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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
Reported) May 22, 1997
FINANCIAL ASSET SECURITIES CORP., (as depositor under the Sale and
Servicing Agreement, dated as of May 1, 1997, which forms Mego
Mortgage Home Loan Owner Trust 1997-2, which will issue the Home
Loan Asset-Backed Notes, Series 1997-2).
FINANCIAL ASSET SECURITIES CORP.
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(Exact name of registrant as specified in its charter)
Delaware 333-21071 06-1442101
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
600 Steamboat Road
Greenwich, Connecticut 06830
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (203) 625-2700
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Item 5. Other Events.
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Filing of Derived Materials./f/
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In connection with the offering of the Home Loan Asset-Backed Notes,
1997-2 (the "Notes") Greenwich Capital Markets, Inc. as underwriter of the
Notes (the "Underwriter"), has prepared certain materials (the "Derived
Materials") for distribution to its potential investors. The Derived
Materials were distributed on May 15 and 16 of 1997. Although the
Registrant provided the Underwriter with certain information regarding the
characteristics of the assets in the related portfolio, it did not
participate in the preparation of the Derived Materials. Concurrently with
the filing hereof, pursuant to Rule 202 of Regulation 202, the Registrant is
filing certain computational materials by paper filing on Form SE in reliance
on a continuing hardship exemption.
For purposes of this Form 8-K, Derived Materials shall mean computer
generated tables and/or charts displaying, with respect to the Notes, any of
the following: yield; average life, duration; expected maturity; loss
sensitivity; cash flow characteristics; background information regarding the
assets; the proposed structure; decrement tables; or similar information
(tabular or otherwise) of a statistical, mathematical, tabular or
computational nature, as well as certain matters relating to the collateral
for such transaction.
Incorporation of Certain Documents by Reference
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Pursuant to Rule 411 of Regulation C under the Securities Act of 1933
and in reliance on MBIA Insurance Corporation, SEC No-Action Letter
(September 6, 1996), the Company will incorporate by reference certain
financial statements of MBIA Insurance Corporation ("MBIA") into the
Company's registration statement (File No. 333-21071). The financial
statements will be referred to in the prospectus supplement relating to the
Company's Home Loan Asset-Backed Notes, Series 1997-2. In connection with
the incorporation of such documents by reference, the Company is hereby
filing the consent of Coopers & Lybrand L.L.P. ("Coopers & Lybrand") to the
use of their name in such prospectus supplement. The consent of Coopers &
Lybrand is attached hereto as Exhibit 2.
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/F/ Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Prospectus dated May 21, 1997, and the
Prospectus Supplment dated May 21, 1997, of Financial Asset Securities
Corp., relating to its Mego Mortgage Home Loan Owner Trust 1997-2, Home
Loan Asset-Backed Notes, Series 1997-2.
Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
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(a) Not applicable.
(b) Not applicable.
(c) Exhibit:
23. The Consent of Coopers & Lybrand.
99.1. The Derived Materials.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FINANCIAL ASSET SECURITIES CORP.
By: /s/ Peter McMullin
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Peter McMullin
Dated: May 23, 1997
Exhibit Index
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Exhibit Page
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1. The Consent of Coopers & Lybrand
2. The Derived Materials
EXHIBIT 1: CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Prospectus Supplement of
our report dated February 3, 1997, on our audits of the consolidated
financial statements of MBIA Insurance Corporation and Subsidiaries as of
December 31, 1996 and 1995 and for the three years in the period ended
December 31, 1996. We also consent to the reference to our firm under the
caption "Report of Experts".
/s/ Coopers & Lybrand L.L.P.
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Coopers & Lybrand L.L.P.
May 21, 1997
New York, New York
EXHIBIT 2: THE DERIVED MATERIALS
Computational Materials Disclaimer
The attached tables (the "Computational Materials") are privileged and
confidential and intended for use by the addressee only. These Computational
Materials are furnished to you solely by Greenwich Capital Markets, Inc. and
not by the issuer of the securities. They may not be provided to any third
party other than the addressee's legal, tax, financial and/or accounting
advisors for the purposes of evaluating said material.
Numerous assumptions were used in preparing the Computational Materials which
may or may not be reflected therein. As such, no assurance can be given as
to either the Computational Material's accuracy, appropriateness or
completeness in any particular context; nor as to whether the Computational
Materials and/or the assumptions upon which they are based reflect present
market conditions or future market performance. These Computational
Materials should not be construed as either projections or predictions or as
legal, tax, financial or accounting advice.
Any weighted average lives and principal payment periods shown in the
Computational Materials are passed on prepayment assumptions, and changes in
such prepayment assumptions may dramatically affect such weighted average
lives or principal payment periods. In addition, it is possible that
prepayments on the underlying assets will occur at rates slower or faster
than the rates shown in the attached Computational Materials. Furthermore,
unless otherwise provided, the Computational Materials assume no losses on
the underlying assets and no interest shortfall. The specific
characteristics of the securities may differ from those shown in the
Computational Materials due to differences between the actual underlying
assets and the hypothetical underlying assets and the hypothetical underlying
assets used in preparing the Computational Materials. The principal amount
and designation of any security described in the Computational Materials are
subject to change prior to issuance.
Although a registration statement (including the prospectus) relating to the
securities discussed in this communication has been filed with the Securities
and Exchange Commission and is effective, the final prospectus supplement
relating to the securities discussed in this communication has not been filed
with the Securities and Exchange Commission. This communication shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities discussed in this communication in any
state in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.
Prospective purchasers are referred to the final prospectus supplement
relating to the securities discussed in this communication for definitive
Computational Materials and any matters discussed in this communication. A
Final prospectus and prospectus supplement may be obtained by contacting
GCM's Trading Desk at (203) 625-6160.
Please be advised that asset-backed securities may not be appropriate for all
investors. Potential investors must be willing to assume, among other
things, market price volatility, prepayments, yield curve and interest rate
risks. Investors should make every effort to consider the risks of these
securities.
If you have received this communication in error, please notify the sending
party immediately by telephone and return the original to such party by mail.
This Preliminary Term Sheet is provided for information purposes only, and
does not constitute an offer to sell, nor a solicitation of an offer to buy,
the referenced securities. It does not purport to be all-inclusive or to
contain all of the information that a prospective investor may require to
make a full analysis of the transaction. All amounts are approximate and
subject to change. The information contained herein supersedes information
contained in any prior information term sheet for this transaction. In
addition, the information contained herein may be superseded by information
contained in term sheets circulated after the date hereof and is qualified in
its entirety by information contained in the Prospectus and Prospectus
Supplement for this transaction. An offering may be made only through the
delivery of the Prospectus and Prospectus Supplement through Greenwich
Capital Markets. Inc., Underwriter.
DATE PREPARED: 5/15/97
GREENWICH CAPITAL MARKETS, INC.
PRELIMINARY TERM SHEET
THE INFORMATION IN THIS PRELIMINARY TERM SHEET RELATES SOLELY TO THE NOTES
SPECIFIED BELOW.
MEGO MORTGAGE HOME LOAN OWNER TRUST 1997-2
HOME LOAN ASSET BACKED NOTES, SERIES 1997-2
$58,541,005 FIXED RATE, SEQUENTIAL PAY
Financial Asset Securities Corp., Depositor
<TABLE>
<CAPTION> WAL to Call/ Payment Window to
Class Amount* Maturity (Yrs) Call/Maturity (Mos)
<S> <C> <C> <C>
A-1 $15,750,000 0.82 1 - 19
A-2 8,500,000 2.10 19 - 32
A-3 6,250,000 3.08 32 - 43
A-4 14,050,000 5.02 43 - 85
A-5 13,991,005 10.29/11.27 85 - 148/85 - 238
</TABLE>
<TABLE>
<CAPTION> Principal Payments to Assumed
Class Call/Maturity Price Benchmark Expected Rating
<S> <C> <C> <C> <C>
A-1 19 months 100 6 1/8% 03/98 AAA/Aaa
A-2 14 months 100 2 Yr. Tsy. AAA/Aaa
A-3 12 months 100 3 Yr. Tsy. AAA/Aaa
A-4 43 months 100 5 Yr. Tsy. AAA/Aaa
A-5 64 / 154 months 100 10 Yr. Tsy. AAA/Aaa
</TABLE>
* BOND SIZES ARE NOT FINAL (SUBJECT TO +/- 5% VARIANCE).
Underwriter: GREENWICH CAPITAL MARKETS, INC.
Seller, Servicer and
Claims Administrator: Mego Mortgage Corporation ("Mego")
Master Servicer: Norwest Bank Minnesota, N.A.
Securities Insurer: MBIA Insurance Corporation.
Depositor: Financial Assets Securities Corp.
Indenture Trustee: First Trust of New York, National
Owner Trustee: Association.
Federal Tax Status: Wilmington Trust Company. It is anticipated
that the Notes, (Classes A-1, A-2, A-3, A-4 and
A-5), will be treated as debt instruments for
federal income tax purposes.
Registration: The Notes will be available in book-entry form
through DTC.
Expected Pricing Date: Friday, May 16, 1997
Expected Settlement Date: Wednesday, May 28, 1997
Accrued Interest: ACCRUED INTEREST TO BE PAID BY INVESTORS WILL
ACCRUE FROM MAY 1, 1997 UP TO, BUT NOT
INCLUDING, THE SETTLEMENT DATE (27 DAYS). THE
FIRST DISTRIBUTION DATE ON WHICH INVESTORS WILL
RECEIVE A REMITTANCE WILL BE JUNE 25, 1997.
THE INTEREST ACCRUAL PERIOD WITH RESPECT TO ANY
DISTRIBUTION DATE WILL BE THE CALENDAR MONTH
PRECEDING SUCH DISTRIBUTION DATE AND WILL BE
BASED ON A 360 DAY YEAR CONSISTING OF TWELVE
30-DAY DAY MONTHS.
Distribution Date: 25th day of each month (or the next succeeding
business day).
Credit Enhancement: Credit protection for the Notes will consist of
the following, to
the extent available: (i) an MBIA Insurance
Policy; (ii) overcollateralization; (iii)
excess spread; and (iv) FHA Title I Insurance
(subject to standard limitations of
availability) on the Title I portion of the
Home Loan pool, (the "FHA Loans," which equal
approx. 4.3% of the pool).
Expected Ratings: AAA/Aaa S&P/Moody's - based on a surety wrap to
be provided by MBIA.
Computational Material should be accompanied by a disclaimer which must be
read in its entirety by the addressee. If such disclaimer is not attached,
please notify Greenwich Capital Markets, Inc. of such omission
ERISA Eligibility: Generally, plans that are subject to the
requirements of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and
the Code are permitted to purchase instruments
like the Notes that are debt under applicable
state law and have no "substantial equity
features" without reference to the prohibited
transaction requirements of ERISA and the Code.
However, any Plan fiduciary considering whether
to purchase the Notes on behalf of a Plan
should consult with its counsel regarding the
applicability of the provisions of ERISA and
the Code and the availability of any
exemptions.
SMMEA Treatment: The Notes WILL NOT constitute "mortgage related
securities" for purposes of SMMEA.
Optional Termination: There is an optional clean-up call which is
exercisable at the time that the current
outstanding aggregate loan balance is equal to
10% or less of the original outstanding
aggregate loan balance as of the Cut-Off Date.
Pricing Speed: Ramping from 3% CPR to 14% CPR at 1%
increments, over 12 months.
Loans: The Home Loans have an original outstanding
aggregate loan balance as of the Cut-Off Date
of approximately $ 63,459,083.77. The Cut-Off
Date is the opening of business on May 1, 1997.
Collateral Description: Please see attached.
THE SELLER, SERVICER AND CLAIMS ADMINISTRATOR
Mego Mortgage Corporation ("Mego"), a Delaware corporation, commenced
operations in March 1994. Mego is a publicly traded company listed on the
NASDAQ National Market. Mego primarily originates, purchases and services
conventional, uninsured home improvement or home equity loans typically
undertaken to pay for a home improvement project, a combination of home
improvement and debt consolidation or solely for debt consolidation
("Conventional Loans"). All Conventional Loans are secured by a first- or
junior-lien mortgage on the borrower's principal residence. Mego generally
originates Conventional Loans to high credit quality borrowers who tend to
have limited equity in their residence after giving effect to the amount of
senior loans.
Mego is also an approved Title I lender that is engaged in the business of
originating, purchasing, selling and servicing loans for (i) property
improvements that qualify under the provisions of Title I of the National
Housing Act of 1934, as amended, which is administered by the Federal Housing
Administration (the "FHA" ) of the U.S. Department of Housing and Urban
Development ("HUD").
Computational Material should be accompanied by a disclaimer which must be
read in its entirety by the addressee. If such disclaimer is not attached,
please notify Greenwich Capital Markets, Inc. of such omission.
