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): October 21, 1998
NATIONAL FINANCIAL AUTO FUNDING TRUST
(Exact name of registrant as specified in its charter)
333-44159
Delaware 333-28829 not applicable
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
One Park Place
621 N.W. 53rd Street
Boca Raton, FL 33487
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (800) 999-7535
Item 5. Other Events
On January 20, 1998 (the Closing Date), National Auto Finance 1998-1 Trust, a
Delaware business trust formed by National Financial Auto Funding Trust (the
Registrant) issued $85,200,000 aggregate principal amount of Notes designated
the National Auto Finance 1998-1 Trust 5.88% Automobile Receivables-Backed
Notes, Series 1998-1 (the Notes), pursuant to an Indenture, dated as of
December 15, 1997, between the 98-1 Trust and Harris Trust and Savings Bank,
as Trustee and Trust Collateral Agent. The Notes are secured by trust property
consisting primarily of a segregated pool (the Receivables Pool) of non-prime
motor vehicle retail installment sale contracts (the Receivables), all of which
are secured by new or used automobiles, light-duty trucks, vans, or minivans
financed thereby. The Receivables Pool consisted as of the Closing Date of
Receivables having an aggregate principal balance as of December 15, 1997 (the
Cut-off Date) of approximately $75,504,414.69. The 98-1 Trust may acquire
certain additional Receivables on or prior to April 30, 1998 with funds
deposited in a Pre-Funding Account in the amount of approximately
$16,490,982.64, which additional Receivables will also secure the Notes. As
of the Cut-off Date, the Receivables had the characteristics described in the
Prospectus dated January 15, 1998 filed with the Commission pursuant to Rule
424(b)(2) of the Securities Act of 1933, as amended. This Current Report
on Form 8-K is being filed to satisfy certain reporting requirements.
A. Monthly Report Information:
Aggregate distribution information for the current
distribution date October 21, 1998.
Principal Interest Ending Balance
See Exhibit 1.
B. No delinquency in payment under the Certificate Guaranty
Insurance Policy has occurred.
C. Have any deficiencies occurred? NO.
Date:
Amount:
D. Were any amounts paid or are any amounts payable under
the Certificate Guaranty Insurance Policy? NO
Amount:
E. Are there any developments with respect to the Certificate
Insurance Guaranty Policy? NONE.
F. Item 1: Legal Proceedings: NONE
G. Item 2: Changes in Securities: NONE
H Item 4: Submission of Matters to a Vote of
Certificatholders: NONE
I. Item 5: Other Information - Form 10-Q, Part II - Items
1,2,4,5 if applicable: NOT APPLICABLE
Item 7. Monthly Statements and Exhibits
Exhibit No.
1. Monthly Servicer Certificate dated October 21, 1998.
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
Pre-
Pre- Funding
Collect Funding Reserve Spread Revolving Cert Trans- Master
Acct Acct Acct Acct Acct Acct feror Servicer
1 0 0 0 5443688 0 0 0 0
2 0 0 22429 0
3
4 3416956
5 0
6 16494
7 0 0
8 -52346 52346
9 0 0
10 -16494 -22429 38922
11 -2234819 0 2234819
12 0
13
14 -1129790 1129790
15 0 0
16 0
17 0 0
18 527547
19 0 0 0
20 0 0
21 0
22 0 0 0 0
23 0
24 0 0 0 0
25 0 0
26 0
27 0 0
28 0 0
29
30 0
31 0
32 -0 0 0 5971234 0 3364610 91269 0
33 3364610
1 Beginning Account Balances
2 Interest Income
3 Collection Account
4 Lockbox Collections during the Collections Period
5 Add: Retransfer Amount received in respect of any Retransferred Contracts
6 Add: Any income and gain from investments of funds in the Collection Account
7 Add: Amts received from the Transferor, Master Servicer or Subservicer
8 Less: Late Payment fees collected with respect to the Contracts on Deposit
9 Less: Supplemental Servicing Fee
10 Less: Any income and gain on investments of deposits in Collection Account
11 Less: Scheduled & Prepay Contract Principal
12 Less: Amounts deposited with respect to Retransferred Contracts
13 Certificate Account
14 Add: Withdrawals from Collection Account
15 Add: Payback from 96-1 Trust
16 Add: Payback from 97-1 Trust
17 Add: Withdrawals from Revolving Account
18 Add: Amounts deposited with respect to the spread requirements
19 Add: Withdrawals from the Pre-Funding Reserve Account
20 Add: Withdrawals from the Spread Account
21 Add: Proceeds of any Contracts or Property
22 Add: Any income and gain on investments of funds in the Certificate Account
23 Add: Amounts received from Certificate Insurer
24 Add: Withdrawals from the Revolving Account or Pre-Funding Account
25 Add: Amount Due to Class A Investors
26 Less: Expenses of Master Servicer or Transferor
27 Less: Payments to the Master servicer of Insurance and Liquidation Proceeds
28 Less: Payments to the Transferor with respect to
Retransferred Contracts or property
29 Pre-Funding Reserve Account
30 Less: Amount in excess of Required Deposit
31 Less: Amounts Distributed
32 Ending Account Balances
33 Available Amount to Certificate Holders
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
Cert
Account Payment
Available Amount 3364610
Payments on Payment Date
(i) Servicing Fee -129714 129714
NAFI Operating Depository Account
First Union National Bank, Charlotte, NC
Acct #2010000259454 - ABA 053000219
(ii) Trustee, Collateral Agent -3734 3734
and Custodian fees
Harris Trust and Savings Bank
(Legal Fees payable to Seward and Kissel)
(iiia) Class A Interest -347037 347037
(iiib) Class A Principal -2336602 2336602
(iv) Certificate Insurer -19975 19975
Financial Security Assurance
Morgan Guaranty Trust
Acct #000-33-345 ABA 021-000-238
(v) Collateral Agent (Spread Account) -527547 527547
Harris Trust and Savings Bank
(va) Cross Collateralization To 96-1 0 0
(vi) [Reserved]
(vii) Unreimbursed expenses to the Trustee 0 0
(viii) Unreimbursed expenses to the Master Servicer 0 0
(ix) Unreimbursed expenses to the Standby Servicer 0 0
(x) Unreimbursed expenses to the Transferor 0 0
(xi) Class B Certificate Holders 0 0
National Auto Finance Company, Inc.
First Union National Bank
Acct #2010000259454 - ABA 053000219
Pursuant to section 3.17 of the Pooling and Servicing Agreement dated as of
January 15, 1998 among National Financial
Auto Funding Trust, National Auto Finance Company, Inc. and
Harris Trust and Savings Bank, the undersigned, as
the Master Servicer, is providing the attached Monthly Statement
for the Collection Period 30-Sep-98
NATIONAL AUTO FINANCE COMPANY, INC.
as Master Servicer
Thomas Costanza 02-Nov-98
Vice President, CFO
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
1 Month 2 Months
(A) Portfolio Performance Tests: Current: Previous Previous
(yes/no) (yes/no) (yes/no)
Trigger Event (Yes/No) yes yes yes
Monthly
Delinquencies Delinquency
Delinquencies ACPB Ratio
2 Months Prior: 8436646 79819637 10.570%
1 Month Prior: 7327948 77828478 9.416%
Current: 7143784 75260784 9.492%
9.826%
Maximum Delinquency Ratio 8.25%
Monthly Annual
Gross Defaulted Contracts Default Default
Defaults ACPB Rate Rate
2 Months Prior: 806056 81120795 0.994% 11.924%
1 Month Prior: 1191408 78824058 1.511% 18.138%
Current: 1234041 76544631 1.612% 19.346%
1.372% 16.469%
Maximum Annualized Default Ratio
(i) Month 1 through 24 18.00%
(iii) Month 25 through the remainder of the transaction 14.00%
Monthly Annual
Losses Loss Loss
Losses ACPB Rate Rate
2 Months Prior: 558390 81120795 0.688% 8.260%
1 Month Prior: 367680 78824058 0.466% 5.597%
Current: 332875 76544631 0.435% 5.219%
0.530% 6.359%
Maximum Annualized Net Loss Rate
(i) Month 1 through 24 8.00%
(iii) Month 25 through the remainder of the transaction 6.00%
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
1 Month 2 Months
(B) Insurance Agreement Event of Defaults Previous Previous
Current: (yes/no) (yes/no)
Event of Default (Yes/No) no no no
(1) Bankruptcy or insolvency of the Company, or the Seller;
(2) A default or a breach of a representation, warranty, or
covenant by the Company or the Seller under any of the
transaction documents which has not been cured
within the applicable grace period;
(3) Any claim for payment under the Certificate Policy;
(4) Delinquency Ratio is 11% or higher averaged
over the 3 previous Monthly Periods:
Monthly
Delinquencies Delinquency
Delinquencies ACPB Ratio
2 Months Prior: 8436646 79819637 10.570%
1 Month Prior: 7327948 77828478 9.416%
Current: 7143784 75260784 9.492%
9.826%
Maximum Delinquency Ratio 11.00%
(5) The Default Rate average over the 3 previous Monthly
Periods exceeds 25% for month 1 through 24,
and 17% for the remainder of the transaction;
Monthly Annual
Defaults Default Default
Defaults ACPB Rate Rate
2 Months Prior: 806056 81120795 0.994% 11.924%
1 Month Prior: 1191408 78824058 1.511% 18.138%
Current: 1234041 76544631 1.612% 19.346%
1.372% 16.469%
Maximum Annualized Default Ratio
(i) Month 1 through 24 25.00%
(iii) Month 25 through the remainder of the transaction 17.00%
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
(B) Insurance Agreement Event of defaults (Cont.)
(6) The Net Loss Rate averaged over the 3 previous Monthly
Periods exceeds 11% for month 1 through 24,
and 8% for the remainder of the transaction;
Monthly Annual
Losses Loss Loss
Losses ACPB Rate Rate
2 Months Prior: 558390 81120795 0.688% 8.260%
1 Month Prior: 367680 78824058 0.466% 5.597%
Current: 332875 76544631 0.435% 5.219%
0.530% 6.359%
Maximum Annualized Net Loss Rate
(i) Month 1 through 24 11.00%
(iii) Month 25 through the remainder of the transaction 8.00%
(7) The Servicer Termination Events listed below:
(i) Failure to deposit funds as required under the no
Pooling and Servicing Agreement
(ii) Failure to deliver the Servicer's Certificate no
(iii) Breach of Servicer covenants no
(iv) Bankruptcy or insolvency of the Servicer no
(v) Material breach of representations and warranties no
(vi) Certificate Insurer has not delivered a no
Servicer Extension Notice
(vii) Insurance Agreement Event of Default on no
this or other transactions
(viii)Claim under the policy no
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
Class A Interest Schedule
Opening Class A Principal Balance 70823915
Class A Interest Rate 5.88%
30/360*Class A Interest Rate 0.49%
Current Class A Interest Distribution 347037
Prior Class A Interest Arrearage 0
Class A Interest Due 347037
Current Class A Interest Arrearage 0
Class A Principal Schedule
Opening Class A Principal Balance 70823915
Scheduled Principal 1094419
Prepayments 569284
Liquidated Contracts 903991
Less: Principal write-up adjustment
2567695
Retransfers 0
2567695
Class A Share - 91% 2336602
Remaining Prefunding Account Balance 0
Principal due to Class A 2336602
Prepayment from Revolving Account 0
Prepayment From Pre-Funding Account 0
Prior Class A Arrearage 0
Class A Principal Due 2336602
Class A Principal Distribution 2336602
Current Class A Arrearage 0
Ending Class A Principal Balance after current Distribution 68487313
Servicing Fee Schedule
Beginning Collateral Balance 77828478
Annual Servicing Rate 2.00%
Prior Servicing Fee Arrearage 0
Current Servicer Fee 129714
Servicer Fee Due 129714
Servicer Fee Paid 129714
Current Servicing Fee Arrearage 0
National Auto Finance 1998-1 Trust
National Auto Finance Company, Inc.
Monthly Servicer Certificate
SEC Reporting and Trustee Fee Schedule
Sec Reporting Fee 0
Legal Fees 3734
Prior Trustee Fee Arrearage 0
Current SEC and Trustee Fee 0
Trustee Fee Due 3734
Current Trustee Fee Arrearage 3734
Certificate Insurer Schedule
Ending Class A Balance 68487313
Insurance Premium 0.350%
Insurance Premium Supplement 0.00%
Certificate Insurer Fee 19975
Pre-Funding Account
Opening Balance 0
Monthly Originations X 91% 0
Withdrawal From Pre-Funding Account 0
Prepayment associated with end of Pre-Funding Period 0
Due to Class A Investors 0
Closing Balance 0
Revolving Account Schedule
Opening Balance 0
Amount Transferred from Collection Account 0
First Interim Balance 0
Withdrawal From Revolving Account 0
Second Interim Balance 0
Amount Transferred to Certificate Account
Prepayment Associated with Release from Revolving Account 0
Ending Balance 0
Spread Account
Initial Collateral Balance 85200000
Opening Spread Account Balance 5443688
Less Interest Earned -22429
Opening Spread Account Balance 5443688
Required Balance Spread Account 6773471
Required Deposit to Spread Account 1329783
Ending Spread Account Balance 5971234
Remaining Deposit Required 802236
Cap 6773471
Floor 68487313
The Floor Amount at any time will be equal to
the greater of (i) the outstanding Class A
Certificate Balance, and (ii) $100,000
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
Class A Certificate Factor
Current Class A Balance 68487313
Initial Class A Balance 85200000
Certificate Factor: 0.8038417051
Aggregate Contract Principal Balance 75260784
Class A Balance 68487313
Less: Prefunding Account 0
Receivable backed Certificates 68487313
A Investor Percentage 91.00%
Weighted Average Coupon 19.08%
Weighted Average Maturity 44.73
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
Beginning of Transaction 12/16/97
Payment Date 10/21/98
Month of Transaction 10
Period Ended 09/30/98
Collection Account
Beginning Balance 0
Collections during the Collections Period 3416956
Retransfer Amt received in respect of any Retransferred Contracts 0
Any income and gain from investments of funds in the Collect Acct 16494
Amts received from the Transferor, Master Servicer or Subservicer 0
Late Payment Fees collected with respect to the Contracts on Deposit 52346
Supplemental Servicing Fee 0
Amounts deposited with respect to Retransferred Accounts 0
Scheduled Principal 1094419
Prepayments 569284
Recoveries 571116
Certificate Account
Amounts received from the Transferor 0
Amounts received from the Master Servicer or Subservicer 0
Withdrawals from the Pre-Funding Reserve Account 0
Withdrawals from the Spread Account 0
Proceeds of any Contracts or Property 0
Any income and gain on investments of funds in the Cert Acct 0
Amounts received from Certificate Insurer (Claims to FSA) 0
Expenses of an Opinion of Counsel 0
Expenses of Master Servicer or Transferor 0
Payments to the Master servicer of Insurance and Liquidation Proceeds 0
Payments to the Transferor with respect to Retransferred Contracts or 0
property
Pre-Funding Reserve Account
Beginning Balance 0
Amount in excess of Required Deposit 0
Interest Income 0
Certificate Insurer
Is there a claim on the policy in the current month, No
or has there ever been a claim?
Revolving Account
Beginning Balance 0
Transfers 0
Over 3.0 Million Principal
Remaining balance due to Investors 0
Interest Income 0
Pre-Funding Account
Beginning Balance 0
Interest Income 0
Remaining balance due to Investors 0
Spread Account
Beginning Balance 5443688
Interest Income 22429
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
Number of loans currently owned by Trust 6640
Initial Collateral Balance 85200000
New Originations Transferred to Trust 0
Initial Certificate Account Balance 0
Previous Servicing Fee Arrearage 0
Previous Trustee, Collateral Agent, 0
Lockbox and Custodian fees - Arrearage
Previous Class A Interest Arrearage 0
Unreimbursed expenses to the Trustee 0
Unreimbursed expenses to the Master Servicer 0
Unreimbursed expenses to the Standby Servicer 0
Unreimbursed expenses to the Transferor 0
Opening Class A Principal Balance 85200000
Prior Class A Principal Arrearage 0
1 Month 2 Months 3 Months
Current Prior Prior Prior
30+ Days Past Due 4558373 4882612 5875719 5225810
60+ Days Past Due 1596490 1843153 1737253 1201553
90+ Days Past Due 988920 602182 823675 593336
Delinquent (30+ days past due) 7143784 7327948 8436646 7020699
Current Month Repos 605414 596800 259555 685117
New over 90 Days 628626 594608 546501 582433
Defaults 1234041 1191408 806056 1267550
Liquidated Contracts
Repos > 90 Days 290047 399611 203006 78398
Closed Repo's 613944 203555 479268 278280
Past Due > 120 Days 0 0 84571 89468
Chapter 13 Bankruptcy 0 0 102365 0
Net Liquidated Accounts 903991 603166 869210 446145
Recoveries - net of expenses 571116 235486 310819 216138
Net Losses 332875 367680 558390 230008
ACPB 75260784 77828478 79819637 82421954
6773471
Principal Paid
01/21/98 570239
02/21/98 1187300
03/21/98 1351552
04/21/98 1748564
05/21/98 1884175
06/21/98 1969574
07/21/98 1484618
08/21/98 2368108
09/21/98 1811954
14376085
National Auto Finance 1998-1 Trust
Monthly Servicer Certificate
21-Oct-98
Amount
World Omni to World Omni ( Servicer) Reconciliation
Opening Principal Balance 74702670
Add: New Accounts Transferred 0
Less: Scheduled Principal Received -1094419
Prepaid Accounts -569284
Repossessed Accounts -807614
Total principal reductions -2471318
Plus BNI Conversion Write Up
Closing Principal Balance 72231352
Closing Principal Balance per BNI 71929254
Difference 302098
ACPB Reconciliation
Closing Principal Balance 71929254
Add: Non Liquidated Repo Inventory
deducted from World Omni balance but
not passed through to investors 1391650
Adjusted Principal Balance 73320904
ACPB Prior to ACPB Current Reconciliation
Prior Month ACPB 77828478
Add: New Accounts Transferred 0
Less: Scheduled Principal Received -1094419
Prepaid Accounts -569284
Less: Liquidated Accounts -903991
Plus: BNI Conversion Write Up 0
Current Month ACPB 75260784
Adjusted Principal Balance 73320904
Current Month ACPB 75260784
Difference -1939880
Repo Liquidated Repo
Repo/Liquidated Accounts Principal Principal Inventory
12/31/97 2196 2196 0
01/31/98 121350 121350 0
02/28/98 260050 260050 0
03/31/98 752214 752214 0
04/30/98 620229 620229 0
05/31/98 726667 726667 0
06/30/98 734195 734195 0
07/31/98 321619 303530 18089
08/31/98 879954 300413 579541
09/30/98 807614 13594 794021
5226090 3834439 1391650
91% Investor Balance:
Ending Class A Balance 68487313
Current ACPB 75260784
Investor Percentage 91.00%
SIGNATURES
Pursuant to the requirements 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.
FINANCIAL ASSET SECURITIES CORPORATION
/s/ Kevin Adams
VP/CFO
Dated: September 30, 1998
