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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended: December 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
For the transition period from __________ to _________.
Commission File Number: 333-46019-04
Headlands Mortgage Securities Inc. (as Sponsor under a Pooling and Servicing
Agreement dated as of October 1, 1998 providing for the issuance of the Mortgage
Pass-Through Certificates, Series 1998-1)
HEADLANDS MORTGAGE SECURITIES INC.
(Exact Name of registrant as specified in its charter)
Delaware 68-0397342
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
1100 Larkspur Landing Circle, Suite 101, 94939
Larkspur, California (Zip code)
(Address of principal executive offices)
(415) 461-6790
(Registrant's telephone number, including area code)
<TABLE>
<S> <C>
Securities registered pursuant to Section 12(b) of the Act: Securities registered pursuant to Section 12(g) of the Act:
None None
(Title of class) (Title of class)
</TABLE>
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates of
Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of specified date within 60 days prior to the date of filing:
Not Applicable
Documents incorporated by reference:
Not Applicable
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HEADLANDS MORTGAGE SECURITIES INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1998-1
INDEX
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Page
----
<S> <C>
PART I .................................................................. 3
ITEM 1 - BUSINESS........................................... 3
ITEM 2 - PROPERTIES......................................... 3
ITEM 3 - LEGAL PROCEEDINGS.................................. 3
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS................................... 3
PART II .................................................................. 3
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS........................ 3
ITEM 6 - SELECTED FINANCIAL DATA............................ 3
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...... 3
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........ 3
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE............. 3
PART III .................................................................. 4
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT..................................... 4
ITEM 11 - EXECUTIVE COMPENSATION............................. 4
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.............................. 4
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..... 7
PART IV .................................................................. 7
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K................................ 7
SIGNATURES................................................................. 8
INDEX TO EXHIBITS.......................................................... 9
</TABLE>
2
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PART I
ITEM 1 - BUSINESS
Not Applicable.
ITEM 2 - PROPERTIES
Headlands Mortgage Securities Inc. (the "Sponsor") will furnish
information regarding the Mortgaged Properties by reference to the Annual
Compliance Certificates to be filed herein under Item 14.
ITEM 3 - LEGAL PROCEEDINGS
The Sponsor is not aware of any material pending legal proceedings
involving either the Mortgage Pass-Through Certificates Series 1998-1 Trust (the
"Trust"), established pursuant to the Pooling and Servicing Agreement (the
"Agreement") dated October 1, 1998 among State Street Bank and Trust Company, as
trustee (the "Trustee"), PNC Mortgage Securities Corp., as servicer (the
"Servicer"); the Trustee; the Sponsor; or the Servicer which relates to the
Trust.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter has been submitted to a vote of the holders of beneficial
interests in the Trust through the solicitation of proxies or otherwise.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
To the best knowledge of the Sponsor, there is no established public
trading market for the Certificates.
All of the Class A Certificates, Class B Certificates, Class X
Certificates, Class R Certificates and Class PO Certificates issued by the Trust
are held by the Depository Trust Company ("DTC") which in turn maintains records
of holders of beneficial interests in such Certificates. Based on information
obtained by the Trust from DTC, as of December 31, 1998, there were one holder
of Class A-1 Certificates, two holders of Class A-2 Certificates, three holders
of Class A-3 Certificates, two holders of Class B-1 Certificates, and one holder
of each of Class B-2, Class B-3, Class B-4, Class X-1, Class X-2, Class R and
Class PO Certificates.
ITEM 6 - SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Not Applicable.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Not Applicable.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes of accountants or disagreements on accounting
or financial disclosures between the Sponsor and its accountants.
3
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PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not Applicable.
ITEM 11 - EXECUTIVE COMPENSATION
Not Applicable.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth (i) the name and address of each
entity owning more than 5% of the outstanding principal amount of each Class of
Certificates of the Trust; (ii) the principal amount of the Class of
Certificates owned by each and (iii) the percent that the principal amount of
the Class of Certificates owned by such entity represents of the outstanding
principal amount of such Class of Certificates. The information set forth in the
table for the Certificates is based upon information obtained by the Trust from
DTC and represents ownership of beneficial interest in the Certificates held by
DTC. The Sponsor is not aware of any Schedules 13D or 13G filed with the
Securities and Exchange Commission in respect of the Certificates.
Class A-1
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<CAPTION>
Name and Address Notional Amount % of Class
<S> <C> <C>
PNC Bank, N.A./Pittsburgh 245,840,000 100%
One PNC Plaza, 9/th/ Floor
249 5/th/ Avenue
Pittsburgh, PA 15222-7707
</TABLE>
Class A-2
<TABLE>
<CAPTION>
Name and Address Principal Amount % of Class
<S> <C> <C>
Boston Safe Deposit and Trust Company 3,906,307 48%
C/o Mellon Bank N.A.
Three Mellon Bank Center, Room 153-3015
Pittsburgh, PA 15259
Investors Fiduciary Trust Company/SSB 4,250,000 52%
Global Corp Action Dept JAB5W
P.O. Box 1631
Boston, MA 02105-1631
</TABLE>
Class A-3
<TABLE>
<CAPTION>
Name and Address Principal Amount % of Class
<S> <C> <C>
Boston Safe Deposit and Trust Company 2,000,000 10%
C/o Mellon Bank N.A.
Three Mellon Bank Center, Room 153-3015
Pittsburgh, PA 15259
Citibank, N.A. 13,879,800 68%
P.O. Box 30576
Tampa, FL 33630-3576
</TABLE>
4
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<TABLE>
<S> <C> <C>
State Street Bank and Trust Company 4,500,000 22%
Global Corp Action Dept JAB5W
P.O. Box 1631
Boston, MA 02105-1631
</TABLE>
Class B-1
<TABLE>
<CAPTION>
Name and Address Principal Amount % of Class
<S> <C> <C>
Compass Bank - ALFA 6,864,323 82%
15 South 20/th/ Street
7/th/ Floor
Birmingham, AL 35233
The Fifth Third Bank 1,500,000 18%
Dept. 00850-Proxy
38 Fountain Square Plaza
Cinncinati, OH 45263
</TABLE>
Class B-2
<TABLE>
<CAPTION>
Name and Address Notional Amount % of Class
<S> <C> <C>
Boston Safe Deposit and Trust Company 4,549,017 100%
C/o Mellon Bank N.A.
Three Mellon Bank Center, Room 153-3015
Pittsburgh, PA 15259
</TABLE>
Class B-3
<TABLE>
<CAPTION>
Name and Address Notional Amount % of Class
<S> <C> <C>
Boston Safe Deposit and Trust Company 2,201,138 100%
C/o Mellon Bank N.A.
Three Mellon Bank Center, Room 153-3015
Pittsburgh, PA 15259
</TABLE>
Class B-4
<TABLE>
<CAPTION>
Name and Address Notional Amount % of Class
<S> <C>
Headlands Mortgage Securities, Inc. 100%
1100 Larkspur Landing Circle, Suite 101
Larkspur, CA 94939
</TABLE>
5
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Class X-1
<TABLE>
<CAPTION>
Name and Address Notional Amount % of Class
<S> <C> <C>
The Bank of New York 12,791,120 100%
925 Patterson Plank Road
Secaucus, NJ 07094
</TABLE>
Class X-2
<TABLE>
<CAPTION>
Name and Address Notional Amount % of Class
<S> <C> <C>
PWI CMO Account 11,923,560 100%
1000 Harbor Boulevard, 8/th/ Floor
Weehawken, NJ 07087
</TABLE>
Class R
<TABLE>
<CAPTION>
Name and Address Notional Amount % of Class
<S> <C> <C>
Headlands Mortgage Securities, Inc. 100%
1100 Larkspur Landing Circle, Suite 101
Larkspur, CA 94939
</TABLE>
Class PO
<TABLE>
<CAPTION>
Name and Address Notional Amount % of Class
<S> <C> <C>
Chase Manhattan Bank 32,276 100%
4 New York Plaza, 21/st/ Floor
New York, NY 10015
</TABLE>
6
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ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements:
Not applicable.
2. Financial Statement Schedules:
Not applicable.
3. Exhibits:
Exhibit No. Description
----------- -----------
99.1* Statement of Compliance of the Master
Servicer.
99.2* Annual Report of Independent Accountant with
respect to the Master Servicer's overall
servicing operations.
_________________
* The document is not due to be delivered until April 30, 1999. Such document
will be filed with the Securities and Exchange Commission by amendment upon
receipt by the Registrant.
7
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Sponsor has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
By: HEADLANDS MORTGAGE SECURITIES INC.,
As Sponsor
By:/s/ Gilbert J. MacQuarrie
------------------------------
Name: Gilbert J. MacQuarrie
Title: Vice President, Treasurer and
Secretary
Date: May 5, 1999.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the Sponsor
and in the capacities and on the dates indicated:
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<CAPTION>
Signature Position Date
--------- -------- ----
<S> <C> <C>
/s/ Peter T. Paul President and Director May 5, 1999
--------------------------------------- (Principal Executive Officer)
Peter T. Paul
/s/ Becky S. Poisson Vice President and Director May 5, 1999
---------------------------------------
Becky S. Poisson
/s/ Gilbert J. MacQuarrie Vice President, Treasurer, Secretary and Director May 5, 1999
--------------------------------------- (Principal Financial Officer and Principal
Gilbert J. MacQuarrie Accounting Officer)
/s/ Steven M. Abreu Vice President and Director May 5, 1999
---------------------------------------
Steven M. Abreu
/s/ Kristen Decker Vice President May 5, 1999
---------------------------------------
Kristen Decker
</TABLE>
8
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INDEX TO EXHIBITS
Item 14(C)
Exhibit No. Description
----------- -----------
99.1* Statement of Compliance of the Master Servicer.
99.2* Annual Report of Independent Accountant with respect to the
Master Servicer's overall servicing operations.
_________________
* The document is not due to be delivered until April 30, 1999. Such document
will be filed with the Securities and Exchange Commission by amendment upon
receipt by the Registrant.
9
