--------------------------------------
OMB APPROVAL
--------------------------------------
OMB Number: 3235-0063
Expires: May 31, 2000
Estimated average burden
hours per response 1711.00
--------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR L5(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
Commission file number 333-32775
THE MONEY STORE TRUST 1998-C (AND THE ORIGINATORS LISTED BELOW UNDER A SALE AND
SERVICING AGREEMENT, DATED AS OF AUGUST 31, 1998 PROVIDING FOR THE ISSUANCE OF
THE MONEY STORE HOME EQUITY ASSET BACKED NOTES SERIES 1998-C).
TMS MORTGAGE INC.
THE MONEY STORE/D.C. INC.
THE MONEY STORE/KENTUCKY INC.
THE MONEY STORE HOME EQUITY CORP.
THE MONEY STORE/MINNESOTA INC.
(Exact name of registrant as specified in its charter)
* *
(State or other jurisdiction (Trust I.R.S. Employer
of incorporation or organization) Identification No.)
707 THIRD STREET, WEST SACRAMENTO, CALIFORNIA 95605
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (916) 617-1000
* See Schedule A attached hereto.
<PAGE>
Schedule A
State of IRS Employer
REGISTRANT INCORPORATION ID NUMBER
- - ---------- ------------- ---------
TMS Mortgage Inc. New Jersey 22-3217781
The Money Store/D.C. Inc. D.C. 22-2133027
The Money Store/Kentucky Inc. Kentucky 22-2459832
The Money Store Home Equity Corp. Kentucky 22-2522232
The Money Store/Minnesota Inc. Minnesota 22-3003495
<PAGE>
Securities registered pursuant to section 12(g) of the Act:
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.
|X| Yes |_| No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 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.
Not Applicable.
State the aggregate market value of the Voting Stock held by non-affiliates of
the registrant.
Not Applicable
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of December 31, 1996.
Not Applicable
This Annual Report on Form 10-K is filed pursuant to a request for no-action
letter forwarded to the Office of Chief Counsel Division of Corporate Financing,
dated June 18, 1993, and the response of the SEC, dated August 4, 1993, to the
no-action request.
<PAGE>
PART I
ITEM 1. BUSINESS
Omitted pursuant to the "Request for no-action letter forwarded to the
Office of Chief Counsel Division of Corporate Financing," dated June 18,
1993, and the response of the SEC, dated August 4, 1993, to the no-action
request.
ITEM 2. PROPERTIES
Reference is made to the Annual Compliance Certificate attached hereto as
Exhibit 20.
Reference is made to the Annual Statement attached hereto as Exhibit 13.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no established trading market for Registrant's securities subject to
this filing.
Number of holders of record of the Certificates as of March 10, 1999: 19
ITEM 6. SELECTED FINANCIAL DATA
Omitted pursuant to the "Request for no-action letter forwarded to the
Office of Chief Counsel Division of Corporate Financing," dated June 18,
1993, and the response of the SEC, dated August 4, 1993, to the no-action
request.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Omitted pursuant to the "Request for no-action letter forwarded to the
Office of Chief Counsel Division of Corporate Financing," dated June 18,
1993, and the response of the SEC, dated August 4, 1993, to the no-action
request.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Annual Compliance Certificate attached as Exhibit
20.
Reference is made to the annual Independent Accountant's Report on the
Servicer's compliance with loan servicing standards as prepared by KPMG
Peat Marwick, the Servicer's and Registrant's Independent Certified Public
Accountants, accompanied by the Registrant's Management Assertion, and
attached as Exhibit 99 hereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Omitted pursuant to the "Request for no-action letter forwarded to the
Office of Chief Counsel Division of Corporate Financing," dated June 18,
1993, and the response of the SEC, dated August 4, 1993, to the no-action
request.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Omitted pursuant to the "Request for no-action letter forwarded to the
Office of Chief Counsel Division of Corporate Financing," dated June 18,
1993, and the response of the SEC, dated August 4, 1993, to the no-action
request.
ITEM 11. EXECUTIVE COMPENSATION
Omitted pursuant to the "Request for no-action letter forwarded to the
Office of Chief Counsel Division of Corporate Financing," dated June 18,
1993, and the response of the SEC, dated August 4, 1993, to the no-action
request.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following information is furnished as of March 10, 1999 as to each
Certificateholder of record of more than 5% of the Certificates:
Amount of
Name and Address of Security of
Title of Class Beneficial Owner Beneficial Owner % of Class
The Money Store Trust, Bankers Trust Company 70,000,000 17.4
Series 1998-C c/o BT Services
Asset Backed Notes, Tennessee Inc.
Class AF-1 648 Grassmere Park Drive
Nashville, TN 37211
Chase Bank of Texas, N.A. 34,000,000 8.5
P.O. Box 2558
Houston, TX 77252-2558
Chase Manhattan Bank 138,000,000 34.4
4 New York Plaza,
13th Floor
New York, NY 10004
Marine/Treasury 31,000,000 7.7
Investments
140 Broadway- Level A
New York, NY 10015
State Street Bank and 109,000,000 27.2
Trust Company
Global Corp. Action
Dept. JAB5W
P.O. Box 1631
Boston, MA 02105-1631
<PAGE>
Amount of
Name and Address of Security of
Title of Class Beneficial Owner Beneficial Owner % of Class
The Money Store Trust, Bankers Trust Company/ 73,100,000 54.7
Series 1998-C First Union Safekeeping
Asset Backed Notes, Dealer Clearance
Class AF-2 16 Wall Street, 5th Floor
New York, NY 10005
First Union Capital 16,150,000 12.1
Markets Corp.
8739 Research Blvd.
Charlotte, NC 28262-0675
First Union National Bank 7,100,000 5.3
1525 West W. T.
Harris Blvd. 3A4
Charlotte, NC 28288
Norwest Bank Minnesota, 14,900,000 11.1
National Association
733 Marquette Avenue
Minneapolis, MN 55479-0056
Wilmington Trust Company 10,000,000 7.5
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
<PAGE>
Amount of
Name and Address of Security of
Title of Class Beneficial Owner Beneficial Owner % of Class
The Money Store Trust, Bankers Trust Company 75,000,000 20.8
Series 1998-C c/o BT Services
Asset Backed Notes, Tennessee Inc.
Class AV 648 Grassmere Park Drive
Nashville, TN 37211
Chase Manhattan Bank 159,000,000 44.2
4 New York Plaza,
13th Floor
New York, NY 10004
State Street Bank and 126,000,000 35.0
Trust Company
Global Corp. Action
Dept. JAB5W
P.O. Box 1631
Boston, MA 02105-1631
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) None
(b)-(d) Omitted pursuant to the "Request for no-action letter forwarded
to the Office of Chief Counsel Division of Corporate Financing,"
dated June 18, 1993, and the response of the SEC, dated August 4,
1993, to the no-action request.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
(a)
1. The consolidated financial statements of MBIA Insurance
Corporation (the surety provider for The Money Store Asset Backed
Notes, Series 1998-C) and subsidiaries contained in the annual
report on form 10-K for the year ended December 31, 1998 which
has been filed with the SEC by MBIA Inc. on March 26, 1999 is
hereby incorporated herein by reference.
2. Not applicable
3. Exhibits
13. Annual Statement
20. Annual Compliance Certificate
99. Annual Independent Accountant's Report on the Servicer's
compliance with loan servicing standards as prepared by KPMG
Peat Marwick, the Servicer's and Registrant's Independent
Certified Public Accountants, accompanied by the
Registrant's Management Assertion.
(b)-(d) Omitted pursuant to the "Request for no-action letter forwarded
to the Office of Chief Counsel Division of Corporate Financing,"
dated June 18, 1993, and the response of the SEC, dated August 4,
1993, to the no-action request.
<PAGE>
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 as representative on behalf
of the trust on the 31st day of March, 1999.
TMS MORTGAGE INC.
THE MONEY STORE/D.C. INC.
THE MONEY STORE/KENTUCKY INC.
THE MONEY STORE HOME EQUITY CORP.
THE MONEY STORE/MINNESOTA INC.
By: /s/ JAMES RANSOM
------------------------------
James Ransom
Chief Accounting Officer
<PAGE>
EXHIBIT INDEX
DESCRIPTION PAGE NUMBER
Annual Statement 12
Annual Compliance Certificate 16
Annual Independent Accountant's Report 18
EXHIBIT 13
SERVICER'S CERTIFICATE
In Accordance with Section 6.10 of the Pooling and Servicing Agreement dated as
of August 31, 1998, The Money Store, Inc. reports the following information
pertaining to Series 1998-C, for the calendar year 1998
Per Section 6.10
(IX) Amount of Interest Received:
Pool I 15,828,293.86
Pool II 9,274,380.77
(XIII) Class "AF-1" Remittance Amount
(A) Current Interest Requirement 6,725,172.49
(B) Principal Distribution Amount 16,895,000.00
(C) Carry Forward Amount 0.00
(D) Monthly Advance for Bankruptcy 0.00
TOTAL CLASS "AF-1" REMITTANCE AMOUNT 23,620,172.49
Class "AF-2" Remittance Amount:
(A) Current Interest Requirement 2,168,433.26
(B) Principal Distribution Amount 5,633,000.00
(C) Carry Forward Amount 0.00
(D) Monthly Advance for Bankruptcy 0.00
TOTAL CLASS "AF-2" REMITTANCE AMOUNT 7,801,433.26
Pool I Remittance Amount:
(A) Current Interest Requirement 8,893,605.76
(B) Principal Distribution Amount 22,528,000.00
(C) Carry Forward Amount 0.00
(D) Monthly Advance for Bankruptcy 0.00
TOTAL POOL I REMITTANCE AMOUNT 31,421,605.76
Class "AV" Remittance Amount:
(A) Current Interest Requirement 6,011,566.63
(B) Principal Distribution Amount 16,623,000.00
(C) Carry Forward Amount 0.00
(D) Monthly Advance for Bankruptcy 0.00
TOTAL CLASS "AV" REMITTANCE AMOUNT 22,634,566.63
(XIX) (A) Servicing Fee for the Related Due Period
POOL I 371,398.71
POOL II 230,689.18
(B) Contingency fee for the related due period
POOL I 371,398.71
POOL II 230,689.18
(C) Amount to be deposited to the expense account - TRUSTEE
POOL I 130,686.55
POOL II 16,229.34
(D) Amount to be deposited to the insurance account - MBIA
POOL I 190,089.00
POOL II 130,681.00
(D) Trust Administrator Fee
POOL I 11,157.47
POOL II 9,693.16
<TABLE>
<CAPTION>
Per Section 6.10 1998-C SEPTEMBER OCTOBER NOVEMBER DECEMBER
(IX) Amount of Interest Received:
<S> <C> <C> <C> <C>
Pool I 2,800,404.73 4,217,968.69 4,315,131.43 4,494,789.01
Pool II 1,480,425.54 2,344,899.64 2,646,703.03 2,802,352.56
(XIII) Class "AF-1" Remittance Amount
(A) Current Interest Requirement 1,008,781.73 2,009,115.43 1,760,339.53 1,946,935.80
(B) Principal Distribution Amount 3,219,000.00 4,137,000.00 4,441,000.00 5,098,000.00
(C) Carry Forward Amount 0.00 0.00 0.00 0.00
(D) Monthly Advance for Bankruptcy 0.00 0.00 0.00 0.00
TOTAL CLASS "AF-1" REMITTANCE AMOUNT 4,227,781.73 6,146,115.43 6,201,339.53 7,044,935.80
Class "AF-2" Remittance Amount:
(A) Current Interest Requirement 326,944.44 645,694.73 575,377.01 620,417.08
(B) Principal Distribution Amount 1,073,000.00 1,379,000.00 1,481,000.00 1,700,000.00
(C) Carry Forward Amount 0.00 0.00 0.00 0.00
(D) Monthly Advance for Bankruptcy 0.00 0.00 0.00 0.00
TOTAL CLASS "AF-2" REMITTANCE AMOUNT 1,399,944.44 2,024,694.73 2,056,377.01 2,320,417.08
Pool I Remittance Amount:
(A) Current Interest Requirement 1,335,726.18 2,654,810.16 2,335,716.54 2,567,352.88
(B) Principal Distribution Amount 4,292,000.00 5,516,000.00 5,922,000.00 6,798,000.00
(C) Carry Forward Amount 0.00 0.00 0.00 0.00
(D) Monthly Advance for Bankruptcy 0.00 0.00 0.00 0.00
TOTAL POOL I REMITTANCE AMOUNT 5,627,726.18 8,170,810.16 8,257,716.54 9,365,352.88
Class "AV" Remittance Amount:
(A) Current Interest Requirement 903,475.20 1,800,686.82 1,569,482.73 1,737,921.88
(B) Principal Distribution Amount 2,632,000.00 5,546,000.00 3,579,000.00 4,866,000.00
(C) Carry Forward Amount 0.00 0.00 0.00 0.00
(D) Monthly Advance for Bankruptcy 0.00 0.00 0.00 0.00
TOTAL CLASS "AV" REMITTANCE AMOUNT 3,535,475.20 7,346,686.82 5,148,482.73 6,603,921.88
(XIX) (A) Servicing Fee for the Related Due Period
POOL I 64,814.45 99,002.84 101,608.78 105,972.64
POOL II 36,788.44 58,350.07 65,925.78 69,624.89
(B) Contingency fee for the related due period
POOL I 64,814.45 99,002.84 101,608.78 105,972
POOL II 36,788.44 58,350.07 65,925.78 69,624.89
(C) Amount to be deposited to the expense account - TRUSTEE
POOL I 5,684.38 5,638.77 4,923.68 114,439.72
POOL II 3,825.00 3,797.04 4,325.65 4,281.65
(D) Amount to be deposited to the insurance account - MBIA
POOL I 45,698.00 48,648.00 48,143.00 47,600.00
POOL II 33,750.00 32,759.00 32,250.00 31,922.00
(D) Trust Administrator Fee
POOL I 0.00 3,759.18 3,720.12 3,678.17
POOL II 0.00 3,275.88 3,225.04 3,192.24
</TABLE>
By: /s/ JAMES RANSOM
------------------------------
James Ransom
Chief Accounting Officer
EXIHIBIT 20
OFFICER'S CERTIFICATE
I, James Ransom, Chief Accounting Officer of The Money Store Inc., a New
Jersey Corporation (The "Company") do hereby certify that:
1. The Company (as Servicer under the following Pooling and Servicing
Agreements):
A. TMS Home Equity Loan Asset Backed Certificates, Series 1993-B,
under the Pooling and Servicing Agreement dated as of May 31,
1993
B. TMS Home Equity Loan Asset Backed Certificates, Series 1993-C,
under the Pooling and Servicing Agreement dated as of August 31,
1993
C. TMS Home Equity Loan Asset Backed Certificates, Series 1993-D,
under the Pooling and Servicing Agreement dated as of November
30, 1993
D. TMS Home Equity Loan Asset Backed Certificates, Series 1994-A,
under the Pooling and Servicing Agreement dated as of January 31,
1994
E. TMS Home Equity Loan Asset Backed Certificates, Series 1994-B,
under the Pooling and Servicing Agreement dated as of May 31,
1994
F. TMS Home Equity Loan Asset Backed Certificates, Series 1994-C,
under the Pooling and Servicing Agreement dated as of July 31,
1994
G. TMS Home Equity Loan Asset Backed Certificates, Series 1994-D,
under the Pooling and Servicing Agreement dated as of November
30, 1994
H. TMS Home Equity Loan Asset Backed Certificates, Series 1995-A,
under the Pooling and Servicing Agreement dated as of February
28, 1995
I. TMS Home Equity Loan Asset Backed Certificates, Series 1997-A,
under the Pooling and Servicing Agreement dated as of February
28, 1997
J. TMS Home Equity Loan Asset Backed Certificates, Series 1997-B,
under the Pooling and Servicing Agreement dated as of May 31,
1997
K. TMS Home Equity Loan Asset Backed Certificates, Series 1997-C,
under the Pooling and Servicing Agreement dated as of August 31,
1997
L. The Money Store Residential Trust, Series 1997-I, under the
Pooling and Servicing Agreement dated as of August 31, 1997
M. The Money Store Residential Trust, Series 1997-II, under the
Pooling and Servicing Agreement dated as of November 30, 1997
N. TMS Home Equity Loan Asset Backed Certificates, Series 1997-D,
under the Pooling and Servicing Agreement dated as of November
30, 1997
O. TMS Home Equity Loan Asset Backed Certificates, Series 1997-I,
under the Pooling and Servicing Agreement dated as of February
28, 1997
P. TMS Home Equity Loan Asset Backed Certificates, Series 1997-II,
under the Pooling and Servicing Agreement dated as of May 31,
1997
Q. TMS Asset Backed Certificates, Series 1998-A, under the Pooling
and Servicing Agreement dated as of February 28, 1998
R. The Money Store Residential Trust, Series 1998-I, under the Sale
and Servicing Agreement dated as of February 28, 1998.
S. TMS Asset Backed Certificates, Series 1998-B, under the Pooling
and Servicing Agreement dated as of July 31, 1998
T. The Money Store Trust, Series 1998-C, under the Sale and
Servicing Agreement dated as of August 31, 1998
U. TMS Home Improvement Loan Backed Certificates, Series 1998-I,
under the Pooling and Servicing Agreement dated as of August 31,
1998.
has fulfilled all of its obligations pursuant to the above referenced
agreements, as described in Section 7.04 (Annual Statements as to Compliance)
for the period of January 1, 1998 through December 31, 1998, and for those
transactions which closed in 1998, from their closing dates through December 31,
1998
The Company has provided this Officer's Certificate to those parties listed
in Section 7.04 of the respective Pooling and Servicing Agreements.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
March 1, 1999.
/s/ JAMES RANSOM
------------------------------
James Ransom
Chief Accounting Officer
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
The Money Store Inc.:
We have examined management's assertion about The Money Store Inc.'s (a
wholly-owned subsidiary of First Union National Bank) compliance with the
minimum servicing standards relating to its servicing of mortgage loans set
forth 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 The Money Store Inc.'s compliance with those minimum
servicing standards. Our responsibility is to express an opinion on management's
assertion about The Money Store Inc.'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 The Money Store Inc.'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 The Money Store Inc.'s compliance with the minimum
servicing standards.
In our opinion, management's assertion that, except for noncompliance by The
Money Store Inc. relating to custodial bank account reconciliations and the
titling of custodial bank accounts, The Money Store Inc. complied in all
material respects with the aforementioned minimum servicing standards relating
to its servicing of mortgage loans as of and for the year ended December 31,
1998 is fairly stated, in all material respects.
March 12, 1999
<PAGE>
MANAGEMENT'S ASSERTION
As of and for the year ended December 31, 1998, The Money Store Inc. ("the
Company") has complied in all material respects with the minimum servicing
standards relating to its servicing of mortgage loans set forth in the Mortgage
Bankers Association of America's UNIFORM SINGLE ATTESTATION PROGRAM FOR MORTGAGE
BANKERS (USAP).
In 1998, the Company was not in compliance with USAP standard I.1. During 1998,
management of the Company implemented processes and staffing changes to ensure
that custodial accounts met the requirements of USAP standard I.1.. Based on the
method that the Company uses to calculate investor remittances, it is
management's belief that this instance of custodial bank account noncompliance
did not materially affect the accuracy of any amounts remitted to trustees or
investors.
In 1998, the Company was not in compliance with USAP standard I.3., which
requires each custodial account be maintained at a federally insured depository
institution in trust for the applicable investor. While all custodial accounts
are maintained in a federally insured depository institution, some accounts are
lacking the appropriate "in trust for" designations. Management is in the
process of correcting the titling of these accounts.
As of and for the year ended December 31, 1998, the Company had in effect a
fidelity bond policy in the amount of $16 million. The Company had in effect an
errors and omissions policy in the amount of $3 million for the period from
January 1, 1998 to June 30, 1998 and an errors and omissions policy in the
amount of $20 million for the period from July 1, 1998 to December 31, 1998.
/s/ ARTHUR Q. LYON
__________________________________ MARCH 12, 1999
Arthur Q. Lyon, CFO --------------
The Money Store Inc. Date
/s/ RUSSELL B. PLEASANTS
__________________________________ MARCH 12, 1999
Russell B. Pleasants --------------
SVP-Mortgage Loan Servicing Date
The Money Store Inc.
