UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) January 21, 1999
Block Mortgage Finance, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-65215 43-1758633
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification)
4435 Main Street, Suite 500, Kansas City Missouri 64111
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (816) 932-4960
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
Exhibit 5.1 Opinion of Morrison & Hecker L.L.P. re: Legality relating to the
Block Mortgage Finance Assset Backed Certificates, Series 1999-1.
Exhibit 8.1 Opinion of Brown & Wood, L.L.P. re: Tax Matters relating to the
Block Mortgage Finance Assset Backed Certificates, Series 1999-1.
Exhibit 23.1 Consent of Counsel Morrison & Hecker L.L.P. Contained in Document
under Exhibit 5.1.
Exhibit 23.2 Consent of Counsel Brown & Wood, L.L.P. Contained in Document
under Exhibit 8.1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BLOCK MORTGAGE FINANCE, INC.
By: /s/ Bret G. Wilson
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Name: Bret G. Wilson
Title: President
Date: January 21, 1999
MORRISON & HECKER L.L.P.
ATTORNEYS AT LAW
2600 Grand Avenue
Kansas City, Missouri 64108-4606
Telephone (816) 691-2600
Telefax (816) 474-4208
January 21, 1999
Block Mortgage Finance, Inc.
One Main Street Plaza
4435 Main Street, Suite 500
Kansas City, Missouri 64111
Re: Block Mortgage Finance, Inc.
Registration Statement on Form S-3 (No. 333-65215)
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Ladies and Gentlemen:
We have acted as your counsel in connection with the preparation of (i) a
registration statement on Form S-3 (Registration No. 333-65215) filed with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Act"), on October 1, 1998, which became effective
October 27, 1998 (the "Registration Statement"); (ii) a prospectus forming a
part of the Registration Statement (the "Prospectus"); (iii) a Pooling and
Servicing Agreement dated as of January 1, 1999 (the "Pooling and Servicing
Agreement") among Block Mortgage Finance, Inc., as Depositor (the "Company"),
Block Financial Corporation, as Master Servicer, Companion Mortgage Corporation,
as Seller, and The First National Bank of Chicago, as Trustee (the "Trustee");
and (iv) a final prospectus supplement dated January 20, 1999 (the "Prospectus
Supplement") relating to the offer and sale of the Block Mortgage Finance Asset
Backed Certificates, Series 1999-1 Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, and Class A-7 Certificates (collectively, together with
the Class R Certificates, the "Certificates"). Capitalized terms used and not
otherwise defined herein have the respective meanings given them in the Pooling
and Servicing Agreement or the Accord identified in the following paragraph.
This Opinion Letter is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualification,
exceptions, definitions, limitations on coverage and other limitation, all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The opinions expressed herein are given only with
respect to the present status of the substantive laws of the state of Missouri
(not including the choice-of-law rules under Missouri law). We express no
opinion as to any matter arising under the laws of any other jurisdiction.
In rendering the opinions set forth below, we have examined and relied on
the following: (1) the Registration Statement, the Prospectus and the Prospectus
Supplement; (2) the Pooling and Servicing Agreement; and (3) such other
documents, materials, and authorities as we have deemed necessary in order to
enable us to render our opinions set forth below.
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Block Mortgage Finance, Inc.
January 21, 1999
Page 2
Based on and subject to the foregoing and other qualifications set forth
below, we are of the opinion that:
1. The Pooling and Servicing Agreement is the valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
2. When (a) the Mortgage Loans and other consideration for the
Certificates constituting the Trust Fund have been deposited with the Trustee,
(b) the Certificates have been duly executed, authenticated, delivered and sold
as provided in the Pooling and Servicing Agreement and the Prospectus Supplement
and (c) the consideration for the sale of the Certificates has been fully paid
to the Company, the Certificates will be legally and validly issued, fully paid
and nonassessable, and the duly registered holders of the Certificates will be
entitled to the benefits of the Pooling and Servicing Agreement.
The General Qualifications apply to the opinions set forth in paragraphs 1
and 2 above, and in addition, such opinions are subject to the qualification
that certain remedial, waiver and other similar provisions of the Pooling and
Servicing Agreement or the Certificates may be rendered unenforceable or limited
by applicable laws, regulations or judicial decisions, but such laws,
regulations and judicial decisions will not render the Pooling and Servicing
Agreement or the Certificates invalid as a whole and will not make the remedies
available thereunder inadequate for the practical realization of the principal
benefits intended to be provided thereby, except for the economic consequences
of any judicial, administrative or other delay or procedure which may be imposed
by applicable law.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to the references to this firm under the heading
"Legal Matters" in the Prospectus and the Prospectus Supplement. This consent is
not to be construed as an admission that we are a person whose consent is
required to be filed with the Registration Statement under the provisions of the
Act.
Very truly yours,
MORRISON & HECKER L.L.P.
/s/Morrison & Hecker L.L.P.
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Morrison & Hecker L.L.P.
January 21, 1999
Salomon Smith Barney Inc.
Seven World Trade Center, 32nd Floor
New York, New York 10048
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Block Mortgage Finance, Inc.
4435 Main Street, Suite 500
Kansas City, Missouri 64111
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Re: Block Mortgage Finance, Inc.
Asset Backed Certificates, Series 1999-1
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Ladies and Gentlemen:
We have acted as special tax counsel for Block Mortgage Finance, Inc. in
connection with the formation of the Block Mortgage Finance, Inc. Asset Backed
Certificates, Series 1999-1 (the "Trust Fund") created pursuant to a Pooling and
Servicing Agreement, dated as January 1, 1999 (the "Pooling and Servicing
Agreement") among Block Mortgage Finance, Inc., as depositor (the "Depositor"),
Companion Mortgage Corporation, as seller (the "Seller"), Block Financial
Corporation, as master servicer (the "Master Servicer") and The First National
Bank of Chicago, as trustee (the "Trustee"), and the issuance of the Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class A-6 Certificates and Class A-7
Certificates (collectively, the "Class A Certificates") and the Class R
Certificates (together with the Class A Certificates, the "Certificates"). The
Trust Fund will
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consist primarily of a pool of mortgage loans secured by mortgages, deeds of
trust or other instruments creating a first or second lien on one- to four-
family dwellings. Unless otherwise indicated, all terms used herein shall have
the meanings assigned to such terms in the Pooling and Servicing Agreement.
In arriving at the opinions below, we have examined such documents and
records as we have deemed appropriate, including the following:
1. A signed copy of registration statement No. 333-65215 filed by the
Depositor on Form S-3 with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"). (The term "Registration Statement" shall mean the registration
statement in the form in which the most recent post-effective
amendment thereto became effective under the Act.)
2. The prospectus dated October 27, 1998 (the "Base Prospectus") and the
supplement thereto dated January 20, 1999 (the "Prospectus
Supplement") relating to the offering of the Class A Certificates in
the form in which the Base Prospectus and the Prospectus Supplement
were filed with the Commission pursuant to Rule 424 of the rules and
regulations of the Commission under the Act. (The Base Prospectus as
supplement by the Prospectus Supplement is hereinafter referred to as
the "Prospectus".)
3. A signed copy of the Pooling and Servicing Agreement.
In addition, we have made such investigations of such matters of law as we
deemed appropriate as a basis for the opinions expressed below. Further, we have
assumed the genuineness of all signatures and the authenticity of all documents
submitted to us as originals. We have, for the purpose of rendering the
opinions, also relied on certain factual, numerical and statistical information
which is based on the assumptions used in pricing the Certificates. Our opinions
are also based on the assumption that there are no agreements or understandings
with respect to the transactions contemplated in the Pooling and Servicing
Agreement other than those contained in the Pooling and Servicing Agreement and
that all parties to the Pooling and Servicing Agreement will comply with the
terms thereof, including all tax reporting requirements contained therein.
Based on the foregoing, we are of the opinion that, assuming compliance
with the pertinent provisions of the Pooling and Servicing Agreement, the Trust
will qualify as a real estate mortgage investment conduit ("REMIC") as defined
in the Internal Revenue Code of 1986, as amended (the "Code"). Each Class of the
Class A Certificates will be treated as "regular interests" in REMIC, and the
Class R Certificates will be treated as the beneficial ownership of a single
class of "residual interests" in a REMIC.
The opinions set forth herein are based upon the existing provisions of
the Code and Treasury regulations issued or proposed thereunder, published
Revenue Rulings and releases of the Internal Revenue Service and existing case
law, any of which could be changed at any time.
2
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Any such changes may be retroactive in application and could modify the legal
conclusions upon which such opinions are based. The opinions expressed herein
are limited as described above, and we do not express an opinion on any legal or
income tax aspect of the transactions contemplated by the Documents relating to
the transaction.
In rendering the foregoing opinions, we express no opinion as to the laws
of any jurisdiction other than the federal income tax laws of the United States.
This opinion is rendered as of the date hereof and we undertake no obligation to
update this opinion or advise you of changes in the event there is any change in
legal authorities, facts, assumptions or documents on which this opinion is
based (including the taking of any action by any party to the documents pursuant
to any opinion of counsel or a waiver), or any inaccuracy in any of the
representations, warranties or assumptions upon which we have relied in
rendering this opinion, unless we are specifically engaged to do so. This
opinion may not be relied upon in connection with any transactions other than
the transactions contemplated herein and may not be relied upon for any other
purpose, without our prior written consent.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to references to this firm under the hearings
"Summary-Federal Income Tax Consequences", "Federal Income Tax Consequences" and
"Legal Matters".
Very truly yours,
/s/ Brown & Wood LLP
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Brown & Wood LLP
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