SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 1997
Commission File Number: 333-22559
Salomon Brothers Mortgage Securities VII, Inc.
(Exact Name of registrant as specified in its charter)
Delaware 13-3439681
(State or Other Juris- (I.R.S. Employer
diction of Incorporation) Identification No.)
Seven World Trade Center, New York, New York 10048
(Address of Principal Executive Office)
212-783-5659
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file
such reports),and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in part III of this
Form 10-K or any amendment to this Form 10-K.
Not applicable.
Aggregate market value of voting stock held by non-affiliates of the
Registrant as of December 31, 1997.
Not applicable.
Number of shares of common stock outstanding a
s of December 31, 1997.
Not applicable.
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Table of Contents
PART I
Item 1. Business..................................................3
Item 2. Properties................................................3
Item 3. Legal Proceedings.........................................3
Item 4. Submission Of Matters To A Vote Of Security Holders.......3
PART II
Item 5. Market For Registrant's Common Equity And
Related Shareholder Matters.......................................3
Item 6. Selected Financial Data...................................3
Item 7. Management's Discussion And Analysis Of Financial Condition
And Results Of Operations...............................4
Item 8. Financial Statements And Supplementary Data...............4
Item 9. Changes In And Disagreements With Accountants On
Accounting And Financial Disclosure.....................4
PART III
Item 10. Directors And Executive Officers Of The Registrant.......4
Item 11. Executive Compensation...................................4
Item 12. Security Ownership Of Certain Beneficial Owners And
Management..............................................4
Item 13. Certain Relationships And Related Transactions...........4
PART IV
Item 14. Exhibits, Financial Statement Schedules And Reports On
Form 8-K................................................4
Signatures........................................................4
Exhibit Index.....................................................4
<PAGE>
PART I
ITEM 1. BUSINESS
This Annual Report on Form 10-K relates to the Trust Fund formed,
and the Mortgage Pass-Through Certificates, Series 1997-HUD 2 issued,
pursuant to a Pooling and Servicing Agreement, dated as of
November 1, 1997 (the "Pooling and Servicing Agreement"), by and
among Salomon Brothers Mortgage Securities VII, Inc. as sponsor
(the "Company"), Wilshire Servicing Corporation, as master servicer,
LaSalle National Bank, as trustee and REMIC administrator, and
ABN AMRO Bank, N.V., as fiscal agent. The Certificates have been
registered pursuant to the Act under a Registration Statement on
Form S-3 (No. 333-27083) (the "Registration
Statement").
Capitalized terms used herein and not defined have the same
meanings ascribed to such terms in the Pooling and Servicing Agreement.
This Annual Report is being filed by the Trustee, in its capacity as
such under the Pooling and Servicing Agreement, on behalf of Registrant.
The information contained herein has been supplied to the Trustee by
one or more of the Borrowers or other third parties without independent
review or investigation by the Trustee. Pursuant to the Pooling and
Servicing Agreement, the Trustee is not responsible for the accuracy
or completeness of such information.
ITEM 2. PROPERTIES
See Exhibits 99.1 and 99.2 hereto for Servicer s Annual Statement of
Compliance and Servicer s Independent Accountant s Report on Servicer's
servicing activities.
ITEM 3. LEGAL PROCEEDINGS
Except for claims arising in the ordinary course of business and
which are covered by liability insurance, there are no material pending
legal proceedings involving the Trust Fund, the Mortgages comprising the
Trust Fund or the Trustee, the Special Servicer or the Servicer with
respect to or affecting their respective duties under the Pooling and
Servicing Agreement.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of Certificateholders during
the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There was one registered holder of the Certificate representing an
equity interest in the Trust as of December 31, 1997. To the
Registrant's knowledge, as of that date, there was no principal market
in which the Certificates representing an equity interest in the Trust
were traded.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF A FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
The information required by Items 10, 11, 12 and 13 is not
applicable as the trust fund does not have directors or officers and
Certificateholders have no right to vote (except with respect to
required consents to certain amendments to the Pooling and Servicing
Agreement and upon certain events of default) or control the Trust
Fund.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a)
1. Servicer's Annual Statement of Compliance for the period ended
12/31/97.
2. Servicer's Independent Accountant's Report on Servicer's servicing
activities.
(b) All current Reports on Form 8-K for the Trust have been filed as of
12/31/97.
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its by the undersigned thereunto duly authorized.
LASALLE NATIONAL BANK, IN
ITS CAPACITY AS TRUSTEE UNDER
THE POOLING AND SERVICING
AGREEMENT ON BEHALF OF Salomon
Brothers Mortgage Securities
VII, Inc., REGISTRANT
By: /s/ Russell Goldenberg
Name: Russell Goldenberg
Title: Senior Vice President
Dated: April 14, 1998
EXHIBIT INDEX
Exhibit No. Description
99.1 Servicer's Annual Statement of Compliance
99.2 Servicer's Independent Accountants' Report on Servicer's servicing
activities
Exhibit 99.1
WILSHIRE CREDIT CORPORATION
P.O. Box 8517
Partlana, Oregon 972077-8517
(603) 223-5600
OFFICER'S CERTIFICATE
April 1, 1998
LaSalle National Bank
Attn: Asset-Backed Securities Trust Group
Salomon Brothers Mortgage Securities Series 1997-HUD2
135 South LaSalle Street \ Suite 1740
Chicago, IL 60674-4107
RE: Pooling & Servicing Agreement dated November 1, 1997 by and among
Salomon Brothers Mortgage Securities VII, Inc., Wilshire Servicing
Corporation, LaSalle National Bank-, and ABN Amro Bank N.V.
Wilshire Mortgage Loan Trust -Series 1997-HUD2 (pool 81)
Ladies and Gentleman-,
In accordance with the provision of section 3.20 of the above-
referenced Pooling & Servicing Agreement, the undersigned hereby
certifies that (a) a review of the activities of Wilshire Credit
Corporation (Servicer) during the preceding calendar year and of
Servicer's performance under this Agreement has been made under
my supervision and (b) to the best of my knowledge the Servicer
has falfilled all its respective obligations under the Agreement
throughout the year in all material respects.
Wilshire Credit Corporation
by: /s/ Chris Tassos
Name:Chris Tassos
Title: Executive Vice President
Wilshire Credit Corporation
By: /s/ Phillip Vincent
Name: Ohillip Vincent
Title: Chief Financial Officer
Wilshire Credit Corporation
by:/s/ Glenn Ohl
Name: Glenn Ohl
Title: Executive Vice President
TOLL FREE PHONE: (800) 77&0100 TOLL
FREE FAX. (800) 776-6599
FAX. (503) 22M799 TELEX: 376-2848 TO: EASYPLEX,
75716, 1350
Exhibit 99.2
ARTHUR ANDERSEN LLP
REPORT OF MEPENDENT PTTBLTC ACCOUNTANTS
To the Board of Directors of
Wilshire Credit Corporation:
We have examined management's assertion about Wilshire Credit
Corporation's (the Company) compliance with the minimum seivicing
standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers (USAP) and that
the Company had in effect a fidelity bond policy in the amount of S5
million and an errors and omissions policy in the amount of Sl million
as of and for the year ended December 31, 1997 included in the
accompanying Management's Assertion on Minimum Servicing Standards.
Management is responsible for the Company's compliance with those
minimum servicing standards and for maintaining a fidelity bond and
errors and omissions policy. Our responsibility is to express an
opinion on management's assertion based on our examination.
Our examination was made in accordance with standards established
by the American Institute of Certified Public Accountants and,
accordingly, included examining, on a test basis, evidence about the
Company's compliance wiEh the minimum servicing standards and
performing such other procedures as we considered necessary in
the circumstances. We believe that our examination provides a
reasonable basis for our opinion. Our examination does not provide
a legal determination on Company's ct~mpliance with the minimum
servicing standards.
In our opinion, management's assertion that the Company complied with
the afOT=CntiOned minimum servicing standards and that the Company
had in effect a fidelity bond policy in the amount of $5 million
and an errors and omissions policy in the amount of S I million as
of and for the year ended December 3 1, 1997 is fairly stated, in all
material respects.
/s/ Arthur Anderson LLP
Los Amgclcs, California
March 31, 1998
