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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: 333-28031-2
Headlands Mortgage Securities Inc. (as Sponsor of the Headlands Home Equity Loan
Trust, providing for the issuance of HELOC Notes, Series 1998-1)
HEADLANDS MORTGAGE SECURITIES INC.
(Exact Name of registrant as specified in its charter)
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<S> <C>
Delaware 68-0397342
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification no.)
1100 Larkspur Landing Circle, Suite 101, 94939
Larkspur, California (Zip code)
(Address of principal executive offices)
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(415) 461-6790
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act: Securities registered pursuant to Section 12(g) of the Act:
<S> <C>
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.
ASSET-BACKED HELOC NOTES 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.......... 5
PART IV...................................................................... 5
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K..................................... 5
SIGNATURES................................................................... 6
INDEX TO EXHIBITS............................................................ 7
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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 Home Equity Loan Trust Series 1998-1 (the "Trust); the
Trustee, Wilmington Trust Company; the Issuer, Headlands Home Equity Loan Trust
1, or the Servicer, Headlands Mortgage Company, 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 Notes.
All of the Class A Notes and Class S Notes issued by the Trust are
held by the Depository Trust Company ("DTC") which in turn maintains records of
holders of beneficial interests in such Notes. Based on information obtained by
the Trust from DTC, as of December 31, 1998, there were five holders of Class A
Notes and one holder of Class S Notes.
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
Notes of the Trust; (ii) the principal amount of the Class of Notes owned by
each and (iii) the percent that the principal amount of the Class of Notes owned
by such entity represents of the outstanding principal amount of such Class of
Notes. The information set forth in the table for the Notes is based upon
information obtained by the Trust from DTC and represents ownership of
beneficial interest in the Notes 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 Notes.
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<CAPTION>
Class A
Name and Address Principal Amount % of Class
<S> <C> <C>
Bankers Trust Company 15,000,000 7.9%
C/o BT Services Tennessee Inc.
648 Grassmere Park Drive
Nashville, TN 37211
State Street Bank and Trust Company 15,000,000 7.9%
Global Corp Action Dept JAB5W
PP Box 1631
Boston, MA 02105-1631
Boston Safe Deposit and Trust Company 75,000,000 39.67%
C/o Mellon Bank N.A.
Three Mellon Bank Center, Room 153-3015
Pittsburgh, CA 15259
LBI-Lehman Government Securities Inc. (LBI) 79,065,000 41.82%
101 Hudson Street, 31/st/ Floor
Jersey City, NJ 07302
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<CAPTION>
Class S
Name and Address Notional Amount % of Class
<S> <C> <C>
Chase Manhattan Bank/Broker & Dealer 189,065,000 100%
Clearance Department
4 New York Plaza, 21/st/ Floor
New York, NY 10015
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4
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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.
99.3 Statement of Compliance of the
Issuer under the Indenture.
5
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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:
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
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6
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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.
99.3 Statement of Compliance of the Issuer under the Indenture.
7
