<PAGE> 1
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
May 25, 1998
Date of Report (Date of Earliest Event Reported)
Sequoia Mortgage Funding Corporation (as Sponsor of Sequoia
Mortgage Trust 2, the Issuer of Collateralized Mortgage Bonds under an
Indenture dated as of October 1, 1997)
SEQUOIA MORTGAGE FUNDING CORPORATION
------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 333-22681-2 91-1771827
-------- ----------- ----------
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction Identification No.)
of Incorporation)
591 Redwood Highway, Suite 3120, Mill Valley, CA 94941
------------------------------------------------------
(Address of Principal Executive Offices)
(415) 381-1765
--------------
(Registrant's Telephone Number,
Including Area Code)
Not Applicable
--------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. OTHER EVENTS
Sequoia Mortgage Funding Corporation has previously registered
the offer and sale of Collateralized Mortgage Bonds issued by
Sequoia Mortgage Trust 2 (the "Bonds").
The following exhibit which relates specifically to the Bonds is
included with this Current Report:
Item 7(c). Exhibits
10.1 Monthly Payment Date Statement distributed to
Bondholders, dated May 25, 1998.
<PAGE> 3
SIGNATURE
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 thereunto duly authorized.
Date: June 16, 1998
SEQUOIA MORTGAGE FUNDING
CORPORATION
By: /s/ Vickie L. Rath
---------------------------------
Vickie L. Rath
Treasurer and Assistant Secretary
(Principal Financial Officer and
and Principal Accounting Officer)
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Page Number
- -------------- -----------
<S> <C>
10.1 Monthly Payment Date Statement distributed to
Bondholders, dated May 25, 1998......................................5
</TABLE>
<PAGE> 1
EXHIBIT 10.1
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
Certificateholder Distribution Summary
<TABLE>
<CAPTION>
===========================================================================================================================
Certificate Certificate Beginning
Class Pass-Through Certificate Interest Principal
Class CUSIP Description Rate Balance Distribution Distribution
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
A-1 81743MAA1 SEQ 6.49330% 539,702,342.50 2,920,374.35 13,928,825.38
A-2 81743MAB9 SEQ 5.99625% 142,630,934.99 712,708.95 3,681,068.67
OC SMTCRT002 R 0.00000% 7,567,274.86 741,437.35 0.00
===========================================================================================================================
Totals 689,900,552.35 4,374,520.65 17,609,894.05
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===================================================================================
Ending Cumulative
Current Certificate Total Realized
Class Realized Loss Balance Distribution Losses
===================================================================================
<S> <C> <C> <C> <C>
A-1 0.00 525,773,517.13 16,849,199.73 0.00
A-2 0.00 138,949,866.31 4,393,777.62 0.00
OC 0.00 7,567,274.86 741,437.35 0.00
===================================================================================
Totals 0.00 672,290,658.30 21,984,414.70 0.00
===================================================================================
</TABLE>
All distributions required by the Pooling and Servicing Agreement have been
calculated by the Certificate Administrator on behalf of the Trustee
Edward M. Frere, Jr.
Vice President, Norwest Bank Minnesota, N.A.
15-June-1998 2:46PM
<PAGE> 2
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
Principal Distribution Statement
<TABLE>
<CAPTION>
========================================================================================================================
Beginning Scheduled Unscheduled
Class Original Face Certificate Principal Principal Realized
Amount Balance Distribution Distribution Accretion Loss(1)
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
A-1 592,560,000.00 539,702,342.50 0.00 13,928,825.38 0.00 0.00
A-2 156,600,000.00 142,630,934.99 0.00 3,681,068.67 0.00 0.00
OC 7,567,489.63 7,567,274.86 0.00 0.00 0.00 0.00
========================================================================================================================
Totals 756,727,489.63 689,900,552.35 0.00 17,609,894.05 0.00 0.00
========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================
Total Ending Ending Total
Class Principal Certificate Certificate Principal
Reduction Balance Percentage Distribution
====================================================================================
<S> <C> <C> <C> <C>
A-1 13,928,825.38 525,773,517.13 0.88729161 13,928,825.38
A-2 3,681,068.67 138,949,866.31 0.88729161 3,681,068.67
OC 0.00 7,567,274.86 0.99997162 0.00
====================================================================================
Totals 17,609,894.05 672,290,658.30 0.88841844 17,609,894.05
====================================================================================
</TABLE>
(1) Amount Does Not Include Excess Special Hazard, Bankruptcy, Or Fraud
Losses Unless Otherwise Disclosed. Please Refer To The Prospectus
Supplement For A Full Description.
<PAGE> 3
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
Principal Distribution Factors Statement
<TABLE>
<CAPTION>
========================================================================================================================
Beginning Scheduled Unscheduled
Class(2) Original Face Certificate Principal Principal Realized
Amount Balance Distribution Distribution Accretion Loss(1)
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
A-1 592,560,000.00 910.79779685 0.00000000 23.50618567 0.00000000 0.00000000
A-2 156,600,000.00 910,79779687 0.00000000 23.50618563 0.00000000 0.00000000
OC 7,567,489.63 999.97161939 0.00000000 0.00000000 0.00000000 0.00000000
========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================
Total Ending Ending Total
Class(2) Principal Certificate Certificate Principal
Reduction Balance Percentage Distribution
====================================================================================
<S> <C> <C> <C> <C>
A-1 23.50618567 887.29161120 0.88729161 23.50618567
A-2 23.50618563 887.29161117 0.88729161 23.50618563
OC 0.00000000 999.97161939 0.99997162 0.00000000
====================================================================================
</TABLE>
(2) All Classes Are Per $1,000 Denomination.
(3) Amount Does Not Include Excess Special Hazard, Bankruptcy, Or
Fraud Losses Unless Otherwise Disclosed. Please Refer To The
Prospectus Supplement For A Full Description.
<PAGE> 4
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
Interest Distribution Statement
<TABLE>
<CAPTION>
===================================================================================================================================
Current Beginning Current Payment of Current Non-Supported
Original Face Certificate Certificate/ Accrued Unpaid Interest Interest Interest
Class Amount Rate Notional Balance Interest Shortfall Shortfall Shortfall
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
A-1 592,560,000.00 6.49330% 539,702,342.50 2,920,374.35 0.00 0.00 0.00
A-2 156,600,000.00 5.99625% 142,630,934.99 712,708.95 0.00 0.00 0.00
OC 7,567,489.63 0.00000% 7,567,274.86 0.00 0.00 0.00 0.00
===================================================================================================================================
Totals 756,727,489.63 3,633,083.30 0.00 0.00 0.00
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
========================================================================
Remaining Ending
Unpaid Certificate/
Realized Total Interest Interest Notional
Class Losses(4) Distribution Shortfall Balance
========================================================================
<S> <C> <C> <C> <C>
A-1 0.00 2,920,374.35 0.00 525,773,517.13
A-2 0.00 712,708.95 0.00 138,949,866.31
OC 0.00 741,437.35 0.00 7,567,274.86
========================================================================
Totals 0.00 4,374,520.65 0.00
========================================================================
</TABLE>
(4) Amount Does Not Include Excess Special Hazard, Bankruptcy, Or
Fraud Losses Unless Otherwise Disclosed. Please Refer To The
Prospectus Supplement For A Full Description.
<PAGE> 5
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
Interest Distribution Factors Statement
<TABLE>
<CAPTION>
===================================================================================================================================
Current Beginning Current Payment of Current Non-Supported
Original Face Certificate Certificate/ Accrued Unpaid Interest Interest Interest
Class(5) Amount Rate Notional Balance Interest Shortfall Shortfall Shortfall
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
A-1 592,560,000.00 6.49330% 910.79779685 4.92840278 0.00000000 0.00000000 0.00000000
A-2 156,600,000.00 5.99625% 910.79779687 4.55114272 0.00000000 0.00000000 0.00000000
OC 7,567,489.63 0.00000% 999.97161939 0.00000000 0.00000000 0.00000000 0.00000000
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
========================================================================
Remaining Ending
Unpaid Certificate/
Realized Total Interest Interest Notional
Class(5) Losses(6) Distribution Shortfall Balance
========================================================================
<S> <C> <C> <C> <C>
A-1 0.00000000 4.92840278 0.00000000 887.29161120
A-2 0.00000000 4.55114272 0.00000000 887.29161117
OC 0.00000000 97.97665887 0.00000000 999.97161939
========================================================================
</TABLE>
(5) All Classes Are Per $1,000 Denomination.
(6) Amount Does Not Include Excess Special Hazard, Bankruptcy, Or Fraud
Losses Unless Otherwise Disclosed. Please Refer To The Prospectus
Supplement For A Full Description.
<PAGE> 6
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
Certificateholder Component Statement
<TABLE>
<CAPTION>
======================================================================================================================
Component Beginning Notional Ending Notional Beginning Component
Class Pass-Through Rate Balance Balance Balance
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.00000% 0.00 0.00 0.00
======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
============================================================================
Ending Component Ending Component Percentage
Class Balance
- ----------------------------------------------------------------------------
<S> <C> <C>
0.00 0.00000000%
============================================================================
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
Certificateholder Account Statement
<TABLE>
<CAPTION>
=============================================================================
CERTIFICATE ACCOUNT
<S> <C>
Beginning Balance 0.00
Deposits
Payments of Interest and Principal 22,180,319.12
Liquidations, Insurance Proceeds, Reserve Funds 0.00
Proceeds from Repurchased Loans 0.00
Other Amounts (Servicer Advances) 0.00
Realized Losses 0.00
-------------
Total Deposits 22,180,319.12
Withdrawals
Reimbursement for Servicer Advances 0.00
Payment of Service Fee 195,904.42
Payment of Interest and Principal 21,984,414.70
-------------
Total Withdrawals (Pool Distribution Amount) 22,180,319.12
=============
Ending Balance 0.00
=============================================================================
</TABLE>
<TABLE>
<CAPTION>
=================================================================================================
OTHER ACCOUNTS
Beginning Current Current Ending
Account Type Balance Withdrawals Deposits Balance
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ambac Assurance 0.00 0.00 0.00 0.00
=================================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================
PREPAYMENT/CURTAILMENT INTEREST SHORTFALL
<S> <C>
Total Prepayment/Curtailment Interest Shortfall 0.00
Servicing Fee Support 0.00
-----
Non Supported Prepayment/Curtailment Interest Shortfall 0.00
=====
================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================
SERVICING FEES
<S> <C>
Gross Servicing Fee 143,729.28
Pool Insurance Fee 51,175.14
Spread 1 Fee 1,000.00
Supported Prepayment/Curtailment Interest Shortfall 0.00
-----------
Net Servicing Fee 195,904.42
===========
================================================================================
</TABLE>
<PAGE> 8
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================
CERTIFICATEHOLDER DELINQUENCY/CREDIT ENHANCEMENT STATEMENT
DELINQUENCY STATUS
Percentage Delinquent Based On
Current Unpaid Principal
Number Of Balance Number Unpaid
Loans of Loans Balance
<S> <C> <C> <C> <C>
30 Days 17 4,712,933.65 0.822050% 0.701026%
60 Days 3 541,772.18 0.145068% 0.080586%
90+ Days 1 483,000.00 0.048356% 0.071844%
Foreclosure 1 268,699.40 0.048356% 0.039968%
REO 0 0.00 0.000000% 0.000000%
Totals 22 6,006,405.23 1,063830% 0.893424%
</TABLE>
<TABLE>
<S> <C>
Current Period Realized Loss - Includes Interest Shortfall 0.00
Cumulative Realized Losses - Includes Interest Shortfall 0.00
Current Period Class A Insufficient Funds 0.00
Principal Balance of Contaminated Properties 0.00
Periodic Advance 0.00
===================================================================================================
</TABLE>
<PAGE> 9
<TABLE>
<S> <C> <C>
Sequoia Mortgage Trust SMT Contact: Customer Service
Mortgage Pass-Through Certificates Series 1997-2 Norwest Bank Minnesota, N.A.
Securities Administration Services
Record Date: 30-Apr-1998 7485 New Horizon Way
Distribution Date: 26-May-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301) 846-8152
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================
COLLATERAL STATEMENT
<S> <C>
Collateral Description Mixed ARM
Weighted Average Gross Coupon 7.884332%
Weighted Average Net Coupon 7.382822%
Weighted Average Pass-Through Rate 0.000000%
Weighted Average Maturity (Stepdown Calculation) 289
Beginning Scheduled Collateral Loan Count 2,132
Number of Loans Paid in Full 64
Ending Scheduled Collateral Loan Count 2,068
Beginning Scheduled Collateral Balance 689,900,552.39
Ending Scheduled Collateral Balance 672,290,658.34
Ending Actual Collateral Balance at 30-Apr-1998 0.00
Monthly P&I Constant 4,376,680.37
Class A Optimal Amount 21,294,152.35
========================================================================================================
</TABLE>
<TABLE>
========================================================================================================
<S> <C>
Serious Delinquency .11017%
Specific OC Amount 7,567,274.90
========================================================================================================
</TABLE>
