SUPPLEMENT
(To Prospectus Supplement dated December 4, 1996)
(To Prospectus Dated July 28, 1996)
$700,000,000
AMRESCO Residential Securities Corporation Mortgage Loan Trust 1996-5
$42,200,000 6.425% Class A-1 Certificates
$29,000,000 6.275% Class A-2 Certificates
$16,500,000 6.400% Class A-3 Certificates
$17,000,000 6.575% Class A-4 Certificates
$15,000,000 6.700% Class A-5 Certificates
$15,900,000 6.925% Class A-6 Certificates
$14,400,000 7.075% Class A-7 Certificates*
$550,000,000 Class A-8 Adjustable Rate Certificates*
----------
Advanta Mortgage Corp. USA
Option One Mortgage Corporation
Servicers
AMRESCO RESIDENTIAL SECURITIES CORPORATION
Depositor
----------
Prudential Securities Incorporated
CS First Boston
Goldman, Sachs & Co.
Morgan Stanley & Co.
Incorporated
- --------------------------------------------------------------------------------
The date of this Supplement to Prospectus Supplement is January 24, 1997
<PAGE>
<TABLE>
<CAPTION>
Delinquencies and Foreclosures
(Dollars in Thousands)
At December 31, At December 31,
1993 1994
---------------------------------------------------------------------------------------------------------
Percent Percent Percent Percent
By No. By Dollar By No. by Dollar By No. By Dollar By No. by Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Portfolio.......... 1,233 $146,352 N/A N/A 6,115 $615,488 N/A N/A
Period of Delinquency:
31 - 59 days.......... 2 251 .16 .17 32 3,247 .52 .53
60 - 89 days.......... 3 265 .24 .18 17 1,637 .28 .27
90 days or more....... 2 282 .16 .19 28 3,556 .46 .58
- --- --- --- --- ----- ---- ----
Total Delinquent Loans... 7 798 .56 .54 77 8,440 1.26 1.38
Loans in Foreclosure*.... 4 415 .32 .28 50 5,328 .82 .87
At December 31, At September 30
1995 1996
---------------------------------------------------------------------------------------------------------
Percent Percent Percent Percent
By No. By Dollar By No. by Dollar By No. By Dollar By No. by Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
---------------------------------------------------------------------------------------------------------
Total Portfolio.......... 12,686 $1,153,199 N/A N/A 16,100 $1,429,042 N/A N/A
Period of Delinquency:
31 - 59 days.......... 126 11,364 .99 .99 268 23,441 1.66 1.64
60 - 89 days.......... 87 8,138 .69 .71 126 11,082 .78 .78
90 days or more....... 294 28,982 2.32 2.51 531 44,629 3.30 3.12
--- ---------- ---- ---- --- ------ ---- ----
Total Delinquent Loans... 507 48,484 4.00 4.21 925 79,152 5.74 5.54
Loans in Foreclosure*.... 301 28,874 2.37 2.50 496 41,669 3.08 2.92
- --------------------
</TABLE>
* Loans in foreclosure are also included under the heading "Total Delinquent
Loans."
<TABLE>
<CAPTION>
Real Estate Owned
(Dollars in Thousands)
At December 31, At December 31, At December 31, At September 30,
1993 1994 1995 1996
----------------------------------------------------------------------------------------------
By Dollar By Dollar By Dollar By Dollar
By No. Amount By No. Amount By No. Amount By No. Amount
of Loans of Loans of Loans of Loans of Loans of Loans of Loans of Loans
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Portfolio............ 1,233 $146,352 6,115 $615,488 12,686 $1,153,199 16,100 $1,429,042
Foreclosed Loans(1)........ 0 0 12 1,512 80 7,634 177 17,379
Foreclosed Ratio(2)........ 0 .00 .20 .25 .63 .66 1.10 1.22
- ------------------------
</TABLE>
(1) For the purposes of these tables, Foreclosed Loans means the principal
balance of mortgage loans secured by mortgaged properties the title to
which has been acquired by Option One, by investors or by an insurer
following foreclosure or delivery of a deed in lieu of foreclosure.
(2) The Foreclosure Ratio is equal to the aggregate principal balance or
number of Foreclosed Loans divided by the aggregate principal balance,
or number, as applicable, of mortgage loans in the Total Portfolio at
the end of the indicated period.
<TABLE>
<CAPTION>
Loan Loss Experience on
Option One's Servicing Portfolio
of Mortgage Loans
(Dollars in Thousands)
Year Ending December 31,
--------------------------------------------------
Nine Months
Ended
1993 1994 1995 September 30,
1996
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Portfolio (1) $146,352 $615,488 $1,153,199 $1,429,042
Gross Losses (2) $ 0 $ 17 $ 1,291 $ 2,249
Recoveries (3) $ 0 $ 0 $ 0 $ 0
Net Losses (4) $ 0 $ 17 $ 1,291 $ 2,249
Net Losses as a Percentage of Total
Portfolio (5) 0.00% 0.00% 0.11% 0.21%
</TABLE>
- -----------------------------------
(1) "Total Portfolio" on the date stated above is the principal balances of
the mortgage loans outstanding on the last day of the period.
(2) "Gross Losses" are actual losses incurred on liquidated properties for
each respective period. Losses are calculated after repayment of all
principal, foreclosure costs and accrued interest to the date of
liquidation.
(3) "Recoveries" are recoveries from liquidation proceeds and deficiency
judgments.
(4) "Net Losses" means "Gross Losses" minus "Recoveries."
(5) For the Nine Months Ending September 30, 1996, "Net Losses as a
Percentage of Total Portfolio" was annualized by multiplying "Net
Losses" by 1.33 before calculating the Percentage of "Net Losses as a
Percentage of Total Portfolio."
S-27
<PAGE>
The following tables set forth, as of December 31, 1993, 1994, 1995 and
September 30, 1996 certain information relating to the delinquency experience
(including imminent foreclosures, foreclosures in progress and bankruptcies) of
one- to four-family residential mortgage loans included in Option One's entire
servicing portfolio (which portfolio includes mortgage loans originated by
Option One and mortgage loans that are subserviced for others) at the end of the
indicated periods. The indicated periods of delinquency are based on the number
of days past due on a contractual basis. No mortgage loan is considered
delinquent for these purposes until it is one month past due on a contractual
basis. Such tables restate PHMC's performance statistics relating only to the
non-conforming mortgage loans previously subserviced by Option One. Such
servicing was subsequently transferred to Option One.
<TABLE>
Delinquencies and Foreclosures
(Dollars in Thousands)
At December 31, At December 31,
1993 1994
---------------------------------------------------------------------------------------------------------
Percent Percent Percent Percent
By No. By Dollar By No. by Dollar By No. By Dollar By No. by Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Portfolio.......... 1,233 $146,352 N/A N/A 6,115 $615,488 N/A N/A
Period of Delinquency:
31 - 59 days.......... 2 251 .16 .17 32 3,247 .52 .53
60 - 89 days.......... 3 265 .24 .18 17 1,637 .28 .27
90 days or more....... 2 282 .16 .19 28 3,556 .46 .58
- --- --- --- --- ----- ---- ----
Total Delinquent Loans... 7 798 .56 .54 77 8,440 1.26 1.38
Loans in Foreclosure*.... 4 415 .32 .28 50 5,328 .82 .87
At December 31, At September 30
1995 1996
---------------------------------------------------------------------------------------------------------
Percent Percent Percent Percent
By No. By Dollar By No. by Dollar By No. By Dollar By No. by Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
---------------------------------------------------------------------------------------------------------
Total Portfolio.......... 14,625 $1,367,031 N/A N/A 17,763 $1,614,210 N/A N/A
Period of Delinquency:
31 - 59 days.......... 161 16,501 1.10 1.21 302 28,320 1.70 1.75
60 - 89 days.......... 104 10,117 .71 .74 150 14,392 .84 .89
90 days or more....... 388 40,275 2.65 2.95 638 58,686 3.59 3.64
--- ---------- ---- ---- --- ------ ---- ----
Total Delinquent Loans... 653 66,893 4.46 4.90 1,090 101,398 6.14 6.28
Loans in Foreclosure*.... 388 38,985 2.65 2.85 604 58,874 3.40 3.40
</TABLE>
- --------------------
* Loans in foreclosure are also included under the heading "Total Delinquent
Loans."
<TABLE>
<CAPTION>
Real Estate Owned
(Dollars in Thousands)
At December 31, At December 31, At December 31, At September 30,
1993 1994 1995 1996
-----------------------------------------------------------------------------------------------
By Dollar By Dollar By Dollar By Dollar
By No. Amount By No. Amount By No. Amount By No. Amount
of Loans of Loans of Loans of Loans of Loans of Loans of Loans of Loans
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Portfolio..... 1,233 $146,352 6,115 $615,488 14,625 $1,367,031 17,763 $1,614,210
Foreclosed Loans(1). 0 0 12 1,512 100 9,632 268 27,186
Foreclosed Ratio(2). 0 .00 .20 .25 .68 .70 1.51 1.68
</TABLE>
- ------------------------
(1) For the purposes of these tables, Foreclosed Loans means the principal
balance of mortgage loans secured by mortgaged properties the title to
which has been acquired by Option One, by investors or by an insurer
following foreclosure or delivery of a deed in lieu of foreclosure.
(2) The Foreclosure Ratio is equal to the aggregate principal balance or
number of Foreclosed Loans divided by the aggregate principal balance,
or number, as applicable, of mortgage loans in the Total Portfolio at
the end of the indicated period.
S-28
<PAGE>
<TABLE>
<CAPTION>
Loan Loss Experience on
Option One's Servicing Portfolio
of Mortgage Loans
(Dollars in Thousands)
Year Ending December 31,
----------------------------------------------------
Nine Months Ended
September 30,
1993 1994 1995 1996
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Portfolio (1) $146,352 $615,488 $1,367,031 $1,614,210
Gross Losses (2) $ 0 $ 17 $ 1,506 $ 3,002
Recoveries (3) $ 0 $ 0 $ 0 $ 0
Net Losses (4) $ 0 $ 17 $ 1,506 $ 3,002
Net Losses as a Percentage of Total
Portfolio (5) 0.00% 0.00% 0.11% 0.25%
</TABLE>
- -----------------------------------
(1) "Total Portfolio" on the date stated above is the principal balances of
the mortgage loans outstanding on the last day of the period.
(2) "Gross Losses" are actual losses incurred on liquidated properties for
each respective period. Losses are calculated after repayment of all
principal, foreclosure costs and accrued interest to the date of
liquidation.
(3) "Recoveries" are recoveries from liquidation proceeds and deficiency
judgments.
(4) "Net Losses" means "Gross Losses" minus "Recoveries."
(5) For the Nine Months Ending September 30, 1996, "Net Losses as a
Percentage of Total Portfolio" was annualized by multiplying "Net
Losses" by 1.33 before calculating the Percentage of "Net Losses as a
Percentage of Total Portfolio."
General
There can be no assurance that the delinquency experience of the
Mortgage Loans originated by Option One (the "Option One Loans") will correspond
to the delinquency experience of Option One's mortgage portfolio set forth in
the foregoing tables. See "The Portfolio of Mortgage Loans -- General" herein.
The statistics shown above represent the delinquency experience for Option One's
residential mortgage servicing portfolio only for the periods presented, whereas
the delinquency experience on the Option One Loans will depend on the results
obtained over the life of such Option One Loans. Option One's residential
mortgage servicing portfolio includes mortgage loans with a variety of payment,
credit and other characteristics (including geographic location) which may not
be representative of the payment, credit and other characteristics of the Option
One Loans. Option One has limited default information with respect to the
mortgage loans originated under the Underwriting Guidelines and is unable to
predict the delinquencies and foreclosures that might be expected with respect
to the Option One Loans. See "Risk Factors -- Risk of Higher Delinquencies
Associated with Underwriting Guidelines" herein. If the residential real estate
market should experience an overall decline in property values, the actual rates
of delinquencies and foreclosures could be higher than those previously
experienced by Option One. In addition, adverse economic conditions may affect
the timely payment by Mortgagors of scheduled payments of principal and interest
on the Option One Loans and accordingly, the actual rates of delinquencies and
foreclosures with respect to the Mortgage Loan Pool. Notwithstanding anything to
the contrary herein, Option One makes no representation as to accuracy of any
information contained herein except for the information provided under the
heading "The Servicers-Option One Mortgage Corporation."
No industrywide data is available for mortgage loans for mortgagors
with less than FNMA credit quality. See "The Portfolio of Mortgage Loans --
Guidelines" herein.
USE OF PROCEEDS
The Depositor will sell the Initial Mortgage Loans to the Trust
concurrently with delivery of the Certificates. Net proceeds from the sale of
the Class A Certificates will be applied by the Depositor to the purchase of the
Initial Mortgage Loans from the Seller, to the deposit of the Original
Pre-Funded Amount in the Pre-Funding
S-29
