EXHIBIT 3.2


                              BNC MORTGAGE, INC.
                            A DELAWARE CORPORATION

                                    BYLAWS

                              ARTICLE I: OFFICES

SECTION 1.1 Registered Office. The registered office of BNC Mortgage, Inc.,
(the "Corporation") shall be at 15 East North Street, Dover, Delaware 19901, and
the name of its registered agent at that address is Paracorp Incorporated.

SECTION 1.2 Principal Office. The principal office for the transaction of the
business of the Corporation shall be at 1063 McGaw Avenue, Irvine, California
92614 or otherwise as set forth in a resolution adopted by the Board.

SECTION 1.3 Other Offices. The Corporation may also have an office or offices at
such other place or places, either within or without the State of Delaware, as
the Board may from time to time determine or as the business of the Corporation
may require.

ARTICLE II: MEETINGS OF STOCKHOLDERS

SECTION 2.1 Place of Meetings. All annual meetings of stockholders and all other
meetings of stockholders shall be held either at the principal office of the
Corporation or at any other place within or without the State of Delaware that
may be designated by the Board pursuant to authority hereinafter granted to the
Board.

SECTION 2.2 Annual Meetings. Annual meetings of stockholders of the Corporation
for the purpose of electing directors and for the transaction of such other
business as may properly come before such meetings may be held at such time and
place and on such date as the Board shall determine by resolution.

SECTION 2.3 Special Meetings. A special meeting of the stockholders for the
transaction of any proper business may be called at any time exclusively by the
Board or the Chairman.

SECTION 2.4 Notice of Meetings. Except as otherwise required by law, notice of
each meeting of stockholders, whether annual or special, shall be given not less
than ten (10) days nor more than sixty (60) days before the date of the meeting
to each stockholder of record entitled to vote at such meeting by delivering a
typewritten or printed notice thereof to such stockholder personally, or by
depositing such notice in the United States mail, in a postage prepaid envelope,
directed to such stockholder at such stockholder's post office address furnished
by such stockholder to the Secretary of the Corporation for such purpose, or, if
such stockholder shall not have furnished an address to

 
the Secretary for such purpose, then at such stockholder's post office address
last known to the Secretary, or by transmitting a notice thereof to such
stockholder at such address by telegraph, cable, wireless or facsimile. Except
as otherwise expressly required by law, no publication of any notice of a
meeting of stockholders shall be required. Every notice of a meeting of
stockholders shall state the place, date and hour of the meeting and, in the
case of a special meeting, shall also state the purpose for which the meeting is
called. Notice of any meeting of stockholders shall not be required to be given
to any stockholder to whom notice may be omitted pursuant to applicable Delaware
law or who shall have waived such notice, and such notice shall be deemed waived
by any stockholder who shall attend such meeting in person or by proxy, except a
stockholder who shall attend such meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Except as otherwise expressly
required by law, notice of any adjourned meeting of stockholders need not be
given if the time and place thereof are announced at the meeting at which the
adjournment is taken.

SECTION 2.5 Fixing Date for Determination of Stockholders of Record. In order
that the Corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any other change,
conversion or exchange of stock or for the purpose of any other lawful action
other than to consent to corporate action in writing without a meeting, the
Board may fix, in advance, a record date, which shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting, nor more than
sixty (60) days prior to any such other action. If in any case involving the
determination of stockholders for any purpose other than notice of or voting at
a meeting of stockholders the Board shall not fix such a record date, then the
record date for determining stockholders for such purpose shall be the close of
business on the day on which the Board shall adopt the resolution relating
thereto. A determination of stockholders entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of such meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.

SECTION 2.6 Quorum. Except as otherwise required by law, the holders of record
of a majority in voting interest of the shares of stock of the Corporation
entitled to be voted thereat, present in person or by proxy, shall constitute a
quorum for the transaction of business at any meeting of stockholders of the
Corporation or any adjournment thereof. Subject to the requirement of a larger
percentage vote, if any, contained in the Certificate of Incorporation, these
Bylaws or by statute, the stockholders present at a duly called or held meeting
at which a quorum is present may continue to do business until adjournment,
notwithstanding any withdrawal of stockholders that may leave less than a quorum
remaining, if any action taken (other than adjournment) is approved by the vote
of at least a majority in voting interest of the shares required to constitute a
quorum. In the absence of a quorum at any meeting or any adjournment thereof, a
majority in voting interest of the stockholders present in person or by proxy
and entitled to vote thereat or, in the absence therefrom of all the
stockholders, any officer entitled to preside at, or to act as secretary of,
such meeting may adjourn such meeting from time to time. At any such adjourned
meeting at which a quorum is present, any business may be transacted that might
have been transacted at the meeting as originally called.

 
SECTION 2.7 Voting.

(A) Each stockholder shall, at each meeting of stockholders, be entitled to
vote, in the manner prescribed by the Corporation's Certificate of
Incorporation, in person or by proxy each share of the stock of the Corporation
that has voting rights on the matter in question and that shall have been held
by such stockholder and registered in such stockholder's name on the books of
the Corporation:

     (i) on the date fixed pursuant to Section 2.5 of these Bylaws as the record
     date for the determination of stockholders entitled to notice of and to
     vote at such meeting; or

     (ii) if no such record date shall have been so fixed, then (a) at the close
     of business on the business day next preceding the day upon which notice of
     the meeting shall be given or (b) if notice of the meeting shall be waived,
     at the close of business on the business day next preceding the day upon
     which the meeting shall be held.

(B) Shares of the Corporation's own stock belonging to the Corporation or to
another corporation, if a majority of the shares entitled to vote in the
election of directors in such other corporation is held, directly or indirectly,
by the Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Persons holding stock of the Corporation in a fiduciary capacity shall
be entitled to vote such stock. Persons whose stock is pledged shall be entitled
to vote, unless in the transfer by the pledgor on the books of the Corporation
the pledgor shall have expressly empowered the pledgee to vote thereon, in which
case only the pledgee, or the pledgee's proxy, may represent such stock and vote
thereon. Stock having voting power standing of record in the names of two or
more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or with respect to
which two or more persons have the same fiduciary relationship, shall be voted
in accordance with the provisions of the Delaware General Corporation Law, as
the same exists or may hereafter be amended (the "DGCL").

(C) Subject to the provisions of the Corporation's Certificate of Incorporation,
any such voting rights may be exercised by the stockholder entitled thereto in
person or by such stockholder's proxy appointed by an instrument in writing,
subscribed by such stockholder or by such stockholder's attorney thereunto
authorized and delivered to the secretary of the meeting. The attendance at any
meeting of a stockholder who may theretofore have given a proxy shall not have
the effect of revoking the same unless such stockholder shall in writing so
notify the secretary of the meeting prior to the voting of the proxy. At any
meeting of stockholders at which a quorum is present, all matters, except as
otherwise provided in the Certificate of Incorporation, in these Bylaws or by
law, shall be decided by the vote of a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat and
thereon. The vote at any meeting of stockholders on any question need not be by
ballot, unless so directed by the chairman of the meeting. On a vote by ballot,
each ballot shall be signed by the stockholder voting, or by such stockholder's
proxy, if there be such proxy, and it shall state the number of shares voted.

SECTION 2.8 Judges. Prior to each meeting of stockholders, the Chairman of such
meeting shall appoint a judge or judges to act with respect to any vote. Each
judge so appointed shall first subscribe

 
an oath faithfully to execute the duties of a judge at such meeting with strict
impartiality and according to the best of such judge's ability. Such judges
shall decide upon the qualification of the voters and shall certify and report
the number of shares represented at the meeting and entitled to vote on any
question, determine the number of votes entitled to be cast by each share, shall
conduct the vote and, when the voting is completed, accept the votes and
ascertain and report the number of shares voted respectively for and against
each question, and determine, and retain for a reasonable period a record of the
disposition of, any challenge made to any determination made by such judges.
Reports of judges shall be in writing and subscribed and delivered by them to
the Secretary of the Corporation. The judges need not be stockholders of the
Corporation, and any officer of the Corporation may be a judge on any question
other than a vote for or against a proposal in which such officer shall have a
material interest. The judges may appoint or retain other persons or entities to
assist the judges in the performance of the duties of the judges.

SECTION 2.9 Advance Notice of Stockholder Proposals and Stockholder Nominations.

(A) At any meeting of the stockholders, only such business shall be conducted as
shall have been brought before the meeting (i) by or at the direction of the
Board or (ii) by any stockholder of the Corporation who complies with the notice
procedures set forth in this Section 2.9(A). For business to be properly brought
before any meeting of the stockholders by a stockholder, the stockholder must
have given notice thereof in writing to the Secretary of the Corporation not
less than ninety (90) days in advance of such meeting or, if later, the seventh
day following the first public announcement of the date of such meeting. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the meeting (1) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting, (2) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (3) the class
and number of shares of the Corporation that are beneficially owned by the
stockholder, and (4) any material interest of the stockholder in such business.
In addition, the stockholder making such proposal shall promptly provide any
other information reasonably requested by the Corporation. Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted at any
meeting of the stockholders except in accordance with the procedures set forth
in this Section 2.9. The Chairman of any such meeting shall direct that any
business not properly brought before the meeting shall not be considered.

(B) Nominations for the election of directors may be made by the Board or by any
stockholder entitled to vote in the election of directors; provided, however,
that a stockholder may nominate a person for election as a director at a meeting
only if written notice of such stockholder's intent to make such nomination has
been given to the Secretary of the Corporation not later than ninety (90) days
in advance of such meeting or, if later, the seventh day following the first
public announcement of the date of such meeting. Each such notice shall set
forth: (i) the name and address of the stockholder who intends to make the
nomination and of the person or persons to be nominated; (ii) a representation
that the stockholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting and nominate the person or persons specified in the notice; (iii) a
description of all arrangements or understandings between the stockholder and
each nominee and any other person or persons (naming such person or persons)

 
pursuant to which the nomination or nominations are to be made by the
stockholder; (iv) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the United States Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
Board; and (v) the consent of each nominee to serve as a director of the
Corporation if so elected. In addition, the stockholder making such nomination
shall promptly provide any other information reasonably requested by the
Corporation. No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 2.9(B). The Chairman of any meeting of stockholders shall direct that
any nomination not made in accordance with these procedures be disregarded.

SECTION 2.10 Action Without Meeting. Any action required to be taken at any
annual or special meeting of stockholders of the Corporation, or any action
which may be taken at any annual or special meeting of such stockholders, may,
if such action has been earlier approved by the Board, be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.

ARTICLE III: BOARD OF DIRECTORS

SECTION 3.1 General Powers. Subject to any requirements in the Certificate of
Incorporation, these Bylaws, or of the DGCL as to action which must be
authorized or approved by the stockholders, any and all corporate powers shall
be exercised by or under the authority of, and the business and affairs of the
Corporation shall be under the direction of, the Board to the fullest extent
permitted by law. Without limiting the generality of the foregoing, it is hereby
expressly declared that the Board shall have the following powers, to wit:

(A) to select and remove all the officers, agents and employees of the
Corporation, prescribe such powers and duties for them as may not be
inconsistent with law, the Certificate of Incorporation or these Bylaws, fix
their compensation, and require from them security for faithful service;

(B) to conduct, manage and control the affairs and business of the Corporation,
and to make such rules and regulations therefor not inconsistent with law, the
Certificate of Incorporation or these Bylaws, as it may deem best;

(C) to change the location of the registered office of the Corporation in
Section 1.1 hereof; to change the principal office and the principal office for
the transaction of the business of the Corporation from one location to another
as provided in Section 1.2 hereof; to fix and locate from time to time one or
more offices of the Corporation within or without the State of Delaware as
provided in Section 1.3 hereof; to designate any place within or without the
State of Delaware for the holding of any meeting or meetings of stockholders;
and to adopt, make and use a corporate seal, and to prescribe the forms

 
of certificates of stock, and to alter the form of such seal and of such
certificates from time to time, and in its judgment as it may deem best,
provided such seal and such certificate shall at all times comply with the
provisions of law;

(D) to authorize the issuance of shares of stock of the Corporation from time to
time, upon such terms and for such considerations as may be lawful;

(E) to borrow money and incur indebtedness for the purposes of the Corporation,
and to cause to be executed and delivered therefor, in the corporate name,
promissory notes, bonds, debentures, deeds of trust and securities therefor; and

(F) by resolution adopted by a majority of the whole Board to designate an
executive and other committees of the Board, each consisting of one or more
directors, to serve at the pleasure of the Board, and to prescribe the manner in
which proceedings of such committee or committees shall be conducted.

SECTION 3.2 Number and Term of Office.

(A) Until this Section 3.2 is amended by a resolution duly adopted by the Board
or by the stockholders of the Corporation, the number of directors constituting
the entire Board shall be not less than five (5) members nor more than nine (9)
members and shall initially consist of five (5) members. Directors need not be
stockholders. Each of the directors of the Corporation shall hold office until
his successor shall have been duly elected or until he shall resign or shall
have been removed in the manner hereinafter provided.

(B) The Board shall be divided into three classes: Class I, Class II and Class
III. Each Director shall serve for a term ending on the date of the third annual
meeting following the annual meeting at which such director was elected;
provided, however, that the directors first elected to Class I shall serve for a
term ending on the date of the annual meeting next following the end of the
calendar year 1998, the director first elected to Class II shall serve for a
term ending on the date of the second annual meeting next following the end of
the calendar year 1998, and the directors first elected to Class III shall serve
for a term ending on the date of the third annual meeting next following the end
of the calendar year 1998. Notwithstanding the foregoing provisions of this
Article, each director shall serve until his successor is duly elected and
qualified or until his death, resignation or removal. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of an
incumbent director.

SECTION 3.3 Chairman of the Board. The Chairman of the Board, when present,
shall preside at all meetings of the Board and all meetings of stockholders. The
Chairman of the Board shall perform other duties commonly incident to his office
and shall also perform such other duties and have such other powers as the Board
of Directors shall designate from time to time.

SECTION 3.4 Election of Directors. The directors shall be elected by the
stockholders of the Corporation, and at each election, the persons receiving the
greater number of votes, up to the

 
number of directors then to be elected, shall be the persons then elected. The
election of directors is subject to any provision contained in the Certificate
of Incorporation relating thereto, including any provision regarding the rights
of holders of preferred stock to elect directors.

SECTION 3.5 Resignations. Any director of the Corporation may resign at any time
by giving written notice to the Board or to the Secretary of the Corporation.
Any such resignation shall take effect at the time specified therein, or, if the
time is not specified, it shall take effect immediately upon receipt; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.

SECTION 3.6 Vacancies. Except as otherwise provided in the Certificate of
Incorporation, any vacancy in the Board, whether because of death, resignation,
disqualification, an increase in the number of directors, removal, or any other
cause, may be filled by vote of the majority of the remaining directors,
although less than a quorum. Increases in the number of directors shall be
filled in accordance with the rule that each class of directors shall be as
nearly equal in number of directors as possible. Notwithstanding such rule, in
the event of any change in the authorized number of directors each director then
continuing to serve as such will nevertheless continue as a director of the
class of which he is a member, until the expiration of his current term or his
earlier death, resignation or removal. If any newly created directorship or
vacancy on the Board, consistent with the rule that the three classes shall be
as nearly equal in number of directors as possible, may be allocated to one or
two or more classes, the Board shall allocate it to that of the available class
whose term of office is due to expire at the earliest date following such
allocation. When the Board fills a vacancy, the director chosen to fill that
vacancy shall be of the same class as the director he succeeds and shall hold
office until such director's successor shall have been elected and shall qualify
or until such director shall resign or shall have been removed. No reduction of
the authorized number of directors shall have the effect of removing any
director prior to the expiration of such director's term of office.

SECTION 3.7 Place of Meeting. The Board or any committee thereof may hold any of
its meetings at such place or places within or without the State of Delaware as
the Board or such committee may from time to time by resolution designate or as
shall be designated by the person or persons calling the meeting or in the
notice or a waiver of notice of any such meeting. Directors may participate in
any regular or special meeting of the Board or any committee thereof by means of
conference telephone or similar communications equipment pursuant to which all
persons participating in the meeting of the Board or such committee can hear
each other, and such participation shall constitute presence in person at such
meeting.

SECTION 3.8 Regular Meetings. Regular meetings of the Board may be held at such
times as the Board shall from time to time by resolution determine.

SECTION 3.9 Special Meetings. Special meetings of the Board for any purpose or
purposes shall be called at any time by the Chairman of the Board or, if the
Chairman of the Board is absent or unable or refuses to act, by the President,
and may also be called by any two members of the Board. Except as otherwise
provided by law or by these Bylaws, written notice of the time and place of
special meetings shall be delivered personally or by facsimile to each director,
or sent to each director by mail

 
or by other form of written communication, charges prepaid, addressed to such
director at such director's address as it is shown upon the records of the
Corporation, or, if it is not so shown on such records and is not readily
ascertainable, at the place in which the meetings of the directors are regularly
held. In case such notice is mailed or telegraphed, it shall be deposited in the
United States mail or delivered to the telegraph company in the County in which
the principal office for the transaction of the business of the Corporation is
located at least 48 hours prior to the time of the holding of the meeting. In
case such notice is delivered personally or by facsimile as above provided, it
shall be delivered at least 24 hours prior to the time of the holding of the
meeting. Such mailing, telegraphing, delivery or facsimile transmission as above
provided shall be due, legal and personal notice to such director. Except where
otherwise required by law or by these Bylaws, notice of the purpose of a special
meeting need not be given. Notice of any meeting of the Board shall not be
required to be given to any director who is present at such meeting, except a
director who shall attend such meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.

SECTION 3.10 Quorum and Manner of Acting. Except as otherwise provided in these
Bylaws, the Certificate of Incorporation or by applicable law, the presence of a
majority of the authorized number of directors shall be required to constitute a
quorum for the transaction of business at any meeting of the Board, and all
matters shall be decided at any such meeting, a quorum being present, by the
affirmative votes of a majority of the directors present. A meeting at which a
quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, provided any action taken is approved by at least a
majority of the required quorum for such meeting. In the absence of a quorum, a
majority of directors present at any meeting may adjourn the same from time to
time until a quorum shall be present. Notice of any adjourned meeting need not
be given. The directors shall act only as a Board, and the individual directors
shall have no power as such.

SECTION 3.11 Action by Unanimous Written Consent. Any action required or
permitted to be taken at any meeting of the Board or of any committee thereof
may be taken without a meeting if consent in writing is given thereto by all
members of the Board or of such committee, as the case may be, and such consent
is filed with the minutes of proceedings of the Board or of such committee.

SECTION 3.12 Compensation. Directors, whether or not employees of the
Corporation or any of its subsidiaries, may receive an annual fee for their
services as directors in an amount fixed by resolution of the Board plus other
compensation, including options to acquire capital stock of the Corporation, in
an amount and of a type fixed by resolution of the Board, and, in addition, a
fixed fee, with or without expenses of attendance, may be allowed by resolution
of the Board for attendance at each meeting, including each meeting of a
committee of the Board. Nothing herein contained shall be construed to preclude
any director from serving the Corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation therefor.

SECTION 3.13 Committees. The Board may, by resolution passed by a majority of
the whole Board, designate one or more committees, each committee to consist of
one or more of the directors of the Corporation. Any such committee, to the
extent provided in the resolution of the Board and subject to any restrictions
or limitations on the delegation of power and authority imposed by applicable
law,

 
shall have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it. Any
such committee shall keep written minutes of its meetings and report the same to
the Board at the next regular meeting of the Board. Unless the Board or these
Bylaws shall otherwise prescribe the manner of proceedings of any such
committee, meetings of such committee may be regularly scheduled in advance and
may be called at any time by the chairman of the committee or by any two members
thereof; otherwise, the provisions of these Bylaws with respect to notice and
conduct of meetings of the Board shall govern.

SECTION 3.14 Affiliated Transactions. Notwithstanding any other provision of
these Bylaws, each transaction, or, if an individual transaction constitutes a
part of a series of transactions, each series of transactions, proposed to be
entered into between the Corporation, on the one hand, and any affiliate of the
Corporation, on the other hand, must be approved by a majority of the
Independent Directors. Notwithstanding any other provision of these Bylaws, this
Section 3.14 may only be amended by the vote of the majority of the Independent
Directors. For the purposes of this Section 3.14, (a) "affiliate" shall mean (i)
any person that, directly or indirectly, controls or is controlled by or is
under common control with such person, (ii) any other person that owns,
beneficially, directly or indirectly, twenty percent (20%) or more of the
outstanding capital shares, shares or equity interests of such person, or (iii)
any officer, director, employee, partner or trustee of such person or any person
controlling, controlled by or under common control with such person (excluding
trustees and persons serving in similar capacities who are not otherwise an
Affiliate of such person); (b) "person" shall mean and include individuals,
corporations, general and limited partnerships, stock companies or associations,
joint ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other entities and governments and agencies and
political subdivisions thereof; (c) "control" (including the correlative
meanings of the terms "controlled by" and "under common control with"), as used
with respect to any person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such person, through the ownership of voting securities, partnership interests
or other equity interests; and (d) Independent Director shall mean a Director
who is not an officer or employee of the Corporation or any of its subsidiaries.

                              ARTICLE IV: OFFICERS

SECTION 4.1 Officers. The officers of the Corporation shall be a Chief Executive
Officer, a President, one or more Vice Presidents (the number thereof and their
respective titles to be determined by the Board), a Secretary, a Chief Financial
Officer, and such other officers as may be appointed at the discretion of the
Board in accordance with the provisions of Section 4.3 hereof.

SECTION 4.2 Election. The officers of the Corporation, except such officers as
may be appointed or elected in accordance with the provisions of Sections 4.3 or
4.5 hereof, shall be chosen annually by the Board at the first meeting thereof
after the annual meeting of stockholders, and each officer shall hold office
until such officer shall resign or shall be removed or otherwise disqualified to
serve, or until such officer's successor shall be elected and qualified.

 
SECTION 4.3 Other Officers. In addition to the officers chosen annually by the
Board at its first meeting, the Board also may appoint or elect such other
officers as the business of the Corporation may require, each of whom shall have
such authority and perform such duties as are provided in these Bylaws or as the
Board may from time to time specify, and shall hold office until such officer
shall resign or shall be removed or otherwise disqualified to serve, or until
such officer's successor shall be elected and qualified.

SECTION 4.4 Removal and Resignation. Except as provided by DGCL Section 141(k),
any officer may be removed, either with or without cause, by resolution of the
Board, at any regular or special meeting of the Board, or except in case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board. Any officer or assistant may resign at any time by
giving written notice of his resignation to the Board or the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time is not specified, upon receipt thereof by the Board or
the Secretary, as the case may be; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.

SECTION 4.5 Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled in the manner
prescribed in these Bylaws for regular appointments to such office.

SECTION 4.6 Chief Executive Officer. The Chief Executive Officer shall preside
at all meetings of the stockholders and at all meetings of the Board of
Directors, unless the Chairman of the Board has been appointed and is present.
The Chief Executive Officer shall be the chief executive officer of the
Corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and affairs of the
Corporation. The Chief Executive Officer shall also perform such other duties
and have such other powers as the Board of Directors may designate from time to
time.

SECTION 4.7 President. The President shall preside at all meetings of the
stockholders and at all meetings of the Board of Directors, unless the Chairman
of the Board has been appointed and is present or, in the absence of the
Chairman of the Board, the Chief Executive Officer has been appointed and is
present. Subject to the provisions of these Bylaws and to the direction of the
Board of Directors and Chief Executive Officer, the President shall have the
responsibility for the general management and control of the business and
affairs of the Corporation and shall perform all duties and have all powers
which are commonly incident to the office of President or which are delegated to
him by the Board of Directors. The President shall have the power to sign all
stock certificates, contracts and other instruments of the Corporation which are
authorized and shall have general supervision and direction of all the other
officers, employees and agents of the corporation.

SECTION 4.8 Vice President. Each Vice President shall have such powers and
perform such duties with respect to the administration of the business and
affairs of the Corporation as are commonly incident to their office or as may
from time to time be assigned to such Vice President by the Chairman of the
Board, or the Board, or the President, or as may be prescribed by these Bylaws.
In the absence or disability of the Chairman of the Board and the President, the
Vice Presidents in order

 
of their rank as fixed by the Board, or if not ranked, the Vice President
designated by the Board, shall perform all of the duties of the Chairman of the
Board, and when so acting shall have all the powers of, and be subject to all
the restrictions upon, the Chairman of the Board.

SECTION 4.9 Secretary.

(A) The Secretary shall attend all meetings of the stockholders and of the Board
of Directors and shall record all acts and proceedings thereof in the minute
book of the Corporation. The Secretary shall give notice in conformity with
these Bylaws of all meetings of the stockholders and of all meetings of the
Board of Directors and any committee thereof requiring notice. The Secretary
shall perform all other duties given him in these Bylaws and other duties
commonly incident to his office and shall also perform such other duties and
have such other powers as the Board shall designate from time to time.

(B) The Secretary shall keep, or cause to be kept, at the principal office of
the Corporation or such other place as the Board may order, a book of minutes of
all meetings of directors and stockholders, with the time and place of holding,
whether regular or special, and if special, how authorized and the notice
thereof given, the names of those present at meetings of directors, the number
of shares present or represented at meetings of stockholders, and the
proceedings thereof.

(C) The Secretary shall keep, or cause to be kept, at the principal office of
the Corporation's transfer agent, a share register, or a duplicate share
register, showing the name of each stockholder, the number of shares of each
class held by such stockholder, the number and date of certificates issued for
such shares, and the number and date of cancellation of every certificate
surrendered for cancellation.

SECTION 4.10 Chief Financial Officer. The Chief Financial Officer shall keep or
cause to be kept the books of account of the corporation in a thorough and
proper manner and shall render statements of the financial affairs of the
corporation in such form and as often as required by the Board of Directors or
the Chief Executive Officer. The Chief Financial Officer, subject to the order
of the Board, shall have the custody of all funds and securities of the
Corporation. The Chief Financial Officer shall perform other duties commonly
incident to his office and shall also perform such other duties and have such
other powers as the Board or the Chief Executive Officer shall designate from
time to time.

                   ARTICLE V: CORPORATE INSTRUMENTS, CHECKS,
                          DRAFTS, BANK ACCOUNTS, ETC.

SECTION 5.1 Execution of Corporate Instruments. The Board of Directors may, in
its discretion, determine the method and designate the signatory officer or
officers, or other person or persons, to execute on behalf of the Corporation
the corporate name without limitation, or enter into contracts on behalf of the
Corporation, except where otherwise provided by law or these Bylaws, and such
execution or signature shall be binding upon the Corporation. Such authority may
be general or confined to specific instances, and unless so authorized by the
Board or by these Bylaws, no officer,

 
agent, or employee shall have any power or authority to bind the Corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or in any amount.

SECTION 5.2 Checks, Drafts, Etc. All checks, drafts or other orders for payment
of money, notes or other evidence of indebtedness, issued in the name of or
payable to the Corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the Board. Each such officer, assistant, agent or attorney shall
give such bond, if any, as the Board may require.

SECTION 5.3 Deposits. All funds of the Corporation not otherwise employed shall
be deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the Board may select, or as may be
selected by any officer or officers, assistant or assistants, agent or agents,
or attorney or attorneys of the Corporation to whom such power shall have been
delegated by the Board. For the purpose of deposit and for the purpose of
collection for the account of the Corporation, the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President (or any other officer
or officers, assistant or assistants, agent or agents, or attorney or attorneys
of the Corporation who shall from time to time be determined by the Board) may
endorse, assign and deliver checks, drafts and other orders for the payment of
money which are payable to the order of the Corporation.

SECTION 5.4 General and Special Bank Accounts. The Board may from time to time
authorize the opening and keeping of general and special bank accounts with such
banks, trust companies or other depositories as the Board may select or as may
be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. The Board may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these Bylaws, as it may deem expedient.

                     ARTICLE VI: SHARES AND THEIR TRANSFER

SECTION 6.1 Certificates for Stock. Every owner of stock of the Corporation
shall be entitled to have a certificate or certificates, to be in such form as
the Board shall prescribe, certifying the number and class or series of shares
of the stock of the Corporation owned by such owner. The certificates
representing shares of such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the Corporation by the
Chairman of the Board, the Chief Executive Officer, the President or any Vice
President, and by the Secretary. Any or all of the signatures on the
certificates may be a facsimile. In case any officer, transfer agent or
registrar who has signed, or whose facsimile signature has been placed upon, any
such certificate, shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, such certificate may nevertheless
be issued by the Corporation with the same effect as though the person who
signed such certificate, or whose facsimile signature shall have been placed
thereupon, were such an officer, transfer agent or registrar at the date of
issue. A record shall be kept of the respective names of the persons, firms or
corporations owning the stock represented by such certificates, the number and
class or series of shares represented by such certificates, respectively, and
the respective dates thereof, and in case of

 
cancellation, the respective dates of cancellation. Every certificate
surrendered to the Corporation for exchange or transfer shall be canceled, and
no new certificate or certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so canceled, except
in cases provided for in Section 6.4 hereof.

SECTION 6.2 Transfers of Stock. Transfers of shares of stock of the Corporation
shall be made only on the books of the Corporation by the registered holder
thereof, or by such holder's attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary, or with a transfer clerk or a
transfer agent appointed as provided in Section 6.3 hereof, and upon surrender
of the certificate or certificates for such shares properly endorsed and the
payment of all taxes thereon. The person in whose name shares of stock stand on
the books of the Corporation shall be deemed the owner thereof for all purposes
as regards the Corporation. Whenever any transfer of shares shall be made for
collateral security, and not absolutely, such fact shall be so expressed in the
entry of transfer if, when the certificate or certificates shall be presented to
the Corporation for transfer, both the transferor and the transferee request the
Corporation to do so.

SECTION 6.3 Regulations. The Board may make such rules and regulations as it may
deem expedient, not inconsistent with these Bylaws, concerning the issue,
transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.

SECTION 6.4 Lost, Stolen, Destroyed, and Mutilated Certificates. In any case of
loss, theft, destruction, or mutilation of any certificate of stock, another may
be issued in its place upon proof satisfactory to the Board of such loss, theft,
destruction, or mutilation and upon the giving of a bond of indemnity to the
Corporation in such form and in such sum as the Board may direct; provided,
however, that a new certificate may be issued without requiring any bond when,
in the judgment of the Board, it is proper so to do.

                          ARTICLE VII: INDEMNIFICATION

SECTION 7.1 Indemnification of Directors and Officers. To the fullest extent
permitted by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (provided that the effect of any such amendment shall be
prospective only) (the "Delaware Law"), a director of the Corporation shall not
be liable to the Corporation or its stockholders for monetary damages for breach
of his or her fiduciary duty as a director. The Corporation shall indemnify, in
the manner and to the fullest extent permitted by the Delaware Law (but in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than permitted prior
thereto), any person (or the estate of any person) who is or was a party to, or
is threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether or not by or in the right of the
Corporation, and whether civil, criminal, administrative, investigative or
otherwise, by reason of the fact that such person is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise. The Corporation may, to the fullest

 
extent permitted by the Delaware Law, purchase and maintain insurance on behalf
of any such person against any liability which may be asserted against such
person. The Corporation may create a trust fund, grant a security interest or
use other means (including without limitation a letter of credit) to ensure the
payment of such sums as may become necessary or desirable to effect the
indemnification as provided herein. To the fullest extent permitted by the
Delaware Law, the indemnification provided herein shall include expenses as
incurred (including attorneys' fees), judgments, fines and amounts paid in
settlement and any such expenses shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the person seeking indemnification to repay such
amounts if it is ultimately determined that he or she is not entitled to be
indemnified. Notwithstanding the foregoing or any other provision of this
Section 7.1, no advance shall be made by the Corporation if a determination is
reasonably and promptly made by the Board by a majority vote of a quorum of
disinterested Directors, or (if such a quorum is not obtainable or, even if
obtainable, a quorum of disinterested Directors so directs) by independent legal
counsel to the Corporation, that, based upon the facts known to the Board or
such counsel at the time such determination is made, (a) the party seeking an
advance acted in bad faith or deliberately breached his or her duty to the
Corporation or its stockholders, and (b) as a result of such actions by the
party seeking an advance, it is more likely than not that it will ultimately be
determined that such party is not entitled to indemnification pursuant to the
provisions of this Section 7.1. The indemnification provided herein shall not be
deemed to limit the right of the Corporation to indemnify any other person for
any such expenses to the fullest extent permitted by the Delaware Law, nor shall
it be deemed exclusive of any other rights to which any person seeking
indemnification from the Corporation may be entitled under any agreement, the
Corporation's Bylaws, vote of stockholders or disinterested directors, or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office. The Corporation may, but only to
the extent that the Board of Directors may (but shall not be obligated to)
authorize from time to time, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to the
fullest extent of the provisions of this Section 7.1 as it applies to the
indemnification and advancement of expenses of directors and officers of the
Corporation.

SECTION 7.2 Indemnification of Employees and Agents. Subject to Section 7.1, the
Corporation may, but only to the extent that the Board may (but shall not be
obligated to) authorize from time to time, grant rights to indemnification and
to the advancement of expenses to any employee or agent of the Corporation to
the fullest extent of the provisions of this Article VII as they apply to the
indemnification and advancement of expenses of directors and officers of the
Corporation.

SECTION 7.3 Enforcement of Indemnification. The rights to indemnification and
the advancement of expenses conferred above shall be contract rights. If a claim
under this Article VII is not paid in full by the Corporation within 60 days
after written claim has been received by the Corporation, except in the case of
a claim for an advancement of expenses, in which case the applicable period
shall be 20 days, the indemnitee may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of such claim. If successful in
whole or in part in any such suit, or in a suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expenses of prosecuting or
defending such suit. In (i) any suit brought by the indemnitee to enforce a
right to indemnification hereunder (but not in

 
a suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) any suit by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking the
Corporation shall be entitled to recover such expenses upon a final adjudication
that, the indemnitee has not met any applicable standard for indemnification set
forth in the DGCL. Neither the failure of the Corporation (including its Board,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of such suit that indemnification of the indemnitee is proper
in the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the DGCL, nor an actual determination by the Corporation
(including its Board, independent legal counsel or stockholders) that the
indemnitee has not met such applicable standard of conduct, shall either create
a presumption that the indemnitee has not met the applicable standard of conduct
or, in the case of such a suit brought by the indemnitee, be a defense to such
suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this Article VII or
otherwise shall be on the Corporation.

                          ARTICLE VIII: MISCELLANEOUS

SECTION 8.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of two concentric circles with the name of the Corporation between the two
circles and the date and state of incorporation appearing in the inner circle.

SECTION 8.2 Waiver of Notices. Whenever notice is required to be given by these
Bylaws or the Certificate of Incorporation or by law, the person entitled to
said notice may waive such notice in writing, either before or after the time
stated therein, and such waiver shall be deemed equivalent to notice.

SECTION 8.3 Amendments. Except as otherwise provided herein or in the
Certificate of Incorporation, these Bylaws or any of them may be altered,
amended, repealed or rescinded and new Bylaws may be adopted by the Board or by
the stockholders at any annual or special meeting of stockholders, provided that
notice of such proposed alteration, amendment, repeal, rescission or adoption is
given in the notice of such meeting.

 
                            CERTIFICATE OF SECRETARY


The undersigned, being the duly elected Secretary of BNC Mortgage, Inc., a
Delaware corporation, hereby certifies that the Bylaws to which this Certificate
is attached were duly adopted by the Board of Directors of said Corporation as
of January 13, 1998.



                                         /s/ EVAN R. BUCKLEY
                                         -------------------
                                         Evan R. Buckley