- --------------------------------------------------------------------------------
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): September 16, 1997
BENEFICIAL MORTGAGE SERVICES, INC.
----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-2151 52-2022851
- ---------------------------- ---------------- ----------------------
(State or Other Jurisdiction (Commission I.R.S. Employer
of Incorporation) File Number Identification No.
One Christina Centre
301 North Walnut Street
Wilmington Delaware 19801
-------------------------------- -------------------------
(State or Other Jurisdiction (Zip Code
or Incorporation
Registrant's telephone number, including area code (302) 425-2500
Not Applicable
(Former name or former address, if changed since last report)
- --------------------------------------------------------------------------------
Item 5. Other Events
Tax Opinion
In connection with the offering of the Beneficial Home Equity Loan Asset
Backed Certificates, Series 1997-2 (the "Certificates"), Dechert Price & Rhoads,
counsel to the Registrant, has issued a tax opinion with respect to the
Certificates.
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following is filed herewith. The exhibit numbers correspond with Item
601(b) of Regulation S-K.
Exhibit No. Description
99.1 Tax opinion of Dechert Price & Rhoads
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
By:/s/ Charles D. Brown
---------------------------------
Name: Charles D. Brown
Its: Vice President
Dated: September 16, 1997
<PAGE>
Exhibit No. 99.1
LAW OFFICES OF
DECHERT PRICE & RHOADS
30 ROCKEFELLER PLAZA
NEW YORK, NY 10112
TELEPHONE: (212) 698-3500
FAX: (212) 698-3599
September 16, 1997
Salomon Brothers Inc. The Chase Manhattan Bank
7 World Trade Center, 33rd Floor 450 West 33rd Street, 10th Floor
New York, New York 10048 New York, NY 10001-2697
Attention: Corporate Trust Officer
Bear, Stearns & Co. Inc. Texas Commerce Bank National
245 Park Avenue Association
New York, New York 10167 600 Travis Street
Houston, TX 77002
Mail Station 6-TCT-36
Goldman, Sachs & Co. Beneficial Mortgage Services, Inc.
85 Broad Street One Christina Centre
New York, New York 10004 301 North Walnut Street
Wilmington, DE 19801
J. P. Morgan Securities Inc. Standard & Poor's Ratings Services
60 Wall Street, 18th Floor 26 Broadway
New York, New York 10260 New York, NY 10004
Merrill Lynch, Pierce, Fenner Moody's Investors Service, Inc.
& Smith Incorporated 99 Church Street
250 Vesey Street New York, NY 10007
World Financial Center, North Tower
New York, New York 100281-1310
UBS Securities LLC Fitch Investors Service L.P.
299 Park Avenue, 26th Floor One State Street Plaza, 32nd Floor
New York, New York 10171 New York, NY 10004
Re: Beneficial Home Equity Loan Asset
Backed Certificates, Series 1997-2
----------------------------------
<PAGE>
September 16, 1997
Page 2
Dear Sirs:
We have acted as federal income tax counsel to Beneficial
Mortgage Services, Inc. (the "Depositor") concerning certain federal tax
consequences of the issuance by the Trust Fund of $800,017,000 aggregate
principal amount of Beneficial Home Equity Loan Asset Backed Certificates,
Series 1997-2, Class A, Class M and Class B (the "Certificates"). In that
connection, the Depositor has asked for our opinion concerning the status of
each of the Lower-Tier REMIC and the Upper-Tier REMIC as a "real estate mortgage
investment conduit" within the meaning of Section 860D of the Internal Revenue
Code of 1986, as amended to date (the "Code"), and certain other federal income
tax matters. This opinion is being rendered to you pursuant to Section 5(b) of
the Underwriting Agreement, dated September 9, 1997, among the Depositor,
Beneficial Mortgage Corporation, as Master Servicer (the "Master Servicer"), and
Salomon Brothers Inc, for itself and as authorized representative of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, J.P. Morgan
Securities Inc., Bear, Stearns & Co. Inc. and Goldman, Sachs & Co. (the
"Underwriters"), relating to the sale of the Certificates. Capitalized terms not
otherwise defined herein are defined as set forth in the Registration Statement
on Form S-3 (Reg. No. 333-21511), and Amendments No. 1 and 2 thereto, relating
to the registration under the Securities Act of 1933, as amended (the "Act"), of
the Certificates (such Registration Statement, as and to the extent so amended,
at the time it became effective on April 23, 1997 being hereinafter called the
"Registration Statement") and the Prospectus, dated May 7, 1997, and the
Prospectus Supplement, dated September 9, 1997, each in the form thereof
transmitted for filing with the Securities and Exchange Commission (the
"Commission") pursuant to Rules 424(b) and 430A promulgated under the Act
(collectively, the "Prospectus").
In arriving at the opinion expressed below, we have examined
and relied upon the originals or copies certified or otherwise identified to our
satisfaction of the following documents:
a. the Registration Statement and the Prospectus;
b. the Pooling and Servicing Agreement;
c. a certification from the Depositor (the "Certification")
dated the date hereof, (i) relating to the reasonableness of the
Monthly Servicing Fee under the Pooling and Servicing Agreement and
certain other matters; (ii) stating that (1) each Home Equity Loan is
an enforceable obligation that provides for total noncontingent
principal payments that at least equal such Home Equity Loan's issue
price, and (2) the Depositor reasonably believes that each Home Equity
Loan is "principally secured by real property" (as defined in the Code
and the Treasury Regulations promulgated thereunder); (iii) stating
that (1) the Trust Fund has not acquired and will not acquire any Home
Equity Loan with an intent that such be foreclosed upon; and (2) when
the Trust Fund acquired the Home Equity Loans, the Depositor did not
know or have reason to know as to any Home Equity Loan (a) that any
payment of principal or interest on or in respect of such Home Equity
Loan was 30 days or
<PAGE>
September 16, 1997
Page 3
more delinquent as of the Cycle Date immediately preceding the Cut-Off
Date, (b) that the Mortgagor had notified the owner of such Home Equity
Loan that the Mortgagor would not make future payments of principal and
interest or that a notice of acceleration had been given to the
Mortgagor or foreclosure proceedings commenced, or (c) as to any Home
Equity Loan that any delinquencies thereon would not be cured; and (iv)
concerning the dimensions and other aspects of mobile homes securing
certain of the Home Equity Loans;
and such other documents, agreements, and instruments, as we have deemed
necessary to render the opinion expressed below. In connection with such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents, agreements, and instruments submitted to us as originals, the
conformity to original documents, agreements, and instruments of all documents,
agreements, and instruments submitted to us as copies or specimens and the
authenticity of the originals of such documents, agreements, and instruments
submitted to us as copies or specimens. We have also assumed (other than with
respect to the Depositor) that all documents, agreements, and instruments have
been duly authorized, executed and delivered by all parties thereto. We have
relied upon statements and representations of officers and other representatives
of the Depositor, including the Certification and the Pooling and Servicing
Agreement.
Our opinion is based upon our analysis and interpretation of
the Code, as well as upon court decisions, regulations, and other administrative
interpretations of the Code. The statutory provisions, regulations, and
interpretations upon which our opinion is based are subject to change, and such
changes could apply retroactively. In addition, our opinion has no binding
effect on the Internal Revenue Service or on any court and only represents our
professional judgment. Thus, there can be no assurance that positions contrary
to those stated in our opinion may not be asserted by the Internal Revenue
Service.
Assuming (i) that the elections required by Section 860D(b) of
the Internal Revenue Code of 1986, as amended (the "Code") are properly made and
(ii) compliance with the Pooling and Servicing Agreement, as in effect at the
Closing Time, and with any subsequent changes in the law, including any
amendments to the Code or applicable regulations of the U.S. Department of the
Treasury thereunder, it is our opinion that the Lower-Tier REMIC and the
Upper-Tier REMIC, each as described in the Pooling and Servicing Agreement, will
each be treated for federal income tax purposes as a "real estate mortgage
investment conduit" within the meaning of Section 860D of the Code, the
Certificates and the Class C Certificates to be issued pursuant to the Pooling
and Servicing Agreement shall be treated as "regular interests" in the
Upper-Tier REMIC and the Class R Certificates shall be treated as "residual
interests" in the Upper-Tier REMIC and the Lower-Tier REMIC. We have prepared
and reviewed the statements in the Prospectus under the headings "Summary of
Prospectus -- Tax Status of the Certificates" and "Federal Income Tax
Consequences" and in the Prospectus Supplement under the headings "Prospectus
Supplement Summary -- Certain Federal Tax Aspects" and "Federal Income Tax
Consequences". To the extent such statements constitute matters of federal law
or legal conclusions with respect thereto, it is our opinion that they provide a
fair and accurate summary of our conclusions. However, we call to your attention
that
<PAGE>
September 16, 1997
Page 4
there is an improper reference which appears on pages S-18 and S-60 of the
Prospectus Supplement. The incorrect language states "...the Trust Fund will
consist of two segregated asset pools (the "Upper-Tier REMIC" and the
"Lower-Tier REMIC"), the first of which [i.e., the Upper-Tier REMIC] shall
consist of the Home Equity Loans and the second of which [i.e., the Lower-Tier
REMIC] shall consist of the regular interests in the Lower-Tier REMIC." The
correct language should be as follows: "...the Trust Fund will consist of two
segregated asset pools (the "Upper-Tier REMIC" and the "Lower-Tier REMIC"), the
first of which shall consist of the regular interests in the Lower-Tier REMIC
and the second of which shall consist of the Home Equity Loans. Except as
provided herein, we are not passing upon and assume no responsibility for, the
accuracy, completeness or fairness of the statements included in the
Registration Statement and the Prospectus. The opinions expressed herein are
limited to the federal laws of the United States.
We hereby consent to the filing of this letter as an exhibit
to the Registration Statement and to a reference to this firm (as counsel to the
Registrant) under the heading "Federal Income Tax Consequences" in the
Prospectus forming a part of the Registration Statement, without implying or
admitting that we are "experts" within the meaning of the Act or the rules and
regulations of the Commission issued thereunder, with respect to any part of the
Registration Statement, including this exhibit. We are furnishing this opinion
letter to the addressee hereof, solely for the benefit of such addressees. This
opinion letter is not to be used, circulated, quoted otherwise referred to for
any other purpose.
Very truly yours,
Dechert Price & Rhoads
