for Certificate Group 1                               $1,903,364.44          $6,485,373.71  
                    The Available Funds for Certificate Group 2                                $130,306.67            $231,104.10   
                    ----------------------------------------------------------------------------------------------------------------
                    Total                                                                     $2,033,671.11          $6,716,477.81  

                    Interest Advance Recovery                                                                         $183,513.96   
                    Servicing Advance Recovery                                                                        $157,938.14   
5.03 (ii,iii,viii)                                                                                                                  

                                                        [Enlarge/Download Table]

Certificate Group 1                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                CUSIP                                                     Interest              Principal                           
  Class                   Beginning Balance     Certificate Rate       Distribution           Distribution          Ending Balance  
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1    24763LEP1          $0.00                 6.160%               $0.00                  $0.00                   $0.00     
Class A-2    24763LEQ9     $56,873,038.53             5.960%            $282,469.42           $6,546,572.99         $50,326,465.54  
Class A-3    24763LER7    $133,200,000.00             6.340%            $703,740.00               $0.00            $133,200,000.00  
Class A-4    24763LES5     $36,800,000.00             6.190%            $189,826.67               $0.00             $36,800,000.00  
 Class B     24763LET3     $14,000,000.00             6.750%             $78,750.00               $0.00             $14,000,000.00  
 Class IO    24763LEU0     $49,000,000.00             6.000%            $245,000.00                 NA              $49,000,000.00  
Class BIO                       $0.00                   N/A             $214,086.87               $0.00                   $0.00     
 Residual                       $0.00                   N/A                $0.00                  $0.00                   $0.00     
------------------------------------------------------------------------------------------------------------------------------------
  TOTALS                  $240,873,038.53                              $1,713,872.96          $6,546,572.99         $234,326,465.54 
------------------------------------------------------------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

Certificate Group 2                                                                                                                 
------------------------------------------------------------------------------------------------------------------------------------
                CUSIP                                                     Interest              Principal                           
  Class                   Beginning Balance     Certificate Rate       Distribution           Distribution          Ending Balance  
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Class A-1A   24763LEV8     $14,283,444.64           4.72250%             $58,085.02           $412,158.33           $13,871,286.31  
------------------------------------------------------------------------------------------------------------------------------------
 TOTALS                   $255,156,483.17                              $1,771,957.98         $6,958,731.32         $248,197,751.85  
------------------------------------------------------------------------------------------------------------------------------------

(**)Class A-1A Certificate rate is a variable rate.                             

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                                                        [Enlarge/Download Table]

                                                                                              GROUP 1         GROUP 2    
                                                                                                                         
5.03 (v)     The Amount of Excess Interest for each Loan Group paid as                     $121,463.22     $121,463.22   
             principal                                                                                                   

5.03 (vi)    SERVICING FEE                                                                 $64,121.11        $2,425.54   
             Premium Amount                                                                 $19,851.39       $1,249.80   
             Reimbursement Amount to Certificate Insurer                                      $0.00             $0.00    
             TRUSTEE FEE                                                                      $493.75          $28.57    

5.03 (vii)   The Aggregate Principal Balance of the Mortgage Loans (Before Distribution)  $246,873,038.53  $14,283,444.64
             The Aggregate Principal Balance of the Mortgage Loans (After Distribution)   $240,205,002.32  $13,992,749.53
             The Certificate Principal Balance  (Before Distribution)                     $240,873,038.53  $14,283,444.64
             The Certificate Principal Balance  (After Distribution)                      $234,326,465.54  $13,871,286.31

5.03 (ix)    Overcollateralization Amount                                                   $6,000,000.00                
             Required Overcollateralization Amount                                          $6,000,000.00                

5.03 (x)     The amount of any Insured Payments                                                $0.00            $0.00    

5.03 (xi)    The number and Principal Balances of all Mortgage Loans                             57               3      
             that were subject to Principal Prepayments during the Due Period               $6,037,077.09     $114,463.65

5.03 (xii)   The amount of all Curtailments that were received during the                    ($2,114.12)        $0.00    
             Due Period                                                                                                  

5.03 (xiii)  The principal portion of all Monthly Payments received                         $229,850.39        $3,970.00 
             during the Due Period                                                                                       

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Delta Funding Corporation                                                      2
Home Equity Loan Trust                                                          
Series 1998-4                                                                   

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
Certificate Group 1                                                                                                                 
                CUSIP     Beginning Balance                            Interest              Principal            Ending Balance    
------------------------------------------------------------------------------------------------------------------------------------
  Class        24783LE     Factor per 1000      Certificate Rate    Factor per 1000        Factor per 1000        Factor per 1000   
                                                                                                                                    
Class A-1        P13         0.000000000            6.160%            0.000000000             0.000000000             0.0000000     
Class A-2        Q95         0.757095827            5.960%            3.760242608            87.148202731            669.9476243    
Class A-3        R78         1.000000000            6.340%            5.283333333             0.000000000           1000.0000000    
Class A-4        S51         1.000000000            6.190%            5.158333333             0.000000000           1000.0000000    
 Class B         T35         1.000000000            6.750%            5.625000000             0.000000000           1000.0000000    
------------------------------------------------------------------------------------------------------------------------------------
Class IO         U08         0.418803419            6.000%            2.094017094             0.000000000            418.8034188    

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
Certificate Group 2                                                                                                                 
                           Beginning Balance                              Interest                 Principal         Ending Balance 
----------------------------------------------------------------------------------------------------------------------------------  
   Class        Cusip       Factor per 1000       Certificate Rate     Factor per 1000          Factor per 1000      Factor per 1000
                                                                                                                                    
Class A-1A                   0.446357645               4.723%            1.815156759              12.879947839          433.4776972 
(**)Class A-1A Certificate rate is a variable rate.                                                                                 
------------------------------------------------------------------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]
                                                                                                             
             One Month LIBOR rate                                                                   4.12250% 
                                                                                       GROUP 1       GROUP 2 
5.03 (xiv)   The interest portion of all Monthly Payments received on               $1,219,661.27  $54,200.78
             the Mortgage Loans during the Due Period                                                        

5.03 (xv)    The amount of the Monthly Advances and the Compensating Interest        $747,824.28   $78,531.43
             payments to be made on the Determination Date                               $0.00        $0.00  

5.03 (xvi)   The amount distributed to the Class R Certificateholder                     $0.00        $0.00  

5.03 (xvii)  The weighted average remaining term to maturity                              296          330   
             The weighted average Loan  Rate                                            9.8500%      11.4828%

5.03 (xviii) The amount of all payments or reimbursements to the Servicer                $0.00        $0.00  

5.03 (xvii)  The number of Mortgage Loans outstanding prior to distribution              2737          173   
             The number of Mortgage Loans outstanding after distribution                  2680         170   

5.03 (xx)    The Amount of Liquidation Loan Losses                                    $182,662.50  $59,591.01
             Loan Losses as percentage of the Initial Collateral Balance                 0.05%        0.19%  
             Cumulative Net Losses as percentage of the Initial Collateral Balance       0.55%        1.04%  
             Non-Recoverable Loss Ajustment                                            $2,163.88      $0.00  

                                                        [Enlarge/Download Table]


5.03 (xxi)   Delinquent Mortgage Loans:  Group 1                                                                                    
             All Delinquencies are exclusive of each other                                                                          
                                                                                       Number       Percent        Principal Balance
                                                                                                                                    
                                                                     30 TO 59 DAYS      238        9.4801040%        $22,771,684.79 
                                                                     60 TO 89 DAYS       93        3.1657600%         $7,604,314.41 
                                                                      90 PLUS DAYS       58        2.2823240%         $5,482,256.80 
                                                                       FORECLOSURE      156        6.5905560%        $15,830,846.33 
                                                                        BANKRUPTCY      110         3.993184%         $9,591,827.61 
                                                                               REO       56         1.499711%         $3,602,379.67 
------------------------------------------------------------------------------------------------------------------------------------
                        (*)NOTE THAT 30, 60, OR 90 PLUS DAYS DOES NOT INCLUDE REO, FORECLOSURE, OR BANKRUPTCY                       
------------------------------------------------------------------------------------------------------------------------------------

             Delinquent Mortgage Loans: Group 2                                                                                     
             All Delinquencies are exclusive of each other                                                                          
                                                                                       Number       Percent        Principal Balance

                                                                     30 TO 59 DAYS       23          11.88%           $1,662,463.44 
                                                                     60 TO 89 DAYS        5           4.33%            $605,696.98  
                                                                      90 PLUS DAYS        8           6.07%            $849,695.73  
                                                                       FORECLOSURE       18           9.19%           $1,286,011.95 
                                                                        BANKRUPTCY       16           9.69%           $1,356,510.16 
                                                                               REO       11           5.36%            $750,534.40  
------------------------------------------------------------------------------------------------------------------------------------
                        (*)NOTE THAT 30, 60, OR 90 PLUS DAYS DOES NOT INCLUDE REO, FORECLOSURE, OR BANKRUPTCY                       
------------------------------------------------------------------------------------------------------------------------------------
5.03 (xxii)  LIBOR Carryover Shortfall Amount                                                                              $0.00    
5.03 (xxiii) Allocated Pre-Funded Amount                                                                                   $0.00    
             Prepayment Penalty                                                                                         $10,470.68  

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                                                                       EXHIBIT O

Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:               31-May-2001                                          
Distribution Date:         15-Jun-2001                                          

 DFH Series 1999-1

Certificateholder Distribution Summary

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
                Certificate   Certificate    Beginning                                Current     Ending                  Cumulative
                  Class      Pass-Through   Certificate    Interest      Principal    Realized  Certificate     Total      Realized 
 Class   CUSIP  Description      Rate         Balance    Distribution   Distribution    Loss      Balance    Distribution    Losses 
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
 A-1F  24763LEW6  SEN_FIX      5.81000%            0.00          0.00           0.00    0.00            0.00           0.00     0.00
 A-2F  24763LEX4  SEN_FIX      5.98000%   56,404,509.67    281,082.47   3,973,194.38    0.00   52,431,315.29   4,254,276.85     0.00
 A-3F  24763LEY2  SEN_FIX      6.13000%   34,800,000.00    177,770.00           0.00    0.00   34,800,000.00     177,770.00     0.00
 A-4F  24763LEZ9  SEN_FIX      6.39000%   52,100,000.00    277,432.50           0.00    0.00   52,100,000.00     277,432.50     0.00
 A-5F  24763LFA3  SEN_FIX      6.81000%   25,750,000.00    146,131.25           0.00    0.00   25,750,000.00     146,131.25     0.00
 A-6F  24763LFB1  SEN_FIX      6.34000%   32,000,000.00    169,066.67           0.00    0.00   32,000,000.00     169,066.67     0.00
 IOF   24763LFC9  SEN_NTL_I    6.00000%            0.00    200,000.00           0.00    0.00            0.00     200,000.00     0.00
 A-1A  24763LFD7  SEN_FIX      4.40250%   29,584,061.99    112,154.41      67,438.99    0.00   29,516,623.00     179,593.40     0.00
 A-2A  24763LFE5  SEN_FIX      5.95000%    4,541,915.05     22,520.33     606,950.95    0.00    3,934,964.10     629,471.28     0.00
  B    24763LFF2  JUN_FIX      6.80000%   11,250,000.00     63,750.00           0.00    0.00   11,250,000.00      63,750.00     0.00
 BIO   DFH991BIO  JUN_FIX      0.00000%            0.00    272,067.38           0.00    0.00            0.00     272,067.38     0.00
 R-1   DFH9901R1  JUN_RES      0.00000%            0.00          0.00           0.00    0.00            0.00           0.00     0.00
 R-2   DFH9901R2  JUN_RES      0.00000%            0.00          0.00           0.00    0.00            0.00           0.00     0.00
 R-3   DFH9901R3  JUN_RES      0.00000%            0.00          0.00           0.00    0.00            0.00           0.00     0.00
------------------------------------------------------------------------------------------------------------------------------------
Totals                                   246,430,486.71  1,721,975.01   4,647,584.32    0.00  241,782,902.39   6,369,559.33     0.00
------------------------------------------------------------------------------------------------------------------------------------

All distributions required by the Pooling and Servicing Agreement have been     
calculated by the Certificate Administrator on behalf of the Trustee.           

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:         31-May-2001                                                
Distribution Date:   15-Jun-2001                                                

 DFH Series 1999-1

Principal Distribution Statement

                                                        [Enlarge/Download Table]


---------------------------------------------------------------------------------------------------------------------------
          Original        Beginning     Scheduled     Unscheduled                              Total            Ending     
            Face         Certificate    Principal      Principal                Realized      Principal       Certificate  
Class      Amount          Balance     Distribution   Distribution   Accretion   Loss (1)     Reduction         Balance    
---------------------------------------------------------------------------------------------------------------------------
                                                                                                                           
A-1F    92,400,000.00            0.00        0.00            0.00        0.00      0.00             0.00             0.00  
A-2F    71,700,000.00   56,404,509.67        0.00    3,973,194.38        0.00      0.00     3,973,194.38    52,431,315.29  
A-3F    34,800,000.00   34,800,000.00        0.00            0.00        0.00      0.00             0.00    34,800,000.00  
A-4F    52,100,000.00   52,100,000.00        0.00            0.00        0.00      0.00             0.00    52,100,000.00  
A-5F    25,750,000.00   25,750,000.00        0.00            0.00        0.00      0.00             0.00    25,750,000.00  
A-6F    32,000,000.00   32,000,000.00        0.00            0.00        0.00      0.00             0.00    32,000,000.00  
IOF              0.00            0.00        0.00            0.00        0.00      0.00             0.00             0.00  
A-1A    44,000,000.00   29,584,061.99        0.00       67,438.99        0.00      0.00        67,438.99    29,516,623.00  
A-2A    11,000,000.00    4,541,915.05        0.00      606,950.95        0.00      0.00       606,950.95     3,934,964.10  
 B      11,250,000.00   11,250,000.00        0.00            0.00        0.00      0.00             0.00    11,250,000.00  
BIO              0.00            0.00        0.00            0.00        0.00      0.00             0.00             0.00  
R-1              0.00            0.00        0.00            0.00        0.00      0.00             0.00             0.00  
R-2              0.00            0.00        0.00            0.00        0.00      0.00             0.00             0.00  
R-3              0.00            0.00        0.00            0.00        0.00      0.00             0.00             0.00  
---------------------------------------------------------------------------------------------------------------------------
Totals 375,000,000.00  246,430,486.71        0.00    4,647,584.32        0.00      0.00     4,647,584.32   241,782,902.39  
---------------------------------------------------------------------------------------------------------------------------

[RESTUBBED TABLE]                                                               

---------------------------------------------                                   
Ending       Total                                        
Certificate   Principal                                       
Class    Percentage   Distribution                                              
---------------------------------------------                                   

A-1F     0.00000000           0.00                                              
A-2F     0.73125963   3,973,194.38                                              
A-3F     1.00000000           0.00                                              
A-4F     1.00000000           0.00                                              
A-5F     1.00000000           0.00                                              
A-6F     1.00000000           0.00                                              
IOF      0.00000000           0.00                                              
A-1A     0.67083234      67,438.99                                              
A-2A     0.35772401     606,950.95                                              
B       1.00000000           0.00                                             
BIO      0.00000000           0.00                                              
R-1      0.00000000           0.00                                              
R-2      0.00000000           0.00                                              
R-3      0.00000000           0.00                                              
---------------------------------------------                                   
Totals   0.64475441   4,647,584.32                                              
---------------------------------------------                                   

(1) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
   Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                       

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:            31-May-2001                                             
Distribution Date:      15-Jun-2001                                             

 DFH Series 1999-1

Principal Distribution Factors Statement

                                                        [Enlarge/Download Table]


------------------------------------------------------------------------------------------------------------------------------------
             Original        Beginning       Scheduled       Unscheduled                                   Total          Ending    
               Face         Certificate      Principal        Principal                      Realized    Principal      Certificate 
Class (2)     Amount          Balance       Distribution     Distribution     Accretion      Loss (3)    Reduction        Balance   
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
  A-1F     92,400,000.00       0.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000      0.00000000 
  A-2F     71,700,000.00     786.67377503    0.00000000      55.41414756      0.00000000    0.00000000  55.41414756    731.25962748 
  A-3F     34,800,000.00    1000.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000   1000.00000000 
  A-4F     52,100,000.00    1000.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000   1000.00000000 
  A-5F     25,750,000.00    1000.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000   1000.00000000 
  A-6F     32,000,000.00    1000.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000   1000.00000000 
  IOF               0.00       0.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000      0.00000000 
  A-1A     44,000,000.00     672.36504523    0.00000000       1.53270432      0.00000000    0.00000000   1.53270432    670.83234091 
  A-2A     11,000,000.00     412.90136818    0.00000000      55.17735909      0.00000000    0.00000000  55.17735909    357.72400909 
   B       11,250,000.00    1000.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000   1000.00000000 
  BIO               0.00       0.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000      0.00000000 
  R-1               0.00       0.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000      0.00000000 
  R-2               0.00       0.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000      0.00000000 
  R-3               0.00       0.00000000    0.00000000       0.00000000      0.00000000    0.00000000   0.00000000      0.00000000 
------------------------------------------------------------------------------------------------------------------------------------

[RESTUBBED TABLE]                                                               

----------------------------------------------------                            
Ending           Total                      
Certificate      Principal                      
Class (2)        Percentage     Distribution                                    
----------------------------------------------------                            

A-1F           0.00000000      0.00000000                                   
A-2F            0.73125963    55.41414756                                   
A-3F            1.00000000     0.00000000                                   
A-4F            1.00000000     0.00000000                                   
A-5F            1.00000000     0.00000000                                   
A-6F            1.00000000     0.00000000                                   
IOF             0.00000000     0.00000000                                   
A-1A            0.67083234     1.53270432                                   
A-2A            0.35772401    55.17735909                                   
B              1.00000000     0.00000000                                  
BIO             0.00000000     0.00000000                                   
R-1             0.00000000     0.00000000                                   
R-2             0.00000000     0.00000000                                   
R-3             0.00000000     0.00000000                                   
-----------------------------------------------------                           
(2) All classes are per $1,000 denomination.                                    
(3) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
   Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                       

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:           31-May-2001                                              
Distribution Date:     15-Jun-2001                                              

 DFH Series 1999-1

 Interest Distribution Statement

                                                        [Enlarge/Download Table]


----------------------------------------------------------------------------------------------------------------------------
                                         Beginning                   Payment of                                             
            Original       Current      Certificate/      Current      Unpaid       Current     Non-Supported               
              Face       Certificate      Notional        Accrued     Interest      Interest      Interest        Realized  
 Class       Amount         Rate          Balance         Interest    Shortfall     Shortfall     Shortfall       Loss (4)  
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                            
 A-1F     92,400,000.00    5.81000%            0.00           0.00        0.00           0.00         0.00          0.00    
 A-2F     71,700,000.00    5.98000%   56,404,509.67     281,082.47        0.00           0.00         0.00          0.00    
 A-3F     34,800,000.00    6.13000%   34,800,000.00     177,770.00        0.00           0.00         0.00          0.00    
 A-4F     52,100,000.00    6.39000%   52,100,000.00     277,432.50        0.00           0.00         0.00          0.00    
 A-5F     25,750,000.00    6.81000%   25,750,000.00     146,131.25        0.00           0.00         0.00          0.00    
 A-6F     32,000,000.00    6.34000%   32,000,000.00     169,066.67        0.00           0.00         0.00          0.00    
 IOF               0.00    6.00000%   40,000,000.00     200,000.00        0.00           0.00         0.00          0.00    
 A-1A     44,000,000.00    4.40250%   29,584,061.99     112,154.41        0.00           0.00         0.00          0.00    
 A-2A     11,000,000.00    5.95000%    4,541,915.05      22,520.33        0.00           0.00         0.00          0.00    
  B       11,250,000.00    6.80000%   11,250,000.00      63,750.00        0.00           0.00         0.00          0.00    
 BIO               0.00    0.00000%            0.00           0.00        0.00           0.00         0.00          0.00    
 R-1               0.00    0.00000%            0.00           0.00        0.00           0.00         0.00          0.00    
 R-2               0.00    0.00000%            0.00           0.00        0.00           0.00         0.00          0.00    
 R-3               0.00    0.00000%            0.00           0.00        0.00           0.00         0.00          0.00    
----------------------------------------------------------------------------------------------------------------------------
Totals   375,000,000.00                               1,449,907.63        0.00           0.00         0.00          0.00    
----------------------------------------------------------------------------------------------------------------------------


[RESTUBBED TABLE]                                                               

-----------------------------------------------------------------               
  Remaining       Ending
Total          Unpaid      Certificate/       
Interest       Interest       Notional          
Class        Distribution     Shortfall      Balance                          
-----------------------------------------------------------------               

A-1F              0.00            0.00              0.00                      
A-2F        281,082.47            0.00     52,431,315.29                      
A-3F        177,770.00            0.00     34,800,000.00                      
A-4F        277,432.50            0.00     52,100,000.00                      
A-5F        146,131.25            0.00     25,750,000.00                      
A-6F        169,066.67            0.00     32,000,000.00                      
IOF         200,000.00            0.00     34,300,000.00                      
A-1A        112,154.41            0.00     29,516,623.00                      
A-2A         22,520.33            0.00      3,934,964.10                      
B           63,750.00            0.00     11,250,000.00                     
BIO         272,067.38            0.00              0.00                      
R-1               0.00            0.00              0.00                      
R-2               0.00            0.00              0.00                      
R-3               0.00            0.00              0.00                      
-----------------------------------------------------------------               
Totals     1,721,975.01            0.00                                         
-----------------------------------------------------------------               

(4) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
   Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                       

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:            31-May-2001                                             
Distribution Date:      15-Jun-2001                                             

 DFH Series 1999-1

 Interest Distribution Factors Statement

                                                        [Enlarge/Download Table]


---------------------------------------------------------------------------------------------------------------------------- 
                                         Beginning                   Payment of                                              
            Original       Current      Certificate/      Current      Unpaid       Current     Non-Supported                
              Face       Certificate      Notional        Accrued     Interest      Interest      Interest        Realized   
 Class (5)   Amount         Rate          Balance         Interest    Shortfall     Shortfall     Shortfall       Loss (6)   
---------------------------------------------------------------------------------------------------------------------------- 
                                                                                                                             
 A-1F     92,400,000.00    5.81000%       0.00000000     0.00000000   0.00000000    0.00000000     0.00000000     0.00000000 
 A-2F     71,700,000.00    5.98000%     786.67377503     3.92025760   0.00000000    0.00000000     0.00000000     0.00000000 
 A-3F     34,800,000.00    6.13000%    1000.00000000     5.10833333   0.00000000    0.00000000     0.00000000     0.00000000 
 A-4F     52,100,000.00    6.39000%    1000.00000000     5.32500000   0.00000000    0.00000000     0.00000000     0.00000000 
 A-5F     25,750,000.00    6.81000%    1000.00000000     5.67500000   0.00000000    0.00000000     0.00000000     0.00000000 
 A-6F     32,000,000.00    6.34000%    1000.00000000     5.28333344   0.00000000    0.00000000     0.00000000     0.00000000 
 IOF               0.00    6.00000%     308.40400925     1.54202005   0.00000000    0.00000000     0.00000000     0.00000000 
 A-1A     44,000,000.00    4.40250%     672.36504523     2.54896386   0.00000000    0.00000000     0.00000000     0.00000000 
 A-2A     11,000,000.00    5.95000%     412.90136818     2.04730273   0.00000000    0.00000000     0.00000000     0.00000000 
  B       11,250,000.00    6.80000%    1000.00000000     5.66666667   0.00000000    0.00000000     0.00000000     0.00000000 
 BIO               0.00    0.00000%       0.00000000     0.00000000   0.00000000    0.00000000     0.00000000     0.00000000 
 R-1               0.00    0.00000%       0.00000000     0.00000000   0.00000000    0.00000000     0.00000000     0.00000000 
 R-2               0.00    0.00000%       0.00000000     0.00000000   0.00000000    0.00000000     0.00000000     0.00000000 
 R-3               0.00    0.00000%       0.00000000     0.00000000   0.00000000    0.00000000     0.00000000     0.00000000 
-----------------------------------------------------------------------------------------------------------------------------

[RESTUBBED TABLE]                                                               

-----------------------------------------------------------------               
  Remaining       Ending
Total          Unpaid      Certificate/       
Interest       Interest       Notional          
Class (5)    Distribution     Shortfall      Balance                          
-----------------------------------------------------------------               

A-1F         0.00000000     0.00000000      0.00000000                        
A-2F         3.92025760     0.00000000    731.25962748                        
A-3F         5.10833333     0.00000000   1000.00000000                        
A-4F         5.32500000     0.00000000   1000.00000000                        
A-5F         5.67500000     0.00000000   1000.00000000                        
A-6F         5.28333344     0.00000000   1000.00000000                        
IOF          1.54202005     0.00000000    264.45643793                        
A-1A         2.54896386     0.00000000    670.83234091                        
A-2A         2.04730273     0.00000000    357.72400909                        
B           5.66666667     0.00000000   1000.00000000                       
BIO          0.00000000     0.00000000      0.00000000                        
R-1          0.00000000     0.00000000      0.00000000                        
R-2          0.00000000     0.00000000      0.00000000                        
R-3          0.00000000     0.00000000      0.00000000                        
-----------------------------------------------------------------               

(5) All classes are per $1,000 denomination                                     
(6) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
   Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                       

 Certificateholder Component Statement

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------ 
               Component               Beginning            Ending              Beginning           Ending         Ending      
              Pass-Through              Notional           Notional             Component          Component      Component    
 Class            Rate                  Balance            Balance               Balance            Balance       Percentage   
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               
  OC              0.00000%                  0.00                0.00               0.00               0.00        0.00000000%  
 MBIA         1,200.00000%             20,578.29           20,171.63               0.00               0.00       63.37675615%  
-------------------------------------------------------------------------------------------------------------------------------

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

                                                        [Enlarge/Download Table]


                                                             DFH Series 1999-1                                                      

                                                    Certificateholder Account Statement                                             

------------------------------------------------------------------    --------------------------------------------------------------
                         CERTIFICATE ACCOUNT                                      PREPAYMENT/CURTAILMENT INTEREST SHORTFALL         
                                                                                                                                    
Beginning Balance                                             0.00                                                                  
                                                                      Total Prepayment/Curtailment Interest Shortfall           0.00
Deposits                                                              Servicing Fee Support                                     0.00
  Payments of Interest and Principal                  5,906,514.09                                                              ----
  Liquidations, Insurance Proceeds, Reserve Funds             0.00    Non-Supported Prepayment/Curtailment Interest Shortf      0.00
  Proceeds from Repurchased Loans                             0.00                                                              ====
  Other Amounts (Servicer Advances)                     865,781.01    --------------------------------------------------------------
  Realized Losses                                      (274,700.31)   --------------------------------------------------------------
                                                     -------------                              SERVICING FEES                      
Total Deposits                                        6,497,594.79                                                                  
                                                                      Gross Servicing Fee                                 104,301.51
Withdrawals                                                           Trustee Fee- Wells Fargo Bank, N.A.                   3,155.66
  Reimbursement for Servicer Advances                         0.00    Supported Prepayment/Curtailment Interest Shortfall       0.00
  Payment of Service Fee                                128,035.46                                                        ----------
  Payment of Interest and Principal                   6,369,559.33    Net Servicing Fee                                   107,457.17
                                                     -------------                                                        ==========
Total Withdrawals (Pool Distribution Amount)          6,497,594.79    --------------------------------------------------------------

Ending Balance                                                0.00                                                                  
                                                     =============                                                                  
------------------------------------------------------------------                                                                  

                                                        [Enlarge/Download Table]


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

                                                                      Beginning             Current    Current               Ending 
      Account Type                                                      Balance         Withdrawals   Deposits              Balance 
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Financial Guaranty                                                         0.00                0.00       0.00                 0.00 
Financial Guaranty                                                         0.00                0.00       0.00                 0.00 
Reserve Fund                                                           5,000.00                0.00       0.00             5,000.00 
Reserve Fund                                                           5,000.00                0.00       0.00             5,000.00 
------------------------------------------------------------------------------------------------------------------------------------

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

                                                        [Enlarge/Download Table]


                                                           DFH Series 1999-1                                                        

                                            Loan Status Stratification/Credit Enhancement Statement                                 
------------------------------------------------------------------------------------------------------------------------------------
         DELINQUENT                        BANKRUPTCY                     FORECLOSURE                            REO                
------------------------------------------------------------------------------------------------------------------------------------
           No. of    Principal               No. of    Principal             No. of     Principal               No. of     Principal
            Loans     Balance                Loans      Balance              Loans       Balance                Loans       Balance 
                                                                                                                                    
                                 0-29 Days    80    6,218,045.85  0-29 Days     4      249,401.68  0-29 Days       0            0.00
30 Days      281  21,517,682.40  30 Days      19    1,579,252.24  30 Days       1       91,623.56  30 Days         0            0.00
60 Days       97   8,495,912.99  60 Days      14      710,633.90  60 Days      12    1,037,242.26  60 Days         0            0.00
90 Days       36   3,083,570.90  90 Days       6      688,597.49  90 Days      12    1,039,406.00  90 Days         0            0.00
120 Days      37   2,424,409.60  120 Days     59    3,892,175.07  120 Days    173   14,445,018.53  120 Days       67    4,331,527.93
150 Days       0           0.00  150 Days      0            0.00  150 Days      0            0.00  150 Days        0            0.00
180+ Days      0           0.00  180+ Days     0            0.00  180+ Days     0            0.00  180+ Days       0            0.00
            ----  -------------             ----   -------------             ----   -------------               ----    ------------
             451  35,521,575.89              178   13,088,704.55              202   16,862,692.03                 67    4,331,527.93

                                                        [Enlarge/Download Table]


           No. of    Principal               No. of    Principal             No. of     Principal               No. of     Principal
            Loans     Balance                Loans      Balance              Loans       Balance                Loans       Balance 
                                 0-29 Days 2.643754%   2.509466%  0-29 Days 0.132188%   0.100653%  0-29 Days  0.000000%    0.000000%
                                                                                                                                    
30 Days   9.286186%   8.684061%  30 Days   0.627892%   0.637351%  30 Days   0.033047%   0.036977%  30 Days    0.000000%    0.000000%
60 Days   3.205552%   3.428763%  60 Days   0.462657%   0.286796%  60 Days   0.396563%   0.418608%  60 Days    0.000000%    0.000000%
90 Days   1.189689%   1.244461%  90 Days   0.198282%   0.277903%  90 Days   0.396563%   0.419481%  90 Days    0.000000%    0.000000%
120 Days  1.222736%   0.978438%  120 Days  1.949769%   1.570796%  120 Days  5.717118%   5.829690%  120 Days   2.214144%    1.748109%
150 Days  0.000000%   0.000000%  150 Days  0.000000%   0.000000%  150 Days  0.000000%   0.000000%  150 Days   0.000000%    0.000000%
180+ Days 0.000000%   0.000000%  180+ Days 0.000000%   0.000000%  180+ Days 0.000000%   0.000000%  180+ Days  0.000000%    0.000000%
          ---------  ----------            ---------   ---------            ---------   ---------             ---------    ---------
          4.904164%  14.335722%            5.882353%   5.282312%            6.675479%   6.805409%             2.214144%    1.748109%
------------------------------------------------------------------------------------------------------------------------------------

[RESTUB]                                                                        

                                                        [Enlarge/Download Table]

----------------------------------                                                                                                  
            Total                                                                                                                   
----------------------------------                                                                                                  
            No. of     Principal                                                                                                    
            Loans       Balance                                                                                                     
                                                                                                                                    
0-29 Days      84    6,467,447.53                                                                                                   
30 Days       301   23,188,558.20                                                                                                   
60 Days       123   10,243,789.15                                                                                                   
90 Days        54    4,811,574.39                                                                                                   
120 Days      336   25,093,131.13                                                                                                   
150 Days        0            0.00                                                                                                   
180+ Days       0            0.00                                                                                                   
             ----   -------------                                                                                                   
              898   69,804,500.40                                                                                                   

            No. of     Principal                                                                                                    
            Loans       Balance                                                                                                     
0-29 Days  2.775942%    2.610119%                                                                                                   
30 Days    9.947125%    9.358389%                                                                                                   
60 Days    4.064772%    4.134167%                                                                                                   
90 Days    1.784534%    1.941845%                                                                                                   
120 Days  11.103767%   10.127033%                                                                                                   
150 Days   0.000000%    0.000000%                                                                                                   
180+ Days  0.000000%    0.000000%                                                                                                   
          ----------   ----------                                                                                                   
          29.676140%   28.171552%                                                                                                   
----------------------------------                                                                                                  
(7) The 120 day category for delinquent, bankruptcy, foreclosure, REO contains loans that are 120 days or more delinquent.          

      Current Period Realized Loss - Includes Interest Shortfall   274,700.31  Principal Balance of Contaminated Properties     0.00
      Cumulative Realized Losses - Includes Interest Shortfall   1,653,859.71  Periodic Advance                           865,781.01
      Current Period Class A Insufficient Funds                          0.00                                                       

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

                                                        [Enlarge/Download Table]


                                                           DFH Series 1999-1                                                        

                                                      Delinquency Status By Group                                                   
------------------------------------------------------------------------------------------------------------------------------------
         DELINQUENT                        BANKRUPTCY                     FORECLOSURE                            REO                
------------------------------------------------------------------------------------------------------------------------------------
1          No. of    Principal               No. of    Principal             No. of     Principal               No. of     Principal
            Loans     Balance                Loans      Balance              Loans       Balance                Loans       Balance 
                                                                                                                                    
                                 0-29 Days    66    5,170,158.09  0-29 Days     3      171,230.32  0-29 Days       0            0.00
30 Days      240  17,988,641.51  30 Days      14    1,094,160.16  30 Days       1       91,623.56  30 Days         0            0.00
60 Days       85   7,273,000.41  60 Days      11      520,644.82  60 Days      10      867,119.56  60 Days         0            0.00
90 Days       27   2,343,666.19  90 Days       4      503,111.43  90 Days       9      606,467.28  90 Days         0            0.00
120 Days      26   1,681,138.11  120 Days     44    2,795,683.16  120 Days    141   11,385,120.83  120 Days       52    3,218,935.58
150 Days       0           0.00  150 Days      0            0.00  150 Days      0            0.00  150 Days        0            0.00
180+ Days      0           0.00  180+ Days     0            0.00  180+ Days     0            0.00  180+ Days       0            0.00
            ----  -------------             ----   -------------             ----   -------------               ----    ------------
             378  29,286,446.22              139   10,083,757.66              164   13,121,561.55                 52    3,218,935.58

                                                        [Enlarge/Download Table]

                                                                                                                                    
                                 0-29 Days 2.504744%   2.413774%  0-29 Days 0.113852%   0.079942%  0-29 Days  0.000000%    0.000000%
30 Days   9.108159%   8.398296%  30 Days   0.531309%   0.510827%  30 Days   0.037951%   0.042776%  30 Days    0.000000%    0.000000%
60 Days   3.225806%   3.395521%  60 Days   0.417457%   0.243072%  60 Days   0.379507%   0.404829%  60 Days    0.000000%    0.000000%
90 Days   1.024668%   1.094179%  90 Days   0.151803%   0.234886%  90 Days   0.341556%   0.283139%  90 Days    0.000000%    0.000000%
120 Days  0.986717%   0.784867%  120 Days  1.669829%   1.305211%  120 Days  5.351044%   5.315332%  120 Days   1.973435%    1.502813%
150 Days  0.000000%   0.000000%  150 Days  0.000000%   0.000000%  150 Days  0.000000%   0.000000%  150 Days   0.000000%    0.000000%
180+ Days 0.000000%   0.000000%  180+ Days 0.000000%   0.000000%  180+ Days 0.000000%   0.000000%  180+ Days  0.000000%    0.000000%
         ----------  ----------            ---------   ---------            ---------   ---------             ---------    ---------
         14.345351%  13.672863%            5.275142%   4.707769%            6.223909%   6.126019%             1.973435%    1.502813%
------------------------------------------------------------------------------------------------------------------------------------

[RESTUB]                                                                        

------------------------------------                                            
Total                                               
------------------------------------                                            
No. of     Principal                                
Loans       Balance                                 

0-29 Days      69    5,341,388.41                                           
30 Days       255   19,174,425.23                                           
60 Days       106    8,660,764.79                                           
90 Days        40    3,453,244.90                                           
120 Days      263   19,080,877.68                                           
150 Days        0            0.00                                           
180+ Days       0            0.00                                           
----   -------------                              
733   55,710,701.01                             

0-29 Days  2.618596%    2.493716%                                           
30 Days    9.677419%    8.951898%                                           
60 Days    4.022770%    4.043422%                                           
90 Days    1.518027%    1.612205%                                           
120 Days   9.981025%    8.908224%                                           
150 Days   0.000000%    0.000000%                                           
180+ Days  0.000000%    0.000000%                                           
----------    ----------                                  
27.817837%   26.009464%                                 
------------------------------------                                            

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                                                        [Enlarge/Download Table]


 -----------------------------------------------------------------------------------------------------------------------------------
         DELINQUENT                        BANKRUPTCY                     FORECLOSURE                            REO                
------------------------------------------------------------------------------------------------------------------------------------
2          No. of    Principal               No. of    Principal             No. of     Principal               No. of     Principal
            Loans     Balance                Loans      Balance              Loans       Balance                Loans       Balance 
                                                                                                                                    
                                 0-29 Days    14    1,047,887.76  0-29 Days     1       78,171.36  0-29 Days       0            0.00
30 Days       41   3,529,040.89  30 Days       5      485,092.08  30 Days       0            0.00  30 Days         0            0.00
60 Days       12   1,222,912.58  60 Days       3      189,989.08  60 Days       2      170,122.70  60 Days         0            0.00
90 Days        9     739,904.71  90 Days       2      185,486.06  90 Days       3      432,938.72  90 Days         0            0.00
120 Days      11     743,271.49  120 Days     15    1,096,491.91  120 Days     32    3,059,897.70  120 Days       15    1,112,592.35
150 Days       0           0.00  150 Days      0            0.00  150 Days      0            0.00  150 Days        0            0.00
180+ Days      0           0.00  180+ Days     0            0.00  180+ Days     0            0.00  180+ Days       0            0.00
            ----  -------------             ----   -------------             ----   -------------               ----    ------------
              73   6,235,129.67               39    3,004,946.89               38    3,741,130.48                 15    1,112,592.35

                                                        [Enlarge/Download Table]

                                                                                                                                    
                                 0-29 Days 3.580563%   3.119670%  0-29 Days 0.255754%   0.232724%  0-29 Days  0.000000%    0.000000%
30 Days  10.485934%  10.506320%  30 Days   1.278772%   1.444169%  30 Days   0.000000%   0.000000%  30 Days    0.000000%    0.000000%
60 Days   3.069054%   3.640737%  60 Days   0.767263%   0.565617%  60 Days   0.511509%   0.506473%  60 Days    0.000000%    0.000000%
90 Days   2.301790%   2.202773%  90 Days   0.511509%   0.552211%  90 Days   0.767263%   1.288903%  90 Days    0.000000%    0.000000%
120 Days  2.813299%   2.212796%  120 Days  3.836317%   3.264370%  120 Days  8.184143%   9.109632%  120 Days   3.836317%    3.312302%
150 Days  0.000000%   0.000000%  150 Days  0.000000%   0.000000%  150 Days  0.000000%   0.000000%  150 Days   0.000000%    0.000000%
180+ Days 0.000000%   0.000000%  180+ Days 0.000000%   0.000000%  180+ Days 0.000000%   0.000000%  180+ Days  0.000000%    0.000000%
         ----------  ----------            ---------   ---------            ---------  ----------             ---------    ---------
         18.670077%  18.562626%            9.974425%   8.946038%            9.718670%  11.137732%             3.836317%    3.312302%
------------------------------------------------------------------------------------------------------------------------------------

[RESTUB]                                                                        

-------------------------------------                                           
Total                                             
-------------------------------------                                           
No. of     Principal                              
Loans       Balance                               

0-29 Days      15    1,126,059.12                                         
30 Days        46    4,014,132.97                                         
60 Days        17    1,583,024.36                                         
90 Days        14    1,358,329.49                                         
120 Days       73    6,012,253.45                                         
150 Days        0            0.00                                         
180+ Days       0            0.00                                         
----   -------------                            
165   14,093,799.39                           

0-29 Days  3.836317%    3.352394%                                         
30 Days   11.764706%   11.950489%                                         
60 Days    4.347826%    4.712827%                                         
90 Days    3.580563%    4.043887%                                         
120 Days  18.670077%   17.899100%                                         
150 Days   0.000000%    0.000000%                                         
180+ Days  0.000000%    0.000000%                                         
----------   ----------                               
42.199488%   41.958698%                               
-------------------------------------                                           

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                             31-May-2001                            
Distribution Date:                       15-Jun-2001                            

 DFH Series 1999-1

--------------------------------------------------------------------------------
COLLATERAL STATEMENT

Collateral Description                                    Mixed Fixed & Arm     

Weighted Average Gross Coupon                                    9.604588%      

Weighted Average Net Coupon                                      9.604588%      

Weighted Average Pass-Through Rate                               9.589587%      

Weighted Average Maturity (Stepdown Calculation)                       302      

Beginning Scheduled Collateral Loan Count                            3,072      

Number of Loans Paid in Full                                            46      

Ending Scheduled Collateral Loan Count                               3,026      

Beginning Scheduled Collateral Balance                      252,430,486.71      

Ending Scheduled Collateral Balance                         247,782,902.38      

Ending Actual Collateral Balance at 31-May-2001             247,783,653.36      

Monthly P&I Constant                                          2,230,079.63      

Ending Scheduled Balance for Premium Loans                  247,782,902.38      

Required Overcollateralized Amount                                    0.00      

Overcollateralized Increase Amount                              274,700.31      

Overcollateralized Reduction Amount                                   0.00      

Specified O/C Amount                                          6,000,000.00      

Overcollateralized Amount                                     6,000,000.00      

Overcollateralized Deficiency Amount                            274,700.31      

Base Overcollateralization Amount                             6,000,000.00      

Extra Principal Distribution Amount                             274,700.31      

Excess Cash Amount                                              546,767.69      
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Group F Curtailments                                             $1,092.44      

Group A Curtailments                                                 $0.00      

Delinquency Reimbursement Amount                               $647,106.52      

Servicing Advance Reimbursement                                $164,704.39      
--------------------------------------------------------------------------------

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Delta Funding Corporation                                                     
Mortgage Pass-Through Certificates                                            
Record Date:                             31-May-2001                          
Distribution Date:                       15-Jun-2001                          

                                                        [Enlarge/Download Table]


                                                                                      DFH Series 1999-1          
-----------------------------------------------------------------------------------------------------------------
    Group                                                       1                  2                     Total   
                                                                                                                 
 Collateral  Description                              Mixed Fixed          Mixed ARM         Mixed Fixed & Arm   
 Weighted Average Coupon Rate                           9.497547           10.289329                 9.604588    
 Weighted Average Net Rate                              9.482547           10.274329                 9.604588    
 Weighted Average Maturity                                297.00              333.00                   302.00    
 Record Date                                          05/31/2001          05/31/2001               05/31/2001    
 Principal And Interest Constant                    1,924,930.39          305,149.24             2,230,079.63    
 Beginning Loan Count                                      2,676                 396                    3,072    
 Loans Paid In Full                                           41                   5                       46    
 Ending Loan Count                                         2,635                 391                    3,026    
 Beginning Scheduled Balance                      218,304,509.67       34,125,977.04           252,430,486.71    
 Ending Scheduled Balance                         214,193,205.92       33,589,696.46           247,782,902.38    
 Scheduled Principal                                  197,132.58           12,538.06               209,670.64    
 Unscheduled Principal                              3,914,171.17          523,742.52             4,437,913.69    
 Scheduled Interest                                 1,727,797.81          292,611.18             2,020,408.99    
 Servicing Fee                                              0.00                0.00                     0.00    
 Master Servicing Fee                                       0.00                0.00                     0.00    
 Trustee Fee                                            2,728.81              426.57                 3,155.38    
 FRY Amount                                                 0.00                0.00                     0.00    
 Special Hazard Fee                                         0.00                0.00                     0.00    
 Other Fee                                                  0.00                0.00                     0.00    
 Pool Insurance Fee                                         0.00                0.00                     0.00    
 Spread 1                                                   0.00                0.00                     0.00    
 Spread 2                                                   0.00                0.00                     0.00    
 Spread 3                                                   0.00                0.00                     0.00    
 Net Interest                                       1,725,069.00          292,184.61             2,017,253.61    
 Realized Loss Amount                                 277,766.74           (3,066.43)              274,700.31    
 Cumulative Realized Loss                           1,446,480.94          207,378.78             1,653,859.72    
 Percentage of Cumulative Losses                            0.01                0.01                     0.01    
-----------------------------------------------------------------------------------------------------------------

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                                                                       EXHIBIT P

Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:            31-May-2001                                             
Distribution Date:      15-Jun-2001                                             

 DFH Series 1999-2

Certificateholder Distribution Summary

                                                        [Enlarge/Download Table]

--------------------------------------------------------------------------------------------------------------------------
                    Certificate    Certificate     Beginning                                  Current       Ending        
                       Class      Pass-Through    Certificate     Interest      Principal     Realized    Certificate     
Class      CUSIP    Description       Rate          Balance     Distribution   Distribution     Loss        Balance       
--------------------------------------------------------------------------------------------------------------------------
                                                                                                                          
A-1F     24763LFG0    SEN_FIX       6.14000%    21,984,641.53    112,488.08    4,335,078.87      0.00     17,649,562.66   
A-2F     24763LFH8    SEN_FIX       6.50000%    56,861,000.00    307,997.08            0.00      0.00     56,861,000.00   
A-3F     24763LFJ4    SEN_FIX       6.58000%    27,651,000.00    151,619.65            0.00      0.00     27,651,000.00   
A-4F     24763LFK1    SEN_FIX       6.83000%    18,534,000.00    105,489.35            0.00      0.00     18,534,000.00   
A-5F     24763LFL9    SEN_FIX       7.07000%    21,609,000.00    127,313.02            0.00      0.00     21,609,000.00   
A-6F     24763LFM7    SEN_FIX       7.37000%    32,569,000.00    200,027.94            0.00      0.00     32,569,000.00   
A-7F     24763LFN5    SEN_FIX       7.03000%    37,000,000.00    216,758.33            0.00      0.00     37,000,000.00   
IOF      24763LFT2    SEN_NTL_I     6.00000%             0.00    243,105.00            0.00      0.00              0.00   
A-1A     24763LFS4    SEN_FTL       4.44250%    34,048,604.97    130,252.46      682,689.59      0.00     33,365,915.38   
M-1      24763LFP0    SEN_FIX       7.37000%    17,850,000.00    109,628.75            0.00      0.00     17,850,000.00   
M-2      24763LFQ8    SEN_FIX       7.37000%    17,850,000.00    109,628.75            0.00      0.00     17,850,000.00   
 B       24763LFR6    JUN_FIX       7.37000%    16,800,000.00    103,180.00            0.00      0.00     16,800,000.00   
BIO      DFH992BIO    JUN_FIX       0.00000%             0.00    432,525.94            0.00      0.00              0.00   
 P       DFH99200P    JUN_FIX       0.00000%           100.00     35,667.51            0.00      0.00            100.00   
R-1      DFH9902R1    JUN_RES       0.00000%             0.00          0.00            0.00      0.00              0.00   
R-2      DFH9902R2    JUN_RES       0.00000%             0.00          0.00            0.00      0.00              0.00   
R-3      DFH9902R3    JUN_RES       0.00000%             0.00          0.00            0.00      0.00              0.00   
--------------------------------------------------------------------------------------------------------------------------
Totals                                         302,757,346.50  2,385,681.86    5,017,768.46      0.00    297,739,578.04   
--------------------------------------------------------------------------------------------------------------------------


[RESTUBBED TABLE]                                                               

------------------------------------------                                      
Cumulative          
Total            Realized                           
Class      Distribution         Losses                                          
------------------------------------------                                      

A-1F         4,447,566.95         0.00                                          
A-2F           307,997.08         0.00                                          
A-3F           151,619.65         0.00                                          
A-4F           105,489.35         0.00                                          
A-5F           127,313.02         0.00                                          
A-6F           200,027.94         0.00                                          
A-7F           216,758.33         0.00                                          
IOF            243,105.00         0.00                                          
A-1A           812,942.05         0.00                                          
M-1            109,628.75         0.00                                          
M-2            109,628.75         0.00                                          
B             103,180.00         0.00                                         
BIO            432,525.94         0.00                                          
P              35,667.51         0.00                                         
R-1                  0.00         0.00                                          
R-2                  0.00         0.00                                          
R-3                  0.00         0.00                                          
--------------------------------------------                                    
Totals       7,403,450.32         0.00                                          
--------------------------------------------                                    

All distributions required by the Pooling and Servicing Agreement have been     
calculated by the Certificate Administrator on behalf of the Trustee.           

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:            31-May-2001                                             
Distribution Date:      15-Jun-2001                                             

 DFH Series 1999-2

Principal Distribution Statement

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------------------
           Original          Beginning      Scheduled     Unscheduled                              Total           Ending    
             Face           Certificate     Principal      Principal                  Realized    Principal      Certificate 
Class       Amount            Balance      Distribution   Distribution    Accretion   Loss (1)    Reduction        Balance   
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                                             
A-1F    123,276,000.00     21,984,641.53    338,936.06   3,996,142.81        0.00        0.00    4,335,078.87   17,649,562.66
A-2F     56,861,000.00     56,861,000.00          0.00           0.00        0.00        0.00            0.00   56,861,000.00
A-3F     27,651,000.00     27,651,000.00          0.00           0.00        0.00        0.00            0.00   27,651,000.00
A-4F     18,534,000.00     18,534,000.00          0.00           0.00        0.00        0.00            0.00   18,534,000.00
A-5F     21,609,000.00     21,609,000.00          0.00           0.00        0.00        0.00            0.00   21,609,000.00
A-6F     32,569,000.00     32,569,000.00          0.00           0.00        0.00        0.00            0.00   32,569,000.00
A-7F     37,000,000.00     37,000,000.00          0.00           0.00        0.00        0.00            0.00   37,000,000.00
IOF               0.00              0.00          0.00           0.00        0.00        0.00            0.00            0.00
A-1A     50,000,000.00     34,048,604.97     19,738.19     662,951.40        0.00        0.00      682,689.59   33,365,915.38
M-1      17,850,000.00     17,850,000.00          0.00           0.00        0.00        0.00            0.00   17,850,000.00
M-2      17,850,000.00     17,850,000.00          0.00           0.00        0.00        0.00            0.00   17,850,000.00
 B       16,800,000.00     16,800,000.00          0.00           0.00        0.00        0.00            0.00   16,800,000.00
BIO               0.00              0.00          0.00           0.00        0.00        0.00            0.00            0.00
 P              100.00            100.00          0.00           0.00        0.00        0.00            0.00          100.00
R-1               0.00              0.00          0.00           0.00        0.00        0.00            0.00            0.00
R-2               0.00              0.00          0.00           0.00        0.00        0.00            0.00            0.00
R-3               0.00              0.00          0.00           0.00        0.00        0.00            0.00            0.00
-----------------------------------------------------------------------------------------------------------------------------
Totals  420,000,100.00    302,757,346.50    358,674.25   4,659,094.21        0.00        0.00    5,017,768.46  297,739,578.04
-----------------------------------------------------------------------------------------------------------------------------

[RESTUBBED TABLE] 

                                                                [Download Table]

------------------------------------
            Ending         Total    
          Certificate    Principal  
Class     Percentage    Distribution
------------------------------------
                                    
A-1F       0.14317112   4,335,078.87
A-2F       1.00000000           0.00
A-3F       1.00000000           0.00
A-4F       1.00000000           0.00
A-5F       1.00000000           0.00
A-6F       1.00000000           0.00
A-7F       1.00000000           0.00
IOF        0.00000000           0.00
A-1A       0.66731831     682,689.59
M-1        1.00000000           0.00
M-2        1.00000000           0.00
 B         1.00000000           0.00
BIO        0.00000000           0.00
 P         1.00000000           0.00
R-1        0.00000000           0.00
R-2        0.00000000           0.00
R-3        0.00000000           0.00
------------------------------------
Totals     0.70890359   5,017,768.46
------------------------------------

(1) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
   Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                       

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:            31-May-2001                                             
Distribution Date:      15-Jun-2001                                             

 DFH Series 1999-2

Principal Distribution Factors Statement

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------------------
            Original         Beginning     Scheduled       Unscheduled                               Total          Ending   
              Face          Certificate    Principal        Principal                Realized      Principal     Certificate 
Class (2)    Amount           Balance     Distribution    Distribution  Accretion    Loss (3)      Reduction       Balance   
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                                             
A-1F    123,276,000.00      178.33675273    2.74940832    32.41622708  0.00000000  0.00000000     35.16563540    143.17111733
A-2F     56,861,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
A-3F     27,651,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
A-4F     18,534,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
A-5F     21,609,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
A-6F     32,569,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
A-7F     37,000,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
IOF               0.00        0.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000      0.00000000
A-1A     50,000,000.00      680.97209940    0.39476380    13.25902800  0.00000000  0.00000000     13.65379180    667.31830760
M-1      17,850,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
M-2      17,850,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
 B       16,800,000.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
BIO               0.00        0.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000      0.00000000
 P              100.00     1000.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000   1000.00000000
R-1               0.00        0.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000      0.00000000
R-2               0.00        0.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000      0.00000000
R-3               0.00        0.00000000    0.00000000     0.00000000  0.00000000  0.00000000      0.00000000      0.00000000
-----------------------------------------------------------------------------------------------------------------------------

 [RESTUBBED TABLE]

                                                                [Download Table]

--------------------------------------
               Ending         Total   
             Certificate    Principal 
Class (2)    Percentage   Distribution
--------------------------------------
                                      
A-1F         0.14317112    35.16563540
A-2F         1.00000000     0.00000000
A-3F         1.00000000     0.00000000
A-4F         1.00000000     0.00000000
A-5F         1.00000000     0.00000000
A-6F         1.00000000     0.00000000
A-7F         1.00000000     0.00000000
IOF          0.00000000     0.00000000
A-1A         0.66731831    13.65379180
M-1          1.00000000     0.00000000
M-2          1.00000000     0.00000000
 B           1.00000000     0.00000000
BIO          0.00000000     0.00000000
 P           1.00000000     0.00000000
R-1          0.00000000     0.00000000
R-2          0.00000000     0.00000000
R-3          0.00000000     0.00000000
--------------------------------------

(2) All classes are per $1,000 denomination.                                    
(3) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
   Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                       

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

 DFH Series 1999-2

 Interest Distribution Statement

                                                        [Enlarge/Download Table]

--------------------------------------------------------------------------------------------------------------------------------
                                         Beginning                Payment of                                                    
           Original         Current     Certificate/    Current     Unpaid     Current   Non-Supported               Total      
             Face         Certificate     Notional      Accrued    Interest    Interest     Interest   Realized     Interest    
Class       Amount           Rate         Balance       Interest   Shortfall   Shortfall   Shortfall   Loss (4)    Distribution 
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                
A-1F    123,276,000.00    6.14000%    21,984,641.53    112,488.08     0.00       0.00         0.00        0.00      112,488.08  
A-2F     56,861,000.00    6.50000%    56,861,000.00    307,997.08     0.00       0.00         0.00        0.00      307,997.08  
A-3F     27,651,000.00    6.58000%    27,651,000.00    151,619.65     0.00       0.00         0.00        0.00      151,619.65  
A-4F     18,534,000.00    6.83000%    18,534,000.00    105,489.35     0.00       0.00         0.00        0.00      105,489.35  
A-5F     21,609,000.00    7.07000%    21,609,000.00    127,313.02     0.00       0.00         0.00        0.00      127,313.02  
A-6F     32,569,000.00    7.37000%    32,569,000.00    200,027.94     0.00       0.00         0.00        0.00      200,027.94  
A-7F     37,000,000.00    7.03000%    37,000,000.00    216,758.33     0.00       0.00         0.00        0.00      216,758.33  
 IOF              0.00    6.00000%    48,621,000.00    243,105.00     0.00       0.00         0.00        0.00      243,105.00  
A-1A     50,000,000.00    4.44250%    34,048,604.97    130,252.47     0.00       0.00         0.00        0.00      130,252.46  
 M-1     17,850,000.00    7.37000%    17,850,000.00    109,628.75     0.00       0.00         0.00        0.00      109,628.75  
 M-2     17,850,000.00    7.37000%    17,850,000.00    109,628.75     0.00       0.00         0.00        0.00      109,628.75  
 B       16,800,000.00    7.37000%    16,800,000.00    103,180.00     0.00       0.00         0.00        0.00      103,180.00  
BIO               0.00    0.00000%             0.00          0.00     0.00       0.00         0.00        0.00      432,525.94  
 P              100.00    0.00000%           100.00          0.00     0.00       0.00         0.00        0.00       35,667.51  
R-1               0.00    0.00000%             0.00          0.00     0.00       0.00         0.00        0.00            0.00  
R-2               0.00    0.00000%             0.00          0.00     0.00       0.00         0.00        0.00            0.00  
R-3               0.00    0.00000%             0.00          0.00     0.00       0.00         0.00        0.00            0.00  
--------------------------------------------------------------------------------------------------------------------------------
Totals  420,000,100.00                               1,917,488.42     0.00       0.00         0.00        0.00     2,385,681.86 
--------------------------------------------------------------------------------------------------------------------------------

[RESTUBBED TABLE]                                                               

                                                                [Download Table]

----------------------------------- 
        Remaining        Ending     
          Unpaid       Certificate/ 
         Interest       Notional    
Class    Shortfall       Balance    
------------------------------------
                                    
A-1F        0.00      17,649,562.66 
A-2F        0.00      56,861,000.00 
A-3F        0.00      27,651,000.00 
A-4F        0.00      18,534,000.00 
A-5F        0.00      21,609,000.00 
A-6F        0.00      32,569,000.00 
A-7F        0.00      37,000,000.00 
 IOF        0.00      45,435,000.00 
A-1A        0.00      33,365,915.38 
 M-1        0.00      17,850,000.00 
 M-2        0.00      17,850,000.00 
 B          0.00      16,800,000.00 
BIO         0.00               0.00 
 P          0.00             100.00 
R-1         0.00               0.00 
R-2         0.00               0.00 
R-3         0.00               0.00 
----------------------------------- 
Totals      0.00                    
----------------------------------- 

(4)  Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses 
     Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                     

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                       31-May-2001                                  
Distribution Date:                 15-Jun-2001                                  

 DFH Series 1999-2

 Interest Distribution Factors Statement

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------------------
                                         Beginning                  Payment of                                               
           Original         Current     Certificate/    Current       Unpaid         Current     Non-Supported               
             Face         Certificate     Notional      Accrued      Interest        Interest      Interest       Realized   
Class (5)   Amount           Rate         Balance       Interest     Shortfall       Shortfall     Shortfall       Loss (6)  
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                                             
A-1F     123,276,000.00     6.14000%    178.33675273    0.91248970   0.00000000     0.00000000     0.00000000     0.00000000 
A-2F      56,861,000.00     6.50000%   1000.00000000    5.41666661   0.00000000     0.00000000     0.00000000     0.00000000 
A-3F      27,651,000.00     6.58000%   1000.00000000    5.48333333   0.00000000     0.00000000     0.00000000     0.00000000 
A-4F      18,534,000.00     6.83000%   1000.00000000    5.69166667   0.00000000     0.00000000     0.00000000     0.00000000 
A-5F      21,609,000.00     7.07000%   1000.00000000    5.89166644   0.00000000     0.00000000     0.00000000     0.00000000 
A-6F      32,569,000.00     7.37000%   1000.00000000    6.14166662   0.00000000     0.00000000     0.00000000     0.00000000 
A-7F      37,000,000.00     7.03000%   1000.00000000    5.85833324   0.00000000     0.00000000     0.00000000     0.00000000 
IOF                0.00     6.00000%    436.01585480    2.18007927   0.00000000     0.00000000     0.00000000     0.00000000 
A-1A      50,000,000.00     4.44250%    680.97209940    2.60504940   0.00000000     0.00000000     0.00000000     0.00000000 
M-1       17,850,000.00     7.37000%   1000.00000000    6.14166667   0.00000000     0.00000000     0.00000000     0.00000000 
M-2       17,850,000.00     7.37000%   1000.00000000    6.14166667   0.00000000     0.00000000     0.00000000     0.00000000 
 B        16,800,000.00     7.37000%   1000.00000000    6.14166667   0.00000000     0.00000000     0.00000000     0.00000000 
BIO               0.00      0.00000%      0.00000000    0.00000000   0.00000000     0.00000000     0.00000000     0.00000000 
 P              100.00      0.00000%   1000.00000000    0.00000000   0.00000000     0.00000000     0.00000000     0.00000000 
R-1               0.00      0.00000%      0.00000000    0.00000000   0.00000000     0.00000000     0.00000000     0.00000000 
R-2               0.00      0.00000%      0.00000000    0.00000000   0.00000000     0.00000000     0.00000000     0.00000000 
R-3               0.00      0.00000%      0.00000000    0.00000000   0.00000000     0.00000000     0.00000000     0.00000000 
-----------------------------------------------------------------------------------------------------------------------------

[RESTUBBED TABLE]                                                               

                                                                [Download Table]

-----------------------------------------------------------
                                Remaining       Ending     
                Total            Unpaid       Certificate/ 
                Interest        Interest       Notional    
Class (5)      Distribution     Shortfall       Balance    
---------------------------------------------------------- 
                                                           
A-1F            0.91248970     0.00000000     143.17111733 
A-2F            5.41666661     0.00000000    1000.00000000 
A-3F            5.48333333     0.00000000    1000.00000000 
A-4F            5.69166667     0.00000000    1000.00000000 
A-5F            5.89166644     0.00000000    1000.00000000 
A-6F            6.14166662     0.00000000    1000.00000000 
A-7F            5.85833324     0.00000000    1000.00000000 
IOF             2.18007927     0.00000000     407.44493866 
A-1A            2.60504920     0.00000000     667.31830760 
M-1             6.14166667     0.00000000    1000.00000000 
M-2             6.14166667     0.00000000    1000.00000000 
 B              6.14166667     0.00000000    1000.00000000 
BIO             0.00000000     0.00000000       0.00000000 
 P          56675.10000000     0.00000000    1000.00000000 
R-1             0.00000000     0.00000000       0.00000000 
R-2             0.00000000     0.00000000       0.00000000 
R-3             0.00000000     0.00000000       0.00000000 
-----------------------------------------------------------

(5)  All classes are per $1,000 denomination                                    

(6)  Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses 
     Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                     

 Certificateholder Component Statement

                                                        [Enlarge/Download Table]

--------------------------------------------------------------------------------------------------------------------
              Component      Beginning     Ending           Beginning               Ending            Ending        
             Pass-Through    Notional     Notional          Component              Component         Component      
    Class       Rate         Balance       Balance           Balance                Balance          Percentage     
--------------------------------------------------------------------------------------------------------------------
                                                                                                                    
      OC      0.00000%         0.00         0.00          4,829,900.00           4,829,900.00        0.00000000%    
--------------------------------------------------------------------------------------------------------------------

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DFH Series 1999-2

 Certificateholder Account Statement

--------------------------------------------------------------------------      
CERTIFICATE ACCOUNT         

Beginning Balance                                                 0.00  

Deposits                                                                
  Payments of Interest and Principal                    6,061,686.61
  Liquidations, Insurance Proceeds, Reserve Funds               0.00
  Proceeds from Repurchased Loans                               0.00
  Other Amounts (Servicer Advances)                     1,534,038.33
   Realized Losses                                         (60,268.73)
                                                        ------------
Total Deposits                                            7,535,456.21  

Withdrawals                                                             
  Reimbursement for Servicer Advances                           0.00
  Payment of Service Fee                                  132,005.89
  Payment of Interest and Principal                     7,403,450.32
                                                        ------------
Total Withdrawals (Pool Distribution Amount)              7,535,456.21  

Ending Balance                                                    0.00  
                                                        ============
--------------------------------------------------------------------------      

--------------------------------------------------------------------------      
PREPAYMENT/CURTAILMENT INTEREST SHORTFALL                         

Total Prepayment/Curtailment Interest Shortfall                   0.00      
Servicing Fee Support                                             0.00      
                                                      ----------
Non-Supported Prepayment/Curtailment Interest Shortfall           0.00      
                                                      ==========
--------------------------------------------------------------------------      

--------------------------------------------------------------------------      
SERVICING FEES                

Gross Servicing Fee                                         128,161.47      
Admin Fee - Wells Fargo Bank, N.A.                            3,844.42      
Supported Prepayment/Curtailment Interest Shortfall               0.00      
                                                      ----------
Net Servicing Fee                                           132,005.89      
                                                      ==========
--------------------------------------------------------------------------      

                                                        [Enlarge/Download Table]

----------------------------------------------------------------------------------------------
                               Beginning            Current        Current           Ending   
      Account Type              Balance           Withdrawals      Deposits          Balance  
----------------------------------------------------------------------------------------------
                                                                                              
  Reserve Fund                 10,000.00            0.00             0.00            10,000.00
  Reserve Fund                 10,000.00            0.00             0.00            10,000.00
----------------------------------------------------------------------------------------------

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

 DFH Series 1999-2

 Loan Status Stratification/Credit Enhancement Statement

                                                        [Enlarge/Download Table]

----------------------------------------------------------------------------------------------------------------
               DELINQUENT                           BANKRUPTCY                         FORECLOSURE              
----------------------------------------------------------------------------------------------------------------
                No. of     Principal                 No. of    Principal                 No. of     Principal   
                 Loans      Balance                  Loans      Balance                   Loans      Balance    
                                                                                                                
                                         0-29 Days     85    6,415,085.69     0-29 Days      1        7,756.62  
30 Days           318    27,155,103.10   30 Days       15    1,243,834.33     30 Days        1      180,182.28  
60 Days           107     8,653,909.41   60 Days       11      596,279.57     60 Days       14    1,229,812.57  
90 Days            50     3,773,332.91   90 Days        7      613,638.61     90 Days       10    1,434,287.92  
120 Days           53     4,023,106.65   120 Days      46    3,285,033.00     120 Days     185   13,770,819.01  
150 Days            0             0.00   150 Days       0            0.00     150 Days       0            0.00  
180+ Days           0             0.00   180+ Days      0            0.00     180+ Days      0            0.00  
                 ----    -------------               ----   -------------                 ----   -------------  
                  528    43,605,452.07                164   12,153,871.20                  211   16,622,858.40  

                                                        [Enlarge/Download Table]


                No. of     Principal                No. of     Principal                No. of     Principal    
                 Loans      Balance                  Loans      Balance                  Loans      Balance     
                                         0-29 Days  2.252252%   2.116726%     0-29 Days 0.026497%    0.002559%  
                                                                                                                
 30 Days    8.426073%        8.960114%   30 Days    0.397456%   0.410416%     30 Days   0.026497%    0.059453%  
 60 Days    2.835188%        2.855449%   60 Days    0.291468%   0.196749%     60 Days   0.370959%    0.405790%  
 90 Days    1.324854%        1.245051%   90 Days    0.185480%   0.202477%     90 Days   0.264971%    0.473258%  
 120 Days   1.404346%        1.327467%   120 Days   1.218866%   1.083931%     120 Days  4.901961%    4.543828%  
 150 Days   0.000000%        0.000000%   150 Days   0.000000%   0.000000%     150 Days  0.000000%    0.000000%  
 180+ Days  0.000000%        0.000000%   180+ Days  0.000000%   0.000000%     180+ Days 0.000000%    0.000000%  
            ---------       ----------              ---------  ----------               ---------    ---------  
            3.990461%       14.388081%              4.345522%   4.010299%               5.590885%    5.484888%  
----------------------------------------------------------------------------------------------------------------

                                                                [Download Table]

-------------------------------------------------------------------------
               REO                                Total                  
-------------------------------------------------------------------------
               No. of    Principal                No. of      Principal  
               Loans      Balance                 Loans        Balance   
                                                                         
   0-29 Days      0           0.00   0-29 Days      86      6,422,842.31 
   30 Days        1      37,289.20   30 Days       335     28,616,408.91 
   60 Days        0           0.00   60 Days       132     10,480,001.55 
   90 Days        0           0.00   90 Days        67      5,821,259.44 
   120 Days      75   5,086,892.24   120 Days      359     26,165,850.90 
   150 Days       0           0.00   150 Days        0              0.00 
   180+ Days      0           0.00   180+ Days       0              0.00 
               ----   ------------                ----     ------------- 
                 76   5,124,181.44                 979     77,506,363.11 

                                                                [Download Table]


               No. of    Principal                No. of      Principal  
               Loans      Balance                  Loans       Balance   
                                                                         
   0-29 Days  0.000000%   0.000000%  0-29 Days  2.278749%      2.119285% 
   30 Days    0.026497%   0.012304%  30 Days    8.876524%      9.442287% 
   60 Days    0.000000%   0.000000%  60 Days    3.497615%      3.457988% 
   90 Days    0.000000%   0.000000%  90 Days    1.775305%      1.920786% 
   120 Days   1.987281%   1.678474%  120 Days   9.512454%      8.633700% 
   150 Days   0.000000%   0.000000%  150 Days   0.000000%      0.000000% 
   180+ Days  0.000000%   0.000000%  180+ Days  0.000000%      0.000000% 
              ---------   ---------            ----------    ----------- 
              2.013778%   1.690778%            25.940647%     25.574046% 
-------------------------------------------------------------------------

(7)  The 120 day category for delinquent, bankruptcy, foreclosure, REO contains 
loans that are 120 or more delinquent.                                

                                                        [Enlarge/Download Table]
                                                                                                                                 
Current Period Realized Loss - Includes Interest Shortfall         0.00  Principal Balance of Contaminated Properties        0.00
Cumulative Realized Losses - Includes Interest Shortfall   1,034,753.16  Periodic Advance                            1,534,038.33
Current Period Class A Insufficient Funds                          0.00                                                          

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

 DFH Series 1999-2
 Delinquency Status By Group

                                                        [Enlarge/Download Table]

-------------------------------------------------------------------------------------------------------------------
                   DELINQUENT                         BANKRUPTCY                                  FORECLOSURE      
-------------------------------------------------------------------------------------------------------------------
  1                                                 No of     Principal                      No of     Principal   
          No of Loans   Prin Balance                Loans      Balance                        Loans      Balance   
                                                                                                                   
                                      0-29 Days       75   5,533,655.68        0-29 Days        1        7,756.62  
 30 Days        273   23,573,736.75   30 Days         12     976,260.72        30 Days          1      180,182.28  
 60 Days         86    6,630,857.07   60 Days         10     503,408.33        60 Days         14    1,229,812.57  
 90 Days         38    2,893,528.79   90 Days          5     504,456.99        90 Days          9    1,311,977.50  
 120 Days        48    3,723,987.55   120 Days        35   2,539,336.99        120 Days       156   11,351,785.02  
 150 Days         0            0.00   150 Days         0           0.00        150 Days         0            0.00  
 180+ Days        0            0.00   180+ Days        0           0.00        180+ Days        0            0.00  
               ----   -------------                 ----  -------------                      ----   -------------  
                445   36,822,110.16                  137  10,057,118.71                       181   14,081,513.99  
                                                        [Enlarge/Download Table]

                                                                                                                   
                                     0-29 Days  2.236803%     2.061270%        0-29 Days  0.029824%     0.002889%  
 30 Days    8.141962%   8.781145%    30 Days    0.357888%     0.363654%        30 Days    0.029824%     0.067117%  
 60 Days    2.564867%   2.469974%    60 Days    0.298240%     0.187518%        60 Days    0.417537%     0.458101%  
 90 Days    1.133313%   1.077831%    90 Days    0.149120%     0.187909%        90 Days    0.268416%     0.488708%  
 120 Days   1.431554%   1.387174%    120 Days   1.043841%     0.945895%        120 Days   4.652550%     4.228505%  
 150 Days   0.000000%   0.000000%    150 Days   0.000000%     0.000000%        150 Days   0.000000%     0.000000%  
 180+ Days  0.000000%   0.000000%    180+ Days  0.000000%     0.000000%        180+ Days  0.000000%     0.000000%  
           ----------  ----------              ----------     ---------                   ---------     ---------  
           13.271697%  13.716123%               4.085893%     3.746246%                   5.398151%     5.245321%  
-------------------------------------------------------------------------------------------------------------------

                                                                [Download Table]

-------------------------------------------------------------------------
                     REO                                Total            
-------------------------------------------------------------------------
             No of       Principal                No of      Principal   
              Loans       Balance                 Loans        Balance   
                                                                         
 0-29 Days      0           0.00     0-29 Days      76      5,541,412.30 
 30 Days        1      37,289.20     30 Days       287     24,767,468.95 
 60 Days        0           0.00     60 Days       110      8,364,077.97 
 90 Days        0           0.00     90 Days        52      4,709,963.28 
 120 Days      54   3,519,841.02     120 Days      293     21,134,950.58 
 150 Days       0           0.00     150 Days        0              0.00 
 180+ Days      0           0.00     180+ Days       0              0.00 
             ----   ------------                  ----     ------------- 
               55   3,557,130.22                   818     64,517,873.08 

                                                                [Download Table]

                                                                         
 0-29 Days 0.000000%   0.000000%     0-29 Days  2.266627%      2.064159% 
 30 Days   0.029824%   0.013890%     30 Days    8.559499%      9.225806% 
 60 Days   0.000000%   0.000000%     60 Days    3.280644%      3.115593% 
 90 Days   0.000000%   0.000000%     90 Days    1.550850%      1.754447% 
 120 Days  1.610498%   1.311130%     120 Days   8.738443%      7.872704% 
 150 Days  0.000000%   0.000000%     150 Days   0.000000%      0.000000% 
 180+ Days 0.000000%   0.000000%     180+ Days  0.000000%      0.000000% 
           ---------   ---------               ----------     ---------- 
           1.640322%   1.325020%               24.396063%     24.032710% 
-------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]

-------------------------------------------------------------------------------------------------------------------
                    DELINQUENT                        BANKRUPTCY                                FORECLOSURE        
-------------------------------------------------------------------------------------------------------------------
  2                                                  No of    Principal                      No of       Principal 
           No of Loans  Prin Balance                Loans      Balance                        Loans       Balance  
                                                                                                                   
                                      0-29 Days       10     881,430.01        0-29 Days        0           0.00   
30 Days         45    3,581,366.35    30 Days          3     267,573.61        30 Days          0           0.00   
60 Days         21    2,023,052.34    60 Days          1      92,871.24        60 Days          0           0.00   
90 Days         12      879,804.12    90 Days          2     109,181.62        90 Days          1     122,310.42   
120 Days         5      299,119.10    120 Days        11     745,696.01        120 Days        29   2,419,033.99   
150 Days         0            0.00    150 Days         0           0.00        150 Days         0           0.00   
180+ Days        0            0.00    180+ Days        0           0.00        180+ Days        0           0.00   
               ---    ------------                   ---   ------------                       ---   ------------   
                83    6,783,341.91                    27   2,096,752.49                        30   2,541,344.41   
                                                        [Enlarge/Download Table]


                                                                                                                   
                                      0-29 Days  2.375297%    2.546903%        0-29 Days  0.000000%     0.000000%  
30 Days   10.688836%    10.348404%    30 Days    0.712589%    0.773157%        30 Days    0.000000%     0.000000%  
60 Days    4.988124%     5.845636%    60 Days    0.237530%    0.268353%        60 Days    0.000000%     0.000000%  
90 Days    2.850356%     2.542205%    90 Days    0.475059%    0.315482%        90 Days    0.237530%     0.353418%  
120 Days   1.187648%     0.864309%    120 Days   2.612827%    2.154698%        120 Days   6.888361%     6.989830%  
150 Days   0.000000%     0.000000%    150 Days   0.000000%    0.000000%        150 Days   0.000000%     0.000000%  
180+ Days  0.000000%     0.000000%    180+ Days  0.000000%    0.000000%        180+ Days  0.000000%     0.000000%  
          ----------    ----------               ---------    ---------                   ---------     ---------  
          19.714964%    19.600554%               6.413302%    6.058593%                   7.125891%     7.343248%  
-------------------------------------------------------------------------------------------------------------------

                                                                [Download Table]

--------------------------------------------------------------------------
                      REO                            Total                
--------------------------------------------------------------------------
                No of    Principal                  No of      Principal  
                Loans      Balance                  Loans       Balance   
                                                                          
   0-29 Days       0           0.00    0-29 Days      10      881,430.01  
   30 Days         0           0.00    30 Days        48    3,848,939.96  
   60 Days         0           0.00    60 Days        22    2,115,923.58  
   90 Days         0           0.00    90 Days        15    1,111,296.16  
   120 Days       21   1,567,051.22    120 Days       66    5,030,900.32  
   150 Days        0           0.00    150 Days        0            0.00  
   180+ Days       0           0.00    180+ Days       0            0.00  
                 ---   ------------                 ----  --------------  
                  21   1,567,051.22                  161   12,988,490.03  

                                                                [Download Table]

                                                                          
   0-29 Days  0.000000%   0.000000%    0-29 Days  2.375297%    2.546903%  
   30 Days    0.000000%   0.000000%    30 Days   11.401425%   11.121562%  
   60 Days    0.000000%   0.000000%    60 Days    5.225653%    6.113989%  
   90 Days    0.000000%   0.000000%    90 Days    3.562945%    3.211105%  
   120 Days   4 988124%   4.528015%    120 Days  15.676960%   14.536851%  
   150 Days   0.000000%   0.000000%    150 Days   0.000000%    0.000000%  
   180+ Days  0.000000%   0.000000%    180+ Days  0.000000%    0.000000%  
              ---------   ---------              ----------   ----------  
              4.988124%   4.528015%              38.242280%   37.530410%  
--------------------------------------------------------------------------

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                       31-May-2001                                  
Distribution Date:                 15-Jun-2001                                  

 DFH Series 1999-2
------------------------------------------------------------------------------- 
          COLLATERAL STATEMENT

 Collateral Description                                Fixed & Mixed ARM

Weighted Average Gross Coupon                                9.918315%

Weighted Average Net  Coupon                                 9.418314%

Weighted Average Pass-Through Rate                           9.403316%

Weighted Average Maturity (Stepdown Calculation)                     0

Beginning Scheduled Collateral Loan Count                        3,824

Number of Loans Paid in Full                                        50

Ending Scheduled Collateral Loan Count                           3,774

Beginning Scheduled Collateral Balance                  307,587,246.49

Ending Scheduled Collateral Balance                     302,569,478.03

Ending Actual Collateral Balance at 31-May-2001         303,066,490.41

Monthly P&I Constant                                      2,900,963.55

Ending Scheduled Balance for Premium Loans              302,569,478.03

Scheduled Principal                                         358,674.25

Unscheduled Principal                                     4,659,094.21

Required Overcollateralized Amount                                0.00

Overcollateralized Increase Amount                                0.00

Overcollateralized Reduction Amount                               0.00

Specified O/C Amount                                      4,830,000.00

Overcollateralized Amount                                 4,830,000.00

Overcollateralized Deficiency Amount                              0.00

Base Overcollateralization Amount                                 0.00

Extra Principal Distribution Amount                               0.00

Excess Cash Amount                                          492,794.68
------------------------------------------------------------------------------- 
Group F Curtailments                                        $29,665.32

Group A Curtailments                                         $1,184.44

Delinquency Reimbursement Amount                           $935,567.52

Servicer Reimbursement Amount                              $148,748.23
--------------------------------------------------------------------------------

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Delta Funding Corporation                                                     
Mortgage Pass-Through Certificates                                            
Record Date:                             31-May-2001                          
Distribution Date:                       15-Jun-2001                          

 DFH Series 1999-2

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------
    Group                                                  1                    2                  Total         
                                                                                                                 
 Collateral  Description                              Mixed Fixed           Mixed ARM        Fixed & Mixed ARM   
 Weighted Average Coupon Rate                            9.869303           10.295259                 9.918315   
 Weighted Average Net Rate                               9.354303            9.780259                 9.418314   
 Weighted Average Maturity                                 295.00              335.00                     0.00   
 Record Date                                           05/31/2001          05/31/2001               05/31/2001   
 Principal And  Interest Constant                    2,577,585.03          323,378.52             2,900,963.55   
 Beginning Loan Count                                       3,394                 430                    3,824   
 Loans Paid In Full                                            41                   9                       50   
 Ending Loan Count                                          3,353                 421                    3,774   
 Beginning Scheduled Balance                       272,195,384.68       35,391,861.81           307,587,246.49   
 Ending Scheduled Balance                          268,020,791.23       34,548,686.80           302,569,478.03   
 Scheduled Principal                                   338,936.06           19,738.19               358,674.25   
 Unscheduled Principal                               3,835,657.39          823,436.82             4,659,094.21   
 Scheduled Interest                                  2,238,648.97          303,640.33             2,542,289.30   
 Servicing Fee                                         113,414.74           14,746.61               128,161.35   
 Master Servicing Fee                                        0.00                0.00                     0.00   
 Trustee Fee                                                 0.00                0.00                     0.00   
 FRY Amount                                                  0.00                0.00                     0.00   
 Special Hazard Fee                                          0.00                0.00                     0.00   
 Other Fee                                               3,402.44              442.40                 3,844.84   
 Pool Insurance Fee                                          0.00                0.00                     0.00   
 Spread 1                                                    0.00                0.00                     0.00   
 Spread 2                                                    0.00                0.00                     0.00   
 Spread 3                                                    0.00                0.00                     0.00   
 Net Interest                                        2,121,831.79          288,451.32             2,410,283.11   
 Realized Loss Amount                                   60,268.73                0.00                60,268.73   
 Cumulative Realized Loss                              900,774.27          133,978.89             1,034,753.16   
 Percentage of Cumulative Losses                             0.00                0.00                     0.00   
-----------------------------------------------------------------------------------------------------------------

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DFH Series 1999-3

Certificateholder Distribution Summary

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------
                           Certificate    Certificate    Beginning                                     Current    Ending      
                             Class       Pass-Through   Certificate       Interest       Principal    Realized  Certificate   
 Class           CUSIP     Description       Rate         Balance       Distribution    Distribution    Loss      Balance     
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
 A-1F          24763LFU9       SEN         7.46200 %  300,231,793.99    1,866,941.37     7,356,374.00    0.00   292,875,419.99
 A-2F          24763LFV7       SEN         7.56100 %   23,539,118.26      148,316.06       576,762.89    0.00    22,962,355.37
 IOF           24763LFW5       SEN         6.00000 %            0.00      463,500.00             0.00    0.00             0.00
 A-1A          24763LFX3       SEN         4.53250 %  107,658,258.72      420,188.69     2,637,876.57    0.00   105,020,382.15
 M-1           24763LFY1       MEZ         7.60000 %   44,450,000.00      281,516.67             0.00    0.00    44,450,000.00
 M-2           24763LFZ8       MEZ         7.60000 %   24,850,000.00      157,383.33             0.00    0.00    24,850,000.00
  B            24763LGA2       JUN         7.60000 %   29,750,000.00      188,416.67             0.00    0.00    29,750,000.00
 BIO           DFH993BIO       JUN         0.00000 %            0.00      629,466.71             0.00    0.00             0.00
  P            DFH99300P       SEN         0.00000 %            0.00       93,154.49             0.00    0.00             0.00
 R-1           DFH9903R1       JUN         0.00000 %            0.00            0.00             0.00    0.00             0.00
 R-2           DFH9903R2       JUN         0.00000 %            0.00            0.00             0.00    0.00             0.00
 R-3           DFH9903R3       JUN         0.00000 %            0.00            0.00             0.00    0.00             0.00
------------------------------------------------------------------------------------------------------------------------------
Totals                                                530,479,170.97    4,248,883.99    10,571,013.46    0.00   519,908,157.51
------------------------------------------------------------------------------------------------------------------------------

 [RESTUBBED TABLE]

                                                                [Download Table]

-----------------------------------------
                            Cumulative   
                 Total       Realized    
 Class        Distribution    Losses     
-----------------------------------------
                                         
 A-1F           9,223,315.37    0.00     
 A-2F             725,078.95    0.00     
 IOF              463,500.00    0.00     
 A-1A           3,058,065.26    0.00     
 M-1              281,516.67    0.00     
 M-2              157,383.33    0.00     
  B               188,416.67    0.00     
 BIO              629,466.71    0.00     
  P                93,154.49    0.00     
 R-1                    0.00    0.00     
 R-2                    0.00    0.00     
 R-3                    0.00    0.00     
-----------------------------------------
Totals         14,819,897.45    0.00     
-----------------------------------------

All distributions required by the Pooling and Servicing Agreement have been     
calculated by the Certificate Administrator on behalf of the Trustee.           

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DFH Series 1999-3

Principal Distribution Statement

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------
                  Original         Beginning        Scheduled       Unscheduled                                 Total   
                    Face          Certificate      Principal        Principal                   Realized      Principal 
 Class             Amount            Balance      Distribution     Distribution     Accretion   Loss (1)      Reduction 
------------------------------------------------------------------------------------------------------------------------
                                                                                                                        
 A-1F          418,160,000.00    300,231,793.99    387,496.47     6,968,877.53        0.00        0.00      7,356,374.00
 A-2F           32,790,000.00     23,539,118.26     30,380.94       546,381.95        0.00        0.00        576,762.89
 IOF                     0.00              0.00          0.00             0.00        0.00        0.00              0.00
 A-1A          150,000,000.00    107,658,258.72     59,706.33     2,578,170.24        0.00        0.00      2,637,876.57
 M-1            44,450,000.00     44,450,000.00          0.00             0.00        0.00        0.00              0.00
 M-2            24,850,000.00     24,850,000.00          0.00             0.00        0.00        0.00              0.00
  B             29,750,000.00     29,750,000.00          0.00             0.00        0.00        0.00              0.00
 BIO                     0.00              0.00          0.00             0.00        0.00        0.00              0.00
  P                    100.00              0.00          0.00             0.00        0.00        0.00              0.00
 R-1                     0.00              0.00          0.00             0.00        0.00        0.00              0.00
 R-2                     0.00              0.00          0.00             0.00        0.00        0.00              0.00
 R-3                     0.00              0.00          0.00             0.00        0.00        0.00              0.00
------------------------------------------------------------------------------------------------------------------------
Totals         700,000,100.00    530,479,170.97    477,583.74    10,093,429.72        0.00        0.00     10,571,013.46
------------------------------------------------------------------------------------------------------------------------

 [RESTUBBED TABLE]

                                                                [Download Table]

---------------------------------------------------------------
                  Ending          Ending             Total     
                Certificate     Certificate        Principal   
 Class            Balance       Percentage        Distribution 
---------------------------------------------------------------
                                                               
 A-1F          292,875,419.99    0.70039081       7,356,374.00 
 A-2F           22,962,355.37    0.70028531         576,762.89 
 IOF                     0.00    0.00000000               0.00 
 A-1A          105,020,382.15    0.70013588       2,637,876.57 
 M-1            44,450,000.00    1.00000000               0.00 
 M-2            24,850,000.00    1.00000000               0.00 
  B             29,750,000.00    1.00000000               0.00 
 BIO                     0.00    0.00000000               0.00 
  P                      0.00    0.00000000               0.00 
 R-1                     0.00    0.00000000               0.00 
 R-2                     0.00    0.00000000               0.00 
 R-3                     0.00    0.00000000               0.00 
---------------------------------------------------------------
Totals         519,908,157.51    0.74272583      10,571,013.46 
---------------------------------------------------------------

(1) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
   Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Descript                                                           

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

                                                        [Enlarge/Download Table]

                                                      DFH Series 1999-3                                                      

                                           Principal Distribution Factors Statement                                          
-----------------------------------------------------------------------------------------------------------------------------
                Original          Beginning      Scheduled     Unscheduled                                         Total     
                  Face           Certificate     Principal      Principal                         Realized       Principal   
Class (2)        Amount            Balance      Distribution   Distribution       Accretion       Loss (3)       Reduction   
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                                             
A-1F        418,160,000.00      717.98305431     0.92667034     16.66557665      0.00000000      0.00000000      17.59224699 
A-2F         32,790,000.00      717.87490881     0.92653065     16.66306648      0.00000000      0.00000000      17.58959713 
 IOF                  0.00        0.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
A-1A        150,000,000.00      717.72172480     0.39804220     17.18780160      0.00000000      0.00000000      17.58584380 
 M-1         44,450,000.00     1000.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
 M-2         24,850,000.00     1000.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
  B          29,750,000.00     1000.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
 BIO                  0.00        0.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
  P                 100.00        0.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
 R-1                  0.00        0.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
 R-2                  0.00        0.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
 R-3                  0.00        0.00000000     0.00000000      0.00000000      0.00000000      0.00000000       0.00000000 
-----------------------------------------------------------------------------------------------------------------------------


---------------------------------------------------------------------------                                                  
                   Ending                  Ending               Total                                                        
                 Certificate            Certificate           Principal                                                      
Class (2)          Balance               Percentage          Distribution                                                    
---------------------------------------------------------------------------                                                  
                                                                                                                             
A-1F             700.39080732            0.70039081          17.59224699                                                     
A-2F             700.28531168            0.70028531          17.58959713                                                     
 IOF               0.00000000            0.00000000           0.00000000                                                     
A-1A             700.13588100            0.70013588          17.58584380                                                     
 M-1            1000.00000000            1.00000000           0.00000000                                                     
 M-2            1000.00000000            1.00000000           0.00000000                                                     
  B             1000.00000000            1.00000000           0.00000000                                                     
 BIO               0.00000000            0.00000000           0.00000000                                                     
  P                0.00000000            0.00000000           0.00000000                                                     
 R-1               0.00000000            0.00000000           0.00000000                                                     
 R-2               0.00000000            0.00000000           0.00000000                                                     
 R-3               0.00000000            0.00000000           0.00000000                                                     
---------------------------------------------------------------------------                                                  

(2) All classes are per $1,000 denomination.                                    
(3) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
   Unless Otherwise Disclosed. Please Refer to the Prospectus Supplement for a
Full Description.                                                       

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                  15-Jun-2001                                 

                                                        [Enlarge/Download Table]

                                                              DFH Series 1999-3                                                    

                                                           Interest Distribution Statement\                                        

-----------------------------------------------------------------------------------------------------------------------------------
                                                  Beginning                           Payment of                                   
              Original             Current       Certificate/         Current           Unpaid          Current       Non-Supported
                Face             Certificate      Notional            Accrued          Interest         Interest        Interest   
 Class         Amount               Rate          Balance             Interest         Shortfall        Shortfall       Shortfall  
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
 A-1F      418,160,000.00         7.46200%     300,231,793.99       1,866,941.37         0.00             0.00            0.00     
 A-2F       32,790,000.00         7.56100%      23,539,118.26         148,316.06         0.00             0.00            0.00     
 IOF                 0.00         6.00000%      92,700,000.00         463,500.00         0.00             0.00            0.00     
 A-1A      150,000,000.00         4.53250%     107,658,258.72         420,188.69         0.00             0.00            0.00     
 M-1        44,450,000.00         7.60000%      44,450,000.00         281,516.67         0.00             0.00            0.00     
 M-2        24,850,000.00         7.60000%      24,850,000.00         157,383.33         0.00             0.00            0.00     
  B         29,750,000.00         7.60000%      29,750,000.00         188,416.67         0.00             0.00            0.00     
 BIO                 0.00         0.00000%               0.00               0.00         0.00             0.00            0.00     
  P                100.00         0.00000%               0.00               0.00         0.00             0.00            0.00     
 R-1                 0.00         0.00000%               0.00               0.00         0.00             0.00            0.00     
 R-2                 0.00         0.00000%               0.00               0.00         0.00             0.00            0.00     
 R-3                 0.00         0.00000%               0.00               0.00         0.00             0.00            0.00     
-----------------------------------------------------------------------------------------------------------------------------------
Totals     700,000,100.00                                           3,526,262.79         0.00             0.00            0.00     
-----------------------------------------------------------------------------------------------------------------------------------



--------------------------------------------------------------------------------                                                   
                                                    Remaining         Ending                                                       
                              Total                 Unpaid         Certificate/                                                    
                Realized     Interest               Interest          Notional                                                     
 Class           Loss(4)   Distribution             Shortfall         Balance                                                      
--------------------------------------------------------------------------------                                                   
                                                                                                                                   
 A-1F             0.00    1,866,941.37                0.00       292,875,419.99                                                    
 A-2F             0.00      148,316.06                0.00        22,962,355.37                                                    
 IOF              0.00      463,500.00                0.00        92,700,000.00                                                    
 A-1A             0.00      420,188.69                0.00       105,020,382.15                                                    
 M-1              0.00      281,516.67                0.00        44,450,000.00                                                    
 M-2              0.00      157,383.33                0.00        24,850,000.00                                                    
  B               0.00      188,416.67                0.00        29,750,000.00                                                    
 BIO              0.00      629,466.71                0.00                 0.00                                                    
  P               0.00       93,154.49                0.00                 0.00                                                    
 R-1              0.00            0.00                0.00                 0.00                                                    
 R-2              0.00            0.00                0.00                 0.00                                                    
 R-3              0.00            0.00                0.00                 0.00                                                    
--------------------------------------------------------------------------------                                                   
Totals            0.00    4,248,883.99                0.00                                                                         
--------------------------------------------------------------------------------                                                   

(4) Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud Losses  
    Unless Otherwise Disclosed.  Please Refer to the Prospectus Supplement for a
Full Description.                                                       

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:        31-May-2001                                                 
Distribution Date:  15-Jun-2001                                                 

 DFH Series 1999-3

 Interest Distribution Factors Statement

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class (5)     Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
A-1F      418,160,000.00           7.46200%        717.98305431          4.46465795          0.00000000          0.00000000   
A-2F       32,790,000.00           7.56100%        717.87490881          4.52321013          0.00000000          0.00000000   
IOF                 0.00           6.00000%        463.03696304          2.31518482          0.00000000          0.00000000   
A-1A      150,000,000.00           4.53250%        717.72172480          2.80125793          0.00000000          0.00000000   
M-1        44,450,000.00           7.60000%       1000.00000000          6.33333341          0.00000000          0.00000000   
M-2        24,850,000.00           7.60000%       1000.00000000          6.33333320          0.00000000          0.00000000   
 B         29,750,000.00           7.60000%       1000.00000000          6.33333345          0.00000000          0.00000000   
BIO                 0.00           0.00000%          0.00000000          0.00000000          0.00000000          0.00000000   
 P                100.00           0.00000%          0.00000000          0.00000000          0.00000000          0.00000000   
R-1                 0.00           0.00000%          0.00000000          0.00000000          0.00000000          0.00000000   
R-2                 0.00           0.00000%          0.00000000          0.00000000          0.00000000          0.00000000   
R-3                 0.00           0.00000%          0.00000000          0.00000000          0.00000000          0.00000000   



            Non-Supported                               Total             Remaining            Ending                         
Class (5)     Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (6)          Distribution         Interest            Notional                        
                                                                          Shortfall            Balance                        
--------------------------------------------------------------------------------------------------------                      
                                                                                                                              
A-1F          0.00000000          0.00000000          4.46465795          0.00000000        700.39080732                      
A-2F          0.00000000          0.00000000          4.52321013          0.00000000        700.28531168                      
IOF           0.00000000          0.00000000          2.31518482          0.00000000        463.03696304                      
A-1A          0.00000000          0.00000000          2.80125793          0.00000000        700.13588100                      
M-1           0.00000000          0.00000000          6.33333341          0.00000000       1000.00000000                      
M-2           0.00000000          0.00000000          6.33333320          0.00000000       1000.00000000                      
 B            0.00000000          0.00000000          6.33333345          0.00000000       1000.00000000                      
BIO           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
 P            0.00000000          0.00000000      31544.90000000          0.00000000          0.00000000                      
R-1           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R-2           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R-3           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      

(5)      All classes are per $1,000 denomination                                

(6)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

 Certificateholder Component Statement

                                                        [Enlarge/Download Table]

            Component              Beginning           Ending        Beginning          Ending              Ending    
           Pass-Through            Notional           Notional       Component         Component           Component  
Class          Rate                 Balance            Balance        Balance           Balance            Percentage 
----------------------------------------------------------------------------------------------------------------------
                                                                                                                      
MBIA      1,200.00000%               0.00               0.00               0.00               0.00       0.00000000%  
 OC           0.00000%               0.00               0.00       9,800,000.00       9,800,000.00       0.00000000%  
 SEN          0.00000%               0.00               0.00               0.00               0.00       0.00000000%  

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:          31-May-2001                                               
Distribution Date:    15-Jun-2001                                               

 DFH Series 1999-3

 Certificateholder Account Statement

--------------------------------------------------------------------------------
CERTIFICATE ACCOUNT         

Beginning Balance                                                          0.00 

Deposits                                                                        

   Payments of Interest and Principal                            12,476,831.58

   Liquidations, Insurance Proceeds, Reserve Funds                        0.00
   Proceeds from Repurchased Loans                                        0.00
   Other Amounts (Servicer Advances)                              2,864,994.14

    Realized Losses                                                 (291,184.04)
                                                                 -------------
Total Deposits                                                    15,050,641.68 

Withdrawals                                                                     
   Reimbursement for Servicer Advances                                    0.00

   Payment of Service Fee                                           230,744.23
   Payment of Interest and Principal                             14,819,897.45
                                                                 -------------
Total Withdrawals (Pool Distribution Amount)                      15,050,641.68 

Ending Balance                                                             0.00 
                                                                 =============
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
 PREPAYMENT/CURTAILMENT INTEREST SHORTFALL

Total Prepayment/Curtailment Interest Shortfall                            0.00 

Servicing Fee Support                                                      0.00 
                                                                 -------------
Non-Supported Prepayment/Curtailment Interest Shortf                       0.00 
                                                                 =============
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
SERVICING FEES

Gross Servicing Fee                                                  225,116.05 

Trustee Fee - Wells Fargo Bank, N.A                                    5,627.89 
Supported Prepayment/Curtailment Interest Shortfall                        0.00 
                                                                 -------------
Net Servicing Fee                                                    230,743.94 
                                                                 =============
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                Beginning          Current       Current        Ending
Account Type                     Balance         Withdrawals    Deposits       Balance
--------------------------------------------------------------------------------------
                                                                                      
Net Rate Cap Fund               10,000.00           0.00           0.00      10,000.00
Reserve Fund                         0.00           0.00           0.00           0.00
Class P Deposit                      0.00           0.00           0.00           0.00
Reserve Fund                         0.00           0.00           0.00           0.00
Libor Carryover Fund            10,000.00           0.00           0.00      10,000.00
Financial Guaranty                   0.00           0.00           0.00           0.00

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:          31-May-2001                                               
Distribution Date:    15-Jun-2001                                               

 DFH Series 1999-3

 Loan Status Stratification/Credit Enhancement Statement

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE              
--------------------------------------------------------------------------------------------------------------------- 
                 No. of   Principal                      No. of    Principal                     No. of   Principal   
                  Loans    Balance                        Loans     Balance                      Loans     Balance    
                                                                                                                      
                                           0-29 Days       147  10,784,852.37      0-29 Days         2     145,525.55 
   30 Days         668  50,811,928.37      30 Days          35   2,168,349.24      30 Days           1     176,699.72 
   60 Days         212  16,221,215.97      60 Days          19   1,303,100.28      60 Days          32   2,790,011.49 
   90 Days          96   6,311,569.53      90 Days          13     936,454.32      90 Days          24   1,892,056.21 
   120 Days        101   6,786,187.01      120 Days         74   5,501,403.40      120 Days        360  24,928,330.58 
   150 Days          0           0.00      150 Days          0           0.00      150 Days          0           0.00 
   180+ Days         0           0.00      180+ Days         0           0.00      180+ Days         0           0.00 
              --------  -------------                 --------  -------------                 --------  ------------- 
                 1,077  80,130,900.88                      288  20,694,159.61                      419  29,932,623.55 



                 No. of   Principal                      No. of    Principal                     No. of   Principal   
                  Loans    Balance                        Loans     Balance                      Loans     Balance    
                                                                                                                      

                                           0-29 Days  2.066929%    2.033172%       0-29 Days  0.028121%      0.027435%
   30 Days    9.392576%      9.579122%     30 Days    0.492126%    0.408780%       30 Days    0.014061%      0.033312%
   60 Days    2.980877%      3.058042%     60 Days    0.267154%    0.245662%       60 Days    0.449944%      0.525976%
   90 Days    1.349831%      1.189864%     90 Days    0.182790%    0.176541%       90 Days    0.337458%      0.356693%
   120 Days   1.420135%      1.279340%     120 Days   1.040495%    1.037131%       120 Days   5.061867%      4.699517%
   150 Days   0.000000%      0.000000%     150 Days   0.000000%    0.000000%       150 Days   0.000000%      0.000000%
   180+ Days  0.000000%      0.000000%     180+ Days  0.000000%    0.000000%       180+ Days  0.000000%      0.000000%
              --------  -------------                 --------  -------------                 --------  ------------- 
              5.143420%     15.106367%                4.049494%    3.901286%                  5.891451%      5.642932%

REO                                 Total       
---------------------------------------------------------------------------     
           No. of   Principal                    No. of    Principal
           Loans    Balance                      Loans     Balance

0-29 Days          0          0.00      0-29 Days       149  10,930,377.92    
30 Days            0          0.00      30 Days         704  53,156,977.33    
60 Days            0          0.00      60 Days         263  20,314,327.74    
90 Days            0          0.00      90 Days         133   9,140,080.06    
120 Days          93  5,259,267.60      120 Days        628  42,475,188.59    
150 Days           0          0.00      150 Days          0           0.00    
180+ Days          0          0.00      180+ Days         0           0.00    
              --  ------------                    ----- --------------
              93  5,259,267.60                    1,877 136,016,951.64

             No. of   Principal                      No. of    Principal
             Loans    Balance                        Loans     Balance

0-29 Days   0.000000%     0.000000%     0-29 Days  2.095051%      2.060607%   
30 Days     0.000000%     0.000000%     30 Days    9.898763%     10.021213%   
60 Days     0.000000%     0.000000%     60 Days    3.697975%      3.829680%   
90 Days     0.000000%     0.000000%     90 Days    1.870079%      1.723098%   
120 Days    1.307649%     0.991483%     120 Days   8.830146%      8.007470%   
150 Days    0.000000%     0.000000%     150 Days   0.000000%      0.000000%   
180+ Days   0.000000%     0.000000%     180+ Days  0.000000%      0.000000%   
         ---------     ---------               ----------     ----------
         1.307649%     0.991483%               26.392013%     25.642068%

(7)      The 120 Day category for delinquent, bankruptcy, foreclosure, and REO  
contains loans that are 120 days or more delinquent.          

Current Period Realized Loss - Includes Interest Shortfall              0.00    
Cumulative Realized Losses - Includes Interest Shortfall        1,372,414.79    
Current Period Class A Insufficient Funds                               0.00    

Principal Balance of Contaminated Properties                            0.00    
Periodic Advance                                                2,864,994.14    

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:          31-May-2001                                               
Distribution Date:    15-Jun-2001                                               

 DFH Series 1999-3
 Delinquency Status By Group

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE             
---------------------------------------------------------------------------------------------------------------------
2            No. of     Principal                  No. of   Principal                       No. of   Principal       
              Loans      Balance                    Loans    Balance                         Loans     Balance       
                                                                                                                     
                                      0-29 Days      114   8,361,340.98        0-29 Days        2     145,525.55     
 30 Days        511   38,749,485.46   30 Days         23   1,320,688.43        30 Days          1     176,699.72     
 60 Days        156   11,934,083.40   60 Days         11     804,672.63        60 Days         24   2,341,895.74     
 90 Days         73    4,351,812.92   90 Days          6     297,620.41        90 Days         16     849,673.72     
 120 Days        66    4,302,079.42   120 Days        48   3,557,891.66        120 Days       253  16,875,760.40     
 150 Days         0            0.00   150 Days         0           0.00        150 Days         0           0.00     
 180+ Days        0            0.00   180+ Days        0           0.00        180+ Days        0           0.00     
                ---   -------------                  ---  -------------                       ---  -------------     
                806   59,337,461.20                  202  14,342,214.11                       296  20,389,555.13     

                                      0-29 Days   2.099834%    2.180740%       0-29 Days   0.036839%    0.037955%    
 30 Days   9.412415%      10.106338%  30 Days     0.423651%    0.344452%       30 Days     0.018420%    0.046085%    
 60 Days   2.873457%       3.112554%  60 Days     0.202616%    0.209868%       60 Days     0.442070%    0.610795%    
 90 Days   1.344631%       1.135006%  90 Days     0.110518%    0.077623%       90 Days     0.294714%    0.221605%    
 120 Days  1.215693%       1.122035%  120 Days    0.884141%    0.927941%       120 Days    4.660158%    4.401404%    
 150 Days  0.000000%       0.000000%  150 Days    0.000000%    0.000000%       150 Days    0.000000%    0.000000%    
 180+ Days 0.000000%       0.000000%  180+ Days   0.000000%    0.000000%       180+ Days   0.000000%    0.000000%    
          ----------      ----------              ---------    ---------                   ---------    ---------    
          14.846196%      15.475933%              3.720759%    3.740624%                   5.452201%    5.317844%    

REO                                 Total       
---------------------------------------------------------------------------     
    No. of   Principal                 No. of    Principal
   Loans     Balance                   Loans     Balance

0-29 Days        0            0.00   0-29 Days      116   8,506,866.53        
30 Days          0            0.00   30 Days        535  40,246,873.61        
60 Days          0            0.00   60 Days        191  15,080,651.77        
90 Days          0            0.00   90 Days         95   5,499,107.05        
120 Days        69    3,742,941.72   120 Days       436  28,478,673.20        
150 Days         0            0.00   150 Days         0           0.00        
180+ Days        0            0.00   180+ Days        0           0.00        
        --    ------------                -----  -------------
        69    3,742,941.72                1,373  97,812,172.16

0-29 Days   0.000000%     0.000000%  0-29 Days   2.136673%    2.218694%       
30 Days     0.000000%     0.000000%  30 Days     9.854485%   10.496875%       
60 Days     0.000000%     0.000000%  60 Days     3.518143%    3.933218%       
90 Days     0.000000%     0.000000%  90 Days     1.749862%    1.434234%       
120 Days    1.270952%     0.976205%  120 Days    8.030945%    7.427585%       
150 Days    0.000000%     0.000000%  150 Days    0.000000%    0.000000%       
180+ Days   0.000000%     0.000000%  180+ Days   0.000000%    0.000000%       
    --------      --------              ---------    ---------
     1.270952%     0.976205%             25.290109%   25.510606%

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE             
---------------------------------------------------------------------------------------------------------------------
3                No. of   Principal                      No. of    Principal                     No. of   Principal  
                  Loans    Balance                        Loans     Balance                      Loans     Balance   
                                                                                                                     
                                         0-29 Days        0           0.00         0-29 Days        0           0.00 
 30 Days          0           0.00       30 Days          0           0.00         30 Days          0           0.00 
 60 Days          0           0.00       60 Days          0           0.00         60 Days          0           0.00 
 90 Days          0           0.00       90 Days          0           0.00         90 Days          0           0.00 
 120 Days         0           0.00       120 Days         0           0.00         120 Days         0           0.00 
 150 Days         0           0.00       150 Days         0           0.00         150 Days         0           0.00 
 180+ Days        0           0.00       180+ Days        0           0.00         180+ Days        0           0.00 
            --------      --------                   --------     --------                    --------      -------- 
                  0           0.00                        0           0.00                          0           0.00 

                                         0-29 Days   0.000000%    0.000000%        0-29 Days  0.000000%     0.000000%
 30 Days    0.000000%     0.000000%      30 Days     0.000000%    0.000000%        30 Days    0.000000%     0.000000%
 60 Days    0.000000%     0.000000%      60 Days     0.000000%    0.000000%        60 Days    0.000000%     0.000000%
 90 Days    0.000000%     0.000000%      90 Days     0.000000%    0.000000%        90 Days    0.000000%     0.000000%
 120 Days   0.000000%     0.000000%      120 Days    0.000000%    0.000000%        120 Days   0.000000%     0.000000%
 150 Days   0.000000%     0.000000%      150 Days    0.000000%    0.000000%        150 Days   0.000000%     0.000000%
 180+ Days  0.000000%     0.000000%      180+ Days   0.000000%    0.000000%        180+ Days  0.000000%     0.000000%
            --------      --------                   --------     --------                    --------      -------- 
            0.000000%     0.000000%                  0.000000%    0.000000%                   0.000000%     0.000000%

REO                                 Total       
---------------------------------------------------------------------------     
             No. of   Principal                      No. of    Principal
             Loans    Balance                        Loans     Balance

0-29 Days        0           0.00        0-29 Days       0            0.00      
30 Days          0           0.00        30 Days         0            0.00      
60 Days          0           0.00        60 Days         0            0.00      
90 Days          0           0.00        90 Days         0            0.00      
120 Days         0           0.00        120 Days        0            0.00      
150 Days         0           0.00        150 Days        0            0.00      
180+ Days        0           0.00        180+ Days       0            0.00      
       --------    --------                   --------      --------
           0           0.00                        0            0.00

0-29 Days   0.000000%   0.000000%       0-29 Days  0.000000%     0.000000%    
30 Days     0.000000%   0.000000%       30 Days    0.000000%     0.000000%    
60 Days     0.000000%   0.000000%       60 Days    0.000000%     0.000000%    
90 Days     0.000000%   0.000000%       90 Days    0.000000%     0.000000%    
120 Days    0.000000%   0.000000%       120 Days   0.000000%     0.000000%    
150 Days    0.000000%   0.000000%       150 Days   0.000000%     0.000000%    
180+ Days   0.000000%   0.000000%       180+ Days  0.000000%     0.000000%    
       --------    --------                   --------      --------
        0.000000%   0.000000%                  0.000000%     0.000000%

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:          31-May-2001                                               
Distribution Date:    15-Jun-2001                                               

 DFH Series 1999-3

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE              
--------------------------------------------------------------------------------------------------------------------- 
4                No. of   Principal                      No. of    Principal                     No. of   Principal   
                  Loans    Balance                        Loans     Balance                      Loans     Balance    
                                                                                                                      
                                           0-29 Days       33   2,423,511.39        0-29 Days        0           0.00 
 30 Days        157   12,062,442.91        30 Days         12     847,660.81        30 Days          0           0.00 
 60 Days         56    4,287,132.57        60 Days          8     498,427.65        60 Days          8     448,115.75 
 90 Days         23    1,959,756.61        90 Days          7     638,833.91        90 Days          8   1,042,382.49 
 120 Days        35    2,484,107.59        120 Days        26   1,943,511.74        120 Days       107   8,052,570.18 
 150 Days         0            0.00        150 Days         0           0.00        150 Days         0           0.00 
 180+ Days        0            0.00        180+ Days        0           0.00        180+ Days        0           0.00 
                ---   -------------                        --   ------------                       ---   ------------ 
                271   20,793,439.68                        86   6,351,945.50                       123   9,543,068.42 

                                           0-29 Days   2.247956%    2.087256%       0-29 Days   0.000000%    0.000000%
 30 Days  10.694823%      10.388812%       30 Days     0.817439%    0.730050%       30 Days     0.000000%    0.000000%
 60 Days   3.814714%       3.692305%       60 Days     0.544959%    0.429272%       60 Days     0.544959%    0.385941%
 90 Days   1.566757%       1.687846%       90 Days     0.476839%    0.550197%       90 Days     0.544959%    0.897755%
 120 Days  2.384196%       2.139444%       120 Days    1.771117%    1.673855%       120 Days    7.288828%    6.935298%
 150 Days  0.000000%       0.000000%       150 Days    0.000000%    0.000000%       150 Days    0.000000%    0.000000%
 180+ Days 0.000000%       0.000000%       180+ Days   0.000000%    0.000000%       180+ Days   0.000000%    0.000000%
          ---------       ---------                    --------     --------                    --------     -------- 
          18.460490%      17.908407%                   5.858311%    5.470630%                   8.378747%    8.218994%

REO                                 Total       
----------------------------------------------------------------------------    
          No. of   Principal                   No. of    Principal
          Loans    Balance                     Loans     Balance

0-29 Days            0           0.00      0-29 Days      33    2,423,511.39    
30 Days              0           0.00      30 Days       169   12,910,103.72    
60 Days              0           0.00      60 Days        72    5,233,675.97    
90 Days              0           0.00      90 Days        38    3,640,973.01    
120 Days            24   1,516,325.88      120 Days      192   13,996,515.39    
150 Days             0           0.00      150 Days        0            0.00    
180+ Days            0           0.00      180+ Days       0            0.00    
                --   ------------                    ---   -------------
                24   1,516,325.88                    504   38,204,779.48

0-29 Days      0.000000%     0.000000%     0-29 Days   2.247956%    2.087256%   
30 Days        0.000000%     0.000000%     30 Days    11.512262%   11.118862%   
60 Days        0.000000%     0.000000%     60 Days     4.904632%    4.507518%   
90 Days        0.000000%     0.000000%     90 Days     2.588556%    3.135798%   
120 Days       1.634877%     1.305940%     120 Days   13.079019%   12.054537%   
150 Days       0.000000%     0.000000%     150 Days    0.000000%    0.000000%   
180+ Days      0.000000%     0.000000%     180+ Days   0.000000%    0.000000%   
            --------      --------                  ---------    ---------
            1.634877%     1.305940%                 34.332425%  32.903971%

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:             31-May-2001                                            
Distribution Date:       15-Jun-2001                                            

 DFH Series 1999-3

--------------------------------------------------------------------------------
COLLATERAL STATEMENT

Collateral Description                                        Mixed Fixed & Arm 

Weighted Average Gross Coupon                                         10.445319%

Weighted Average Net Coupon                                            9.945320%

Weighted Average Pass-Through Rate                                     9.932820%

Weighted Average Maturity (Stepdown Calculation)                            341 

Beginning Scheduled Collateral Loan Count                                 7,232 

Number of Loans Paid in Full                                                120 

Ending Scheduled Collateral Loan Count                                    7,112 

Beginning Scheduled Collateral Balance                           540,279,170.97 

Ending Scheduled Collateral Balance                              529,708,157.51 

Ending Actual Collateral Balance at 31-May-2001                  530,444,543.08 

Monthly P&I Constant                                               5,180,407.51 

Ending Scheduled Balance for Premium Loans                       529,708,157.51 

Scheduled Principal                                                  477,583.74 

Unscheduled Principal                                             10,093,429.72 

Required Overcollateralized Amount                                         0.00 

Overcollateralized Increase Amount                                         0.00 

Overcollateralized Reduction Amount                                        0.00 

Specified O/C Amount                                               9,800,000.00 

Overcollateralized Amount                                          9,800,000.00 

Overcollateralized Deficiency Amount                                       0.00 

Base Overcollateralization Amount                                          0.00 

Extra Principal Distribution Amount                                        0.00 

Excess Cash Amount                                                   920,650.75 
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Group F Curtailments                                                 $44,977.83 

Group A Curtailments                                                  $4,881.61 

Delinquency Reimbursement Amount                                  $1,897,489.05 

Servicing Advance Reimbursement                                     $182,009.27 
--------------------------------------------------------------------------------

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Delta Funding Corporation                                                     
Mortgage Pass-Through Certificates                                            
Record Date:                             31-May-2001                          
Distribution Date:                       15-Jun-2001                          

 DFH Series 1999-3

                                                        [Enlarge/Download Table]

    Group                               2              3                4                 Total     

                                                                                                    
Collateral Description            Fixed 30 Year   Fixed 30 Year        Mixed ARM   Mixed Fixed & Arm
Weighted Average Coupon Rate          10.413198       11.015840        10.400548           10.445319
Weighted Average Net Rate              9.900698       10.503340         9.888048            9.945320
Weighted Average Maturity                 (3.00)          (3.00)           (3.00)             341.00
Record Date                          05/31/2001      05/31/2001       05/31/2001          05/31/2001
Principal And Interest Constant    3,798,773.82      305,263.16     1,076,370.53        5,180,407.51
Beginning Loan Count                      5,532             217            1,483               7,232
Loans Paid In Full                          103               2               15                 120
Ending Loan Count                         5,429             215            1,468               7,112
Beginning Scheduled Balance      391,718,307.98   31,259,636.05   117,301,226.94      540,279,170.97
Ending Scheduled Balance         382,844,190.12   30,889,184.21   115,974,783.18      529,708,157.51
Scheduled Principal                  399,573.53       18,303.88        59,706.33          477,583.74
Unscheduled Principal              8,474,544.33      352,147.96     1,266,737.43       10,093,429.72
Scheduled Interest                 3,399,200.29      286,959.28     1,016,664.20        4,702,823.77
Servicing Fee                        163,215.97       13,024.85        48,875.51          225,116.33
Master Servicing Fee                       0.00            0.00             0.00                0.00
Trustee Fee                            4,080.40          325.62         1,221.89            5,627.91
FRY Amount                                 0.00            0.00             0.00                0.00
Special Hazard Fee                         0.00            0.00             0.00                0.00
Other Fee                                  0.00            0.00             0.00                0.00
Pool Insurance Fee                         0.00            0.00             0.00                0.00
Spread 1                                   0.00            0.00             0.00                0.00
Spread 2                                   0.00            0.00             0.00                0.00
Spread 3                                   0.00            0.00             0.00                0.00
Net Interest                       3,231,903.92      273,608.81       966,566.80        4,472,079.53
Realized Loss Amount                 105,824.85            0.00       185,359.19          291,184.04
Cumulative Realized Loss             874,664.11            0.00       497,750.68        1,372,414.79
Percentage of Cumulative Losses            0.00            0.00             0.00                0.00

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                                                                       EXHIBIT R
Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:          31-May-2001                                               
Distribution Date:    15-Jun-2001                                               

 DFH Series 2000-1

Certificateholder Distribution Summary

                                                        [Enlarge/Download Table]

                                  Certificate         Certificate       Beginning                         
                                     Class            Pass-Through      Certificate            Interest   
 Class          CUSIP             Description             Rate           Balance             Distribution 
--------------------------------------------------------------------------------------------------------- 
                                                                                                          
 A-1F         24763LGB0             SEN SEQ             7.38000%       25,600,907.28          157,445.58  
 A-2F         24763LGC8             SEN SEQ             7.58000%       22,700,000.00          143,388.33  
 A-3F         24763LGD6             SEN SEQ             7.69000%       30,300,000.00          194,172.50  
 A-4F         24763LGE4             SEN SEQ             7.94000%       15,300,000.00          101,235.00  
 A-5F         24763LGF1             SEN SEQ             8.09000%       14,900,000.00          100,450.83  
 A-6F         24763LGG9                 SEN             7.87000%       10,000,000.00           65,583.33  
 IOF          24763LGH7              SEN IO             6.40000%                0.00          226,666.67  
 A-1A         24763LGJ3                 SEN             4.38250%       52,519,803.72          198,200.26  
 M-1          24763LGK0                 MEZ             8.09000%       16,500,000.00          111,237.50  
 M-2          24763LGL8                 MEZ             8.09000%       11,375,000.00           76,686.46  
  B           24763LGM6                 SUB             8.09000%       10,625,000.00           71,630.21  
 BIO          DFH001BIO              SUB IO             0.00000%                0.00                0.00  
  P           DFH00001P                  PO             0.00000%              100.00           53,235.91  
 R-1          DFH0002R1                 RES             0.00000%                0.00                0.00  
 R-2          DFH0002R2                 RES             0.00000%                0.00                0.00  
 R-3          DFH0002R3                 RES             0.00000%                0.00                0.00  
----------------------------------------------------------------------------------------------------------
Totals                                                                209,820,811.00        1,499,932.58  



                                      Current         Ending                                    Cumulative
            Principal                Realized       Certificate          Total                   Realized 
 Class     Distribution                Loss           Balance         Distribution                Losses  
----------------------------------------------------------------------------------------------------------
                                                                                                          
 A-1F      3,328,278.72                0.00       22,272,628.55        3,485,724.30                0.00   
 A-2F              0.00                0.00       22,700,000.00          143,388.33                0.00   
 A-3F              0.00                0.00       30,300,000.00          194,172.50                0.00   
 A-4F              0.00                0.00       15,300,000.00          101,235.00                0.00   
 A-5F              0.00                0.00       14,900,000.00          100,450.83                0.00   
 A-6F              0.00                0.00       10,000,000.00           65,583.33                0.00   
 IOF               0.00                0.00                0.00          226,666.67                0.00   
 A-1A      1,471,373.83                0.00       51,048,429.89        1,669,574.09                0.00   
 M-1               0.00                0.00       16,500,000.00          111,237.50                0.00   
 M-2               0.00                0.00       11,375,000.00           76,686.46                0.00   
  B                0.00                0.00       10,625,000.00           71,630.21                0.00   
 BIO               0.00                0.00                0.00                0.00                0.00   
  P                0.00                0.00              100.00           53,235.91                0.00   
 R-1               0.00                0.00                0.00                0.00                0.00   
 R-2               0.00                0.00                0.00                0.00                0.00   
 R-3               0.00                0.00                0.00                0.00                0.00   
----------------------------------------------------------------------------------------------------------
Totals     4,799,652.55                0.00      205,021,158.44        6,299,585.13                0.00   

All distributions required by the Pooling and Servicing Agreement have been     
calculated by the Certificate Administrator on behalf of the Trustee.           

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Delta Funding Corporation                                               
Mortgage Pass-Through Certificates                                      
Record Date:                      31-May-2001                           
Distribution Date:                15-Jun-2001                           

 DFH Series 2000-1

Principal Distribution Statement

                                                        [Enlarge/Download Table]

                     Original          Beginning             Scheduled           Unscheduled                      
                       Face           Certificate            Principal            Principal                       
    Class             Amount             Balance            Distribution         Distribution            Accretion
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
    A-1F           53,300,000.00       25,600,907.28          159,425.57        3,168,853.15                0.00  
    A-2F           22,700,000.00       22,700,000.00                0.00                0.00                0.00  
    A-3F           30,300,000.00       30,300,000.00                0.00                0.00                0.00  
    A-4F           15,300,000.00       15,300,000.00                0.00                0.00                0.00  
    A-5F           14,900,000.00       14,900,000.00                0.00                0.00                0.00  
    A-6F           10,000,000.00       10,000,000.00                0.00                0.00                0.00  
    IOF                     0.00                0.00                0.00                0.00                0.00  
    A-1A           65,000,000.00       52,519,803.72           25,605.81        1,445,768.02                0.00  
    M-1            16,500,000.00       16,500,000.00                0.00                0.00                0.00  
    M-2            11,375,000.00       11,375,000.00                0.00                0.00                0.00  
     B             10,625,000.00       10,625,000.00                0.00                0.00                0.00  
    BIO                     0.00                0.00                0.00                0.00                0.00  
     P                    100.00              100.00                0.00                0.00                0.00  
    R-1                     0.00                0.00                0.00                0.00                0.00  
    R-2                     0.00                0.00                0.00                0.00                0.00  
    R-3                     0.00                0.00                0.00                0.00                0.00  
------------------------------------------------------------------------------------------------------------------
   Totals         250,000,100.00      209,820,811.00          185,031.38        4,614,621.17                0.00  



                                          Total              Ending                Ending              Total      
                          Realized      Principal          Certificate           Certificate         Principal    
    Class                  Loss (1)     Reduction            Balance             Percentage         Distribution  
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
    A-1F                    0.00        3,328,278.72       22,272,628.55          0.41787296         3,328,278.72 
    A-2F                    0.00                0.00       22,700,000.00          1.00000000                 0.00 
    A-3F                    0.00                0.00       30,300,000.00          1.00000000                 0.00 
    A-4F                    0.00                0.00       15,300,000.00          1.00000000                 0.00 
    A-5F                    0.00                0.00       14,900,000.00          1.00000000                 0.00 
    A-6F                    0.00                0.00       10,000,000.00          1.00000000                 0.00 
    IOF                     0.00                0.00                0.00          0.00000000                 0.00 
    A-1A                    0.00        1,471,373.83       51,048,429.89          0.78536046         1,471,373.83 
    M-1                     0.00                0.00       16,500,000.00          1.00000000                 0.00 
    M-2                     0.00                0.00       11,375,000.00          1.00000000                 0.00 
     B                      0.00                0.00       10,625,000.00          1.00000000                 0.00 
    BIO                     0.00                0.00                0.00          0.00000000                 0.00 
     P                      0.00                0.00              100.00          1.00000000                 0.00 
    R-1                     0.00                0.00                0.00          0.00000000                 0.00 
    R-2                     0.00                0.00                0.00          0.00000000                 0.00 
    R-3                     0.00                0.00                0.00          0.00000000                 0.00 
------------------------------------------------------------------------------------------------------------------
   Totals                   0.00        4,799,652.55      205,021,158.44          0.82008431         4,799,652.55 

(1)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:             31-May-2001                                            
Distribution Date:       15-Jun-2001                                            

 DFH Series 2000-1

Principal Distribution Factors Statement

                                                        [Enlarge/Download Table]

                     Original          Beginning             Scheduled           Unscheduled                      
                       Face           Certificate            Principal            Principal                       
    Class(2)          Amount             Balance            Distribution         Distribution         Accretion   
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
    A-1F           53,300,000.00        480.31720976          2.99109887         59.45315478          0.00000000  
    A-2F           22,700,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    A-3F           30,300,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    A-4F           15,300,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    A-5F           14,900,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    A-6F           10,000,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    IOF                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
    A-1A           65,000,000.00        807.99698031          0.39393554         22.24258492          0.00000000  
    M-1            16,500,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    M-2            11,375,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
     B             10,625,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    BIO                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
     P                    100.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    R-1                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
    R-2                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
    R-3                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
------------------------------------------------------------------------------------------------------------------



                                          Total              Ending                Ending              Total      
                      Realized          Principal          Certificate           Certificate         Principal    
    Class              Loss (3)         Reduction            Balance             Percentage         Distribution  
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
    A-1F              0.00000000         62.44425366        417.87295591          0.41787296         62.44425366  
    A-2F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    A-3F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    A-4F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    A-5F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    A-6F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    IOF               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
    A-1A              0.00000000         22.63652046        785.36045985          0.78536046         22.63652046  
    M-1               0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    M-2               0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
     B                0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    BIO               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
     P                0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    R-1               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
    R-2               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
    R-3               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
------------------------------------------------------------------------------------------------------------------

(2)      All classes are per 1,000 denomination.                                

(3)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Corporation                                             
Mortgage Pass-Through Certificates                                    
Record Date:                     31-May-2001                          
Distribution Date:               15-Jun-2001                          

 DFH Series 2000-1

 Interest Distribution Statement

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class         Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
A-1F       53,300,000.00             7.38000%       25,600,907.28          157,445.58                0.00                0.00 
A-2F       22,700,000.00             7.58000%       22,700,000.00          143,388.33                0.00                0.00 
A-3F       30,300,000.00             7.69000%       30,300,000.00          194,172.50                0.00                0.00 
A-4F       15,300,000.00             7.94000%       15,300,000.00          101,235.00                0.00                0.00 
A-5F       14,900,000.00             8.09000%       14,900,000.00          100,450.83                0.00                0.00 
A-6F       10,000,000.00             7.87000%       10,000,000.00           65,583.33                0.00                0.00 
IOF                 0.00             6.40000%       42,500,000.00          226,666.67                0.00                0.00 
A-1A       65,000,000.00             4.38250%       52,519,803.72          198,200.26                0.00                0.00 
M-1        16,500,000.00             8.09000%       16,500,000.00          111,237.50                0.00                0.00 
M-2        11,375,000.00             8.09000%       11,375,000.00           76,686.46                0.00                0.00 
 B         10,625,000.00             8.09000%       10,625,000.00           71,630.21                0.00                0.00 
BIO                 0.00             0.00000%                0.00                0.00                0.00                0.00 
 P                100.00             0.00000%              100.00                0.00                0.00                0.00 
R-1                 0.00             0.00000%                0.00                0.00                0.00                0.00 
R-2                 0.00             0.00000%                0.00                0.00                0.00                0.00 
R-3                 0.00             0.00000%                0.00                0.00                0.00                0.00 
------------------------------------------------------------------------------------------------------------------------------
Totals    250,000,100.00                             1,446,696.67                0.00                0.00                0.00 



            Non-Supported                               Total             Remaining            Ending                         
Class         Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (4)          Distribution         Interest            Notional                        
                                                                         Shortfall            Balance                         
--------------------------------------------------------------------------------------------------------                      
                                                                                                                              
A-1F                0.00                0.00          157,445.58                0.00       22,272,628.55                      
A-2F                0.00                0.00          143,388.33                0.00       22,700,000.00                      
A-3F                0.00                0.00          194,172.50                0.00       30,300,000.00                      
A-4F                0.00                0.00          101,235.00                0.00       15,300,000.00                      
A-5F                0.00                0.00          100,450.83                0.00       14,900,000.00                      
A-6F                0.00                0.00           65,583.33                0.00       10,000,000.00                      
IOF                 0.00                0.00          226,666.67                0.00       37,000,000.00                      
A-1A                0.00                0.00          198,200.26                0.00       51,048,429.89                      
M-1                 0.00                0.00          111,237.50                0.00       16,500,000.00                      
M-2                 0.00                0.00           76,686.46                0.00       11,375,000.00                      
 B                  0.00                0.00           71,630.21                0.00       10,625,000.00                      
BIO                 0.00                0.00                0.00                0.00                0.00                      
 P                  0.00                0.00           53,235.91                0.00              100.00                      
R-1                 0.00                0.00                0.00                0.00                0.00                      
R-2                 0.00                0.00                0.00                0.00                0.00                      
R-3                 0.00                0.00                0.00                0.00                0.00                      
--------------------------------------------------------------------------------------------------------                      
Totals              0.00                0.00        1,499,932.58                0.00                                          

(4)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

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Delta Funding Corporation                                             
Mortgage Pass-Through Certificates                                    
Record Date:                 31-May-2001                              
Distribution Date:           15-Jun-2001                              

 DFH Series 2000-1

 Interest Distribution Factors Statement

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class (5)     Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
A-1F       53,300,000.00             7.38000%        480.31720976          2.95395084          0.00000000          0.00000000 
A-2F       22,700,000.00             7.58000%       1000.00000000          6.31666652          0.00000000          0.00000000 
A-3F       30,300,000.00             7.69000%       1000.00000000          6.40833333          0.00000000          0.00000000 
A-4F       15,300,000.00             7.94000%       1000.00000000          6.61666667          0.00000000          0.00000000 
A-5F       14,900,000.00             8.09000%       1000.00000000          6.74166644          0.00000000          0.00000000 
A-6F       10,000,000.00             7.87000%       1000.00000000          6.55833300          0.00000000          0.00000000 
IOF                 0.00             6.40000%        696.72131148          3.71584705          0.00000000          0.00000000 
A-1A       65,000,000.00             4.38250%        807.99698031          3.04923477          0.00000000          0.00000000 
M-1        16,500,000.00             8.09000%       1000.00000000          6.74166667          0.00000000          0.00000000 
M-2        11,375,000.00             8.09000%       1000.00000000          6.74166681          0.00000000          0.00000000 
 B         10,625,000.00             8.09000%       1000.00000000          6.74166682          0.00000000          0.00000000 
BIO                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
 P                100.00             0.00000%       1000.00000000          0.00000000          0.00000000          0.00000000 
R-1                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
R-2                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
R-3                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 



            Non-Supported                               Total             Remaining            Ending                         
Class (5)     Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (6)          Distribution         Interest            Notional                        
                                                                         Shortfall            Balance                         
--------------------------------------------------------------------------------------------------------                      
                                                                                                                              
A-1F          0.00000000          0.00000000          2.95395084          0.00000000        417.87295591                      
A-2F          0.00000000          0.00000000          6.31666652          0.00000000       1000.00000000                      
A-3F          0.00000000          0.00000000          6.40833333          0.00000000       1000.00000000                      
A-4F          0.00000000          0.00000000          6.61666667          0.00000000       1000.00000000                      
A-5F          0.00000000          0.00000000          6.74166644          0.00000000       1000.00000000                      
A-6F          0.00000000          0.00000000          6.55833300          0.00000000       1000.00000000                      
IOF           0.00000000          0.00000000          3.71584705          0.00000000        606.55737705                      
A-1A          0.00000000          0.00000000          3.04923477          0.00000000        785.36045985                      
M-1           0.00000000          0.00000000          6.74166667          0.00000000       1000.00000000                      
M-2           0.00000000          0.00000000          6.74166681          0.00000000       1000.00000000                      
 B            0.00000000          0.00000000          6.74166682          0.00000000       1000.00000000                      
BIO           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
 P            0.00000000          0.00000000      32359.10000000          0.00000000       1000.00000000                      
R-1           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R-2           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R-3           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
--------------------------------------------------------------------------------------------------------                      

(5)      All classes are per 1,000 denomination                                 

(6)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

 Certificateholder Component Statement

                                                        [Enlarge/Download Table]

            Component              Beginning           Ending        Beginning          Ending              Ending     
           Pass-Through            Notional           Notional       Component         Component           Component   
Class          Rate                 Balance            Balance        Balance           Balance            Percentage  
---------------------------------------------------------------------------------------------------------------------- 
                                                                                                                       
 OC             0.00000%              0.00               0.00       3,535,543.82       3,911,596.72         0.00000000%
FSA             0.08000%     171,320,710.99     166,521,058.44              0.00               0.00        78.73336096%

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                   31-May-2001                                      
Distribution Date:             15-Jun-2001                                      

 DFH Series 2000-1

 Certificateholder Account Statement

--------------------------------------------------------------------------------
CERTIFICATE ACCOUNT             

 Beginning Balance                                                        0.00

Deposits                                                                    

     Payments of Interest and Principal                           5,273,578.53
     Liquidations, Insurance Proceeds, Reserve Funds                      0.00
     Proceeds from Repurchased Loans                                      0.00
     Other Amounts (Servicer Advances)                            1,130,771.69
     Realized Losses                                                      0.00
                                                                  ------------
 Total Deposits                                                   6,404,350.22

Withdrawals                                                                 
     Reimbursement for Servicer Advances                                  0.00

     Payment of Service Fee                                         104,765.09
     Payment of Interest and Principal                            6,299,585.13
                                                                  ------------
 Total Withdrawals (Pool Distribution Amount)                     6,404,350.22

 Ending Balance                                                           0.00
                                                                  ============
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
 PREPAYMENT/CURTAILMENT INTEREST SHORTFALL

Total Prepayment/Curtailment Interest Shortfall                            0.00 
Servicing Fee Support                                                      0.00 
                                                                  ------------
Non-Supported Prepayment/Curtailment Interest Shortf                       0.00 
                                                                  ============
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
SERVICING FEES                    

Gross Servicing Fee                                                   88,898.78 
Trustee Fee - Wells Fargo Bank, N.A                                    4,444.89 
Supported Prepayment/Curtailment Interest Shortfall                        0.00 
                                                                  ------------
Net Servicing Fee                                                     93,343.67 
                                                                  ============
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                Beginning          Current       Current        Ending
Account Type                     Balance         Withdrawals    Deposits       Balance
--------------------------------------------------------------------------------------
                                                                                      

Reserve Fund                    10,000.00           0.00           0.00      10,000.00
Reserve Fund                    10,000.00           0.00           0.00      10,000.00

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DFH Series 2000-1

 Loan Status Stratification/Credit Enhancement Statement

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE             
---------------------------------------------------------------------------------------------------------------------
                 No. of   Principal                      No. of    Principal                     No. of   Principal  
                  Loans    Balance                        Loans     Balance                      Loans     Balance   
                                                                                                                     
                                           0-29 Days        58   4,469,328.38     0-29 Days         3     144,862.83 
   30 Days         241   18,121,632.44     30 Days          12     826,253.96     30 Days           0           0.00 
   60 Days          92    6,218,424.00     60 Days           5     391,687.16     60 Days           4     485,464.44 
   90 Days          35    2,105,669.61     90 Days           9     547,475.08     90 Days           8     554,634.30 
   120 Days         41    2,986,895.00     120 Days         31   2,025,318.81     120 Days        148  10,485,373.77 
   150 Days          0            0.00     150 Days          0           0.00     150 Days          0           0.00 
   180+ Days         0            0.00     180+ Days         0           0.00     180+ Days         0           0.00 
                   ---   -------------                     ---   ------------                     ---  ------------- 
                   409   29,432,621.05                     115   8,260,063.39                     163  11,670,335.34 



                 No. of   Principal                      No. of    Principal                     No. of   Principal  
                  Loans    Balance                        Loans     Balance                      Loans     Balance   
                                                                                                                     
                                           0-29 Days   2.062589%     2.137065%    0-29 Days   0.106686%     0.069268%
   30 Days    8.570413%       8.665083%    30 Days     0.426743%     0.395084%    30 Days     0.000000%     0.000000%
   60 Days    3.271693%       2.973417%    60 Days     0.177809%     0.187290%    60 Days     0.142248%     0.232131%
   90 Days    1.244666%       1.006852%    90 Days     0.320057%     0.261782%    90 Days     0.284495%     0.265205%
   120 Days   1.458037%       1.428221%    120 Days    1.102418%     0.968431%    120 Days    5.263158%     5.013711%
   150 Days   0.000000%       0.000000%    150 Days    0.000000%     0.000000%    150 Days    0.000000%     0.000000%
   180+ Days  0.000000%       0.000000%    180+ Days   0.000000%     0.000000%    180+ Days   0.000000%     0.000000%
              --------       ---------                 --------      --------                 --------      -------- 
              4.544808%      14.073573%                4.089616%     3.949652%                5.796586%     5.580316%


REO                                 Total       
----------------------------------------------------------------------------    
             No. of   Principal                      No. of    Principal
             Loans    Balance                        Loans     Balance

0-29 Days          0          0.00        0-29 Days        61   4,614,191.21    
30 Days            1     44,629.69        30 Days         254  18,992,516.09    
60 Days            0          0.00        60 Days         101   7,095,575.60    
90 Days            0          0.00        90 Days          52   3,207,778.99    
120 Days          16    677,975.26        120 Days        236  16,175,562.84    
150 Days           0          0.00        150 Days          0           0.00    
180+ Days          0          0.00        180+ Days         0           0.00    
              --    ----------                        ---  -------------
              17    722,604.95                        704  50,085,624.73

0-29 Days   0.000000%     0.000000%       0-29 Days  2.169275%      2.206333%   
30 Days     0.035562%     0.021340%       30 Days    9.032717%      9.081507%   
60 Days     0.000000%     0.000000%       60 Days    3.591750%      3.392837%   
90 Days     0.000000%     0.000000%       90 Days    1.849218%      1.533839%   
120 Days    0.568990%     0.324182%       120 Days   8.392603%      7.734546%   
150 Days    0.000000%     0.000000%       150 Days   0.000000%      0.000000%   
180+ Days   0.000000%     0.000000%       180+ Days  0.000000%      0.000000%   
        --------      --------                  ---------      ---------
         0.604552%     0.345523%                 25.035562%     23.949062%

(7)      The 120 Day category for delinquent, bankruptcy, foreclosure, and REO  
contains loans that are 120 days or more delinquent.          

Current Period Realized Loss - Includes Interest Shortfall             0.00     
Cumulative Realized Losses - Includes Interest Shortfall         264,332.75     
Current Period Class A Insufficient Funds                              0.00     
Principal Balance of Contaminated Properties                           0.00     
Periodic Advance                                                       0.00     

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                31-May-2001                                         
Distribution Date:          15-Jun-2001                                         

 DFH Series 2000-1
 Delinquency Status By Group

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE               
---------------------------------------------------------------------------------------------------------------------- 
1             No. of   Principal                         No. of    Principal                     No. of   Principal    
               Loans    Balance                           Loans     Balance                      Loans     Balance     
                                                                                                                       
                                            0-29 Days       38   2,791,499.59        0-29 Days        2      82,168.97 
 30 Days        176   12,721,743.03         30 Days          4     194,462.02        30 Days          0           0.00 
 60 Days         61    4,373,134.25         60 Days          3     194,813.87        60 Days          3     400,875.69 
 90 Days         26    1,565,945.01         90 Days          7     416,079.60        90 Days          7     367,785.53 
 120 Days        30    2,003,850.75         120 Days        19   1,190,208.77        120 Days       102   7,040,803.24 
 150 Days         0            0.00         150 Days         0           0.00        150 Days         0           0.00 
 180+ Days        0            0.00         180+ Days        0           0.00        180+ Days        0           0.00 
                ---   -------------                         --   ------------                       ---   ------------ 
                293   20,664,673.04                         71   4,787,063.85                       114   7,891,633.43 

                                            0-29 Days  1.784038%     1.801584%       0-29 Days  0.093897%     0.053030%
 30 Days    8.262911%      8.210388%        30 Days    0.187793%     0.125502%       30 Days    0.000000%     0.000000%
 60 Days    2.863850%      2.822343%        60 Days    0.140845%     0.125729%       60 Days    0.140845%     0.258718%
 90 Days    1.220657%      1.010633%        90 Days    0.328638%     0.268530%       90 Days    0.328638%     0.237362%
 120 Days   1.408451%      1.293250%        120 Days   0.892019%     0.768140%       120 Days   4.788732%     4.544010%
 150 Days   0.000000%      0.000000%        150 Days   0.000000%     0.000000%       150 Days   0.000000%     0.000000%
 180+ Days  0.000000%      0.000000%        180+ Days  0.000000%     0.000000%       180+ Days  0.000000%     0.000000%
           ---------      ---------                    --------      --------                   --------      -------- 
           13.755869%     13.336614%                   3.333333%     3.089486%                  5.352113%     5.093120%

REO                                 Total       
---------------------------------------------------------------------------     
           No. of   Principal                    No. of    Principal
           Loans    Balance                      Loans     Balance

0-29 Days        0              0.00     0-29 Days      40    2,873,668.56    
30 Days          1         44,629.69     30 Days       181   12,960,834.74    
60 Days          0              0.00     60 Days        67    4,968,823.81    
90 Days          0              0.00     90 Days        40    2,349,810.14    
120 Days         9        398,658.02     120 Days      160   10,633,520.78    
150 Days         0              0.00     150 Days        0            0.00    
180+ Days        0              0.00     180+ Days       0            0.00    
            --        ----------                   ---   -------------
            10        443,287.71                   488   33,786,658.03

0-29 Days   0.000000%     0.000000%      0-29 Days  1.877934%     1.854615%   
30 Days     0.046948%     0.028803%      30 Days    8.497653%     8.364693%   
60 Days     0.000000%     0.000000%      60 Days    3.145540%     3.206791%   
90 Days     0.000000%     0.000000%      90 Days    1.877934%     1.516526%   
120 Days    0.422535%     0.257287%      120 Days   7.511737%     6.862686%   
150 Days    0.000000%     0.000000%      150 Days   0.000000%     0.000000%   
180+ Days   0.000000%     0.000000%      180+ Days  0.000000%     0.000000%   
        --------      --------                 ---------     ---------
         0.469484%     0.286090%                22.910798%    21.805310%

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE               
---------------------------------------------------------------------------------------------------------------------- 
2               No. of    Principal                      No. of    Principal                     No. of   Principal    
                 Loans     Balance                        Loans     Balance                      Loans     Balance     
                                                                                                                       
                                            0-29 Days       20   1,677,828.79        0-29 Days        1      62,693.86 
 30 Days         65    5,399,889.41         30 Days          8     631,791.94        30 Days          0           0.00 
 60 Days         31    1,845,289.75         60 Days          2     196,873.29        60 Days          1      84,588.75 
 90 Days          9      539,724.60         90 Days          2     131,395.48        90 Days          1     186,848.77 
 120 Days        11      983,044.25         120 Days        12     835,110.04        120 Days        46   3,444,570.53 
 150 Days         0            0.00         150 Days         0           0.00        150 Days         0           0.00 
 180+ Days        0            0.00         180+ Days        0           0.00        80+ Days         0           0.00 
                ---    ------------                         --   ------------                        --   ------------ 
                116    8,767,948.01                         44   3,472,999.54                        49   3,778,701.91 

                                            0-29 Days   2.932551%    3.096365%        0-29 Days  0.146628%    0.115699%
 30 Days    9.530792%      9.965278%        30 Days     1.173021%    1.165946%        30 Days    0.000000%    0.000000%
 60 Days    4.545455%      3.405408%        60 Days     0.293255%    0.363322%        60 Days    0.146628%    0.156105%
 90 Days    1.319648%      0.996040%        90 Days     0.293255%    0.242485%        90 Days    0.146628%    0.344822%
 120 Days   1.612903%      1.814168%        120 Days    1.759531%    1.541162%        120 Days   6.744868%    6.356816%
 150 Days   0.000000%      0.000000%        150 Days    0.000000%    0.000000%        150 Days   0.000000%    0.000000%
 180+ Days  0.000000%      0.000000%        180+ Days   0.000000%    0.000000%        180+ Days  0.000000%    0.000000%
           ---------      ---------                     --------     --------                    --------     -------- 
           17.008798%     16.180894%                    6.451613%    6.409280%                   7.184751%    6.973442%

REO                                 Total       
----------------------------------------------------------------------------    
           No. of   Principal                    No. of    Principal
           Loans    Balance                      Loans     Balance

0-29 Days        0              0.00      0-29 Days      21    1,740,522.65   
30 Days          0              0.00      30 Days        73    6,031,681.35   
60 Days          0              0.00      60 Days        34    2,126,751.79   
90 Days          0              0.00      90 Days        12      857,968.85   
120 Days         7        279,317.24      120 Days       76    5,542,042.06   
150 Days         0              0.00      150 Days        0            0.00   
180+ Days        0              0.00      180+ Days       0            0.00   
              -        ----------                    ---   -------------
              7        279,317.24                    216   16,298,966.70

0-29 Days    0.000000%      0.000000%     0-29 Days  3.079179%     3.212064%  
30 Days      0.000000%      0.000000%     30 Days   10.703812%    11.131224%  
60 Days      0.000000%      0.000000%     60 Days    4.985337%     3.924834%  
90 Days      0.000000%      0.000000%     90 Days    1.759531%     1.583347%  
120 Days     1.026393%      0.515469%     120 Days  11.143695%    10.227615%  
150 Days     0.000000%      0.000000%     150 Days   0.000000%     0.000000%  
180+ Days    0.000000%      0.000000%     180+ Days  0.000000%     0.000000%  
          --------       --------                ---------     ---------
           1.026393%      0.515469%               31.671554%    30.079084%

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                 31-May-2001                                        
Distribution Date:           15-Jun-2001                                        

 DFH Series 2000-1

--------------------------------------------------------------------------------
COLLATERAL STATEMENT

Collateral Description                                         Mixed Fixed & Arm

Weighted Average Gross Coupon                                         10.841098%

Weighted Average Net Coupon                                           10.341097%

Weighted Average Pass-Through Rate                                    10.316097%

Weighted Average Maturity (Stepdown Calculation)                            345 

Beginning Scheduled Collateral Loan Count                                 2,859 

Number of Loans Paid in Full                                                 47 

Ending Scheduled Collateral Loan Count                                    2,812 

Beginning Scheduled Collateral Balance                           213,356,354.81 

Ending Scheduled Collateral Balance                              208,932,755.16 

Ending Actual Collateral Balance at 31-May-2001                  209,133,969.81 

Monthly P&I Constant                                               2,112,545.74 

Ending Scheduled Balance for Premium Loans                       208,932,755.16 

Scheduled Principal                                                  185,031.38 

Unscheduled Principal                                              4,238,568.27 

Required Overcollateralized Amount                                         0.00 

Overcollateralized Increase Amount                                   376,052.90 

Overcollateralized Reduction Amount                                        0.00 

Specified O/C Amount                                               4,625,000.00 

Overcollateralized Amount                                          3,911,596.72 

Overcollateralized Deficiency Amount                               1,089,456.18 

Base Overcollateralization Amount                                          0.00 

Extra Principal Distribution Amount                                  376,052.90 

Excess Cash Amount                                                   376,052.90 
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Interest Advance Recoveries                                       $  744,726.99 

Servicing Advance Recoveries                                      $   54,794.85 
--------------------------------------------------------------------------------

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Delta Funding Corporation                                                     
Mortgage Pass-Through Certificates                                            
Record Date:                             31-May-2001                          
Distribution Date:                       15-Jun-2001                          

 DFH Series 2000-1

                                                        [Enlarge/Download Table]

-------------------------------------------------------------------------------------------------------
    Group                                         1                         2               Total      
                                                                                                       
Collateral Description                       Mixed Fixed               Mixed ARM      Mixed Fixed & Arm
Weighted Average Coupon Rate                   10.914116               10.632835              10.841098
Weighted Average Net Rate                      10.389116               10.107835              10.341097
Weighted Average Maturity                         345.00                  345.00                 345.00
Record Date                                   05/31/2001              05/31/2001             05/31/2001
Principal And Interest Constant             1,596,188.35              516,357.39           2,112,545.74
Beginning Loan Count                               2,163                     696                  2,859
Loans Paid In Full                                    33                      14                     47
Ending Loan Count                                  2,130                     682                  2,812
Beginning Scheduled Balance               157,971,133.90           55,385,220.91         213,356,354.81
Ending Scheduled Balance                  154,787,403.33           54,145,351.83         208,932,755.16
Scheduled Principal                           159,425.57               25,605.81             185,031.38
Unscheduled Principal                       3,024,305.00            1,214,263.27           4,238,568.27
Scheduled Interest                          1,436,762.78              490,751.58           1,927,514.36
Servicing Fee                                  65,821.31               23,077.17              88,898.48
Master Servicing Fee                                0.00                    0.00                   0.00
Trustee Fee                                     3,291.07                1,153.86               4,444.93
FRY Amount                                          0.00                    0.00                   0.00
Special Hazard Fee                                  0.00                    0.00                   0.00
Other Fee                                           0.00                    0.00                   0.00
Pool Insurance Fee                                  0.00                    0.00                   0.00
Spread 1                                            0.00                    0.00                   0.00
Spread 2                                            0.00                    0.00                   0.00
Spread 3                                            0.00                    0.00                   0.00
Net Interest                                1,367,650.40              466,520.55           1,834,170.95
Realized Loss Amount                                0.00                    0.00                   0.00
Cumulative Realized Loss                      256,865.62                7,467.13             264,332.75
Percentage of Cumulative Losses                     0.00                    0.00                   0.00
-------------------------------------------------------------------------------------------------------

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                                                                       EXHIBIT S
Delta Funding Corporation                                                   
Mortgage Pass-Through Certificates                                          
Record Date:               31-May-2001                                      
Distribution Date:         15-Jun-2001                                      

 DFH Series 2000-2

Certificateholder Distribution Summary

                                                        [Enlarge/Download Table]

                                  Certificate         Certificate       Beginning                         
                                     Class            Pass-Through      Certificate            Interest   
 Class          CUSIP             Description             Rate           Balance             Distribution 
--------------------------------------------------------------------------------------------------------- 
                                                                                                          
    A_1F      24763LGN4                 SEN             7.79000%       36,001,496.51          233,709.71  
    A_2F      24763LGP9                 SEN             7.82000%       14,502,000.00           94,504.70  
    A_3F      24763LGQ7                 SEN             7.98000%       41,519,000.00          276,101.35  
    A_4F      24763LGR5                 SEN             8.22000%       10,953,000.00           75,028.05  
    A_5F      24763LGS3                 SEN             8.36000%       20,327,000.00          141,611.43  
    A_6F      24763LGT1                 SEN             7.97000%       21,000,000.00          139,475.00  
    IOF       24763LGU8                 SEN             7.00000%                0.00          268,333.33  
    A_1A      24763LGV6                 SEN             4.44250%       55,245,653.37          211,341.48  
    M_1       24763LGW4                 MEZ             8.36000%       16,500,000.00          114,950.00  
    M_2       24763LGX2                 MEZ             8.36000%       11,344,000.00           79,029.87  
     B        24763LGY0                 JUN             8.36000%       12,375,000.00           86,212.50  
    BIO       DFH002BIO                 JUN             0.00000%                0.00               68.61  
     OC       DFH0002OC                 JUN             0.00000%        2,975,380.57                0.00  
    R_1       DFH0002R1                 JUN             0.00000%                0.00                0.00  
    R_2       DFH0002R2                 RES             0.00000%                0.00                0.00  
    R_3       DFH0002R3                 RES             0.00000%                0.00                0.00  
--------------------------------------------------------------------------------------------------------- 
   Totals                                                             242,742,530.45        1,720,366.03  



                                      Current         Ending                                    Cumulative
            Principal                Realized      Certificate           Total                   Realized 
 Class     Distribution                Loss           Balance         Distribution                Losses  
----------------------------------------------------------------------------------------------------------
                                                                                                          
    A_1F   5,800,560.03                0.00       30,200,936.49        6,034,269.74                 0.00  
    A_2F           0.00                0.00       14,502,000.00           94,504.70                 0.00  
    A_3F           0.00                0.00       41,519,000.00          276,101.35                 0.00  
    A_4F           0.00                0.00       10,953,000.00           75,028.05                 0.00  
    A_5F           0.00                0.00       20,327,000.00          141,611.43                 0.00  
    A_6F           0.00                0.00       21,000,000.00          139,475.00                 0.00  
    IOF            0.00                0.00                0.00          268,333.33                 0.00  
    A_1A   2,220,722.00                0.00       53,024,931.37        2,432,063.48                 0.00  
    M_1            0.00                0.00       16,500,000.00          114,950.00                 0.00  
    M_2            0.00                0.00       11,344,000.00           79,029.87                 0.00  
     B             0.00                0.00       12,375,000.00           86,212.50                 0.00  
    BIO            0.00                0.00                0.00               68.61                 0.00  
     OC            0.00                0.00        3,359,456.11                0.00                 0.00  
    R_1            0.00                0.00                0.00                0.00                 0.00  
    R_2            0.00                0.00                0.00                0.00                 0.00  
    R_3            0.00                0.00                0.00                0.00                 0.00  
----------------------------------------------------------------------------------------------------------
   Totals  8,021,282.03                0.00      235,105,323.97        9,741,648.06                 0.00  

All distributions required by the Pooling and Servicing Agreement have been     
calculated by the Certificate Administrator on behalf of the Trustee.           

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Delta Funding Corporation                                               
Mortgage Pass-Through Certificates                                      
Record Date:                 31-May-2001                                
Distribution Date:           15-Jun-2001                                

 DFH Series 2000-2

Principal Distribution Statement

                                                        [Enlarge/Download Table]

                     Original          Beginning             Scheduled           Unscheduled                      
                       Face           Certificate            Principal            Principal                       
    Class             Amount             Balance            Distribution         Distribution            Accretion
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
    A_1F       61,480,000.00       36,001,496.51          195,146.68        5,605,413.35                0.00      
    A_2F       14,502,000.00       14,502,000.00                0.00                0.00                0.00      
    A_3F       41,519,000.00       41,519,000.00                0.00                0.00                0.00      
    A_4F       10,953,000.00       10,953,000.00                0.00                0.00                0.00      
    A_5F       20,327,000.00       20,327,000.00                0.00                0.00                0.00      
    A_6F       21,000,000.00       21,000,000.00                0.00                0.00                0.00      
    IOF                 0.00                0.00                0.00                0.00                0.00      
    A_1A       65,000,000.00       55,245,653.37           24,871.41        2,195,850.59                0.00      
    M_1        16,500,000.00       16,500,000.00                0.00                0.00                0.00      
    M_2        11,344,000.00       11,344,000.00                0.00                0.00                0.00      
     B         12,375,000.00       12,375,000.00                0.00                0.00                0.00      
    BIO                 0.00                0.00                0.00                0.00                0.00      
     OC                 0.00        2,975,380.57                0.00                0.00                0.00      
    R_1                 0.00                0.00                0.00                0.00                0.00      
    R_2                 0.00                0.00                0.00                0.00                0.00      
    R_3                 0.00                0.00                0.00                0.00                0.00      
------------------------------------------------------------------------------------------------------------------
   Totals     275,000,000.00      242,742,530.45          220,018.09        7,801,263.94                0.00      



                                          Total              Ending                Ending              Total      
                          Realized      Principal          Certificate           Certificate         Principal    
    Class                  Loss (1)     Reduction            Balance             Percentage         Distribution  
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
    A_1F                    0.00        5,800,560.03       30,200,936.49          0.49123189      5,800,560.03    
    A_2F                    0.00                0.00       14,502,000.00          1.00000000              0.00    
    A_3F                    0.00                0.00       41,519,000.00          1.00000000              0.00    
    A_4F                    0.00                0.00       10,953,000.00          1.00000000              0.00    
    A_5F                    0.00                0.00       20,327,000.00          1.00000000              0.00    
    A_6F                    0.00                0.00       21,000,000.00          1.00000000              0.00    
    IOF                     0.00                0.00                0.00          0.00000000              0.00    
    A_1A                    0.00        2,220,722.00       53,024,931.37          0.81576817      2,220,722.00    
    M_1                     0.00                0.00       16,500,000.00          1.00000000              0.00    
    M_2                     0.00                0.00       11,344,000.00          1.00000000              0.00    
     B                      0.00                0.00       12,375,000.00          1.00000000              0.00    
    BIO                     0.00                0.00                0.00          0.00000000              0.00    
     OC                     0.00                0.00        3,359,456.11          0.00000000              0.00    
    R_1                     0.00                0.00                0.00          0.00000000              0.00    
    R_2                     0.00                0.00                0.00          0.00000000              0.00    
    R_3                     0.00                0.00                0.00          0.00000000              0.00    
------------------------------------------------------------------------------------------------------------------
   Totals                   0.00        8,021,282.03      235,105,323.97          0.85492845      8,021,282.03    

(1)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Corporation                                           
Mortgage Pass-Through Certificates                                  
Record Date:            31-May-2001                                 
Distribution Date:      15-Jun-2001                                 

 DFH Series 2000-2

Principal Distribution Factors Statement

                                                        [Enlarge/Download Table]

                     Original          Beginning             Scheduled           Unscheduled                      
                       Face           Certificate            Principal            Principal                       
    Class (2)         Amount             Balance            Distribution         Distribution            Accretion
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
    A_1F           61,480,000.00        585.58061988          3.17414899         91.17458279          0.00000000  
    A_2F           14,502,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    A_3F           41,519,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    A_4F           10,953,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    A_5F           20,327,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    A_6F           21,000,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    IOF                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
    A_1A           65,000,000.00        849.93312877          0.38263708         33.78231677          0.00000000  
    M_1            16,500,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    M_2            11,344,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
     B             12,375,000.00       1000.00000000          0.00000000          0.00000000          0.00000000  
    BIO                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
     OC                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
    R_1                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
    R_2                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  
    R_3                     0.00          0.00000000          0.00000000          0.00000000          0.00000000  



                                          Total              Ending                Ending              Total      
                       Realized         Principal          Certificate           Certificate         Principal    
    Class (2)           Loss (3)        Reduction            Balance             Percentage         Distribution  
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
    A_1F              0.00000000         94.34873178        491.23188826          0.49123189         94.34873178  
    A_2F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    A_3F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    A_4F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    A_5F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    A_6F              0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    IOF               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
    A_1A              0.00000000         34.16495385        815.76817492          0.81576817         34.16495385  
    M_1               0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    M_2               0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
     B                0.00000000          0.00000000       1000.00000000          1.00000000          0.00000000  
    BIO               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
     OC               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
    R_1               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
    R_2               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  
    R_3               0.00000000          0.00000000          0.00000000          0.00000000          0.00000000  

(2)      All classes are per 1,000 denomination.                                

(3)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Corporation                                             
Mortgage Pass-Through Certificates                                    
Record Date:              31-May-2001                                 
Distribution Date:        15-Jun-2001                                 

 DFH Series 2000-2

Interest Distribution Statement 

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class         Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
A_1F       61,480,000.00             7.79000%       36,001,496.51          233,709.71          0.00                0.00       
A_2F       14,502,000.00             7.82000%       14,502,000.00           94,504.70          0.00                0.00       
A_3F       41,519,000.00             7.98000%       41,519,000.00          276,101.35          0.00                0.00       
A_4F       10,953,000.00             8.22000%       10,953,000.00           75,028.05          0.00                0.00       
A_5F       20,327,000.00             8.36000%       20,327,000.00          141,611.43          0.00                0.00       
A_6F       21,000,000.00             7.97000%       21,000,000.00          139,475.00          0.00                0.00       
IOF                 0.00             7.00000%       46,000,000.00          268,333.33          0.00                0.00       
A_1A       65,000,000.00             4.44250%       55,245,653.37          211,341.48          0.00                0.00       
M_1        16,500,000.00             8.36000%       16,500,000.00          114,950.00          0.00                0.00       
M_2        11,344,000.00             8.36000%       11,344,000.00           79,029.87          0.00                0.00       
 B         12,375,000.00             8.36000%       12,375,000.00           86,212.50          0.00                0.00       
BIO                 0.00             0.00000%                0.00                0.00          0.00                0.00       
 OC                 0.00             0.00000%        2,975,380.57                0.00          0.00                0.00       
R_1                 0.00             0.00000%                0.00                0.00          0.00                0.00       
R_2                 0.00             0.00000%                0.00                0.00          0.00                0.00       
R_3                 0.00             0.00000%                0.00                0.00          0.00                0.00       
------------------------------------------------------------------------------------------------------------------------------
Totals    275,000,000.00                                                 1,720,297.42          0.00                0.00       



            Non-Supported                               Total             Remaining            Ending                         
Class         Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (4)          Distribution         Interest            Notional                        
                                                                          Shortfall           Balance                         
--------------------------------------------------------------------------------------------------------                      
                                                                                                                              

A_1F                0.00                0.00          233,709.71                0.00       30,200,936.49                      
A_2F                0.00                0.00           94,504.70                0.00       14,502,000.00                      
A_3F                0.00                0.00          276,101.35                0.00       41,519,000.00                      
A_4F                0.00                0.00           75,028.05                0.00       10,953,000.00                      
A_5F                0.00                0.00          141,611.43                0.00       20,327,000.00                      
A_6F                0.00                0.00          139,475.00                0.00       21,000,000.00                      
IOF                 0.00                0.00          268,333.33                0.00       41,000,000.00                      
A_1A                0.00                0.00          211,341.48                0.00       53,024,931.37                      
M_1                 0.00                0.00          114,950.00                0.00       16,500,000.00                      
M_2                 0.00                0.00           79,029.87                0.00       11,344,000.00                      
 B                  0.00                0.00           86,212.50                0.00       12,375,000.00                      
BIO                 0.00                0.00               68.61                0.00                0.00                      
 OC                 0.00                0.00                0.00                0.00        3,359,456.11                      
R_1                 0.00                0.00                0.00                0.00                0.00                      
R_2                 0.00                0.00                0.00                0.00                0.00                      
R_3                 0.00                0.00                0.00                0.00                0.00                      
--------------------------------------------------------------------------------------------------------                      
Totals              0.00                0.00        1,720,366.03                0.00                                          

(4)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

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Delta Funding Corporation                                             
Mortgage Pass-Through Certificates                                    
Record Date:                      31-May-2001                         
Distribution Date:                15-Jun-2001                         

 DFH Series 2000-2

 Interest Distribution Factors Statement

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class (5)     Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
A_1F       61,480,000.00             7.79000%        585.58061988          3.80139411          0.00000000          0.00000000 
A_2F       14,502,000.00             7.82000%       1000.00000000          6.51666667          0.00000000          0.00000000 
A_3F       41,519,000.00             7.98000%       1000.00000000          6.65000000          0.00000000          0.00000000 
A_4F       10,953,000.00             8.22000%       1000.00000000          6.85000000          0.00000000          0.00000000 
A_5F       20,327,000.00             8.36000%       1000.00000000          6.96666650          0.00000000          0.00000000 
A_6F       21,000,000.00             7.97000%       1000.00000000          6.64166667          0.00000000          0.00000000 
IOF                 0.00             7.00000%        786.32478632          4.58689453          0.00000000          0.00000000 
A_1A       65,000,000.00             4.44250%        849.93312877          3.25140738          0.00000000          0.00000000 
M_1        16,500,000.00             8.36000%       1000.00000000          6.96666667          0.00000000          0.00000000 
M_2        11,344,000.00             8.36000%       1000.00000000          6.96666696          0.00000000          0.00000000 
 B         12,375,000.00             8.36000%       1000.00000000          6.96666667          0.00000000          0.00000000 
BIO                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
 OC                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
R_1                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
R_2                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
R_3                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 



            Non-Supported                               Total             Remaining            Ending                         
Class (5)     Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (6)          Distribution         Interest            Notional                        
                                                                          Shortfall           Balance                         
--------------------------------------------------------------------------------------------------------                      
                                                                                                                              
A_1F          0.00000000          0.00000000          3.80139411          0.00000000        491.23188826                      
A_2F          0.00000000          0.00000000          6.51666667          0.00000000       1000.00000000                      
A_3F          0.00000000          0.00000000          6.65000000          0.00000000       1000.00000000                      
A_4F          0.00000000          0.00000000          6.85000000          0.00000000       1000.00000000                      
A_5F          0.00000000          0.00000000          6.96666650          0.00000000       1000.00000000                      
A_6F          0.00000000          0.00000000          6.64166667          0.00000000       1000.00000000                      
IOF           0.00000000          0.00000000          4.58689453          0.00000000        700.85470085                      
A_1A          0.00000000          0.00000000          3.25140738          0.00000000        815.76817492                      
M_1           0.00000000          0.00000000          6.96666667          0.00000000       1000.00000000                      
M_2           0.00000000          0.00000000          6.96666696          0.00000000       1000.00000000                      
 B            0.00000000          0.00000000          6.96666667          0.00000000       1000.00000000                      
BIO           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
 OC           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R_1           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R_2           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R_3           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      

(5)      All classes are per 1,000 denomination                                 

(6)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

 Certificateholder Component Statement

                                                        [Enlarge/Download Table]

            Component              Beginning           Ending        Beginning          Ending              Ending    
           Pass-Through            Notional           Notional       Component         Component           Component  
Class          Rate                 Balance            Balance        Balance           Balance            Percentage 
----------------------------------------------------------------------------------------------------------------------
                                                                                                                      

FSA       0.08000%             199,548,149.88         191,526,867.86   0.00               0.00          81.57681749%  

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DFH Series 2000-2

 Certificateholder Account Statement

--------------------------------------------------------------------------------
CERTIFICATE ACCOUNT 

Beginning Balance                                                          0.00 

Deposits                                                                        

    Payments of Interest and Principal                            7,933,974.68

    Liquidations, Insurance Proceeds, Reserve Funds                       0.00

    Proceeds from Repurchased Loans                                       0.00

    Other Amounts (Servicer Advances)                             1,897,908.95

    Realized Losses                                                       0.00
                                                                  ------------
Total Deposits                                                     9,831,883.63 

Withdrawals                                                                     

    Reimbursement for Servicer Advances                                   0.00

    Payment of Service Fee                                           90,235.57

    Payment of Interest and Principal                             9,741,648.06
                                                                  ------------
Total Withdrawals (Pool Distribution Amount)                       9,831,883.63 

Ending Balance                                                             0.00 
                                                                  ============
--------------------------------------------------------------------------------
PREPAYMENT/CURTAILMENT INTEREST SHORTFALL 

Total Prepayment/Curtailment Interest Shortfall                       29,267.50 
                                                                  ------------
Servicing Fee Support                                                 29,267.50 
                                                                  ------------
Non-Supported Prepayment/Curtailment Interest Shortf                       0.00 
                                                                  ============
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
SERVICING FEES

Gross Servicing Fee                                                  101,142.72 

Trustee Fee- Wells Fargo                                               5,057.14 

Supported Prepayment/Curtailment Interest Shortfall                   29,267.50 
                                                                  ------------
Net Servicing Fee                                                     76,932.36 
                                                                  ============
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                Beginning          Current       Current        Ending
Account Type                     Balance         Withdrawals    Deposits       Balance
--------------------------------------------------------------------------------------
                                                                                      

Net Rate Cap Fund               10,000.00           34.30          34.30     10,000.00
LIBOR Carryover Fund            10,000.00           34.31          34.31     10,000.00

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                       31-May-2001                                  
Distribution Date:                 15-Jun-2001                                  

 DFH Series 2000-2

 Loan Status Stratification/Credit Enhancement Statement

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE               
---------------------------------------------------------------------------------------------------------------------- 
               No. of    Principal                         No. of    Principal                    No. of   Principal   
                Loans     Balance                          Loans      Balance                      Loans    Balance    
                                                                                                                       
                                            0-29 Days        7     810,459.48        0-29 Days        5     288,446.41 
 30 Days        186   13,225,340.12         30 Days          0           0.00        30 Days          0           0.00 
 60 Days         75    5,186,359.37         60 Days          2     134,990.68        60 Days          5     488,694.13 
 90 Days         35    2,235,437.25         90 Days          1     132,812.83        90 Days         15   1,370,254.62 
120 Days         31    1,756,170.35         120 Days        41   2,732,034.28        120 Days       174  12,553,894.63 
150 Days          0            0.00         150 Days         0           0.00        150 Days         0           0.00 
180+ Days         0            0.00         180+ Days        0           0.00        180+ Days        0           0.00 
                ---    ------------                         --   ------------                       ---   ------------ 
                327   22,403,307.09                         51   3,810,297.27                       199  14,701,289.79 


---------------------------------------------------------------------------------------------------------------------- 
             No. of        Principal                      No. of     Principal                    No. of      Principal
             Loans         Balance                        Loans       Balance                     Loans        Balance 
                                                                                                                       
                                            0-29 Days    0.218750%   0.344482%       0-29 Days   0.156250%    0.122603%
 30 Days   5.812500%       5.621366%        30 Days      0.000000%   0.000000%       30 Days     0.000000%    0.000000%
 60 Days   2.343750%       2.204437%        60 Days      0.062500%   0.057377%       60 Days     0.156250%    0.207717%
 90 Days   1.093750%       0.950162%        90 Days      0.031250%   0.056451%       90 Days     0.468750%    0.582420%
 120 Days  0.968750%       0.746452%        120 Days     1.281250%   1.161238%       120 Days    5.437500%    5.335971%
 150 Days  0.000000%       0.000000%        150 Days     0.000000%   0.000000%       150 Days    0.000000%    0.000000%
 180+ Days 0.000000%       0.000000%        180+ Days    0.000000%   0.000000%       180+ Days   0.000000%    0.000000%
           --------        --------                      --------    --------                    --------     -------- 
           0.218750%       9.522416%                     1.593750%   1.619548%                   6.218750%    6.248711%


REO                                 Total       
-----------------------------------------------------------------------------   
           No. of   Principal                    No. of    Principal
           Loans    Balance                      Loans     Balance

0-29 Days          0          0.00     0-29 Days        12     1,098,905.89   
30 Days            0          0.00     30 Days         186    13,225,340.12   
60 Days            0          0.00     60 Days          82     5,810,044.18   
90 Days            1     90,716.84     90 Days          52     3,829,221.54   
120 Days          20    805,202.02     120 Days        266    17,847,301.28   
150 Days           0          0.00     150 Days          0             0.00   
180+ Days          0          0.00     180+ Days         0             0.00   
               --    ----------                     ---    -------------
               21    895,918.86                     598    41,810,813.01

          No. of     Principal                  No. of       Principal
          Loans      Balance                   Loans         Balance

0-29 Days   0.000000%     0.000000%    0-29 Days  0.375000%        0.467085%  
30 Days     0.000000%     0.000000%    30 Days    5.812500%        5.621366%  
60 Days     0.000000%     0.000000%    60 Days    2.562500%        2.469531%  
90 Days     0.031250%     0.038559%    90 Days    1.625000%        1.627592%  
120 Days    0.625000%     0.342247%    120 Days   8.312500%        7.585908%  
150 Days    0.000000%     0.000000%    150 Days   0.000000%        0.000000%  
180+ Days   0.000000%     0.000000%    180+ Days  0.000000%        0.000000%  
         --------      --------               ---------        ---------
          0.656250%     0.380806%              18.687500%       17.771481%

(7)      The 120 day category for delinquent, bankruptcy, foreclosures, and REO 
contains that are 120 days or more delinquent.                

                                                        [Enlarge/Download Table]
                                                                                                
Current Period Realized Loss -                                                                  
  Includes Interest Shortfall   0.00  Principal Balance of Contaminated Properties          0.00
Cumulative Realized Losses -                                                                    
  Includes Interest Shortfall   0.00  Periodic Advance                              1,897,908.95
Current Period Class A                                                                          
  Insufficient Funds            0.00                                                            

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

 DFH Series 2000-2
 Delinquency Status By Group

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE                 
----------------------------------------------------------------------------------------------------------------------   
1             No. of     Principal                      No. of      Principal                      No. of   Principal    
               Loans      Balance                        Loans       Balance                        Loans    Balance     
                                                                                                                         
                                              0-29 Days         4    382,760.49        0-29 Days        1      43,792.32 
 30 Days          129    8,367,812.30         30 Days           0          0.00        30 Days          0           0.00 
 60 Days           58    4,330,774.83         60 Days           1     15,530.19        60 Days          3     292,283.06 
 90 Days           25    1,618,653.87         90 Days           1    132,812.83        90 Days         10     591,565.71 
 120 Days          29    1,247,780.20         120 Days         24  1,363,239.81        120 Days       115   8,001,221.86 
 150 Days           0            0.00         150 Days          0          0.00        150 Days         0           0.00 
 180+ Days          0            0.00         180+ Days         0          0.00        180+ Days        0           0.00 
                  ---   -------------                          --  ------------                       ---   ------------ 
                  241   15,565,021.20                          30  1,894,343.32                       129   8,928,862.95 

                                              0-29 Days  0.159490%     0.214320%       0-29 Days 0.039872%      0.024521%
 30 Days     5.143541%       4.685409%        30 Days    0.000000%     0.000000%       30 Days   0.000000%      0.000000%
 60 Days     2.312600%       2.424941%        60 Days    0.039872%     0.008696%       60 Days   0.119617%      0.163659%
 90 Days     0.996810%       0.906337%        90 Days    0.039872%     0.074366%       90 Days   0.398724%      0.331237%
 120 Days    1.156300%       0.698673%        120 Days   0.956938%     0.763322%       120 Days  4.585327%      4.480143%
 150 Days    0.000000%       0.000000%        150 Days   0.000000%     0.000000%       150 Days  0.000000%      0.000000%
 180+ Days   0.000000%       0.000000%        180+ Days  0.000000%     0.000000%       180+ Days 0.000000%      0.000000%
             --------        --------                    --------      --------                  --------       -------- 
             9.609250%      8.715360%                   1.196172%     1.060704%                 5.143541%      4.999560% 

REO                                 Total       
----------------------------------------------------------------------------    
1             No. of     Principal                      No. of      Principal   
           Loans      Balance                        Loans       Balance

0-29 Days          0            0.00         0-29 Days         5    426,552.81
30 Days            0            0.00         30 Days         129  8,367,812.30
60 Days            0            0.00         60 Days          62  4,638,588.08
90 Days            0            0.00         90 Days          36  2,343,032.41
120 Days          14      518,579.26         120 Days        182 11,130,821.13
150 Days           0            0.00         150 Days          0          0.00
180+ Days          0            0.00         180+ Days         0          0.00
                 ---   -------------                         --- -------------
                  14      518,579.26                         414 26,906,806.73

 0-29 Days   0.000000%       0.000000%        0-29 Days  0.199362%     0.238841%
 30 Days     0.000000%       0.000000%        30 Days    5.143541%     4.685409%
 60 Days     0.000000%       0.000000%        60 Days    2.472089%     2.597296%
 90 Days     0.000000%       0.000000%        90 Days    1.435407%     1.311940%
 120 Days    0.558214%       0.290369%        120 Days   7.256778%     6.232508%
 150 Days    0.000000%       0.000000%        150 Days   0.000000%     0.000000%
 180+ Days   0.000000%       0.000000%        180+ Days  0.000000%     0.000000%
            --------        --------                   ---------     ---------
             0.558214%       0.290369%                  16.507177%    15.065993%

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE                 
----------------------------------------------------------------------------------------------------------------------   
2             No. of     Principal                      No. of      Principal                      No. of   Principal    
               Loans      Balance                        Loans       Balance                        Loans    Balance     
                                                                                                                         
                                              0-29 Days         3    427,698.99        0-29 Days        4     244,654.09 
 30 Days           57    4,857,527.82         30 Days           0          0.00        30 Days          0           0.00 
 60 Days           17      855,584.54         60 Days           1    119,460.49        60 Days          2     196,411.07 
 90 Days           10      616,783.38         90 Days           0          0.00        90 Days          5     778,688.91 
 120 Days           2      508,390.15         120 Days         17  1,368,794.47        120 Days        59   4,552,672.77 
 150 Days           0            0.00         150 Days          0          0.00        150 Days         0           0.00 
 180+ Days          0            0.00         180+ Days         0          0.00        180+ Days        0           0.00 
                  ---   -------------                          --  ------------                       ---   ------------ 
                   86    6,838,285.89                          21  1,915,953.95                        70   5,772,426.84 

                                              0-29 Days  0.433526%     0.754636%       0-29 Days 0.578035%      0.431670%
 30 Days     8.236994%       8.570671%        30 Days    0.000000%     0.000000%       30 Days   0.000000%      0.000000%
 60 Days     2.456647%       1.509602%        60 Days    0.144509%     0.210777%       60 Days   0.289017%      0.346550%
 90 Days     1.445087%       1.088259%        90 Days    0.000000%     0.000000%       90 Days   0.722543%      1.373927%
 120 Days    0.289017%       0.897009%        120 Days   2.456647%     2.415115%       120 Days  8.526012%      8.032781%
 150 Days    0.000000%       0.000000%        150 Days   0.000000%     0.000000%       150 Days  0.000000%      0.000000%
 180+ Days   0.000000%       0.000000%        180+ Days  0.000000%     0.000000%       180+ Days 0.000000%      0.000000%
             --------        --------                    --------      --------                  --------       -------- 
            12.427746%      12.065540%                   3.034682%     3.380528%                10.115607%     10.184928%

REO                                 Total       
----------------------------------------------------------------------------    
2             No. of     Principal                      No. of      Principal   
            Loans       Balance                        Loans       Balance

0-29 Days          0            0.00         0-29 Days         7    672,353.08
30 Days            0            0.00         30 Days          57  4,857,527.82
60 Days            0            0.00         60 Days          20  1,171,456.10
90 Days            1       90,716.84         90 Days          16  1,486,189.13
120 Days           6      286,622.76         120 Days         84  6,716,480.15
150 Days           0            0.00         150 Days          0          0.00
180+ Days          0            0.00         180+ Days         0          0.00
                 ---   -------------                         --- -------------
                   7      377,339.60                         184 14,904,006.28

 0-29 Days   0.000000%       0.000000%        0-29 Days  1.011561%     1.186307%
 30 Days     0.000000%       0.000000%        30 Days    8.236994%     8.570671%
 60 Days     0.000000%       0.000000%        60 Days    2.890173%     2.066929%
 90 Days     0.144509%       0.160062%        90 Days    2.312139%     2.622247%
 120 Days    0.867052%       0.505720%        120 Days  12.138728%    11.850625%
 150 Days    0.000000%       0.000000%        150 Days   0.000000%     0.000000%
 180+ Days   0.000000%       0.000000%        180+ Days  0.000000%     0.000000%
            --------        --------                   ---------     ---------
             1.011561%       0.665782%                  26.589595%    26.296778%

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                             31-May-2001                            
Distribution Date:                       15-Jun-2001                            

 DFH Series 2000-2

COLLATERAL STATEMENT

Collateral Description                                      Fixed & Mixed ARM   

Weighted Average Gross Coupon                                       10.993752%  

Weighted Average Net Coupon                                         10.468754%  

Weighted Average Pass-Through Rate                                  10.468754%  

Weighted Average Maturity (Stepdown Calculation)                          348   

Beginning Scheduled Collateral Loan Count                               3,286   

Number of Loans Paid in Full                                               86   

Ending Scheduled Collateral Loan Count                                  3,200   

Beginning Scheduled Collateral Balance                         242,742,530.45   

Ending Scheduled Collateral Balance                            235,105,323.97   

Ending Actual Collateral Balance at 31-May-2001                235,269,152.69   

Monthly P&I Constant                                             2,443,894.13   

Ending Scheduled Balance for Premium Loans                     235,105,323.97   

Scheduled Principal                                                220,018.09   

Unscheduled Principal                                            7,417,188.39   

Required Overcollateralized Amount                                       0.00   

Overcollateralized Increase Amount                                 384,075.54   

Overcollateralized Reduction Amount                                      0.00   

Specified O/C Amount                                             4,468,750.00   

Overcollateralized Amount                                        3,359,456.11   

Overcollateralized Deficiency Amount                             1,493,369.43   

Base Overcollateralization Amount                                        0.00   

Extra Principal Distribution Amount                                384,075.54   

Excess Cash Amount                                                 384,075.54   

Group F Curtailment                                                $80,371.57   
Group A Curtailment                                                 $4,160.74   

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Delta Funding Corporation                                                     
Mortgage Pass-Through Certificates                                            
Record Date:                             31-May-2001                          
Distribution Date:                       15-Jun-2001                          

 DFH Series 2000-2

                                                        [Enlarge/Download Table]


   Group                                       1                  2              Total
                                                                                      
Collateral  Description            Fixed 30 Year  6 Month LIBOR ARM  Fixed & Mixed ARM
Weighted Average Coupon Rate           11.009609          10.943381          10.993752
Weighted Average Net Rate              10.484609          10.418381          10.468754
Weighted Average Maturity                 300.00             348.00             348.00
Record Date                           05/31/2001         05/31/2001         05/31/2001
Principal And  Interest Constant    1,889,019.47         554,874.66       2,443,894.13
Beginning Loan Count                       2,577                709              3,286
Loans Paid In Full                            69                 17                 86
Ending Loan Count                          2,508                692              3,200
Beginning Scheduled Balance       184,624,851.69      58,117,678.76     242,742,530.45
Ending Scheduled Balance          178,465,533.57      56,639,790.40     235,105,323.97
Scheduled Principal                   195,146.68          24,871.41         220,018.09
Unscheduled Principal               5,964,171.44       1,453,016.95       7,417,188.39
Scheduled Interest                  1,693,872.79         530,003.25       2,223,876.04
Servicing Fee                          76,927.02          24,215.70         101,142.72
Master Servicing Fee                        0.00               0.00               0.00
Trustee Fee                             3,846.35           1,210.79           5,057.14
FRY Amount                                  0.00               0.00               0.00
Special Hazard Fee                          0.00               0.00               0.00
Other Fee                                   0.00               0.00               0.00
Pool Insurance Fee                          0.00               0.00               0.00
Spread 1                                    0.00               0.00               0.00
Spread 2                                    0.00               0.00               0.00
Spread 3                                    0.00               0.00               0.00
Net Interest                        1,613,099.42         504,576.76       2,117,676.18
Realized Loss Amount                        0.00               0.00               0.00
Cumulative Realized Loss                    0.00               0.00               0.00
Percentage of Cumulative Losses             0.00               0.00               0.00

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EXHIBIT T                                                                       

Delta Funding Corporation                                                   
Mortgage Pass-Through Certificates                                          
Record Date:                              31-May-2001                       
Distribution Date:                        15-Jun-2001                       

 DFH Series 2000-3

Certificateholder Distribution Summary

                                                        [Enlarge/Download Table]

                             Certificate   Certificate    Beginning                                   
                                Class     Pass-Through   Certificate          Interest     Principal  
Class       CUSIP            Description      Rate         Balance          Distribution  Distribution
                                                                                                      
 A_1F   24763LGZ7               SEN         7.26000%     30,188,248.69        182,638.90  3,418,807.40
 A_2F   24763LHA1               SEN         7.17000%     12,000,000.00         71,700.00          0.00
 A_3F   24763LHB9               SEN         7.31000%     29,000,000.00        176,658.33          0.00
 A_4F   24763LHC7               SEN         7.61000%      8,000,000.00         50,733.33          0.00
 A 5F   24763LHD5               SEN         7.89000%     17,500,000.00        115,062.50          0.00
 A 6F   24763LHE3               SEN         7.51000%     12,000,000.00         75,100.00          0.00
 IOF    24763LHF0               SEN         9.20000%              0.00        334,266.67          0.00
 A_1A   24763LHG8               SEN         4.37250%     49,608,744.23        186,787.26  1,560,451.51
 M_1    24763LHH6               MEZ         7.89000%      9,500,000.00         62,462.50          0.00
 M_2    24763LHJ2               MEZ         7.89000%      8,500,000.00         55,887.50          0.00
  B     24763LHK9               JUN         7.89000%      6,500,000.00         42,737.50          0.00
 BIO    DFH003BIO               JUN         0.00000%              0.00              0.00          0.00
 R_1    DFH0003R1               SEN         0.00000%              0.00              0.00          0.00
 R_2    DFH0003R2               SEN         0.00000%              0.00              0.00          0.00
 R_3    DFH0003R3               SEN         0.00000%              0.00              0.00          0.00
  P     DFH00003P               JUN         0.00000%            100.00        133,821.33          0.00

Totals                                                  182,797,092.92      1,487,855.82  4,979,258.91


                Current      Ending                                Cumulative                         
                Realized   Certificate         Total                Realized                          
Class            Loss        Balance       Distribution              Losses                           
                                                                                                      
 A_1F            0.00     26,769,441.29    3,601,446.30               0.00                            
 A_2F            0.00     12,000,000.00       71,700.00               0.00                            
 A_3F            0.00     29,000,000.00      176,658.33               0.00                            
 A_4F            0.00      8,000,000.00       50,733.33               0.00                            
 A 5F            0.00     17,500,000.00      115,062.50               0.00                            
 A 6F            0.00     12,000,000.00       75,100.00               0.00                            
 IOF             0.00              0.00      334,266.67               0.00                            
 A_1A            0.00     48,048,292.72    1,747,238.77               0.00                            
 M_1             0.00      9,500,000.00       62,462.50               0.00                            
 M_2             0.00      8,500,000.00       55,887.50               0.00                            
  B              0.00      6,500,000.00       42,737.50               0.00                            
 BIO             0.00              0.00            0.00               0.00                            
 R_1             0.00              0.00            0.00               0.00                            
 R_2             0.00              0.00            0.00               0.00                            
 R_3             0.00              0.00            0.00               0.00                            
  P              0.00            100.00      133,821.33               0.00                            

Totals           0.00    177,817,834.01    6,467,114.73               0.00                            


All distributions required by the Pooling and Servicing Agreement have been     
calculated by the Certificate Administrator on behalf of the Trustee.           

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Delta Funding Corporation                                               
Mortgage Pass-Through Certificates                                      
Record Date:                      31-May-2001                           
Distribution Date:                  15-Jun-2001                         

 DFH Series 2000-3

Principal Distribution Statement

                                                        [Enlarge/Download Table]

               Original       Beginning        Scheduled   Unscheduled                  
                Face         Certificate       Principal     Principal                  
Class          Amount          Balance       Distribution  Distribution        Accretion
                                                                                        
A_1F      42,000,000.00     30,188,248.69      126,346.42  3,292,460.98          0.00   
A_2F      12,000,000.00     12,000,000.00            0.00          0.00          0.00   
A_3F      29,000,000.00     29,000,000.00            0.00          0.00          0.00   
A_4F       8,000,000.00      8,000,000.00            0.00          0.00          0.00   
A_5F      17,500,000.00     17,500,000.00            0.00          0.00          0.00   
A_6F      12,000,000.00     12,000,000.00            0.00          0.00          0.00   
IOF                0.00              0.00            0.00          0.00          0.00   
A_1A      55,000,000.00     49,608,744.23       19,471.01  1,540,980.50          0.00   
M_1        9,500,000.00      9,500,000.00            0.00          0.00          0.00   
M_2        8,500,000.00      8,500,000.00            0.00          0.00          0.00   
 B         6,500,000.00      6,500,000.00            0.00          0.00          0.00   
BIO                0.00              0.00            0.00          0.00          0.00   
 P               100.00            100.00            0.00          0.00          0.00   
                 100.00            100.00            0.00          0.00          0.00   
 Totals  200,000,200.00    182,797,192.92      145,817.43  4,833,441.48          0.00   


                                 Total         Ending          Ending         Total     
                 Realized      Principal     Certificate     Certificate    Principal   
Class            Loss (1)      Reduction       Balance       Percentage   Distribution  
                                                                                        
A_1F               0.00      3,418,807.40   26,769,441.29    0.63736765   3,418,807.40  
A_2F               0.00              0.00   12,000,000.00    1.00000000           0.00  
A_3F               0.00              0.00   29,000,000.00    1.00000000           0.00  
A_4F               0.00              0.00    8,000,000.00    1.00000000           0.00  
A_5F               0.00              0.00   17,500,000.00    1.00000000           0.00  
A_6F               0.00              0.00   12,000,000.00    1.00000000           0.00  
IOF                0.00              0.00            0.00    0.00000000           0.00  
A_1A               0.00      1,560,451.51   48,048,292.72    0.87360532   1,560,451.51  
M_1                0.00              0.00    9,500,000.00    1.00000000           0.00  
M_2                0.00              0.00    8,500,000.00    1.00000000           0.00  
 B                 0.00              0.00    6,500,000.00    1.00000000           0.00  
BIO                0.00              0.00            0.00    0.00000000           0.00  
 P                 0.00              0.00          100.00    1.00000000           0.00  
                   0.00              0.00          100.00    1.00000000           0.00  

 Totals            0.00      4,979,258.91  177,817,934.01    0.88908878   4,979,258.91  

(1)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Corporation                                           
Mortgage Pass-Through Certificates                                  
Record Date:                        31-May-2001                     
Distribution Date:                  15-Jun-2001                     

 DFH Series 2000-3

Principal Distribution Factors Statement

                                                        [Enlarge/Download Table]

              Original         Beginning        Scheduled    Unscheduled                             
                Face          Certificate       Principal     Principal                      Realized
Class (2)      Amount           Balance       Distribution  Distribution   Accretion         Loss (3)
                                                                                                     
   A_1F    42,000,000.00      718.76782595     3.00824810   78.39192810    0.00000000      0.00000000
   A_2F    12,000,000.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000
   A_3F    29,000,000.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000
   A_4F     8,000,000.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000
   A_5F    17,500,000.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000
   A_6F    12,000,000.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000
    IOF             0.00        0.00000000     0.00000000    0.00000000    0.00000000      0.00000000
   A_1A    55,000,000.00      901.97716782     0.35401836   28.01782727    0.00000000      0.00000000
    M_1     9,500,000.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000
    M_2     8,500,000.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000
     B      6,500,000.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000
    BIO             0.00        0.00000000     0.00000000    0.00000000    0.00000000      0.00000000
    R_1             0.00        0.00000000     0.00000000    0.00000000    0.00000000      0.00000000
    R_2             0.00        0.00000000     0.00000000    0.00000000    0.00000000      0.00000000
    R_3             0.00        0.00000000     0.00000000    0.00000000    0.00000000      0.00000000
     P            100.00     1000.00000000     0.00000000    0.00000000    0.00000000      0.00000000


                    Total               Ending                  Ending             Total             
                  Principal           Certificate             Certificate        Principal           
Class (2)         Reduction             Balance               Percentage        Distribution         
                                                                                                     
   A_1F         81.40017619           637.36764976            0.63736765        81.40017619          
   A_2F          0.00000000          1000.00000000            1.00000000         0.00000000          
   A_3F          0.00000000          1000.00000000            1.00000000         0.00000000          
   A_4F          0.00000000          1000.00000000            1.00000000         0.00000000          
   A_5F          0.00000000          1000.00000000            1.00000000         0.00000000          
   A_6F          0.00000000          1000.00000000            1.00000000         0.00000000          
    IOF          0.00000000             0.00000000            0.00000000         0.00000000          
   A_1A         28.37184564           873.60532218            0.87360532        28.37184564          
    M_1          0.00000000          1000.00000000            1.00000000         0.00000000          
    M_2          0.00000000          1000.00000000            1.00000000         0.00000000          
     B           0.00000000          1000.00000000            1.00000000         0.00000000          
    BIO          0.00000000             0.00000000            0.00000000         0.00000000          
    R_1          0.00000000             0.00000000            0.00000000         0.00000000          
    R_2          0.00000000             0.00000000            0.00000000         0.00000000          
    R_3          0.00000000             0.00000000            0.00000000         0.00000000          
     P           0.00000000          1000.00000000            1.00000000         0.00000000          


(2)      All classes are per $1,000 denomination.                               

(3)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Corporation                                             
Mortgage Pass-Through Certificates                                    
Record Date:                        31-May-2001                       
Distribution Date:                  15-Jun-2001                       

 DFH Series 2000-3

 Interest Distribution Statement

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current      Payment of         Current   
Class         Face               Certificate        Certificate/           Accrued        Unpaid           Interest  
             Amount                  Rate             Notional             Interest      Interest         Shortfall  
                                                      Balance                            Shortfall                   
---------------------------------------------------------------------------------------------------------------------
                                                                                                                     
A_1F          42,000,000.00             7.26000%       30,188,248.69      182,638.90        0.00            0.00     
A_2F          12,000,000.00             7.17000%       12,000,000.00       71,700.00        0.00            0.00     
A_3F          29,000,000.00             7.31000%       29,000,000.00      176,658.33        0.00            0.00     
A_4F           8,000,000.00             7.61000%        8,000,000.00       50,733.33        0.00            0.00     
A_5F          17,500,000.00             7.89000%       17,500,000.00      115,062.50        0.00            0.00     
A_6F          12,000,000.00             7.51000%       12,000,000.00       75,100.00        0.00            0.00     
IOF                    0.00             9.20000%       43,600,000.00      334,266.67        0.00            0.00     
A_1A          55,000,000.00             4.37250%       49,608,744.23      186,787.26        0.00            0.00     
M_1            9,500,000.00             7.89000%        9,500,000.00       62,462.50        0.00            0.00     
M_2            8,500,000.00             7.89000%        8,500,000.00       55,887.50        0.00            0.00     
B              6,500,000.00             7.89000%        6,500,000.00       42,737.50        0.00            0.00     
BIO                    0.00             0.00000%                0.00            0.00        0.00            0.00     
R_1                    0.00             0.00000%                0.00            0.00        0.00            0.00     
R_2                    0.00             0.00000%                0.00            0.00        0.00            0.00     
R_3                    0.00             0.00000%                0.00            0.00        0.00            0.00     
P                    100.00             0.00000%              100.00            0.00        0.00            0.00     

Totals       200,000,100.00                                             1,354,034.49        0.00            0.00     


                     Non-Supported                 Total        Remaining         Ending                             
Class                  Interest     Realized      Interest        Unpaid        Certificate/                         
                      Shortfall     Loss (4)    Distribution     Interest        Notional                            
                                                                Shortfall        Balance                             
-----------------------------------------------------------------------------------------------                      
                                                                                                                     

A_1F                    0.00        0.00        182,638.90        0.00        26,769,441.29                          
A_2F                    0.00        0.00         71,700.00        0.00        12,000,000.00                          
A_3F                    0.00        0.00        176,658.33        0.00        29,000,000.00                          
A_4F                    0.00        0.00         50,733.33        0.00         8,000,000.00                          
A_5F                    0.00        0.00        115,062.50        0.00        17,500,000.00                          
A_6F                    0.00        0.00         75,100.00        0.00        12,000,000.00                          
IOF                     0.00        0.00        334,266.67        0.00        38,400,000.00                          
A_1A                    0.00        0.00        186,787.26        0.00        48,048,292.72                          
M_1                     0.00        0.00         62,462.50        0.00         9,500,000.00                          
M_2                     0.00        0.00         55,887.50        0.00         8,500,000.00                          
B                       0.00        0.00         42,737.50        0.00         6,500,000.00                          
BIO                     0.00        0.00              0.00        0.00                 0.00                          
R_1                     0.00        0.00              0.00        0.00                 0.00                          
R_2                     0.00        0.00              0.00        0.00                 0.00                          
R_3                     0.00        0.00              0.00        0.00                 0.00                          
P                       0.00        0.00        133,821.33        0.00               100.00                          

Totals                  0.00        0.00      1,487,855.82        0.00                                               

(4)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

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Delta Funding Corporation                                             
Mortgage Pass-Through Certificates                                    
Record Date:                      31-May-2001                         
Distribution Date:                  15-Jun-2001                       

 DFH Series 2000-3

 Interest Distribution Factors Statement

                                                        [Enlarge/Download Table]

                Original         Current         Beginning        Current     Payment of     Current  
Class (5)         Face         Certificate      Certificate/      Accrued       Unpaid      Interest  
                 Amount           Rate            Notional        Interest     Interest     Shortfall 
                                                  Balance                      Shortfall              
                                                                                                      
  A_1F       42,000,000.00       7.26000%      718.76782595      4.34854524   0.00000000    0.00000000
  A_2F       12,000,000.00       7.17000%     1000.00000000      5.97500000   0.00000000    0.00000000
  A_3F       29,000,000.00       7.31000%     1000.00000000      6.09166655   0.00000000    0.00000000
  A_4F        8,000,000.00       7.61000%     1000.00000000      6.34166625   0.00000000    0.00000000
  A_5F       17,500,000.00       7.89000%     1000.00000000      6.57500000   0.00000000    0.00000000
  A_6F       12,000,000.00       7.51000%     1000.00000000      6.25833333   0.00000000    0.00000000
   IOF                0.00       9.20000%      893.44262295      6.84972684   0.00000000    0.00000000
  A_1A       55,000,000.00       4.37250%      901.97716782      3.39613200   0.00000000    0.00000000
  M_1         9,500,000.00       7.89000%     1000.00000000      6.57500000   0.00000000    0.00000000
  M_2         8,500,000.00       7.89000%     1000.00000000      6.57500000   0.00000000    0.00000000
   B          6,500,000.00       7.89000%     1000.00000000      6.57500000   0.00000000    0.00000000
  BIO                 0.00       0.00000%        0.00000000      0.00000000   0.00000000    0.00000000
  R_1                 0.00       0.00000%        0.00000000      0.00000000   0.00000000    0.00000000
  R_2                 0.00       0.00000%        0.00000000      0.00000000   0.00000000    0.00000000
  R_3                 0.00       0.00000%        0.00000000      0.00000000   0.00000000    0.00000000
    P               100.00       0.00000%     1000.00000000      0.00000000   0.00000000    0.00000000


           Non-Supported                    Total             Remaining         Ending                
Class (5)   Interest        Realized       Interest             Unpaid        Certificate/            
            Shortfall        Loss (6)    Distribution          Interest         Notional              
                                                               Shortfall         Balance              
                                                                                                      
  A_1F      0.00000000     0.00000000       4.34854524        0.00000000      637.36764976            
  A_2F      0.00000000     0.00000000       5.97500000        0.00000000     1000.00000000            
  A_3F      0.00000000     0.00000000       6.09166655        0.00000000     1000.00000000            
  A_4F      0.00000000     0.00000000       6.34166625        0.00000000     1000.00000000            
  A_5F      0.00000000     0.00000000       6.57500000        0.00000000     1000.00000000            
  A_6F      0.00000000     0.00000000       6.25833333        0.00000000     1000.00000000            
   IOF      0.00000000     0.00000000       6.84972684        0.00000000      786.88524590            
  A_1A      0.00000000     0.00000000       3.39613200        0.00000000      873.60532218            
  M_1       0.00000000     0.00000000       6.57500000        0.00000000     1000.00000000            
  M_2       0.00000000     0.00000000       6.57500000        0.00000000     1000.00000000            
   B        0.00000000     0.00000000       6.57500000        0.00000000     1000.00000000            
  BIO       0.00000000     0.00000000       0.00000000        0.00000000        0.00000000            
  R_1       0.00000000     0.00000000       0.00000000        0.00000000        0.00000000            
  R_2       0.00000000     0.00000000       0.00000000        0.00000000        0.00000000            
  R_3       0.00000000     0.00000000       0.00000000        0.00000000        0.00000000            
    P       0.00000000     0.00000000   38213.30000000        0.00000000     1000.00000000            


(5)      All classes are per $1,000 denomination                                

(6)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

 DFH Series 2000-3

 Certificateholder Account Statement

                                                                [Download Table]

-----------------------------------------------------------------------------------
                               CERTIFICATE ACCOUNT                                 
-----------------------------------------------------------------------------------
                                                                                   
Beginning Balance                                                              0.00

Deposits                                                                           
    Payments of Interest and Principal                                 5,385,820.39
    Liquidations, Insurance Proceeds, Reserve Funds                            0.00
    Proceeds from Repurchased Loans                                            0.00
    Other Amounts (Servicer Advances)                                  1,155,429.67

    Realized Losses                                                            0.00
                                                                       ------------
Total Deposits                                                         6,541,250.06

Withdrawals                                                                        
    Reimbursement for Servicer Advances                                        0.00
    Payment of Service Fee                                                74,135.33
    Payment of Interest and Principal                                  6,467,114.73
                                                                       ------------
Total Withdrawals (Pool Distribution Amount)                           6,541,250.06

Ending Balance                                                                 0.00
                                                                       ============
-----------------------------------------------------------------------------------
                    PREPAYMENT/CURTAILMENT INTEREST SHORTFALL                      
-----------------------------------------------------------------------------------

Total Prepayment/Curtailment Interest Shortfall                           17,897.66

Servicing Fee Support                                                     17,897.66
                                                                       ------------
Non-Supported Prepayment/Curtailment Interest Shortfall                        0.00
                                                                       ============
-----------------------------------------------------------------------------------
                                 SERVICING FEES                                    
-----------------------------------------------------------------------------------

Gross Servicing Fee                                                       76,871.31
Trustee - Wells Fargo Bank N.A                                             4,608.55
Supported Prepayment/Curtailment Interest Shortfall                       17,897.66
                                                                       ------------
Net Servicing Fee                                                         63,582.20
                                                                       ============
-----------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                               Beginning                  Current            Current               Ending   
       Account Type             Balance                 Withdrawals          Deposits              Balance  
------------------------------------------------------------------------------------------------------------
                                                                                                            
 Net Rate Cap Fund             10,000.00                   0.00                0.00                10,000.00
 LIBOR Carryover Fund          10,000.00                   0.00                0.00                10,000.00

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

 DFH Series 2000-3

 Loan Status Stratification/Credit Enhancement Statement

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE              
----------------------------------------------------------------------------------------------------------------------
                 No. of     Principal                   No. of    Principal                   No. of   Principal      
                  Loans      Balance                    Loans      Balance                     Loans    Balance       
                                                                                                                      
                                          0-29 Days        7     447,659.09    0-29 Days         3       85,787.43    
   30 Days         151    9,686,134.65    30 Days          0           0.00    30 Days           1       87,123.90    
   60 Days          61    3,882,009.08    60 Days          2      75,167.02    60 Days           5      382,984.02    
   90 Days          20    1,451,664.97    90 Days          1     101,272.62    90 Days          14    1,432,204.34    
   120 Days         17      671,023.12    120 Days        10     608,882.03    120 Days        163   10,010,253.97    
   150 Days          0            0.00    150 Days         0           0.00    150 Days          0            0.00    
   180+ Days         0            0.00    180+ Days        0           0.00    180+ Days         0            0.00    
                   ---   -------------                    --   ------------                    ---   -------------    
                   249   15,690,831.82                    20   1,232,980.76                    186   11,998,353.66    


                REO                                 Total                                                             
-----------------------------------------------------------------------------                                         
                No. of    Principal                  No. of    Principal                                              
                 Loans     Balance                    Loans     Balance                                               
                                                                                                                      
0-29 Days          0          0.00    0-29 Days        10     533,446.52                                              
30 Days            0          0.00    30 Days         152   9,773,258.55                                              
60 Days            0          0.00    60 Days          68   4,340,160.12                                              
90 Days            0          0.00    90 Days          35   2,985,141.93                                              
120 Days           5    334,061.41    120 Days        195  11,624,220.53                                              
150 Days           0          0.00    150 Days          0           0.00                                              
180+ Days          0          0.00    180+ Days         0           0.00                                              
                   -    ----------                    ---  -------------                                              
                   5    334,061.41                    460  29,256,227.65                                              

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE              
----------------------------------------------------------------------------------------------------------------------
              No. of          Principal              No. of        Principal               No. of         Principal   
               Loans           Balance                Loans         Balance                Loans           Balance    
                                                                                                                      
                                          0-29 Days 0.265152%      0.248967%   0-29 Days  0.113636%       0.047711%   
   30 Days    5.719697%       5.386983%   30 Days   0.000000%      0.000000%   30 Days    0.037879%       0.048454%   
   60 Days    2.310606%       2.158995%   60 Days   0.075758%      0.041804%   60 Days    0.189394%       0.212998%   
   90 Days    0.757576%       0.807349%   90 Days   0.037879%      0.056323%   90 Days    0.530303%       0.796526%   
   120 Days   0.643939%       0.373192%   120 Days  0.378788%      0.338632%   120 Days   6.174242%       5.567244%   
   150 Days   0.000000%       0.000000%   150 Days  0.000000%      0.000000%   150 Days   0.000000%       0.000000%   
   180+ Days  0.000000%       0.000000%   180+ Days 0.000000%      0.000000%   180+ Days  0.000000%       0.000000%   
              --------        --------              --------       --------               --------        --------    
              9.431818%       8.726520%             0.757576%      0.685727%              7.045455%       6.672933%   


                REO                                 Total                                                             
-----------------------------------------------------------------------------                                         
              No. of       Principal               No. of       Principal                                             
              Loans        Balance                 Loans         Balance                                              
                                                                                                                      
0-29 Days   0.000000%     0.000000%   0-29 Days  0.378788%      0.296678%                                             
30 Days     0.000000%     0.000000%   30 Days    5.757576%      5.435438%                                             
60 Days     0.000000%     0.000000%   60 Days    2.575758%      2.413798%                                             
90 Days     0.000000%     0.000000%   90 Days    1.325758%      1.660199%                                             
120 Days    0.189394%     0.185790%   120 Days   7.386364%      6.464858%                                             
150 Days    0.000000%     0.000000%   150 Days   0.000000%      0.000000%                                             
180+ Days   0.000000%     0.000000%   180+ Days  0.000000%      0.000000%                                             
            --------      --------              ---------      ---------                                              
            0.189394%     0.185790%             17.424242%     16.270970%                                             


(7)      The 120 day category for delinquent, bankruptcy, foreclosure, and REO  
contains loans that are 120 days or more delinquent.          

                                                        [Enlarge/Download Table]
                                                                                                           
Current Period Realized Loss -                                                                             
  Includes Interest Shortfall              0.00  Principal Balance of Contaminated Properties          0.00
Cumulative Realized Losses -                                                                               
  Includes Interest Shortfall              0.00  Periodic Advance                              1,155,429.67

Current Period Class A Insufficient Funds  0.00                                                            


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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

 DFH Series 2000-3

 Delinquency Status By Group

                                                        [Enlarge/Download Table]

                     DELINQUENT                             BANKRUPTCY                             FORECLOSURE        
----------------------------------------------------------------------------------------------------------------------
1               No. of       Principal                No. of      Principal                 No. of       Principal    
                 Loans         Balance                 Loans        Balance                  Loans         Balance    
                                                                                                                      

                                          0-29 Days        5     273,623.77    0-29 Days         3       85,787.43    
   30 Days          99    6,142,977.50    30 Days          0           0.00    30 Days           1       87,123.90    
   60 Days          41    2,377,455.79    60 Days          2      75,167.02    60 Days           3      265,726.87    
   90 Days          16    1,184,426.31    90 Days          0           0.00    90 Days          10      858,117.37    
   120 Days         10      223,506.31    120 Days         5     310,172.75    120 Days         98    5,887,656.77    
   150 Days          0            0.00    150 Days         0           0.00    150 Days          0            0.00    
   180+ Days         0            0.00    180+ Days        0           0.00    180+ Days         0            0.00    
                   ---    ------------                    --     ----------                    ---    ------------    
                   166    9,928,365.91                    12     658,963.54                    115    7,184,412.34    

                                          0-29 Days 0.251762%      0.211343%   0-29 Days  0.151057%       0.066261%   
   30 Days    4.984894%       4.744738%   30 Days   0.000000%      0.000000%   30 Days    0.050352%       0.067293%   
   60 Days    2.064451%       1.836309%   60 Days   0.100705%      0.058058%   60 Days    0.151057%       0.205243%   
   90 Days    0.805639%       0.914832%   90 Days   0.000000%      0.000000%   90 Days    0.503525%       0.662796%   
   120 Days   0.503525%       0.172633%   120 Days  0.251762%      0.239572%   120 Days   4.934542%       4.547532%   
   150 Days   0.000000%       0.000000%   150 Days  0.000000%      0.000000%   150 Days   0.000000%       0.000000%   
   180+ Days  0.000000%       0.000000%   180+ Days 0.000000%      0.000000%   180+ Days  0.000000%       0.000000%   
              --------        --------              --------       --------               --------        --------    
              8.358510%       7.668511%             0.604230%      0.508973%              5.790534%       5.549126%   


                       REO                                 Total                                                      
-----------------------------------------------------------------------------                                         
               No. of     Principal                 No. of      Principal                                             
                Loans       Balance                  Loans        Balance                                             
                                                                                                                      
 0-29 Days          0          0.00    0-29 Days         8     359,411.20                                             
 30 Days            0          0.00    30 Days         100   6,230,101.40                                             
 60 Days            0          0.00    60 Days          46   2,718,349.68                                             
 90 Days            0          0.00    90 Days          26   2,042,543.68                                             
 120 Days           4    234,472.82    120 Days        117   6,655,808.65                                             
 150 Days           0          0.00    150 Days          0           0.00                                             
 180+ Days          0          0.00    180+ Days         0           0.00                                             
                    -    ----------                    ---  -------------                                             
                    4    234,472.82                    297  18,006,214.61                                             

 0-29 Days   0.000000%     0.000000%   0-29 Days  0.402820%      0.277603%                                            
 30 Days     0.000000%     0.000000%   30 Days    5.035247%      4.812031%                                            
 60 Days     0.000000%     0.000000%   60 Days    2.316213%      2.099610%                                            
 90 Days     0.000000%     0.000000%   90 Days    1.309164%      1.577628%                                            
 120 Days    0.201410%     0.181103%   120 Days   5.891239%      5.140840%                                            
 150 Days    0.000000%     0.000000%   150 Days   0.000000%      0.000000%                                            
 180+ Days   0.000000%     0.000000%   180+ Days  0.000000%      0.000000%                                            
             --------      --------              ---------      ---------                                             
             0.201410%     0.181103%             14.954683%     13.907713%                                            


                                                        [Enlarge/Download Table]

                   DELINQUENT                             BANKRUPTCY                             FORECLOSURE          
----------------------------------------------------------------------------------------------------------------------
2               No. of       Principal                No. of      Principal                 No. of       Principal    
                 Loans         Balance                 Loans        Balance                  Loans         Balance    
                                                                                                                      
                                          0-29 Days        2     174,035.32    0-29 Days         0            0.00    
   30 Days          52    3,543,157.15    30 Days          0           0.00    30 Days           0            0.00    
   60 Days          20    1,504,553.29    60 Days          0           0.00    60 Days           2      117,257.15    
   90 Days           4      267,238.66    90 Days          1     101,272.62    90 Days           4      574,086.97    
   120 Days          7      447,516.81    120 Days         5     298,709.28    120 Days         65    4,122,597.20    
   150 Days          0            0.00    150 Days         0           0.00    150 Days          0            0.00    
   180+ Days         0            0.00    180+ Days        0           0.00    180+ Days         0            0.00    
                    --    ------------                     -     ----------                     --    ------------    
                    83    5,762,465.91                     8     574,017.22                     71    4,813,941.32    

                                          0-29 Days 0.305810%      0.345740%   0-29 Days  0.000000%       0.000000%   
   30 Days    7.951070%       7.038870%   30 Days   0.000000%      0.000000%   30 Days    0.000000%       0.000000%   
   60 Days    3.058104%       2.988960%   60 Days   0.000000%      0.000000%   60 Days    0.305810%       0.232944%   
   90 Days    0.611621%       0.530899%   90 Days   0.152905%      0.201189%   90 Days    0.611621%       1.140487%   
   120 Days   1.070336%       0.889041%   120 Days  0.764526%      0.593419%   120 Days   9.938838%       8.189991%   
   150 Days   0.000000%       0.000000%   150 Days  0.000000%      0.000000%   150 Days   0.000000%       0.000000%   
   180+ Days  0.000000%       0.000000%   180+ Days 0.000000%      0.000000%   180+ Days  0.000000%       0.000000%   
             ---------       ---------              --------       --------              ---------        --------    
             12.691131%      11.447770%             1.223242%      1.140348%             10.856269%       9.563422%   



                       REO                                 Total                                                      
-----------------------------------------------------------------------------                                         
               No. of     Principal                 No. of      Principal                                             
                Loans       Balance                  Loans        Balance                                             
                                                                                                                      

 0-29 Days          0          0.00    0-29 Days         2     174,035.32                                             
 30 Days            0          0.00    30 Days          52   3,543,157.15                                             
 60 Days            0          0.00    60 Days          22   1,621,810.44                                             
 90 Days            0          0.00    90 Days           9     942,598.25                                             
 120 Days           1     99,588.59    120 Days         78   4,968,411.88                                             
 150 Days           0          0.00    150 Days          0           0.00                                             
 180+ Days          0          0.00    180+ Days         0           0.00                                             
                    -     ---------                    ---  -------------                                             
                    1     99,588.59                    163  11,250,013.04                                             

 0-29 Days   0.000000%     0.000000%   0-29 Days  0.305810%      0.345740%                                            
 30 Days     0.000000%     0.000000%   30 Days    7.951070%      7.038870%                                            
 60 Days     0.000000%     0.000000%   60 Days    3.363914%      3.221904%                                            
 90 Days     0.000000%     0.000000%   90 Days    1.376147%      1.872575%                                            
 120 Days    0.152905%     0.197844%   120 Days  11.926606%      9.870294%                                            
 150 Days    0.000000%     0.000000%   150 Days   0.000000%      0.000000%                                            
 180+ Days   0.000000%     0.000000%   180+ Days  0.000000%      0.000000%                                            
             --------      --------              ---------      ---------                                             
             0.152905%     0.197844%             24.923547%     22.349383%                                            


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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                             31-May-2001                            
Distribution Date:                       15-Jun-2001                            

 DFH Series 2000-3

COLLATERAL STATEMENT

Collateral Description                                    Fixed & Mixed ARM     

Weighted Average Gross Coupon                                     11.737372%    

Weighted Average Net Coupon                                       11.236967%    

Weighted Average Pass-Through Rate                                11.206966%    

Weighted Average Maturity (Stepdown Calculation)                        352     

Beginning Scheduled Collateral Loan Count                             2,700     

Number of Loans Paid in Full                                             60     

Ending Scheduled Collateral Loan Count                                2,640     

Beginning Scheduled Collateral Balance                       184,341,936.33     

Ending Scheduled Collateral Balance                          179,719,684.84     

Ending Actual Collateral Balance at 31-May-2001              179,806,288.94     

Monthly P&I Constant                                           2,082,713.62     

Ending Scheduled Balance for Premium Loans                   179,719,684.84     

Required Overcollateralized Amount                                     0.00     

Overcollateralized Increase Amount                               357,007.43     

Overcollateralized Reduction Amount                                    0.00     

Specified O/C Amount                                           4,500,000.00     

Overcollateralized Amount                                      1,901,850.82     

Overcollateralized Deficiency Amount                           2,955,156.61     

Base Overcollateralization Amount                                      0.00     

Extra Principal Distribution Amount                                    0.00     

Excess Cash Amount                                               357,007.43     

Curtailments Group F                                           -$116,703.49     
Curtailments Group A                                                $527.83     
Group F Prepayment Penalties                                     $83,886.92     
Group A Prepayment Penalties                                     $49,934.41     

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Delta Funding Corporation                                                     
Mortgage Pass-Through Certificates                                            
Record Date:                             31-May-2001                          
Distribution Date:                       15-Jun-2001                          

 DFH Series 2000-3

                                                                [Download Table]

   Group                                      1              2              Total
                                                                                 
Collateral  Description             Mixed Fixed      Mixed ARM  Fixed & Mixed ARM
Weighted Average Coupon Rate          12.565268      12.719395          11.737372
Weighted Average Net Rate             12.034706      12.189395          11.236967
Weighted Average Maturity                200.00         350.00             352.00
Record Date                          05/31/2001     05/31/2001         05/31/2001
Principal And Interest Constant    1,515,165.98     567,547.64        ,082,713.62
Beginning Loan Count                      2,034            666              2,700
Loans Paid In Full                           48             12                 60
Ending Loan Count                         1,986            654              2,640
Beginning Scheduled Balance      132,634,133.19  51,707,803.14     184,341,936.33
Ending Scheduled Balance         129,404,115.24  50,315,569.60     179,719,684.84
Scheduled Principal                  126,346.42      19,471.01         145,817.43
Unscheduled Principal              3,103,671.53   1,372,762.53       4,476,434.06
Scheduled Interest                 1,388,819.56     548,076.63       1,936,896.19
Servicing Fee                         55,326.34      21,544.92          76,871.26
Master Servicing Fee                       0.00           0.00               0.00
Trustee Fee                            3,315.86       1,292.69           4,608.55
FRY Amount                                 0.00           0.00               0.00
Special Hazard Fee                         0.00           0.00               0.00
Other Fee                                  0.00           0.00               0.00
Pool Insurance Fee                         0.00           0.00               0.00
Spread 1                                   0.00           0.00               0.00
Spread 2                                   0.00           0.00               0.00
Spread 3                                   0.00           0.00               0.00
Net Interest                       1,330,177.36     525,239.02       1,855,416.38
Realized Loss Amount                       0.00           0.00               0.00
Cumulative Realized Loss                   0.00           0.00               0.00
Percentage of Cumulative Losses            0.00           0.00               0.00


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                                                                     EXHIBIT U
Delta Funding Corporation                                                   
Mortgage Pass-Through Certificates                                          
Record Date:                      31-May-2001                               
Distribution Date:                  15-Jun-2001                             

 DFH Series 2000-4

Certificateholder Distribution Summary

                                                        [Enlarge/Download Table]

                                  Certificate         Certificate       Beginning                         
                                     Class            Pass-Through      Certificate            Interest   
 Class          CUSIP             Description             Rate           Balance             Distribution 
--------------------------------------------------------------------------------------------------------- 

                                                                                                          
     A         24763LHL7               SEN               7.06000%       94,138,878.81          553,850.40 
     IO        24763LHM5                IO               9.25000%                0.00          250,666.67 
    M-1        24763LHN3               MEZ               7.15000%        6,000,000.00           35,750.00 
    M-2        24763LHP8               MEZ               7.15000%        5,500,000.00           32,770.83 
     B         24763LHQ6               SUB               7.15000%        4,900,000.00           29,195.83 
    BIO        DFH004BIO               SUB               0.00000%                0.00                0.00 
    R-1        DFH0004R1               RES               0.00000%                0.00                0.00 
    R-2        DFH0004R2               RES               0.00000%                0.00                0.00 
    R-3        DFH0004R3               RES               0.00000%                0.00                0.00 
     P         DFH00004P               SEN               0.00000%              100.00            6,318.01 
--------------------------------------------------------------------------------------------------------- 
   Totals                                                              110,538,978.81          908,551.74 


                                      Current         Ending                                    Cumulative
            Principal                Realized      Certificate           Total                   Realized 
 Class     Distribution                Loss           Balance         Distribution                Losses  
----------------------------------------------------------------------------------------------------------

                                                                                                          
     A      3,428,331.92                0.00       90,710,546.88        3,982,182.32                 0.00 
     IO             0.00                0.00                0.00          250,666.67                 0.00 
    M-1             0.00                0.00        6,000,000.00           35,750.00                 0.00 
    M-2             0.00                0.00        5,500,000.00           32,770.83                 0.00 
     B              0.00                0.00        4,900,000.00           29,195.83                 0.00 
    BIO             0.00                0.00                0.00                0.00                 0.00 
    R-1             0.00                0.00                0.00                0.00                 0.00 
    R-2             0.00                0.00                0.00                0.00                 0.00 
    R-3             0.00                0.00                0.00                0.00                 0.00 
     P              0.00                0.00              100.00            6,318.01                 0.00 
----------------------------------------------------------------------------------------------------------
   Totals   3,428,331.92                0.00      107,110,646.88        4,336,883.66                 0.00 

All distributions required by the Pooling and Servicing Agreement have been     
calculated by the Certificate Administrator on behalf of the Trustee.           

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Delta Funding Corporation                                               
Mortgage Pass-Through Certificates                                      
Record Date:                      31-May-2001                           
Distribution Date:                  15-Jun-2001                         

 DFH Series 2000-4

Principal Distribution Statement

                                                        [Enlarge/Download Table]

                     Original          Beginning             Scheduled          Unscheduled                       
                       Face           Certificate            Principal            Principal                       
    Class             Amount             Balance            Distribution         Distribution            Accretion
------------------------------------------------------------------------------------------------------------------

                                                                                                                  
     A             98,600,000.00       94,138,878.81           74,564.55        3,353,767.37                0.00  
     IO                     0.00                0.00                0.00                0.00                0.00  
    M-1             6,000,000.00        6,000,000.00                0.00                0.00                0.00  
    M-2             5,500,000.00        5,500,000.00                0.00                0.00                0.00  
     B              4,900,000.00        4,900,000.00                0.00                0.00                0.00  
    BIO                     0.00                0.00                0.00                0.00                0.00  
    R-1                     0.00                0.00                0.00                0.00                0.00  
    R-2                     0.00                0.00                0.00                0.00                0.00  
    R-3                     0.00                0.00                0.00                0.00                0.00  
     P                      0.00              100.00                0.00                0.00                0.00  
------------------------------------------------------------------------------------------------------------------
   Totals         115,000,000.00      110,538,978.81           74,564.55        3,353,767.37                0.00  


                                          Total              Ending                Ending              Total      
                          Realized      Principal          Certificate           Certificate         Principal    
    Class                  Loss (1)     Reduction            Balance             Percentage         Distribution  
------------------------------------------------------------------------------------------------------------------

                                                                                                                  
     A                     0.00        3,428,331.92       90,710,546.88          0.91998526         3,428,331.92  
     IO                    0.00                0.00                0.00          0.00000000                 0.00  
    M-1                    0.00                0.00        6,000,000.00          1.00000000                 0.00  
    M-2                    0.00                0.00        5,500,000.00          1.00000000                 0.00  
     B                     0.00                0.00        4,900,000.00          1.00000000                 0.00  
    BIO                    0.00                0.00                0.00          0.00000000                 0.00  
    R-1                    0.00                0.00                0.00          0.00000000                 0.00  
    R-2                    0.00                0.00                0.00          0.00000000                 0.00  
    R-3                    0.00                0.00                0.00          0.00000000                 0.00  
     P                     0.00                0.00              100.00          0.00000000                 0.00  
------------------------------------------------------------------------------------------------------------------
   Totals                  0.00        3,428,331.92      107,110,646.88          0.93139693         3,428,331.92  

(1)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Corporation                                           
Mortgage Pass-Through Certificates                                  
Record Date:                      31-May-2001                       
Distribution Date:                  15-Jun-2001                     

 DFH Series 2000-4

Principal Distribution Factors Statement

                                                        [Enlarge/Download Table]

                     Original          Beginning             Scheduled          Unscheduled                        
                       Face           Certificate            Principal            Principal                        
    Class (2)         Amount             Balance            Distribution         Distribution            Accretion 
------------------------------------------------------------------------------------------------------------------ 

                                                                                                                   
     A             98,600,000.00        954.75536318          0.75623276         34.01386785             0.00000000
     IO                     0.00          0.00000000          0.00000000          0.00000000             0.00000000
    M-1             6,000,000.00       1000.00000000          0.00000000          0.00000000             0.00000000
    M-2             5,500,000.00       1000.00000000          0.00000000          0.00000000             0.00000000
     B              4,900,000.00       1000.00000000          0.00000000          0.00000000             0.00000000
    BIO                     0.00          0.00000000          0.00000000          0.00000000             0.00000000
    R-1                     0.00          0.00000000          0.00000000          0.00000000             0.00000000
    R-2                     0.00          0.00000000          0.00000000          0.00000000             0.00000000
    R-3                     0.00          0.00000000          0.00000000          0.00000000             0.00000000
     P                      0.00          0.00000000          0.00000000          0.00000000             0.00000000


                                          Total              Ending                Ending              Total       
                          Realized      Principal          Certificate           Certificate         Principal     
    Class (2)               Loss (3)     Reduction            Balance             Percentage         Distribution  
------------------------------------------------------------------------------------------------------------------ 

                                                                                                                   
     A                0.00000000         34.77010061        919.98526247          0.91998526          34.77010061  
     IO               0.00000000          0.00000000          0.00000000          0.00000000           0.00000000  
    M-1               0.00000000          0.00000000       1000.00000000          1.00000000           0.00000000  
    M-2               0.00000000          0.00000000       1000.00000000          1.00000000           0.00000000  
     B                0.00000000          0.00000000       1000.00000000          1.00000000           0.00000000  
    BIO               0.00000000          0.00000000          0.00000000          0.00000000           0.00000000  
    R-1               0.00000000          0.00000000          0.00000000          0.00000000           0.00000000  
    R-2               0.00000000          0.00000000          0.00000000          0.00000000           0.00000000  
    R-3               0.00000000          0.00000000          0.00000000          0.00000000           0.00000000  
     P                0.00000000          0.00000000          0.00000000          0.00000000           0.00000000  

(2)      All classes are per $1,000 denomination.                               

(3)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Corporation                                             
Mortgage Pass-Through Certificates                                    
Record Date:                      31-May-2001                         
Distribution Date:                  15-Jun-2001                       

 DFH Series 2000-4

 Interest Distribution Statement

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class         Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------

                                                                                                                              
 A         98,600,000.00             7.06000%       94,138,878.81          553,850.40             0.00                0.00    
 IO                 0.00             9.25000%       32,518,919.00          250,666.67             0.00                0.00    
M-1         6,000,000.00             7.15000%        6,000,000.00           35,750.00             0.00                0.00    
M-2         5,500,000.00             7.15000%        5,500,000.00           32,770.83             0.00                0.00    
 B          4,900,000.00             7.15000%        4,900,000.00           29,195.83             0.00                0.00    
BIO                 0.00             0.00000%                0.00                0.00             0.00                0.00    
R-1                 0.00             0.00000%                0.00                0.00             0.00                0.00    
R-2                 0.00             0.00000%                0.00                0.00             0.00                0.00    
R-3                 0.00             0.00000%                0.00                0.00             0.00                0.00    
 P                  0.00             0.00000%              100.00                0.00             0.00                0.00    
------------------------------------------------------------------------------------------------------------------------------
Totals    115,000,000.00                                                   902,233.73             0.00                0.00    



            Non-Supported                               Total             Remaining            Ending                         
Class         Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (4)          Distribution         Interest            Notional                        
                                                                         Shortfall            Balance                         
--------------------------------------------------------------------------------------------------------                      

                                                                                                                              
 A               0.00                0.00          553,850.40                0.00           90,710,546.88                     
 IO              0.00                0.00          250,666.67                0.00           32,518,919.00                     
M-1              0.00                0.00           35,750.00                0.00            6,000,000.00                     
M-2              0.00                0.00           32,770.83                0.00            5,500,000.00                     
 B               0.00                0.00           29,195.83                0.00            4,900,000.00                     
BIO              0.00                0.00                0.00                0.00                    0.00                     
R-1              0.00                0.00                0.00                0.00                    0.00                     
R-2              0.00                0.00                0.00                0.00                    0.00                     
R-3              0.00                0.00                0.00                0.00                    0.00                     
 P               0.00                0.00            6,318.01                0.00                  100.00                     
--------------------------------------------------------------------------------------------------------                      
Totals           0.00                0.00          908,551.74                0.00                                             

(4)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

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Delta Funding Corporation                                             
Mortgage Pass-Through Certificates                                    
Record Date:                      31-May-2001                         
Distribution Date:                  15-Jun-2001                       

 DFH Series 2000-4

 Interest Distribution Factors Statement

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class (5)     Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------

                                                                                                                              
 A         98,600,000.00             7.06000%        954.75536318          5.61714402          0.00000000          0.00000000 
 IO                 0.00             9.25000%        972.83312094          7.49892205          0.00000000          0.00000000 
M-1         6,000,000.00             7.15000%       1000.00000000          5.95833333          0.00000000          0.00000000 
M-2         5,500,000.00             7.15000%       1000.00000000          5.95833273          0.00000000          0.00000000 
 B          4,900,000.00             7.15000%       1000.00000000          5.95833265          0.00000000          0.00000000 
BIO                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
R-1                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
R-2                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
R-3                 0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 
 P                  0.00             0.00000%          0.00000000          0.00000000          0.00000000          0.00000000 


            Non-Supported                               Total             Remaining            Ending                         
Class (5)     Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (6)          Distribution         Interest            Notional                        
                                                                         Shortfall            Balance                         
--------------------------------------------------------------------------------------------------------                      

                                                                                                                              
 A            0.00000000          0.00000000          5.61714402          0.00000000        919.98526247                      
 IO           0.00000000          0.00000000          7.49892205          0.00000000        972.83312094                      
M-1           0.00000000          0.00000000          5.95833333          0.00000000       1000.00000000                      
M-2           0.00000000          0.00000000          5.95833273          0.00000000       1000.00000000                      
 B            0.00000000          0.00000000          5.95833265          0.00000000       1000.00000000                      
BIO           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R-1           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R-2           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
R-3           0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      
 P            0.00000000          0.00000000          0.00000000          0.00000000          0.00000000                      

(5)      All classes are per $1,000 denomination                                

(6)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

                                                        [Enlarge/Download Table]
                        Certificate Component Statement                                                                    


              Component            Beginning           Ending           Beginning           Ending             Ending      
             Pass-Through           Notional          Notional          Component          Component          Component    
Class           Rate                Balance           Balance            Balance            Balance           Percentage   
---------------------------------------------------------------------------------------------------------------------------

                                                                                                                           
OC           0.00000%              0.00               0.00              805,287.45         972,612.73         0.00000000%  
FSA          0.10000%              0.00               0.00                    0.00               0.00         0.00000000%  
SUB          0.00000%              0.00               0.00                    0.00               0.00         0.00000000%  

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DFH Series 2000-4

 Certificateholder Account Statement

--------------------------------------------------------------------------------
 CERTIFICATE ACCOUNT

Beginning Balance                                                   0.00      

Deposits                                                                      
Payments of Interest and Principal                      3,803,196.08  
Liquidations, Insurance Proceeds, Reserve Funds                 0.00  
Proceeds from Repurchased Loans                                 0.00  
Other Amounts (Servicer Advances)                         591,766.76  
Realized Losses                                                 0.00  
                                                     -------------
Total Deposits                                              4,394,962.84      

Withdrawals                                                                   
Reimbursement for Servicer Advances                             0.00  
Payment of Service Fee                                     58,079.18  
Payment of Interest and Principal                       4,336,883.66  
                                                     -------------
Total Withdrawals (Pool Distribution Amount)                4,394,962.84      

Ending Balance                                                      0.00      
                                                     =============
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
 PREPAYMENT/CURTAILMENT INTEREST SHORTFALL

Total Prepayment/Curtailment Interest Shortfall                15,644.36      
Servicing Fee Support                                          15,644.36      
                                                     -------------
Non-Supported Prepayment/Curtailment Interest Shortf                0.00      
                                                     =============
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
SERVICING FEES

Gross Servicing Fee                                            60,311.42      
Trustee Fee - Wells Fargo Bank, N.A.                            5,567.21      
Supported Prepayment/Curtailment Interest Shortfall            15,644.36      
                                                     -------------
Net Servicing Fee                                               50,234.27     
                                                     =============

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

                                                                [Download Table]

                    Beginning    Current    Current   Ending  
Account Type        Balance    Withdrawals  Deposits  Balance 

                                                              
Reserve Fund         5,000.00       0.00       0.00   5,000.00
Reserve Fund             0.00       0.00       0.00       0.00
Financial Guaranty       0.00       0.00       0.00       0.00

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                  15-Jun-2001                                 

 DFH Series 2000-4

 Loan Status Stratification/Credit Enhancement Statement

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE              
--------------------------------------------------------------------------------------------------------------------- 
             No. of      Principal                      No. of    Principal                     No. of   Principal    
              Loans       Balance                        Loans     Balance                      Loans     Balance     
                                                                                                                      
                                           0-29 Days        0           0.00        0-29 Days        1      16,481.55 
30 Days         129    7,728,334.94        30 Days          1      47,986.16        30 Days          0           0.00 
60 Days          53    3,662,777.44        60 Days          0           0.00        60 Days          1     104,160.45 
90 Days          20    1,145,796.49        90 Days          0           0.00        90 Days         13   1,052,036.10 
120 Days          7      398,765.27        120 Days         0           0.00        120 Days        76   5,231,414.39 
150 Days          0            0.00        150 Days         0           0.00        150 Days         0           0.00 
180+ Days         0            0.00        180+ Days        0           0.00        180+ Days        0           0.00 
                ---   -------------                        --   ------------                       ---   ------------ 
                209   12,935,674.14                         1      47,986.16                        91   6,404,092.49 

             No. of      Principal                      No. of    Principal                     No. of   Principal    
              Loans       Balance                        Loans     Balance                      Loans     Balance     
                                           0-29 Days   0.000000%    0.000000%       0-29 Days   0.061958%    0.015243%
30 Days    7.992565%       7.147507%       30 Days     0.061958%    0.044380%       30 Days     0.000000%    0.000000%
60 Days    3.283767%       3.387499%       60 Days     0.000000%    0.000000%       60 Days     0.061958%    0.096332%
90 Days    1.239157%       1.059683%       90 Days     0.000000%    0.000000%       90 Days     0.805452%    0.972970%
120 Days   0.433705%       0.368796%       120 Days    0.000000%    0.000000%       120 Days    4.708798%    4.838244%
150 Days   0.000000%       0.000000%       150 Days    0.000000%    0.000000%       150 Days    0.000000%    0.000000%
180+ Days  0.000000%       0.000000%       180+ Days   0.000000%    0.000000%       180+ Days   0.000000%    0.000000%
          ---------       ---------                    --------     --------                    --------     -------- 
           2.949195%      11.963485%                   0.061958%    0.044380%                   5.638166%    5.922789%

REO                                    Total    
---------------------------------------------------------------------------     
         No. of     Principal                   No. of     Principal
         Loans      Balance                     Loans      Balance

0-29 Days            0           0.00    0-29 Days         1       16,481.55    
30 Days              0           0.00    30 Days         130    7,776,321.10    
60 Days              0           0.00    60 Days          54    3,766,937.89    
90 Days              0           0.00    90 Days          33    2,197,832.59    
120 Days             0           0.00    120 Days         83    5,630,179.66    
150 Days             0           0.00    150 Days          0            0.00    
180+ Days            0           0.00    180+ Days         0            0.00    
                --   ------------                    ---   -------------
                 0           0.00                    301   19,387,752.79

         No. of     Principal                   No. of     Principal
         Loans      Balance                     Loans      Balance

0-29 Days      0.000000%     0.000000%   0-29 Days      0.061958%    0.015243%  
30 Days        0.000000%     0.000000%   30 Days        8.054523%    7.191886%  
60 Days        0.000000%     0.000000%   60 Days        3.345725%    3.483831%  
90 Days        0.000000%     0.000000%   90 Days        2.044610%    2.032653%  
120 Days       0.000000%     0.000000%   120 Days       5.142503%    5.207040%  
150 Days       0.000000%     0.000000%   150 Days       0.000000%    0.000000%  
180+ Days      0.000000%     0.000000%   180+ Days      0.000000%    0.000000%  
            --------      --------                  ---------    ---------
             0.000000%     0.000000%                 18.649318%   17.930653%

(7)      The 120 Day category for delinquent, bankruptcy, foreclosure, and REO  
contains loans that are 120 days or more delinquent.          

       Current Period Realized Loss - Includes Interest Shortfall       0.00
       Cumulative Realized Losses - Includes Interest Shortfall         0.00
       Current Period Class A Insufficient Funds                        0.00
       Principal Balance of Contaminated Properties                     0.00
       Periodic Advance                                           591,766.76

B-99

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                        31-May-2001                                 
Distribution Date:                  15-Jun-2001                                 

 DFH Series 2000-4
 Delinquency Status By Group

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE             
---------------------------------------------------------------------------------------------------------------------
 1           No. of      Principal                      No. of    Principal                     No. of   Principal   
              Loans       Balance                        Loans     Balance                      Loans     Balance    
                                                                                                                     
                                           0-29 Days       0           0.00         0-29 Days       0           0.00 
30 Days         95    5,800,466.18         30 Days         1      47,986.16         30 Days         0           0.00 
60 Days         38    2,427,397.60         60 Days         0           0.00         60 Days         1     104,160.45 
90 Days         16      836,163.72         90 Days         0           0.00         90 Days        10     934,006.58 
120 Days         6      374,797.71         120 Days        0           0.00         120 Days       52   3,779,020.83 
150 Days         0            0.00         150 Days        0           0.00         150 Days        0           0.00 
180+ Days        0            0.00         180+ Days       0           0.00         180+ Days       0           0.00 
               ---   -------------                        --   ------------                       ---   ------------ 
               155    9,438,825.21                         1      47,986.16                        63   4,817,187.86 

                                           0-29 Days   0.000000%    0.000000%       0-29 Days  0.000000%   0.000000% 
30 Days    6.914119%       6.282065%       30 Days     0.072780%    0.051970%       30 Days    0.000000%   0.000000% 
60 Days    2.765648%       2.628939%       60 Days     0.000000%    0.000000%       60 Days    0.072780%   0.112809% 
90 Days    1.164483%       0.905588%       90 Days     0.000000%    0.000000%       90 Days    0.727802%   1.011555% 
120 Days   0.436681%       0.405916%       120 Days    0.000000%    0.000000%       120 Days   3.784571%   4.092784% 
150 Days   0.000000%       0.000000%       150 Days    0.000000%    0.000000%       150 Days   0.000000%   0.000000% 
180+ Days  0.000000%       0.000000%       180+ Days   0.000000%    0.000000%       180+ Days  0.000000%   0.000000% 
          ---------       ---------                    --------     --------                    --------     --------
          11.280932%      10.222508%                   0.072780%    0.051970%                  4.585153%   5.217148% 

REO                                    Total    
---------------------------------------------------------------------------     
         No. of     Principal                   No. of     Principal
         Loans      Balance                     Loans      Balance

0-29 Days            0           0.00    0-29 Days         0            0.00    
30 Days              0           0.00    30 Days          96    5,848,452.34    
60 Days              0           0.00    60 Days          39    2,531,558.05    
90 Days              0           0.00    90 Days          26    1,770,170.30    
120 Days             0           0.00    120 Days         58    4,153,818.54    
150 Days             0           0.00    150 Days          0            0.00    
180+ Days            0           0.00    180+ Days         0            0.00    
                --   ------------                    ---   -------------
                 0           0.00                    219   14,303,999.23

0-29 Days      0.000000%     0.000000%   0-29 Days      0.000000%    0.000000%  
30 Days        0.000000%     0.000000%   30 Days        6.986900%    6.334035%  
60 Days        0.000000%     0.000000%   60 Days        2.838428%    2.741747%  
90 Days        0.000000%     0.000000%   90 Days        1.892285%    1.917143%  
120 Days       0.000000%     0.000000%   120 Days       4.221252%    4.498700%  
150 Days       0.000000%     0.000000%   150 Days       0.000000%    0.000000%  
180+ Days      0.000000%     0.000000%   180+ Days      0.000000%    0.000000%  
            --------      --------                  ---------    ---------
             0.000000%     0.000000%                 15.938865%   15.491626%

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE              
--------------------------------------------------------------------------------------------------------------------- 
 2           No. of      Principal                      No. of    Principal                     No. of   Principal    
              Loans       Balance                        Loans     Balance                      Loans     Balance     
                                                                                                                      
                                           0-29 Days       0           0.00         0-29 Days       1      16,481.55  
30 Days         34    1,927,868.76         30 Days         0           0.00         30 Days         0           0.00  
60 Days         15    1,235,379.84         60 Days         0           0.00         60 Days         0           0.00  
90 Days          4      309,632.77         90 Days         0           0.00         90 Days         3     118,029.52  
120 Days         1       23,967.56         120 Days        0           0.00         120 Days       24   1,452,393.56  
150 Days         0            0.00         150 Days        0           0.00         150 Days        0           0.00  
180+ Days        0            0.00         180+ Days       0           0.00         180+ Days       0           0.00  
               ---   -------------                        --   ------------                       ---   ------------  
                54    3,496,848.93                         0           0.00                        28   1,586,904.63  

                                           0-29 Days   0.000000%    0.000000%       0-29 Days   0.416667%    0.104363%
30 Days   14.166667%      12.207452%       30 Days     0.000000%    0.000000%       30 Days     0.000000%    0.000000%
60 Days    6.250000%       7.822545%       60 Days     0.000000%    0.000000%       60 Days     0.000000%    0.000000%
90 Days    1.666667%       1.960625%       90 Days     0.000000%    0.000000%       90 Days     1.250000%    0.747374%
120 Days   0.416667%       0.151765%       120 Days    0.000000%    0.000000%       120 Days   10.000000%    9.196697%
150 Days   0.000000%       0.000000%       150 Days    0.000000%    0.000000%       150 Days    0.000000%    0.000000%
180+ Days  0.000000%       0.000000%       180+ Days   0.000000%    0.000000%       180+ Days   0.000000%    0.000000%
          ---------       ---------                    --------     --------                   ---------    --------- 
          22.500000%      22.142386%                   0.000000%    0.000000%                  11.666667%   10.048434%

REO                                    Total    
---------------------------------------------------------------------------     
         No. of     Principal                   No. of     Principal
         Loans      Balance                     Loans      Balance

0-29 Days            0           0.00    0-29 Days         1       16,481.55    
30 Days              0           0.00    30 Days          34    1,927,868.76    
60 Days              0           0.00    60 Days          15    1,235,379.84    
90 Days              0           0.00    90 Days           7      427,662.29    
120 Days             0           0.00    120 Days         25    1,476,361.12    
150 Days             0           0.00    150 Days          0            0.00    
180+ Days            0           0.00    180+ Days         0            0.00    
                --   ------------                    ---   -------------
                 0           0.00                     82    5,083,753.56

0-29 Days      0.000000%     0.000000%   0-29 Days      0.416667%    0.104363%  
30 Days        0.000000%     0.000000%   30 Days       14.166667%   12.207452%  
60 Days        0.000000%     0.000000%   60 Days        6.250000%    7.822545%  
90 Days        0.000000%     0.000000%   90 Days        2.916667%    2.707999%  
120 Days       0.000000%     0.000000%   120 Days      10.416667%    9.348462%  
150 Days       0.000000%     0.000000%   150 Days       0.000000%    0.000000%  
180+ Days      0.000000%     0.000000%   180+ Days      0.000000%    0.000000%  
            --------      --------                  ---------    ---------
             0.000000%     0.000000%                 34.166667%   32.190820%

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Delta Funding Corporation                                                       
Mortgage Pass-Through Certificates                                              
Record Date:                             31-May-2001                            
Distribution Date:                       15-Jun-2001                            

 DFH Series 2000-4

--------------------------------------------------------------------------------
COLLATERAL STATEMENT

Collateral Description                                        Mixed Fixed & Arm 

Weighted Average Gross Coupon                                        12.321607% 

Weighted Average Net Coupon                                          11.671605% 

Weighted Average Pass-Through Rate                                   11.611599% 

Weighted Average Maturity (Stepdown Calculation)                            319 

Beginning Scheduled Collateral Loan Count                                 1,650 

Number of Loans Paid in Full                                                 36 

Ending Scheduled Collateral Loan Count                                    1,614 

Beginning Scheduled Collateral Balance                           111,344,166.26 

Ending Scheduled Collateral Balance                              108,083,159.61 

Ending Actual Collateral Balance at 31-May-2001                  108,126,304.71 

Monthly P&I Constant                                               1,217,847.10 

Ending Scheduled Balance for Premium Loans                       108,083,159.61 

Scheduled Principal                                                   74,564.55 

Unscheduled Principal                                              3,186,442.10 

Required Overcollateralized Amount                                         0.00 

Overcollateralized Increase Amount                                   167,325.27 

Overcollateralized Reduction Amount                                        0.00 

Specified O/C Amount                                               2,587,500.00 

Overcollateralized Amount                                            972,612.73 

Overcollateralized Deficiency Amount                               1,782,212.55 

Base Overcollateralization Amount                                          0.00 

Extra Principal Distribution Amount                                        0.00 

Excess Cash Amount                                                   167,325.27 
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Curtailments                                                         $15,036.45 
--------------------------------------------------------------------------------

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Delta Funding Corporation                                                     
Mortgage Pass-Through Certificates                                            
Record Date:                             31-May-2001                          
Distribution Date:                       15-Jun-2001                          

 DFH Series 2000-4

                                                                [Download Table]

Group                                     1               2              Total  

                                                                                
Collateral  Description            Mixed Fixed    Mixed ARM    Mixed Fixed & Arm
Weighted Average Coupon Rate         12.311093      12.381743          12.321607
Weighted Average Net Rate            11.601093      11.671743          11.671605
Weighted Average Maturity               319.00         319.00             319.00
Record Date                         05/31/2001     05/31/2001         05/31/2001
Principal And Interest Constant   1,041,305.74     176,541.36       1,217,847.10
Beginning Loan Count                     1,403            247              1,650
Loans Paid In Full                          29              7                 36
Ending Loan Count                        1,374            240              1,614
Beginning Scheduled Balance      94,773,616.15  16,570,550.11     111,344,166.26
Ending Scheduled Balance         92,297,079.08  15,786,080.53     108,083,159.61
Scheduled Principal                  69,000.10       5,564.45          74,564.55
Unscheduled Principal             2,407,536.97     778,905.13       3,186,442.10
Scheduled Interest                  972,305.64     170,976.91       1,143,282.55
Servicing Fee                        51,335.71       8,975.71          60,311.42
Master Servicing Fee                      0.00           0.00               0.00
Trustee Fee                           4,738.68         828.53           5,567.21
FRY Amount                                0.00           0.00               0.00
Special Hazard Fee                        0.00           0.00               0.00
Other Fee                                 0.00           0.00               0.00
Pool Insurance Fee                        0.00           0.00               0.00
Spread 1                                  0.00           0.00               0.00
Spread 2                                  0.00           0.00               0.00
Spread 3                                  0.00           0.00               0.00
Net Interest                        916,231.25     161,172.67       1,077,403.92
Realized Loss Amount                      0.00           0.00               0.00
Cumulative Realized Loss                  0.00           0.00               0.00
Percentage of Cumulative Losses           0.00           0.00               0.00

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 Delta Funding Non-Performing Loan Trust                             EXHIBIT V
Mortgage Pass-Through Certificates                                          
Record Date:                      31-May-2001                               
Distribution Date:                15-Jun-2001                               

 DNT Series 2000-1

Certificateholder Distribution Summary

                                                        [Enlarge/Download Table]

                                  Certificate         Certificate       Beginning                         
                                     Class            Pass-Through      Certificate            Interest   
 Class          CUSIP             Description             Rate           Balance             Distribution 
--------------------------------------------------------------------------------------------------------- 
                                                                                                          
   NOTES        DNT00001A            SEN                9.50000%        1,570,371.92           12,432.11  
  TRUSTCER      DNT0001TC            JUN                0.00000%                0.00                0.00  
                                                                        ------------           ---------  
   Totals                                                               1,570,371.92           12,432.11  


                                      Current         Ending                                    Cumulative
                 Principal           Realized      Certificate           Total                   Realized 
 Class          Distribution           Loss           Balance         Distribution                Losses  
----------------------------------------------------------------------------------------------------------
                                                                                                          
   NOTES         253,839.49           0.00        1,316,532.43          266,271.60                 0.00   
  TRUSTCER             0.00           0.00                0.00                0.00                 0.00   
                 ----------           ----        ------------          ----------                 ----   
   Totals        253,839.49           0.00        1,316,532.43          266,271.60                 0.00   

All distributions required by the Pooling and Servicing Agreement have been     
calculated by the Certificate Administrator on behalf of the Trustee.           

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Delta Funding Non-Performing Loan Trust                                 
Mortgage Pass-Through Certificates                                      
Record Date:                      31-May-2001                           
Distribution Date:                15-Jun-2001                           

 DNT Series 2000-1

Principal Distribution Statement

                                                        [Enlarge/Download Table]

                     Original          Beginning             Scheduled          Unscheduled                       
                       Face           Certificate            Principal            Principal                       
    Class             Amount             Balance            Distribution         Distribution            Accretion
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
   NOTES          3,013,040.40        1,570,371.92          252,159.12            1,680.37                0.00    
 TRUSTCERT                0.00                0.00                0.00                0.00                0.00    
                  ------------        ------------          ----------            --------                ----    
   Totals         3,013,040.40        1,570,371.92          252,159.12            1,680.37                0.00    


                                          Total              Ending                Ending              Total      
                          Realized      Principal          Certificate           Certificate         Principal    
    Class                  Loss (1)     Reduction            Balance             Percentage         Distribution  
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
   NOTES                    0.00        253,839.49        1,316,532.43          0.43694483           253,839.49   
 TRUSTCERT                  0.00              0.00                0.00          0.00000000                 0.00   
                            ----        ----------        ------------          ----------           ----------   
   Totals                   0.00        253,839.49        1,316,532.43          0.43694483           253,839.49   

(1)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Non-Performing Loan Trust                             
Mortgage Pass-Through Certificates                                  
Record Date:                      31-May-2001                       
Distribution Date:                15-Jun-2001                       

 DNT Series 2000-1

Principal Distribution Factors Statement

                                                        [Enlarge/Download Table]

                     Original          Beginning             Scheduled          Unscheduled                       
                       Face           Certificate            Principal            Principal                       
    Class             Amount             Balance            Distribution         Distribution          Accretion  
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
   NOTES            3,013,040.40        521.19179019         83.68925953          0.55769913          0.00000000  
 TRUSTCERT                  0.00          0.00000000          0.00000000          0.00000000          0.00000000  


                                          Total              Ending                Ending              Total      
                          Realized      Principal          Certificate           Certificate         Principal    
    Class                  Loss (3)     Reduction            Balance             Percentage         Distribution  
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
   NOTES                0.00000000     84.24695865        436.94483154          0.43694483          84.24695865   
 TRUSTCERT              0.00000000      0.00000000          0.00000000          0.00000000           0.00000000   

(2)      All Classes are per $1,000 denomination.                               

(3)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Descript                                

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Delta Funding Non-Performing Loan Trust                               
Mortgage Pass-Through Certificates                                    
Record Date:                      31-May-2001                         
Distribution Date:                15-Jun-2001                         

 DNT Series 2000-1

 Interest Distribution Statement

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class         Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
 NOTES      3,013,040.40          9.50000%         1,570,371.92           12,432.11              0.00               0.00      
TRUSTCE             0.00          0.00000%                 0.00                0.00              0.00               0.00      
            ------------                                                  ---------              ----               ----      
Totals      3,013,040.40                                                  12,432.11              0.00               0.00      


            Non-Supported                               Total             Remaining            Ending                         
Class         Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (4)          Distribution         Interest            Notional                        
                                                                         Shortfall            Balance                         
--------------------------------------------------------------------------------------------------------                      
                                                                                                                              
 NOTES           0.00               0.00               12,432.11            0.00           1,316,532.43                       
TRUSTCE          0.00               0.00                    0.00            0.00                   0.00                       
                 ----               ----               ---------            ----                                              
Totals           0.00               0.00               12,432.11            0.00                                              

(4)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

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Delta Funding Non-Performing Loan Trust                               
Mortgage Pass-Through Certificates                                    
Record Date:                      31-May-2001                         
Distribution Date:                15-Jun-2001                         

 DNT Series 2000-1

                                                        [Enlarge/Download Table]

            Original               Current           Beginning             Current           Payment of            Current    
Class (5)     Face               Certificate        Certificate/           Accrued             Unpaid              Interest   
             Amount                  Rate             Notional             Interest           Interest             Shortfall  
                                                      Balance                                 Shortfall                       
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
  NOTES     3,013,040.40          9.50000%         521.19179019           4.12610133         0.00000000         0.00000000    
TRUSTCER            0.00          0.00000%           0.00000000           0.00000000         0.00000000         0.00000000    


            Non-Supported                               Total             Remaining            Ending                         
Class (5)     Interest            Realized             Interest            Unpaid           Certificate/                      
              Shortfall            Loss (4)          Distribution         Interest            Notional                        
                                                                         Shortfall            Balance                         
--------------------------------------------------------------------------------------------------------                      
                                                                                                                              
  NOTES       0.00000000        0.00000000         4.12610133           0.00000000        436.94483154                        
TRUSTCER      0.00000000        0.00000000         0.00000000           0.00000000          0.00000000                        

(5)      All Classes are per $1,000 denomination                                

(6)      Amount Does Not Include Excess Special Hazard, Bankruptcy, or Fraud    
   Losses Unless Otherwise Disclosed. Please Refer to the Prospectus
Supplement for a Full Description.                            

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Delta Funding Non-Performing Loan Trust                                         
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DNT Series 2000-1

 Certificateholder Account Statement

--------------------------------------------------------------------------------
 CERTIFICATE ACCOUNT

Beginning Balance                                               0.00    

Deposits                                                                

Payments of Interest and Principal                    277,672.62

Liquidations, Insurance Proceeds, Reserve Funds             0.00
Proceeds from Repurchased Loans                             0.00
Other Amounts (Servicer Advances)                           0.00

 Realized Losses                                        (6,616.02)
                                                     -----------
Total Deposits                                            271,056.60    

Withdrawals                                                             
Reimbursement for Servicer Advances                         0.00
Payment of Service Fee                                  4,785.00
Payment of Interest and Principal                     266,271.60
                                                     -----------
Total Withdrawals (Pool Distribution Amount)              271,056.60    

Ending Balance                                                  0.00    
                                                     ===========
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
   PREPAYMENT/CURTAILMENT INTEREST SHORTFALL

Total Prepayment/Curtailment Interest Shortfall                 0.00    

Servicing Fee Support                                           0.00    
                                                     -----------
Non-Supported Prepayment/Curtailment Interest Shortf            0.00    
                                                     ===========
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
SERVICING FEES

Gross Servicing Fee                                         2,160.00    

Trustee - Wells Fargo Bank, N.A.                            1,500.00    
Trust Expenses                                              1,125.00    
Owner Trustee Fee                                               0.00    
Supported Prepayment/Curtailment Interest Shortfall             0.00    
                                                     -----------
Net Servicing Fee                                           4,785.00    
                                                     ===========
--------------------------------------------------------------------------------

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Delta Funding Non-Performing Loan Trust                                         
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DNT Series 2000-1

 Loan Status Stratification/Credit Enhancement Statement

                                                        [Enlarge/Download Table]

               DELINQUENT                             BANKRUPTCY                             FORECLOSURE               
---------------------------------------------------------------------------------------------------------------------  
             No. of      Principal                      No. of    Principal                     No. of   Principal     
              Loans       Balance                        Loans     Balance                      Loans     Balance      
                                                                                                                       
                                           0-29 Days       1      46,418.92         0-29 Days       0           0.00   
30 Days          3      254,546.51         30 Days         0           0.00         30 Days         0           0.00   
60 Days          0            0.00         60 Days         0           0.00         60 Days         0           0.00   
90 Days          0            0.00         90 Days         0           0.00         90 Days         0           0.00   
120 Days         0            0.00         120 Days        1      19,579.06         120 Days        0           0.00   
150 Days         0            0.00         150 Days        0           0.00         150 Days        0           0.00   
180+ Days        0            0.00         180+ Days       6     732,267.30         180+ Days      12   2,092,432.86   
               ---   -------------                        --   ------------                       ---   ------------   
                 3      254,546.51                         8     798,265.28                        12   2,092,432.86   

                                           0-29 Days    3.125000%    1.292853%      0-29 Days    0.000000%    0.000000%
30 Days   9.375000%       7.089592%        30 Days      0.000000%    0.000000%      30 Days      0.000000%    0.000000%
60 Days   0.000000%       0.000000%        60 Days      0.000000%    0.000000%      60 Days      0.000000%    0.000000%
90 Days   0.000000%       0.000000%        90 Days      0.000000%    0.000000%      90 Days      0.000000%    0.000000%

120 Days  0.000000%       0.000000%        120 Days     3.125000%    0.545313%      120 Days     0.000000%    0.000000%
150 Days  0.000000%       0.000000%        150 Days     0.000000%    0.000000%      150 Days     0.000000%    0.000000%
180+ Days 0.000000%       0.000000%        180+ Days   18.750000%   20.395002%      180+ Days   37.500000%   58.278136%
          ---------       ---------                    ---------    ---------                   ---------    --------- 
          9.375000%       7.089592%                    25.000000%    2.233169%                   7.500000%    8.278136%

REO                                    Total    
---------------------------------------------------------------------------     
         No. of     Principal                   No. of     Principal
         Loans      Balance                     Loans      Balance

0-29 Days            0           0.00    0-29 Days         1       46,418.92    
30 Days              0           0.00    30 Days           3      254,546.51    
60 Days              0           0.00    60 Days           0            0.00    
90 Days              0           0.00    90 Days           0            0.00    
120 Days             0           0.00    120 Days          1       19,579.06    
150 Days             0           0.00    150 Days          0            0.00    
180+ Days            4     139,499.57    180+ Days        22    2,964,199.73    
                --   ------------                    ---   -------------
                 4     139,499.57                     27    3,284,744.22

0-29 Days      0.000000%     0.000000%   0-29 Days      3.125000%    1.292853%  
30 Days        0.000000%     0.000000%   30 Days        9.375000%    7.089592%  
60 Days        0.000000%     0.000000%   60 Days        0.000000%    0.000000%  
90 Days        0.000000%     0.000000%   90 Days        0.000000%    0.000000%  

120 Days       0.000000%     0.000000%   120 Days       3.125000%    0.545313%  
150 Days       0.000000%     0.000000%   150 Days       0.000000%    0.000000%  
180+ Days     12.500000%     3.885322%   180+ Days     68.750000%   82.558460%  
           ---------      --------                  ---------    ---------
            12.500000%     3.885322%                 84.375000%   91.486219%

(7)      The 90 day category for delinquent, bankruptcy, foreclosures, and REO  
may contain loans that are 90 days or more delinquent.        

         Current Period Realized Loss - Includes Interest Shortfall         0.00
         Cumulative Realized Losses - Includes Interest Shortfall     275,154.16
         Current Period Class A Insufficient Funds                          0.00
         Principal Balance of Contaminated Properties                       0.00
         Periodic Advance                                                   0.00

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Delta Funding Non-Performing Loan Trust                                         
Mortgage Pass-Through Certificates                                              
Record Date:                      31-May-2001                                   
Distribution Date:                15-Jun-2001                                   

 DNT Series 2000-1

--------------------------------------------------------------------------------
COLLATERAL STATEMENT

Collateral Description                               Fixed Mixed & ARM & Balloon

Weighted Average Gross Coupon                                          3.309306%

Weighted Average Net Coupon                                            2.635845%

Weighted Average Pass-Through Rate                                     2.168165%

Weighted Average Maturity (Stepdown Calculation)                               1

Beginning Scheduled Collateral Loan Count                                     33

Number of Loans Paid in Full                                                   1

Ending Scheduled Collateral Loan Count                                        32

Beginning Scheduled Collateral Balance                              3,848,779.62

Ending Scheduled Collateral Balance                                 3,590,425.17

Ending Actual Collateral Balance at 31-May-2001                     3,590,425.17

Monthly P&I Constant                                                  269,317.29
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Reimbursed Servicer Advances                                           $3,044.80

Reimbursed Escrow Advances                                             $5,659.38

Interest on Taxes                                                          $0.00
--------------------------------------------------------------------------------

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PART II 

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers                              

Our certificate of incorporation and Delta Funding Residual Management,   
Inc.'s certificate of incorporation eliminate, to the fullest extent permitted  
by the law of the State of Delaware, personal liability of directors to those   
companies and their shareholders for monetary damages for breach of fiduciary   
duty as directors.                                                              

  Section 145(a) of the Delaware General Corporation Law, or DGCL, provides in
relevant part that "a corporation may indemnify any person who was or is a      
party or is threatened to be made a party to any threatened, pending or         
completed action, suit or proceeding, whether civil, criminal, administrative   
or investigative (other than an action by or in the right of the corporation)   
by reason of the fact that he is or was a director, officer, employee or agent  
of the corporation, or is or was serving at the request of the corporation as   
a director, officer, employee or agent of another corporation, partnership,     
joint venture, trust or other enterprise, against expenses (including           
attorneys' fees), judgments, fines and amounts paid in settlement actually and  
reasonably incurred by him in connection with such action, suit or proceeding   
if he acted in good faith and in a manner he reasonably believed to be in or    
not opposed to the best interests of the corporation, and with respect to any   
criminal action or proceeding, had no reasonable cause to believe his conduct   
was unlawful."                                                                  

With respect to derivative actions, Section 145(b) of the DGCL provides in
relevant part that "[a] corporation may indemnify any person who was or is a    
party or is threatened to be made a party to any threatened, pending or         
completed action or suit by or in the right of the corporation to procure a     
judgment in its favor. . . [by reason of his service in one of the capacities   
specified in the preceding sentence] against expenses (including attorneys'     
fees) actually and reasonably incurred by him in connection with the defense    
or settlement or such action or suit if he acted in good faith and in a manner  
he reasonably believed to be in or not opposed to the best interests of the     
corporation and except that no indemnification shall be made in respect of any  
claim, issue or matter as to which such person shall have been adjudged to be   
liable to the corporation unless and only to the extent that the Court of       
Chancery or the court in which such action or suit was brought shall determine  
upon application that, despite the adjudication of liability but in view of     
all the circumstances of the case, such person is fairly and reasonably         
entitled to indemnity for such expenses which the Court of Chancery or such     
other court shall deem proper."                                                 

To the fullest extent permitted by applicable law, each of us and Delta   
Funding Residual Management Inc. agrees to indemnify any of its respective      
officers or directors for, and to hold each of them harmless against, any       
loss, liability or expense incurred without negligence or bad faith on its      
part, arising out of or in connection with his or her duties as an officer or   
director formed pursuant to our or Delta Funding Residual Management's charter  
documents, as the case may be, including the costs and expenses (including      
reasonable legal fees and expenses) of defending him or herself against, or     
investigating, any claim or liability in connection with the exercise or        
performance of any of its powers or duties thereunder.                          

Delta Funding Residual Exchange Company, LLC's operating agreement        
eliminates to the fullest extent permitted by the State of Delaware, the        
personal liability of its managing member.                                      

  Section 18-108 of the Delaware Limited Liability Company Act provides that a
limited liability company may indemnify and hold harmless any manager from and  
against any and all claims and demands whatsoever, subject to the standards     
and restrictions, if any, as are set forth in its limited liability company     
agreement.                                                                      

Section 7 of Delta Funding Residual Exchange Company, LLC's operating     
agreement, provides that neither the manager, nor any of its agents, partners,  
employees, counsel or affiliates (other than professionals employed by Delta    
Funding Residual Exchange Company, LLC who shall be held to the usual           
standards of professional practice), shall be liable, responsible or            
accountable in damages or otherwise to Delta Funding Residual Exchange          
Company, LLC or any member for any action taken or failure to act (even if      
such action or failure to act constituted negligence, other than gross          
negligence, on such person's part) on behalf of Delta Funding Residual          
Exchange Company, LLC unless such act or failure to act was fraudulent,         
performed or omitted, in bad faith or constituted gross negligence.             

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Delta Funding Residual Exchange Company, LLC's operating agreement further
provides that Delta Funding Residual Exchange Company, LLC shall indemnify and  
hold harmless the manager and each officer of Delta Funding Residual Exchange   
Company, LLC and any of the manager's affiliates with respect to the following  
activities as follows:                                                          

o Delta Funding Residual Exchange Company, LLC shall indemnify and hold   
harmless, to the fullest extent permitted by law, each of the above   
listed parties from and against any and all losses, claims, damages,  
liabilities, expenses (including reasonable legal fees and expenses), 
  judgments, fines, settlements and other amounts arising from all claims,
demands, actions, suits or proceedings, whether civil, criminal,      
 administrative or investigative, in which the party may be involved, or
   threatened to be involved, as a party or otherwise arising as a result of
 such person's status as an indemnified party, regardless of whether the
party continues in such capacity at the time any such liability or    
   expense is paid or incurred, and regardless of whether any such action is
   brought by a third party, a member, or by or in the name of Delta Funding
Residual Exchange Company, LLC; provided, however, no party shall be  
indemnified under Delta Funding Residual Exchange Company, LLC's      
operating agreement for any costs that proximately result from such   
party's fraud, gross negligence or willful misconduct, or a material  
breach of the Delta Funding Residual Exchange Company, LLC's operating
agreement.                                                            

o Delta Funding Residual Exchange Company, LLC shall pay or reimburse, to 
   the fullest extent allowed by law, in advance of the final disposition of
  the proceeding, costs as incurred by the indemnified party in connection
  with any; provided, however, that such indemnified party shall repay all
amounts received from Delta Funding Residual Exchange Company, LLC    
  pursuant to its operating agreement if it shall ultimately be determined
   at the final disposition of the proceeding that such indemnified party is
not entitled to be indemnified by Delta Funding Residual Exchange     
Company, LLC as authorized by its operating agreement.                

 o Delta Funding Residual Exchange Company, LLC shall pay or reimburse costs
incurred by an indemnified party in connection with such person's     
  appearance as a witness or other participation in a proceeding involving
  or affecting Delta Funding Residual Exchange Company, LLC at a time when
the indemnified party is not a named defendant or respondent in the   
proceeding.                                                           

o The managing member of Delta Funding Residual Exchange Company,  LLC may
cause it to purchase and maintain insurance or other arrangements on  
  behalf of the indemnified parties and/or Delta Funding Residual Exchange
   Company, LLC against any liability asserted against any indemnified party
 and incurred by any indemnified party in such person's capacity as such
or arising out of the indemnified party's status in such capacity,    
  regardless of whether Delta Funding Residual Exchange Company, LLC would
  have the power to indemnify the indemnified party against that liability
under Section 7 of its operating agreement, to the extent that such   
 insurance is available on commercially reasonable terms. An party shall
not be denied indemnification in whole or in part under the operating 
agreement because the party had an interest in the transaction with   
respect to which the indemnification applies if the transaction was   
otherwise permitted by the terms of the operating agreement.          

Item 21. Exhibits and Financial Statements and Schedules                        

(a) Exhibits                                                              

                                                        [Enlarge/Download Table]

Exhibit                                                                                                                       
Number                                   Exhibit                                                                              
------                                   -------                                                                              
                                                                                                                              
3.1      Articles of Incorporation of Delta Financial Corporation.(1)                                                         

3.2      Bylaws of Delta Financial Corporation.(1)                                                                            

3.3      Delta Funding Residual Exchange Company, LLC Amended and Restated Limited Liability Company Agreement.(2)            

3.4      Delta Funding Residual Management, Inc. Certificate of Incorporation.(3)                                             

3.5      Delta Funding Residual Management, Inc. Amended and Restated Certificate of Incorporation.(2)                        

3.6      Delta Funding Residual Management, Inc. Bylaws.(2)                                                                   

3.7      Certificate of Designations, Voting Powers, Preferences and Rights of The Series A Preferred Stock of Delta Financial
         Corporation.(2)                                                                                                      

3.8      Reorganization and Exchange Agreement.(2)                                                                            

3.9      Management Agreement for Delta Funding Residual Management, Inc.(2)                                                  

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Exhibit                                                                                                                       
Number                                   Exhibit                                                                              
------                                   -------                                                                              
                                                                                                                              
4.1      Senior Notes Indenture, dated as of July 23, 1997, of Delta Financial Corporation.(4)                                

4.2      Senior Notes First Supplemental Indenture, dated as of August 1, 2000, of Delta Financial Corporation.(5)            

4.3      Senior Notes Second Supplemental Indenture, dated as of October 16, 2000, of Delta Financial Corporation.(3)         

4.4      Senior Notes Third Supplemental Indenture, dated as of November 20, 2000, of Delta Financial Corporation.(3)         

4.5      Senior Notes Fourth Supplemental Indenture, dated as of December 21, 2000, of Delta Financial Corporation.(3)        

4.6      Senior Secured Notes Indenture, dated as of December 21, 2000, of Delta Financial Corporation.(6)                    

4.7      Senior Secured Notes First Supplemental Indenture, dated as of January 11, 2001, of Delta Financial Corporation.(3)  

4.8      Senior Secured Notes Second Supplemental Indenture, dated as of February 12, 2001, of Delta Financial Corporation.(3)

4.9      Senior Secured Notes Third Supplemental Indenture, dated as of March 16, 2001, of Delta Financial Corporation.(7)    

4.10     Senior Secured Notes Fourth Supplemental Indenture, dated as of July 31, 2001, of Delta Financial Corporation.(2)    

5.1      Legal Opinion of Stroock & Stroock & Lavan LLP.(2)                                                                   

8.1      Legal Opinion of Stroock & Stroock & Lavan LLP as to tax matters.(2)                                                 

10.1     Employment Agreement, dated October 1, 1996, between Delta Financial Corporation and Sidney A. Miller.(9)            

10.2     Employment Agreement, dated October 1, 1996, between Delta Financial Corporation and Hugh Miller.(9)                 

10.3     Employment Agreement, dated October 1, 1996, between Delta Financial Corporation and Christopher Donnelly.(9)        

10.4     Employment Agreement, dated March 4, 1997, between Delta Financial Corporation and Richard Blass.(9)                 

10.5     Lease Agreement between Delta Funding Corporation and the Tilles Investment Company.(8)                              

13.1     Annual Report of Delta Financial Corporation.(10)                                                                    

23.1     Consent of KPMG LLP.(2)                                                                                              

23.2     Consent of Stroock & Stroock & Lavan LLP (included in Exhibit 5.1).(2)                                               

24.1     Power of Attorney (included in the signature page).                                                                  

99.1     Letter of Transmittal and Consent.(11)                                                                               

99.2     Letter to Holders of the Notes.(11)                                                                                  

99.3     Letter to Broker, Dealers, Commercial Banks Trust Companies and Other Nominees.(10)                                  

99.4     Letter to Our Clients.(11)                                                                                           

99.5     Delta Funding Residual Exchange Company, LLC Notice of Guaranteed Delivery Pursuant to the Prospectus Dated July 23, 
         2001.(11)                                                                                                            

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

(1)   Incorporated by reference from Delta Financial Corporation's Registration 
    Statement on Form S-1 filed with the Commission on October 9, 1996 (File
No. 333-11289).                                                     

(2)   Incorporated by reference from Amendment No. 4 to Delta Financial         
Corporation, Delta Funding Residual Exchange Company, LLC and Delta 
  Funding Residual Management, Inc.'s Registration Statement on Form S-4
filed with the Commission on August 9, 2001 (File No. 333-60188).   

(3)   Incorporated by reference from Amendment No. 1 to Delta Financial         
Corporation, Delta Funding Residual Exchange Company, LLC and Delta 
  Funding Residual Management, Inc.'s Registration Statement on Form S-4
filed with the Commission on July 3, 2001 (File No. 333-60188).     
(4)   Incorporated by reference from Delta Financial Corporation's Current      
    Report on Form 8-K filed with the Commission on September 30, 1997 (File
No. 1- 12109).                                                      
(5)   Incorporated by reference from Delta Financial Corporation's Current      
    Report on Form 8-K filed with the Commission on August 1, 2001 (File No.
1-12109).                                                           
(6)   Incorporated by reference from Delta Financial Corporation's Current      
      Report on Form 8-K filed with the Commission on January 10, 2001 (File No.
1- 12109).                                                          
(7)   Incorporated by reference from Delta Financial Corporation's Current      
    Report on Form 8-K filed with the Commission on March 16, 2001 (File No.
1-12109).                                                           
(8)   To be filed by amendment.                                                 
(9)   Incorporated by reference from Delta Financial Corporation's Amendment to 
      Registration Statement on Form S-1/A filed with the Commission on July 18,
1997 (File No. 1-12109).                                            
(10)  Incorporated by reference from Delta Financial Corporation's Annual Report
on Form 10-K/A for the year ended December 31, 2000, filed with the 
Commission on July 3, 2001 (File No. 1-12109).                      
(11)  Incorporated by reference from Amendment No. 2 to Delta Financial         
Corporation, Delta Funding Residual Exchange Company, LLC and Delta 
  Funding Residual Management, Inc.'s Registration Statement on Form S-4
filed with the Commission on July 18, 2001 (File No. 333-60188).    

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Item 22. Undertakings                                                           

(a) Each of the undersigned registrants hereby undertakes:                

      (1)  To file, during any period in which offers or sales are being
   made, a post-effective amendment to this registration
statement:                                        

             (i)   To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;           

            (ii)  To reflect in the prospectus any facts or events arising
                    after the effective date of the registration statement (or
                  the most recent post-effective amendment thereof) which,
                   individually or in the aggregate, represent a fundamental
                 change in the information set forth in the registration
                   statement. Notwithstanding the foregoing, any increase or
                decrease in volume of securities offered (if the total
                  dollar value of securities offered would not exceed that
                 which was registered) and any deviation from the low or
                 high end of the estimated maximum offering range may be
            reflected in the form of prospectus filed with the
                    Securities and Exchange Commission pursuant to Rule 424(b)
               if, in the aggregate, the changes in volume and price
                 represent no more than 20 percent change in the maximum
                   aggregate offering price set forth in the "Calculation of
               Registration Fee" table in the effective registration
statement;                            

           (iii) To include any material information with respect to the
              plan of distribution not previously disclosed in the
               registration statement or any material change to such
    information in the registration statement;

  (2)  That, for purposes of determining any liability under the
            Securities Act of 1933, each filing of the registrants' annual
         report pursuant to Section 13(a) or 15(d) of the Securities
            Exchange Act of 1934 (and, where applicable, each filing of an
             employee benefit plan's annual report pursuant to Section 15(d)
             of the Securities Exchange Act of 1934) that is incorporated by
             reference in the registration statement shall be deemed to be a
           new registration statement relating to the securities offered
             therein, and the offering of such securities at that time shall
     be deemed to be the initial bona fide offering thereof;

     (3)  That, for the purpose of determining any liability under the
        Securities Act of 1933, each such post-effective amendment
            shall be deemed to be a new registration statement relating to
      the securities offered therein, and the offering of such
            securities at that time shall be deemed to be the initial bona
fide offering thereof; and                        

 (4)  To remove from registration by means of a post-effective
           amendment any of the securities being registered which remain
unsold at the termination of the offering.        

(b)  Each of the undersigned Registrants hereby undertakes:           

       Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
 the registrants pursuant to the foregoing provisions, or otherwise, the
 registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as  
  expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrants of expenses incurred or paid by a 
  director, officer or controlling person in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or  
controlling person in connection with the securities being registered,
   the registrants will, unless in the opinion of its counsel the matter has
 been settled by controlling precedent, submit to a court of appropriate
 jurisdiction the question whether such indemnification by it is against
  public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.                                 

(c) Each of the undersigned registrants hereby undertakes to respond to   
requests for information that is incorporated by reference into the prospectus  
pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of    
receipt of such request, and to send the incorporated by first class mail or    
equally prompt means. This includes information contained in documents filed    
subsequent to the effective ate of the registration statement through the date  
of responding to the request.                                                   

(d) Each of the undersigned registrants hereby undertakes to supply by    
means of a post-effective amendment all information concerning a transaction,   
and the company being acquired involved therein, that was not the subject of    
and included in the registration statement when it became effective.            

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SIGNATURES

               Pursuant to the requirements of the Securities Act of 1933,
the Registrants have duly caused Amendment No. 4 to this Registration Statement 
to be signed on their behalf by the undersigned, thereunto duly authorized, in  
the City of New York, State of New York, on August 13, 2001.                    

DELTA FINANCIAL CORPORATION         

By: /s/ Hugh Miller                 
                 ---------------------------------------------
Name:  Hugh Miller          
                Title: President and Chief Executive Officer

        DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC

              By: Delta Funding Residual Management Inc., as its
Managing Member             

By: /s/ Hugh Miller                 
                 ---------------------------------------------
Name:  Hugh Miller          
Title: President            

   DELTA FUNDING RESIDUAL MANAGEMENT, INC.

By: /s/ Hugh Miller                 
                 ---------------------------------------------
Name:  Hugh Miller          
                Title: President and Chief Executive Officer

 POWER OF ATTORNEY

                  Each person whose signature appears below on this Registration
Statement hereby constitutes and appoints Hugh Miller and Marc Miller and each  
of them, with full power to act without the other, his true and lawful          
attorney-in-fact and agent, with full power of substitution and resubstitution, 
for him and in his name, place and stead, in any and all capacities (until      
revoked in writing) to sign any and all amendments to this Registration         
Statement (including post-effective amendments and amendments thereto) and any  
registration statement relating to the same offering as this Registration       
Statement that is to be effective upon filing pursuant to Rule 462(b) under the 
Securities Act of 1933, and to file the same, with all exhibits thereto, and    
other documents in connection therewith, with the Securities and Exchange       
Commission, granting unto said attorneys-in-fact and agents, and each of them,  
full power and authority to do and perform each and every act and thing,        
ratifying and confirming all that said attorneys-in-fact and agents or any of   
them, or their or his substitute or substitutes, may lawfully do or cause to be 
done by virtue hereof.                                                          

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Pursuant to the requirements of the Securities Act of 1933, this Registration   
Statement has been signed by the following persons in the capacities and on the 
dates indicated:                                                                

DELTA FINANCIAL CORPORATION:                                                    

                                                        [Enlarge/Download Table]

Signature                       Title                                       Date           
---------                       -----                                       ----           

                                                                                           
*/s/ Hugh Miller                Chairman of the Board of Directors          August 13, 2001
------------------------------                                                             
Sidney Miller                                                                              

/s/ Hugh Miller                 Chief Executive Officer, President          August 13, 2001
------------------------------  and Director (Principal Executive Officer)                 
Hugh Miller                                                                                

*/s/ Hugh Miller                Executive Vice President, Chief             August 13, 2001
------------------------------  Financial Officer and Director (Principal                  
Richard Blass                   Financial Officer)                                         

*/s/ Hugh Miller                Director                                    August 13, 2001
------------------------------                                                             
Arnold B. Pollard                                                                          

* By Hugh Miller as Attorney-in-Fact.                                           

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DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC:                                   

                                                        [Enlarge/Download Table]

Signature                              Title                                       Date           
---------                              -----                                       ----           

                                                                                                  
By: Delta Funding Residual                                                                        
Management, Inc., as its                                                                          
Managing Member                                                                                   

/s/ Hugh Miller                        Chief Executive Officer and                 August 13, 2001
------------------------------         President                                                  
Hugh Miller                                                                                       


DELTA FUNDING RESIDUAL MANAGEMENT, INC.:                                                          

Signature                              Title                                       Date           
---------                              -----                                       ----           

                                                                                                  
/s/ Hugh Miller                        Chief Executive Officer, President          August 13, 2001
------------------------------         and Director (Principal Executive Officer)                 
Hugh Miller                                                                                       

/s/ Richard Blass                      Executive Vice President, Chief             August 13, 2001
------------------------------         Financial Officer and Director (Principal                  
Richard Blass                          Financial Officer)                                         

/s/ Marc E. Miller                     Senior Vice President, Secretary            August 13, 2001
------------------------------         and Director                                               
Marc E. Miller                                                                                    

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