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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) July 2, 1997
FINANCIAL ASSET SECURITIES CORP., (as depositor)
FINANCIAL ASSET SECURITIES CORP.
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(Exact name of registrant as specified in its charter)
Delaware 333-29381 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.
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In connection with the offering of the Mego Mortgage Home Loan Owner
Trust 1997-3, Home Loan Asset Backed Notes and Certificates (the "Offered
Securities") Greenwich Capital Markets, Inc. as underwriter of the Offered
Securities (the "Underwriter"), has prepared Derived Materials (as defined
below) which include a preliminary term sheet for distribution to its
potential investors. With the exception of the preliminary term sheet which
was circulated on June 23, 1997, the Derived Materials were distributed on
June 24, 1997. The preliminary term sheet is attached hereto as Exhibit
99.1.
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 all the Derived Materials other than
the preliminary term sheet circulated on June 23, 1997, 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 Offered
Securities, 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.
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) Exhibits:
99.1 Preliminary Term Sheet for Series 1997-3
99.2 Other Computational Materials for Series 1997-3
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: July 2, 1997
Exhibit Index
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Exhibit Page
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99.1 Preliminary Term Sheet for Series 1997-3
99.2 Other Computational Materials for Series 1997-3
EXHIBIT 99.1
DATE PREPARED: 6/23/97
PRELIMINARY TERM SHEET
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GREENWICH CAPITAL MARKETS, INC.
MEGO MORTGAGE HOME LOAN OWNER TRUST 1997-3
HOME LOAN ASSET BACKED NOTES AND CERTIFICATES, SERIES 1997-3
<TABLE>
<CAPTION> WAL(2)* Payment Expected
(Yrs.) Window(2)* Tranche Ratings
Class(1) Amount Call/Mat. Call/Mat.(mos.) Type Benchmark S&P/D&P/Fitch
- ------------ -------------- ------------ --------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
A-1 Notes $33,400,000 0.99 1-24 Adj. Seq. 1M LIBOR AAA/AAA/AAA
A-2 Notes $25,700,00 3.00 24-51 Fixed Seq. 3 Yr. AAA/AAA/AAA
A-3 Notes $6,500,000 5.15 51-80 Fixed Seq. WI 5 Yr. AAA/AAA/AAA
A-4 Notes $9,451,000 9.98/11.01 80-147/80-262 Fixed Seq. 10 Yr. AAA/AAA/AAA
M-1 Notes $16,213,000 8.42/9.08 52-147/52-252 Fixed Mezz. 5 7/8% 11/05 AA/AA/AA-
M-2 Notes $7,584,000 8.42/9.05 52-147/52-234 Fixed Mezz. 5 7/8% 11/05 A/A/A-
Certificates $5,753,639 8.42/9.00 52-147/52-220 Fixed Sub. 5 7/8% 11/05 BBB/BBB/BBB
Total $104,601,639
</TABLE>
Notes
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1. All class sizes and ratings are subject to Rating Agency
confirmation. The Class A-1 Notes will be the "Variable Rate Notes"
based on One Month LIBOR plus the Class A-1 pass-through margin. The
pass-through rate on the Variable Rate Notes will be subject to a cap
of 12.00%. The Class A-2 through A-4, M-1, M-2 Notes and the
Certificates will be the "Fixed Rate Notes" and "Fixed Rate
Certificates", respectively. See "Federal Tax Status" below.
2. Based on 100% Prepayment Assumption. 100% Prepayment Assumption: 3%
CPR in month 1, and an additional 1.00% CPR in each month thereafter
until month 12; on and thereafter, 14% CPR. The Class A-1 through A-
3 Notes are unaffected by the optional clean-up call. The Class A-
4, M-1 and M-2 Notes and the Certificates will be priced to the
option clean-up call. If the optional clean-up call is not
exercised, the pass through rates on the Class A-4, M-1 and M-2 Notes
and the Certificates will increase by 50 basis points.
* See "Computational Materials Disclaimer" attached hereto.
Underwriter: GREENWICH CAPITAL MARKETS, INC.
Seller and Servicer: Mego Mortgage Corporation ("Mego").
Master Servicer: Norwest Bank Minnesota, N.A.
Depositor: Financial Asset Securities Corp.
Indenture Trustee: First Bank National Association.
Owner Trustee: Wilmington Trust Company.
Co-Owner Trustee: First Bank National Association.
Registration: The Notes and Certificates will be available in
book-entry form through DTC.
Cut-Off Date: Opening of business June 14, 1997.
Expected Pricing Date: Tuesday/Wednesday, June 24/25, 1997.
Expected Closing Date: Friday, June 27, 1997.
Expected Settlement
Date: Wednesday, July 2, 1997.
Accrued Interest: The price to be paid by investors for the Fixed
Rate Notes and Fixed Rate Certificates will
include accrued interest from the Cut-off Date
up to, but not including, the Settlement Date
(18 days). The price to be paid by investors
for the Variable Rate Notes will include
accrued interest from June 27, 1997 (the
"Closing Date") up to, but not including, the
Expected Settlement Date (5 days).
Interest Accrual
Period: The interest accrual period for the first
Distribution Date with respect the Fixed Rate
Notes and Fixed Rate Certificates will include
17 days of interest and with respect to any
subsequent Distribution Date will be the
calendar month preceding such Distribution Date
(based on a 360-day year consisting of twelve
30-day months).
The interest accrual period for the first
Distribution Date with respect to the Variable
Rate Notes will include 28 days of interest and
with respect to any subsequent Distribution
Date will be the period beginning with the
previous Distribution Date and ending on the
day prior to such Distribution Date
(actual/360).
Distribution Dates: 25th day of each month (or the next succeeding
business day), commencing July, 1997.
ERISA Eligibility: The Class A and Class M Notes are expected to
be ERISA eligible. Prospective investors must
review the Prospectus and Prospectus Supplement
and consult with their professional advisors
for a more detailed description of these
matters prior to investing in the Class A
and/or Class M Notes. The Certificates WILL
NOT be ERISA eligible.
Federal Tax Status: It is anticipated that the Notes will be
treated as debt instruments for Federal income
tax purposes. Each Certificateholder, by
acceptance of a Certificate, will agree to
treat the Trust as a partnership in which the
Certificateholders are partners for Federal
income tax purposes.
SMMEA Treatment: The Notes and Certificates WILL NOT constitute
"mortgage related securities" for purposes of
SMMEA.
Optional Termination: 10% optional clean-up call (outstanding
collateral principal balance is less than 10%
of the original collateral principal balance).
Credit Enhancement: Credit enhancement for the Class A Notes will
consist of (i) excess cashflow, (ii)
subordination of the Class M-1 and Class M-2
Notes and the Certificates (initially (28.25%))
and (iii) overcollateralization (as described
below).
Credit enhancement for the Class M-1 Notes will
consist of (i) excess cashflow, (ii)
subordination of the Class M-2 Notes and the
Certificates (initially (12.75%)) and (iii)
overcollateralization (as described below).
Credit enhancement for the Class M-2 Notes will
consist of (i) excess cashflow, (ii)
subordination of the Certificates (initially
(5.50%)) and (iii) overcollateralization (as
described below).
Credit enhancement for the Certificates will
consist of (i) excess cashflow, (ii)
overcollateralization (as described below).
Overcollateralization: The Notes and Certificates will represent
approximately 100% of the sum of (i) the
aggregate principal balance of the Loans as of
the Cut-off Date (the "Original Pool Principal
Balance"). On each Distribution Date prior to
the Stepdown Date (defined below) excess
interest will be paid as principal until the
O/C reaches the greater of (i) (8.0%) of the
Original Pool Principal Balance and (ii) the
Net Delinquency Calculation Amount (as
described below). On and after the Stepdown
Date, O/C needs to be maintained at the greater
of (i) (16%) of the current principal balance
of the loans and (ii) the Net Delinquency
Calculation Amount (the O/C is subject to a
floor of (0.50%) of the Original Pool Principal
Balance).
Stepdown Date: The first Distribution Date occurring after
June 2000 as to which the credit enhancement
for the Class A Notes reaches its targeted
level.
Net Delinquency
Calculation Amount: The Net Delinquency Calculation Amount is equal
to the difference between (A) (2.5) times the
average of 60+ day delinquencies for the
previous six months and (b) excess cashflow for
the previous three Distribution Dates.
Priority of
Distributions: Available funds will be distributed first, to
interest on the Notes and Certificates and
second, as principal of the Notes and
Certificates in the following order of
priority:
Interest
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1. Class A Notes, current interest and unpaid interest
shortfalls
2. Class M-1 Notes, current interest and unpaid interest
shortfalls
3. Class M-2 Notes, current interest and unpaid interest
shortfalls
4. Certificates, current interest and unpaid interest
shortfalls
5. Excess interest will be paid as principal, subject to
the O/C target, based on the principal payment rules
described below.
Principal (prior to the Stepdown Date)
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1. Class A-1 through A-4 Notes, sequentially
2. Class M-1, M-2 and Certificates, sequentially (once
Class A Notes are retired)
Principal (on and after the Stepdown Date)
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Principal will be distributed to each Class in order
of priority until the target principal balance and
related target credit enhancement level for each Class
is reached (targeted credit enhancement levels (i) are
subject to the O/C floor, as described above, and (ii)
may change due to application of the Net Delinquency
Calculation Amount).
Target % of Pool Target Credit Enhancement
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Class A (27.50%) (72.50%)
Class M-1 (31.00%) (41.50%)
Class M-2 (14.50%) (27.00%)
Certificates (11.00%) (16.00%)
Any Remaining Funds
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1) reimbursements of principal writedowns on the Notes (with
accrued interest) and reimbursement of principal writedowns
on the Certificates.
Loans: All of the Home Loans will be Conventional Loans (as defined
below) and will have an original outstanding aggregate loan
balance as of the Cut-Off Date of approximately
$104,601,639.24.
Collateral Description: Please see attached.
THE SELLER AND SERVICER
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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"); provided, however, no such Title I loans are
included among the Home Loans.
EXHIBIT 99.2
