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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) September 19, 1997
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC. (as depositor under a Pooling and
Servicing Agreement dated as of August 1, 1997 providing for, inter alia, the
issuance of Asset-Backed Floating Rate Certificates, Series 1997-NC4)
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 333-22559 13-3439681
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
Seven World Trade Center
New York, New York 10048
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code, is (212) 783-5659
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
<PAGE>
On August 27, 1997 (the "Closing Date"), a single series of
certificates, entitled Salomon Brothers Mortgage Securities VII, Inc.,
Asset-Backed Floating Rate Certificates, Series 1997-NC4 (the "Certificates"),
were issued pursuant to the Pooling and Servicing Agreement, dated as of August
1, 1997 (the "Agreement") among Salomon Brothers Mortgage Securities VII, Inc.
(the "Depositor"), New Century Mortgage Corporation and First Trust National
Association (the "Trustee"). On September 19, 1997 following the closing of the
initial issuance of the Certificates, the Trustee purchased from the Depositor
certain Subsequent Mortgage Loans, as defined in the Agreement, with an
aggregate principal balance equal to approximately $69,218,542 with funds on
deposit in the pre-funding account (the APre-Funding Account@) established
pursuant to the Agreement at a purchase price equal to the principal balance
thereof, which Subsequent Mortgage Loans were conveyed to the Trustee pursuant
to a Subsequent Transfer Instrument, dated September 19, 1997, between the
Depositor and the Trustee (the "Instrument"). Attached to the Instrument is the
Mortgage Loan Schedule listing the Subsequent Mortgage Loans that are the
subject of such Instrument.
Item 5. OTHER EVENTS
Description of the Mortgage Pool
The Certificates, issued pursuant to the Agreement, evidence in the
aggregate the entire beneficial ownership interest in a trust fund (the "Trust
Fund"), consisting primarily of a segregated pool (the "Mortgage Pool") of
conventional, one- to four- family, first lien adjustable-rate mortgage loans
having original terms to maturity of not greater than 30 years (the "Mortgage
Loans"). As of the Closing Date, the Trust Fund primarily consisted of (i) the
Mortgage Pool, which consisted of Mortgage Loans having an aggregate principal
balance of approximately $210,149,998 as of August 1, 1997 and (ii) the
Pre-Funding Account, which contained approximately $69,850,402.
As more fully described above, on September 19, 1997, the Depositor
purchased the Subsequent Mortgage Loans with the funds on deposit in the
Pre-Funding Account. The tables attached as an exhibit hereto describe certain
characteristics of the Mortgage Pool as of September 19, 1997, the end of the
"Funding Period" (as defined in the Agreement).
<PAGE>
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits
EXHIBIT NO. DESCRIPTION
----------- -----------
4.2 Subsequent Transfer Instrument, dated as of September 19,
1997 between Salomon Brothers Mortgage Securities VII, Inc. as
seller, and First Trust National Association, as trustee.
99.9 Characteristics of the Mortgage Pool as of September 19,
1997, relating to Salomon Brothers Mortgage Securities VII, Inc.,
Asset-Backed Floating Rate Certificates, Series 1997-NC4
<PAGE>
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 thereunto duly authorized.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Matthew R. Bollo
-----------------------------------
Name: Matthew R. Bollo
Title: Assistant Vice President
Dated: September 19, 1997
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
4.2 Subsequent Transfer Instrument
99.9 Characteristics of the Mortgage Pool
as of September 19, 1997, relating to
Salomon Brothers Mortgage Securities
VII, Inc., Asset Backed Floating Rate
Certificates, Series 1997-NC4
EXHIBIT 4.2
<PAGE>
SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument, dated
September 19, 1997 (the "Instrument"), between Salomon Brothers Mortgage
Securities VII, Inc. as seller (the "Depositor") and First Trust National
Association as trustee of the Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Floating Rate Certificates, Series 1997-NC4, as purchaser (the
"Trustee"), and pursuant to the Pooling and Servicing Agreement, dated as of
August 1, 1997 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, New Century Mortgage Corporation as master servicer and the Trustee
as trustee, the Depositor and the Trustee agree to the sale by the Depositor and
the purchase by the Trustee, on behalf of the Trust Fund, of the Mortgage Loans
listed on the attached Schedule of Mortgage Loans (the "Subsequent Mortgage
Loans").
Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.
Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
(a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee, on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.
(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, between the Depositor
as purchaser and the Master Servicer as seller, to the extent of the Subsequent
Mortgage Loans, a copy of which agreement is annexed hereto as Attachment G.
(c) Additional terms of the sale are set forth on Attachment A
hereto.
<PAGE>
Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS
PRECEDENT.
(a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.
(b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.
Section 3. RECORDATION OF INSTRUMENT.
To the extent permitted by applicable law, this Instrument, or
a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. GOVERNING LAW.
This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. COUNTERPARTS.
This Instrument may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.
<PAGE>
Section 6. SUCCESSORS AND ASSIGNS.
This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Matthew R. Bollo
---------------------------------------
Name: Matthew R. Bollo
Title: Assistant Vice President
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee for Salomon Brothers
Mortgage Securities VII, Inc.,
Asset-Backed Floating Rate Certificates,
Series 1997-NC4
By: /s/ Eve Kaplan
---------------------------------------
Name: Eve Kaplan
Title: Vice President
ATTACHMENTS
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Depositor's Officer's certificate.
D. Opinions of Depositor's counsel (bankruptcy, corporate).
E. Trustee's Certificate.
F. Opinion of Trustee's Counsel.
G. Subsequent Mortgage Loan Purchase Agreement.
<PAGE>
ATTACHMENT A
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: September 1, 1997
2. Subsequent Transfer Date: September 19, 1997
3. Aggregate Principal Balance of the Subsequent
Mortgage Loans as of the Subsequent Cut-off Date:
$69,218,541.65
4. Purchase Price: 100.00%
B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date shall be
true and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date; (ii) the stated term to
maturity of the Subsequent Mortgage Loan will not be less than 168 months and
will not exceed 360 months; (iii) the Subsequent Mortgage Loan may not provide
for negative amortization; (iv) the Subsequent Mortgage Loan will not have a
Loan-to-Value Ratio greater than 90%; (v) the Subsequent Mortgage Loans will
have as of the end of the Funding Period, a weighted average term since
origination not in excess of 2 months; (vi) no Subsequent Mortgage Loan shall
have a Mortgage Rate less than 5.5% or greater than 14.5%; (vii) the Subsequent
Mortgage Loan will have been serviced by the Master Servicer since origination
or purchase by the Depositor; and (viii) the Subsequent Mortgage Loan will be
underwritten in accordance with the criteria set forth under the section "The
Mortgage Pool--Underwriting Standards; Representations" in the Prospectus
Supplement.
C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the related Subsequent Mortgage Loans) will
as of the end of the Funding Period: (i) have a weighted average original term
to stated maturity of not less than 168 months and not more than 360 months;
(ii) have a weighted average Mortgage Rate of not less than 9.30% and not more
than 9.60% by aggregate principal balance of the Mortgage Loans; (iii) have a
weighted average Loan-to-Value Ratio of not more than 75%, by aggregate
principal balance of the Mortgage Loans; (iv) have no Mortgage Loan with a
principal balance in excess of $1,000,000 and (v) have a weighted average Gross
Margin not less than 6.80%.
D. Notwithstanding the foregoing, any Subsequent Mortgage Loan
may be rejected by either Rating Agency if the inclusion of any such Subsequent
Mortgage Loans would adversely affect the ratings of any Class of Certificates.
<PAGE>
ATTACHMENT B
[Filed by paper]
<PAGE>
ATTACHMENT C
DEPOSITOR'S OFFICER'S CERTIFICATE
Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Floating Rate Certificates
Series 1997-NC4
I, Matthew R. Bollo, hereby certify that I am a duly elected
Assistant Vice President of Salomon Brothers Mortgage Securities VII, Inc. (the
"Depositor"), a Delaware corporation, and further, to the best of my knowledge
and after due inquiry, as follows:
Each condition precedent and representation and warranty
specified in Section 2.11 of the Pooling and Servicing Agreement, dated
as of August 1, 1997, among the Depositor, New Century Mortgage
Corporation as Master Servicer and First Trust National Association as
Trustee (the "Pooling and Servicing Agreement") and each condition
precedent specified in the Subsequent Transfer Instrument has been
satisfied by the Depositor.
Capitalized terms not defined herein have the meanings set
forth in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: September 19, 1997
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Matthew R. Bollo
---------------------------------------
Name: Matthew R. Bollo
Title: Assistant Vice President
<PAGE>
ATTACHMENT D
OPINION OF DEPOSITOR'S COUNSEL
September 19, 1997
Standard & Poor's Ratings Services
25 Broadway
New York, New York 10004
Fitch Investors Service, Inc.
One State Street Plaza, 33rd Floor
New York, New York 10004
Re: Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Floating Rate Certificates, Series 1997-NC4
--------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Salomon Brothers Mortgage Securities VII,
Inc. (the "Depositor") in connection with the conveyance of approximately
$69,218,542 of certain adjustable-rate mortgage loans (the "Subsequent Mortgage
Loans") by the Depositor to First Trust National Association as trustee (the
"Trustee") under the Pooling and Servicing Agreement, dated as of August 1, 1997
(the "Pooling and Servicing Agreement"), among the Depositor as depositor, New
Century Mortgage Corporation as master servicer and the Trustee, pursuant to a
Subsequent Transfer Instrument, dated September 19, 1997 (the "Subsequent
Transfer Instrument"), between the Depositor and the Trustee (the Subsequent
Transfer Instrument and the Pooling and Servicing Agreement, together, the
"Agreements"). The Depositor purchased the Subsequent Mortgage Loans from New
Century Mortgage Corporation (in such capacity, the "Seller") pursuant to a
Subsequent Mortgage Loan Purchase Agreement, dated September 19, 1997, between
the Depositor and the Seller. On the Closing Date, the Depositor previously
transferred to a trust fund certain adjustable-rate mortgage loans
(collectively, the "Initial Mortgage Loans"; the Subsequent Mortgage Loans and
the Initial Mortgage Loans, together, the "Mortgage Loans") and deposited the
amount of approximately $69,850,402 in a separate pre-funding account pursuant
to the Pooling and Servicing Agreement. Capitalized terms used but not otherwise
defined shall have the meaning set forth in the Pooling and Servicing Agreement.
In connection with rendering this opinion letter, we have examined the
Agreements and such other documents as we have deemed necessary. As to matters
of fact, we have examined and relied upon representations of parties to the
Agreements contained therein and, where we have deemed appropriate,
representations or certifications of officers of parties to the Agreements or
public officials. We have assumed, except for the matters that are specifically
<PAGE>
addressed in the opinions expressed below, (i) the authenticity of all documents
submitted to us as originals and the conformity to the originals of all
documents submitted to us as copies, (ii) the necessary entity formation and
continuing existence in the jurisdiction of formation, and the necessary
licensing and qualification in all jurisdictions, of all parties to all
documents, (iii) the necessary authorization, execution, delivery and
enforceability of such documents, and the necessary entity power with respect
thereto, (iv) that there is not and will not be any other agreement that
modifies or supplements any of the documents to which this opinion letter
relates and that renders any of the opinions expressed below inconsistent with
such documents as so modified or supplemented and (v) the conformity of the
Mortgage Loans and related documents to the requirements of the Agreements.
In rendering this opinion letter, we do not express any opinion
concerning any law other than Title 11 of the United States Code (the
"Bankruptcy Code"; a proceeding thereunder, a "Bankruptcy") and the law of the
State of New York to the extent that it may be applicable thereto. We express no
opinion with respect to the ability of any person or entity to obtain a
temporary restraining order prohibiting or limiting the ability of any person or
entity from obtaining any property of or from the Depositor prior to a final
judicial resolution of any assertion that the automatic stay provisions of
Section 362 of the Bankruptcy Code preclude the obtaining of such property. We
do not express any opinion herein with respect to any matter not specifically
addressed in the opinions expressed below.
Based upon and subject to the foregoing, it is our opinion that in the
event of the Bankruptcy of the Depositor, a court in such a proceeding (i) would
not characterize the transfer of the Subsequent Mortgage Loans by the Depositor
to the Trustee as a loan to the Depositor secured by the Mortgage Loans rather
than as a sale of the interest in the Mortgage Loans and (ii) accordingly, on
the basis of such a characterization would not hold that the Subsequent Mortgage
Loans or any proceeds thereof constitute property of the estate of the Depositor
pursuant to Bankruptcy Code Section 541, thereby subject to the automatic stay
provisions of Bankruptcy Code Section 362(a) that would be applicable to the
property of the Depositor in such a proceeding.
This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity is entitled to rely hereon. Copies of this
opinion letter may not be made available, and this opinion letter may not be
quoted or referred to in any other document made available, to any other person
or entity, except to any rating agency or any accountant or attorney for any
person or entity entitled hereunder to rely hereon or to whom or which this
opinion letter may be disclosed as provided herein, or as otherwise required by
law.
Very truly yours,
THACHER PROFFITT & WOOD
By
<PAGE>
ATTACHMENT E
TRUSTEE'S ACKNOWLEDGEMENT OF RECEIPT
September 19, 1997
Salomon Brothers Mortgage
Securities VII, Inc.
Seven World Trade Center
New York, New York 10048
New Century Mortgage Corporation
18400 Von Karman, Suite 1000
Irvine, California 92612
Re: Pooling and Servicing Agreement, dated as of August 1, 1997,
among Salomon Brothers Mortgage Securities VII, Inc.,
New Century Mortgage Corporation and First Trust National
Association, Asset-Backed Floating Rate Certificates,
Series 1997-NC4 Subsequent Transfer on September 19, 1997
---------------------------------------------------------
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report with
respect to the Subsequent Mortgage Loans delivered in accordance with Section
2.02 of the referenced Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"). Capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Pooling and Servicing Agreement.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in the Mortgage File pertaining to
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File included any of the documents specified
in clause (v) of Section 2.01 of the Pooling and Servicing Agreement.
FIRST TRUST NATIONAL ASSOCIATION
By: /s/ Eve D. Kaplan
--------------------------------
Name: Eve D. Kaplan
Title: Vice President
<PAGE>
ATTACHMENT F
OPINION OF TRUSTEE'S COUNSEL
September 19, 1997
Salomon Brothers Mortgage New Century Mortgage Corporation
Securities VII, Inc. 18400 Von Karman, Suite 1000
Seven World Trade Center Irvine, California 92612
New York, New York 10048
Salomon Brothers Inc Standard & Poor's Rating Services
Seven World Trade Center 26 Broadway
New York, New York 10048 New York, New York 10004
.
Fitch Investors Service, L.P.
1 State Street Plaza
New York, New York 10004
Re: Salomon Brothers Mortgage Securities VII, Inc. New Century
Asset-Backed Floating Rate Certificates, Series 1997-NC4
Ladies and Gentlemen:
We are counsel for First Trust National Association, a national banking
association (the "Trustee"). As such, we have reviewed the provisions of the
Pooling and Servicing Agreement, dated as of August 1, 1997 (the "Pooling and
Servicing Agreement"), among Salomon Brothers Mortgage Securities VII, Inc. (the
"Depositor"), New Century Mortgage Corporation and the Trustee, relating to the
New Century Asset-Backed Floating Rate Certificates, Series 1997-NC4 (the
"Certificates"), and the Subsequent Transfer Instrument, dated September 19,
1997 (the "Subsequent Transfer Instrument"), between the Depositor and the
Trustee, and are generally familiar with the Articles of Association and the
Bylaws of the Trustee and are also familiar with the corporate proceedings of
the Trustee with regard to its authorization, execution and delivery of the
Pooling and Servicing Agreement and the Certificates. Capitalized terms used
herein shall have the respective meanings ascribed to them in the Pooling and
Servicing Agreement except as otherwise defined herein.
In such review, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with originals of all documents submitted to us as copies. Where questions of
fact material to our opinion expressed below were not established independently,
we have relied upon statements of officers of the Trustee as contained in their
certificates.
Based upon the foregoing, we are of the opinion that:
<PAGE>
1. The Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States of America.
2. The Trustee has duly authorized, executed and delivered the
Pooling and Servicing Agreement and the Subsequent Transfer Instrument. Assuming
the due authorization, execution and delivery thereof by the other parties
thereto, each of the Pooling and Servicing Agreement and Subsequent Transfer
Instrument is the legal, valid and binding agreement of the Trustee, enforceable
in accordance with its terms against the Trustee.
3. The Trustee is duly authorized and empowered to exercise
trust powers under applicable law.
5. The execution, delivery and performance of the Pooling and
Servicing Agreement and the Subsequent Transfer Instrument do not now, and will
not hereafter, (a) conflict with, result in a breach of or constitute a default
under any term or provision of the Articles of Association or Bylaws of the
Trustee, any term or provision of any agreement, contract, instrument or
indenture of any nature whatsoever, known to us, to which the Trustee is a party
or by which it is bound, or, to the best of our knowledge, any order, judgment,
writ, injunction or decree of any court or governmental authority having
jurisdiction over the Trustee, or (b) to the best of our knowledge, result in
the creation or imposition of any lien, charge or encumbrance upon the Trust
Estate established in the Pooling and Servicing Agreement or upon the
Certificates.
6. To the best of our knowledge, there are no actions,
proceedings or investigations pending or threatened against the Trustee before
any court, administrative agency or tribunal (a) asserting the invalidity of the
Certificates, the Pooling and Servicing Agreement or the Subsequent Transfer
Instrument, (b) seeking to prevent the consummation of any of the transactions
contemplated by the Certificates, the Pooling and Servicing Agreement or the
Subsequent Transfer Instrument, or (c) that might materially and adversely
affect the performance by the Trustee of its obligations under, or the validity
or enforceability of, the Certificates, the Pooling and Servicing Agreement or
the Subsequent Transfer Instrument.
7. The execution, delivery and performance by the Trustee of
the Pooling and Servicing Agreement and the Subsequent Transfer Instrument will
not violate any provisions of any law or regulation governing the banking and
trust powers of the Trustee. Such execution, delivery and performance will not
require the authorization, consent or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in respect of any
governmental authority or agency regulating the activities of the Trustee.
<PAGE>
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) The opinions are subject to the effect of any applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or other similar laws of general application affecting creditors'
rights.
(b) The opinions are subject to the effect of general
principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing, and other
similar doctrines affecting the enforceability of agreements generally
(regardless of whether considered in a proceeding in equity or at law).
(c) Minnesota Statutes ss.290.371, Subd. 4, provides that any
corporation required to file a Notice of Business Activities Report
does not have a cause of action upon which it may bring suit under
Minnesota law unless the corporation has filed a Notice of Business
Activities Report and further provides that the use of the courts of
the State of Minnesota for all contracts executed and all causes of
action that arose before the end of any period for which a corporation
failed to file a required report is precluded. Insofar as the foregoing
opinions may relate to the valid, binding and enforceable character of
any agreement under Minnesota law or in a Minnesota court, we have
assumed that any party seeking to enforce such agreement has at all
times been, and will continue at all times to be, exempt from the
requirement of filing a Notice of Business Activities Report or, if not
exempt, has duly filed, and will continue to duly file, all Notice of
Business Activities Reports.
Our opinions expressed above are limited to the laws of the
State of Minnesota and the federal laws of the United States of America.
The foregoing opinions are being furnished to you solely for
your benefit and may not be relied upon by, nor may copies be delivered to, any
other person without our prior written consent.
Very truly yours,
<PAGE>
ATTACHMENT G
SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT
This is a Subsequent Mortgage Loan Purchase Agreement (this
"Agreement"), dated September 19, 1997, between Salomon Brothers Mortgage
Securities VII, Inc., a Delaware corporation (the "Purchaser") and New Century
Mortgage Corporation, a California corporation (the "Seller").
PRELIMINARY STATEMENT
The Seller intends to sell the Subsequent Mortgage Loans (as
hereinafter identified) to the Purchaser on the terms and subject to the
conditions set forth in this Agreement. The Purchaser intends to deposit the
Subsequent Mortgage Loans into a mortgage pool comprising the Trust Fund. The
Trust Fund is evidenced by a single series of asset-backed floating rate
certificates designated as Series 1997-NC4 (the "Certificates"). The
Certificates consist of eight classes of certificates. The Certificates were
issued pursuant to a Pooling and Servicing Agreement, dated as of August 1, 1997
(the "Pooling and Servicing Agreement"), among the Purchaser as depositor, the
Seller as master servicer (in such capacity, the "Master Servicer") and First
Trust National Association as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before September 19, 1997 (the
"Subsequent Transfer Date"), certain conventional, one- to four-family,
adjustable-rate residential mortgage loans (the "Subsequent Mortgage Loans"),
having an aggregate principal balance as of the close of business on September
1, 1997 (the "Subsequent Cut-off Date") of $69,218,541.65 (the "Closing
Balance"), after giving effect to all payments due on the Subsequent Mortgage
Loans on or before the Subsequent Cut-off Date, whether or not received.
SECTION 2. SUBSEQUENT MORTGAGE LOAN SCHEDULE. The Purchaser
and the Seller have agreed upon which of the mortgage loans owned by the Seller
are to be purchased by the Purchaser pursuant to this Agreement and the Seller
will prepare or cause to be prepared on or prior to the Subsequent Transfer Date
a final schedule (the "Closing Schedule") that shall describe such Subsequent
Mortgage Loans and set forth all of the Subsequent Mortgage Loans to be
purchased under this Agreement. The Closing Schedule will conform to the
requirements set forth in this Agreement and to the definition of "Mortgage Loan
Schedule" under the Pooling and Servicing Agreement. The Closing Schedule shall
be appended to the Mortgage Loan Schedule under the Pooling and Servicing
Agreement.
<PAGE>
SECTION 3. CONSIDERATION.
(a) In consideration for the Subsequent Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to
or upon the order of the Seller in immediately available funds an amount (the
"Purchase Price") equal to the Closing Balance.
(b) The Purchaser or any assignee, transferee or designee of
the Purchaser shall be entitled to all scheduled payments of principal due after
the Subsequent Cut-off Date, all other payments of principal due and collected
after the Subsequent Cut-off Date, and all payments of interest on the
Subsequent Mortgage Loans allocable to the period after the Subsequent Cut-off
Date. All scheduled payments of principal and interest due on or before the
Subsequent Cut-off Date and collected after the Subsequent Cut-off Date shall
belong to the Seller.
(c) Pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign all of its right, title and interest in and to the
Subsequent Mortgage Loans, together with its rights under this Agreement, to the
Trustee for the benefit of the Certificateholders.
SECTION 4. TRANSFER OF THE SUBSEQUENT MORTGAGE LOANS.
(a) POSSESSION OF MORTGAGE FILES. The Seller does hereby
sell, transfer, assign, set over and convey to the Purchaser, without recourse
but subject to the terms of this Agreement, all of its right, title and interest
in, to and under the Subsequent Mortgage Loans. The contents of each Mortgage
File not delivered to the Purchaser or to any assignee, transferee or designee
of the Purchaser on or prior to the Subsequent Transfer Date are and shall be
held in trust by the Seller for the benefit of the Purchaser or any assignee,
transferee or designee of the Purchaser. Upon the sale of the Subsequent
Mortgage Loans, the ownership of each Mortgage Note, the related Mortgage and
the other contents of the related Mortgage File is vested in the Purchaser and
the ownership of all records and documents with respect to the related
Subsequent Mortgage Loan prepared by or that come into the possession of the
Seller on or after the Subsequent Transfer Date shall immediately vest in the
Purchaser and shall be delivered immediately to the Purchaser or as otherwise
directed by the Purchaser.
(b) DELIVERY OF SUBSEQUENT MORTGAGE LOAN DOCUMENTS. The Seller
will, on or prior to the Subsequent Transfer Date, deliver or cause to be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser each of the following documents for each Subsequent Mortgage Loan:
(i) the original Mortgage Note, endorsed in the
following form: "Pay to the order of First Trust National Association,
as Trustee for the registered holders of Salomon Brothers Mortgage
Securities VII, Inc., under the applicable pooling and servicing
agreement, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the
originator to the Person so endorsing to the Trustee;
<PAGE>
(ii) the original Mortgage with evidence of recording
thereon;
(iii) an original Assignment of Mortgage executed in
the following form: "First Trust National Association, as Trustee for
the registered holders of Salomon Brothers Mortgage Securities VII,
Inc., under the applicable pooling and servicing agreement";
(iv) the original recorded Assignment or Assignments
of the Mortgage showing a complete chain of assignment from the
originator to the Person assigning the Mortgage to the Trustee as
contemplated by the immediately preceding clause (iii);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy,
together with all endorsements or riders that were issued with or
subsequent to the issuance of such policy, insuring the priority of the
Mortgage as a first lien on the Mortgaged Property represented therein
as a fee interest vested in the Mortgagor.
The Seller promptly shall (and in no event later than five
Business Days following the Subsequent Transfer Date submit or cause to be
submitted for recording, at no expense to Purchaser (or the Trust Fund or the
Trustee under the Pooling and Servicing Agreement), in the appropriate public
office for real property records, each Assignment referred to in clauses
(b)(iii) and (b)(iv) of this Section 4. In the event that any such Assignment is
lost or returned unrecorded because of a defect therein, the Seller promptly
shall prepare a substitute Assignment or cure such defect, as the case may be,
and thereafter cause each such Assignment to be duly recorded.
Notwithstanding anything to the contrary contained in this
Section 4, if any document referred to in Section 4(b)(ii) or 4(b)(iv) above has
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the Seller
hereunder shall be deemed to have been satisfied upon delivery to the Purchaser
or any assignee, transferee or designee of the Purchaser promptly upon receipt
thereof by or on behalf of the Seller of either the original or a copy of such
document certified by the applicable public recording office to be a true and
complete copy of the original.
In the event that the original lender's title insurance policy
has not yet been issued, the Seller shall deliver to the Purchaser or any
assignee, transferee or designee of the Purchaser a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company. The Seller shall deliver to the Purchaser or any assignee,
transferee or designee of the Purchaser promptly upon receipt by the Seller of
any such original title insurance policy or original Primary Mortgage Insurance
Policy.
<PAGE>
(c) ACCEPTANCE OF SUBSEQUENT MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Subsequent Transfer Date (and with respect to each document permitted
to be delivered after the Subsequent Transfer Date, within seven days of its
delivery) to ascertain that all required documents have been executed and
received and that such documents relate to the Subsequent Mortgage Loans
identified on the Subsequent Mortgage Loan Schedule.
(d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser has the
right to assign its interest under this Agreement, in whole or in part, to the
Trustee, as may be required to effect the purposes of the Pooling and Servicing
Agreement, without the consent of the Seller, and the assignee shall succeed to
the rights and obligations hereunder of the Purchaser. Any expense reasonably
incurred by or on behalf of the Purchaser or the Trustee in connection with
enforcing any obligations of the Seller under this Agreement will be promptly
reimbursed by the Seller.
(e) EXAMINATION OF MORTGAGE FILES. Prior to the
Subsequent Transfer Date, the Seller shall either (i) deliver in escrow to the
Purchaser or to any assignee, transferee or designee of the Purchaser for
examination the Mortgage File pertaining to each Subsequent Mortgage Loan, or
(ii) make such Mortgage Files available to the Purchaser or to any assignee,
transferee or designee of the Purchaser for examination. Such examination may be
made by the Purchaser or the Trustee, and their respective designees, upon
reasonable notice to the Seller during normal business hours before the
Subsequent Transfer Date and within 60 days after the Subsequent Transfer Date.
If any such person makes such examination prior to the Subsequent Transfer Date
and identifies any Subsequent Mortgage Loans that do not conform to the
requirements of the Purchaser as described in this Agreement, such Subsequent
Mortgage Loans shall be deleted from the Closing Schedule. The Purchaser may, at
its option and without notice to the Seller, purchase all or part of the
Subsequent Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or any person has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the rights of the Purchaser or any assignee, transferee or
designee of the Purchaser to demand repurchase or other relief as provided
herein or under the Pooling and Servicing Agreement.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE SELLER.
The Seller hereby represents and warrants, as of the date
hereof and as of the Subsequent Transfer Date, and covenants, that:
(i) The Seller is duly organized, validly existing
and in good standing as a corporation under the laws of the State of California
with full corporate power and authority to conduct its business as presently
conducted by it to the extent material to the consummation of the transactions
contemplated herein. The Seller had the full corporate power and authority to
own the Subsequent Mortgage Loans and to transfer and convey the Subsequent
Mortgage Loans to the Purchaser and has the full corporate power and authority
to execute and deliver, engage in
<PAGE>
the transactions contemplated by, and perform and observe the terms and
conditions of this Agreement.
(ii) The Seller has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity.
(iii) The execution, delivery and performance of this
Agreement by the Seller (x) does not conflict and will not conflict with, does
not breach and will not result in a breach of and does not constitute and will
not constitute a default (or an event, which with notice or lapse of time or
both, would constitute a default) under (A) any terms or provisions of the
articles of incorporation or by-laws of the Seller, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which the Seller
is a party or by which the Seller or any of its property is bound, or (C) any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Seller or any of its
property and (y) does not create or impose and will not result in the creation
or imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Subsequent Mortgage Loans or any documents or
instruments evidencing or securing the Subsequent Mortgage Loans.
(iv) No consent, approval, authorization or order
of, registration or filing with, or notice on behalf of the Seller to any
governmental authority or court is required, under federal laws or the laws of
the State of California, for the execution, delivery and performance by the
Seller of, or compliance by the Seller with, this Agreement or the consummation
by the Seller of any other transaction contemplated hereby and by the Pooling
and Servicing Agreement; provided, however, that the Seller makes no
representation or warranty regarding federal or state securities laws in
connection with the sale or distribution of the Certificates.
(v) This Agreement does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements contained herein not misleading. The written statements, reports
and other documents prepared and furnished or to be prepared and furnished by
the Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby taken in the aggregate do not contain any untrue statement
of material fact or omit to state a material fact necessary to make the
statements contained therein not misleading.
(vi) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
<PAGE>
Seller or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Seller or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder.
(vii) The Seller is a HUD approved mortgagee
pursuant to Section 203 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, that would make the
Seller unable to comply with HUD eligibility requirements or that would require
notification to HUD.
(viii) The Seller does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement.
(ix) Immediately prior to the sale of the
Subsequent Mortgage Loans to the Purchaser as herein contemplated, the Seller
was the owner of the related Mortgage and the indebtedness evidenced by the
related Mortgage Note, and, upon the payment to the Seller of the Purchase
Price, in the event that the Seller retains or has retained record title, the
Seller shall retain such record title to each Mortgage, each related Mortgage
Note and the related Mortgage Files with respect thereto in trust for the
Purchaser as the owner thereof from and after the date hereof.
(x) There are no actions or proceedings against,
or investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Subsequent Mortgage Loans by the Seller or
the consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the Seller
of its obligations under, or validity or enforceability of, this Agreement.
(xi) The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or any similar statutory provisions.
(xii) [intentionally omitted]
(xiii) The Seller has not dealt with any broker,
investment banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Subsequent Mortgage Loans (except that an entity that
previously financed the Seller's ownership of the Subsequent Mortgage Loans may
be entitled to a fee to release its security interest in the Subsequent Mortgage
Loans, which fee shall have been paid and which security interest shall have
been released on or prior to the Subsequent Transfer Date).
<PAGE>
(xiv) There is no litigation currently pending or,
to the best of the Seller's knowledge without independent investigation,
threatened against the Seller that would reasonably be expected to adversely
affect the transfer of the Subsequent Mortgage Loans, the issuance of the
Certificates or the execution, delivery, performance or enforceability of this
Agreement, or that would result in a material adverse change in the financial
condition of the Seller.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
RELATING TO THE SUBSEQUENT MORTGAGE LOANS.
REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL MORTGAGE
LOANS. The Seller hereby represents and warrants to the Purchaser that as to
each Subsequent Mortgage Loan as of the Subsequent Transfer Date:
(i) The information set forth in the Subsequent Mortgage
Loan Schedule is complete, true and correct as of the Subsequent Cut-off Date;
(ii) The Subsequent Mortgage Loan is in compliance with all
requirements set forth on Exhibit 4, and the characteristics of the Subsequent
Mortgage Loans as set forth on Exhibit 4 are true and correct;
(iii) (a) All payments required to be made on or before the
first day of the month prior to the month of the Subsequent Transfer Date, with
respect to such Subsequent Mortgage Loan under the terms of the Mortgage Note
have been made; (b) the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
related Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Note or Mortgage; and (c) no payment required
under any Subsequent Mortgage Loan has been 30 days delinquent more than once
during the last twelve months and no Subsequent Mortgage Loan has ever been 60
or more days delinquent;
(iv) There are no delinquent taxes, ground rents, water
charges, sewer rents, assessments, insurance premiums, leasehold payments,
including assessments payable in future installments or other outstanding
charges affecting the related Mortgaged Property;
(v) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage; the substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required by the related policy, and is reflected on the Subsequent Mortgage Loan
Schedule. No instrument of waiver, alteration or modification has been executed,
and no Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement approved by the title insurer, to the extent
required by the policy, and the terms of
<PAGE>
which are reflected in the Subsequent Mortgage Loan Schedule;
(vi) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(vii) All buildings upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the Mortgaged
Property is located, pursuant to insurance policies conforming to the
requirements of the Pooling and Servicing Agreement. All such insurance policies
contain a standard mortgagee clause naming the Seller, its successors and
assigns as mortgagee and all premiums thereon have been paid. If upon
origination of the Subsequent Mortgage Loan, the Mortgaged Property was in an
area identified on a Flood Hazard Map or Flood Insurance Rate Map issued by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect which policy conforms to the requirements of FNMA and FHLMC. The
Mortgage obligates the Mortgagor thereunder to maintain all such insurance at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at Mortgagor's
cost and expense and to seek reimbursement therefor from the Mortgagor;
(viii) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the origination and servicing of Subsequent
Mortgage Loan have been complied with. Any and all statements or acknowledgments
required to be made by the Mortgagor relating to such requirements are and will
remain in the Mortgage File;
(ix) The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;
(x) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Subsequent Mortgage Loan
<PAGE>
and which do not adversely affect the appraised value of the Mortgaged Property,
and (c) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Subsequent Mortgage
Loan establishes and creates a valid, existing and enforceable first lien and
first priority security interest on the property described therein and the
Seller has full right to sell and assign the same to the Purchaser. The
Mortgaged Property was not, as of the date of origination of the Subsequent
Mortgage Loan, subject to a mortgage, deed of trust, deed to secured debt or
other security instrument creating a lien subordinate to the lien of the
Mortgage;
(xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Subsequent Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties. The Mortgagor is
a natural person who is a party to the Mortgage Note and the Mortgage is in an
individual capacity or family trust that is guaranteed by a natural person;
(xiii) The proceeds of the Subsequent Mortgage Loan have been
fully disbursed to or for the account of the Mortgagor and there is no
obligation for the Mortgagee to advance additional funds thereunder and any and
all requirements as to completion of any on-site or off-site improvement and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Subsequent Mortgage
Loan and the recording of the Mortgage have been paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due to the Mortgagee pursuant to
the Mortgage Note or Mortgage;
(xiv) As of the Subsequent Transfer Date and prior to the sale
of the Subsequent Mortgage Loan hereunder, the Seller was the sole legal,
beneficial and equitable owner of the Mortgage Note and the Mortgage and has
full right to transfer and sell the Subsequent Mortgage Loan to the Purchaser
free and clear of any encumbrance, equity, lien, pledge, charge, claim or
security interest;
(xv) All parties which have had any interest in the Subsequent
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) in
compliance with any and all applicable "doing business" and licensing
requirements of the laws of the state wherein the Mortgaged Property is located;
(xvi) The Subsequent Mortgage Loan is covered by an ALTA
lender's title insurance policy with an adjustable rate mortgage endorsement,
such endorsement substantially in the form of ALTA Form 6.0 or 6.1, acceptable
to FNMA or FHLMC, issued by a title insurer
<PAGE>
acceptable to FNMA and FHLMC and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring (subject to the exceptions
contained in (x)(a) and (b) above) the Seller, its successors and assigns as to
the first priority lien of the Mortgage in the original principal amount of the
Subsequent Mortgage Loan and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the Mortgage Rate and monthly payment. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress to
and from the Mortgaged Property, and against encroachments by or upon the
Mortgaged Property or any interest therein. The Seller is the sole insured of
such lender's title insurance policy, and such lender's title insurance policy
is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy;
(xvii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation or
event of acceleration;
(xviii) There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(xix) All improvements which were considered in determining
the appraised value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property. Each
appraisal has been performed in accordance with the provisions of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989;
(xx) The Subsequent Mortgage Loan was (i) originated by the
Seller or by a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a federal or
state authority, or by a mortgagee approved as such by the Secretary of HUD or
(ii) acquired by the Seller directly through loan brokers or correspondents such
that (a) the Subsequent Mortgage Loan was originated in conformity with the
Seller's underwriting guidelines, (b) the Seller approved the Subsequent
Mortgage Loan prior to funding and (c) the Seller provided the funds used to
originate the Subsequent Mortgage Loan and acquired the Subsequent Mortgage Loan
on the date of origination thereof;
(xxi) Principal payments on the Subsequent Mortgage Loan
commenced no more than two months after the proceeds of the Subsequent Mortgage
Loan were disbursed. The Subsequent Mortgage Loan bears interest at the Mortgage
Rate. The Mortgage Note is payable
<PAGE>
on the first day of each month in Monthly Payments which are changed on each
Adjustment Date to an amount which will amortize the Stated Principal Balance of
the Subsequent Mortgage Loan over its remaining term at the Mortgage Rate.
Interest on the Subsequent Mortgage Loan is calculated on the basis of a 360-day
year consisting of twelve 30-day months. The Mortgage Note does not permit
negative amortization. The Subsequent Mortgage Loan does not permit the
Mortgagor to convert the Subsequent Mortgage Loan to a fixed rate Subsequent
Mortgage Loan;
(xxii) The origination and collection practices used by the
Seller with respect to each Mortgage Note and Mortgage have been in all respects
legal, proper, prudent and customary in the mortgage origination and servicing
industry. The Subsequent Mortgage Loan has been serviced by the Seller (directly
or through a subservicer) and any predecessor servicer in accordance with the
terms of the Mortgage Note. With respect to escrow deposits and Escrow Payments,
if any, all such payments are in the possession of, or under the control of, the
Seller and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under any Mortgage or the related Mortgage Note;
(xxiii) The Mortgaged Property is free of damage and waste and
there is no proceeding pending for the total or partial condemnation thereof;
(xxiv) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (b)
otherwise by judicial foreclosure. Since the date of origination of the
Subsequent Mortgage Loan, the Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed
for protection under applicable bankruptcy laws. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. The Mortgagor has not notified the Seller and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the Soldiers
and Sailors Civil Relief Act of 1940;
(xxv) The related Mortgaged Property is not a leasehold estate
or, if such Mortgaged Property is a leasehold estate, the remaining term of such
lease is at least ten (10) years
greater than the remaining term of the related Mortgage Note;
(xxvi) The Mortgage Note is not and has not been secured by
any collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(xxvii) The Mortgage File contains an appraisal of the related
Mortgaged Property made and signed, prior to the approval of the Mortgage Loan
application, by a qualified
<PAGE>
appraiser, approved by the Seller, who had no interest, direct or indirect in
the Mortgaged Property or in any loan made on the security thereof, whose
compensation is not affected by the approval or disapproval of the Subsequent
Mortgage Loan and who met the minimum qualifications of FNMA and FHLMC;
(xxviii) In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxix) No Subsequent Mortgage Loan contains provisions
pursuant to which Monthly Payments are (a) paid or partially paid with funds
deposited in any separate account established by the Seller, the Mortgagor, or
anyone on behalf of the Mortgagor, (b) paid by any source other than the
Mortgagor or (c) contains any other similar provisions which may constitute a
"buydown" provision. The Subsequent Mortgage Loan is not a graduated payment
mortgage loan and the Subsequent Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(xxx) The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by applicable
law with respect to the making of adjustable rate mortgage loans; and if the
Subsequent Mortgage Loan is a Refinanced Subsequent Mortgage Loan, the Mortgagor
has received all disclosure and rescission materials required by applicable law
with respect to the making of a Refinanced Mortgage Loan, and evidence of such
receipt is and will remain in the Mortgage File;
(xxxi) No Subsequent Mortgage Loan was made in connection with
(a) the construction or rehabilitation of a Mortgaged Property or (b)
facilitating the trade-in or exchange of a Mortgaged Property;
(xxxii) The Mortgage Note, the Mortgage, the Assignment of
Mortgage and any other documents required to be delivered with respect to each
Subsequent Mortgage Loan pursuant to the Pooling and Servicing Agreement, have
been delivered to the Trustee all in compliance with the specific requirements
of the Pooling and Servicing Agreement;
(xxxiii) The Mortgaged Property is lawfully occupied under
applicable law; all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities;
(xxxiv) No error, omission, misrepresentation, negligence,
fraud or similar occurrence with respect to a Subsequent Mortgage Loan has taken
place on the part of any person,
<PAGE>
including, without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the Subsequent
Mortgage Loan or in the application of any insurance in relation to such
Subsequent Mortgage Loan;
(xxxv) The Assignment of Mortgage, is in recordable form and
is acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(xxxvi) Any principal advances made to the Mortgagor prior to
the Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
FNMA and FHLMC. The consolidated principal amount does not exceed the original
principal amount of the Subsequent Mortgage Loan;
(xxxvii) No Mortgage Loan has a balloon payment feature;
(xxxviii) If the Residential Dwelling on the Mortgaged
Property is a condominium unit or a unit in a planned unit development (other
than a de minimis planned unit development) such condominium or planned unit
development project meets the FNMA's eligibility requirements;
(xxxix) Neither the Seller nor any affiliate of the Seller
has made a mortgage on any Mortgaged Property other than the Subsequent Mortgage
Loan;
(xl) Any Mortgage Loan subject to the provisions of the
Homeownership and Equity Protection Act of 1994, P.L. 103-325, 108 Stat 2160 was
originated in compliance therewith;
(xli) The Subsequent Mortgage Loan was not intentionally
selected by the Seller in a manner intended to adversely affect the interest of
the Purchaser;
(xlii) The Seller has not dealt with any broker or agent or
other Person who might be entitled to a fee, commission or compensation in
connection with the transaction contemplated by this Agreement other than the
Purchaser except as set forth in the parenthetical in Section
5(xiii) hereof;
(xliii) The Mortgaged Property consists of a parcel of real
property of not more than ten acres with a single family residence erected
thereon, or a two to four-family dwelling, or an individual condominium unit in
a low-rise or high-rise condominium project, or an individual unit in a planned
unit development. The Mortgaged Property is improved with a Residential
Dwelling. Without limiting the foregoing, the Mortgaged Property does NOT
consist of any of the
<PAGE>
following property types: (a) co-operative units, (b) log homes, (c) earthen
homes, (d) underground homes, (e) mobile homes and (f) manufactured homes (as
defined in the FNMA Originator-Servicer's Guide), except when the appraisal
indicates that the home is of comparable construction to a stick or beam
construction home, is readily marketable, has been permanently affixed to the
site and is not in a mobile home "park." The Mortgaged Property is either a fee
simple estate or a long-term residential lease. If the Subsequent Mortgage Loan
is secured by a long-term residential lease, unless otherwise specifically
disclosed in the Subsequent Mortgage Loan Schedule, (A) the terms of such lease
expressly permit the mortgaging of the leasehold estate, the assignment of the
lease without the lessor's consent (or the lessor's consent has been obtained
and such consent is the Mortgage File) and the acquisition by the holder of the
Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially similar
protection; (B) the terms of such lease do not (x) allow the termination thereof
upon the lessee's default without the holder of the Mortgage being entitled to
receive written notice of, and opportunity to cure, such default or (y) prohibit
the holder of the Mortgage from being insured under the hazard insurance policy
relating to the Mortgaged Property; (C) the original term of such lease is not
less than 15 years; (D) the term of such lease does not terminate earlier than
ten years after the maturity date of the Mortgage Note; and (E) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates for
residential properties is an accepted practice;
(xliv) At the time of origination, the Loan-To-Value Ratio
of the Subsequent Mortgage Loan was not greater than 90.00%;
(xlv) The Mortgage, and if required by applicable law the
related Mortgage Note, contains a provision for the acceleration of the payment
of the unpaid principal balance of the Subsequent Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior written
consent of the Mortgagee, at the option of the Mortgagee;
(xlvi) The Subsequent Mortgage Loan either contains a
customary due-on-sale clause or may be assumed by a creditworthy purchaser of
the related Mortgaged Property;
(xlvii) As of any Adjustment Date for such Mortgage Loan, the
Index applicable to the determination of the Mortgage Rate on such Mortgage Loan
will be the average of the interbank offered rates for six-month United States
dollar deposits in the London market, generally as published in THE WALL STREET
JOURNAL and as most recently available as of either (i) the first business day
45 days prior to such Adjustment Date or (ii) the first business day of the
month preceding the month of such Adjustment Date, as specified in the related
Mortgage Note;
(xlviii) The Subsequent Mortgage Loan will have been serviced
by the Seller since origination or purchase by the Purchaser; and
(xlix) The Subsequent Mortgage Loan will be underwritten in
accordance with the criteria set forth under the section "The Mortgage
Pool--Underwriting Standards; Representations"
<PAGE>
in the Prospectus Supplement, dated August 26, 1997 (the "Prospectus
Supplement").
SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE
DOCUMENTATION AND FOR BREACH OF
REPRESENTATION AND WARRANTY.
(a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Subsequent Mortgage Loans or any failure
on the part of the Seller or the Purchaser to review or examine such documents
and shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of the Certificates.
With respect to the representations and warranties contained herein as to which
the Seller has no knowledge, if it is discovered that the substance of any such
representation and warranty was inaccurate as of the date such representation
and warranty was made or deemed to be made, and such inaccuracy materially and
adversely affects the value of the related Subsequent Mortgage Loan or the
interest therein of the Purchaser or the Purchaser's assignee, transferee or
designee, then notwithstanding the lack of knowledge by the Seller with respect
to the substance of such representation and warranty being inaccurate at the
time the representation and warranty was made, the Seller shall take such action
described in the following paragraph in respect of such Subsequent Mortgage
Loan.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report) as part of any Mortgage File, or of
a breach of any of the representations and warranties contained in Section 6
that materially and adversely affects the value of any Subsequent Mortgage Loan
or the interest therein of the Purchaser or the Purchaser's assignee, transferee
or designee, the party discovering such breach shall give prompt written notice
to the other. Within sixty (60) days of its discovery or its receipt of notice
of any such missing documentation that was not transferred by the Seller as
described above, or of materially defective documentation, or of any such breach
of a representation and warranty, the Seller promptly shall deliver such missing
document or cure such defect or breach in all material respects or, in the event
the Seller cannot deliver such missing document or cannot cure such defect or
breach, the Seller shall, within ninety (90) days of its discovery or receipt of
notice, repurchase the affected Subsequent Mortgage Loan at the Purchase Price
(as such term is defined in the Pooling and Servicing Agreement). The Seller
shall amend the Closing Schedule to reflect the withdrawal of such Subsequent
Mortgage Loan from the terms of this Agreement and the Pooling and Servicing
Agreement. The Seller shall deliver to the Purchaser such amended Closing
Schedule and shall deliver such other documents as are required by this
Agreement or the Pooling and Servicing Agreement within five (5) days of any
such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by transfer to an account designated by the Purchaser of the amount
of the Purchase Price in accordance with Section 2.03 of the Pooling and
Servicing Agreement. Any repurchase required by this Section shall be made in a
manner consistent with Section 2.03 of the Pooling and Servicing Agreement.
<PAGE>
(b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure or repurchase a defective Subsequent
Mortgage Loan constitute the sole remedies of the Purchaser against the Seller
respecting a missing document or a breach of the
representations and warranties contained in Section 6.
SECTION 8. CLOSING; PAYMENT FOR THE SUBSEQUENT MORTGAGE LOANS.
The closing of the purchase and sale of the Subsequent Mortgage Loans shall be
held at the New York City office of Thacher Proffitt & Wood at 10:00 a.m. New
York City time on the Subsequent Transfer Date.
The closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the
Seller under this Agreement shall be true and correct
in all material respects as of the date as of which
they are made and no event shall have occurred which,
with notice or the passage of time, would constitute
a default under this Agreement;
(b) The Purchaser shall have received, or the attorneys
of the Purchaser shall have received in escrow (to be
released from escrow at the time of closing), all
Closing Documents as specified in Section 9 of this
Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required
pursuant to the respective terms thereof;
(c) The Seller shall have delivered and released to the
Purchaser or to its designee, all documents
(including without limitation, the Subsequent
Mortgage Loans) required to be so delivered by the
Purchaser pursuant to Section 2.01 of the Pooling and
Servicing Agreement; and
(d) All other terms and conditions of this Agreement and
the Pooling and Servicing Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Subsequent Transfer Date,
against delivery and release by the Seller to the Trustee of all documents
required pursuant to the Pooling and Servicing Agreement, the consideration for
the Subsequent Mortgage Loans as specified in Section 3 of this Agreement, by
delivery to the Seller of the Purchase Price in immediately available funds.
SECTION 9. CLOSING DOCUMENTS. Without limiting the
generality of Section 8 hereof, the closing shall be subject to delivery of each
of the following documents:
(a) An Officers' Certificate of the Seller, dated the
Subsequent Transfer Date,
<PAGE>
upon which the Purchaser and Salomon Brothers Inc
(the "Underwriter") may rely, in the form of Exhibit
1 hereto, and attached thereto copies of the
certificate of incorporation, by-laws and certificate
of good standing of the Seller under the laws of
California;
(b) An Officers' Certificate of the Seller, dated the
Subsequent Transfer Date, upon which the Purchaser
and the Underwriter may rely, in the form of Exhibit
2 hereto, with respect to certain facts regarding the
sale of the Subsequent Mortgage Loans by the Seller
to the Purchaser;
(c) An Opinion of Counsel of the Seller, dated the
Subsequent Transfer Date and addressed to the
Purchaser and the Underwriter, substantially in the
form attached hereto as Exhibit 3;
(d) Such opinions of counsel as the Rating Agencies or
the Trustee may request in connection with the sale
of the Subsequent Mortgage Loans by the Seller to the
Purchaser or the Seller's execution and delivery of,
or performance under, this Agreement;
(e) Such further information, certificates, opinions and
documents as the Purchaser or the Underwriter may
reasonably request.
SECTION 10. COSTS. The Seller shall pay (or shall
reimburse the Purchaser or any other Person to the extent that the Purchaser or
such other Person shall pay) all costs and expenses incurred in connection with
the transfer and delivery of the Subsequent Mortgage Loans, including without
limitation, recording fees, fees for title policy endorsements and continuations
and the fees for recording Assignments of Mortgage, the fees and expenses of the
Seller's accountants and attorneys, the costs and expenses incurred in
connection with producing the Seller's or any Subservicer's loan loss,
foreclosure and delinquency experience, and the costs and expenses incurred in
connection with obtaining the documents referred to in Sections 9(d), 9(e) and
9(g), the costs and expenses of printing (or otherwise reproducing) and
delivering this Agreement, the Pooling and Servicing Agreement, the
Certificates, the prospectus and Prospectus Supplement, and any private
placement memorandum relating to the Certificates, the Insurance Agreement and
other related documents, the initial fees, costs and expenses of the Trustee,
the initial fees, the fees and expenses of the Purchaser's counsel in connection
with the preparation of all documents relating to the securitization of the
Subsequent Mortgage Loans, the filing fee charged by the Securities and Exchange
Commission for registration of the Certificates and the fees charged by any
rating agency to rate the Certificates. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.
SECTION 11. SERVICING. The Seller has represented to the
Purchaser that certain of the Subsequent Mortgage Loans are being serviced by
the Seller, in its capacity as
<PAGE>
servicer under the Mortgage Loan Purchase and Servicing Agreement dated as of
September 1, 1996 between Salomon Brothers Realty Corp. and the Seller, and that
such Mortgage Loans are not subject to any other servicing agreements with third
parties (other than Sub-Servicing Agreements with Advanta Mortgage Corp. USA).
It is understood and agreed between the Seller and the Purchaser that the
Subsequent Mortgage Loans are to be delivered free and clear of any servicing
agreements. The Seller, without reimbursement from the Purchaser, shall pay any
fees or penalties required by any servicer for releasing the Subsequent Mortgage
Loans from any such servicing agreement (it being understood that neither the
Purchaser nor any affiliate of the Purchaser is servicing the Subsequent
Mortgage Loans under any such servicing agreement and, accordingly, that neither
the Purchaser nor any affiliate of the Purchaser is entitled to receive any fee
for releasing the Subsequent Mortgage Loans from any such servicing agreement)
and shall arrange for the orderly transfer, as of the Subsequent Cut-off Date,
of such servicing from any such servicer to the Master Servicer. The Subsequent
Mortgage Loans shall be serviced by the Seller, in its capacity as Master
Servicer, in accordance with the terms of the Pooling and Servicing Agreement.
For so long as the Seller services the Subsequent Mortgage Loans, the Seller
shall be entitled to the Servicing Fee and such other payments as provided for
under the terms of the Pooling and Servicing Agreement.
SECTION 12. INDEMNIFICATION. (a) The Seller shall indemnify
and hold harmless each of (i) the Purchaser, (ii) the Underwriter, (iii) the
Person, if any, to which the Purchaser assigns its rights in and to a Mortgage
Loan and each of their respective successors and assigns and (iv) each person,
if any, who controls the Purchaser within the meaning of Section 15 of the
Securities Act of 1933, as amended (the "1933 Act") ((i) through (iv)
collectively, the "Indemnified Party") against any and all losses, claims,
expenses, damages or liabilities to which the Indemnified Party may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
expenses, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (a) any untrue statement or alleged untrue statement of any
material fact contained in the Prospectus Supplement or any private placement
memorandum, or the omission or the alleged omission to state therein the
material fact necessary in order to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with (i) information furnished in writing to the
Purchaser or any of its affiliates by the Seller specifically for use therein,
which shall include, with respect to the Prospectus Supplement, the information
set forth under the captions "Summary -- The Mortgage Pool," "Risk Factors
- -Additional Risks Associated with the Mortgage Loans," "The Mortgage Pool" and
"Pooling and Servicing Agreement -- The Master Servicer" and, with respect to
any private placement memorandum, any information of a comparable nature, or
(ii) the data files containing information with respect to the Subsequent
Mortgage Loans as transmitted by modem to the Purchaser by the Seller on
September 18, 1997 (as such transmitted information may have been amended in
writing by the Seller with the written consent of the Purchaser subsequent to
such transmission), or (b) any representation, warranty or covenant made by the
Seller herein or in the Pooling and Servicing Agreement, on which the Purchaser
has relied, being, or alleged to be, untrue or incorrect; provided, however,
that to the extent that any such losses, claims, expenses, damages or
liabilities
<PAGE>
to which the Indemnified Party may become subject arise out of or are based upon
both (1) statements, omissions, representations, warranties or covenants of the
Seller described in clause (a) or (b) above and (2) any other factual basis, the
Seller shall indemnify and hold harmless the Indemnified Party only to the
extent that the losses, claims, expenses, damages, or liabilities of the person
or persons asserting the claim are determined to rise from or be based upon
matters set forth in clause (1) above and do not result from the gross
negligence or willful misconduct of such Indemnified Party. This indemnity shall
be in addition to any liability that the Seller may otherwise have.
SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Subsequent Transfer Date of the Subsequent Mortgage
Loans described on the Subsequent Mortgage Loan Schedule in accordance with the
terms and conditions of this Agreement is mandatory. It is specifically
understood and agreed that each Subsequent Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser in the event of the Seller's failure to deliver the Subsequent
Mortgage Loans on or before the Subsequent Transfer Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Subsequent Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by the
Seller of its obligation hereunder, and the Seller agrees that it holds such
Subsequent Mortgage Loans in custody for the Purchaser, subject to the
Purchaser's (i) right, prior to the Subsequent Transfer Date, to reject any
Subsequent Mortgage Loan to the extent permitted by this Agreement, and (ii)
obligation to deliver or cause to be delivered the consideration for the
Subsequent Mortgage Loans pursuant to Section 8 hereof. Any Subsequent Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
Notwithstanding the foregoing, if on the Subsequent Transfer
Date, each of the conditions set forth in Section 8 hereof shall have been
satisfied and the Purchaser shall not have paid or caused to be paid the
Purchase Price, or any such condition shall not have been waived or satisfied
and the Purchaser determines not to pay or cause to be paid the Purchase Price,
the Purchaser shall immediately effect the redelivery of the Subsequent Mortgage
Loans, if delivery to the Purchaser has occurred, and the security interest
created by this Section 12 shall be deemed to have been released.
SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by fax and, receipt of which is confirmed by telephone, if to the
Purchaser, addressed to the Purchaser at Seven World Trade Center, New York, New
York 10048, Attention: Mortgage Finance Group, fax (212) 783-4581, or such other
address as may hereafter be furnished to the Seller in writing by the Purchaser;
and
<PAGE>
if to the Seller, addressed to the Seller at 18400 Von Karman, Suite 1000,
Irvine, California 92612, fax (714) 440-7033, or to such other address as the
Seller may designate in writing to the Purchaser.
SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement that is prohibited or that is held
to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement that
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Subsequent Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 16. AGREEMENT OF PARTIES. The Seller and the Purchaser
each agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement and the
Pooling and Servicing Agreement.
SECTION 17. SURVIVAL. (a) The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Subsequent
Mortgage Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE
RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF
LAW PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO
INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 19. MISCELLANEOUS. This Agreement may be executed
in two or more counterparts, each of which when so executed and delivered shall
be an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This
<PAGE>
Agreement supersedes all prior agreements and understandings relating to the
subject matter hereof. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
It is the express intent of the parties hereto that the
conveyance of the Subsequent Mortgage Loans by the Seller to the Purchaser as
provided in Section 4 hereof be, and be construed as, a sale of the Subsequent
Mortgage Loans by the Seller to the Purchaser and not as a pledge of the
Subsequent Mortgage Loans by the Seller to the Purchaser to secure a debt or
other obligation of the Seller. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Subsequent Mortgage Loans are held to
be property of the Seller, then (a) it is the express intent of the parties that
such conveyance be deemed a pledge of the Subsequent Mortgage Loans by the
Seller to the Purchaser to secure a debt or other obligation of the Seller and
(b) (1) this Agreement shall also be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2) the
conveyance provided for in Section 4 hereof shall be deemed to be a grant by the
Seller to the Purchaser of a security interest in all of the Seller's right,
title and interest in and to the Subsequent Mortgage Loans and all amounts
payable to the holders of the Subsequent Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 of the New York
Uniform Commercial Code; and (4) notifications to persons holding such property
and acknowledgments, receipts or confirmations from persons holding such
property shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to
Section 4(d) hereof shall also be deemed to be an assignment of any security
interest created hereby. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Subsequent Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Matthew R. Bollo
---------------------------------
Name: Matthew R. Bollo
Title: Assistant Vice President
NEW CENTURY MORTGAGE CORPORATION
By: /s/ Brad A. Morrice
---------------------------------
Name: Brad A. Morrice
Title: Chief Executive Officer
<PAGE>
EXHIBIT 1
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER]
I, __________________ hereby certify that I am the duly
appointed __________________________ of New Century Mortgage Corporation, a
California corporation (the "Company"), and further certify, on behalf of the
Company, as follows:
1. Attached hereto as Attachment I is a true and correct copy
of the Articles of Incorporation and By-laws of the Company as in full
force and effect on the date hereof. Attached hereto as Attachment II
is a certificate of good standing, dated August ___, 1997, issued by
the State of California with respect to the Company. No event has
occurred since the date thereof that has affected the good standing of
the Company under the laws of the State of California.
2. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the Company
which, if adversely determined, individually or in the aggregate, would
materially and adversely affect the Company's ability to perform its
obligations under the Subsequent Mortgage Loan Purchase Agreement,
dated September ___, 1997 (the "Subsequent Mortgage Loan Purchase
Agreement"), between Salomon Brothers Mortgage Securities VII, Inc.
(the "Purchaser") and the Company or the Pooling and Servicing
Agreement, dated as of August 1, 1997 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor, the Company as master
servicer (in such capacity, the "Master Servicer") and First Trust
National Association as Trustee. No proceedings looking toward merger,
consolidation or liquidation, dissolution or bankruptcy of the Company
are pending or contemplated.
3. Each person who, as an officer or representative of the
Company, signed the Subsequent Mortgage Loan Purchase Agreement and any
other document delivered prior hereto or on the date hereof in
connection with the transactions contemplated by the Subsequent
Mortgage Loan Purchase Agreement and the Pooling and Servicing
Agreement, was at the respective times of such signing and delivery,
and is as of the date hereof, duly elected or appointed, qualified and
acting as such officer or representative, and the signatures of such
persons appearing on such documents are their genuine signatures.
4. Each of the Subsequent Mortgage Loans referred to in the
Subsequent Mortgage Loan Purchase Agreement and the Pooling and
Servicing Agreement was originated in accordance with Section 6(xx) of
the Subsequent Mortgage Loan Purchase Agreement.
5. Attached hereto as Attachment III is a true and correct
copy of the
<PAGE>
resolutions duly adopted by the Board of Directors of the Company on
September ___, 1997 (the "Resolutions") with respect to the
transactions contemplated by the Subsequent Mortgage Loan Purchase
Agreement and the Pooling and Servicing Agreement; said Resolutions
have not been amended or modified, annulled or revoked and are in full
force and effect on the date hereof.
6. All of the representations and warranties of the Company
contained in the Subsequent Mortgage Loan Purchase Agreement are true
and correct in all material respects as of the Subsequent Transfer
Date, and no event has occurred which, with notice or the passage of
time or both, would constitute a default under the Subsequent Mortgage
Loan Purchase Agreement.
7. The information set forth in the Mortgage Loan Schedule
attached as an attachment to the Subsequent Transfer Instrument, dated
September __, 1997, between the Purchaser as seller and the Trustee is
true and correct in all material respects.
8. The transactions contemplated in the Subsequent Mortgage
Loan Purchase Agreement will be reported as a sale in the Company's
financial reports.
9. The information contained in the Purchaser's Prospectus
Supplement, dated August 26, 1997, relating to the Mortgage Loans, the
Company, and its loan portfolio, specifically the information, in the
summary under the subheadings "Summary-The Mortgage Pool," "Risk
Factors-Additional Risks Associated with the Mortgage Loans," "The
Mortgage Pool" and "Pooling and Servicing Agreement-The Master
Servicer" is true and accurate and does not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
10. The Company has performed all of its duties and has
satisfied all of the material conditions on its part to be performed or
satisfied prior to the Subsequent Transfer Date.
11. Capitalized terms used but not defined herein shall have
the meanings assigned in the Subsequent Mortgage Loan Purchase
Agreement and the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Company.
Dated: September ___, 1997
By:
---------------------------------
Name:
[Seal] Title:
I, ____________________________, an [Assistant] Secretary of
New Century Mortgage Corporation, hereby certify that __________________ is the
duly appointed, qualified and acting _______________________ of New Century
Mortgage Corporation and that the signature appearing above is his genuine
signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: September ___, 1997
By:
---------------------------------
Name:
Title:
<PAGE>
EXHIBIT 2
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER WITH RESPECT TO CERTAIN
FACTS REGARDING THE SALE OF THE SUBSEQUENT MORTGAGE LOANS]
Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Floating Rate Certificates
Series 1997-NC4
Reference is made to the sale of mortgage loans (the "Mortgage
Loans") by New Century Mortgage Corporation ("New Century") to Salomon Brothers
Mortgage Securities VII, Inc. (the "Depositor") pursuant to the Subsequent
Mortgage Loan Purchase Agreement, dated September ___, 1997 (the "Purchase
Agreement"), between the Depositor and New Century. Reference is further made to
the Pooling and Servicing Agreement, dated as of August 1, 1997 (the "Pooling
and Servicing Agreement"; together with the Purchase Agreement, the
"Agreements"), among the Depositor as depositor, New Century as master servicer
(in such capacity, the "Master Servicer") and First Trust National Association
as trustee (the "Trustee"). In consideration for its purchase of the Subsequent
Mortgage Loans, the Depositor will deliver to New Century immediately available
funds. Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Agreements.
The undersigned is a duly appointed ___________________ of New
Century Mortgage Corporation and hereby certifies after reasonable investigation
that:
1. The price to be paid to New Century for the Subsequent
Mortgage Loans will have been paid in full at the closing of the sale pursuant
to the Purchase Agreement, and no agreement or arrangement exists or will exist
that permits the modification of the consideration for the Subsequent Mortgage
Loans subsequent to that sale. New Century will not have any right or obligation
to repurchase any Subsequent Mortgage Loan, except as provided in the Purchase
Agreement.
2. Each Mortgage Note and each related Mortgage has been
appropriately prepared and duly executed and delivered by the related Mortgagor,
and each Mortgage has been appropriately recorded in the applicable jurisdiction
and any intervening endorsement of any Mortgage Note and any intervening
assignment of any Mortgage, which was required in order to transfer to New
Century ownership of the Subsequent Mortgage Loans, was obtained and completed.
3. Each Mortgage Note has been endorsed or assigned in a
manner that satisfies all requirements necessary to transfer to the Trustee all
right, title and interest of the party so endorsing or assigning, as noteholder
or transferee thereof, in and to that Mortgage Note, as provided in the Purchase
Agreement and the Pooling and Servicing Agreement. Each Assignment
<PAGE>
is in recordable form and is sufficient to effect the assignment and transfer to
the Depositor of the benefits of the assignor, as original mortgagee or assignee
thereof, under each Mortgage to which that Assignment relates, as provided in
the Purchase Agreement and the Pooling and Servicing Agreement. Each Assignment
has been or will be appropriately recorded to the extent required under
applicable law, as provided in the Purchase Agreement.
4. Each original Mortgage Note, each original recorded
Mortgage, each original recorded intervening Assignment and each Assignment has
been delivered to the Trustee at the direction of the Depositor.
5. Immediately prior to the transfer of the Subsequent
Mortgage Loans by New Century to the Depositor, New Century was the sole owner
of each Subsequent Mortgage Loan, free and clear of any and all prior liens,
mortgages, security interests, pledges, participation interests, adverse claims,
charges or other equities or encumbrances of any nature, and had full right and
authority to sell, assign and transfer the Subsequent Mortgage Loans.
6. No Mortgage Note, Mortgage or other document constituting
part of the Mortgage File reflects or will reflect on its face any interest that
is inconsistent with the ownership interest of the Trustee in and to the
Subsequent Mortgage Loans or the transfer of the Subsequent
Mortgage Loans by New Century to the Trustee.
7. The transfer of the Subsequent Mortgage Loans by New
Century to the Depositor as provided in the Purchase Agreement is intended by
New Century to be, and is in fact, a contemporaneous exchange in which New
Century receives new value.
8. New Century was solvent at all relevant times prior to, and
will not be rendered insolvent by, the transfer of the Subsequent Mortgage Loans
to the Depositor.
9. New Century did not transfer the Subsequent Mortgage Loans
to the Depositor with any intent to hinder, delay or defraud any of New
Century's creditors.
10. Neither New Century nor any agent acting on behalf of it,
has been or will become a party to any fraud or illegality affecting any
Mortgage Loan or Certificate.
11. To the best of my knowledge, no breach of the Agreements
by any party, misrepresentation or failure by any party to perform all acts
required to be performed prior to the Subsequent Transfer Date, or fraud or
mistake on the part of any party to the Agreements in connection with the
transactions contemplated by the Agreements, has occurred or will occur.
12. To the best of my knowledge, no party to the Agreements
has taken or will take any action that is unreasonable, arbitrary or capricious,
or that is not taken in good faith or in a commercially reasonable manner,
affecting the Subsequent Mortgage Loans in connection with the transactions
contemplated by the Agreements.
<PAGE>
13. To the best of my knowledge, there is not and will not be
any other agreement among the parties to the Agreements that modifies or
otherwise supplements the agreement of the parties as expressed in the
Agreements.
14. New Century does not have and will not have any right to
modify or alter the terms of the transfer of the Subsequent Mortgage Loans by
New Century to the Depositor, or to substitute or add any mortgage loan
thereafter, except as provided in the Agreements.
15. New Century will not take any action that is inconsistent
with the ownership interest in the Subsequent Mortgage Loans evidenced by the
Certificates. New Century will promptly indicate to other persons or entities,
when a response is appropriate, that the Subsequent Mortgage Loans were
transferred by New Century to the Depositor. New Century will not claim any
ownership interest directly in the Subsequent Mortgage Loans other than that
represented by Certificates in which it may have an ownership interest from time
to time and that represented by its role as Master Servicer.
16. Under generally accepted accounting principles ("GAAP")
and for federal income tax purposes, New Century will report the transfer of the
Subsequent Mortgage Loans to the Depositor, as provided in the Purchase
Agreement as a sale of all of its interest in the Subsequent Mortgage Loans. New
Century has been advised by or has confirmed with its independent public
accountants for similar transactions that the sale will be so classified under
GAAP in accordance with Statement No. 125 of the Financial Accounting Standards
Board.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of the ___th day of September, 1997.
NEW CENTURY MORTGAGE CORPORATION
By:
---------------------------------
Name:
Title:
<PAGE>
EXHIBIT 3
[FORM OF OPINION OF COUNSEL TO THE SELLER]
<PAGE>
EXHIBIT 4
On the Subsequent Cut-off Date, the Subsequent Mortgage Loans shall
comply with the following conditions:
(i) no less than 60.9% of the Subsequent Mortgage Loans shall have a
risk grade of A+, A+MO, A- or A-MO, no more than 16.6% of such loans shall have
a risk grade of B and no more than 22.6% of such loans shall have a risk grade
of C or C-; provided, however, with regard to the Delayed First Adjustment
Mortgage Loans, no less than 60.4% of such loans shall have a risk grade of A+,
A+MO, A- or A-MO, no more than 19.1% of such loans shall have a risk grade of B
and no more than 20.4% of such loans shall have a risk grade of C or C-;
(ii) any Mortgage Loan with a loan-to-value ratio (an "LTV") between
16.13% and 90.00% shall have a risk grade of A+, A+MO, A-, A-MO or B;
(iii) the weighted average LTV for each of the Subsequent Mortgage
Loans at origination shall be approximately 73.38%; provided, however, the
weighted average LTV for each of the Delayed First Adjustment Mortgage Loans at
origination shall be approximately 73.35%;
(iv) the maximum percentage concentration of Mortgage Loans secured by
mortgaged properties in any one zip code shall be approximately 1.21%;
(v) approximately 53.92% of the Subsequent Mortgage Loans provide for
payment by the mortgagor of a prepayment charge within a specified period as
provided in the related Mortgage Note not in excess of 6 years; provided,
however, approximately 67.00% of the Delayed First Adjustment Mortgage Loans
provide for payment by the mortgagor of a prepayment charge within a specified
period as provided in the related Mortgage Note not in excess of 6 years;
(vi) the Subsequent Mortgage Loans shall have a weighted average
Mortgage Rate equal to approximately 9.686% per annum and a weighted average
Gross Margin equal to approximately 7.273% per annum, provided, however, the
Delayed First Adjustment Mortgage Loans to be purchased shall have a weighted
average Mortgage Rate equal to approximately 7.495% per annum and a weighted
average Gross Margin equal to approximately 9.685% per annum. The Subsequent
Mortgage Loans will be adjustable rate mortgage loans, payable on the first day
of each month. Interest on the Subsequent Mortgage Loans and the monthly
payments will be adjusted on each Adjustment Date to equal the sum of the Index
and the margin, rounded to the next highest multiple of 0.125%, subject to the
Periodic Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate. The
Subsequent Mortgage Loans will not be subject to negative amortization and will
not provide for graduated payments. None of the Subsequent Mortgage Loans will
be convertible to a fixed mortgage interest rate. None of the Subsequent
Mortgage Loans shall be subject to temporary buydown agreements. Each of the
Subsequent Mortgage Loans shall be fully-amortizing and none of the Subsequent
Mortgage Loans shall provide for the payment of a balloon payment.
<PAGE>
EXHIBIT 5
Form of Subsequent Transfer Instrument
EXHIBIT 99.9
<PAGE>
THE MORTGAGE POOL
GENERAL
The Mortgage Pool consists of approximately 2,432 conventional, one- to
four-family, adjustable-rate Mortgage Loans (the AMortgage Loans@) secured by
first liens on residential real properties (the "Mortgaged Properties") and
having an aggregate principal balance as of September 1, 1997 (the "Cut-off
Date") of approximately $279,259,722.90, after application of scheduled payments
due on or before the Cut-off Date whether or not received. The Mortgage Loans
have original terms to maturity of not greater than 30 years.
References to percentages of the Mortgage Loans, unless otherwise
noted, are calculated based on the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.
Each Mortgage Loan provides for semi-annual adjustment to the Mortgage
Rate thereon (in the case of approximately 54.73% and approximately 9.64% of the
Mortgage Loans, after an initial period of approximately two years and three
years, respectively, from the date of origination thereof (each such Mortgage
Loan, a "Delayed First Adjustment Mortgage Loan")), and for corresponding
adjustments to the monthly payment amount due thereon, in each case on each
adjustment date applicable thereto (each such date, an "Adjustment Date"). On
each Adjustment Date, the Mortgage Rate on each Mortgage Loan will be adjusted
to equal the sum, rounded to the nearest multiple of 0.125%, of the Index (as
described in the Prospectus Supplement) and a fixed percentage amount (the
"Gross Margin"); provided, however, that the Mortgage Rate on each Mortgage
Loan, including each Delayed First Adjustment Mortgage Loan, will generally not
increase or decrease by more than a specified percentage ranging from 1.00% to
1.50% per annum (the "Periodic Rate Cap"), as provided in the related Mortgage
Note, on any related Adjustment Date and will not exceed a specified maximum
Mortgage Rate over the life of such Mortgage Loan (the "Maximum Mortgage Rate")
or be less than a specified minimum Mortgage Rate over the life of such Mortgage
Loan (the "Minimum Mortgage Rate"). Effective with the first monthly payment due
on each Mortgage Loan after each related Adjustment Date, the monthly payment
amount will be adjusted to an amount that will amortize fully the outstanding
principal balance of the related Mortgage Loan over its remaining term and pay
interest at the Mortgage Rate as so adjusted. Due to the application of the
Periodic Rate Caps and the Maximum Mortgage Rates, the Mortgage Rate on each
Mortgage Loan, as adjusted on any related Adjustment Date, may be less than the
sum of the Index and Gross Margin. None of the Mortgage Loans permits the
related mortgagor to convert the adjustable Mortgage Rate thereon to a fixed
Mortgage Rate.
Approximately 62.29% of the Mortgage Loans provide for payment by the
mortgagor of a prepayment charge in limited circumstances on certain prepayments
as provided in the related Mortgage Note. Such Mortgage Loans provide for
payment of a prepayment charge on certain partial prepayments and all
prepayments in full made within a specified period not in excess of six years
from the date of origination of such Mortgage Loan, as provided in the related
Mortgage Note. The amount of the prepayment charge is as provided in the related
Mortgage Note, but is generally equal to six month's interest on any amounts
prepaid in excess of 20% of the then outstanding principal balance of the
related Mortgage Loan in any 12 month period, as permitted by law. The holders
of the Class CE Certificates will be entitled to all prepayment charges received
on the Mortgage Loans and such
<PAGE>
amounts will not be available for distribution on the Offered Certificates.
None of the Mortgage Loans are Buydown Mortgage Loans.
Approximately 35.69% of the Mortgage Loans are secured by Mortgaged
Properties located in the State of California. The aggregate principal balance
of Mortgage Loans in the California zip code with the largest amount of such
Mortgage Loans, by aggregate principal balance as of the Cut-off Date, was
approximately $1,661,335.
The average principal balance of the Mortgage Loans at origination was
approximately $114,966. No Mortgage Loan had a principal balance at origination
greater than approximately $877,500 or less than approximately $15,000. The
average principal balance of the Mortgage Loans as of the Cut-off Date was
approximately $114,827. No Mortgage Loan had a principal balance as of the
Cut-off Date greater than approximately $873,490 or less than approximately
$15,000.
The Mortgage Loans had Mortgage Rates as of the Cut-off Date ranging
from approximately 5.500% per annum to approximately 14.500% per annum, and the
weighted average Mortgage Rate was approximately 9.435% per annum. As of the
Cut-off Date, the Mortgage Loans had Gross Margins ranging from approximately
2.250% to approximately 10.550%, Minimum Mortgage Rates ranging from
approximately 5.500% per annum to approximately 14.500% per annum and Maximum
Mortgage Rates ranging from approximately 12.500% per annum to approximately
21.500% per annum. As of the Cut-off Date, the weighted average Gross Margin was
approximately 7.123%, the weighted average Minimum Mortgage Rate was
approximately 9.413% per annum and the weighted average Maximum Mortgage Rate
was approximately 16.395% per annum. The latest first Adjustment Date following
the Cut-off Date on any Mortgage Loan occurs in September 2000 and the weighted
average next Adjustment Date for all of the Mortgage Loans following the Cut-off
Date is February 1999.
Approximately 13.34% of the Mortgage Loans had a loan-to-value
ratio at origination in excess of 80%. The weighted average loan-to-value ratio
of the Mortgage Loans at origination was approximately 73.83%. At origination,
no Mortgage Loan will have a loan-to-value ratio greater than approximately
90.00% or less than approximately 15.73%.
The weighted average remaining term to maturity of the Mortgage Loans
will be approximately 29 years and 8 months as of the Cut-off Date. None of the
Mortgage Loans will have a first Due Date prior to August 1996 or after October
1997, or will have a remaining term to maturity of less than 14 years or greater
than 30 years as of the Cut-off Date. The latest maturity date of any Mortgage
Loan is September 2027.
The Mortgage Loans are expected to have the following characteristics
as of the Cut-off Date (the sum in any column may not equal the total indicated
due to rounding):
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL BALANCES OF THE MORTGAGE LOANS AT ORIGINATION
% OF
NUMBER AGGREGATE ORIGINAL AGGREGATE ORIGINAL
RANGE ($) OF LOANS PRINCIPAL BALANCE PRINCIPAL BALANCE
--------- -------- ------------------ -----------------
<S> <C> <C> <C>
0.01 - 50,000.00 . . . . . . . 418 $ 15,685,670.00 5.61%
50,000.01 - 100,000.00 . . . . . . . 987 73,553,602.00 26.31
100,000.01 - 150,000.00 .................... 534 65,063,467.00 23.27
150,000.01 - 200,000.00 .................... 218 37,775,626.00 13.51
200,000.01 - 250,000.00 .................... 99 22,018,350.00 7.88
250,000.01 - 300,000.00 .................... 61 16,835,949.00 6.02
300,000.01 - 350,000.00 .................... 36 11,725,010.00 4.19
350,000.01 - 400,000.00 .................... 22 8,328,050.00 2.98
400,000.01 - 450,000.00 .................... 22 9,319,375.00 3.33
450,000.01 - 500,000.00 .................... 13 6,144,450.00 2.20
500,000.01 - 550,000.00 .................... 7 3,665,500.00 1.31
550,000.01 - 600,000.00 .................... 9 5,173,200.00 1.85
600,000.01 - 650,000.00 .................... 3 1,895,500.00 0.68
700,000.01 - 750,000.00 .................... 1 715,000.00 0.26
800,000.01 - 850,000.00 .................... 1 820,000.00 0.29
850,000.01 - 900,000.00 .................... 1 877,500.00 0.31
--- ----------- ----
Total.. 2,432 $279,596,249.00 100.00%
===== ============== ======
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL BALANCES OF THE MORTGAGE LOANS AS OF THE CUT-OFF DATE
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
RANGE ($) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
--------- -------- ---------------- ----------------
<S> <C> <C> <C>
0.01 - 50,000.00 . . . . . . . . 418 $ 15,668,637.37 5.61%
50,000.01 - 100,000.00 . . . . . . . . 989 73,679,157.48 26.38
100,000.01 - 150,000.00 ..................... 532 64,788,793.93 23.20
150,000.01 - 200,000.00 ..................... 219 37,931,711.93 13.58
200,000.01 - 250,000.00 ..................... 98 21,790,407.04 7.80
250,000.01 - 300,000.00 ..................... 61 16,810,577.95 6.02
300,000.01 - 350,000.00 ..................... 36 11,716,538.60 4.20
350,000.01 - 400,000.00 ..................... 22 8,314,259.25 2.98
400,000.01 - 450,000.00 ..................... 23 9,745,313.51 3.49
450,000.01 - 500,000.00 ..................... 12 5,678,411.71 2.03
500,000.01 - 550,000.00 ..................... 7 3,663,800.50 1.31
550,000.01 - 600,000.00 ..................... 9 5,170,890.10 1.85
600,000.01 - 650,000.00 ..................... 3 1,893,439.27 0.68
700,000.01 - 750,000.00 ..................... 1 714,293.83 0.26
800,000.01 - 850,000.00 ..................... 1 820,000.00 0.29
850,000.01 - 900,000.00 ..................... 1 873,490.43 0.31
--- ----------- ----
Total 2,432 $279,259,722.90 100.00%
===== ============== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MORTGAGE RATES OF THE MORTGAGE LOANS AT ORIGINATION
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MORTGAGE RATE (%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------- -------- ---------------- ----------------
<S> <C> <C> <C>
5.500 - 5.999................ 13 $ 2,450,095.91 0.88%
6.000 - 6.499............... 4 631,327.91 0.23
6.500 - 6.999............... 32 4,907,908.69 1.76
7.000 - 7.499............... 25 4,198,901.82 1.50
7.500 - 7.999............... 134 20,305,862.19 7.27
8.000 - 8.499............... 136 18,726,639.46 6.71
8.500 - 8.999............... 474 64,746,690.85 23.19
9.000 - 9.499............... 244 29,689,071.83 10.63
9.500 - 9.999............... 511 57,789,741.58 20.69
10.000 - 10.499.............. 200 21,349,934.80 7.65
10.500 - 10.999.............. 289 26,528,767.93 9.50
11.000 - 11.499.............. 139 10,544,109.33 3.78
11.500 - 11.999.............. 114 8,732,637.91 3.13
12.000 - 12.499.............. 47 3,299,310.91 1.18
12.500 - 12.999.............. 46 3,819,499.80 1.37
13.000 - 13.499.............. 10 753,607.57 0.27
13.500 - 13.999.............. 12 707,564.02 0.25
14.000 - 14.499.............. 1 44,784.51 0.02
14.500 - 14.999.............. 1 33,265.88 0.01
--- ----------- ----
Total............... 2,432 $ 279,259,722.90 100.00%
===== ============== ======
</TABLE>
<TABLE>
<CAPTION>
MORTGAGE RATES OF THE MORTGAGE LOANS AS OF THE CUT-OFF DATE
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MORTGAGE RATE (%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------- -------- ---------------- ----------------
<S> <C> <C> <C>
5.500 - 5.999................ 13 $2,450,095.91 0.88%
6.000 - 6.499............... 3 439,905.52 0.16
6.500 - 6.999............... 32 4,907,908.69 1.76
7.000 - 7.499............... 23 3,630,112.97 1.30
7.500 - 7.999............... 133 20,343,162.85 7.28
8.000 - 8.499............... 136 18,726,639.46 6.71
8.500 - 8.999............... 467 63,732,936.51 22.82
9.000 - 9.499............... 244 29,486,921.72 10.56
9.500 - 9.999............... 507 57,583,917.36 20.62
10.000 - 10.499.............. 208 22,861,462.58 8.19
10.500 - 10.999.............. 289 26,683,985.37 9.56
11.000 - 11.499.............. 139 10,575,156.38 3.79
11.500 - 11.999.............. 111 8,466,157.98 3.03
12.000 - 12.499.............. 49 3,544,133.79 1.27
12.500 - 12.999.............. 49 3,974,034.79 1.42
13.000 - 13.499.............. 13 1,020,087.50 0.37
13.500 - 13.999.............. 14 755,053.13 0.27
14.000 - 14.499.............. 1 44,784.51 0.02
14.500 - 14.999.............. 1 33,265.88 0.01
--- ----------- ----
Total............... 2,432 $279,259,722.90 100.00%
===== ============== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAXIMUM MORTGAGE RATES OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
MAXIMUM NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MORTGAGE RATE (%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------- -------- ---------------- ----------------
<S> <C> <C> <C>
12.500 - 12.999........................................ 16 $ 3,161,443.69 1.13%
13.000 - 13.499........................................ 5 1,038,689.43 0.37
13.500 - 13.999........................................ 30 4,381,285.45 1.57
14.000 - 14.499........................................ 26 4,302,554.81 1.54
14.500 - 14.999........................................ 139 21,226,019.28 7.60
15.000 - 15.499........................................ 138 18,654,180.90 6.68
15.500 - 15.999........................................ 472 64,104,452.06 22.96
16.000 - 16.499........................................ 242 29,628,390.52 10.61
16.500 - 16.999........................................ 510 57,889,299.70 20.73
17.000 - 17.499........................................ 200 21,061,001.76 7.54
17.500 - 17.999........................................ 287 26,085,292.75 9.34
18.000 - 18.499........................................ 139 10,644,068.91 3.81
18.500 - 18.999........................................ 115 8,888,039.78 3.18
19.000 - 19.499........................................ 45 3,085,896.19 1.11
19.500 - 19.999........................................ 45 3,634,385.69 1.30
20.000 - 20.499........................................ 9 689,107.57 0.25
20.500 - 20.999........................................ 12 707,564.02 0.25
21.000 - 21.499........................................ 1 44,784.51 0.02
21.500 - 21.999........................................ 1 33,265.88 0.01
--- ----------- ----
Total......................................... 2,432 $ 279,259,722.90 100.00%
===== ================ =======
</TABLE>
<TABLE>
<CAPTION>
MINIMUM MORTGAGE RATES OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
MINIMUM NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MORTGAGE RATE (%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------- -------- ---------------- ----------------
<S> <C> <C> <C>
5.500- 5.999........................................... 13 $ 2,450,095.91 0.88%
6.000- 6.499.......................................... 4 631,327.91 0.23
6.500- 6.999.......................................... 32 4,907,908.69 1.76
7.000- 7.499.......................................... 25 4,198,901.82 1.50
7.500- 7.999.......................................... 134 20,305,862.19 7.27
8.000- 8.499.......................................... 136 18,726,639.46 6.71
8.500- 8.999.......................................... 474 64,746,690.85 23.19
9.000- 9.499.......................................... 244 29,689,071.83 10.63
9.500- 9.999.......................................... 512 58,183,047.69 20.83
10.000 - 10.499........................................ 200 21,349,934.80 7.65
10.500 - 10.999........................................ 288 26,135,461.82 9.36
11.000 - 11.499........................................ 139 10,544,109.33 3.78
11.500 - 11.999........................................ 114 8,732,637.91 3.13
12.000 - 12.499........................................ 47 3,299,310.91 1.18
12.500 - 12.999........................................ 46 3,819,499.80 1.37
13.000 - 13.499........................................ 10 753,607.57 0.27
13.500 - 13.999........................................ 12 707,564.02 0.25
14.000 - 14.499........................................ 1 44,784.51 0.02
14.500 - 14.999........................................ 1 33,265.88 0.01
--- ----------- ----
Total......................................... 2,432 $279,259,722.90 100.00%
===== ============== =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROSS MARGINS OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
GROSS MARGIN (%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------- -------- ---------------- ----------------
<S> <C> <C> <C>
2.250 - 2.499.......................................... 1 $ 85,889.94 0.03%
2.750 - 2.999.......................................... 1 122,613.49 0.04
3.000 - 3.249.......................................... 3 323,668.65 0.12
3.250 - 3.499.......................................... 1 84,706.47 0.03
3.500 - 3.749.......................................... 3 386,139.32 0.14
3.750 - 3.999.......................................... 5 674,968.45 0.24
4.000 - 4.249.......................................... 7 905,396.93 0.32
4.250 - 4.499.......................................... 6 399,496.08 0.14
4.500 - 4.749.......................................... 9 1,749,862.95 0.63
4.750 - 4.999.......................................... 21 2,567,374.56 0.92
5.000 - 5.249.......................................... 14 2,818,940.79 1.01
5.250 - 5.499.......................................... 31 5,650,037.83 2.02
5.500 - 5.749.......................................... 48 6,491,771.20 2.32
5.750 - 5.999.......................................... 96 11,997,377.62 4.30
6.000 - 6.249.......................................... 73 10,202,707.34 3.65
6.250 - 6.499.......................................... 93 11,316,078.75 4.05
6.500 - 6.749.......................................... 149 17,445,313.63 6.25
6.750 - 6.999.......................................... 247 30,380,100.40 10.88
7.000 - 7.249.......................................... 116 15,233,725.07 5.46
7.250 - 7.499.......................................... 225 21,983,003.75 7.87
7.500 - 7.749.......................................... 255 30,831,506.41 11.04
7.750 - 7.999.......................................... 1,008 106,272,020.38 38.05
8.000 - 8.249.......................................... 5 296,608.42 0.11
8.250 - 8.499.......................................... 1 58,984.21 0.02
8.500 - 8.749.......................................... 1 101,221.02 0.04
8.750 - 8.999.......................................... 1 61,463.02 0.02
9.000 - 9.249.......................................... 4 331,075.65 0.12
9.250 - 9.499.......................................... 4 343,232.35 0.12
9.500 - 9.749.......................................... 3 129,438.22 0.05
10.500 - 10.749........................................ 1 15,000.00 0.01
--- ----------- ----
Total......................................... 2,432 $279,259,722.90 100.00%
===== ============== =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL LOAN-TO-VALUE RATIOS OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
LOAN-TO-VALUE RATIO (%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------------- -------- ---------------- ----------------
<S> <C> <C> <C>
Less than or equal to 25.00.. 12 $520,630.67 0.19%
25.01 - 30.00................ 5 390,352.95 0.14
30.01 - 35.00................ 14 811,763.65 0.29
35.01 - 40.00................ 16 1,352,566.46 0.48
40.01 - 45.00................ 19 1,631,005.78 0.58
45.01 - 50.00................ 57 6,557,968.95 2.35
50.01 - 55.00................ 47 4,388,615.38 1.57
55.01 - 60.00................ 115 10,559,770.08 3.78
60.01 - 65.00................ 210 20,051,331.93 7.18
65.01 - 70.00................ 377 38,672,549.80 13.85
70.01 - 75.00................ 592 68,803,704.72 24.64
75.01 - 80.00................ 704 88,280,169.64 31.61
80.01 - 85.00................ 214 30,181,656.02 10.81
85.01 - 90.00................ 50 7,057,636.87 2.53
--- ----------- ----
Total............... 2,432 $ 279,259,722.90 100.00%
===== ================ =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF THE MORTGAGED PROPERTIES
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
LOCATION OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- -------- -------- ---------------- ----------------
<S> <C> <C> <C>
Arizona...................... 137 $14,937,832.52 5.35%
California................... 591 99,656,172.61 35.69
Colorado..................... 174 17,786,098.79 6.37
Delaware..................... 2 87,595.67 0.03
Florida...................... 33 2,729,112.16 0.98
Georgia...................... 1 449,392.87 0.16
Hawaii....................... 7 1,358,037.98 0.49
Idaho........................ 8 581,259.19 0.21
Illinois..................... 484 53,183,322.86 19.04
Indiana...................... 32 1,687,605.05 0.60
Iowa......................... 4 287,825.11 0.10
Kansas....................... 32 2,650,494.01 0.95
Kentucky..................... 29 1,960,604.34 0.70
Louisiana.................... 1 186,472.02 0.07
Maryland..................... 3 185,899.58 0.07
Massachusetts................ 27 3,729,570.50 1.34
Michigan..................... 4 338,100.00 0.12
Minnesota.................... 88 8,739,773.60 3.13
Missouri..................... 75 5,380,189.14 1.93
Montana...................... 4 524,477.13 0.19
Nevada....................... 34 4,468,636.63 1.60
New Hampshire................ 2 257,012.50 0.09
New Jersey................... 8 933,619.08 0.33
New Mexico................... 46 4,772,784.98 1.71
North Carolina............... 18 1,359,845.09 0.49
North Dakota................. 1 152,075.16 0.05
Ohio......................... 233 17,041,196.04 6.10
Oklahoma..................... 1 24,150.00 0.01
Oregon....................... 67 7,404,287.67 2.65
Pennsylvania................. 45 2,856,034.80 1.02
Rhode Island................. 2 142,830.58 0.05
South Carolina............... 8 666,107.79 0.24
South Dakota................. 1 68,221.38 0.02
Texas........................ 48 3,995,577.78 1.43
Utah......................... 98 10,312,038.77 3.69
Washington................... 34 4,315,414.47 1.55
Wisconsin.................... 49 3,977,863.35 1.42
Wyoming...................... 1 72,191.70 0.03
--- ----------- ----
Total............... 2,432 $ 279,259,722.90 100.00%
===== ================ =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MORTGAGED PROPERTY TYPES OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
PROPERTY TYPE OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------- -------- ---------------- ----------------
<S> <C> <C> <C>
Single Family........................... 2,072 $236,907,129.20 84.83%
Two-Four Family......................... 195 19,701,169.42 7.05
Condominium............................. 86 7,903,673.84 2.83
Planned Unit Development................ 79 14,747,750.44 5.28
--- ----------- ----
Total.......................... 2,432 $279,259,722.90 100.00%
===== =============== ======
</TABLE>
<TABLE>
<CAPTION>
MORTGAGED PROPERTY OCCUPANCY STATUS OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
OCCUPANCY STATUS OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------- -------- ---------------- ----------------
<S> <C> <C> <C>
Owner-Occupied............... 2,114 $251,625,676.49 90.10%
Secondary.................... 10 1,740,955.77 0.62
Investor..................... 308 25,893,090.64 9.27
--- ----------- ----
Total............... 2,432 $279,259,722.90 100.00%
===== =============== =======
</TABLE>
The occupancy status of a Mortgaged Property is as represented by the
mortgagor in its loan application.
<TABLE>
<CAPTION>
PURPOSE OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
LOAN PURPOSE OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------ -------- ---------------- ----------------
<S> <C> <C> <C>
Purchase..................... 381 $ 50,023,651.79 17.91%
Equity-out Refinance......... 1,466 163,590,300.14 58.58
Rate-term Refinance.......... 585 65,645,770.97 23.51
--- ----------- ----
Total............... 2,432 $279,259,722.90 100.00%
===== =============== =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOAN PROGRAMS OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
LOAN PROGRAM OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------ -------- ---------------- ----------------
<S> <C> <C> <C>
Full or Limited Documentation Program 1,751 $198,524,070.66 71.09%
Stated Income Documentation Program 681 80,735,652.24 28.91
--- ----------- ----
Total............... 2,432 $279,259,722.90 100.00%
===== =============== =======
</TABLE>
<TABLE>
<CAPTION>
RISK CATEGORIES OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
RISK CATEGORIES OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- --------------- -------- ---------------- ----------------
<S> <C> <C> <C>
A+........................... 476 $ 64,648,523.45 23.15%
A+MO......................... 64 6,194,198.70 2.22
A-........................... 811 98,940,823.73 35.43
A-MO......................... 22 1,934,249.20 0.69
B............................ 482 54,127,055.72 19.38
C............................ 305 30,353,840.24 10.87
C-.......................... 272 23,061,031.86 8.26
--- ----------- ----
Total............... 2,432 $279,259,722.90 100.00%
===== =============== =======
<PAGE>
NEXT ADJUSTMENT DATES FOR THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MONTH OF NEXT ADJUSTMENT DATE OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------------------- -------- ---------------- ----------------
<S> <C> <C> <C>
October 1997........................................... 64 $ 10,735,518.35 3.84%
November 1997.......................................... 21 2,471,785.89 0.89
December 1997.......................................... 48 5,609,301.00 2.01
January 1998........................................... 180 21,548,399.57 7.72
February 1998.......................................... 187 21,377,323.21 7.65
March 1998............................................. 159 20,886,793.11 7.48
April 1998............................................. 141 16,864,321.68 6.04
July 1998.............................................. 3 327,370.82 0.12
October 1998........................................... 1 439,444.49 0.16
November 1998.......................................... 3 596,147.61 0.21
December 1998.......................................... 2 516,053.10 0.18
January 1999........................................... 3 300,398.30 0.11
February 1999.......................................... 7 1,312,852.66 0.47
March 1999............................................. 150 17,571,002.72 6.29
April 1999............................................. 105 11,543,342.73 4.13
May 1999............................................... 19 2,182,449.36 0.78
June 1999.............................................. 11 1,966,478.61 0.70
July 1999.............................................. 124 13,610,222.19 4.87
August 1999............................................ 611 63,519,661.11 22.75
September 1999......................................... 379 38,955,546.78 13.95
May 2000............................................... 2 308,516.99 0.11
July 2000.............................................. 9 1,753,782.93 0.63
August 2000............................................ 127 15,315,866.69 5.48
September 2000......................................... 76 9,547,143.00 3.42
--- ----------- ----
Total......................................... 2,432 $279,259,722.90 100.00%
===== ============== =======
</TABLE>
<TABLE>
<CAPTION>
PERIODIC RATE CAPS ON THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
PERIODIC RATE CAP (%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- --------------------- -------- ---------------- ----------------
<S> <C> <C> <C>
1.00......................... 37 $6,222,298.12 2.23%
1.50......................... 2,394 272,911,989.46 97.73
3.00......................... 1 125,435.32 0.04
--- ----------- ----
Total............... 2,432 $279,259,722.90 100.00%
===== =============== =======
</TABLE>
