<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
July 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 Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
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
<TABLE>
<S> <C>
10.1 Monthly Payment Date Statement distributed
to Bondholders, dated July 25, 1998.
</TABLE>
<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: August 5, 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> <C>
10.1 Monthly Payment Date Statement distributed to
Bondholders, dated July 25, 1998....................... 5
</TABLE>
<PAGE> 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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
EXHIBIT 10.1
Certificateholder Distribution Summary
<TABLE>
<CAPTION>
======================================================================================================
Certificate
Certificate Pass- Beginning
Class Through Certificate Interest Principal
Class CUSIP Description Rate Balance Distribution Distribution
======================================================================================================
<S> <C> <C> <C> <C> <C> <C>
A-1 81743MAA1 SEQ 6.48750% 513,819,389.62 2,777,836.08 12,671,500.23
A-2 81743MAB9 SEQ 5.99625% 135,790,664.93 678,528.98 3,348,786.51
OC SMTCRT002 R 0.00000% 7,567,274.86 707,624.92 0.00
======================================================================================================
Totals 657,177,329.41 4,163,989.98 16,020,286.74
======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
==================================================================
Current Ending Cumulative
Realized Certificate Total Realized
Class Loss Balance Distribution Losses
==================================================================
<S> <C> <C> <C> <C>
A-1 0.00 501,147,889.39 15,449,336.31 0.00
A-2 0.00 132,441,878.42 4,027,315.49 0.00
OC 0.00 7,567,274.86 707,624.92 0.00
==================================================================
Totals 0.00 641,157,042.67 20,184,276.72 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.
31-July-1998 3:00PM
<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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
Principal Distribution Statement
<TABLE>
<CAPTION>
========================================================================================
Beginning Scheduled Unscheduled
Original Certificate Principal Principal
Class Face Amount Balance Distribution Distribution Accretion
========================================================================================
<S> <C> <C> <C> <C> <C>
A-1 592,560,000.00 513,819,389.62 0.00 12,671,500.23 0.00
A-2 156,600,000.00 135,790,664.93 0.00 3,348,786.51 0.00
OC 7,567,489.63 7,567,274.86 0.00 0.00 0.00
========================================================================================
Totals 756,727,489.63 657,177,329.41 0.00 16,020,286.74 0.00
========================================================================================
</TABLE>
<TABLE>
<CAPTION>
=======================================================================================
Total Ending Ending Total
Realized Principal Certificate Certificate Principal
Class Loss(1) Reduction Balance Percentage Distribution
=======================================================================================
<S> <C> <C> <C> <C> <C>
A-1 0.00 12,671,500.23 501,147,889.39 0.84573358 12,671,500.23
A-2 0.00 3,348,786.51 132,441,878.42 0.84573358 3,348,786.51
OC 0.00 0.00 7,567,274.86 0.99997162 0.00
=======================================================================================
Totals 0.00 16,020,286.74 641,157,042.67 0.84727600 16,020,286.74
=======================================================================================
</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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
Principal Distribution Factors Statement
<TABLE>
<CAPTION>
=========================================================================================
Beginning Scheduled Unscheduled
Original Certificate Principal Principal
Class(2) Face Amount Balance Distribution Distribution Accretion
=========================================================================================
<S> <C> <C> <C> <C> <C>
A-1 592,560,000.00 867.11791147 0.00000000 21.38433278 0.00000000
A-2 156,600,000.00 867.11791143 0.00000000 21.38433276 0.00000000
OC 7,567,489.63 999.97161939 0.00000000 0.00000000 0.00000000
=========================================================================================
</TABLE>
<TABLE>
<CAPTION>
======================================================================================
Total Ending Ending Total
Realized Principal Certificate Certificate Principal
Class(2) Loss(3) Reduction Balance Percentage Distribution
======================================================================================
<S> <C> <C> <C> <C> <C>
A-1 0.00000000 21.38433278 845.73357869 0.84573358 21.38433278
A-2 0.00000000 21.38433276 845.73357867 0.84573358 21.38433276
OC 0.00000000 0.00000000 999.97161939 0.99997162 0.00000000
======================================================================================
</TABLE>
(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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
Interest Distribution Statement
<TABLE>
<CAPTION>
=====================================================================================
Beginning Payment of
Current Certificate/ Current Unpaid
Original Face Certificate Notional Accrued Interest
Class Amount Rate Balance Interest Shortfall
=====================================================================================
<S> <C> <C> <C> <C> <C>
A-1 592,560,000.00 6.48750% 513,819,389.62 2,777,836.08 0.00
A-2 156,600,000.00 5.99625% 135,790,664.93 678,528.98 0.00
OC 7,567,489.63 0.000000% 7,567,274.86 0.00 0.00
=====================================================================================
Totals 756,727,489.63 3,456,365.06 0.00
=====================================================================================
</TABLE>
<TABLE>
<CAPTION>
========================================================================================
Remaining Ending
Current Non-Supported Total Unpaid Certificate/
Interest Interest Realized Interest Interest Notional
Class Shortfall Shortfall Losses(4) Distribution Shortfall Balance
========================================================================================
<S> <C> <C> <C> <C> <C> <C>
A-1 0.00 0.00 0.00 2,777,836.08 0.00 501,147,889.39
A-2 0.00 0.00 0.00 678,528.98 0.00 132,441,878.42
OC 0.00 0.00 0.00 707,624.92 0.00 7,567,274.86
========================================================================================
Totals 0.00 0.00 0.00 4,163,989.98 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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
Interest Distribution Factors Statement
<TABLE>
<CAPTION>
================================================================================================
Beginning Payment of
Current Certificate/ Current Unpaid Current
Original Face Certificate Notional Accrued Interest Interest
Class(5) Amount Rate Balance Interest Shortfall Shortfall
================================================================================================
<S> <C> <C> <C> <C> <C> <C>
A-1 592,560,000.00 6.48750% 867.11791147 4.68785622 0.00000000 0.00000000
A-2 156,600,000.00 5.99625% 867.11791143 4.33287982 0.00000000 0.00000000
OC 7,567,489.63 0.00000% 999.97161939 0.00000000 0.00000000 0.00000000
================================================================================================
</TABLE>
<TABLE>
<CAPTION>
==============================================================================
Non- Remaining Ending
Supported Total Unpaid Certificate/
Interest Realized Interest Interest Notional
Class(5) Shortfall Losses(6) Distribution Shortfall Balance
==============================================================================
<S> <C> <C> <C> <C> <C>
A-1 0.00000000 0.00000000 4.68785622 0.00000000 845.73357869
A-2 0.00000000 0.00000000 4.33287982 0.00000000 845.73357867
OC 0.00000000 0.0000000 93.50854175 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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
Certificateholder Component Statement
<TABLE>
<CAPTION>
============================================================================================================================
Component Beginning Ending Beginning Ending Ending
Pass-Through Notional Notional Component Component Component
Class Rate Balance Balance Balance Balance Percentage
============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
0.00000% 0.00 0.00 0.00 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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
Certificateholder Account Statement
<TABLE>
==================================================================
<S> <C>
CERTIFICATE ACCOUNT
Beginning Balance 0.00
Deposits
Payments of Interest and Principal 20,370,909.48
Liquidations, Insurance Proceeds, Reserve 0.00
Funds
Proceeds from Repurchased Loans 0.00
Other Amounts (Servicer Advances) 0.00
Realized Losses 0.00
-------------
Total Deposits 20,370,909.48
Withdrawals
Reimbursement for Servicer Advances 0.00
Payment of Service Fee 186,632.76
Payment of Interest and Principal 20,184,276.72
-------------
Total Withdrawals (Pool Distribution Amount) 20,370,909.48
=============
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>
<S> <C>
====================================================================
PREPAYMENT/CURTAILMENT INTEREST SHORTFALL
Total Prepayment/Curtailment Interest Shortfall 0.00
Servicing Fee Support 0.00
----
Non-Supported Prepayment/Curtailment Interest Shortfall 0.00
====
====================================================================
</TABLE>
<TABLE>
<S> <C>
====================================================================
SERVICING FEES
Gross Servicing Fee 136,911.94
Pool Insurance Fee 48,720.82
Spread 1 Fee 1,000.00
Supported Prepayment/Curtailment Interest Shortfall 0.00
----------
Net Servicing Fee 186,632.76
==========
====================================================================
</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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-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
Number Of Principal Number Unpaid
Loans Balance of Loans Balance
--------- ------------- -------- ---------
<S> <C> <C> <C> <C>
30 Days 27 11,380,619.69 1.365706% 1.775013%
60 Days 1 128,250.00 0.050582% 0.020003%
90+ Days 2 733.95 0.101163% 0.000114%
Foreclosure 2 751,699.40 0.101163% 0.117241%
REO 0 0.00 0.000000% 0.000000%
-- ------------- -------- --------
Totals 32 12,261,303.04 1.618614% 1.912371%
</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>
<TABLE>
<CAPTION>
==========================================================================================================
SUBORDINATION LEVEL/CREDIT ENHANCEMENT/CLASS PERCENTAGE AND PREPAYMENT PERCENTAGE
Current Next
Class Original $ Original % Current $ Current % Class % Prepayment %
----- ---------- ---------- --------- --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Class A 7,567,489.63 1.00002838% 7,567,274.86 1.18025294% 100.000000% 0.000000%
Class OC 0.00 0.00000000% 0.00 0.00000000% 1.180253% 0.000000%
Please refer to the Prospectus Supplement for a Full Description of Loss Exposure.
==========================================================================================================
</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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
<TABLE>
<CAPTION>
=========================================================================================
COLLATERAL STATEMENT
Collateral Description Mixed ARM
<S> <C>
Weighted Average Gross Coupon 7.845323%
Weighted Average Net Coupon 7.343738%
Weighted Average Pass-Through Rate 0.000000%
Weighted Average Maturity (Stepdown Calculation) 287
Beginning Scheduled Collateral Loan Count 2,020
Number of Loans Paid in Full 43
Ending Scheduled Collateral Loan Count 1,977
Beginning Scheduled Collateral Balance 657,177,329.45
Ending Scheduled Collateral Balance 641,157,042.71
Ending Actual Collateral Balance at 30-June-1998 0.00
Monthly P&I Constant 4,052,638.29
Class A Optimal Amount 19,525,372.55
Required Overcollateralized Amount 0.00
Overcollateralized Increase Amount 0.00
Overcollateralized Reduction Amount 0.00
Specified O/C Amount 0.00
Overcollateralized Amount 7,567,274.86
Overcollateralized Deficiency Amount 0.00
Base Overcollateralization Amount 0.00
=========================================================================================
</TABLE>
<TABLE>
=========================================================================================
<S> <C>
Serious Delinquency .1258639
Specific OC Amount 7,567,274.90
=========================================================================================
</TABLE>
<PAGE> 10
<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-June-1998 7485 New Horizon Way
Distribution Date: 27-July-1998 Frederick, MD 21703
Telephone: (301) 846-8130
Facsimile: (301)846-8152
</TABLE>
<TABLE>
<S> <C>
======================================================================
POOL LEVEL COLLATERAL STATEMENT
Collateral Description None
Weighted Average Gross Coupon 0.000000%
Weighted Average Net Coupon 0.000000%
Weighted Average Pass-Through Rate 0.000000%
Weighted Average Maturity (Stepdown 0
Calculation)
Beginning Scheduled Collateral Loan Count 0
Number of Loans Paid in Full 0
Ending Scheduled Collateral Loan Count 0
Beginning Scheduled Collateral Balance 3,271.78
Ending Scheduled Collateral Balance 3,271.78
=============================================== ======================
</TABLE>
