SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from________________to_______________.
Commission file number '033-61474
ADVANTA Mortgage Loan Trust 1998-3
New York 33-0839210
(State of other jurisdictio (IRS Employer
incorporation or organizat Identification No.)
c/o Bankers Trust Company
4 Albany Street
New York, NY 10015
Registrant's telephone number, including area code: (212) 250-2500
Securities registered pursuant to Section 12(b) of the Act.
Title of each class Name of each exchange on
which registered:
None None
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
Indicated 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 ($ 229.405 of this chapter) 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. [X]
State the aggregate market value of the voting stock held by non-affiliates
of registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices
of such stock, as of specified date within 60 days prior to the date of filing:
$945,130,445.68
Documents Incorporated by Reference: Not Applicable
PART 1
ITEM 1 - BUSINESS
The ADVANTA Mortgage Loan Trust 1998-3, (the "Trust" or "Issuer") is
a New York common law trust established as of September 1, 1998,
pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") between ADVANTA Mortgage Conduit Services, Inc. as
sponsors (the "Sponsor") and ADVANTA Mortgage Corp. USA as Master
Servicer (the "Master Servicer") (together, the "Companies") and Bankers
Trust Company, acting thereunder not in its individual capacity but solely as
trustee (the "Trustee"). The Issuer's only purpose is the issuance of
$1,000,000,000.00 principal amount of ADVANTA Mortgage Loan Asset-
Backed Certificates, Series 1998-3, Class A-1, Class A-2, (the
"Certificates") and the subordinated residual certificates pursuant to the
Pooling and Servicing Agreement. On September 10, 1998, the Sponsor
sold $1,000,000,000.00 aggregate principal amount of mortgage loans (the
"Mortgage Loans"), to the Issuer in exchange for the Certificates, and sold
the Certificates pursuant to a public offering, the underwriting of which was
co-managed by Salomon Smith Barney, Lehman Brothers, J.P. Morgan &
Co., and Prudential Securities Incorporated. The Mortgage Loans and the
distributions thereon, along with certain insurance proceeds, certain proceeds
proceeds obtained on foreclosure and any investment income earned
thereon, are the only significant assets of the Issuer. The Certificates
represent obligations solely of the Issuer. The Certificates were registered
under a Registration Statement (file no. 033-61474) on Form S-3 declared
effective on March 10, 1998.
ITEM 2 - PROPERTIES
The Issuer neither owns nor leases any physical properties.
ITEM 3 - LEGAL PROCEEDINGS
The Master Servicer is not aware of any material pending legal proceedings
involving either the Issuer, the Trustee, the Sponsor or the Master Servicer
with respect to the Certificates or the Issuer's property.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter has been submitted to a vote of the holders of beneficial interests
in the Issuer through the solicitation of proxies or otherwise.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCK-
HOLDER MATTERS
The Trust is not an issuer of common stock in a corporation, although the
Certificates represent equity interest that has voting rights. The equity of
the Trust consists of the beneficial or ownership interest therein for which,
to the best knowledge of the Master Servicer, there is no established
public trading market.
As of March 4, 1999, there were approximately 9 holders of the Class A-1
Certificates, and 9 holders of the Class A-2 Certificates. The number of
holders includes individual participants in security position listings. As of
December 28, 1998, 3 monthly distributions had been made to the holders
of the Certificates.
ITEM 6 - SELECTED FINANCIAL DATA
Not applicable.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATION
On September 23, 1998, the Issuer issued $500,000,000.00 aggregate
principal amount of Class A-1 Certificates having a floating rate
and $500,000,000.00 aggregate principal amount of Class A-2 having a
floating rate, which are collateralized by Mortgage Loans. The sale of
the Mortgage Loans to the Issuer, the issuance of the Certificates and
the simultaneous delivery
of the Certificates to the Companies for sale pursuant to a public offering, the
underwriting of which was co-managed by Salomon Smith Barney, Lehman
Brothers, J.P. Morgan & Co., and Prudential Securities Incorporated
has been accounted for as a sale of the Certificates.
The value of the Certificates issued by the Issuer equaled the value of the
Mortgage Loans conveyed to the Issuer by the Companies, plus funds held in
the Prefunding Account (if any) and subsequently used to acquire additional
mortgage loans. Accordingly, there was no income, expense, gain or loss
resulting from the aforementioned transaction.
CAPITAL RESOURCES AND LIQUIDITY
The Issuer's primary sources of funds with respect to the Certificates will be
receipts of interest on and principal of the Mortgage Loans, along with certain
insurance proceeds, certain proceeds obtained on foreclosure and any
investment income earned thereon. The respective management's of the
Companies believe that the Issuer will have sufficient liquidity and capital
resources to pay all amounts on the Certificates as they become due and
all other anticipated expenses of the Issuer. The Issuer does not have, nor
will it have in the future, any significant source of capital for payment of the
Certificates and its operating expenses other than the receipt of interest on
and principal of the mortgage loans, certain insurance proceeds and certain
proceeds obtained on foreclosure and any payments made by the Certificate
Insurer. The Issuer is a limited purpose trust. The Certificates represent
obligations solely of the Issuer.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes of accountants or disagreements on accounting or
financial disclosures between the Issuer and its accountants.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Issuer does not have any directors or officers.
ITEM 11 - EXECUTIVE COMPENSATION
Not applicable.See "Item 10-Directors and Executive Officers of the Registrant".
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth (i) the name and address of each entity owning
more than 5% of the outstanding principal amount of the ADVANTA
Mortgage Loan Asset-Backed Certificates, Series 1998-3, Class A-1
("Class A-1 Certificates"), the name and address of each entity owning more
than 5% of the outstanding principal amount of the ADVANTA Mortgage Loan
Trust Asset-Backed Certificates, Series 1998-3, Class A-2 ("Class A-2
Certificates");(ii) the principal amount of the Class A-1 Certificates or Class
A-2 Certificates and (iii) the percent that the principal amount of Class A-1
Certificates of Class A-2 Certificates owned represents of the outstanding
principal amount of the Class A-1 Certificates or Class A-2 Certificates,
respectively. The information set forth in the table is based upon
information obtained by the Issuer from Depository Trust Company.
The Master Servicer is not aware of any Schedules 13D or 13G filed with the
Securities and Exchange Commission in respect of the Certificates.
Amount Owned
(All Dollar Amounts are in Thousands)
Name and Address Principal Percent
Class A-1 Certificates
Bankers Trust Company
J. Lasher, c/o BT Services Tennessee Inc
648 Grassmere Park Drive
Nashville, TN 37211 17.84%
Barclays Global Investors, NA
Linda Selbach
45 Fremont Street, 33rd Floor
San Francisco, CA 94105 10.00%
Chase Bank of Texas, NA
Barbara Deason
PO Box 2558
Houston, TX 77252-2558 12.50%
Chase Manhattan Bank
Orma Trim, Supervisor
4 New York Plaza, 13th Floor
New York, NY 10004 1 36.50%
Norwest Bank Minnesota, NA
John Kemper
733 Marquette Avenue
Minneapolis, MN 55479-0056 12.76%
Class A-2 Certificates
Bank of New York
Diana Karenbauer
925 Patterson Plank Rd
Secaucus, NJ 07094 6.90%
Bankers Trust Company
J. Lasher, c/o BT Services Tennessee
648 Grassmere Park Drive
Nashville, TN 37211 5.00%
Barclays Global Investors, NA
Linda Selbach
45 Fremont Street, 33rd Floor
San Francisco, CA 94105 5.00%
Chase Manhattan Bank
Orma Trim, Supervisor
4 New York Plaza, 13th Floor
New York, NY 10004 2 50.80%
Merrill Lynch, Pierce Fenner & Smith
Veronica O'Neill
4 Corporate Place, Corp Park 287
Piscataway, NJ 08855 7.00%
Morgan Stanley & Co, Inc.
Launa McAfee
One Pierrepont Plaza, 7th Floor
Brooklyn, NY 11201 13.74%
Norwest Bank Minnesota, NA
John Kemper
733 Marquette Avenue
Minneapolis, MN 55479-0056 5.10%
State Street Bank & Trust
J. Callahan, Global Corp Action Dept JAB5W
PP Box 1631
Boston, MA 02105-1631 6.00%
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements: Not applicable.
2. Financial Statement Schedules: Not applicable.
3. Exhibits: As the Issuer was established as of September 1,
1998, the Master Servicer was obligated to prepare an Annual Statement to
Certificateholders as to Compliance for the year ended December 31, 1998,
and mail such statement to the Certificateholders on or before the last day
of March, 1999 and Independent Certified Public Accountants were required
to prepare an annual report pertaining to the compliance of the Master
Servicer with its servicing obligations pursuant to the Pooling and Servicing
Agreement on or before the last day of March, 1999. The Annual Statement
to Certificate holders as to Compliance is included herewith as Exhibit 28.1
and the Annual Independent Certified Public Accountants' Report is included
herewith as Exhibit 28.2. The Statement to Certificateholders on December
28, 1998, is included herewith as Exhibit 28.3.
Exhibit No. Description
*3.1 Certificates of Incorporation of the
Companies
*3.2 By-laws of the Companies
*4 Pooling and Servicing Agreement
28.1 Annual Statement to Certificateholders
as to Compliance for the year ended
December 31, 1998.
28.2 Annual Independent Certified Public
Accountants' Report.
28.3 Report of Management on Compliance
with Minimum Servicing Standards
28.4 Statement to Certificateholders on
December 28, 1998.
* Incorporated by reference to the Exhibit of the same designation filed with
the Issuer's Form S-3 registration statement declared effective March 10,
1998.
(b) Reports on Form 8-K.
Three reports on Form 8-K have been filed by the Issuer during the
period covered by this report.
Items Reported/Financial
Date of Reports on Form 8-K Statements Filed
October 25, 1998Monthly Report for the September 1998 Monthly
Period relating to the ADVANTA Mortgage Loan
Asset- Backed Certificates 1998-3, Class
A-1, and Class A-2 issued by the ADVANTA
Mortgage Loan Trust 1998-3.
November 25, 199Monthly Report for the October 1998 Monthly
Period relating to the ADVANTA Mortgage Loan
Asset- Backed Certificates 1998-3, Class
A-1, and Class A-2 issued by the ADVANTA
Mortgage Loan Trust 1998-3.
December 28, 199Monthly Report for the November 1998 Monthly
Period relating to the ADVANTA Mortgage Loan
Asset- Backed Certificates 1998-3, Class
A-1, and Class A-2 issued by the ADVANTA
Mortgage Loan Trust 1998-3.
(c) See "Item 14(a) (3)-Exhibits".
(d) Not applicable.
SIGNATURES
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
behalf by the undersigned, thereunto duly authorized.
ADVANTA Mortgage Corp., USA,
as Master Servicer and on behalf of
ADVANTA Mortgage Loan Trust 1998-3
Registrant
BY; /s/ William P. Garland
William P. Garland
Senior Vice President
Loan Service Administration
March 31, 1999
INDEX TO EXHIBITS (Item 14(c))
Exhibit # Description
*3.1 Certificates of Incorporation of the Companies
*3.2 By-laws of the Companies.
*4 Pooling and Servicing Agreement
28.1 Annual Statement to Certificateholders as to
Compliance for the year ended December 31,
1998.
28.2 Annual Independent Certified Public Account-
ants' Report.
28.3 Report of Management on Compliance with
Minimum Servicing Standards.
28.4 Statement to Certificateholders on December 28,
1998.
* Incorporated by reference to the Exhibit of the same designation filed with
the Issuer's Form S-3 registration statement declared effective March 10,
1998.
<TABLE>
EXHIBIT 28.1
<S>
March 24, 1999
Bankers Trust Company(293)
Attention: Mark McNeill
3 Park Plaza -- 16th Floor
Irvine, CA 92714
RE: Annual Statement as to Compliance
Pursuant to that certain Loan Servicing Agreement ("Agreement") dated as of
September 1, 1998, relating to ADVANTA Mortgage Loan Trust 1998-3, I,
William P. Garland, hereby certify that (I) a review of the activities of the Servicer
during the preceding year and the performance under this Agreement has
been made under my supervision, and (II) to the best of my knowledge, based
on such review, the Servicer has fulfilled all its obligations under this Agreement
for such year.
Sincerely,
BY; /s/ William P. Garland
William P. Garland
Senior Vice President
Loan Service Administration
WPG/cg
cc: Mr. James L. Shreero
Annette Aguirre, Esq.
Mr. Mark Casale
<S>
</TABLE>
<TABLE>
EXHIBIT 28.2
<S>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To ADVANTA Mortgage Corp. USA:
We have examined management's assertion included in the accompanying Report
of Management on Compliance with Minimum Servicing Standards, that Advanta
Mortgage Corp. USA, an indirect wholly-owned subsidiary of Advanta Corp., complied
with the minimum servicing standards identified in the Mortgage Bankers Association of
America's Uniform Single Attestation Program for Mortgage Bankers (USAP) and that
Advanta Mortgage Corp. USA had in effect fidelity bond coverage in the amount of $15 million
and mortgage contingent liability protection coverage in the amount of $5 million per
occurrence as of and during the year ended December 31, 1998. As discussed
in the accompanying Report of Management on compliance with Minimum Servicing
Standards, Management is responsible for Advanta Mortgage Corp. USA's compliance
with those minimum servicing standards and maintaining a fidelity bond and errors
and omissions policies. Our responsibility is to express an opinion on
management's assertion about Advanta Mortgage Corp. USA's compliance
based on our examination.
Our examination was made in accordance with attestation standards established
by the American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about Advanta Mortgage Corp. USA's compliance
with the minimum servicing standards and performing such other procedures as we
considered necessary in the circumstances. We believe that our examination provides
provides a reasonable basis for our opinion. Our examination does not provide a legal
determination on Advanta Mortgage Corp. USA's compliance with the minimum
servicing standards.
In our opinion, management's assertion that Advanta Mortgage Corp. USA complied with the
aforementioned minimum servicing standards and that Advanta Mortgage Corp. USA had in
effect fidelity bond coverage in the amount of $15 million and mortgage contingent liability
protection coverage in the amount of $5 million per occurrence as of and during the year
ended December 31, 1998 is fairly stated, in all material respects.
BY; /s/ Arthur Andersen LLP
Philadelphia, PA
January 26, 1999
<S>
</TABLE>
<TABLE>
EXHIBIT 28.3
<S>
REPORT OF MANAGEMENT ON COMPLIANCE WITH
MINIMUM SERVICING STANDARDS
As of and during the year ended December 31, 1998, Advanta Mortgage Corp. USA has
complied in all material respects with the minimum servicing standards as set forth in the
Mortgage Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers. As of and during the same period, Advanta Mortgage Corp. USA had in effect fidelity
bond coverage in the same amount of $15 million and mortgage contigent liability protection
coverage in the amount of $5 million per occurrence.
BY; /s/ William P. Garland BY; /s/ James L. Shreero
William P. Garland James L. Shreero
Senior Vice President Senior Vice President
Loan Servicing and Chief Financial
Officer
Finance and Accounting
<S>
</TABLE>
<TABLE>
EXHIBIT 28.4
ADVANTA Mortgage Loan Trust 1998-3
Statement to Certificateholders
<CAPTION>
Original Prior
Face Principal
Class Value Balance Interest Principal Total
<S> <C> <C> <C> <C> <C>
A-1 500,000,000. 493,140,648. 2,420,70 5,793,260 8,213,964.30
A-2 500,000,000. 492,103,248. 2,447,18 5,725,439 8,172,627.59
RS -
Totals 1,000,000,000. 985,243,897. 4,867,89 11,518,699. 16,386,591.89
</TABLE>
<TABLE>
<CAPTION>
Current Pass-Through
Realized Deferred Principal Rates
Class Losses Interest Balance Current Next
<S> <C> <C> <C> <C> <C>
A-1 487,347,388. 5.355000% 5.917500%
A-2 486,377,809. 5.425000% 5.987500%
RS 0.000000% 0.000000%
Totals 973,725,197.94
</TABLE>
<TABLE>
<CAPTION>
Prior Current
Principal Principal
Class CUSIP Balance Interest Principal Total Balance
<S> <C> <C> <C> <C> <C> <C>
A-1 00755WGA8 986.281298 4.841408 11.586521 16.427929 974.694777
A-2 00755WGB6 984.206497 4.894377 11.450878 16.345255 972.755619
RS AM980103 0.000000 0.000000 0.000000 0.000000 0.000000
</TABLE>
<TABLE>
Delinquent Loan Information:
<CAPTION>
90+ Days Loans Loans
30-59 60-89 excldg f/c,REO in in
Days Days & Bkrptcy REO Foreclosure
<S> <C> <C> <C> <C> <C>
Group 1 Principal Balanc 12,028,576 4,289,98 480,76 3,395,259
% of Pool Balanc 2.42070% 0.86334% 0.09675% 0.00000% 0.68328%
Number of Loans 132 44 5 0 39
% of Loans 2.66559% 0.88853% 0.10097% 0.00000% 0.78756%
Group 2 Principal Balanc 11,480,788 3,706,40 960,77 2,143,523
% of Pool Balanc 2.33991% 0.75541% 0.19582% 0.00000% 0.43687%
Number of Loans 215 63 18 0 32
% of Loans 2.89017% 0.84689% 0.24197% 0.00000% 0.43017%
Loans in Bankrup Group 1 859,724.40
Group 2 1,580,611.91
2,440,336.31
</TABLE>
<TABLE>
General Mortgage Loan Information:
<CAPTION>
Group I Group II Total
<S> <C> <C> <C>
Beginning Aggregate Mortgage Loan Balance 501,191,088. 494,969,883. 996,160,972.
Prefunding
Principal Reduction 4,285,932 4,318,72 8,604,661
Ending Aggregate Mortgage Loan Balance 496,905,155. 490,651,154. 987,556,310.
Beginning Aggregate Mortgage Loan Count 4990 7503 12493
Ending Aggregate Mortgage Loan Count 4952 7439 12391
Current Weighted Average Coupon Rate 10.013661% 9.953372% 9.983705%
Next Weighted Average Coupon Rate 10.014467% 9.949001% 9.981941%
</TABLE>
<TABLE>
Mortgage Loan Principal Reduction Information:
<CAPTION>
Group I Group II Total
<S> <C> <C> <C>
Scheduled Principal 273,30 802,8 1,076,165
Curtailments
Prepayments 3,941,060 3,515,86 7,456,928
Repurchases/Substitutions 71,4 71,4
Liquidation Proceeds
Other Principal
Less: Realized Losses
Less: Delinquent Principal not Advanced by Servicer
Total Principal Reduction 4,285,932 4,318,72 8,604,661
</TABLE>
<TABLE>
Servicer Information:
<CAPTION>
Group I Group II Total
<S> <C> <C> <C>
Accrued Servicing Fee for the Current Period 208,82 206,2 415,06
Less: Amounts to Cover Interest Shortfalls 2, 3,0
Less: Delinquent Service Fees 34,1 37,8 72,0
Collected Servicing Fees for Current Period: 174,47 165,4 339,97
Advanced Principal 12,2 44,2 56,5
Advanced Interest 685,60 772,3 1,457,923
</TABLE>
<TABLE>
<CAPTION>
Other Subordination
Prepayment Unscheduled Increase Applied Realized Loss Unpaid
Principal Principal Principal Realized Loss Amortization Realized Loss
Class Distributed Distributed Distributed Amount Amount Amount
<S> <C> <C> <C> <C> <C> <C>
A-1 3,750,41 35,9
A-2 3,706,51 35,5
RS
Total 7,456,92 71,5
</TABLE>
<TABLE>
<CAPTION>
Has a Senior Prior Supplemental Extra Extra
Trigger Event Enhancement Subordinated Interest Principal Principal
Occurred Percentage Amount Amount Dist. Amt. Distributed
<S> <S> <C> <C> <C> <C> <C>
Group I NO N/A 8,050,43 1,507,32 1,507,327
Group II NO N/A 2,866,63 1,406,70 1,406,709
Total 10,917,075 2,914,03 2,914,037
Current Target
Subordinated Overcollateralization
Amount Amount
<S> <S> <S>
Group I 9,557,767.37 26,289,224.05
Group II 4,273,345.35 17,750,000.82
Total 13,831,112.72 44,039,224.87
</TABLE>
<TABLE>
<CAPTION>
<S> <S> <C> <C> <C> <C> <C>
Group I Group II Total
Insured Payment 0.00 0.00 0.00
Pool Rolling six month delinquency rate N/A N/A N/A
Pool Cumulative 12 months loss ratio - average balance N/A N/A N/A
Pool Cumulative 12 months loss ratio - current balance 0.00% 0.00% 0.00%
60+ day Delinquent loans (excluding f/c, reo & bankruptcy) 4,770,755.26 4,667,182.89 9,437,938.15
Book Value of REO loans 0.00 0.00 0.00
</TABLE>
<TABLE>
TOTAL AVAILABLE FUNDS:
<CAPTION>
<S> <S> <C> <C> <C>
Current Interest Collected: 6,757,858.17
Principal Collected: 8,476,712.98
Insurance Proceeds Received: -
Net Liquidation Proceeds: -
Delinquency Advances on Mortgage Interest: 1,457,923.88
Delinquency Advances on Mortgage Principal 56,520.00
Substitution Amounts: 71,428.76
Trust Termination Proceeds: -
Investment Earnings on Certificate Account: 12,366.47
Capitalized Interest Requirement: -
Capitalized Interest Fund Earnings 0.00
Capitalized Interest Account 0.00
Investment Earnings on Pre-Funding Account 0.00
Pre-Funding Account: -
Sum of the Above Amounts: 16,832,810.26
LESS:
Servicing Fees (including PPIS): 343,034.92
Dealer Reserve: -
Trustee Fees: 5,810.93
Insurance Premiums: 97,372.52
Reimbursement of Delinquency Advances/Servicing -
Total Reductions to Available Funds Amount: 446,218.37
Total Available Funds: 16,386,591.
</TABLE>
