<PAGE>
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) August 21, 1997
HEADLANDS MORTGAGE SECURITIES INC., (as sponsor under the Sale and
Servicing Agreement, dated as of August 1, 1997, providing for the
issuance of Headlands Home Equity Loan Trust 1997-1, Series 1997- 1,
Revolving Home Equity Loan Asset-Backed Notes).
Headlands Mortgage Securities Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-28031 68-0397342
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation) File Number) Identification No.)
900 Larkspur Landing Circle 94939
Suite 240 (Zip Code)
Larkspur, California
(Address of Principal Executive
Offices)
Registrant's telephone number, including area code (415) 925-5442
<PAGE>
Item 5. Other Events
In connection with the offering of Home Equity Loan Asset-Backed Notes,
Series 1997-1, Class A and Class S Notes, of which Headlands Home Equity Loan
Trust 1997-1 is the issuer as described in a Prospectus Supplement dated as of
August 18, 1997 to the Prospectus dated as of July 17, 1997, certain
"Computational Materials" within the meanings of the May 20, 1994 Kidder,
Peabody No-Action Letter and the February 17, 1995 Public Securities Association
No-Action Letter were furnished to certain prospective investors (the "Related
Computational Materials").
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibit 99.1. Related Computational Materials
(as defined in Item 5 above).
2
<PAGE>
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 hereunto duly authorized.
HEADLANDS MORTGAGE
SECURITIES INC.
By: /s/ Gilbert MacQuarrie
------------------------
Name: Gilbert MacQuarrie
Title: Vice President
Dated: August 14, 1997
3
<PAGE>
Exhibit Index
Exhibit Page
99.1. Related Computational Materials (as defined in Item 5 above).
4
<PAGE>
This Preliminary Term Sheet is provided for information purposes only and
does not constitute an offer to sell, nor a solicitation of an offer to buy the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the proposed transaction. All amounts are approximate and subject to
change. The information contained herein supersedes information contained in any
prior information term sheet for this transaction. In addition, the information
contained herein may be superseded by information contained in the term sheets
circulated after the date hereof and is qualified in its entirety by information
contained in the Prospectus Supplement for this transaction. An offering may
only be made through the delivery of a Prospectus Supplement and the related
Prospectus.
Prepared: August 12, 1997
Preliminary Term Sheet
$189,065,000.00
Headlands Home Equity Loan Trust 1997-1
Revolving Home Equity Loan Asset-Backed Notes, Series 1997-1
<TABLE>
<CAPTION>
WAL Payment Expected
(Yrs.)* Window * Targeted Dollar Rating Legal Final
Class Amount Call Call (mos) Price Benchmark (S&P/Moodys) Maturity
- ------ ------------------- ------------ ------------------- ----------------- ----------------- ------------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
A $189,065,000.00 5.08 1 - 103 100-00 1 M LIBOR AAA/Aaa August 2024
Total $189,065,000.00
</TABLE>
* See "Computational Materials Disclaimer"
** Class S Notional Principal Balance equal to the Class A
Note Balance.
<TABLE>
<S> <C>
Underwriter: Greenwich Capital Markets, Inc.
Seller & Servicer: Headlands Mortgage Company ("Headlands")
Sponsor: Headlands Mortgage Securities, Inc.
Securities Insurer: Capital Markets Assurance Corporation
Indenture Trustee: First National Bank of Chicago
Owner Trustee: Wilmington Trust Company
Federal Tax Status: It is anticipated that the Class A and Class S Notes (the "Notes") will be treated as
debt instruments for federal income tax purposes.
Registration: The Notes will be available in book-entry form through DTC.
Expected Pricing Date: August 14, 1997***
Expected Closing Date: August 21, 1997***
Expected Settlement Date: August 21, 1997***
Cut-off Date: August 1, 1997
Accrued Interest: Accrued interest paid by investors for the Notes will accrue from the Closing Date, up to,
but not including, September 15, 1997, the first Distribution Date.
Thereafter, Interest will accrue from and including the prior Distribution Date,
to, but not including the next Distribution Date
on an actual/360 basis.
Distribution Dates: 15th day of each month (or the next succeeding business day), beginning September 15, 1997.
Credit Enhancement: Overcollateralization, a Spread Account and a surety wrap to be provided by Capital Markets
Assurance Corporation ("CapMAC")
Expected Ratings: Class A Notes AAA/Aaa, S&P / Moody's (based on
CapMAC surety wrap);
Class S Notes AAAr/Aaa, S&P / Moody's (based on
CapMAC surety wrap).
ERISA Eligibility: The Class A and Class S Notes are expected to
be ERISA eligible. Prospective investors must
review the Prospectus and Prospectus Supplement
and consult with their professional advisors for
a more detailed description of these matters
prior to investing in the Class A and/or Class
S Notes.
SMMEA Treatment: The Notes will not constitute "mortgage related securities" for purposes of SMMEA.
Optional Termination: 10% optional termination provision.
Prepayment Assumption: 30% CPR, 18% Draw Rate.
Mortgage Loans: The Mortgage Loans will consist of certain
adjustable-rate home equity revolving credit line
loans ("HELOCs"). It is expected that Mortgage
Loans (the "Initial Mortgage Loans") having an
aggregate principal balance of approximately
$192,924,110.37 will be deposited into the Trust
on the Closing Date. Subsequent HELOCs may be
purchased by the Trust during the first twelve
months of the securitization (the "Funding
Period").
</TABLE>
*** Subject to change
1
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Expected Initial Mortgage Loans
Collateral Characteristics
HELOCs
Wtd. Avg Max Min
-------- --- ---
Current Balance: $39,308 $300,000 $0
WAC: 7.30% 14.00% 5.875%
Margin: 3.08% 5.75% 0.00%
WAM: 232 months 300 months 170 months
CLTV: 85.10% 100% 8.4%
Seasoning: 2.5 months 15 months 0 months
Parameter % Geographic %
--------- - ---------- -
5 Yr Draw: 54.1% California: 86.1%
15 Yr Draw: 45.9% Oregon: 3.4%
Washington: 2.8%
2nd Lien: 100%
Total States: 12
Single Family: 81%
2-4 Family: 3%
Condo: 4%
PUD: 12%
SEE ATTACHED COLLATERAL TERM SHEETS.
THE INFORMATION CONTAINED HEREIN WILL BE SUPERSEDED BY THE DESCRIPTION OF THE
COLLATERAL IN THE PROSPECTUS SUPPLEMENT.
See Disclaimer on Page 1 of this Prelimiary Term Sheet
2
<PAGE>
The Seller and Servicer
Headlands Mortgage Company, a California S-corporation, is a full service
mortgage banker engaged in the business of originating, acquiring, selling and
servicing residential mortgage loans secured by one- to four-family residential
properties. Headlands was incorporated in California in 1986 and currently is
licensed as a mortgage banker or registered, as appropriate, in 12 states
(including California, Washington, Oregon, and Colorado). As of June 30, 1997,
Headlands had a mortgage servicing portfolio of 35,083 loans with an aggregate
principal balance of $3.87 billion.
The Trust
Headlands Home Equity
Loan Trust 1997-1: The Headlands Home Equity Loan Trust (the
"Trust") will issue one class of Class A Notes
(the "Offered Notes") and one class of Class
S Notes (the Class A Notes and the Class S
Notes together, the "Notes"). The Trust will
also issue a certificate which is not offered
hereby but will initially be retained by the
Sponsor (the "Sponsor Interest"). The Cut-off
Date Trust Principal Balance will be equal to
$192,924,110.37. As of the Closing Date, the
Offered Notes will represent 98% of the
outstanding principal balances of the Mortgage
Loans of the Trust. The Certificate or the
Sponsor Interest will initially represent 2% of
the outstanding principal balances of the Trust
as of the Closing Date. The property of the
Trust as of the Closing Date will consist
entirely of HELOCs and subsequently, any
additional new advances under the HELOCs (the
"Additional Advances") and any new HELOCs
purchased during the Funding Period.
Mortgage Loan Amortization: Approximately 54.1% of the HELOCs have 5 year
Draw Periods followed by a 10 year amortization
period, while the other 45.9% have a 15 year Draw
Period followed by a 10 year amortization period.
Each outstanding HELOC principal balance is fixed
at the end of the Draw Period, and then amortized
over the subsequent 10 year period. Each HELOC
interest rate continues to adjust (on the first
of each month) over the life of the loan.
HELOC Interest Rates: 100% Prime-based, monthly re-setting HELOCs.
Substantially all of the HELOCs are teased for
three months, at a current rate of 5.875%, and
float thereafter. The weighted average margin on
the HELOCs as of the Cut-off Date is 3.08%, with
the margins ranging from 0.00% to 5.75%. All of
the HELOCs have an 18.00% Life Cap, and no
Periodic Caps.
Prepayment Penalties: The HELOCs do not have prepayment penalties.
Invested Amount: The "Initial Invested Amount" as of the
Closing Date will be equal to the Class A Note
Principal Balance. On any Distribution Date
thereafter, the "Invested Amount" will be equal
to the Initial Invested Amount less all principal
collections distributed to Class A Noteholderss
(other than Accelerated Principal Distribution
Amounts (defined below)).
See Disclaimer on Page 1 of this Prelimiary Term Sheet
3
<PAGE>
The Offered Notes
Class A Notes: The Class A Notes will initially evidence
approximately 98% of the Cut-Off Date Trust
Principal Balance. The Class A Notes receive
distributions of principal in the manner
described below. The Class A Notes will receive
interest on each Distribution Date based on a
variable rate described more fully below.
Credit Enhancement
Credit Enhancement: The Class A Noteholders and the Class S
Noteholders will have the benefit of the \
following credit enhancement;
(a) monthly available excess spread;
(b) the Spread Account (described below)
(c) the Overcollateralization Amount
(described below);
(d) the Sponsor Interest (described below);
(e) the Policy (described below).
Spread Account: Pursuant to the Insurance Agreement, a spread
account will be created to be held by the
Trustee, for the benefit of the Class A
Noteholders, the Class S Noteholders and the Note
Insurer. On the Closing Date, a spread account
will be funded with a deposit equal to
$964,620.55, or 0.50% of the Cut-Off Date Trust
Principal Balance (the "Required Spread Account
Balance").
Overcollateralization: Although it is not anticipated that any
distribution of principal collections will be
made to the Class A Noteholders during the
Funding Period, Class A Noteholders will be
entitled to receive distributions of excess
interest collections as principal ("Accelerated
Principal Distribution Amounts") up to
$2,893,861.66 or 1.50% of the Cut-Off Date Trust
Principal Balance, the "Required
Overcollateralization Amount". This distribution
of interest as principal will have the effect of
accelerating the Class A Notes relative to the
underlying Trust assets. On any Distribution
Date, the Overcollateralization Amount will be
the amount by which the Invested Amount exceeds
the Class A Note Balance. On any Distribution
Date in which the Invested Amount does not
exceed the Class A Noteholder Balance by the
Required Overcollateralization Amount, excess
interest collections will be distributed as
principal to the Class A Noteholders to
increase the Overcollateralization Amount to
the Required Overcollateralization Amount.
Sponsor Interest: The Sponsor will retain approximately 2% of the
Cut-Off Date Trust Principal Balance, evidenced
by the Sponsor Interest. The Sponsor Interest
will be provide credit support to the Class A
Noteholders and the Class S Noteholders, should
excess spread, the Spread Account and the
Overcollateralization Amount be insufficient.
The Policy: Capital Markets Assurance Corporation will issue
a note insurance policy which will guarantee
timely interest and ultimate repayment of
principal to the Class A Noteholders and timely
interest to the Class S Noteholders.
See Disclaimer on Page 1 of this Prelimiary Term Sheet
4
<PAGE>
Distributions of Principal
Funding Period: The Funding Period will begin on the Closing
Date and continue through the Distribution Date
occurring in August 1998. During the Funding
Period, all principal collections will be
reinvested in (a) additional draws on existing
Trust HELOCs, (b) and in any newly originated
HELOCs, if cash remains after applying principal
collections received during the calendar month
occurring prior to the related Distribution Date
(each a "Collection Period") to clauses (a) and
(b) above, those moneys will be distributed to
Class A Noteholders on each respective
Distribution Date during the Funding Period.
As long as amounts created under clauses (a) and
(b) above equal or exceed principal collected
during the Funding Period, no distributions of
principal collections will be made to the Class
A Noteholders, unless a Rapid Amortization
Event has occurred (as defined below).
Managed Am. Period: The Managed Amortization Period will begin on
the Distribution Date occurring in September
1998 and end on the Distribution Date occurring
in August 2003. During the Managed Amortization
Period, the Class A Noteholders will receive the
lesser of (a) the Maximum Principal Payment (as
defined herein) and (b) the Alternative
Principal Payment (as defined herein). The
"Maximum Principal Payment" is equal to the
Investor Fixed Allocation Percentage (defined
below) multiplied by principal collections for
such Distribution Date. The "Alternative
Principal Payment" is equal to the amount (not
less than zero) of principal collection for such
Distribution Date less the aggregate of
additional draws on existing Trust HELOCs
created during such Distribution Date.
Rapid Am. Period: Commencing no later than the Distribution Date
occurring in September 2003 (or earlier, upon
the occurrence of a Rapid Amortization Event
(as described below)), Class A Noteholders will
receive the lesser of (a) the Maximum Principal
Payment and (b) the then outstanding Class A
Noteholders balance.
Investor Fixed
Allocation %: 98%.
Rapid Am. Events: Any of the following events described below:
(i) failure of Sponsor to remit funds
required under the Sale and Servicing
Agreement or the Insurance Agreement
(collectively, the Agreements");
(ii) failure of Sponsor to observe or
perform in any material respect any other
covenants of either Agreement which
continues unremedied for 60 days after
written notice;
(iii) any breach of representation and
warranty made by the Sponsor in either
Agreement which adversely affects the
Noteholders or the Note Insurer and is not
repurchased in accordance with the
provisions of the Sale and Servicing
Agreement within 60 days after written
notification of such breach;
(iv) the bankruptcy, insolvency or
receivership of the Sponsor or any
subsidiary or affiliate of the Sponsor
related to the Trust;
(v) the Trust becomes subject to
regulation under the Investment Company Act
of 1940;
(vi) the aggregate of all draws under the
Insurance Policy exceeds 1% of the Cut-Off
Date Pool Balance.
See Disclaimer on Page 1 of this Prelimiary Term Sheet
5
<PAGE>
Distributions of Interest
Interest Distributions: Interest will be allocated to the Class A
Noteholders and the Class S Noteholders from the
Investor Floating Allocation Percentage of
interest collections received with respect to
such Distribution Date. The "Investor Floating
Allocation Percentage" for any Distribution
Date is the percentage equivalent of a fraction
determined by dividing (a) the Invested Amount
as of the close of business on the prior
Distribution Date (or, in the case of the first
Distribution Date, as of the Closing Date) and
(b) the sum of (x) the pool balance as of the
beginning of the related collection period and
(y) the amount of principal collected during
the related Collection Period. The remainder of
the interest received during the Collection
Period will be allocated to the Sponsor Interest.
Interest will be distributed on the Class A
Noteholders at a rate equal to the lesser of (a)
One Month LIBOR plus [TBD] basis points based on
the actual number of days elapsed since the prior
Distribution Date (or in the case of the Initial
Distribution Date, from the Closing Date) and (b)
the weighted average net available funds rate.
The "weighted average net available funds rate"
is an amount equal to the weighted average of the
Loan Rates minus (i) the Class S Note Rate, (ii)
the Servicing Fee, (iii) the Insurance Premium
Fee and (iv) the Trustee Fee (the Class S Note
Rate and the three fees in total, expected to be
approximately 1.96%). Should Class A Noteholders
receive an interest amount based on clause (b)
above (creating a "Deferred Interest Amount"),
future remaining interest amounts to be
distributed to the Sponsor Interest will first be
allocated to the Deferred Interest Amounts
outstanding and unpaid, with accrued interest at
the applicable Class A Noteholder rate. In no
event are Deferred Interest Amounts rated by the
Rating Agencies or guaranteed under the Policy.
Class A Decrement Tables: See attached.
Collateral Term Sheets: See attached.
See Disclaimer on Page 1 of this Prelimiary Term Sheet
6
<PAGE>
HEADLANDS MORTGAGE COMPANY
OVERALL MORTGAGE PORTFOLIO
Delinquency and Foreclosure Experience
The following tables set forth information relating to the delinquency and
foreclosure experience of Headlands for its servicing portfolio of home equity
loans (including home equity loans serviced for others) as of the dates or for
the periods indicated.
<TABLE>
<CAPTION>
At December 31, At June 30, 1997
------------------------------------------------------------------- ----------------
1994 1995 1996
---- ---- ----
% of % of % of % of
Loans Portfolio(1) Loans Portfolio(1) Loans Portfolio(1) Loans Portfolio(1)
----- ------------ ----- ------------ ----- ------------ ----- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total $ Amount (2) $5,347 $4,156 $4,387 $3,874
Total Number 29,076 100% 27,261 100% 34,363 100% 35,083 100%
Delinquencies
30 - 59 Days 327 1.1% 283 1.0% 466 1.4% 298 0.9%
60 - 89 Days 49 0.2% 62 0.2% 43 0.1% 51 0.1%
90 Days or more 50 0.2% 47 0.2% 14 0.0% 29 0.1%
--------------- -- ---- -- ---- -- ---- -- ----
Total 426 1.5% 392 1.4% 523 1.5% 378 1.1%
Foreclosures 102 0.4% 146 0.5% 197 0.6% 98 0.3%
Pending
</TABLE>
(1) As a percentage of the total number of loans serviced.
(2) Dollar amount in millions; Total Portfolio has been reduced by the number of
loans pending servicing release or loans in foreclosure.
(3) The past due period is based on the actual number of days that a payment is
contractually past due. A loan as to which a monthly payment was due 30-59
days prior to the reporting period is considered 30-59 days past due, etc.
Excludes foreclosures.
7
See Disclaimer on Page 1 of this Prelimiary Term Sheet
<PAGE>
FOR INTERNAL USE ONLY
ALL AMOUNTS SUBJECT TO CHANGE
PRELIMINARY INFORMATION SHEET
08/12/97
HEADLANDS MORTGAGE COMPANT:1997-1
07/31/97 Actual Balances
<TABLE>
<CAPTION>
LOAN TYPE: Helocs
<S> <C> <C> <C>
TOTAL CURRENT BALANCE: $ 192,924,110.37
TOTAL ORIGINAL BALANCE: $ 191,328,622.27
TOTAL CREDIT LINE: $ 257,675,977.00
TOTAL FIRST MORT BALANCE: $ 1,215,428,558.60
NUMBER OF LOANS: 5,152
AVERAGE CURRENT BALANCE: $ 39,308.09 RANGE: $ 0.00 - $ 300,000.00
AVERAGE ORIGINAL BALANCE: $ 38,582.10 RANGE: $ 0.00 - $ 325,000.00
AVERAGE CREDIT LINE: $ 50,014.75 RANGE: $ 8,700.00 - $ 500,000.00
AVERAGE FIRST MORT BALANCE: $ 239,304.70 RANGE: $ 0.00 - $ 3,721,000.00
AVERAGE APPRAISAL VALUE: $ 345,936.11 RANGE: $ 0.00 - $ 3,350,000.00
AVERAGE PURCHASE PRICE: $ 325,207.53 RANGE: $ 0.00 - $ 1,672,500.00
AVERAGE COLLATERAL VALUE: $ 343,849.81 RANGE: $ 0.00 - $ 3,350,000.00
AVERAGE PI PAYMENT: $ 589.04 RANGE: $ 96.04 - $ 7,318.81
WEIGHTED AVERAGE FULLY INDEXED RATE: 11.4263 % RANGE: 8.5000 - 14.2500 %
WEIGHTED AVERAGE GROSS COUPON: 7.3007 % RANGE: 5.8750 - 14.0000 %
WEIGHTED AVERAGE CURR MARGIN: 3.0805 % RANGE: 0.0000 - 5.7500 %
WEIGHTED AVERAGE CURRENT INDEX: 8.5000 % RANGE: 8.5000 - 8.5000 %
WEIGHTED AVERAGE LIFE CAP: 18.0000 % RANGE: 18.0000 - 18.0000 %
WEIGHTED AVERAGE COMBINED LTV: 85.10 % RANGE: 8.42 - 100.00 %
WEIGHTED AVERAGE 2ND MORTGAGE RATIO: 22.22 % RANGE: 0.01 - 100.00 %
WEIGHTED AVERAGE CREDIT UTIL.(CURRENT BAL.): 90.5622 % RANGE: 0.0000 - 100.0000 %
WEIGHTED AVERAGE CREDIT UTIL.(CREDIT LIMIT): 74.8708 % RANGE: 0.0000 - 100.0000 %
WEIGHTED AVERAGE DEBT RATIO: 37.78 % RANGE: 0.00 - 99.99 %
WEIGHTED AVERAGE ORIGINAL TERM: 235.08 months RANGE: 180.00 - 300.00 months
WEIGHTED AVERAGE REMAINING TERM: 231.83 months RANGE: 170.00 - 300.00 months
WEIGHTED AVERAGE SEASONING: 2.53 months RANGE: 0.00 - 15.00 months
TOP CITY CONCENTRATIONS ($): 7.41 % LOS ANGELES, 4.66 % SAN JOSE, 3.95 % SAN DIEGO
TOP STATE CONCENTRATIONS ($): 86.12 % California, 3.43 % Oregon, 2.84 % Washington
MAXIMUM ZIP CODE CONCENTRATION ($): 1.75 % 94941 (MILL VALLEY, CA)
ORIGINATION DATE: Mar 22, 1996 - Jul 29, 1997
FIRST PAY DATE: May 25, 1996 - Sep 25, 1997
PAID TO DATE: Jul 25, 1997 - Sep 25, 1997
MATURE DATE: Sep 25, 2011 - Jul 28, 2022
NEXT RATE CHG DATE: Aug 01, 1997 - Nov 01, 1997
</TABLE>
<TABLE>
<CAPTION>
CURRENT
PRINCIPAL BALANCE PCT($) # OF LOANS PCT(#)
----------------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C>
CURRENT BALANCE: <= 0.00 0.00 0.00 244 4.74
0.01 - 25,000.00 28,349,758.41 14.69 1,756 34.08
25,000.01 - 50,000.00 80,596,196.78 41.78 2,161 41.94
50,000.01 - 75,000.00 32,633,526.37 16.92 526 10.21
75,000.01 - 100,000.00 28,879,879.16 14.97 319 6.19
> 100,000.00 22,464,749.65 11.64 146 2.83
ORIGINAL BALANCE: <= 0.00 2,033,228.51 1.05 193 3.75
0.01 - 25,000.00 36,032,167.95 18.68 1,870 36.30
25,000.01 - 50,000.00 78,469,998.40 40.67 2,131 41.36
50,000.01 - 75,000.00 29,500,308.14 15.29 493 9.57
75,000.01 - 100,000.00 25,721,908.93 13.33 308 5.98
> 100,000.00 21,166,498.44 10.97 157 3.05
</TABLE>
The information contained herein has been prepared solely for the use of
Greenwich Capital Markets, Inc. and has not been independently verified by
Greenwich Capital Markets, Inc. Accordingly, Greenwich Capital Markets, Inc.
makes no express or implied representations or warranties of any kind and
expressly disclaims all liability for any use or misuse of the contents hereof.
Greenwich Capital Markets, Inc. assumes no responsibility for the accuracy of
any material contained herein. (Tue Aug 12 13:25:26 EDT 1997) [rmg]
8
<PAGE>
FOR INTERNAL USE ONLY
ALL AMOUNTS SUBJECT TO CHANGE
PRELIMINARY INFORMATION SHEET
08/12/97
HEADLANDS MORTGAGE COMPANT:1997-1
07/31/97 Actual Balances
<TABLE>
<CAPTION>
CURRENT
PRINCIPAL BALANCE PCT($) # OF LOANS PCT(#)
----------------- ------ ---------- ------
<S> <C> <C> <C> <C>
STATE: Arizona 3,084,726.22 1.60 105 2.04
California 166,137,622.04 86.12 4,310 83.66
Colorado 2,378,534.89 1.23 75 1.46
Florida 109,696.16 0.06 4 0.08
Idaho 1,526,623.98 0.79 61 1.18
Montana 821,776.60 0.43 33 0.64
Nevada 2,193,568.71 1.14 80 1.55
New Mexico 152,640.64 0.08 3 0.06
Oregon 6,612,372.42 3.43 185 3.59
Utah 4,381,880.93 2.27 135 2.62
Washington 5,484,767.78 2.84 159 3.09
Wyoming 39,900.00 0.02 2 0.04
COMBINED LTV: <= 10.00 30,351.49 0.02 2 0.04
10.01 - 20.00 709,772.36 0.37 19 0.37
20.01 - 30.00 989,102.91 0.51 33 0.64
30.01 - 40.00 1,215,220.51 0.63 39 0.76
40.01 - 50.00 2,666,429.26 1.38 55 1.07
50.01 - 60.00 3,953,962.06 2.05 96 1.86
60.01 - 70.00 9,304,863.01 4.82 220 4.27
70.01 - 80.00 34,394,083.40 17.83 828 16.07
80.01 - 90.00 98,425,905.48 51.02 2,804 54.43
90.01 - 100.00 41,234,419.89 21.37 1,056 20.50
PROPERTY TYPE: Single Family 155,520,939.34 80.61 4,109 79.76
PUD 23,206,805.41 12.03 592 11.49
Condominium 8,337,283.95 4.32 283 5.49
2 Units 3,956,444.87 2.05 111 2.15
4 Units 1,132,431.06 0.59 36 0.70
3 Units 770,205.74 0.40 21 0.41
LIEN PRIORITY: Second Lien 192,924,110.37 100.00 5,152 100.00
FULLY INDEXED RATE: 8.50 - 8.50 19,952.53 0.01 1 0.02
8.51 - 9.00 4,094,320.94 2.12 201 3.90
9.01 - 9.50 17,066,429.32 8.85 423 8.21
9.51 - 10.00 21,772,558.08 11.29 599 11.63
10.01 - 10.50 6,012,010.98 3.12 163 3.16
10.51 - 11.00 22,497,747.88 11.66 716 13.90
11.01 - 11.50 27,373,499.06 14.19 736 14.29
11.51 - 12.00 28,215,576.65 14.63 712 13.82
12.01 - 12.50 23,596,252.47 12.23 507 9.84
12.51 - 13.00 24,107,499.90 12.50 715 13.88
13.01 - 13.50 15,364,484.13 7.96 333 6.46
13.51 - 14.00 2,454,313.91 1.27 42 0.82
14.01 - 14.25 349,464.52 0.18 4 0.08
LOAN RATE: 5.88 - 6.00 143,142,646.95 74.20 3,748 72.75
6.01 - 6.50 262.00 0.00 1 0.02
6.51 - 7.00 56,522.40 0.03 1 0.02
8.51 - 9.00 36,466.77 0.02 3 0.06
9.01 - 9.50 425,743.52 0.22 11 0.21
9.51 - 10.00 15,651,428.35 8.11 452 8.77
10.01 - 10.50 1,106,142.20 0.57 37 0.72
10.51 - 11.00 1,642,959.08 0.85 50 0.97
11.01 - 11.50 5,433,730.29 2.82 196 3.80
11.51 - 12.00 7,663,320.67 3.97 227 4.41
12.01 - 12.50 9,054,960.57 4.69 218 4.23
12.51 - 13.00 4,934,631.37 2.56 140 2.72
13.01 - 13.50 3,075,742.74 1.59 57 1.11
13.51 - 14.00 699,553.46 0.36 11 0.21
</TABLE>
The information contained herein has been prepared solely for the use of
Greenwich Capital Markets, Inc. and has not been independently verified by
Greenwich Capital Markets, Inc. Accordingly, Greenwich Capital Markets, Inc.
makes no express or implied representations or warranties of any kind and
expressly disclaims all liability for any use or misuse of the contents hereof.
Greenwich Capital Markets, Inc. assumes no responsibility for the accuracy of
any material contained herein. (Tue Aug 12 13:25:26 EDT 1997) [rmg]
9
<PAGE>
FOR INTERNAL USE ONLY
ALL AMOUNTS SUBJECT TO CHANGE
PRELIMINARY INFORMATION SHEET
08/12/97
HEADLANDS MORTGAGE COMPANT:1997-1
07/31/97 Actual Balances
<TABLE>
<CAPTION>
CURRENT
PRINCIPAL BALANCE PCT($) # OF LOANS PCT(#)
----------------- ------ ---------- ------
<S> <C> <C> <C> <C> <C>
MARGIN: <= 0.50 4,389,505.20 2.28 218 4.23
0.51 - 1.00 17,599,486.51 9.12 448 8.70
1.01 - 1.50 6,997,756.86 3.63 173 3.36
1.51 - 2.00 6,396,370.17 3.32 172 3.34
2.01 - 2.50 24,957,094.75 12.94 806 15.64
2.51 - 3.00 27,387,677.93 14.20 709 13.76
3.01 - 3.50 31,606,793.50 16.38 839 16.28
3.51 - 4.00 24,792,561.79 12.85 513 9.96
4.01 - 4.50 27,713,984.82 14.37 815 15.82
4.51 - 5.00 17,711,925.62 9.18 399 7.74
5.01 - 5.50 3,003,757.87 1.56 55 1.07
5.51 - 5.75 367,195.35 0.19 5 0.10
UTILIZATION: <= 0.00 0.00 0.00 244 4.74
0.01 - 10.00 351,442.18 0.18 145 2.81
10.01 - 20.00 1,156,454.76 0.60 98 1.90
20.01 - 30.00 1,597,215.70 0.83 101 1.96
30.01 - 40.00 2,606,570.28 1.35 124 2.41
40.01 - 50.00 5,995,685.65 3.11 197 3.82
50.01 - 60.00 5,821,378.04 3.02 199 3.86
60.01 - 70.00 7,016,749.69 3.64 198 3.84
70.01 - 80.00 9,362,933.20 4.85 228 4.43
80.01 - 90.00 10,136,136.70 5.25 249 4.83
90.01 - 100.00 148,879,544.17 77.17 3,369 65.39
CREDIT LIMIT: 8,700 - 25,000 19,369,427.73 10.04 1,154 22.40
25,001 - 50,000 80,997,922.11 41.98 2,570 49.88
50,001 - 75,000 29,494,066.58 15.29 577 11.20
75,001 - 100,000 35,572,151.66 18.44 582 11.30
100,001 - 125,000 6,268,273.09 3.25 78 1.51
125,001 - 150,000 5,954,196.62 3.09 67 1.30
150,001 - 175,000 2,220,169.44 1.15 18 0.35
> 175,000 13,047,903.14 6.76 106 2.06
REMAINING TERM: 170 - 170 21,600.00 0.01 1 0.02
171 - 176 39,720,325.98 20.59 1,108 21.51
177 - 182 64,666,999.23 33.52 1,691 32.82
183 - 188 21,959.01 0.01 1 0.02
279 - 284 56,522.40 0.03 1 0.02
285 - 290 94,092.84 0.05 1 0.02
291 - 296 39,214,869.07 20.33 1,078 20.92
297 - 300 49,127,741.84 25.46 1,271 24.67
ORIGINATION MONTH/YR: 01/1997 17,134,096.31 8.88 479 9.30
02/1997 19,632,449.89 10.18 521 10.11
03/1996 56,522.40 0.03 1 0.02
03/1997 24,053,212.38 12.47 669 12.99
04/1997 32,061,919.83 16.62 823 15.97
05/1997 33,296,902.17 17.26 844 16.38
06/1997 29,589,538.90 15.34 764 14.83
07/1997 18,813,924.62 9.75 530 10.29
08/1996 94,092.84 0.05 1 0.02
09/1996 21,600.00 0.01 1 0.02
10/1996 9,580.54 0.00 3 0.06
11/1996 1,869,137.42 0.97 60 1.16
12/1996 16,291,133.07 8.44 456 8.85
MONTHS DELINQUENT: Current 192,924,110.37 100.00 5,152 100.00
LOAN TYPE: Helocs 192,924,110.37 100.00 5,152 100.00
</TABLE>
The information contained herein has been prepared solely for the use of
Greenwich Capital Markets, Inc. and has not been independently verified by
Greenwich Capital Markets, Inc. Accordingly, Greenwich Capital Markets, Inc.
makes no express or implied representations or warranties of any kind and
expressly disclaims all liability for any use or misuse of the contents hereof.
Greenwich Capital Markets, Inc. assumes no responsibility for the accuracy of
any material contained herein. (Tue Aug 12 13:25:26 EDT 1997) [rmg]
10
<PAGE>
COMPUTATIONAL MATERIALS DISCLAIMER
The attached tables and other statistical analyses (the "Computational
Materials") are privileged and intended for use by the addressee only. These
Computational Materials have been prepared by Greenwich Capital Markets, Inc. in
reliance upon information furnished by Headlands Mortgage Company and its
affiliates. These Computational Materials are furnished to you solely by
Greenwich Capital Markets, Inc. and not by Headlands Mortgage Company Inc. They
may not be provided to any third party other than the addressee's legal, tax,
financial and/or accounting advisors for the purposes of evaluating said
material.
Numerous assumptions were used in preparing the Computational Materials which
may or may not be reflected therein. As such, no assurance can be given as to
the Computational Materials' accuracy, appropriateness or completeness in any
particular context; nor as to whether the Computational Materials and/or the
assumptions upon which they are based reflect present market conditions or
future market performance. These Computational Materials should not be construed
as either projections or predictions or as legal, tax, financial or accounting
advice.
Any weighted average lives, yields and principal payment periods shown in the
Computational Materials are based on prepayments assumptions. Changes in such
prepayment assumptions may dramatically affect such weighted average lives,
yields and principal payment periods. In addition, it is possible that
prepayments on the underlying assets will occur at rates significantly slower or
faster than the rates shown in the attached Computational Materials.
Furthermore, unless otherwise provided, the Computational Materials assume no
losses on the underlying assets and no interest shortfall. The specific
characteristics of the securities may differ from those shown in the
Computational Materials due to differences between the actual underlying assets
and the hypothetical underlying assets used in preparing the Computational
Materials. The principal amount and designation of any security described in the
Computational Materials are subject to change prior to issuance. Neither
Greenwich Capital Markets, Inc. nor any of its affiliates makes any
representation or warranty as to the actual rate or timing of payments on any of
the underlying assets or the payments or yield on the securities.
Although a registration statement (including the Prospectus) relating to the
securities discussed in this communication has been filed with the Securities
and Exchange Commission and is effective, the final prospectus supplement
relating to the securities discussed in this communication has not been filed
with Securities and Exchange Commission. This communication shall not constitute
an offer to sell or the solicitation of an offer to buy nor shall there be any
sale of the securities discussed in this communication in any state in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification of such securities under the securities laws of any such state.
Prospective purchasers are referred to the final prospectus supplement relating
to the securities discussed in this communication for definitive Computational
Materials and any matter discussed in this communication. Once available, a
final prospectus and prospectus supplement may be obtained by contacting the
Greenwich Capital Markets Trading Desk at (203) 625-6160.
Please be advised that the securities described herein may not be appropriate
for all investors. Potential investors must be willing to assume, among other
things, market price volatility, prepayment, yield curve and interest rate
risks. Investors should make every effort to consider the risks of these
securities.
If you have received this communication in error, please notify the sending
party immediately by telephone and return the original to such party by mail.
11
<PAGE>
Headlands Home Equity Loan Trust 1997-1 CLASS A
Price-DM Sensitivity Report
Settlement 08/21/97
Next Payment 09/15/97
Class Balance $189,065,628
Accrued Date 08/21/97
Pass-Thru Margin 0.17%
Accrued Days 0
Cleanup Call 10%
Draw Rate 18% CPR
<TABLE>
<CAPTION>
Flat
Price 0% CPR 10% CPR 20% CPR 25% CPR 30% CPR 35% CPR 40% CPR
=====================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 0.193% 0.205% 0.211% 0.219% 0.228% 0.238% 0.248%
99-24+ 0.192% 0.203% 0.208% 0.216% 0.225% 0.233% 0.243%
99-25 0.190% 0.200% 0.206% 0.213% 0.221% 0.229% 0.238%
99-25+ 0.189% 0.198% 0.203% 0.210% 0.217% 0.225% 0.233%
99-26 0.187% 0.196% 0.201% 0.207% 0.214% 0.221% 0.228%
99-26+ 0.186% 0.194% 0.198% 0.204% 0.210% 0.216% 0.223%
99-27 0.185% 0.192% 0.196% 0.201% 0.206% 0.212% 0.218%
99-27+ 0.183% 0.190% 0.193% 0.198% 0.203% 0.208% 0.214%
99-28 0.182% 0.187% 0.190% 0.195% 0.199% 0.204% 0.209%
99-28+ 0.180% 0.185% 0.188% 0.192% 0.195% 0.200% 0.204%
99-29 0.179% 0.183% 0.185% 0.188% 0.192% 0.195% 0.199%
99-29+ 0.177% 0.181% 0.183% 0.185% 0.188% 0.191% 0.194%
99-30 0.176% 0.179% 0.180% 0.182% 0.185% 0.187% 0.189%
99-30+ 0.174% 0.177% 0.178% 0.179% 0.181% 0.183% 0.185%
99-31 0.173% 0.174% 0.175% 0.176% 0.177% 0.178% 0.180%
99-31+ 0.171% 0.172% 0.173% 0.173% 0.174% 0.174% 0.175%
100-00 0.170% 0.170% 0.170% 0.170% 0.170% 0.170% 0.170%
100-00+ 0.169% 0.168% 0.167% 0.167% 0.166% 0.166% 0.165%
100-01 0.167% 0.166% 0.165% 0.164% 0.163% 0.162% 0.160%
100-01+ 0.166% 0.163% 0.162% 0.161% 0.159% 0.157% 0.155%
100-02 0.164% 0.161% 0.160% 0.158% 0.155% 0.153% 0.151%
100-02+ 0.163% 0.159% 0.157% 0.155% 0.152% 0.149% 0.146%
100-03 0.161% 0.157% 0.155% 0.152% 0.148% 0.145% 0.141%
100-03+ 0.160% 0.155% 0.152% 0.148% 0.145% 0.140% 0.136%
100-04 0.158% 0.153% 0.150% 0.145% 0.141% 0.136% 0.131%
100-04+ 0.157% 0.150% 0.147% 0.142% 0.137% 0.132% 0.126%
100-05 0.155% 0.148% 0.144% 0.139% 0.134% 0.128% 0.122%
100-05+ 0.154% 0.146% 0.142% 0.136% 0.130% 0.124% 0.117%
100-06 0.153% 0.144% 0.139% 0.133% 0.126% 0.119% 0.112%
100-06+ 0.151% 0.142% 0.137% 0.130% 0.123% 0.115% 0.107%
100-07 0.150% 0.140% 0.134% 0.127% 0.119% 0.111% 0.102%
100-07+ 0.148% 0.137% 0.132% 0.124% 0.116% 0.107% 0.097%
100-08 0.147% 0.135% 0.129% 0.121% 0.112% 0.103% 0.093%
======================================================================================================
WAL (yr) 17.43 9.36 7.62 6.15 5.08 4.27 3.65
First
Prin Pay 09/15/97 09/15/97 09/15/97 09/15/97 09/15/97 09/15/97 09/15/97
Last
Prin Pay 05/16/2022 12/15/2009 10/15/2007 12/15/2006 03/15/2006 06/15/2005 09/15/2004
MDUR (yr) 10.35 6.92 5.88 4.88 4.14 3.56 3.10
</TABLE>
"Full Price" = "Flat Price" + Accrued Interest.
Duration and related sensitivities are calculated at midpoint price/yield.
Maturity and Last Principal Pay Dates may be distorted
by the use of collateral pool WAMs.
These Computational Materials should be accompanied by a one page disclaimer
which must be read in its entirety by the addressee of this communication. If
such disclaimer is not attached hereto, please contact your Greenwich Capital
sales representative.
GREENWICH CAPITAL MARKETS, INC.
12
<PAGE>
Percentage of Original Certificate Principal Balance --
Amortization Schedule (1)(2)
Conditional Prepayment Rate (% CPR)
<TABLE>
<CAPTION>
Date 0% 10% 20% 25% 30% 35% 40%
- ----------------- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage 100% 100% 100% 100% 100% 100% 100%
08/15/98 98% 98% 98% 98% 98% 98% 98%
08/15/99 98% 98% 96% 90% 84% 78% 72%
08/15/2000 98% 98% 94% 82% 72% 62% 53%
08/15/2001 98% 98% 91% 75% 61% 49% 38%
08/15/2002 98% 98% 89% 69% 52% 39% 28%
08/15/2003 98% 98% 87% 63% 44% 30% 20%
08/15/2004 98% 84% 68% 45% 29% 18% 11%
08/15/2005 98% 70% 49% 29% 16% 0% 0%
08/15/2006 98% 56% 30% 14% 0% 0% 0%
08/15/2007 98% 42% 12% 0% 0% 0% 0%
08/15/2008 98% 28% 0% 0% 0% 0% 0%
08/15/2009 98% 14% 0% 0% 0% 0% 0%
08/15/2010 98% 0% 0% 0% 0% 0% 0%
08/15/2011 98% 0% 0% 0% 0% 0% 0%
08/15/2012 29% 0% 0% 0% 0% 0% 0%
08/15/2013 29% 0% 0% 0% 0% 0% 0%
08/15/2014 29% 0% 0% 0% 0% 0% 0%
08/15/2O15 29% 0% 0% 0% 0% 0% 0%
08/15/2016 29% 0% 0% 0% 0% 0% 0%
08/15/2017 29% 0% 0% 0% 0% 0% 0%
08/15/2018 29% 0% 0% 0% 0% 0% 0%
08/15/2019 29% 0% 0% 0% 0% 0% 0%
08115/2020 29% 0% 0% 0% 0% 0% 0%
08/15/2021 29% 0% 0% 0% 0% 0% 0%
08/l5/2022 0% 0% 0% 0% 0% 0% 0%
08/l5/2023 0% 0% 0% 0% 0% 0% 0%
Weighted Average Life
Years 17.43 9.36 7.62 6.15 5.08 4.27 3.65
</TABLE>
(1) Assumes (i) that an optional termination is exercised when the outstanding
Certificate Principal Balance is less than or equal to 10% of the Original
Certificate Principal Balance and (ii) a constant draw rate of 18%.
(2) All percentages are rounded to the nearest 1%.
These Computational Materials should be accompanied by a one page disclaimer
which must be read in its entirety by the addressee of this communication. If
such disclaimer is not attached hereto, please contact your Greenwich Capital
sales representative.
13
<PAGE>
<TABLE>
<CAPTION>
Index:
Tranche Balance % of Pool 1M LIBOR Margin(%) Coupon(%)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A 189,065,628.16 98.0000 5.64453 0.1700 5.8145
S 0.00 0.0000 1.2500
Seller 3,858,482.21 2.0000
--------------- ---------
192,924,110.37 100.0000
</TABLE>
Collateral Information - Total
Original Balance: 192,924,110.37
Base Prepayment Rate (% CPR): 30.00
Base Draw Rate (% CPR): 18.00
Starting in Period: 0
Stress Prepayment Rate (% CPR): 60.00
Stress Draw Rate (% CPR): 0.00
Surety Bond Premium (%): 0.20
Annual Losses (%): 0.00
Revolving Periods (mos): 12
MAP - including Revolving (mos): 72
Cutoff Date: 08/21/97
Settlement Date: 08/21/97
Next Payment Date: 09/15/97
Accrued Interest Days: 0
Delay: -0.2000
14
<PAGE>
<TABLE>
<CAPTION>
Collateral Information - HELOC 1 Original Coupon
Period Rate (%)
-------- --------
<S> <C> <C> <C> <C>
Balance ($): 88,479,119.34 1 6.6435
2 10.8744
Normal Servicing Rate (%): 0.5100 0.000425 361 10.8744
361 10.8744
Gross Margin (%): 2.3744 361 10.8744
361 10.8744
WAM (months): 297 361 10.8744
361 10.8744
Credit Limit Utilization Rate (%) 71.3852 123,946,027.10 361 10.8744
361 10.8744
Max Credit Utilization Rate (%): 100.00 123,946,027.10 361 10.8744
361 10.8744
Prime Rate (%): 8.5000 361 10.8744
361 10.8744
Base Prepayment Rate (% CP 30.00
Base Draw Rate (% CPR): 18.00
Starting in Period: 0
Stress Prepayment Rate (% C 60.00
Stress Draw Rate (% CPR): 0.00
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Collateral Information - HELOC 2 Original Coupon
Period Rate (%)
-------- --------
<S> <C> <C> <C> <C>
Balance ($): 104,444,991.03 1 7.8575
2 12.1787
Normal Servicing Rate (%): 0.5100 0.000425 361 12.1787
361 12.1787
Gross Margin (%): 3.6787 361 12.1787
361 12.1787
WAM (months): 177 361 12.1787
361 12.1787
Credit Limit Utilization Rate (%) 78.1014 133,729,985.67 361 12.1787
361 12.1787
Max Credit Utilization Rate (%): 100.00 133,729,985.67 361 12.1787
361 12.1787
Prime Rate (%): 8.5000 361 12.1787
361 12.1787
Base Prepayment Rate (% CP 30.00
Base Draw Rate (% CPR): 18.00
Starting in Period: 0
Stress Prepayment Rate (% C 60.00
Stress Draw Rate (% CPR): 0.00
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Collateral Information - Revolving HELOC 1 Original Coupon
Period Rate (%)
-------- --------
<S> <C> <C> <C> <C>
Balance ($): 2,485,624.05 1 5.8750
4 11.5805
Normal Servicing Rate (%): 0.5100 0.000425 361 11.5805
361 11.5805
Gross Margin (%): 3.0805 361 11.5805
361 11.5805
WAM (months): 232 361 11.5805
361 11.5805
Credit Limit Utilization Rate (%) 74.8708 3,319,884.45 361 11.5805
361 11.5805
Max Credit Utilization Rate (%): 100.00 3,319,884.45 361 11.5805
361 11.5805
Prime Rate (%): 8.5000 361 11.5805
361 11.5805
Base Prepayment Rate (% CP 30.00
Base Draw Rate (% CPR): 18.00
Starting in Period: 0
Stress Prepayment Rate (% C 60.00
Stress Draw Rate (% CPR): 0.00
</TABLE>
17
<PAGE>
Headlands Mortgage Company
Headquarters: 700 Larkspur Landing Circle, Suite 250, Larkspur,
California 94939. 415-461-6790/800-462-2700
Business: Headlands Mortgage Company("Headlands"), a
closely-held California S-corporation originates,
purchases and sells mortgage loans secured by
one-to-four unit family residences. Loans are
originated through wholesale and retail operations.
Headlands underwrites all mortgage loans it
originates and sells them on a non-recourse basis,
usually retaining the mortgage servicing rights. The
company's mortgage banking operations is
predominantly in California and the western United
States.
History: Headlands began originating loans in 1986. In 1996,
the company diversified its residential mortgage loan
sale activities to include the securitization of
loans into REMICs and Asset-Backed Securities. As of
June 30, 1997, Headlands had total assets of $436
million and shareholders equity of $46 million.
Financing Sources: Headlands has mortgage loan financing sources to
accommodate $1 billion in loan fundings and a secured
working capital line of credit of $14 million.
Statistics: Headlands has offices throughout California, Nevada,
Arizona, Washington State, Idaho, Oregon and Florida,
and is approved to do business in 42 other states.
During 1996, the company originated $2.3 billion of
mortgage loans. Projected production for 1997 is
expected to reach approximately $3.0 billion. The
company anticipates that it will issue around $1.5
billion in securities backed by first mortgages and
approximately $500 million of securities backed by
second mortgages and home equity lines of credit.
Underwriting: The company employs industry-standard methods for
reviewing and analyzing the creditworthiness of the
borrower and the collateral value of the property. A
borrower generally is required to provide a list of
assets and liabilities and a statement of income and
expenses, as well as a credit report. Each loan
submission is also scrutinized for any additional
specifications as required by an investor. The
average credit score on Headlands' securities is over
700.
1
<PAGE>
Headlands requires title insurance for all mortgage
loans. Fire and extended hazard insurance and flood
insurance, when applicable, are also required.
Servicing: As a master servicer, Headlands oversees all aspects
of the loan servicing function. The company opened
its own servicing center in January 1994 and as of
December 31, 1996 was servicing approximately 34,400
loans with a principal balance of approximately $4.4
billion.
Mortgage loan servicing includes collecting payments
from borrowers and remitting those funds to
investors, accounting for mortgage loan principal and
interest, reporting to investors, holding custodial
funds for payment of mortgage and mortgage related
expenses such as taxes and insurance, advancing funds
to cover delinquent payments, inspecting foreclosures
and property disposition in the event of unremedied
defaults, and otherwise administering the mortgages.
Management: Peter T. Paul President
Becky Poisson EVP/Operations
Steve Abreu EVP/CPO
Gilbert MacQuarrie EVP/CFO
Bernie Grochmal SVP/Product Manager
Financial Highlights:
12/31/95 12/31/96 6/30/97
-------- -------- -------
Assets $147,431,468 $288,990,472 $435,826,382
Liabilities $121,557,347 $259,846,232 $389,932,222
Equity $25,874,121 $29,144,240 $45,894,160
Revenue $40,215,929 $58,208,152 $40,817,375
Net Income $6,970,601 $17,659,599 $16,749,920
Securitization Summary:
Headlands Mortgage Securitizations
Number Size Date Issued Type
GRCAP 1994-HM4 $276,539,000 4/28/94 ARMs
BSMSI 1996-5 $173,115,584 9/30/96 Fixed Alt A
BSMSI 1996-8 $174,006,377 11/27/96 Fixed Alt A
HHELT 1996-1 $125,595,644 12/31/96 HELOCs
2
<PAGE>
HMSI 1997-1 $306,314,022 2/28/97 Fixed Alt A
HMSI 1997-2 $228,344,859 4/30/97 Fixed Alt A
HMSI 1997-3 $229,356,710 6/30/97 Fixed Alt A
Headlands Mortgage Company
Overall Mortgage Portfolio
Delinquency and Foreclosure Experience
12/31/94 12/31/95 12/31/96 6/30/97
Period of Delinquency
30 days 1.12% 1.04% 1.36% 0.85%
60 days 0.17% 0.23% 0.13% 0.15%
90 days 0.17% 0.17% 0.04% 0.08%
Total Delinquencies 1.47% 1.44% 1.52% 1.08%
(excluding Foreclosures)
Foreclosure Pending 0.35% 0.54% 0.57% 0.28%
3
