.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(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, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File number 33-96410
Option One/CTS Mortgage Loan Trust 1996-1
-----------------------------------------
(Exact name of registrant as specified in its charter)
13-3881133 and
New York 13-3881130
-------- ----------
(State of otherjurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Chemical Bank
Structured Finance Services
450 West 33rd Street
New York,NY 10001
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (212) 946-3185
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on
which registered:
None None
---- ----
None
----
(Title of class)
Indicated by check mark whether the registrant (1) has filed all reports
required to be file 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 .
Indicate by check mark ifdisclosure of delinquent filers pursuant to Item
405 of Regulation S-K (subsection 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [X ]
State the aggregate market value of the voting stock held by non-affiliates
of registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of specified date within 60 days prior to the date of filing:
Not Applicable
Documents Incorporated by Reference:
None
<PAGE>
OPTION ONE/CTS MORTGAGE LOAN TRUST 1996-1
INDEX
PART 1.......................................................... 3
ITEM 1 - BUSINESS............................ 3
ITEM 2 - PROPERTIES...................... 3
ITEM 3 - LEGAL PROCEEDINGS............... 3
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS............................. 3
PART II............................................. 3
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS........... 3
ITEM 6 - SELECTED FINANCIAL DATA............... 3
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 4
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA......4
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.................................... 4
PART III................................................................. 4
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT.................................... 4
ITEM 11 - EXECUTIVE COMPENSATION ..................... 4
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT......................... 4
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.................................. 7
PART IV.............................................................. 7
ITEM 14 - EXHIBITS,FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K..............................7
SIGNATURES ............................................................ 9
INDEX TO EXHIBITS......................................................... 10
-2-
<PAGE>
PART I
ITEM 1 - BUSINESS
Not Applicable.
ITEM 2 - PROPERTIES
Not Applicable.
ITEM 3 - LEGAL PROCEEDINGS
The Depositor is not aware of any material pending legal proceedings
involving either the Option One CTS Mortgage Loan Trust (the "Trust")
established pursuant to the Pooling and Servicing Agreement (the
"Agreement") dated March 1, 1996, among Chemical Bank, as trustee (the
"Trustee") ContiSecurities Asset Funding Corp., as depositor (the
"Depositor") and Option One Mortgage Corporation, as servicer (the
"Servicer"), the Trustee, the Depositor or the Servicer which relates to
the Trust.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter has been submitted to a vote of the holders of beneficial
interests in the Trust through the solicitation of proxies or otherwise.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
To the best knowledge of the Depositor, there is no established
public trading market for any beneficial interests in the Trust.
All of the Class A-1 Certificates, Class A-2 Certificates, and Class
I-0 issued by the Trust are held by the Depository Trust Company ("DTC")
which in turn maintains records of holders of beneficial interests in such
Certificates. Based on information obtained by the Trust from DTC, as of
March 10, 1997, there were 7 holders of the Class A-1 Certificates, 12
holders of the Class A-2 Certificates, and 7 holders of the Class I-O
Certificates.
ITEM 6 - SELECTED FINANCIAL DATA
Not applicable.
-3-
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Not applicable.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
In addition to the information included in the Annual Compilation of
Monthly Trustee's Statements attached as Exhibit 99.3 hereto, the gross
servicing compensation paid to the Servicer for the year ended December
31, 1996 was $810,939.15
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes of accountants or disagreements on accounting
or financial disclosures between the Issuer and its accountants.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not applicable.
ITEM 11 - EXECUTIVE COMPENSATION
Not applicable.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth (i) the name and address of each
entity owning more than 5% of the outstanding principal amount of each
Class of Certificates of the Trust; (ii) the principal amount of the Class
of Certificates owned by each and (iii) the percent that the principal
amount of the Class of Certificates owned by such entity represents of the
outstanding principal amount of such Class of Certificates. The
information set forth in the table for the Certificates is based upon
information obtained by the Trust from DTC and represents ownership of
beneficial interest in the Certificates held by DTC. The Depositor is not
aware of any Schedules 13D or 13G filed with the Securities and Exchange
Commission in respect of the Certificates.
-4-
<PAGE>
<TABLE>
<CAPTION>
Amount Owned
Name and Address All Dollar Amounts Are in Thousands
---------------- -----------------------------------
Principal Percent
--------- -------
Class A-1 Certificates
- ----------------------
<S> <C> <C>
First National Bank of Boston $ 5,000 7.35%
c/o ADP Proxy Services
51 Mercedes Way
Edgewood, NY 11717
LaSalle National Bank 27,000 39.71
c/o ADP Proxy Services
51 Mercedes Way
Edgewood, NY 11717
Nomura International Trust Co. 15,800 23.24
Inc.
10 Exchange Place
Jersey City, NJ 07302
15,000 22.06
Norwest Bank Minnesota
National Assoc
733 Marquette Avenue
Minneaoplis, MN 55479-0056
Class A-2 Certificates
- ----------------------
Bank of New York $10,000 5.81%
925 Patterson Plank Rd
Secaucus, NJ 07094
Chase Manhattan Bank 54,500 31.69
Two Chase Manhattan Plaza, 5th
Floor
New York, NY 10081
Credit Suisse First Boston 23,275 13.53
Corporation
c/o ADP Proxy Services
51 Mercedes Way
Edgewood, NY 11717
First National Bank of Chicago 12,000 6.98
One First National Plaza,
Suite 0417
Chicago, IL 60670
Republic National Bank of New 34,000 19.77
York -
Investment Account
One Hanson Place, Lower Level
Brooklyn, NY 11243
SSB-Custodian 15,400 8.95
Global Proxy Unit, A5NW
P.O. Box 1631
Boston, MA 02105-1631
Class I-O Certificates
- -----------------------
Boston Safe Deposit & Trust Co. $33,674(1) 32.80%
c/o Mellon Bank N.A.
Three Mellon Bank Center
Room 153-3015
Pittsburgh, PA 15259
SSB-Custodian 49,022(1) 47.75
Global Proxy Unit, A5NW
P.O. Box 1631
Boston, MA 02105-1631
Wachovia Bank North Carolina 5,414(1) 5.27
100 N. Main Street, NC 37121
Winston-Salem, NC 27150
- ----------
<FN>
(1) Represents the "Notional Principal Amount" of the Class I-O Certificates
which is based on the aggregate outstanding Certificate Principal Balance
of the Certificates.
</FN>
</TABLE>
-6-
<PAGE>
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
[None]
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements:
Not applicable.
2. Financial Statement Schedules:
Not applicable.
3. Exhibits:
Exhibit No. Description
99.1 Statement of Compliance of the
Servicer.
99.2 Annual Report of Independent
Accountants with respect to
the Servicer's overall
servicing operations.
99.3 Annual compilation of Monthly
Trustee's Statement.
-7-
<PAGE>
(b) Reports on Form 8-K.
10 Reports on Form 8-K have been filed by the Issuer during the
period covered by this report.
Items Reported/Financial
Date of Reports on Form 8-K Statements Filed
April 25, 1996 Trustee's Monthly Report for
the March Monthly Period.
May 25, 1996 Trustee's Monthly Report for
the April Monthly Period.
June 25, 1996 Trustee's Monthly Report for
the May Monthly Period.
July 25, 1996 Trustee's Monthly Report for
the June Monthly Period.
August 25, 1996 Trustee's Monthly Report for
the July Monthly Period.
September 25, 1996 Trustee's Monthly Report for
the August Monthly Period.
October 25, 1996 Trustee's Monthly Report for
the September Monthly Period.
November 25, 1996 Trustee's Monthly Report for
the October Monthly Period.
December 26, 1996 Trustee's Monthly Report for
the November Monthly Period.
January 25, 1997 Trustee's Monthly Report for
the December Monthly Period.
-8-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Depositor has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.
By: CONTISECURITIES ASSET FUNDING CORP.,
AS DEPOSITOR
By: /s/ Jerome M. Perelson
Name: Jerome M. Perelson
Title:Vice President
By: /s/ Susan E. O'Donovan
Name: Susan E. O'Donovan
Title:Vice President & Chief Financial Officer
Date: March 27, 1997
-9-
<PAGE>
INDEX TO EXHIBITS
Item 14(C)
Exhibit No. Description
99.1 Statement of Compliance of the
Servicer.
99.2 Annual Report of Independent
Accountants with respect to
the Servicer's overall
servicing operations.
99.3 Annual compilation of Monthly
Trustee's Statement.
<PAGE>
Option One Mortgage Corporation
2020 East First Street, Suite 120
Santa Ana, CA 92799
The Chase Manhattan Bank
Corporate Trust Administration
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Structured Finance Services (MBS)
(Option One/CTS Adjustable Rate Mortgage Trust 1996-1)
Inv#476
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management Group-SF
(Option One/CTS Adjustable Rate Mortgage Trust 1996-1)
ContiTrade Services L.L.C.
277 Park Avenue
38th Floor
New York, New York 10172
Attention: Accounting
ContiSecurities Asset Funding Corporation
277 Park Avenue
38th Floor
New York, New York 10172
Attention: Accounting
Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: The Home Equity Monitoring Department
Standard & Poor's, a division of the McGraw Hill Companies
26 Broadway
15th Floor
New York, New York 10007
Pursuant to Section 8.16 of the Pooling and Servicing Agreement, dated and
effective as of March 28, 1995, (the "Agreement") among ContiSecurities Asset
Funding Corporation, as Depositor, Option One Mortgage Corporation as Servicer,
ContiTrade Services L.L.C., as the Company, and Chemical Bank as Trustee, I
certify that:
1. A review of the activities of the Master Servicer during the year ended
December 31, 1996, and of performance under the aforementioned agreement has
been made under my supervision.
2. To the best of my knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under the Agreement during the year ended
December 31, 1996, subject to any matters noted in the servicing report provided
under Section 8.17 of the Agreement.
/s/ William L. O'Neill
- ----------------------
William L. O'Neill
Senior Vice President \ Chief Financial Officer
Option One Mortgage Corporation
KPMG Peat Marwick LLP
Center Tower
650 Town Center Drive
Costa Mesa, CA 92626
INDEPENDENT ACCOUNTANTS'S REPORT
The Board of Directors
Option One Mortgate Corporation:
We have examined managements assertion about Option One Mortgage Corporation's
(the Company) 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, 1996.
Management is responsible for the Company's compliance with those minimum
servicing standards. Our responsibility is to express an opinion on management's
assertion about the Company'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 the 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 the Company's compliance with the minimum servicing
standards.
In our opinion, management's assertion that Option One Mortgage Corporation
complied with the aforementioned minimum servicing standards as of and for the
year ended December 31, 1996 is fairly stated, in all material respects.
By: /s/KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
February 18, 1997
OPTION ONE/CTS
ARM TRUST
ANNUAL AGGREGATE SUMMARY FOR: 1996 PAGE # 1
<TABLE>
<CAPTION>
ORIGINAL BEGINNING ENDING SUBORDINATE ENDING
CLASS CERTIFICATE CERTIFICATE PRINCIPAL INTEREST TOTAL CERTIFICATE AMOUNT PRINCIPAL
A-1 BALANCE BALANCE DISTRIBUTION DISTRIBUTION DISTRIBUTION BALANCE BALANCE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JAN 68,000,000.00 250,329,909.87 7,208,866.09 1,468,602.14 8,677,468.23 243,121,043.78 2,947,352.12 246,068,395.90
FEB 68,000,000.00 243,121,043.78 4,760,305.85 1,179,981.23 5,940,287.08 238,360,737.93 3,452,878.17 241,813,616.10
MARCH 68,000,000.00 238,360,737.92 5,080,601.19 1,108,874.02 6,189,475.21 233,280,136.73 4,240,578.28 237,520,715.01
APRIL 68,000,000.00 68,000,000.00 601,317.75 391,000.00 992,317.75 67,398,682.25 20,167.54 67,418,849.79
MAY 68,000,000.00 67,398,682.25 1,100,210.75 387,542.42 1,487,753.17 66,298,471.50 167,479.03 66,465,950.53
JUNE 68,000,000.00 66,298,471.50 744,045.69 381,216.21 1,125,261.90 65,554,425.81 313,142.42 65,867,568.23
JULY 68,000,000.00 65,554,425.81 1,134,661.17 376,937.95 1,511,599.12 64,419,764.64 458,317.27 64,878,081.91
AUG 68,000,000.00 64,419,764.64 1,522,906.49 370,413.65 1,893,320.14 62,896,858.15 600,998.12 63,497,856.27
SEPT 68,000,000.00 62,896,858.15 912,893.52 361,656.93 1,274,550.45 61,983,964.63 742,189.00 62,726,153.63
OCT 68,000,000.00 61,983,964.63 1,172,523.10 356,407.80 1,528,930.90 60,811,441.53 879,974.98 61,691,416.51
NOV 68,000,000.00 60,811,441.53 1,565,796.11 349,665.79 1,915,461.90 59,245,645.42 976,327.91 60,221,973.33
DEC 68,000,000.00 59,245,645.42 1,987,786.59 340,662.46 2,328,449.05 57,257,858.83 1,087,012.11 58,344,870.94
TOTALS
/END 68,000,000.00 59,245,645.42 27,791,914.30 7,072,960.60 34,864,874.90 57,257,858.83 1,087,012.11 58,344,870.94
ORIGINAL BEGINNING ENDING SUBORDINATE ENDING
CLASS CERTIFICATE CERTIFICATE PRINCIPAL INTEREST TOTAL CERTIFICATE AMOUNT PRINCIPAL
A-2 BALANCE BALANCE DISTRIBUTION DISTRIBUTION DISTRIBUTION BALANCE BALANCE
JAN 0.00 0.00 0.00 210,697.88 210,697.88 0.00 0.00 0.00
FEB 0.00 0.00 0.00 205,057.00 205,057.00 0.00 0.00 0.00
MARCH 0.00 0.00 0.00 201,511.35 201,511.35 0.00 0.00 0.00
APRIL 172,000,000.00 172,000,000.00 1,515,863.90 1,163,365.00 2,679,228.90 170,484,136.10 1,806.48 170,485,942.58
MAY 172,000,000.00 170,484,136.10 3,280,197.02 915,783.95 4,195,980.97 167,203,939.08 210,362.04 167,414,301.12
JUNE 172,000,000.00 167,203,939.08 2,897,600.02 753,950.43 3,651,550.45 164,306,339.06 568,957.25 164,875,296.31
JULY 172,000,000.00 164,306,339.06 3,437,643.01 802,362.62 4,240,005.63 160,868,696.05 881,072.93 161,749,768.98
AUG 172,000,000.00 160,868,696.05 4,564,139.02 837,947.16 5,402,086.18 156,304,557.03 1,165,211.14 157,469,768.17
SEPT 172,000,000.00 156,304,557.03 4,188,355.58 755,146.39 4,943,501.97 152,116,201.45 1,526,675.35 153,642,876.80
OCT 172,000,000.00 152,116,201.45 4,167,187.94 750,756.84 4,917,944.78 147,949,013.51 1,877,981.68 149,826,995.19
NOV 172,000,000.00 147,949,013.51 3,944,329.68 738,604.63 4,682,934.31 144,004,683.83 2,219,846.36 146,224,530.19
DEC 172,000,000.00 144,004,683.83 4,990,913.27 718,913.38 5,709,826.65 139,013,770.56 2,555,619.79 141,569,390.35
TOTALS 172,000,000.00 144,004,683.83 32,986,229.44 8,054,096.63 41,040,326.07 139,013,770.56 2,555,619.79 141,569,390.35
</TABLE>
<TABLE>
<CAPTION>
ORIGINAL BEGINNING ENDING SUBORDINATE ENDING
CERTIFICATE CERTIFICATE PRINCIPAL INTEREST TOTAL CERTIFICATE AMOUNT PRINCIPAL
CLASS R BALANCE BALANCE DISTRIBUTION DISTRIBUTION DISTRIBUTION BALANCE BALANCE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JAN 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FEB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
MARCH 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
APRIL N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
MAY N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
JUNE N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
JULY N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AUG N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
SEPT N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
OCT N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
NOV N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
DEC N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
TOTALS N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
CUMULATIVE 240,000,000.00 203,250,329.25 60,778,143.74 15,127,057.23 75,905,200.97 196,271,629.39 3,642,631.90 199,914,261.29
</TABLE>
IF THERE ARE ANY QUESTIONS OR PROBLEMS WITH THIS STATEMENT,
PLEASE CONTACT THE ADMINISTRATOR LISTED BELOW:
RUTH McKENNA
THE CHASE MANHATTAN BANK - STRUCTURED PRODUCTS GROUP
450 WEST 33RD STREET, 15TH FLOOR
NEW YORK, NEW YORK 10001
(212) 946-3157
