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Exhibit 99.2
[KPMG Peat Marwick LLP Letterhead]
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors
Headlands Mortgage Company:
We have examined management's assertion about Headlands Mortgage Company's (the
Company) compliance with the minimum servicing standards set forth in the
Mortgage Bankers Association of America's (MBA's) Uniform Single Attestation
Program for Mortgage Bankers (USAP) as of and for the year ended December 31,
1998 included in the accompanying management assertion. Management is
responsible for the Company's compliance with those minimum servicing standards.
Our responsibility is to express an opinion on management's assertion about the
Company's compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Company's compliance with the
minimum servicing standards and performing such other procedures as we
considered necessary in the circumstances. We believe that our examination
provides a reasonable basis for our opinion. Our examination does not provide a
legal determination on the Company's compliance with the minimum servicing
standards.
In our opinion, management's assertion that the Company has complied in all
material respects with the aforementioned minimum servicing standards as of and
for the year ended December 31, 1998 is fairly stated, in all material respects.
San Francisco, California
February 2, 1999
/s/ KPMG Peat Marwick LLP
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[HEADLANDS MORTGAGE SECURITIES INC. LETTERHEAD]
As of and for the year ended December 31, 1998, Headlands Mortgage Company (the
"Company") has complied in all material respects with the minimum servicing
standards set forth in the Mortgage Bankers Association of America's Uniform
Single Attestation Program for Mortgage Bankers. As of and for this same
period, the Company had in effect a fidelity bond and errors and omissions
policy both in the amount of $6.6 million.
HEADLANDS MORTGAGE COMPANY
By: /s/ Dennis Tussey
-----------------
Dennis Tussey
Senior Vice President, Loan
Administration
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