SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission file number 333-03885-02
TRUST CREATED BY MIDLAND REALTY ACCEPTANCE CORPORATION
(under a Pooling & Servicing Agreement dated
as of December 1, 1996, which Trust is the
issuer of Commercial Mortgage Pass-Through
Certificates, Series 1996-C2)
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(Exact name of Registrant as specified in its Charter)
Missouri 36-4122515
State or other jurisdiction (I.R.S. Employer of
incorporation or organization Identification No.)
LaSalle National Bank, Trustee
135 South LaSalle Street, Suite 1740
Chicago, Illinois
Attention: Asset-Backed Securities Trust Services
MRAC Series 1996-C2 60603
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (800) 246-5761
Securities registered pursuant to Section 12(b) of the Act: Not applicable.
Securities registered pursuant to Section 12(g) of the Act: Not applicable.
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 (section 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]
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Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1996: Not applicable.
Number of shares of common stock as of December 31, 1996: Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
PART I
ITEM 1. BUSINESS.
The Registrant issued Commercial Mortgage Pass-Through Certificates, Series
1996-C2 (the "Securities") pursuant to a Pooling and Servicing Agreement dated
as of December 1, 1996 (the "Cut-off Date") among Midland Realty Acceptance
Corporation, as Depositor, Midland Loan Services, L.P., as Servicer, LaSalle
National Bank, as Trustee, and ABN AMRO Bank N.V., as Fiscal Agent of the
Trustee. The assets of the Trust consist primarily of a pool of one hundred
thirty-six fixed rate mortgage loans (the "Mortgage Loans") having an aggregate
principal balance as of the Cut-off Date of approximately $511,098,331.73. The
Mortgage Loans are secured by Multi-family and Commercial Properties(each, a
"Mortgaged Property"). Security Holders receive Monthly Reports regarding
distributions.
Further information with respect to the performance of the Trust is
summarized in the Monthly Reports to Security Holders, which are filed on Form
8-K.
ITEM 2. PROPERTIES.
Information regarding the Mortgaged Properties securing the Mortgage Loans
is set forth in the Prospectus Supplement and the Monthly Reports to Security
Holders, which are filed on Form 8-K. The Trust will acquire title to real
estate only upon default of the mortgagors under the Mortgage Loans. Therefore,
this item is inapplicable.
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings involving the Trust or,
with respect to the Trust or the Mortgage Loans, the Trustee, any custodian, the
Servicer or the Depositor, other than ordinary routine litigation incidental to
the Trustee's, any custodian's, the Servicer's or the Depositor's duties under
the Pooling and Servicing Agreement.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of Security Holders during the fiscal
year covered by this report.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Registrant's Series 1996-C2 Securities represent non-recourse
obligations of the Trust, such Trust having assets which consist of the Mortgage
Loans. Strictly speaking, Registrant has no "common equity," but for purposes of
this Item only, Registrant's Commercial Mortgage Pass-Through Certificates,
Series 1996-C2 Securities are treated as "common equity."
(a) Market Information. There is no established public trading
market for Registrant's Securities. Registrant believes the
Securities are traded primarily in intra-dealer markets and
non-centralized inter-dealer markets.
(b) Holders. The approximate number of registered holders of
all classes of Securities as of December 31, 1996 was 46.
(c) Dividends. Not applicable. The information regarding dividends
required by sub-paragraph (c) of Item 201 of Regulation S-K is
inapplicable because the Trust does not pay dividends. However,
information as to distribution to Security Holders is provided in
the Monthly Reports to Security Holders for each month of the
fiscal year in which a distribution to Security Holders was made.
ITEM 6. SELECTED FINANCIAL DATA.
Not Applicable. Because of the limited activities of the Trust information
with respect to the performance of the Trust is summarized in the Monthly
Reports to Security Holders, which are filed on a monthly basis on Form 8-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Not Applicable. The information required by Item 303 of Regulation S-K is
inapplicable because the Trust does not have management per se, but rather the
Trust has a Trustee who causes the preparation of the Monthly Reports to
Security Holders. Information concerning the Mortgage Loans and distributions
to the Security Holders is contained in the Monthly Reports to Security Holders
which are filed on Form 8-K, and on the Annual Statement of Compliance and the
Annual Servicing Report filed under Item 14 of Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Not Applicable. Information with respect to the Trust is contained
in the Monthly Reports to Security Holders filed on a monthly basis on
Form 8-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
Not Applicable. The Trust does not have officers or directors. Therefore,
the information requested by items 401 and 405 of Regulation S-K is
inapplicable.
ITEM 11. EXECUTIVE COMPENSATION.
Not Applicable. The Trust does not have officers or directors to whom
compensation needs to be paid. Therefore, the information requested by item
402 of regulation S-K is inapplicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security ownership of certain beneficial owners. Not Applicable.
Under the Pooling and Servicing Agreement governing the Trust, the
holders of the Securities generally do not have the right to vote and
are prohibited from taking part in management of the Trust.
Therefore, the information requested by item 403(a) of Regulation S-K
is inapplicable.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(Continued)
(b) Security ownership of management. Not Applicable. The Trust does not
have any officers or directors. Therefore, the information requested
by item 403(b) of Regulation S-K is inapplicable.
(c) Changes in control. Not Applicable. Because Security Holders do not
possess, directly or indirectly, the power to direct or cause the
direction of the management and policies of the Trust, other than
with respect to certain required consents to amendments to the
Pooling and Servicing Agreement and the ability of holders of
specified amounts of the Securities to act as a group in the event
of the occurrence of certain events which if continuing would
constitute events of default under the Pooling & Servicing Agreement,
the information requested with respect to item 403(c) of Regulation
S-K is inapplicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not Applicable. The Trust does not have officers or directors and under
the Pooling and Servicing Agreement governing the Trust, the holders of the
Securities generally do not have the right to vote. Therefore, the information
requested by item 404 of Regulation S-K is inapplicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following is a list of documents filed as part of this report:
EXHIBITS
4.1 Pooling and Servicing Agreement dated as of December 1,
1996 (hereby incorporated herein by reference as exhibit
to Depositor's Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 7,
1997.
99.1 Independent Auditor's Report on Compliance with the
Uniform Single Audit Program for Mortgage Bankers dated
February 19, 1997.
________________________________________________________________________________
(b) Reports on Form 8-K
None
(c) The exhibits required to be filed by Registrant pursuant to item 601
of Regulation S-K are listed above and in the Exhibit Index that
immediately follows the signature page hereof.
(d) Not Applicable. The Trust does not have any subsidiaries or
affiliates. Therefore, no financial statements are filed with respect
to subsidiaries or affiliates.
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SUPPLEMENTAL INFORMATION TO BE FURNISHED
WITH REPORTS FILED PURSUANT TO SECTION 15(D)
BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT
No Annual report, proxy statement, form of proxy or other soliciting
material has been sent to Security Holders, and the Registrant does not
contemplate sending any such materials subsequent to the filing of this report.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
MIDLAND LOAN SERVICES, L.P., not in its individual
capacity but solely as a duly authorized agent of the
Registrant pursuant to Section 3.20 of the Pooling and
Servicing Agreement dated as of December 1, 1996.
By: Midland Data Systems, Inc., its
General Partner
By: /s/ Lawrence D. Ashley
Name: Lawrence D. Ashley
Title: Director of MBS Programs
Date: March 28, 1997
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT DOCUMENT PAGE NUMBER
4.1 Pooling and Servicing Agreement dated as
of December 1, 1996 (hereby incorporated
herein by reference as exhibit to
Depositor's Current Report on Form 8-K
filed with the Securities and Exchange
Commission on January 7, 1997.
99.1 Independent Auditor's Report on 8
Compliance with the Uniform Single
Audit Program for Mortgage Bankers
dated February 19, 1997.
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Independent Auditors' Report on Management's
Assertion on Compliance with Minimum
Servicing Standards Set Forth in the Uniform
Single Attestation Program for Mortgage Bankers
The Board of Directors and Stockholder
of Midland Data Systems, Inc.
The Partners of Midland Loan Services, L.P.
We have examined management's assertion that Midland Data Systems, Inc. and
Midland Loan Services, L.P. (the Companies) complied with the minimum servicing
standards set forth in the Mortgage Bankers Association of America's (MBA)
Uniform Single Attestation Program for Mortgage Bankers, except for commercial
loan and multifamily loan servicing, minimum servicing standards V.4. and VI.1.,
which the MBA has interpreted as inapplicable to such servicing during the year
ended December 31, 1996, included in the accompanying report titled Report of
Management. Management is responsible for the Companies' compliance with those
requirements. Our responsibility is to express an opinion on management's
assertion about the Companies' 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 Companies' compliance with those
requirements 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
Companies' compliance with specified requirements.
In our opinion, management's assertion that the Companies complied with the
aforementioned requirements during the year ended December 31, 1996 is fairly
stated, in all material respects.
/s/ Ernst & Young LLP
February 19, 1997
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Report of Management
We, as members of management of Midland Data Systems, Inc. and Midland Loan
Services, L.P., (the Companies), are responsible for complying with the minimum
servicing standards as set forth in the Mortgage Bankers Association of
America's (MBA) Uniform Single Attestation Program for Mortgage Bankers (USAP)
except, for commercial loan and multifamily loan servicing, minimum servicing
standards V.4. and V1.1., which the MBA has interpreted as inapplicable to such
servicing. We are also responsible for establishing and maintaining effective
internal control over compliance with these standards. We have performed an
evaluation of the Companies' compliance with the minimum servicing standards as
set forth in the USAP as of December 31, 1996 and for the year then ended. Based
on this evaluation, we assert that during the year ended December 31, 1996 the
Companies complied with the minimum servicing standards set forth in the USAP.
As of and for this same period, the Companies had in effect a fidelity bond and
errors and omissions policy in the amount of not less than $13 million.
February 19, 1997
/s/ Paula Mickelson
Paula Mickelson
Compliance Officer
/s/ C.J. Sipple
C.J. Sipple
Director of Loan Servicing
