10-K/A

                     SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549


                                   FORM 10-K/A
                                 Amendment No.1

(Mark One)

/ x / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
      THE SECURITIES EXCHANGE ACT OF 1934
      For the fiscal year ended December 31, 1998 or

/   / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934


      Commission File No.:   333-44593-05

             Salomon Brothers Mortgage Securities VII, Inc.
                        Asset Backed Certificates
                       Series  1998-AQ1      Trust
        (Exact name of registrant as specified in its charter)



New York                             52-2107852, 52-2107845
(State or other jurisdiction     (I.R.S. Employer
 of incorporation or              Identification  No.)
 organization)

c/o Norwest Bank Minnesota, N.A.
11000 Broken Land Parkway
Columbia, Maryland                            21044
(Address of principal executive offices)     (ZIP Code)


Registrant's telephone number, including area code:
     (410) 884-2000

Securities to be registered pursuant to Section 12(b)
of the Act:

     NONE

Securities to be registered pursuant to Section 12(g)
of the Act:

     NONE

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

     Yes   X          No ___


This Amendment No. 1 on Form 10-K/A amends Item 14 of the original Annual Report
on Form 10-K (the  "Original  Form 10-K") filed on March 25, 1999, on behalf of
Salomon Brothers Mortgage  Securities VII, Inc. Asset Backed Certificates Series
1998-AQ1 Trust established  pursuant to a Pooling and Servicing  Agreement among
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC. as Depositor, AMERIQUEST MORTGAGE
COMPANY as Master Servicer, and NORWEST BANK MINNESOTA,  NATIONAL ASSOCIATION as
Trustee,  pursuant to which the Salomon Brothers  Mortgage  Securities VII, Inc.
Asset Backed  Certificates Series 1998-AQ1 Trust registered under the Securities
Act of 1933 (the "Certificates") were issued.

Item 14 of the Original Form 10-K is amended to read in its entirety as follows:


Item 14.  Exhibits, Financial Statement Schedules, and Reports
          on Form 8-K.

          (a) Exhibits

              (99.1) Annual Independent Accountants' Servicing
                     Reports concerning servicing activities for
                     the year ended December 31, 1998.

                     a)   Ameriquest Mortgage 

              (99.2) Report of Management as to Compliance with
                     Minimum Servicing Standards for the year
                     ended December 31, 1998.

                     a)   Ameriquest Mortgage 

              (99.3) Annual Statements of Compliance under the
                     Pooling and Servicing Agreements for the
                     year ended December 31, 1998.

                     a)   Ameriquest Mortgage 

              (99.4) Aggregate Statement of Principal and
                     Interest Distributions to Certificate
                     Holders. 

            (b)  On  October 7, 1998, November 10, 1998, and
                 December 4, 1998, reports on Form 8-K were filed
                 by the Company in order to provide the
                 statements for the monthly distributions to
                 holders of the Certificates.  No other reports on
                 Form 8-K have been filed during the last quarter
                 of the period covered by this report.

            (c)  Not applicable.

            (d)  Omitted.

  Filed herewith.

  Previously filed.



                           SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized:

Salomon Brothers Mortgage Securities VII, Inc.
Asset Backed Certificates
Series  1998-AQ1 Trust

Signed:   Norwest Bank Minnesota, N.A., as Trustee

By:   Sherri J. Sharps, Vice President
By:  /s/  Sherri J. Sharps, Vice President

Dated:  December 15, 1999

Exhibits
Exhibit No.1

99.1 Annual  Independent  Accountants'  Servicing Reports  concerning  servicing
     activities for the year ended December 31, 1998.

                     a)   Ameriquest Mortgage 

99.2 Report of Management as to Compliance with Minimum Servicing  Standards for
     the year ended December 31, 1998.

                     a)   Ameriquest Mortgage 

99.3 Annual Statements of Compliance under the Pooling and Servicing  Agreements
     for the year ended December 31, 1998.

                     a)   Ameriquest Mortgage 

99.4 Aggregate Statement of Principal and Interest  Distributions to Certificate
     Holders. 


  Filed herewith.

  Previously filed.

EX-99.1(A)

(LOGO)
Deloitte & Touche LLP

Suite 1200
695 Town Center Drive
Costa Mesa, California 92626-1924
Telephone: (714) 436-7100
Facsimile: (714)436-7200

INDEPENDENT ACCOUNTANTS' REPORT

To Ameriquest Mortgage Company

We have examined  management's  assertion about  Ameriquest  Mortgage  Company's
compliance  with the minimum  servicing  standards  identified  in the  Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers (USAP) as of and for the year ended  December 31, 1998,  included in the
accompanying  management  assertion.  Management is  responsible  for Ameriquest
Mortgage  Company's  compliance  with those  minimum  servicing  standards.  Our
responsibility is  to express an  opinion on  management's  assertion  about the
entity's compliance based on our examination.

Our  examination  was  made in  accordance  with  standards  established  by the
American  Institute of Certified Public Accountants and,  accordingly,  included
examining,  on a  test  basis,  evidence  about  Ameriquest  Mortgage  Company's
compliance  with the  minimum  servicing  standards  and  performing  such other
procedures as we considered necessary, in the circumstances. We believe that our
examination  provides a reasonable  basis for our opinion.  Our examination does
not provide a legal  determination on Ameriquest  Mortgage Company's  compliance
with the minimum servicing standards.

In our opinion, management's assertion that Ameriquest Mortgage Company complied
with the aforementioned minimum servicing standards as of and for the year ended
December 3l, 1998 is fairly stated, in all material respects.

Deloitte & Touche LLP
March 12, 1999

EX-99.2(A)

(Logo)

                               AMERIQEST MORTGAGE


March 12, 1999

As of and for the year ended December 31, 1998,  Ameriquest Mortgage Company has
complied in all material respects with the minimum servicing standards set forth
in the Mortgage  Bankers  Association of America's  Uniform  Single  Attestation
Program for Mortgage  Bankers.  From January 1, 1998 through  December 31, 1998,
Ameriquest  Mortgage  Company  had in effect a  fidelity  bond in the  amount of
$10,000,000 and for the same period, an errors and omissions policy in an amount
between $6,200,000 and $6,425,000.

James R. Brazil
President

Elaine Stangl
Executive Vice President, Loan Servicing

John P. Grazer
Executive Vice President
Chief Financial Officer

1100  Town & Country Road. Suite 1100. Orange. CA,  92868-4642o  (714) 564-0600

EX-99.3(A)

ANNUAL CERTIFICATION OF COMPLIANCE
PURSUANT TO THE SALE SERVICING AND ADMINISTRATION AGREEMENT (S)


In accordance with the  Agreement(s),  I, the undersigned,  hereby certify as to
each Mortgage Loan being serviced by the below named institution that:

1. I am an  "Officer"  as  defined  in the above  referenced  Agreement,  and am
empowered and authorized to issue this Annual Certification.

2. To the best of my knowledge and upon reasonable investigation,  the servicing
of the Mortgage Loans during the year preceding the last Anniversary Date of the
Agreement has been  conducted in compliance  with the Agreement  except for such
exceptions as I am setting forth below.

Exceptions (if any):

3. A review of  activities  with  respect to  performances  under the  Agreement
during the year  preceding the last  Anniversary  Date of the Agreement has been
made under my supervision and to the best of my knowledge, based on such review,
no default  exists as of the above date in the  fulfillment  of any  obligations
under the Agreement other than the events of default, if any, which I am listing
below with the nature and status thereof.

Events of Default (if any):

This certification covers the period of January 1, 1998 through December 31,
1998

AMERIQUEST MORTGAGE COMPANY
By: Elaine Stangl
Title: Executive Vice President, Loan Servicing


Investor: