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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): May 19, 1997
BENEFICIAL MORTGAGE SERVICES, INC.
(Exact name of registrant as specified in its character)
Delaware
(State or other jurisdiction of incorporation or organization)
333-2151 52-2022851
(Commission File Number) (IRS Employer Identification No.)
Beneficial Mortgage Services, Inc.
One Christina Centre
301 North Walnut Street
Wilmington, DE 19801
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (302) 425-2500
Not applicable
(Former name or form address, if changed since last report)
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Item 7. Financial Statements and Exhibits
(c) Exhibits
The following is filed herewith. The exhibit number corresponds with
item 601(b) of the Regulation S-K.
Exhibit No. Description
99 Tax opinion of Dechert Price & Rhoads.
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.
BENEFICIAL MORTGAGE SERVICES, INC.
By: /s/Charles D. Brown
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Name: Charles D. Brown
Its: Vice President
Dated: May 19, 1997
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<S> <C>
May 20, 1997
Merrill Lynch, Pierce, Fenner & Smith Beneficial Mortgage Services, Inc.
Incorporated One Christina Centre
250 Vesey Street 301 North Walnut Street
World Financial Center, North Tower Wilmington, DE 19801
New York, New York 100281-1310
Salomon Brothers Inc UBS Securities LLC
7 World Trade Center, 33rd Floor 299 Park Avenue, 26th Floor
New York, New York 10048 New York, New York 10171
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
The Chase Manhattan Bank Moody's Investors Service, Inc.
450 West 33rd Street, 10th Floor 99 Church Street
New York, New York 10001-2697 New York, NY 10007
Attention: Corporate Trust Officer
Fitch Investors Service L.P.
One State Street Plaza, 32nd Floor
New York, NY 10004
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Re: Beneficial Home Equity Loan Asset
Backed Certificates, Series 1997-1
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 $807,824,000.00 aggregate
principal amount of Beneficial Home Equity Loan Asset Backed Certificates,
Series 1997-1 (the "Certificates"). In that connection, the Depositor has asked
for our opinion concerning the status of the Trust Fund 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 May 13, 1997, among the Depositor,
Beneficial Mortgage Corporation, as Master Servicer (the "Master Servicer"), and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, for itself and as authorized
representative of J.P. Morgan Securities Inc., Salomon Brothers Inc and UBS
Securities LLC (the "Underwriters"), relating to the
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May 20, 1995
Page 2
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 May 13, 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 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
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May 20, 1995
Page 3
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 election required by Section 860D(b) of the
Internal Revenue Code of 1986, as amended (the "Code") is 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 Trust Fund will 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 shall be treated as
"regular interests" in such REMIC and the Class R Certificates shall be treated
as the single class of "residual interests" in such 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. 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
