SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the period from May 1, 1996 (Commencement of Operations)
to December 31, 1996
[ ] 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 - 333-01451
LEHMAN ABS CORPORATION, (as depositor under the Pooling and Servicing
Agreement, dated as of May 1, 1996, which forms Lehman Home Equity Loan
Trust 1996-2, which will issue the Lehman Home Equity Loan Trust 1996-2,
Home Equity Loan Asset-Backed Certificates, Series 1996-2).
LEHMAN ABS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
13-3447441
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Three World Financial Center
200 Vesey Street
New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code : (212) 526-7000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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]
Page 1 of 8 This report consists of 12 consecutively numbered pages.
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2
AMENDMENT NUMBER
1 OF 1
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(2) Financial Statement Schedules:
Omitted.
(3) Exhibits:
Derived Materials of Lehman Brothers and of First Union dated May 1996
for Lehman Home Equity Loan Asset-Backed Certificates, Series 1996-2
(incorporated by reference to Exhibits 1 and 2 to Current Report on
Form 8-K dated May 1996).
Annual Statement of Compliance, filed as Exhibit 99.1 hereto.
Annual Servicing Report, filed as Exhibit 99.2 hereto.
(b) Reports on Form 8-K: The following Current Reports on Form 8-K were
filed by the Registrant.
A Current Report on Form 8-K, dated September 26, 1996, was filed for
the purpose of filing the Monthly Certificateholder Statements, as
Exhibits 99.1 through 99.3 for payments made on June 25, 1996, July
25, 1996, and August 26, 1996, respectively. A Current Report on Form
8-K, dated February 11, 1997, was filed for the purpose of filing the
Monthly Certificateholder Statements, as Exhibits 99.1 through 99.5
for payments made on September 25, 1996, October 25, 1996, November
25, 1996, December 26, 1996 and January 27, 1997, respectively. A
Current Report on Form 8-K, dated March 27, 1997, was filed for the
purpose of filing the Monthly Certificateholder Statement, as Exhibit
99.6 for payments made on February 25, 1997. The items reported in
such Current Report were Item 5 (Other Events).
(c) Exhibits to this report are listed in Item (14)(a)(3) above.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
CHASE MANHATTAN BANK
(SUCCESSOR BY MERGER OF THE
CHASE MANHATTAN BANK, N.A.),
AS TRUSTEE, FOR
LEHMAN HOME EQUITY LOAN TRUST 1996-2
Date: August 1, 1997 By: /s/ Ron
--------------------------
Feldman
Ron Feldman
Vice President
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INDEX TO EXHIBITS
Exhibit
Number Description of Exhibits Page
4.1 Derived Materials of Lehman Brothers and of First Union * dated
May 1996 for Lehman Home Equity Loan Asset-Backed Certificates,
Series 1996-2 (incorporated by reference to Exhibits 1 and 2 to
Current Report on Form 8-K dated May 1996).
99.1 Annual Statement of Compliance 9
99.2 Annual Servicing Report
11
* Incorporated by reference.
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EXHIBIT 99.1
ANNUAL STATEMENT OF COMPLIANCE
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First Union National Bank of North Carolina
Master Servicing Division
301 South College Street, TW9
Charlotte, North Carolina 28288-0828
7040374-2487
Fax 704 383-0387
OFFICER'S CERTIFICATE
Reference is hereby made to that certain Pooling and Servicing Agreement dated
as of May 1, 1996 among First Union National Bank of North Carolina, Lehman ABS
Corporation and The Chase Manhattan Bank with respect to Home Equity Loan
Asset-Backed Certificates, Series 1996-2 (the "Agreement"). Capitalized terms
used herein not otherwise defined shall have the meanings assigned in the
Agreement.
Pursuant to Section 3.10 of this Agreement, I, Karl Mendenhall, Senior Vice
President, and I, Anthony J. Gagliardo, Vice President of First Union National
Bank of North Carolina, as Servicer (the "Servicer"), do hereby certify that:
1. The Servicer has fully complied with the provisions of Article III and
V, as applicable, of the Agreement during the period from the May 1,
1996 through December 31, 1996;
2. A review of the activities of the Servicer during the period from May
1, 1996 through December 31, 1996 and of performance under the
Agreement during such period has been made under my supervision; and
3. To the best of my knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Agreement throughout the period
May 1, 1996 through December 31, 1996.
IN WITNESS WHEREOF, the undersigned have executed this Certificate as of the 7th
day of April, 1997.
Karl Mendenhall, Senior Vice President
Anthony J. Gagliardo, Vice President
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EXHIBIT 99.2
ANNUAL SERVICING REPORT
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First Union National Bank of North Carolina
301 South College Street, TW6
Charlotte, North Carolina 28268-0828
800 786-8919
Fax 704 383-0387
Management Assertion
As of and for the year ended December 31, 1996, except as noted in the following
paragraphs, First Union National Bank of North Carolina's Master Servicing
Division (the Company) has compiled in all material respects with the minimum
servicing standards for master servicers set forth in the Mortgage Bankers
Association of America's Uniform Single Attestation Program for Mortgage Bankers
(USAP). With respect to minimum servicing standards I.4., II.1., II.2., II.3.,
II.4., III.2., III.3., III.4., III.6., V.1., V.2., V.3., V.4. and VI.1. as set
forth in such program, the Company relies on the performance of its primary
servicers. There were instances of noncompliance with minimum servicing
standards by primary servicers noted in the most recently received independent
auditors reports for several primary servicers. These instances of noncompliance
are discussed below.
From July to December 1996, the Company was not in full compliance with USAP
standard I.1, relating to reconciliations of custodial bank accounts, including
the preparation of the reconciliations within 45 calendar days of the cutoff
date and the identification of all reconciling items. The noncompliance was
primarily concentrated in 18 of the Company's 157 custodial bank accounts. Since
January 1997, the Company has worked diligently to properly reconcile all
affected accounts and all accounts are currently being reconciled in a timely
manner with only certain pre-1997 unidentified reconciling items existing. Based
on the method that the Company uses to calculate investor remittances, it is
management's belief that the custodial bank account should not affect any
trustee or investor in any manner. Once Management believes that all custodial
bank accounts have been completely reconciled, which is expected to be on May
31, 1997, we plan to engage our external auditors, KPMG Peat Marwick LLP, to
perform an interim 1997 examination of the USAP standard relating to custodial
bank account reconciliations. We will make this report available upon request.
As discussed above, with respect to minimum servicing standards I.4., II.1,
II.2., II.3., II.4., III.2., III.3., III.4., III.6., V.1., V.2., V.3., V.4., and
VI.1. of the USAP, the Company relies on the performance of its primary
servicers. As part of our on-going monitoring of the primary servicers, the
Company obtains independent accountant's reports regarding those companies'
compliance with minimum servicing standards. The Company's readings of the most
recently available reports noted certain instances of noncompliance by primary
servicers that are reported below:
Instances of exceptions with respect to the Company's approximately 190 primary
servicers were:
Custodial Bank Accounts (USAP standard I.1.) - five primary servicers
Unissued Checks (III.6.) - one primary servicer
Escrow Account Analysis (V.3.) - two primary servicers
Delinquencies (VI.1.) - four primary servicers
The Company does not have current USAP's for primary servicers comprising
approximately 16% of the master servicing portfolio, therefore, we could not
review the most recently available reports.
The Company has a process in place to review the financial soundness and
servicing performance of primary servicers on an annual basis. Among other
factors, the Company considers the results of the primary servicers' USAP
reports in these reviews and takes appropriate corrective actions where it is
warranted. The Company is currently in the process of obtaining the most current
USAP's for those primary servicers for which it has not yet been received.
As of and for this same period, the Company had in effect fidelity bond and
errors and omissions insurance policies in the amount of $100 million and $20
million, respectively.
Karl J. Mendenhall 4/28/97 Anthony J. Gagliardo 4/28/97
Senior Vice President Vice President
Master Servicing Master Servicing
Bruce W. Good 4/28/97 John M. Church 4/28/97
Assistant Vice President Senior Vice President
Master Servicing Structured Servicing Products
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KPMG Peat Marwick LLP
Suite 2800
Two First Union Center
Charlotte, NC 28282-8290
Independent Accountants' Report
The Board of Directors
First Union National Bank of North Carolina:
We Have examined management's assertion about First Union National Bank of North
Carolina Master Servicing Division'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 (the USAP) as of and for
the year ended December 31, 1996 included in the accompanying management
assertion. In as much as the Company does not service the loans underlying the
master servicing directly, our procedures relative to minimum servicing
standards I.4, II.1, II.2, II.3, II.4, III.2, III.3, III.4, III.6, V.1, V.2,
V.3, V.4, and VI.1 of the USAP, involved obtaining and reading the most recently
available reports from the primary servicers' independent auditors. Our opinion
as expressed herein, insofar as it relates to such minimum servicing standards
performed by such primary servicers, is solely based upon the reports of the
respective independent auditors. 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, except for noncompliance by the
Company relating to custodial bank account reconciliations and various
noncompliance with minimum servicing standards by certain of it's primary
servicers noted from reading other independent auditors' reports, the Company
compiled with the aforementioned minimum servicing standards as of and for the
year ended December 31, 1996, is fairly stated, in all material respects.
KPMG Peat Marwick LLP
April 28, 1997
