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UNITED STATES
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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File number 333-44585-04
First Alliance Mortgage Loan Trust 1998-3
Minnesota 52-2151946
(State of other jurisdiction (I.R.S. Employer
of Identification No.)
incorporation or organization)
First Alliance Mortgage Loan Trust 1998-3
C/O Norwest Bank Minnesota, National Association, as Trustee
Sixth Street and Marquette Avenue
Minneapolis, MN 55479-0113
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (612) 667-9764
Securities registered pursuant to Section 12(b) of the Act:
None None
(Title of each class) (Name of each exchange on
which registered)
None
(Title of class)
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 No X. *
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.
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. Not
applicable.
Number of shares of common stock outstanding as of December 31, 1998. Not
applicable.
Documents Incorporated by Reference. Not applicable.
* All filings required have been made, several of which have been filed late.
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Index
Part I
Item 1 - BUSINESS
Item 2 - PROPERTIES
Item 3 - LEGAL PROCEEDINGS
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Part II
Item 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Item 6 - SELECTED FINANCIAL DATA
Item 7 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Item 7A - QUANTITIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Part III
Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Item 11 - EXECUTIVE COMPENSATION
Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Part IV
Item 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SIGNATURES
INDEX TO EXHIBITS
Exhibit 99.1
Exhibit 99.2
Exhibit 99.3
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PART I
ITEM 1 - BUSINESS
Not Applicable.
ITEM 2 - PROPERTIES
Not Applicable.
ITEM 3 - LEGAL PROCEEDINGS
First Alliance Mortgage Company (the "Seller")is not aware of any material
pending legal proceedings involving the First Alliance Mortgage Loan Trust
1998-3 established pursuant to the Pooling and Servicing Agreement dated as of
September 1, 1998, between the Seller and Norwest Bank Minnesota as trustee and
master servicer, as amended and restated as of February 12, 1999.
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 Trust through the solicitation of proxies or otherwise.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
To the best knowledge of the Seller, there is no established public
trading market for any beneficial interests in the Trust.
All of the Class A-1, A-2, A-3 and A-4 Certificates issued by the Trust
are held by the Depository Trust Company ("DTC") which in turn maintains records
of holders of beneficial interests in such Certificates. Based on information
obtained from DTC, as of December 31, 1998, there were 3 holders of the Class
A-1 Certificate, 8 holders of the Class A-2 Certificate, 2 holders of the Class
A-3 Certificate, and 2 holders of the Class A-4 Certificate.
ITEM 6 - SELECTED FINANCIAL DATA
Not applicable.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Not applicable.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
In addition to the information included in the Annual Compilation of
Monthly Trustee's Statements attached as Exhibit 99.3 hereto, the gross
servicing compensation paid to the Servicer for the year ended December 31, 1998
was $123,789.
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
Not applicable.
ITEM 11 - EXECUTIVE COMPENSATION
Not applicable.
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 each Class of Class A
Certificates of the Trust; (ii) the principal amount of the Class of
Certificates owned by each and (iii) the percent that the principal amount of
the Class of Certificates owned by such entity represents of the outstanding
principal amount of the Class of Certificates. The information set forth in the
table for the Class A Certificates is based upon information obtained from DTC
and represents ownership of beneficial interest in the Certificates held by DTC.
The Seller 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 Class Principal Percent
- ---------------- ----- --------- -------
Chase Manhattan Bank A-1 $14,000,000 47%
4 New York Plaza
13th Floor
New York, NY 10004
First Union National Bank A-1 $14,000,000 47%
1525 West W.T. Harris Blvd.
3A4
Charlotte, NC 28288
Paine Webber Incorporated A-1 $2,000,000 7%
1000 Harbor Blvd.
Weehawken, NJ 07087
The Bank of New York A-2 $3,000,000 14%
925 Patterson Plank RD.
Secaucus, NJ 07094
Bankers Trust Company A-2 $3,000,000 14%
C/O BT Services Tennessee INC.
648 Grassmere Park Drive
Nashville, TN 37211
Raymond, James & Associates, INC. A-2 $1,900,000 9%
880 Carilion Parkway
P.O. Box 12749
St. Petersburg, FL 33733
UMB Bank, National Association A-2 $7,000,000 32%
P.O. Box 419260
Kansas City, MO 64141-6260
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Union Bank of California, N.A. A-2 $5,000,000 23%
P.O. Box 109
San Diego, CA 92112-4103
The Bank of New York A-3 $13,000,000 72%
925 Patterson Plank RD.
Secaucus, NJ 07094
State Bank and Trust Company A-3 $5,000,000 28%
Global Corp Action Dept JAB5W
P.P. Box 1631
Boston, MA 02105-1631
The Bank of New York A-4 $6,000,000 20%
925 Patterson Plank RD.
Secaucus, NJ 07094
Chase Manhattan Bank A-4 $24,000,000 80%
4 New York Plaza
13th Floor
New York, NY 10004
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:
Exhibit No. Description
99.1 Statement of Compliance of the Servicer - First
Alliance Mortgage Company
99.2 Annual Report of Independent Accountants with
respect to the Servicer's overall
servicing operations - Deloitte & Touche LLP
99.3 Annual Compilation of Monthly Trustee's Statements
(b) Reports on Form 8-K.
Reports on Form 8-K have been filed by the Issuer during the period covered
by this report.
Date of Reports on Items Reported/Financial
Form 8-K Statements Filed
November 19, 1998 Trustee's Monthly Report for the
October Monthly Period.
December 21, 1998 Trustee's Monthly Report for the
November Monthly Period.
March 18, 1999 Trustee's Monthly Report for the
December Monthly Period.
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SIGNATURES
Pursuant to the requirements of Section 13 and 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.
FIRST ALLIANCE MORTGAGE COMPANY
on behalf of
First Alliance Mortgage Loan Trust 1998-3
By: /s/ Francisco Nebot
---------------------------------------
Name: Francisco Nebot
Title: Executive Vice President and Chief Financial Officer
Date: March 18, 1999
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INDEX TO EXHIBITS
Item 14(C)
Exhibit No. Description
99.1 Statement of Compliance of the Servicer - First Alliance
Mortgage Company
99.2 Annual Report of Independent Accountants with respect to
the Servicers' overall servicing operations -
Deloitte & Touche LLP
99.3 Annual Compilation of Monthly Trustee's Statements
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Exhibit 99.1
FIRST ALLIANCE MORTGAGE EQUITY TRUST 1998-3
OFFICER'S CERTIFICATE OF COMPLIANCE
Pursuant to the terms of the Pooling and Servicing Agreement dated as of
September 1, 1998 among First Alliance Mortgage Company as Seller and Servicer
and Norwest Bank, National Association, as Trustee, I have reviewed the
activities of the Servicer during the year ended December 31, 1998. I have also
reviewed its performance under the Pooling and Servicing Agreement and to the
best of my knowledge, based on such review, the Servicer has fulfilled all its
obligations under the Agreement throughout such period.
By: /s/ Brian Chisick
--------------------------------
Name: Brian Chisick
Title: President and Chief Executive Officer
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Exhibit 99.2
Deloitte &
Touche LLP
Suite 1200 Telephone: (714) 436-7100
695 Town Center Drive Facsimile: (714) 436-7200
Costa Mesa, California 92626-1924
INDEPENDENT AUDITORS' REPORT
We have examined management's assertion about First Alliance Mortgage Company's
compliance with the minimum servicing standards identified in the Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers (USAP) as of and for the year ended December 31, 1998, included in the
accompanying management assertion. Management is responsible for First Alliance
Mortgage Company's compliance with those minimum servicing standards. Our
responsibility is to express an opinion on management's assertion about the
entity's compliance 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 First Alliance Mortgage Company'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 a reasonable basis for our opinion. Our examination does
not provide a legal determination on First Alliance Mortgage Company's
compliance with the minimum servicing standards.
In our opinion, management's assertion that First Alliance Mortgage Company
complied with the aforementioned minimum servicing standards as of and for the
year ended December 31, 1998 is fairly stated, in all respects.
\s\ Deloitte & Touche LLP
Costa Mesa, CA
January 25, 1999
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Exhibit 99.3
First Alliance Mortgage Company
Series 1998-3
1998 - Annual Statement
DISTRIBUTION DOLLARS
ENDING
PERIOD CLASS CUST INTEREST PRINCIPAL BALANCE
199810 A-1 $155,000.00 $1,032,496.28 $28,967,503.72
199811 A-1 $149,665.44 $932,998.12 $28,034,505.60
199812 A-1 $144,844.95 $828,814.17 $27,205,691.43
Total by Class $449,510.39 $2,794,308.57
ENDING
PERIOD CLASS CUST INTEREST PRINCIPAL BALANCE
199810 A-2 $112,933.33 $0.00 $22,000,000.00
199811 A-2 $112,933.33 $0.00 $22,000,000.00
199812 A-2 $112,933.33 $0.00 $22,000,000.00
Total by Class $338,799.99 $0.00
ENDING
PERIOD CLASS CUST INTEREST PRINCIPAL BALANCE
199810 A-3 $96,900.00 $0.00 $18,000,000.00
199811 A-3 $96,900.00 $0.00 $18,000,000.00
199812 A-3 $96,900.00 $0.00 $18,000,000.00
Total by Class $290,700.00 $0.00
ENDING
PERIOD CLASS CUST INTEREST PRINCIPAL BALANCE
199810 A-4 $140,940.72 $199,322.64 $29,800,677.37
199811 A-4 $140,546.02 $81,654.17 $29,719,023.20
199812 A-4 $135,914.29 $643,712.13 $29,075,311.06
Total by Class $417,401.03 $924,688.94
Total Class R Certificates: $0.00
Factor Information Per $1,000
PRINCIPAL INTEREST ENDING NOTE INIT NOTE CURR NOTE
CLASS DISTRIBUTION DISTRIBUTION BALANCE RATE RATE
A-1 93.14361900 14.98367966 906.85638100 6.20000% 6.20000%
A-2 N/A 15.39999954 1000.00000000 6.16000% 6.16000%
A-3 N/A 15.03888888 1000.00000000 6.46000% 6.46000%
A-4 30.82296466 13.91336766 969.17703533 5.83203% 5.31094%
Per $1,000
NOTE DISTRIBUTION: $5,215,408.92 52.15
SCHEDULED PRINCIPAL: $186,591.71
PREPAYMENTS: $2,961,832.92
SUBORDINATION INCREASE: $570,572.88
-------------
TOTAL PRINCIPAL DISTRIBUTION: $3,718,997.51 37.19
TOTAL INTEREST DISTRIBUTION: $1,496,411.41
LOAN PURCHASE PRICES
GROUP I: $256,513.21
GROUP II: 0.00
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SUBORDINATION REDUCTION AMOUNT
GROUP I: 0.00
GROUP II: 0.00
CURRENT REALIZED LOSSES
GROUP I: 0.00
GROUP II: 0.00
CUMULATIVE REALIZED LOSSES
GROUP I: 0.00
GROUP II: 0.00
DELINQUENT MORTGAGE LOANS(includes loans in foreclosure and bankruptcy)
GROUP I:
AGGREGATE
CATEGORY NUMBER LOAN BALANCE PERCENTAGE
30-59 DAYS 3 $245,640.71 0.36%
60-89 DAYS 3 $317,632.23 0.47%
90+ DAYS 0 $0.00 0.00%
GROUP II:
AGGREGATE
CATEGORY NUMBER LOAN BALANCE PERCENTAGE
30-59 DAYS 1 $80,498.30 0.28%
60-89 DAYS 0 $0.00 0.00%
90+ DAYS 0 $0.00 0.00%
LOANS IN FORECLOSURE(included in delinquencies above)
GROUP I: AGGREGATE
NUMBER LOAN BALANCE PERCENTAGE
7 $619,753.49 0.92%
GROUP II: AGGREGATE
NUMBER LOAN BALANCE PERCENTAGE
1 $80,498.30 0.28%
LOANS IN BANKRUPTCY(included in delinquencies above)
GROUP I: AGGREGATE
NUMBER LOAN BALANCE PERCENTAGE
0 $0.00 0.00%
GROUP II: AGGREGATE
NUMBER LOAN BALANCE PERCENTAGE
0 $0.00 0.00%
REO PROPERTIES(included in delinquencies above)
GROUP I: AGGREGATE
NUMBER LOAN BALANCE PERCENTAGE
0 $0.00 0.00%
GROUP II: AGGREGATE
NUMBER LOAN BALANCE PERCENTAGE
0 $0.00 0.00%
ENDING AGGREGATE LOAN BALANCE
GROUP I: $67,618,334.84
GROUP II: $29,233,737.65
BOOK VALUE OF REO PROPERTY:
GROUP I: 0.00
GROUP II: 0.00
