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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): May 12, 1999
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION
(as depositor under the Pooling and Servicing Agreement,
dated as of April 1, 1999, providing for the issuance of
Asset-Backed Certificates,
Series 1999-2)
Option One Mortgage Acceptance Corporation
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(Exact name of registrant as specified in its charter)
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DELAWARE 333-14625 33-0727357
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
3 Ada Road
Irvine, California 92618
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 790-8100
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<PAGE>
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 28 ,1999, a single series of certificates, entitled Option
One Mortgage Loan Trust, Asset-Backed Certificates, Series 1999-2 (the
"Certificates"), were issued pursuant to a pooling and servicing agreement,
dated as of April 1, 1999 (the "Agreement"), among Option Mortgage Acceptance
Corporation as depositor (the "Depositor"), Option One Mortgage Corporation
("Option One") as master servicer (in such capacity, the "Master Servicer") and
Norwest Bank Minnesota, National Association as trustee (the "Trustee"). On May
12, 1999 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 principle balance equal to
approximately $83,336,671 with funds on deposit in the pre-funding account (the
"Pre-Funding Account") established pursuant to the Agreement at a purchase price
equal to the principle balance thereof, which Subsequent Mortgage Loans were
conveyed to the Trustee pursuant to a Subsequent Transfer Instrument, dated May
12, 1999, 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 and second lien adjustable-rate and
fixed 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 $286,131,890 as of April
1, 1999 and (ii) the Pre-Funding Account, which contained approximately
$83,788,149.
As more fully described above, on May 12, 1999, 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 May, 1999, the end of the "Funding
Period" (as defined in the Agreement).
<PAGE>
-3-
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits
EXHIBIT NO. DESCRIPTION
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4.2 Subsequent Transfer Instrument, dated as of May 12,
1999 between Option One Mortgage Acceptance
Corporation as seller, and Norwest Bank Minnesota,
National Association, as trustee.
99.1 Characteristics of the Mortgage Pool as of May 1,
1999, relating to Option One Mortgage Loan Trust
1999-2, Asset- Backed Certificates, Series 1999-2
<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.
Dated: May 12, 1999
OPTION ONE MORTGAGE
ACCEPTANCE CORPORATION
By: /s/ William O'Neill
-----------------------------
Name: William O'Neill
Title: Senior Vice President
<PAGE>
Index To Exhibits
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Sequentially
Exhibit No. Description Numbered Page
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4.2 Subsequent Transfer Instrument
99.1 Characteristics of the Mortgage Pool as of May
1, 1999, relating to Option One Mortgage
Acceptance Corporation, Asset-Backed
Certificates, Series 1999-2
Exhibit 4.2
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<PAGE>
SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument, dated May 12, 1999 (the
"Instrument"), between Option One Mortgage Acceptance Corporation as seller (the
"Depositor"), and Norwest Bank Minnesota, National Association as trustee of the
Option One Mortgage Loan Trust 1999-2 Asset-Backed Certificates, Series 1999-2,
as purchaser (the "Trustee"), and pursuant to the Pooling and Servicing
Agreement, dated as of April 1, 1999 (the "Pooling and Servicing Agreement"),
among the Depositor as depositor, Option One 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,
of the Mortgage Loans listed on the attached Schedule of Subsequent 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, 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 Subsequent 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.
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 2.08 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.
<PAGE>
(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.
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION
By: /s/ William L. O'Neill
---------------------------------
Name: William L. O'Neill
Title: Senior Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee for Option One Mortgage
Loan Trust 1999-2, Asset-Backed
Certificates, Series 1999-2
By: /s/ Amy Wahl
---------------------------------
Name: Amy Wahl
Title: Asst. 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
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<PAGE>
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: May 1, 1999
2. Subsequent Transfer Date: May 12, 1999
3. Aggregate Principal Balance of the Subsequent Mortgage Loans
as of the Subsequent Cut-off Date: $83,336,671.22
4. Purchase Price: 100.00%
B. The following representations and warranties with respect to each
Subsequent Mortgage Loan in Loan Group I determined as of the Subsequent Cut-off
Date are true and correct: (i) such Subsequent Mortgage Loan may not be 30 or
more days delinquent as of the related Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 120 months and will not exceed 360 months; (iii) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 95.00%; (iv) such
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 6 months; (v) no such
Subsequent Mortgage Loan shall have a Mortgage Rate less than 6.250% or greater
than 15.250%; (vi) such Subsequent Mortgage Loan shall have been serviced by the
Master Servicer since originated or purchased by the Depositor; (vii) such
Subsequent Mortgage Loan must have a first payment date occurring on or before
July 1, 1999; and (viii) such Subsequent Mortgage Loan shall have been
underwritten in accordance with the criteria set forth under "Option One
Mortgage Corporation--Underwriting Standards" in the Prospectus Supplement.
C. Following the purchase of any Subsequent Mortgage Loan to be
included in Loan Group I by the Trust, the Group I Mortgage Loans (including
such Subsequent Mortgage Loans) will as of the Subsequent Cut-off Date: (i) have
a weighted average original term to stated maturity of not more than 290 months;
(ii) have a weighted average Mortgage Rate of not less than 9.500% and not more
than 10.500%; (iii) have a weighted average loan-to-value ratio of not more than
80.00%; and (iv) have no Mortgage Loan with a principal balance in excess of
$240,000, in each case, as applicable, by aggregate principal balance of the
Group I Mortgage Loans as of the Subsequent Cut-off Date. In the sole discretion
of the Certificate Insurer, Subsequent Mortgage Loans with characteristics
varying from those set forth above may be purchased by the Trust; provided,
however that the addition of such Mortgage Loans will not materially affect the
aggregate characteristics of Group I.
D. The following representations and warranties with respect to each
Subsequent Mortgage Loan in Loan Group II determined as of the Subsequent
Cut-off Date are true and correct: (i) such Subsequent Mortgage Loan may not be
30 or more days delinquent as of the related Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 180 months and will not exceed 360 months; (iii) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 95.00%; (iv) such
Subsequent Mortgage Loans will have, as of the related Subsequent Cut-off Date,
a weighted
<PAGE>
average term since origination not in excess of 6 months; (v) no Subsequent
Mortgage Loan shall have a Mortgage Rate less than 7.250% or greater than
11.000%; (vi) such Subsequent Mortgage Loan shall have been serviced by the
Master Servicer since originated or purchased by the Depositor; (vii) such
Subsequent Mortgage Loan must have a first payment date occurring on or before
July 1, 1999; and (viii) such Subsequent Mortgage Loan shall have been
underwritten in accordance with the criteria set forth under "Option One
Mortgage Corporation--Underwriting Standards" in the Prospectus Supplement.
E. Following the purchase of any Subsequent Mortgage Loan to be
including in Loan Group II by the Trust, the Group II Mortgage Loans (including
such Subsequent Mortgage Loans) will as of the Subsequent Cut-off Date: (i) have
a weighted average original term to stated maturity of not more than 305 months;
(ii) have a weighted average Mortgage Rate of not less than 8.500% and not more
than 9.500%, by aggregate principal balance of the Mortgage Loans; (iii) have a
weighted average loan-to-value ratio of not more than 80.00%; and (iv) have no
Mortgage Loan with a principal balance in excess of $900,000, in each case, as
applicable, by aggregate principal balance of the Group II Mortgage Loans as of
the Subsequent Cut-off Date. In the sole discretion of the Certificate Insurer,
Subsequent Mortgage Loans with characteristics varying from those set forth
above may be purchased by the Trust; provided, however that the addition of such
Mortgage Loans will not materially affect the aggregate characteristics of Group
II.
F. The following representations and warranties with respect to each
Subsequent Mortgage Loan in Loan Group III determined as of the Subsequent
Cut-off Date are true and correct: (i) such Subsequent Mortgage Loan may not be
30 or more days delinquent as of the related Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 180 months and will not exceed 360 months; (iii) such Subsequent
Mortgage Loan may not provide for negative amortization; (iv) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 95.00%; (v) such
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 6 months; (vi) no
Subsequent Mortgage Loan shall have a Mortgage Rate less than 6.500% or greater
than 12.000%; (vii) such Subsequent Mortgage Loan shall have been serviced by
the Master Servicer since originated or purchased by the Depositor; (viii) such
Subsequent Mortgage Loan must have a first payment date occurring on or before
July 1, 1999; (ix) Gross Margin not less than 3.500%; (x) Maximum Rate not less
than 12.500%; (xi) Minimum Rate not less than 6.500%; and (xii) such Subsequent
Mortgage Loan shall have been underwritten in accordance with the criteria set
forth under "Option One Mortgage Corporation--Underwriting Standards" in the
Prospectus Supplement.
G. Following the purchase of any Subsequent Mortgage Loan to be
included in Loan Group III, the Group III Mortgage Loans (including such
Subsequent Mortgage Loans) will as of the Subsequent Cut-off Date: (i) have a
weighted average original term to stated maturity of not more than 360 months;
(ii) have a weighted average Mortgage Rate of not less than 8.750% and not more
than 9.750%; (iii) have a weighted average loan-to-value ratio of not more than
85.00%; (iv) have no Mortgage Loan with a principal balance in excess of
$900,000; and (v) have a weighted average Gross Margin not less than 5.000%, in
each case, as applicable, by aggregate principal balance of the Group III
Mortgage Loans as of the Subsequent Cut-off Date. In the sole discretion of the
Certificate Insurer, Subsequent Mortgage Loans with characteristics varying from
<PAGE>
those set forth above may be purchased by the Trust; provided, however that the
addition of such Mortgage Loans will not materially affect the aggregate
characteristics of Group III.
H. Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by either Rating Agency if the inclusion of such Subsequent Mortgage
Loan would adversely affect the ratings on any class of Offered Certificates.
<PAGE>
ATTACHMENT B
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FILED BY PAPER
<PAGE>
ATTACHMENT C
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<PAGE>
OFFICER'S CERTIFICATE
Option One Mortgage Acceptance Corporation
Option One Mortgage Loan Trust 1999-2
Asset-Backed Certificates
Series 1999-2
I, William L. O'Neill, hereby certify that I am a duly elected Senior
Vice President of Option One Mortgage Acceptance Corporation (the "Depositor"),
a Delaware corporation, and further certify, to the best of my knowledge and
after due inquiry, as follows:
Each condition precedent and representation and warranty specified in
Section 2.08 of the Pooling and Servicing Agreement, dated as of April 1,
1999, among the Depositor, Option One Mortgage Corporation as Master
Servicer and Norwest Bank Minnesota, 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: May 12, 1999
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION
By: /s/ William L. O'Neill
-------------------------------
Name: William L. O'Neill
Title: Senior Vice President
<PAGE>
ATTACHMENT D
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<PAGE>
May 12, 1999
Greenwich Capital Markets, Inc. Financial Security Assurance Inc.
600 Steamboat Road 350 Park Avenue, 13th Floor
Greenwich, Connecticut New York, New York 10022
Opinion: True Sale
Option One Mortgage Acceptance Corporation.,
Option One Mortgage Loan Trust 1999-2
Asset-Backed Certificates, Series 1999-2
----------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Option One Mortgage Acceptance Corporation
(the "Depositor") in connection with the conveyance of approximately
$83,336,671.22 of certain mortgage loans (the "Subsequent Mortgage Loans") by
the Depositor to Norwest Bank Minnesota, National Association (the"Trustee")
under the Pooling and Servicing Agreement dated as of April 1, 1999 among the
Depositor as depositor, Option One Mortgage Corporation as master servicer and
the Trustee, pursuant to a Subsequent Transfer Instrument, dated May 12, 1999
(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 Option One Mortgage Corporation (in such capacity, the "Seller")
pursuant to a Subsequent Mortgage Loan Purchase Agreement, dated May 12, 1999
between the Depositor and the Seller. On the Closing Date, the Depositor
previously transferred to a trust fund certain adjustable-rate and fixed 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 $73,726,584 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.
<PAGE>
OOMAC, Series 1999-2 Page 2.
May 12, 1999
In rendering this opinion letter, we have examined the documents described
above and such other documents as we have deemed necessary including, where we
have deemed appropriate, representations or certifications of officers of
parties thereto or public officials. In rendering this opinion letter, except
for the matters that are specifically addressed in the opinions expressed below,
we have assumed (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 all documents, and the
necessary entity power with respect thereto, and (iv) that there is not any
other agreement that modifies or supplements the agreements expressed in 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. In rendering this opinion letter, we have made no inquiry, have
conducted no investigation and assume no responsibility with respect to (a) the
accuracy of and compliance by the parties thereto with the representations,
warranties and covenants contained in any document or (b) the conformity of the
underlying assets and related documents to the requirements of the agreements to
which this opinion letter relates.
In rendering this opinion letter, we have assumed and relied upon (1) the
accuracy of and compliance by the parties thereto with the representations,
warranties and covenants contained in (1) the Agreements and (2) the accuracy of
the Certificates of the Seller and the Depositor, copies of which are annexed as
Exhibits A and B.
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 laws of the State of New York to
the extent applicable. We do not express any opinion herein with respect to (i)
the ability of any person or entity to obtain any property prior to a final
resolution of any judicial proceeding involving any claim contrary to or
inconsistent with any opinion expressed herein or (ii) the securities laws of
any jurisdiction or any other matter not specifically addressed in the opinions
expressed below.
Based upon and subject to the foregoing, it is our opinion that:
1. In the event of the Bankruptcy of the Seller, a court in such a
proceeding (i) would not hold that the transfer of the Subsequent
Mortgage Loans by the Seller to the Depositor pursuant to the
Subsequent Mortgage Loan Purchase Agreement should be characterized as
a loan by the Depositor to the Seller secured by the Subsequent
Mortgage Loans rather than as a sale of the Subsequent Mortgage Loans
and (ii) accordingly, on the basis of such a characterization would
not hold that the Subsequent Mortgage Loans or any proceeds thereof
payable to the holders of the Class A Certificates constitute property
of the estate of the Seller pursuant to Bankruptcy Code Section 541,
thereby subject to the automatic stay provisions of Bankruptcy Code
Section 362(a) that would be applicable to such property in such a
proceeding.
<PAGE>
OOMAC, Series 1999-2 Page 3.
May 12, 1999
2. In the event of the Bankruptcy of the Depositor, a court in such a
proceeding (i) would not hold that the transfer of the Subsequent
Mortgage Loans by the Depositor to the Trustee in exchange for the
Certificates pursuant to the Pooling and Servicing Agreement and the
transfer of the Class A Certificates by the Depositor to the
Underwriter in exchange for cash proceeds pursuant to the Underwriting
Agreement should be characterized as a loan to the Depositor secured
by the Subsequent Mortgage Loans rather than as a sale of the interest
in the Subsequent Mortgage Loans evidenced by the Class A Certificates
and (ii) accordingly, on the basis of such a characterization would
not hold that the Subsequent Mortgage Loans or any proceeds thereof
payable to the holders of the Class A Certificates 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 such property 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 (i) any applicable rating agency, institution providing
credit enhancement or liquidity support or governmental authority, (ii) any
accountant or attorney for any person or entity entitled hereunder to rely
hereon or to whom or which this opinion letter may be made available as provided
herein and (iii) as otherwise required by law.
Very truly yours,
THACHER PROFFITT & WOOD
By /s/ Richard M. Horowitz
<PAGE>
May 12, 1999
Greenwich Capital Markets, Inc. Financial Security Assurance Inc.
600 Steamboat Road 350 Park Avenue, 13th Floor
Greenwich, Connecticut New York, New York 10022
Opinion: Underwriting Agreement
Option One Mortgage Acceptance Corporation,
Option One Mortgage Loan Trust 1999-2
Asset-Backed Certificates, Series 1999-2
-------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Option One Mortgage Acceptance Corporation (the
"Depositor") in connection with the conveyance of approximately $83,336,671.22
of certain mortgage loans (the "Subsequent Mortgage Loans") by the Depositor to
Norwest Bank Minnesota, National Association (the"Trustee") under the Pooling
and Servicing Agreement dated as of April 1, 1999 among the Depositor as
depositor, Option One Mortgage Corporation as master servicer and the Trustee,
pursuant to a Subsequent Transfer Instrument, dated May 12, 1999 (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 Option One Mortgage Corporation (in such capacity, the "Seller")
pursuant to a Subsequent Mortgage Loan Purchase Agreement, dated May 12, 1999
between the Depositor and the Seller. On the Closing Date, the Depositor
previously transferred to a trust fund certain adjustable-rate and fixed 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 $73,726,584 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.
<PAGE>
OOMAC, Series 1999-2 Page 2.
May 12, 1999
In rendering this opinion letter, we have examined the documents described
above and such other documents as we have deemed necessary including, where we
have deemed appropriate, representations or certifications of officers of
parties thereto or public officials. In rendering this opinion letter, except
for the matters that are specifically addressed in the opinions expressed below,
we have assumed (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 all documents, and the
necessary entity power with respect thereto, and (iv) that there is not any
other agreement that modifies or supplements the agreements expressed in 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. In rendering this opinion letter, we have made no inquiry, have
conducted no investigation and assume no responsibility with respect to (a) the
accuracy of and compliance by the parties thereto with the representations,
warranties and covenants contained in any document or (b) the conformity of the
underlying assets and related documents to the requirements of the agreements to
which this opinion letter relates.
Our opinions set forth below with respect to the enforceability of any
right or obligation under any agreement are subject to (i) general principles of
equity, including concepts of materiality, reasonableness, good faith and fair
dealings and the possible unavailability of specific performance and injunctive
relief, regardless of whether considered in a proceeding in equity or at law,
(ii) the effect of certain laws, regulations and judicial and other decisions
upon the availability and enforceability of certain covenants, remedies and
other provisions, including the remedies of specific performance and self-help
and any provision which purports or is construed to require waiver of the
obligation of good faith, materiality, fair dealing, diligence or reasonableness
or objection to venue or forum, to impose a penalty or forfeiture or to release,
exculpate or exempt a party from, or to require indemnification of a party for,
liability for its own action or inaction to the extent that the action or
inaction includes negligence, recklessness or willful or unlawful conduct, (iii)
bankruptcy, insolvency, receivership, reorganization, liquidation, voidable
preference, fraudulent conveyance and transfer, moratorium and other similar
laws affecting the rights of creditors or secured parties and (iv) public policy
considerations underlying the securities laws, to the extent that such public
policy considerations limit the enforceability of any provision of any agreement
which purports or is construed to provide indemnification with respect to
securities law violations. Wherever we indicate that our opinion with respect to
the existence or absence of facts is based on our knowledge, our opinion is
based solely on the current actual knowledge of the attorneys in this firm who
are involved in the representation of parties to the transactions described
herein. In that regard we have conducted no special or independent investigation
of factual matters in connection with this opinion letter.
In rendering this opinion letter, we do not express any opinion concerning
any law other than the federal laws of the United States including without
limitation the Securities Act of 1933, as amended (the "1933 Act"), the laws of
the State of New York and the General Corporation Law of the State of Delaware.
We do not express any opinion with respect to the securities laws of any
jurisdiction or any other matter not specifically addressed in the opinions
expressed below.
<PAGE>
OOMAC, Series 1999-2 Page 3.
May 12, 1999
Based upon the foregoing, we are of the opinion that:
1. The Depositor has been legally incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Delaware, and has the requisite entity power and authority to enter
into and perform its obligations under the Agreements.
2. Each of the Agreements has been authorized, executed and delivered by
the Depositor and, assuming the necessary authorization, execution and
delivery thereof by the other parties thereto, is a valid and legally
binding agreement under the laws of the State of New York, enforceable
thereunder against the Depositor in accordance with its terms.
3. The performance by the Depositor of its obligations under the
Agreements and the consummation of the transactions contemplated
thereby do not require any consent, approval, authorization or order
of, filing with or notice to any court, agency or other governmental
body, except such as may be required under the securities laws of any
state or such as have been obtained, effected or given.
4. The performance by the Depositor of its obligations under the
Agreements and the consummation of the transactions contemplated
thereby will not result in any breach or violation of any statute or
regulation or, to our knowledge, any order of any court, agency or
other governmental body.
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 (i) any applicable rating agency, institution providing
credit enhancement or liquidity support or governmental authority, (ii) any
accountant or attorney for any person or entity entitled hereunder to rely
hereon or to whom or which this opinion letter may be made available as provided
herein and (iii) as otherwise required by law.
Very truly yours,
THACHER PROFFITT & WOOD
By /s/ Richard M. Horowitz
<PAGE>
ATTACHMENT E
------------
<PAGE>
TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT
May 12, 1999
Option One Mortgage Acceptance Corporation
3 Ada Road
Irvine, California 92618
Option One Mortgage Corporation
3 Ada Road
Irvine, California 92618
Re: Pooling and Servicing Agreement, dated as of April 1, 1999,
among Option One Mortgage Acceptance Corporation Option One
Mortgage Corporation and Norwest Bank Minnesota, National
Association, Asset-Backed Certificates, Series 1999-2
Subsequent Transfer on May 12, 1999
----------------------------------------------------------------
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 Subsequent Mortgage
Loans identified on the Subsequent Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such
Subsequent 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.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By: /s/ Amy Wahl
------------------------------
Name: Amy Wahl
Title: Asst. Vice President
<PAGE>
ATTACHMENT F
------------
<PAGE>
WELLS FARGO LETTERHEAD
LAW DEPARTMENT
WELLS FARGO & COMPANY
NORWEST CENTER
SIXTH AND MARQUETTE
MINNEAPOLIS, MN 55479-1026
April 28, 1999
To the Parties Listed on
Schedule A Attached Hereto
Ladies and Gentlemen:
Re: Option One Mortgage Loan Trust 1999-2
Asset-Backed Certificates, Series 1999-2
I am an Assistant Vice President and Senior Counsel of Wells Fargo & Company,
the parent corporation of Norwest Bank Minnesota, National Association, a
national banking association ("Norwest"), and have been requested by Norwest to
give this opinion in connection with the Pooling and Servicing Agreement, dated
as of April 1, 1999 (the "Pooling and Servicing Agreement") among Option One
Mortgage Acceptance Corp. as depositor, Option One Mortgage Corporation, as
master servicer, and Norwest, as trustee, relating to the above-referenced
certificates (the "Certificates") representing interests in a trust created
under the Pooling and Servicing Agreement. Capitalized terms used herein but not
defined herein have the meanings given to them in the Pooling and Servicing
Agreement.
In connection with this opinion, I have examined the Pooling and Servicing
Agreement and such other documents, and made such investigation, as I have
deemed necessary or appropriate for the purpose of rendering the opinions
expressed herein. As to factual matters set forth herein, I have relied on the
accuracy of the representations and warranties made by the parties to the
Pooling and Servicing Agreement and on statements of officers and employees of
Norwest. I have assumed the due authorization, execution and delivery of the
Pooling and Servicing Agreement by the party thereto other than Norwest, the
authenticity of all documents submitted to me as originals and the authenticity
of the originals of all documents submitted to me as copies.
Based upon the foregoing, I am of the opinion that:
<PAGE>
April 28, 1999
Page 2
1. Norwest has been duly incorporated and is validly existing as a national
banking association and is duly qualified to do business and in good
standing under the laws of each jurisdiction in which the performance of
its duties under the Pooling and Servicing Agreement would require such
qualification.
2. The Pooling and Servicing Agreement has been duly authorized, executed and
delivered by Norwest and, assuming valid execution and delivery thereof by
the other parties thereto, the Pooling and Servicing Agreement constitutes
the valid and legally binding agreement of Norwest, enforceable against
Norwest in accordance with its terms, subject to bankruptcy, insolvency,
reorganization or other laws of general applicability relating to or
affecting creditors' rights generally and to general equity principles
regardless of whether such enforcement is considered in a proceeding at law
or in equity.
3. No consent, approval, authorization or order of any Minnesota or federal
court or governmental agency or body is required for the consummation by
Norwest of the transactions contemplated by the terms of the Pooling and
Servicing Agreement except any such as may be required under the blue sky
laws of any jurisdiction in connection with the offering, sale or
acquisition of the Certificates, any recordations of the assignments of the
mortgage loans evidenced by the Certificates pursuant to the Pooling and
Servicing Agreement that have not yet been completed and any approvals as
have been obtained.
4. The consummation of the transactions contemplated by the terms of the
Pooling and Servicing Agreement does not conflict with or result in a
breach or violation of any material term or provision of, or constitute a
default under, (i) the articles of incorporation or bylaws of Norwest, (ii)
to my knowledge, any indenture or other agreement or instrument to which
Norwest is a party or by which it is bound, (iii) any Minnesota or federal
statute or regulation applicable to Norwest or (iv) any order known to me
of any Minnesota or federal court, regulatory body, administrative agency
or governmental body having jurisdiction over Norwest.
5. To the best of my knowledge after due inquiry, there are no legal or
governmental actions, investigations or proceedings pending to which
Norwest is a party, or threatened against Norwest (a) asserting the
invalidity of the Pooling and Servicing Agreement or (b) which might
materially and adversely affect the performance by Norwest of its
obligations under, or the validity or enforceability of, the Pooling and
Servicing Agreement. For purposes of the foregoing, I have not regarded any
legal or governmental actions, investigations or proceedings to be
"threatened" unless the potential litigant or governmental authority has
manifested to a member of the law department of Wells Fargo & Company
having responsibility for litigation matters a present intention to
initiate such proceedings.
I am admitted to practice law in the State of Minnesota. The opinions expressed
herein are limited to the present laws of the State of Minnesota and the Federal
laws of the United States. For purposes of the opinion expressed in numbered
paragraph 2 above with respect to the enforceability of the Indenture, I have
assumed that the laws of the State of New York are the same as the laws of the
State of Minnesota.
<PAGE>
April 28, 1999
Page 3
This letter may not be delivered to any other party for any purpose, and the
opinions expressed herein may not be relied on by any other party except upon my
written consent.
Sincerely,
TIMOTHY J. CARLIN
Assistant Vice President and
Senior Counsel
<PAGE>
Schedule A
Option One Mortgage Acceptance Corporation
3 Ada Road
Irvine, California 92618
Option One Mortgage Corporation
3 Ada Road
Irvine, California 92618
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Merrill, Lynch, Pierce, Fenner & Smith, Incorporated
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281
Financial Security Assurance, Inc.
350 Park Avenue
New York, New York 10022
Standard & Poor's, a division of the
McGraw-Hill Companies, Inc.
25 Broadway
New York, New York 10004
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10048
Fitch IBCA, Inc.
One State Street Plaza
New York, NY 10004
<PAGE>
KENNEDY COVINGTON LOBDELL & HICKMAN, L.L.P LETTERHEAD
Bank of America Corporate Center
Suite 4200
100 North Tryon Street
Charlotte, North Carolina
28202-4006
Telephone: 704/331-7400
Fascimile: 704/331-7598
April 28, 1999
To the Persons Listed on
Schedule A attached hereto
Re: Option One Mortgage Loan Trust 1999-2
Asset-Backed Certificates, Series 1999-2
Ladies and Gentlemen:
We have acted as special counsel to Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"), in connection with the Pooling and
Servicing Agreement, dated as of April 1, 1999 (the "Agreement"), among Option
One Mortgage Acceptance Corporation, as depositor, Option One Mortgage
Corporation, as master servicer, and the Trustee, as trustee, relating to the
above-referenced certificates (the "Certificates") representing interests in a
trust created under the Agreement. Capitalized terms used herein but not defined
herein have the meanings given to them in the Agreement.
In rendering the opinions set forth below, we have examined and relied
upon the originals, copies or specimens, certified or otherwise identified to
our satisfaction, of the Agreement and such certificates, corporate and public
records, agreements and instruments and other documents, including, among other
things, the documents delivered on the Closing Date, as we have deemed
appropriate as a basis for the opinions expressed below. In such examination we
have assumed the genuineness of all signatures (other than with respect to the
Trustee), the authenticity of all documents, agreements and instruments
submitted to us as originals, the conformity to original documents, agreements
and instruments of all documents, agreements and instruments submitted to us as
copies or specimens, the authenticity of the originals of all documents,
agreements and instruments submitted to us as copies or specimens, and the
accuracy of the matters set forth in the documents, agreements and instruments
we reviewed. As to any facts material to such opinions that were not known to
us, we have relied upon statements and representations of officers and other
representatives of the Trustee.
0053199.02
LIB:
<PAGE>
To the Persons Listed On Schedule A attached hereto.
April 28, 1999
Page 2
We have assumed that each of the parties to the Agreement had the power
and authority to enter into and perform the obligations undertaken by it under
the Agreement, that (other than with respect to the Trustee) the Agreement was
duly authorized, executed and delivered by each such party, and that (other than
with respect to the Trustee) the Agreement constitutes the legal, valid and
binding agreement of each such party, enforceable against each such party in
accordance with its terms, subject to bankruptcy, insolvency, reorganization or
other laws of general applicability relating to or affecting creditors' rights
generally and to general equity principles regardless of whether such
enforcement is considered in a proceeding at law or in equity. As used herein,
"to our knowledge" means the actual knowledge, without independent
investigation, of facts or other information by any lawyer in our firm actively
involved in the transactions contemplated by the Agreement.
We express no opinion concerning the laws of any jurisdiction other than
the substantive laws of the State of New York (without regard to conflicts of
laws principles).
Based upon and subject to the foregoing, we are of the opinion that:
1. The Agreement constitutes a legal, valid and binding agreement of the
Trustee, enforceable against the Trustee in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, receivership or other laws relating to creditors' rights generally,
and to general principles of equity including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity), and except that the enforcement
of rights with respect to indemnification and contribution obligations may be
limited by applicable law.
2. No consent, license, approval or authorization of, or filing or
registration with, any New York governmental authority, bureau or agency is
required to be obtained that has not been obtained by the Trustee in connection
with the execution, delivery or performance by the Trustee of the Agreement.
3. The execution, delivery and performance by the Trustee of the
Agreement does not violate any provision of any existing New York State law or
regulation applicable to the Trustee, other than violations which individually
and in the aggregate are not expected to have a material adverse effect on the
ability of the Trustee to perform its obligations under the Agreement.
We are furnishing this letter to you solely for your benefit in
connection with the transactions referred to herein. This letter is not to be
relied upon, used, circulated, quoted or otherwise referred to for any other
purpose or by any other person without our prior written consent.
Very truly yours,
/s/ Kennedy Covington Lobdell & Hickman, L.L.P.
-----------------------------------------------
0053199.02
LIB:
<PAGE>
SCHEDULE A
Option One Mortgage Acceptance Corporation
3 Ada Road
Irvine, California 92618
Option One Mortgage Corporation
3 Ada Road
Irvine, California 92618
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Merrill Lynch & Co.
250 Vesey Street
World Financial Center
New York, New York 10281
Financial Security Assurance, Inc.
350 Park Avenue
New York, New York 10022
Norwest Bank Minnesota, National Association
Sixth and Marquette
Minneapolis, Minnesota 55479
Standard & Poor's, a division of the
McGraw-Hill Companies, Inc.
25 Broadway
New York, New York 10004
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10048
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
0053199.02
LIB:
<PAGE>
ATTACHMENT G
------------
<PAGE>
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
as Purchaser
and
OPTION ONE MORTGAGE CORPORATION,
as Seller
SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of May 12, 1999
Fixed Rate and Adjustable Rate Mortgage Loans
Option One Mortgage Loan Trust 1999-2
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions..................................................1
ARTICLE II.
SALE OF SUBSEQUENT MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Subsequent Mortgage Loans................................2
Section 2.02 Obligations of Seller Upon Sale..................................2
Section 2.03 Payment of Purchase Price for the Subsequent Mortgage Loans......4
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Subsequent Mortgage Loans........................................4
Section 3.02 Seller Representations and Warranties...........................10
Section 3.03 Remedies for Breach of Representations and Warranties...........12
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller.........................................13
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE SUBSEQUENT MORTGAGE LOANS
Section 5.01 Indemnification.................................................14
ARTICLE VI.
TERMINATION
Section 6.01 Termination.....................................................17
i
<PAGE>
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment......................................................17
Section 7.02 Governing Law..................................................17
Section 7.03 Notices........................................................17
Section 7.04 Severability of Provisions.....................................17
Section 7.05 Counterparts...................................................17
Section 7.06 Further Agreements.............................................18
Section 7.07 Intention of the Parties.......................................18
Section 7.08 Successors and Assigns; Assignment of Purchase Agreement.......18
Section 7.09 Survival.......................................................19
Schedule I Subsequent Mortgage Loans.....................................I-1
ii
<PAGE>
SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT, dated as of May 12, 1999
(the "Agreement"), between Option One Mortgage Corporation (the "Seller") and
Option One Mortgage Acceptance Corporation (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Seller is the owner of (a) the notes or other evidence of
indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto referred
to below, and (b) the other documents or instruments constituting the Mortgage
File (collectively, the "Subsequent Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Subsequent Mortgage Loans, including rights to (a) any property acquired by
foreclosure or deed in lieu of foreclosure or otherwise and (b) the proceeds of
any insurance policies covering the Subsequent Mortgage Loans or the Mortgaged
Properties or the obligors on the Subsequent Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the Subsequent
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of April 1, 1999 (the "Pooling and Servicing Agreement") among the
Purchaser as depositor, the Seller as master servicer, and Norwest Bank
Minnesota, National Association, as trustee (the "Trustee"), the Purchaser will
convey the Subsequent Mortgage Loans to Option One Mortgage Loan Trust 1999-2
(the "Trust").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS. All capitalized terms used but not defined herein
and below shall have the meanings assigned thereto in the Pooling and Servicing
Agreement.
"SELLER INFORMATION": The information in the Prospectus Supplement as
follows: under "SUMMARY OF TERMS--Mortgage Loans," the fourth bullet
point under "RISK FACTORS--Unpredictability of Prepayments and Effect
on Yields," the third and fourth sentences under "RISK
FACTORS--Balloon Loan Risks," the fourth bullet point under "RISK
FACTORS--Interest Generated by the Mortgage Loans May Be Insufficient
to Create or Maintain Overcollateralization," the third and fourth
sentences under "RISK FACTORS--Effect of Mortgage Loan Rates on the
Group III Certificates," the second sentence under "RISK FACTORS--High
Loan-to-Value Ratios Increase Risk of Loss," the chart under "RISK
FACTORS--Geographic Concentration," the first and third sentences
under "RISK FACTORS--Nature of the
1
<PAGE>
Mortgage Loans," "THE MORTGAGE POOL," "OPTION ONE MORTGAGE
CORPORATION," the fifth sentence of the first paragraph, the third and
fourth sentences of the second paragraph and the sixth and ninth
sentences of the fourth paragraph under "YIELD, PREPAYMENT AND
MATURITY CONSIDERATIONS--General."
ARTICLE II.
SALE OF SUBSEQUENT MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF SUBSEQUENT MORTGAGE LOANS.
(a) The Seller, concurrently with the execution and delivery of this
Agreement, does hereby sell, assign, set over, and otherwise convey to the
Purchaser, without recourse, (b) all of its right, title and interest in and to
each Subsequent Mortgage Loan, including the related Subsequent Cut-Off Date
Principal Balance, all interest accruing thereon on and after the Subsequent
Cut-Off Date and all collections in respect of interest and principal due on or
after the Subsequent Cut-Off Date; (c) property which secured such Subsequent
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (d) its interest in any insurance policies in respect of the
Subsequent Mortgage Loans; and (e) all proceeds of any of the foregoing.
Section 2.02 OBLIGATIONS OF SELLER UPON SALE. In connection with any
subsequent transfer pursuant to Section 2.01 hereof, the Seller further agrees,
at its own expense on or prior to the Subsequent Transfer Date, (a) to indicate
in its books and records that the Subsequent Mortgage Loans have been sold to
the Purchaser pursuant to this Agreement and (b) to deliver to the Purchaser and
the Trustee a computer file containing a true and complete list of all such
Subsequent Mortgage Loans specifying for each such Subsequent Mortgage Loan, as
of the Subsequent Cut-Off Date, (i) its account number and (ii) the Subsequent
Cut-Off Date Principal Balance. Such file, which forms a part of Exhibit D to
the Pooling and Servicing Agreement, shall also be marked as Schedule I to this
Agreement and is hereby incorporated into and made a part of this Agreement.
In connection with any conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Trustee, as assignee of
the Purchaser, on or before the Subsequent Transfer Date, the following
documents or instruments with respect to each Subsequent Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse either (A) in
blank, in which case the Trustee shall cause the endorsement to be completed or
(B) in the following form: "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee", with all prior and intervening endorsements showing a
complete chain of endorsement from the originator to the Person so endorsing to
the Trustee;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon;
2
<PAGE>
(iii) an original Assignment of the Mortgage either (A) in blank or (B)
executed in the following form: "Norwest Bank Minnesota, National Association,
as Trustee";
(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 or attorney's opinion of
title or a copy thereof certified as true and correct by the applicable insurer,
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 or second lien, as applicable, on the Mortgaged Property represented
therein as a fee interest vested in the Mortgagor, or in the event such original
title policy is unavailable, a written commitment or uniform binder or
preliminary report of title issued by the title insurance or escrow company or a
copy thereof certified by the title company, with the original policy of title
insurance to be delivered within one year of the Subsequent Transfer Date.
The Seller hereby confirms to the Purchaser and the Trustee that it
has made the appropriate entries in its general accounting records, to indicate
that such Subsequent Mortgage Loans have been transferred to the Trustee and
constitute part of the Trust in accordance with the terms of the Pooling and
Servicing Agreement.
If any original Mortgage Note referred to in Section 2.02(i) cannot be
located, the obligations of the Seller to deliver such documents shall be deemed
to be satisfied upon delivery to the Trustee, as assignee of the Purchaser, of a
photocopy of the original of such Mortgage Note, with an original Lost Note
Affidavit. If any of the documents referred to in Sections 2.02(ii), (iii) or
(iv) above has, as of the Subsequent Transfer Date, 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 to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee, as assignee of the
Purchaser, of a copy of each such document certified by the Seller in the case
of (x) above or the applicable public recording office in the case of (y) above
to be a true and complete copy of the original that was submitted for recording
and (2) if such copy is certified by the Seller, delivery to the Trustee
promptly upon receipt thereof 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. Notice shall be provided to the Purchaser, the Certificate
Insurer and the Trustee by the Seller if delivery pursuant to clause (2) above
will be made more than 180 days after the Subsequent Transfer Date. If the
original lender's title insurance policy was not delivered pursuant to Section
2.02(vi) above, the Seller shall deliver or cause to be delivered to the
Trustee, promptly after receipt thereof, the original lender's title insurance
policy. The Seller shall deliver or cause to be delivered to the Trustee,
promptly upon receipt thereof, any other original documents constituting a part
of a Mortgage File received with respect to any Subsequent Mortgage Loan,
including, but not limited to, any original documents evidencing an assumption
or modification of any Subsequent Mortgage Loan.
3
<PAGE>
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Subsequent Mortgage Loans and other property, now existing
and hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Subsequent Mortgage Loans and other property described
above. In the event the transaction set forth herein is deemed not to be a sale,
the Seller hereby grants to the Purchaser a security interest in all of the
Seller's right, title and interest in, to and under the Subsequent Mortgage
Loans and other property described above, whether now existing or hereafter
created, to secure all of the Seller's obligations hereunder; and this Agreement
shall constitute a security agreement under applicable law. 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 the Pooling and
Servicing Agreement.
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE SUBSEQUENT MORTGAGE LOANS.
(a) In consideration of the sale of the Subsequent Mortgage Loans from
the Seller to the Purchaser on the Subsequent Transfer Date, the Purchaser
agrees to pay to the Seller on the Subsequent Transfer Date (the "Purchase
Price") (i) by transfer of immediately available funds, an amount equal to
$83,336,671.22. The Seller shall reimburse the Purchaser an expense
reimbursement amount of approximately $_______, (the "Expense Reimbursement
Amount") and shall pay, and be billed directly for, all expenses incurred by the
Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the prospectus
relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's counsel, fees of the rating agencies requested to rate
the Certificates, accountant's fees and expenses and the fees and expenses of
the Trustee and other out-of-pocket costs, if any.
(b) Within thirty Business Days of the Subsequent Transfer Date, the
Seller, at its own expense, shall submit for recording each Assignment of
Mortgage in favor of the Trustee as transferee of the Purchaser pursuant to the
Pooling and Servicing Agreement in the appropriate real property or other
records. With respect to any Assignment of Mortgage as to which the related
recording information is unavailable within the applicable time period set forth
above, such Assignment of Mortgage shall be submitted for recording within
thirty Business Days after receipt of such information but in no event later
than one year from the date such Assignment of Mortgage is otherwise required to
be recorded pursuant to this Section 2.04(b). The Trustee shall be required to
retain a copy of each Assignment of Mortgage submitted for recording. In the
event that any such Assignment of Mortgage is lost or returned unrecorded
because of a defect therein, the Seller shall promptly prepare a substitute
Assignment of Mortgage or cure such defect, as the case may be, and shall be
required to submit each such Assignment of Mortgage for recording. Any failure
of the Seller to comply with this Section shall result in the obligation of the
Seller to repurchase or substitute a Qualified Substitute Mortgage Loan for the
related Subsequent Mortgage Loan pursuant to the provisions of the Pooling and
Servicing Agreement. Notwithstanding the foregoing, however, the Seller need not
cause to be recorded any Assignment which relates to a Subsequent Mortgage
4
<PAGE>
Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of
Counsel delivered by the Seller to the Trustee, the Certificate Insurer and the
Rating Agencies, the recordation of such assignment is not necessary to protect
the Trustee's interest in the related Subsequent Mortgage Loan; provided,
however, notwithstanding the delivery of any Opinion of Counsel, each Assignment
of Mortgage shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) reasonable direction by the Certificate Insurer or Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii) the occurrence
of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Seller, (iv) the occurrence of a
servicing transfer as described in Section 7.02 of the Pooling and Servicing
Agreement and (iv) if the Seller is not the Master Servicer and with respect to
any one Assignment of Mortgage, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
SUBSEQUENT MORTGAGE LOANS. The Seller hereby represents and warrants with
respect to the Subsequent Mortgage Loans to the Purchaser that as of the
Subsequent Transfer Date or as of such date specifically provided herein:
(a) The Seller has good title to and is the sole owner and holder of
the Subsequent Mortgage Loan.
(b) Immediately prior to the transfer and assignment to the Purchaser,
the Note and the Subsequent Mortgage Loan were not subject to an assignment or
pledge, and the Seller has full right and authority to sell and assign the
Subsequent Mortgage Loan.
(c) The Seller is transferring such Subsequent Mortgage Loan to the
Purchaser free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Subsequent Mortgage Loans.
(d) The information set forth on Schedule I is true and correct in all
material respects as of the Subsequent Cut-off Date or such other date as may be
indicated in such schedule.
(e) The Subsequent Mortgage Loan has been acquired, serviced,
collected and otherwise dealt with by the Seller and any affiliate of the Seller
in compliance with all applicable federal, state and local laws and regulations
and the terms of the related Note and Mortgage.
(f) The related Note and Mortgage are genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in accordance
with its terms except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
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(g) The related Mortgage is a valid and enforceable first or second
lien on the related Mortgaged Property, which Mortgaged Property is free and
clear of all encumbrances and liens (including mechanics liens) having priority
over the first or second lien of the Mortgage except for: (i) liens for real
estate taxes and assessments not yet due and payable; (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of public record as
of the date of recording of such Mortgage, such exceptions appearing of record
being acceptable to mortgage lending institutions generally or specifically
reflected or considered in the lender's title insurance policy delivered to the
originator of the Subsequent Mortgage Loan and referred to in the appraisal made
in connection with the origination of the related Subsequent Mortgage Loan,
(iii) 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 such Mortgage and (iv) the first lien on the Mortgaged Property, in the case
of Mortgages that are second liens.
(h) Any security agreement, chattel mortgage or equivalent document
related to such Subsequent Mortgage Loan establishes and creates a valid and
enforceable first or second lien on the related Mortgaged Property.
(i) As of the Subsequent Cut-off Date, each Scheduled Payment required
to be made on or prior to [March 1, 1999] has been paid and no Subsequent
Mortgage Loan has been dishonored. No Subsequent Mortgage Loan has been thirty
or more days delinquent more than one time in the twelve months preceding the
Subsequent Cut-off Date (assuming that a "rolling" thirty day delinquency is
considered to be one time delinquent).
(j) The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Subsequent Mortgage Loan under the Subsequent Mortgage Loan.
(k) The Seller has not impaired, waived, altered or modified the
related Mortgage or Note in any material respect, or satisfied, canceled,
rescinded or subordinated such Mortgage or Note in whole or in part or released
all or any material portion of the Mortgaged Property from the lien of the
Mortgage, or executed any instrument of release, cancellation, rescission or
satisfaction of the Note or Mortgage.
(l) As of the Subsequent Cut-off Date, the Mortgage has not been
satisfied, canceled or subordinated, in whole or in part, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part (except for a release that does not materially impair the security of
the Subsequent Mortgage Loan or a release the effect of which is reflected in
the Loan-to-Value Ratio for the Subsequent Mortgage Loan as set forth in the
Schedule of Subsequent Mortgage Loans), nor has any instrument been executed
that would effect any such release, cancellation, subordination or rescission.
(m) No condition exists which could give rise to any right of
rescission, set off, counterclaim, or defense including, without limitation, the
defense of usury, and no such right has been asserted.
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(n) To Seller's knowledge, there is no proceeding pending for the
total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property.
(o) Each Subsequent Mortgage Loan is covered by either (i) a mortgage
title insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged Property is
located, an attorney's opinion of title given by an attorney licensed to
practice law in the jurisdiction where the Mortgaged Property is located. All of
the Seller's rights under such policies, opinions or other instruments shall be
transferred and assigned to Purchaser upon sale and assignment of the Subsequent
Mortgage Loans hereunder. The title insurance policy has been issued by a title
insurer licensed to do business in the jurisdiction where the Mortgaged Property
is located, insuring the original lender, its successor and assigns, as to the
first or second priority lien of the Mortgage in the original principal amount
of the Subsequent Mortgage Loan, subject to the exceptions contained in such
policy. Seller is the sole insured of such mortgagee title insurance policy, and
such mortgagee title insurance policy is in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. Neither the Seller nor any affiliate of the Seller has made, and
Seller has no knowledge of, any claims under such mortgagee title insurance
policy. Seller is not aware of any action by a prior holder and neither Seller
nor any affiliate of the Seller has done, by act or omission, anything which
could impair the coverage or enforceability of such mortgagee title insurance
policy or the accuracy of such attorney's opinion of title.
(p) There is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the related 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 material default, breach, violation or
event of acceleration, other than a payment delinquency that is for a payment
due after the date specified in (i) above. Neither the Seller nor any affiliate
of the Seller has waived any default, breach, violation or event of
acceleration.
(q) With respect to any Subsequent Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in accordance
with the terms of the related Note or subsequent modifications, if any.
(r) To Seller's knowledge, 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.
(s) No foreclosure proceedings are pending against the Mortgaged
Property and the Subsequent Mortgage Loan is not subject to any pending
bankruptcy or insolvency proceeding, and to the Seller's best knowledge, no
material litigation or lawsuit relating to the Subsequent Mortgage Loan is
pending.
(t) The Subsequent Mortgage Loan obligates the mortgagor thereunder to
maintain a hazard insurance policy ("Hazard Insurance") in an amount at least
equal to the lesser of (i) the maximum insurable value of such improvements or
(ii) the principal balance of the Subsequent Mortgage Loan with a standard
mortgagee clause, in either case in an amount sufficient
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to avoid the application of any "co-insurance provisions", and, if it was in
place at origination of the Subsequent Mortgage Loan, flood insurance, at the
mortgagor's cost and expense. If the Mortgaged Property is in an area identified
in the Federal Register by the Federal Emergency Management Agency ("FEMA") as
having special flood hazards, a flood insurance policy is in effect which met
the requirements of FEMA at the time such policy was issued. The Mortgage
obligates the Mortgagor to maintain the Hazard Insurance and, if applicable,
flood insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. The Mortgaged Property is covered by
Hazard Insurance.
(u) The Note is not and has not been secured by any collateral except
the lien of the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage.
(v) The Mortgage contains an enforceable 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 thereunder. The Mortgage
contains 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
(i) in the case of a Mortgage designated as a deed of trust, by trustee's sale
or judicial foreclosure and (ii) 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 that would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. In the event the Mortgage constitutes a
deed of trust, a trustee, duly qualified under applicable law to serve as such,
as been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by Purchaser to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the related Mortgagor. The Mortgagor has not notified the
Seller or any affiliate of 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.
(w) Except as set forth in the appraisal which forms part of the
related Mortgage File, the Mortgaged Property, normal wear and tear excepted, is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect materially and adversely the value of
the Mortgaged Property as security for the Subsequent Mortgage Loan or the use
for which the premises were intended.
(x) To Seller's knowledge, there was no fraud involved in the
origination of the Subsequent Mortgage Loan by the mortgagee or by the
Mortgagor, any appraiser or any other party involved in the origination of the
Subsequent Mortgage Loan.
(y) Each Mortgage File contains an appraisal of the Mortgaged Property
indicating an appraised value equal to the appraised value identified for such
Mortgaged Property
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on the Schedule of Subsequent Mortgage Loans. Each appraisal has been performed
in accordance with the provisions of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989.
(z) 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.
(aa) No improvements on the related Mortgaged Property (upon which
value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements are within the project with respect to that
unit), and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments.
(bb) Each Subsequent Mortgage Loan was originated or acquired 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 by the Secretary of HUD, such that the
origination procedures relating to such Subsequent Mortgage Loan would not
prevent the Class A-2 Certificates or the Class A-3 Certificates from being
"mortgage related securities" as such term is defined in Section 3 of the
Securities Exchange Act of 1934.
(cc) (i) Principal payments on the Subsequent Mortgage Loan commenced
no more than sixty days after the proceeds of the Subsequent Mortgage Loan were
disbursed and (ii) each Note is payable on the first day of each month.
(dd) Other than with respect to not more than approximately ___% of
the Group I Subsequent Mortgage Loans and approximately ___% of the Group II
Subsequent Mortgage Loans (in each case, by Loan Balance of the related Loan
Group as of the Cutoff Date) of the Subsequent Mortgage Loans, which are
"balloon payment" mortgage loans, each Subsequent Mortgage Loan is fully
amortizing.
(ee) The Subsequent Mortgage Loan bears interest at the Mortgage Rate
and the Note does not permit negative amortization. No Subsequent Mortgage Loan
bearing interest at an adjustable rate permits the Mortgagor to convert the
Subsequent Mortgage Loan to a fixed rate Subsequent Mortgage Loan.
(ff) With respect to escrow deposits, if any, all such payments are in
the possession of, or under the control of, the Master Servicer and there exist
no deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or escrow advances or
other charges or payments due the Master Servicer have been capitalized under
any Mortgage or the related Note.
(gg) No Subsequent Mortgage Loan contains provisions pursuant to which
Scheduled Payments are: (i) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor; (ii) paid by any source other than the Mortgagor or (iii)
contains any other similar provisions which may constitute
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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.
(hh) As of the origination date of each Subsequent Mortgage Loan, the
related Mortgaged Property is lawfully permitted to be occupied under applicable
law.
(ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Subsequent Mortgage Loan transferred to the Purchaser
pursuant to this Agreement, including, without limitation, usury, truth in
lending, real estate settlement procedures, consumer credit protection, equal
credit opportunity or disclosure laws. The Subsequent Mortgage Loan has been
serviced in accordance with the terms of the Note.
(jj) 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.
(kk) 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 Note
or Mortgage.
(ll) There are no mechanics' or similar liens or claims that 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 that are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage.
(mm) As to each fixed rate Subsequent Mortgage Loan, interest is
calculated on the Note on the basis of twelve 30-day months and a 360 day year,
and, as to each adjustable rate Subsequent Mortgage Loan, interest is calculated
on the Note on the basis of the number of days in the related interest accrual
period.
(nn) The Mortgaged Property consists of detached or semi-detached one-
to four family dwelling units, townhouses, individual condominium units and
individual units in planned unit developments, and manufactured homes. Except
with respect to ___ Mortgage Loans with an aggregate principal balance as of the
Subsequent Cut-off Date not exceeding $_________, no Mortgaged Property is a
leasehold estate.
(oo) Each Subsequent Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code.
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(pp) The Subsequent Mortgage Loans were not intentionally selected by
the Seller in a manner intended to adversely affect the Purchaser or the Trust.
(qq) The representations, warranties and covenants, set forth in this
Section shall survive the Subsequent Transfer Date.
(rr) The Subsequent Mortgage Loans have original terms to maturity
ranging from 15 to 30 years.
(ss) No more than approximately ______%; ____%, _____% and ______% of
the Subsequent Mortgage Loans, by Subsequent Cut-off Date Principal Balance will
be secured by Mortgaged Properties located in _______, _______, ________, and
_________; and approximately ____% of the Subsequent Mortgage Loans, by
Subsequent Cut-off Date Principal Balance will be secured by real property with
a single family residence erected thereon and approximately _____% of the
Subsequent Mortgage Loans, by the Subsequent Cut-off Date Principal Balance are
secured by condominiums.
(tt) As of the Subsequent Cut-off Date, each Subsequent Mortgage Loan,
had a Loan-to-Value Ratio that was less than or equal to ____%.
(uu) With respect to each Group I and Group II Subsequent Mortgage
Loan, the Mortgage Note related thereto bears a fixed Mortgage Rate; and with
respect to each Group III Subsequent Mortgage Loan, the Mortgage Rate will be
adjusted on each Adjustment Date to equal the Index plus the Gross Margin,
rounded to the nearest _____%, subject to the Periodic Rate Cap, the Maximum
Mortgage Rate and the Minimum Mortgage Rate.
(vv) The average Subsequent Cut-off Date Principal Balance of the
Subsequent Mortgage Loans is $_________.
Section 3.02 SELLER REPRESENTATIONS AND WARRANTIES. The Seller represents,
warrants and covenants to the Purchaser as of the Closing Date or as of such
other date specifically provided herein or in the applicable Assignment and
Conveyance:
(i) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of California and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Subsequent Mortgage Loan in accordance with the terms of this Agreement;
(ii) The Seller has the full power and authority to hold each
Subsequent Mortgage Loan, to sell each Subsequent Mortgage Loan, to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. 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;
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(iii) The execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will not
violate the Seller's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;
(iv) 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 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;
(v) The Seller is a HUD approved mortgagee pursuant to Section
203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Seller unable to comply with HUD eligibility requirements or which would
require notification to HUD;
(vi) 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;
(vii) Immediately prior to the payment of the Purchase Price for
each Subsequent Mortgage Loan, the Seller was the owner of the related Mortgage
and the indebtedness evidenced by the related Mortgage Note and upon the payment
of the Purchase Price by the Purchaser, in the event that the Seller retains
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 and only for the purpose of
servicing and supervising the servicing of each Subsequent Mortgage Loan;
(viii) 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 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;
(ix) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;
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(x) 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
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions;
(xi) The information delivered by the Seller to the Purchaser
with respect to the Seller's loan loss, foreclosure and delinquency experience
on mortgage loans underwritten to similar standards as the Subsequent Mortgage
Loans and covering mortgaged properties similar to the Mortgaged Properties, is
true and correct in all material respects as of the date of such report; and
(xii) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, 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.
Section 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It is
understood and agreed that the representations and warranties set forth in
Subsections 3.01 and 3.02 shall survive the sale of the Subsequent Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment or the examination or lack of examination of any Mortgage File. With
respect to the representations and warranties contained herein that are made to
the knowledge or the best knowledge of the Seller or as to which the Seller has
no knowledge, if it is discovered that the substance of any such representation
and warranty is inaccurate and the 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, designee or transferee, then
notwithstanding the Seller's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
and warranty was made, such inaccuracy shall be deemed a breach of the
applicable representation and warranty and the Seller shall take such action
described in the following paragraphs of this Section 3.03 in respect of such
Subsequent Mortgage Loan. Upon discovery by either the Seller, the Master
Servicer or the Purchaser of a breach of any of the foregoing representations
and warranties that materially and adversely affects the value of the Subsequent
Mortgage Loans or the interest of the Purchaser (or which materially and
adversely affects the interests of the Purchaser in the related Subsequent
Mortgage Loan in the case of a representation and warranty relating to a
particular Subsequent Mortgage Loan), the party discovering such breach shall
give prompt written notice to the others.
Within 60 days of the earlier of either discovery by or notice to the
Seller of any breach of a representation or warranty that materially and
adversely affects the value of a Subsequent Mortgage Loan or the Subsequent
Mortgage Loans, the Seller or the Master Servicer, as the case may be, shall use
its best efforts promptly to cure such breach in all material respects and, if
such breach cannot be cured, the Seller shall, at the Purchaser's option,
repurchase such Subsequent Mortgage Loan at the Purchase Price. In the event
that a breach shall involve any representation or warranty
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set forth in Subsection 3.01 and such breach cannot be cured within 60 days of
the earlier of either discovery by or notice to the Seller or Servicer, as
applicable, of such breach, all of the Subsequent Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Purchase Price. The
Seller may, at the request of the Purchaser and assuming the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase the Subsequent
Mortgage Loan as provided above, remove such Subsequent Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the
Seller does not provide a Qualified Substitute Mortgage Loan or Loans, it shall
repurchase the deficient Subsequent Mortgage Loan. Any repurchase of a
Subsequent Mortgage Loan(s) pursuant to the foregoing provisions of this Section
3.03 shall occur on a date designated by the Purchaser and shall be accomplished
by deposit in accordance with Section 2.03 of the Pooling and Servicing
Agreement. Any repurchase or substitution required by this Section shall be made
in a manner consistent with Section 2.03 of the Pooling and Servicing Agreement.
At the time of substitution or repurchase of any deficient Subsequent
Mortgage Loan, the Purchaser and the Seller shall arrange for the reassignment
of the deficient or repurchased Subsequent Mortgage Loan to the Seller and the
delivery to the Seller of any documents held by the Trustee relating to the
deficient or repurchased Subsequent Mortgage Loan. In the event the Purchase
Price is deposited in the Collection Account, the Seller shall, simultaneously
with such deposit, give written notice to the Purchaser that such deposit has
taken place. Upon such repurchase, the related Subsequent Mortgage Loan Schedule
shall be amended to reflect the withdrawal of the repurchased Subsequent
Mortgage Loan from this Agreement.
As to any Deleted Subsequent Mortgage Loan for which the Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, the Seller shall
effect such substitution by delivering to the Purchaser or its designee for such
Qualified Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Custodial Agreement, with the Mortgage Note endorsed as required therein. The
Seller shall deposit in the Collection Account the Monthly Payment less the
Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Seller. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Subsequent
Mortgage Loan in the month of substitution, and the Seller shall thereafter be
entitled to retain all amounts subsequently received by the Seller in respect of
such Deleted Subsequent Mortgage Loan. Upon such substitution, the Qualified
Substitute Mortgage Loans shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans as of the date of substitution, the
covenants, representations and warranties set forth in Subsections 3.01 and
3.02.
It is understood and agreed that the representations and warranties
set forth in Section 3.01 shall survive delivery of the respective Mortgage
Files to the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of the Seller set
forth in Section 3.03 to cure, repurchase and substitute for a defective
Subsequent Mortgage Loan and to indemnify the Purchaser as provided in Section
5.01 constitute the sole remedies of the Purchaser respecting a
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missing or defective document or a breach of the representations and warranties
contained in Section 3.01.
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE SELLER. The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Subsequent Mortgage Loan, or any interest therein; the Seller
will notify the Trustee, as assignee of the Purchaser, of the existence of any
Lien on any Subsequent Mortgage Loan immediately upon discovery thereof, and the
Seller will defend the right, title and interest of the Trust, as assignee of
the Purchaser, in, to and under the Subsequent Mortgage Loans, against all
claims of third parties claiming through or under the Seller; PROVIDED, HOWEVER,
that nothing in this Section 4.01 shall prevent or be deemed to prohibit the
Seller from suffering to exist upon any of the Subsequent Mortgage Loans any
Liens for municipal or other local taxes and other governmental charges if such
taxes or governmental charges shall not at the time be due and payable or if the
Seller shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate reserves
with respect thereto.
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.
(a) The Seller agrees to indemnify and hold harmless the Purchaser,
each of its directors, each of its officers and each person or entity who
controls the Purchaser or any such person, within the meaning of Section 15 of
the Securities Act, against any and all losses, claims, damages or liabilities,
joint and several, as incurred, to which the Purchaser, or any such person or
entity may become subject, under the Securities Act or otherwise, and will
reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Seller or the omission or the
alleged omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Seller, in the light of the
circumstances under which they were made, not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission relates to the Seller Information contained in the Prospectus
Supplement, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the information on any computer tape furnished to the
Purchaser or any affiliate thereof by or on behalf of the Seller containing
information regarding the assets of the Trust or (iii) any untrue statement or
alleged untrue statement of any material fact contained in any information
provided by the Seller to the
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<PAGE>
Purchaser or any affiliate thereof, or any material omission from the
information purported to be provided thereby, and disseminated to the
Certificate Insurer, Deloitte & Touche LLP or prospective investors (directly or
indirectly through available information systems) in connection with the
issuance, marketing or offering of the Certificates. This indemnity agreement
will be in addition to any liability which the Seller may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the Seller,
each of its officers, directors and each person or entity who controls the
Seller or any such person, against any and all losses, claims, damages or
liabilities, joint and several, to which the Seller, or any such person or
entity may become subject, under the Securities Act or otherwise, and will
reimburse the Seller for any legal or other expenses incurred by the Seller,
each such officer and director and such controlling person in connection with
investigating or defending any such losses, claims, damages or liabilities
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus Supplement or any
amendment or supplement to the Prospectus Supplement or the omission or the
alleged omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement, in the light of the circumstances under which they were
made, not misleading, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission is not contained in the
Seller Information in the Prospectus Supplement. This indemnity agreement will
be in addition to any liability which the Purchaser may otherwise have.
(c) Promptly after receipt by any indemnified party under this Article
V of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Article V for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable
16
<PAGE>
judgment of such counsel it is advisable for such indemnified party to employ
separate counsel; or (iii) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties, which firm shall be designated in writing by the
Purchaser, if the indemnified parties under this Article V consist of the
Purchaser, or by the Seller, if the indemnified parties under this Article V
consist of the Seller.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller, on the one hand, and the Purchaser, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Seller and
the Purchaser in such proportions as shall be appropriate to reflect the
relative benefits received by the Seller on the one hand and the Purchaser on
the other from the sale of the Subsequent Mortgage Loans such that the Purchaser
is responsible for the lesser of (i) 0.25% thereof and (ii) 0.25% of the
aggregate proceeds to the Seller from the sale of the Subsequent Mortgage Loans
and the Seller shall be responsible for the balance; PROVIDED, HOWEVER, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section,
each officer and director of the Purchaser and each person, if any, who controls
the Purchaser within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as the Purchaser and each director of the Seller,
each officer of the Seller, and each person, if any, who controls the Seller
17
<PAGE>
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Seller.
(e) The Seller agrees to indemnify and to hold each of the Purchaser,
the Trustee, the Certificate Insurer, each of the officers and directors of each
such entity and each person or entity who controls each such entity or person
and each Certificateholder harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Purchaser, the Trustee, the Certificate
Insurer, or any such person or entity and any Certificateholder may sustain in
any way (i) related to the failure of the Seller to perform its duties in
compliance with the terms of this Agreement, (ii) arising from a breach by the
Seller of its representations and warranties in Section 3.01 of this Agreement
or (iii) related to the origination or prior servicing of the Subsequent
Mortgage Loans by reason of any acts, omissions, or alleged acts or omissions of
the Seller, the originator or any servicer. The Seller shall immediately notify
the Purchaser, the Trustee, the Certificate Insurer and each Certificateholder
if a claim is made by a third party with respect to this Agreement. The Seller
shall assume the defense of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against the Purchaser, the
Trustee, the Certificate Insurer or any such person or entity and/or any
Certificateholder in respect of such claim.
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION. The respective obligations and responsibilities
of the Seller and the Purchaser created hereby shall terminate, except for the
Seller's indemnity obligations as provided herein upon the termination of the
Trust as provided in Article X of the Pooling and Servicing Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to time by
the Seller and the Purchaser, by written agreement signed by the Seller and the
Purchaser.
Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
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.
Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:
18
<PAGE>
if to the Seller:
Option One Mortgage Corporation
3 Ada Road
Irvine, CA 92618
Attention: William L. O'Neill
or such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
if to the Purchaser:
Option One Mortgage Acceptance Corporation
3 Ada Road
Irvine, CA 92618
Attention: William L. O'Neill
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.
Section 7.05 COUNTERPARTS. This Agreement 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 and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 FURTHER AGREEMENTS. The Purchaser and the Seller each agree to
execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or reasonable and appropriate to effectuate the
purposes of this Agreement or in connection with the issuance of any Series of
Certificates representing interests in the Subsequent Mortgage Loans.
Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Subsequent Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Subsequent Mortgage Loans. In that
connection, the Seller will provide to the Purchaser any and all information and
appropriate verification of information, whether through letters of its auditors
and counsel or otherwise, as the Purchaser shall reasonably request and will
provide to the Purchaser such additional representations and warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Seller as are reasonably required in
connection with such transactions and the offering of investment grade
securities rated by the Rating Agencies.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Subsequent
Mortgage Loans rather than pledging the
19
<PAGE>
Subsequent Mortgage Loans to secure a loan by the Purchaser to the Seller.
Accordingly, the parties hereto each intend to treat the transaction for Federal
income tax purposes and all other purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Subsequent Mortgage Loans. The Purchaser will
have the right to review the Subsequent Mortgage Loans and the related Mortgage
Files to determine the characteristics of the Subsequent Mortgage Loans which
will affect the Federal income tax consequences of owning the Subsequent
Mortgage Loans and the Seller will cooperate with all reasonable requests made
by the Purchaser in the course of such review.
Section 7.08 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser, the Trustee and the Certificate Insurer. The Certificate
Insurer shall be a third party beneficiary hereof and may enforce the terms
hereof as if a party hereto. The obligations of the Seller under this Agreement
cannot be assigned or delegated to a third party without the consent of the
Purchaser which consent shall be at the Purchaser's sole discretion, except that
the Purchaser acknowledges and agrees that the Seller may assign its obligations
hereunder to any Person into which the Seller is merged or any corporation
resulting from any merger, conversion or consolidation to which the Seller is a
party or any Person succeeding to the business of the Seller. The parties hereto
acknowledge that the Purchaser is acquiring the Subsequent Mortgage Loans for
the purpose of contributing them to a trust that will issue a Series of
Certificates representing undivided interests in such Subsequent Mortgage Loans.
As an inducement to the Purchaser to purchase the Subsequent Mortgage Loans, the
Seller acknowledges and consents to the assignment by the Purchaser to the
Trustee of all of the Purchaser's rights against the Seller pursuant to this
Agreement insofar as such rights relate to Subsequent Mortgage Loans transferred
to the Trustee and to the enforcement or exercise of any right or remedy against
the Seller pursuant to this Agreement by the Trustee. Such enforcement of a
right or remedy by the Trustee shall have the same force and effect as if the
right or remedy had been enforced or exercised by the Purchaser directly.
Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01 and 3.02 and the provisions of Article V hereof shall survive the
purchase of the Subsequent Mortgage Loans hereunder.
20
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Subsequent Mortgage Loan Purchase Agreement by their
respective officers thereunto duly authorized as of the day and year fist above
written.
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION,
as Purchaser
By: /s/ William L. O'Neill
------------------------------------
Name: William L. O'Neill
Title: Senior Vice President
OPTION ONE MORTGAGE CORPORATION
as Seller
By: /s/ William L. O'Neill
------------------------------------
Name: William L. O'Neill
Title: Senior Vice President
21
<PAGE>
SCHEDULE I
MORTGAGE LOANS
Exhibit 99.1
------------
<PAGE>
GROUP I MORTGAGE LOANS STATISTICS
The Group I Mortgage Loans have original terms to maturity ranging
from 10 years to 30 years. The following statistical information, unless
otherwise specified, is based upon the Group I Loan Balance as of May 1, 1999
(the "Cut-off Date").
The Group I Mortgage Loans are secured by mortgages or deeds of trust
or other similar security instruments (each, a "Mortgage") creating first liens
or second liens on one- to four-family residential properties consisting of
detached, attached or semi-detached one- to four-family dwelling units and
individual condominium units (each, a "Mortgaged Property"). Approximately
21.69% of the Group I Mortgage Loans had Loan-to-Value Ratios (or combined
loan-to-value ratios, in the case of second lien Mortgage Loans) at origination
in excess of 80.00%. Approximately 3.43% of the Group I Mortgage Loans had
Loan-to-Value Ratios (or combined loan-to-value ratios, in the case of second
lien Mortgage Loans) at origination greater than 90.00% but no Group I Mortgage
Loan had a Loan-to-Value Ratio (or combined loan-to-value ratio, in the case of
a second lien mortgage loan) at origination more than 100%. There can be no
assurance that the Loan-to-Value Ratio (or combined loan-to-value ratio, in the
case of a second lien Mortgage Loan) of any Group I Mortgage Loan determined at
any time after origination is less than or equal to its original Loan-to-Value
Ratio (or combined loan-to-value ratio, in the case of a second lien Mortgage
Loan).
Approximately 80.66% of the Group I Mortgage Loans provide for the
payment of prepayment premiums by the related borrowers in certain instances.
There are 773 Group I Mortgage Loans (representing approximately
27.06% of the Group I Loan Balance) that are balloon payment mortgage loans
(each, a "Balloon Loan"). The monthly payment for each Balloon Loan amortizes
over 360 months, but the final payment (the "Balloon Payment") is due on the
180th month. The amount of the Balloon Payment on each Balloon Loan is
substantially in excess of the amount of the scheduled monthly payment for such
Mortgage Loan.
Approximately 97.43% of the Group I Mortgage Loans are secured by
first liens on the related Mortgaged Property and approximately 2.57% of the
Group I Mortgage Loans are secured by second liens on the related Mortgaged
Property.
Each Group I Mortgage Loan accrues interest at a rate (each, a "Loan
Rate") of not less than 6.500% per annum and not more than 15.640% per annum and
as of the Cut-off Date the weighted average Loan Rate of the Group I Mortgage
Loans was approximately 10.087% per annum.
The weighted average remaining term to maturity of the Group I
Mortgage Loans will be approximately 280 months as of the Cut-off Date. None of
the Group I Mortgage Loans had a first Due Date prior to May 1998 or after June
1999 or will have a remaining term to maturity of less than 117 months or
greater than 30 years as of the Cut-off Date. The latest maturity date of any
Group I Mortgage Loan is May 2029.
The average Principal Balance of the Group I Mortgage Loans at
origination was approximately $78,537. The average Cut-off Date Principal
Balance of the Group I Mortgage Loans was approximately $78,364.
<PAGE>
No Group I Mortgage Loan had a Cut-off Date Principal Balance of
greater than approximately $239,682 or less than approximately $8,753. The Group
I 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>
CREDIT GRADE FOR THE GROUP I MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Credit Grade of Mortgage Loans the Cut-off-Date the Cut-off Date
- --------------- ------------------ ------------------- ------------------
A............... 767 $ 64,456,198.40 27.50%
AA.............. 1,130 94,796,877.66 40.44
AA+............. 94 5,806,047.89 2.48
B............... 719 50,973,148.59 21.75
C............... 218 14,153,623.04 6.04
CC.............. 63 4,200,916.51 1.79
----- --------------- ------
Total..... 2,991 $234,386,812.09 100.00%
===== ============== ======
______________________
(1) For a description of each credit grade, see "Option One Mortgage
Corporation - Underwriting Standards" herein.
CUT-OFF DATE PRINCIPAL BALANCES OF THE GROUP I MORTGAGE LOANS (1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Principal Balance($) of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------- ------------------ ----------------- -----------------
8,753 - 25,000.... 134 $ 2,826,532.06 1.21%
25,001 - 50,000.... 845 32,840,310.32 14.01
50,001 - 75,000.... 784 48,479,878.06 20.68
75,001 - 100,000.... 497 43,125,700.83 18.40
100,001 - 125,000.... 282 31,588,314.05 13.48
125,001 - 150,000.... 168 23,112,202.56 9.86
150,001 - 175,000.... 107 17,321,215.36 7.39
175,001 - 200,000.... 90 16,841,462.34 7.19
200,001 - 225,000.... 64 13,573,803.86 5.79
225,001 - 239,682.... 20 4,677,392.65 2.00
----- -------------- ------
Total............. 2,991 $234,386,812.09 100.00%
===== ============== ======
_____________________
(1) The Average Cut-off Date Principal Balance of the Group I Mortgage Loans
was approximately $78,364.
<PAGE>
ORIGINAL TERMS TO MATURITY OF THE GROUP I MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Original Term (months) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- -----------------
120................... 36 $ 1,537,318.81 0.66%
121-180............... 1,262 91,497,640.23 39.04
181-240............... 164 10,503,462.53 4.48
301-360............... 1,529 130,848,390.52 55.83
----- -------------- ------
Total.......... 2,991 $234,386,812.09 100.00%
===== ============== ======
_____________________
(1) The weighted average original term of the Group I Mortgage Loans was
approximately 283 months.
REMAINING TERMS TO MATURITY OF THE GROUP I MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Remaining Term (months) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ----------------------- ----------------- ----------------- -----------------
117-120................ 36 $ 1,537,318.81 0.66%
121-180................ 1,262 91,497,640.23 39.04
181-240................ 164 10,503,462.53 4.48
301-360................ 1,529 130,848,390.52 55.83
----- -------------- ------
Total.............. 2,991 $234,386,812.09 100.00%
===== ============== ======
_______________________
(1) The weighted average remaining term of the Group I Mortgage Loans was
approximately 280 months.
<PAGE>
PROPERTY TYPES OF THE GROUP I MORTGAGE LOANS
% of Aggregate
Number Principal Balance Principal Balance
of Mortgage Outstanding as of Outstanding as of
Property Type Loans the Cut-off-Date the Cut-off Date
- ---------------------------- ------------ ----------------- ----------------
Single Family Detached...... 2,408 $188,398,561.09 80.38%
2-4 Units Detached.......... 143 11,860,400.54 5.06
PUD Detached (1)............ 103 11,520,297.75 4.92
Manufactured Housing 123 8,455,232.42 3.61
Condo Low-Rise Attached..... 99 6,334,776.55 2.70
Single Family Attached...... 70 3,788,625.62 1.62
PUD Attached (1)............ 21 1,587,238.76 0.68
2-4 Units Attached.......... 9 1,159,692.52 0.49
Condo High-Rise Attached.... 14 1,052,739.02 0.45
Condo Low-Rise Detached..... 1 229,247.82 0.10
----- --------------- ------
Total.................. 2,991 $234,386,812.09 100.00%
===== ============== ======
_______________________
(1) PUD refers to a home or "unit" in a Planned Unit Development.
OCCUPANCY STATUS OF THE GROUP I MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Occupancy Status(1) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------- ----------------- ----------------- -----------------
Primary............ 2,706 $216,976,648.42 92.57%
Non-owner.......... 247 14,318,932.17 6.11
Second Home........ 38 3,091,231.50 1.32
----- --------------- ------
Total......... 2,991 $234,386,812.09 100.00%
===== ============== ======
___________________
(1) Occupancy as represented by the borrower at the time of origination.
<PAGE>
PURPOSE OF THE GROUP I MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Purpose of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ---------------- -----------------
Cash Out Refinance.... 1,989 $154,741,696.25 66.02%
Rate/Term Refinance... 485 42,049,885.77 17.94
Purchase.............. 517 37,595,230.07 16.04
------ --------------- ------
Total.......... 2,991 $234,386,812.09 100.00%
===== ============== ======
LOAN RATES OF THE GROUP I MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Loan Rate(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------- ----------------- ----------------- -----------------
6.50 - 7.00....... 5 710,892.08 0.30%
7.01 - 8.00....... 123 12,777,096.11 5.45
8.01 - 9.00....... 466 50,279,494.78 21.45
9.01 - 10.00...... 728 61,448,079.02 26.22
10.01 - 11.00...... 727 53,730,760.97 22.92
11.01 - 12.00...... 537 33,900,143.73 14.46
12.01 - 13.00...... 302 16,696,605.13 7.12
13.01 - 14.00...... 89 4,252,505.13 1.81
14.01 - 15.00...... 12 540,872.75 0.23
15.01 - 15.64...... 2 50,362.39 0.02
----- --------------- -------
Total...... 2,991 $234,386,812.09 100.00%
===== ============== ======
__________________
(1) The weighted average Loan Rate of the Group I Mortgage Loans as of the
Cut-off Date was approximately 10.087% per annum.
<PAGE>
ORIGINAL COMBINED LOAN-TO-VALUE RATIOS OF THE GROUP I MORTGAGE LOANS(1)(2)
% of Aggregate
Principal Balance Principal Balance
Original Combined Loan- Number Outstanding as of Outstanding as of
to-Value Ratio(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ----------------------- ----------------- ------------------ -----------------
3.62 - 5.00......... 2 $ 88,297.92 0.04%
5.01 - 10.00........ 1 37,000.00 0.02
15.01 - 20.00........ 7 286,693.59 0.12
20.01 - 25.00........ 9 897,295.36 0.38
25.01 - 30.00........ 14 639,425.85 0.27
30.01 - 35.00........ 20 929,310.22 0.40
35.01 - 40.00........ 36 1,813,010.99 0.77
40.01 - 45.00........ 49 3,211,111.31 1.37
45.01 - 50.00........ 63 3,752,442.26 1.60
50.01 - 55.00........ 78 5,362,068.49 2.29
55.01 - 60.00........ 132 8,864,576.13 3.78
60.01 - 65.00........ 242 18,134,824.48 7.74
65.01 - 70.00........ 296 21,966,277.07 9.37
70.01 - 75.00........ 455 34,799,587.98 14.85
75.01 - 80.00........ 1,064 82,755,642.16 35.31
80.01 - 85.00........ 141 11,901,722.62 5.08
85.01 - 90.00........ 304 30,905,779.87 13.19
90.01 - 95.00........ 75 7,620,748.23 3.25
95.01 - 100.00....... 3 420,997.56 0.18
----- --------------- ------
Total........ 2,991 $234,386,812.09 100.00%
===== ============== ======
____________________
(1) The weighted average original combined Loan-to-Value Ratio of the Group I
Mortgage Loans as of the Cut-off Date was approximately 75.22%.
(2) For a description of the determination of Combined Loan-to-Value Ratio by
the Master Servicer see "Option One Mortgage Corporation -
Underwriting Standards" herein.
<PAGE>
GEOGRAPHIC DISTRIBUTION OF THE GROUP I MORTGAGED PROPERTIES(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Location of Mortgage Loans the Cut-off-Date the Cut-off Date
- ----------------------- ----------------- ------------------ -----------------
Arizona................ 48 3,740,724.81 1.60%
Arkansas............... 2 96,549.57 0.04
California............. 311 35,377,595.82 15.09
Colorado............... 33 3,812,448.11 1.63
Connecticut............ 48 4,337,079.27 1.85
Delaware............... 14 1,233,060.36 0.53
District of Columbia... 17 1,630,154.41 0.70
Florida................ 359 24,352,054.72 10.39
Georgia................ 83 6,187,624.81 2.64
Idaho.................. 10 825,801.50 0.35
Illinois............... 139 10,459,810.17 4.46
Indiana................ 103 5,149,433.32 2.20
Iowa................... 17 952,259.97 0.41
Kansas................. 13 753,566.09 0.32
Kentucky............... 80 4,682,785.96 2.00
Louisiana.............. 78 4,929,619.22 2.10
Maine.................. 31 1,944,929.18 0.83
Maryland............... 81 6,699,874.20 2.86
Massachusetts.......... 109 11,212,946.47 4.78
Michigan............... 146 9,366,690.33 4.00
Minnesota.............. 22 1,781,860.39 0.76
Mississippi............ 50 2,557,310.19 1.09
Missouri............... 36 2,339,965.85 1.00
Montana................ 4 374,153.25 0.16
Nebraska............... 5 372,994.87 0.16
Nevada................. 34 3,235,373.02 1.38
New Hampshire.......... 20 1,947,613.48 0.83
New Jersey............. 96 10,806,482.49 4.61
New Mexico............. 7 597,142.75 0.25
New York............... 149 12,053,869.09 5.14
North Carolina......... 48 3,423,162.78 1.46
Ohio................... 159 10,978,350.47 4.68
Oklahoma............... 3 143,662.55 0.06
Oregon................. 37 3,337,659.67 1.42
Pennsylvania........... 129 7,929,324.70 3.38
Rhode Island........... 24 1,951,179.21 0.83
South Carolina......... 18 1,154,913.50 0.49
Tennessee.............. 57 3,911,962.86 1.67
Texas.................. 114 8,619,694.84 3.68
Utah................... 13 921,514.33 0.39
Vermont................ 3 127,339.00 0.05
Virginia............... 151 11,304,455.03 4.82
Washington............. 58 5,001,571.20 2.13
West Virginia.......... 12 612,078.46 0.26
Wisconsin.............. 20 1,158,169.82 0.49
----- --------------- ------
Total 2,991 $234,386,812.09 100.00%
===== ============== ======
_______________________
(1) The greatest ZIP Code geographic concentration of Group I Mortgage Loans,
by Cut-off Date Principal Balance, was approximately 0.30%
in the 91719 Zip Code.
<PAGE>
<TABLE>
<CAPTION>
DOCUMENTATION LEVEL OF THE GROUP I MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Documenation Level of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------------------ ----------------- ------------------ -----------------
<S> <C> <C> <C>
Full Documentation............. 2,072 $163,863,060.77 69.91%
Stated Income Documentation.... 913 70,016,624.56 29.87
Lite Documentation............. 6 507,126.76 0.22
----- --------------- ------
Total.......................... 2,991 $234,386,812.09 100.00%
===== ============== ======
_________________________
(1) For a description of each documentation level, see "Option One Mortgage
Corporation --Underwriting Standards" herein.
</TABLE>
GROUP II MORTGAGE LOANS STATISTICS
The Group II Mortgage Loans have original terms to maturity ranging from 15
years to 30 years. The following statistical information, unless otherwise
specified, is based upon the Group II Loan Balance as of the Cut-off Date.
The Group II Mortgage Loans are secured by Mortgages creating first liens
on Mortgaged Properties. Approximately 21.70% of the Group II Mortgage Loans had
Loan-to-Value Ratios at origination in excess of 80.00%. Approximately 2.38% of
the Group II Mortgage Loans had Loan-to-Value Ratios at origination greater than
90.00% but no Group II Mortgage Loan had a Loan-to-Value Ratio at origination
more than 93.80%. There can be no assurance that the Loan-to-Value Ratio of any
Group II Mortgage Loan determined at any time after origination is less than or
equal to its original Loan-to-Value Ratio.
Approximately 81.58% of the Group II Mortgage Loans provide for the payment
of prepayment premiums by the related borrowers in certain instances.
There are 40 Group II Mortgage Loans (representing approximately 33.46% of
the Group II Loan Balance) that are Balloon Loans. The monthly payment for each
Balloon Loan amortizes over 360 months, but the Balloon Payment is due on the
180th month. The amount of the Balloon Payment on each Balloon Loan is
substantially in excess of the amount of the scheduled monthly payment for such
Mortgage Loan.
Each Group II Mortgage Loan accrues interest at a Loan Rate of not less
than 7.000% per annum and not more than 12.300% per annum and as of the Cut-off
Date the weighted average Loan Rate of the Group II Mortgage Loans was
approximately 9.011% per annum.
The weighted average remaining term to maturity of the Group II Mortgage
Loans will be approximately 296 months as of the Cut-off Date. None of the Group
II Mortgage Loans had a first Due Date prior to August 1998 or after June 1999
or will have a remaining term to maturity of less than 172 months or greater
than 30 years as of the Cut-off Date. The latest maturity date of any Group II
Mortgage Loan is April 2029.
The average Principal Balance of the Group II Mortgage Loans at origination
was approximately $323,569. The average Cut-off Date Principal Balance of the
Group II Mortgage Loans was approximately $322,809.
No Group II Mortgage Loan had a Cut-off Date Principal Balance of greater
than approximately $894,139 or less than approximately $240,753. The Group II
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>
CREDIT GRADE FOR THE GROUP II MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Credit Grade of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------- ----------------- ------------------ -----------------
A................... 31 $10,379,651.20 27.02%
AA.................. 58 19,474,858.38 50.70
AA+................. 2 484,972.04 1.26
B................... 23 6,666,616.27 17.35
C................... 3 814,207.83 2.12
CC.................. 2 594,020.49 1.55
--- -------------- ------
Total......... 119 $38,414,326.21 100.00%
=== ============= ======
_______________________
(1) For a description of each credit grade, see "Option One Mortgage
Corporation - Underwriting Standards" herein.
CUT-OFF DATE PRINCIPAL BALANCES OF THE GROUP II MORTGAGE LOANS (1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Principal Balance($) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
240,753 - 250,000..... 17 4,164,430.36 10.84%
250,001 - 275,000..... 26 6,814,869.64 17.74
275,001 - 300,000..... 29 8,330,179.54 21.69
300,001 - 325,000..... 11 3,436,188.78 8.95
325,001 - 350,000..... 18 6,141,615.42 15.99
350,001 - 375,000..... 2 728,099.85 1.90
375,001 - 400,000..... 2 771,124.69 2.01
400,001 - 425,000..... 3 1,260,335.69 3.28
425,001 - 450,000..... 1 442,220.36 1.15
450,001 - 475,000..... 2 923,748.17 2.40
475,001 - 500,000..... 1 498,460.93 1.30
550,001 - 575,000..... 1 566,992.51 1.48
575,001 - 600,000..... 1 595,674.45 1.55
625,001 - 650,000..... 1 639,136.54 1.66
700,001 - 725,000..... 1 723,288.49 1.88
725,001 - 750,000..... 2 1,483,821.51 3.86
875,001 - 894,139..... 1 894,139.28 2.33
--- -------------- ------
Total......... 119 $38,414,326.21 100.00%
=== ============= ======
_____________________
(1) The average Cut-off Date Principal Balance of the Group II Mortgage Loans
was approximately $322,809.
<PAGE>
ORIGINAL TERMS TO MATURITY OF THE GROUP II MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Original Term (months) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
180................... 41 $13,095,369.28 34.09%
301-360............... 78 25,318,956.93 65.91
---- ------------- ------
Total.......... 119 $38,414,326.21 100.00%
=== ============= ======
________________________
(1) The weighted average original term of the Group II Mortgage Loans was
approximately 299 months.
REMAINING TERMS TO MATURITY OF THE GROUP II MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Remaining Term (months) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ----------------------- ----------------- ----------------- ----------------
172-180............... 41 $13,095,369.28 34.09%
301-359............... 78 25,318,956.93 65.91
---- ------------- ------
Total......... 119 $38,414,326.21 100.00%
=== ============= ======
____________________
(1) The weighted average remaining term of the Group II Mortgage Loans was
approximately 296 months.
<TABLE>
<CAPTION>
PROPERTY TYPES OF THE GROUP II MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Property Type of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------------------ ----------------- ----------------- ----------------
<S> <C> <C> <C>
Single Family Detached........ 92 $30,089,570.08 78.33%
PUD Detached (1).............. 20 6,323,841.81 16.46
Condo Low-Rise Attached....... 6 1,681,564.09 4.38
2-4 Units Detached............ 1 319,350.23 0.83
--- -------------- ------
Total.................... 119 $38,414,326.21 100.00%
=== ============= ======
______________________
(1) PUD refers to a home or "unit" in a Planned Unit Development.
</TABLE>
<PAGE>
OCCUPANCY STATUS OF THE GROUP II MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Occupancy Status(1) of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------- ----------------- ---------------- ----------------
Primary............. 117 $37,884,824.36 98.62%
Non-owner........... 2 529,501.85 1.38
---- -------------- ------
Total.......... 119 $38,414,326.21 100.00%
=== ============= ======
______________________
(1) Occupancy as represented by the borrower at the time of origination.
<TABLE>
<CAPTION>
PURPOSE OF THE GROUP II MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Purpose of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------------- ----------------- ----------------- ----------------
<S> <C> <C> <C>
Cash Out Refinance....... 83 $26,705,712.45 69.52%
Rate/Term Refinance...... 26 8,643,745.95 22.50
Purchase................. 10 3,064,867.81 7.98
--- -------------- ------
Total........... 119 $38,414,326.21 100.00%
=== ============= ======
</TABLE>
LOAN RATES OF THE GROUP II MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Loan Rate (%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------- ----------------- ----------------- ----------------
7.00................ 1 $ 240,940.57 0.63%
7.01 - 8.00........ 26 8,419,994.80 21.92
8.01 - 9.00........ 41 14,061,711.90 36.61
9.01 - 10.00....... 29 8,605,897.17 22.40
10.01 - 11.00....... 16 5,261,563.40 13.70
11.01 - 12.00....... 5 1,479,610.62 3.85
12.01 - 12.30....... 1 344,607.75 0.90
--- -------------- ------
Total....... 119 $38,414,326.21 100.00%
=== ============= ======
________________________
(1) The weighted average Loan Rate of the Group II Mortgage Loans as of the
Cut-off Date was approximately 9.011% per annum.
<PAGE>
ORIGINAL LOAN-TO-VALUE RATIOS OF THE GROUP II MORTGAGE LOANS(1)(2)
% of Aggregate
Principal Balance Principal Balance
Original Loan-to-Value Number Outstanding as of Outstanding as of
Ratio(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
43.47 - 45.00......... 1 $ 249,624.68 0.65%
45.01 - 50.00......... 1 278,589.35 0.73
50.01 - 55.00......... 2 583,217.61 1.52
55.01 - 60.00......... 3 839,448.47 2.19
60.01 - 65.00......... 10 2,854,724.29 7.43
65.01 - 70.00......... 13 4,720,070.54 12.29
70.01 - 75.00......... 23 7,727,571.40 20.12
75.01 - 80.00......... 38 12,826,565.73 33.39
80.01 - 85.00......... 9 2,711,564.64 7.06
85.01 - 90.00......... 16 4,707,423.19 12.25
90.01 - 93.80......... 3 915,526.31 2.38
--- -------------- ------
Total......... 119 $38,414,326.21 100.00%
=== ============= ======
_________________________
(1) The weighted average originaL Loan-to-Value Ratio of the Group II Mortgage
Loans as of the Cut-off Date was approximately 76.37%.
(2) For a description of the determination of Loan-to-Value Ratio by the Master
Servicer see "Option One Mortgage Corporation - Underwriting
Standards" herein.
<PAGE>
GEOGRAPHIC DISTRIBUTION OF THE GROUP II MORTGAGED PROPERTIES(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Location of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
Arizona................ 2 $ 687,603.37 1.79%
California............. 47 14,465,087.13 37.66
Connecticut............ 5 1,860,343.47 4.84
District of Columbia... 1 279,893.44 0.73
Florida................ 4 1,781,811.96 4.64
Georgia................ 3 891,103.86 2.32
Illinois............... 4 1,231,987.01 3.21
Indiana................ 1 279,876.13 0.73
Kansas................. 1 258,756.44 0.67
Kentucky............... 1 269,576.84 0.70
Louisiana.............. 2 592,701.30 1.54
Maryland............... 2 1,008,058.52 2.62
Massachusetts.......... 10 2,865,970.72 7.46
Michigan............... 2 540,260.67 1.41
Minnesota.............. 2 492,570.60 1.28
Nevada................. 1 327,601.18 0.85
New Hampshire.......... 1 344,755.50 0.90
New Jersey............. 5 1,799,084.40 4.68
New York............... 3 811,526.78 2.11
Ohio................... 2 682,164.95 1.78
Oregon................. 2 660,278.59 1.72
Pennsylvania........... 3 854,054.98 2.22
South Carolina......... 2 488,722.48 1.27
Texas.................. 5 2,321,929.75 6.04
Virginia............... 4 1,326,804.67 3.45
Washington............. 4 1,291,801.47 3.36
--- -------------- ------
Total 119 $38,414,326.21 100.00%
=== ============= ======
____________________
(1) The greatest ZIP code geographic concentration of Group II Mortgage Loans,
by Cut-off Date Principal Balance, was approximately 2.33% in the 75205 ZIP
code.
<PAGE>
<TABLE>
<CAPTION>
DOCUMENTATION LEVEL OF THE GROUP II MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Documentation Level of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------------------- ----------------- ----------------- ----------------
<S> <C> <C> <C>
Full Documentation.............. 80 $26,637,279.97 69.34%
Stated Income Documentation..... 39 11,777,046.24 30.66
--- -------------- ------
Total.................. 119 $38,414,326.21 100.00%
=== ============= ======
_______________________
(1) For a description of each documentation level, see "Option One Mortgage
Corporation --Underwriting Standards" herein.
</TABLE>
GROUP III MORTGAGE LOANS STATISTICS
The Group III Mortgage Loans have original terms to maturity of 30 years.
The following statistical information, unless otherwise specified, is based upon
the Group III Loan Balance as of the Cut-off Date.
The Group III Mortgage Loans are secured by Mortgages creating first liens
on Mortgaged Properties. Approximately 32.26% of the Group III Mortgage Loans
had Loan-to-Value Ratios at origination in excess of 80.00%. Approximately 5.70%
of the Group III Mortgage Loans had Loan-to-Value Ratios at origination greater
than 90.00% but not more than 95.00%. There can be no assurance that the
Loan-to-Value Ratio of any Group III Mortgage Loan determined at any time after
origination is less than or equal to its original Loan-to-Value Ratio.
None of the Group III Mortgage Loans are Balloon Loans.
Approximately 79.11% of the Group III Mortgage Loans provide for the
payment of prepayment premiums by the related borrowers in certain instances.
The weighted average remaining term to maturity of the Group III Mortgage
Loans will be approximately 358 months as of the Cut-off Date. None of the Group
III Mortgage Loans had a first Due Date prior to September 1998 or after June
1999 or will have a remaining term to maturity of less than 351 months or
greater than 30 years as of the Cut-off Date. The latest maturity date of any
Group III Mortgage Loan is May 2029.
The average Principal Balance of the Group III Mortgage Loans at
origination was approximately $324,895. The average Cut-off Date Principal
Balance of the Group III Mortgage Loans was approximately $324,454.
No Group III Mortgage Loan had a Cut-off Date Principal Balance of greater
than approximately $863,949 or less than approximately $240,989.
Generally, the Group III Mortgage Loans provide for semi-annual adjustment
to the Loan Rate thereon 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"); provided, that the first
adjustment for such Mortgage Loans will occur after an initial period of two
years in the case of 90.81% of the Group III Mortgage Loans and three years in
the case of 3.74% of the Group III Mortgage Loans (each such Mortgage Loan, a
"Delayed First Adjustment Mortgage Loan"). On each Adjustment Date for each
Group III Mortgage Loan, the Loan Rate thereon will be adjusted to equal the
sum, rounded to the nearest or next highest multiple of 0.125%, of Six-Month
LIBOR (as defined below) and a fixed percentage amount (the "Gross Margin"). The
Loan Rate on any such Group III Mortgage Loan will not increase by more than an
amount set forth in the related Mortgage Note, which is not more than 3.000% per
annum on the first related Adjustment Date (the "Initial Periodic Rate Cap") and
1.500% on any Adjustment Date thereafter (the "Periodic Rate Cap"). The Group
III Mortgage Loans have a weighted average Initial Periodic Rate Cap of
approximately 2.884% per annum and a weighted average Periodic Rate Cap of
approximately 1.002% per annum thereafter. Each Loan Rate on each such Group III
Mortgage Loan will not exceed a specified maximum Loan Rate over the life of
such Group III
<PAGE>
Mortgage Loan (the "Maximum Loan Rate") or be less than a specified minimum Loan
Rate over the life of such Group III Mortgage Loan (the "Minimum Loan Rate").
The Group III Mortgage Loans that are Delayed First Adjustment Mortgage Loans
have a weighted average Initial Periodic Rate Cap of approximately 2.992% per
annum and a weighted average Periodic Rate Cap of approximately 1.003% per annum
thereafter. Effective with the first monthly payment due on each Group III
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 Loan Rate as so adjusted. Due to the application of the Periodic Rate
Caps and the Maximum Loan Rates, the Loan Rate on each such Mortgage Loan, as
adjusted on any related Adjustment Date, may be less than the sum of the Index
and the related Gross Margin, rounded as described herein. See "--The Index"
herein. None of the Group III Mortgage Loans will permit the related mortgagor
to convert the adjustable Loan Rate thereon to a fixed Loan Rate.
The Group III Mortgage Loans had Loan Rates as of the Cut-off Date of not
less than 6.750% per annum and not more than 12.850% per annum and the weighted
average Loan Rate was approximately 9.270% per annum. As of the Cut-off Date,
the Group III Mortgage Loans had Gross Margins ranging from 3.700% to 7.625%,
Minimum Loan Rates ranging from 6.750% per annum to 12.850% per annum and
Maximum Loan Rates ranging from 12.750% per annum to 18.850% per annum. As of
the Cut-off Date, the weighted average Gross Margin was approximately 5.587%,
the weighted average Minimum Loan Rate was approximately 9.270% per annum and
the weighted average Maximum Loan Rate was approximately 15.277% per annum. The
latest next Adjustment Date following the Cut-off Date on any Group III Mortgage
Loan occurs on April 2002 and the weighted average time until the next
Adjustment Date for all of the Group III Mortgage Loans is approximately 21
months.
The Group III 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):
CREDIT GRADE FOR THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Credit Grade of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------- ----------------- ----------------- ----------------
A................... 96 $31,558,662.15 32.97%
AA.................. 136 45,673,094.83 47.72
B................... 44 13,156,857.72 13.75
C................... 17 4,648,641.61 4.86
CC.................. 2 676,720.71 0.71
--- -------------- ------
Total......... 295 $95,713,977.02 100.00%
=== ============= ======
____________________
(1) For a description of each credit grade, see "Option One Mortgage
Corporation - Underwriting Standards" herein.
<PAGE>
CUT-OFF DATE PRINCIPAL BALANCES OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Principal Balance($) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
240,989 - 250,000.... 29 7,106,114.18 7.42%
250,001 - 275,000.... 70 18,281,205.25 19.10
275,001 - 300,000.... 62 17,823,180.03 18.62
300,001 - 325,000.... 36 11,233,147.42 11.74
325,001 - 350,000.... 35 11,918,658.79 12.45
350,001 - 375,000.... 10 3,639,851.61 3.80
375,001 - 400,000.... 7 2,717,108.39 2.84
400,001 - 425,000.... 10 4,101,773.08 4.29
425,001 - 450,000.... 7 3,075,036.93 3.21
450,001 - 475,000.... 10 4,159,520.96 4.35
475,001 - 500,000.... 9 4,845,659.12 5.06
525,001 - 550,000.... 1 539,637.67 0.56
575,001 - 600,000.... 1 577,971.51 0.60
625,001 - 650,000.... 3 1,918,787.79 2.00
650,001 - 675,000.... 2 1,326,148.83 1.39
725,001 - 750,000.... 1 749,625.22 0.78
825,001 - 850,000.... 1 836,601.50 0.87
850,001 - 863,949.... 1 863,948.74 0.90
--- -------------- ------
Total................. 295 $95,713,977.02 100.00%
=== ============= ======
_______________________
(1) The average Cut-off Date Principal Balance of the Group III Mortgage Loans
was approximately $324,454.
REMAINING TERMS TO MATURITY OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Remaining Term (months) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
351-360.............. 295 $95,713,977.02 100.00%
--- ------------- ------
Total................ 295 $95,713,977.02 100.00%
=== ============= ======
_____________________
(1) The weighted average remaining term of the Group III Mortgage Loans was
approximately 358 months.
<PAGE>
PROPERTY TYPES OF THE GROUP III MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Property Type of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------------ ----------------- ----------------- ----------------
Single Family Detached.. 248 $80,421,807.69 84.02%
PUD Detached (1)........ 25 8,383,225.78 8.76
Condo Low-Rise
Attached................ 7 2,142,212.48 2.24
Single Family Attached.. 7 2,045,509.89 2.14
2-4 Units Detached...... 3 1,175,159.65 1.23
Condo High-Rise
Attached................ 3 1,044,315.51 1.09
PUD Attached (1)........ 2 501,746.02 0.52
--- -------------- ------
Total.............. 295 $95,713,977.02 100.00%
=== ============= ======
_____________________
(1) PUD refers to a home or "unit" in a Planned Unit Development.
OCCUPANCY STATUS OF THE GROUP III MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Occupancy Status(1) of Mortgage Loans the Cut-off-Date the Cut-off Date
- --------------------- ----------------- ----------------- ----------------
Primary.............. 282 $91,300,175.92 95.39%
Non-owner............ 7 2,503,769.43 2.62
Second Home.......... 6 1,910,031.67 2.00
----- -------------- ------
Total........... 295 $95,713,977.02 100.00%
=== ============= ======
________________________
(1) Occupancy as represented by the borrower at the time of origination.
PURPOSE OF THE GROUP III MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Purpose of Mortgage Loans the Cut-off-Date the Cut-off Date
- --------------------- ----------------- ----------------- ----------------
Cash Out Refinance... 149 $49,168,691.82 51.37%
Purchase............. 104 32,917,316.62 34.39
Rate/Term Refinance.. 42 13,627,968.58 14.24
---
Total................ 295 $95,713,977.02 100.00%
=== ============= ======
<PAGE>
CURRENT LOAN RATES OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Current Loan Rate(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- --------------------- ----------------- ----------------- ----------------
6.75 - 7.00......... 4 $ 1,232,035.19 1.29%
7.01 - 8.00......... 41 14,625,661.32 15.28
8.01 - 9.00......... 83 27,158,941.42 28.38
9.01 - 10.00........ 103 33,609,801.81 35.11
10.01 - 11.00........ 45 13,483,891.98 14.09
11.01 - 12.00........ 16 4,632,150.87 4.84
12.01 - 12.85........ 3 971,494.43 1.01
--- --------------- ------
Total........ 295 $95,713,977.02 100.00%
=== ============= ======
______________________
(1) The weighted average Loan Rate of the Group III Mortgage Loans as of the
Cut-off Date was approximately 9.270% per annum.
ORIGINAL LOAN-TO-VALUE RATIOS OF THE GROUP III MORTGAGE LOANS(1)(2)
% of Aggregate
Principal Balance Principal Balance
Original Loan-to-Value Number Outstanding as of Outstanding as of
Ratio(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
17.17 - 20.00......... 1 $ 248,805.46 0.26%
45.01 - 50.00......... 1 304,705.04 0.32
50.01 - 55.00......... 6 2,262,216.44 2.36
55.01 - 60.00......... 5 1,662,860.20 1.74
60.01 - 65.00......... 10 3,748,831.44 3.92
65.01 - 70.00......... 20 7,292,108.95 7.62
70.01 - 75.00......... 34 11,929,111.80 12.46
75.01 - 80.00......... 117 37,386,085.97 39.06
80.01 - 85.00......... 18 5,192,114.43 5.42
85.01 - 90.00......... 65 20,229,927.51 21.14
90.01 - 95.00......... 18 5,457,209.78 5.70
--- -------------- ------
Total............ 295 $95,713,977.02 100.00%
=== ============= ======
____________________
(1) The weighted average original Loan-to-Value Ratio of the Group III Mortgage
Loans as of the Cut-off Date was approximately 79.42%.
(2) For a description of the determination of Loan-to-Value Ratio by the Master
Servicer see "Option One Mortgage Corporation - Underwriting Standards"
herein.
<PAGE>
GEOGRAPHIC DISTRIBUTION OF THE GROUP III MORTGAGED PROPERTIES(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Location of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
Arizona............... 3 $ 881,921.25 0.92%
California............ 109 36,928,160.22 38.58
Colorado.............. 10 4,040,519.92 4.22
Connecticut........... 10 3,844,836.56 4.02
District of Columbia.. 2 550,321.77 0.57
Florida............... 6 1,815,885.40 1.90
Georgia............... 6 1,636,536.21 1.71
Illinois.............. 24 7,155,037.09 7.48
Kentucky.............. 2 551,800.97 0.58
Maine................. 1 371,412.06 0.39
Maryland.............. 8 2,224,908.52 2.32
Massachusetts......... 30 9,661,160.08 10.09
Michigan.............. 9 2,623,503.27 2.74
Minnesota............. 2 506,782.67 0.53
Missouri.............. 2 563,585.46 0.59
Nevada................ 6 1,992,758.43 2.08
New Hampshire......... 4 1,282,377.09 1.34
New Jersey............ 7 2,330,752.32 2.44
New York.............. 13 4,037,103.74 4.22
Ohio.................. 10 3,222,749.31 3.37
Oregon................ 2 529,283.35 0.55
Pennsylvania.......... 2 611,092.41 0.64
Tennessee............. 2 541,448.99 0.57
Texas................. 4 1,082,032.21 1.13
Vermont............... 1 299,874.20 0.31
Virginia.............. 6 1,747,494.14 1.83
Washington............ 12 3,963,655.50 4.14
Wisconsin............. 2 716,983.88 0.75
---- -------------- ------
Total ........... 295 $95,713,977.02 100.00%
=== ============= ======
________________________
(1) The greatest ZIP code geographic concentration of Group III Mortgage Loans,
by Group III Loan Balance as of the Cut-off Date, was approximately 1.59%
In the 06880 ZIP code.
<PAGE>
<TABLE>
<CAPTION>
DOCUMENTATION LEVELS OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Documentation Level of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------------------- ----------------- ----------------- ----------------
<S> <C> <C> <C>
Full Documentation............. 211 $69,043,397.63 72.14%
Stated Income Documentation.... 83 26,250,729.47 27.43
Lite Documentation............. 1 419,849.92 0.44
--- -------------- ------
Total..................... 295 $95,713,977.02 100.00%
=== ============= ======
______________________
(1) For a description of each documentation level, see "Option One Mortgage
Corporation - Underwriting Standards" herein.
</TABLE>
MAXIMUM LOAN RATES OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Maximum Loan Rate(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ---------------------- ----------------- ----------------- ----------------
12.75 - 13.00......... 4 $ 1,232,035.19 1.29%
13.01 - 14.00......... 41 14,625,661.32 15.28
14.01 - 15.00......... 82 26,693,273.46 27.89
15.01 - 16.00......... 104 34,075,469.77 35.60
16.01 - 17.00......... 45 13,483,891.98 14.09
17.01 - 18.00......... 15 4,282,790.44 4.47
18.01 - 18.85......... 4 1,320,854.86 1.38
--- -------------- ------
Total......... 295 $95,713,977.02 100.00%
=== ============= ======
_______________________
(1) The weighted average Maximum Loan Rate of the Group III Mortgage Loans as
of the Cut-off Date was approximately 15.277% per annum.
<PAGE>
MINIMUM LOAN RATES OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Minimum Loan Rate(% of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------- ----------------- ----------------- ----------------
6.75 - 7.00..... 4 $ 1,232,035.19 1.29%
7.01 - 8.00..... 41 14,625,661.32 15.28
8.01 - 9.00..... 83 27,158,941.42 28.38
9.01 - 10.00.... 103 33,609,801.81 35.11
10.01 - 11.00.... 45 13,483,891.98 14.09
11.01 - 12.00.... 16 4,632,150.87 4.84
12.01 - 12.85.... 3 971,494.43 1.01
--- --------------- ------
Total.......... 295 $95,713,977.02 100.00%
=== ============= ======
_________________
(1) The weighted average Minimum Loan Rate of the Group III Mortgage Loans as
of the Cut-off Date was approximately 9.270% per annum.
GROSS MARGINS OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Gross Margins(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------- ----------------- ----------------- ----------------
3.70 - 5.00......... 34 $13,330,036.43 13.93%
5.01 - 7.63......... 261 82,383,940.59 86.07
--- ------------- ------
Total........ 295 $95,713,977.02 100.00%
=== ============= ======
___________________
(1) The weighted average Gross Margin of the Group III Mortgage Loans as of the
Cut-off Date was approximately 5.587%.
<PAGE>
NEXT ADJUSTMENT DATE FOR THE GROUP III MORTGAGE LOANS
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Rate Change Date of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------- ----------------- ----------------- ----------------
07/01/99............ 1 $ 404,193.59 0.42%
08/01/99............ 4 1,366,720.00 1.43
09/01/99............ 5 1,753,028.39 1.83
10/01/99............ 4 1,685,462.12 1.76
08/01/00............ 2 858,789.80 0.90
09/01/00............ 5 2,169,723.76 2.27
10/01/00............ 7 2,640,901.03 2.76
11/01/00............ 3 1,075,960.81 1.12
12/01/00............ 5 1,448,922.77 1.51
01/01/01............ 9 2,836,338.64 2.96
02/01/01............ 73 22,447,028.67 23.45
02/15/01............ 1 254,706.24 0.27
03/01/01............ 79 24,388,877.43 25.48
04/01/01............ 86 28,543,624.00 29.82
05/01/01............ 1 255,850.00 0.27
09/01/01............ 1 328,046.21 0.34
01/01/02............ 1 342,269.62 0.36
02/01/02............ 2 656,445.34 0.69
03/01/02............ 2 900,174.10 0.94
04/01/02............ 4 1,356,914.50 1.42
--- --------------- ------
Total......... 295 $95,713,977.02 100.00%
=== ============= ======
<TABLE>
<CAPTION>
INITIAL PERIODIC RATE CAPS OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Initial Periodic Rate Cap Number Outstanding as of Outstanding as of
(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- ------------------------- ----------------- ----------------- ----------------
<S> <C> <C> <C>
1.00..................... 14 $ 5,209,404.10 5.44%
1.50..................... 1 465,667.96 0.49
3.00..................... 280 90,038,904.96 94.07
--- ------------- ------
Total......... 295 $95,713,977.02 100.00%
=== ============= ======
______________________
(1) Relates solely to initial rate adjustments.
</TABLE>
<PAGE>
SUBSEQUENT PERIODIC RATE CAPS OF THE GROUP III MORTGAGE LOANS(1)
% of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Periodic Rate Cap(%) of Mortgage Loans the Cut-off-Date the Cut-off Date
- -------------------- ----------------- ----------------- ----------------
1.00................ 294 $95,248,309.06 99.51%
1.50................ 1 465,667.96 0.49
--- -------------- ------
Total........ 295 $95,713,977.02 100.00%
=== ============= ======
______________________
(1) Relates to all rate adjustments subsequent to initial rate adjustments.
