Ernst & Young LLP

March 27, 1997


Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Gentlemen:

We have  read Item 9 of Form 10-K  dated  January  22,  1997 of  Monterey  Homes
Corporation  (formerly  Homeplex  Mortgage  Investments  Corporation) and are in
agreement  with the  statements  contained  in the  second  paragraph  under the
heading "Changes in Registrant's Certifying Accountant" under Item 9 in the Form
10-K.  We have no basis  to  agree or  disagree  with  other  statements  of the
registrant contained therein.



                                                   Ernst & Young LLP