<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1997
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ______ to ________
Commission File Number 33-84896
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1996-4
ISSUE DATE: DECEMBER 31, 1996
(Exact name of the registrant as specified in charter)
Delaware 36-4118157
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
75 NORTH FAIRWAY DRIVE
VERNON HILLS, ILLINOIS 60061
Registrant's telephone number, including area code:
(847) 549-6500
Securities registered pursuant to Section 12(b) of the Act: None
Title of each Class Name of each exchange on which registered
________________________ _________________________________________
________________________ _________________________________________
Securities registered pursuant to Section 12(g) of the Act: None
____________________________________________________________________
(Title of Class)
____________________________________________________________________
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
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. [ ] Not applicable.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
YES _____ NO _____. Not applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
Not applicable.
<PAGE>
Part I
------
Item 1. Business. Not applicable.
------ --------
Item 2. Properties.
------ ----------
The Registrant furnishes information regarding the mortgaged properties by
reference to the annual report (the "Annual Report") filed under Item 14
hereof and attached hereto as Exhibit 99.1. Page 3 of the Annual Report pro-
vides the number and aggregate principal balance of delinquent or foreclosed
mortgage loans as well as the available credit, special hazard, bankruptcy
and fraud coverage available to certain Certificates.
Item 3. Legal Proceedings.
------ -----------------
There are no material pending legal proceedings involving either the Mortgage
Pool or the Trustee or the Registrant with respect to the Mortgage Pool,
other than ordinary routine litigation incidental to the Trustee's or the
Registrant's duties under the Pooling and Servicing Agreement.
Item 4. Submission of Matters to a Vote of Security Holders.
------ ---------------------------------------------------
No vote or consent of Certificateholders has been solicited for any purpose
during the fourth quarter of the fiscal year covered by this report.
Part II
-------
Item 5. Market for Registrant's Common Equity and Related Stockholder
------ -------------------------------------------------------------
Matters. Not applicable.
- -------
Item 6. Selected Financial Data. Not applicable.
------ -----------------------
Item 7. Management's Discussion and Analysis of Financial Condition and
------ ---------------------------------------------------------------
Results of Operation. Not applicable.
- --------------------
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
------- ----------------------------------------------------------
Not applicable.
Item 8. Financial Statements and Supplementary Data. Not applicable.
------ -------------------------------------------
Item 9. Changes in and Disagreements With Accountants on Accounting and
------ ---------------------------------------------------------------
Financial Disclosure. No material disagreement concerning accounting proce-
- --------------------
dures or change of accountants has occurred.
<PAGE>
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 Manage-
------- -----------------------------------------------------------
ment. As of December 31, 1997, the following persons were known to the
- ----
Registrant to be the registered beneficial owners of more than 5% of the
aggregate fractional undivided interest evidenced by any publicly offered
Certificates:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Name and Address Amount and Nature of Percent of
Title of Class of Beneficial Owner Beneficial Ownership Class
- -------------- ------------------- -------------------- -----------
<S> <C> <C> <C>
Mortgage Wells Fargo Bank, N.A. $ 31,969,544.00 100.00
Pass-Through 26610 W. Agoura Rd.
Certificates, Calabasas, CA 91307
Class IA-1
Mortgage Bear, Stearns Securities $ 7,680,000.00 100.00
Pass-Through Corp.
Certificates, One Metrotech Center No.
Class IA-2 4th Fl.
Brooklyn, NY 11201
Mortgage Deseret Trust Co.-Zions $ 4,700,000.00 100.00
Pass-Through PO Box 11558
Certificates, Salt Lake City, UT 84147
Class IA-3
Mortgage The Bank of New York $ 25,494,373.00 100.00
Pass-Through 925 Patterson Plank Rd.
Certificates, Secaucus, NJ 07094
Class IIA-1
Mortgage Morgan Stanley & Co., $ 25,494,373.00 100.00
Pass-Through Incorporated
Certificates, One Pierrepont Plaza,
Class IIA-2 7th Fl.
Brooklyn, NY 11201
Mortgage Deseret Trust Company - $ 11,164,000.00 100.00
Pass-Through Zions
Certificates P.O. Box 11558
Class IIA-3 Salt Lake City, UT 84147
Mortgage Deseret Trust Co.-Zions $ 3,436,000.00 100.00
Pass-Through PO Box 11558
Certificates, Salt Lake City, UT 84147
Class IIA-4
Mortgage Chase Manhattan Bank $ 9,658,126.00 100.00
Pass-Through 4 New York Plaza
Certificates, 13th Fl.
Class IIA-5 New York, NY 10004
Mortgage Bankers Trust Company $ 7,703,372.00 33.93
Pass-Through C/o BT Services
Certificates, Tennessee Inc.
Class IIA-6 648 Grassmere Park Dr.
Nashville, TN 37211
Mortgage Citibank, N.A. $ 15,000,000.00 66.07
Pass-Through P.O. Box 30576
Certificates, Tampa, FL 33630
Class IIA-6
Mortgage Credit Suisse First $ 22,703,372.00 100.00
Pass-Through Boston Corporation
Certificates, C/o ADP Proxy Services
Class IIA-7 Issuer Services
51 Mercedes Way
Edgewood, NY 11717
Mortgage DLJ Securities Corp. $ 336,248.15 100.00
Pass-Through 277 Park Ave.
Certificates, New York, NY 10172
Class IP
Mortgage DLJ Securities Corp. $ 2,589,942.00 100.00
Pass-Through 277 Park Ave.
Certificates, New York, NY 10172
Class IX
Mortgage Norwest Bank $ 993,737.28 100.00
Pass-Through Minnesota N.A.
Certificates, 11000 Broken Land Pkwy.
Class IIP Columbia, MD 21044
Mortgage DLJ Securities Corp. $ 3,122,756.00 100.00
Pass-Through 277 Park Ave.
Certificates, New York, NY 10172
Class IIX
Mortgage Cudd & Co. $ 1,833,840.00 100.00
Pass-Through C/o The Chase Manhattan
Certificates, Bank N.A.
Class B-1 P.O. Box 1508
Church Street Station
New York, NY 10008
Mortgage DLJ Securities Corp. $ 1,833,840.00 100.00
Pass-Through 277 Park Ave.
Certificates, New York, NY 10172
Class B-2
Mortgage Llama Company LP $ 733,536.00 100.00
Pass-Through The Bank of New York
Certificates, Tr UA Sep 30 97
Class B-3 101 Barclay St.
New York, NY 10286
Mortgage First Union NA Bank of $ 49.99 99.99
Pass-Through North Carolina
Certificates, One First Union Center
Class R TW-8
Charlotte, NC 28288
Mortgage Bankers Trust Company $ 49.99 99.99
Pass-Through London Branch
Certificates, 1 Appold St., Broadgate
Class R-1 London, UK
Mortgage Bankers Trust Company $ 49.99 99.99
Pass-Through London Branch
Certificates, 1 Appold St., Broadgate
Class R-2 London, UK
</TABLE>
<PAGE>
Item 13. Certain Relationships and Related Transactions. Not applicable.
------- ----------------------------------------------
Part IV
-------
Item 14. Exhibits, Financial Statement, Schedules, and Reports on Form
------- -------------------------------------------------------------
8-K.
- ---
EX-99.1 Report on the mortgaged properties filed under Part I, Item 2.
The Registrant has filed a Report on Form 8-K on or before the tenth
day of each month during the last quarter of the period covered by this
report. Each such Report on Form 8-K described distributions made to
Certificateholders on the Distribution Date occurring in the month pre-
ceding the month in which such Report on Form 8-K was filed, as well as
provided certain information regarding delinquent Mortgage Loans and
credit enhancements as of such Distribution Date.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PNC MORTGAGE SECURITIES CORP.
as Sponsor
(Registrant)
March 30, 1998 By: \s\Thomas G. Lehmann Vice President
--------------------
Thomas G. Lehmann
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
Registrant and in the capacities and on the dates indicated.
Date Signatures Title
- ---- ---------- -----
Principal Executive Officers and Directors:
March 30, 1998 \s\Saiyid T. Naqvi President and Director
------------------
Saiyid T. Naqvi
March 30, 1998 \s\Alexander T. Topping, Jr. Director and Senior
----------------------------- Vice President
Alexander T. Topping, Jr.
Principal Financial Officer and Director:
March 30, 1998 \s\Douglas H. Burr Director, Senior Vice
------------------- President and Chief
Douglas H. Burr Financial Officer
Principal Accounting Officer:
March 30, 1998 \s\John W. Lauber Vice President and
----------------- Controller
John W. Lauber
<PAGE>
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1996-4
Annual Accounting Report Reference Sheet
----------------------------------------
The Annual Accounting Report discloses relevant Mortgage Pool information for
each month of the current reporting year as well as aggregates of such infor-
mation for the reporting year. The descriptions below refer primarily to
the aggregate information which is located in the "Total" column on page two
of the report.
"BALANCES FROM LAST FISCAL MONTH-END"
Carries forward the loan count and the aggregate principal balance of the
Mortgage Pool from the previous Annual Report.
"PRINCIPAL POOL COLLECTIONS"
Shows detailed information regarding principal collections on the mortgage
loans. The line "Scheduled Principal Collected Due Current Month" repre-
sents the current year's aggregate principal installments applied to the
Certificate Principal Balance. The line "Unscheduled Principal Collections/
Reversals" represents partial prepayments of principal (curtailments) applied
or reversed in the current year. The line "Liquidations-in-Full" represents
the proceeds of prepaid mortgage loans and foreclosed mortgage loans, as
well as insurance proceeds applied to liquidate defaulted mortgage loans.
The lines "Principal Balance Sale Adjustments" represent adjustments to
original Certificate Principal Balances purchased by the Certificateholders
resulting from incorrect data supplied by the Seller/Servicers at the Mortgage
Pool origination. The line "Net Principal Distributed" represents the actual
distribution to Certificateholders respecting principal applied to the Certi-
ficate Principal Balance.
"CAPITAL LOSS"
Shows the amount of principal written off as a result of receiving sale and
insurance proceeds on acquired property insufficient to cover the outstanding
principal balance of the mortgage loan at the time of liquidation.
"BALANCE CURRENT FISCAL MONTH-END"
Provides the loan count and aggregate principal balance of the Mortgage
Pool at the close of the current fiscal year.
<PAGE>
"SCHEDULED INTEREST AT MORTGAGE RATE"
Shows scheduled interest collections. The fiscal year's aggregate interest
installments at the pass-through rate due on the Certificate Principal
Balance outstanding at the beginning of each fiscal month is shown under
the appropriate column. The actual amount of interest distributed for the
current fiscal year after the rounding adjustment is shown in the "Total"
column.
"UNSCHEDULED INTEREST AT MORTGAGE RATE"
Provides detailed information regarding interest collections or reversals
other than the scheduled interest collections. The line "Unscheduled
Interest Collections/Reversals" represents interest collected or reversals
of previous interest applications. The lines "Interest Sale Adjustments"
represent the interest, at the pass-through rate, applicable to the Certi-
ficate Principal Balance increased, or the Certificate Principal Balance
decreased, as reported in Section B. The line "Interest Accrual Adjustment"
represents adjustments to the scheduled interest resulting from the appli-
cation of the partial prepayment of principal (curtailment) before the
installment due in any one fiscal month during the current fiscal year.
The line "Interest Uncollected on Liquidation" represents that portion of
the accrued interest (based on a 30 day month) that was not collected as
a result of a liquidation-in-full in the current fiscal year. The line
"Interest Uncollected on Non-Earning Assets" represents the interest accrued
but not collected as a result of a mortgage loan in a non-earning (non
accruing) status. The line "Net Unscheduled Interest Distributed" represents
the actual distribution of unscheduled items to Certificateholders.
"OTHER"
Provides detailed information regarding collections of mortgage loan conversion
fees, expense reimbursements, i.e., property preservation expenses, etc., gains
on liquidated mortgage loans and hazard insurance premium refunds as a result
of a liquidations-in-full on defaulted mortgage loans.
"SCHEDULED SERVICING FEE EXPENSES"
Provides a break-down of servicing fees payable to PNC Mortgage Securities
Corp. and Seller/Servicers, representing the difference between interest
collected at the mortgage rates and interest passed through to Certifi-
cateholders at the pass-through rate (see Section E).
"UNSCHEDULED SERVICING FEES"
Provides detailed information on servicing fees directly related to the funds
reported under "Unscheduled Interest at Mortgage Rate" (Section F).
<PAGE>
"MISCELLANEOUS EXPENSES"
Shows the amount of expenses reimbursed to PNC Mortgage Securities Corp. and
Seller/Servicers for expenditures resulting from mortgage loans in foreclo-
sure, i.e., attorney fees, trustee fees, property preservation expenses,
etc., which are reimbursable under the terms of the Pooling and Servicing
Agreement. The expenses will not be reimbursed until all proceeds
available from primary mortgage insurance, if any, have been deposited to
the certificate account.
"NET FUNDS DISTRIBUTED"
Provides the aggregate amount distributed to Certificateholders for the
current fiscal year.
"INSURANCE RESERVES"
Provides certain information regarding the status of the credit, special
hazard, bankruptcy and fraud support established for certain Certificates.
"DELINQUENT INSTALLMENTS"
Provides certain information regarding delinquent mortgage loans as of the
calendar year end.
<PAGE>
<TABLE>
PNC SERIES 1996-4 (1386)
EXHIBIT 99.1
FISCAL 1997
<CAPTION>
JANUARY FEBRUARY
MARCH APRIL
<S> <C> <C> <C>
<C>
ISSUE DATE: 12/27/96
CERTIFICATE BALANCE AT ISSUE: $146,707,211.48
BALANCES FROM LAST FISCAL MONTH-END:
PRINCIPAL DOLLARS $146,707,211.48 $145,592,952.11
$141,328,014.25 $138,216,623.71
UNITS 445 442 431
423
PRINCIPAL POOL COLLECTIONS:
SCHEDULED PRINCIPAL COLLECTED DUE CURRENT MONTH 215,854.43
215,192.12 213,585.12 211,383.35
UNSCHEDULED PRINCIPAL COLLECTION/REVERSALS 11,905.42
9,572.98 28,965.89 88,384.92
LIQUIDATIONS-IN-FULL 886,499.52 4,040,172.76
2,868,839.53 1,385,188.88
PRINCIPAL BALANCE SALE ADJUSTMENTS 0.00 0.00
0.00 0.00
NET PRINCIPAL DISTRIBUTED 1,114,259.37 4,264,937.86
3,111,390.54 1,684,957.15
CAPITAL LOSS (PRINCIPAL WRITTEN OFF): 0.00 0.00
0.00 0.00
BALANCES CURRENT FISCAL MONTH-END:
PRINCIPAL DOLLARS 145,592,952.11 141,328,014.25
138,216,623.71 136,531,666.56
UNITS 442 431 423
418
SCHEDULED INTEREST AT MORTGAGE RATE: 1,001,131.28
993,565.71 962,236.16 940,445.95
UNSCHEDULED INTEREST AT MORTGAGE RATE:
UNSCHEDULED INTEREST COLLECTION/REVERSALS 0.00
67.63 0.00 0.14
INTEREST SALE ADJUSTMENTS 0.00 0.00
0.00 0.00
INTEREST ACCRUAL ADJUSTMENT 0.00 0.00
0.00 0.00
INTEREST UNCOLLECTED ON LIQUIDATION 0.00
0.00 0.00 0.00
INTEREST UNCOLLECTED ON NON-EARNING ASSETS 0.00
0.00 0.00 0.00
NET UNSCHEDULED INTEREST DISTRIBUTED 0.00
67.63 0.00 0.14
OTHER:
LOAN CONVERSION FEE 0.00 0.00
0.00 0.00
EXPENSE REIMBURSEMENTS 0.00 0.00
0.00 0.00
GAIN ON LIQUIDATIONS 0.00 0.00
0.00 0.00
HAZARD INSURANCE PREMIUM REFUNDS 0.00
0.00 0.00 0.00
NET OTHER DISTRIBUTIONS 0.00 0.00
0.00 0.00
SCHEDULED SERVICING FEE EXPENSES: 34,533.00 34,261.92
33,242.76 32,487.58
UNSCHEDULED SERVICING FEES:
UNSCHEDULED SERVICE FEE COLLECTIONS/REVERSALS 0.00
1.48 0.00 0.00
SERVICING FEES SALE ADJUSTMENTS 0.00 0.00
0.00 0.00
SERVICING FEES ACCRUAL ADJUSTMENTS 0.00 0.00
0.00 0.00
SERVICING FEES UNCOLLECTED ON LIQUIDATIONS 0.00
0.00 0.00 0.00
SERVICING FEES UNCOLLECTED - NON-EARNING ASSETS 0.00
0.00 0.00 0.00
NET UNSCHEDULED SERVICING FEE DISTRIBUTED 0.00
1.48 0.00 0.00
MISCELLANEOUS EXPENSES: 0.00 0.00
0.00 0.00
NET FUNDS DISTRIBUTED $2,080,857.65 $5,224,307.80
$4,040,383.94 $2,592,915.66
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMSC SERIES 1996-4 (1386)
FISCAL 1997 MAY JUNE
JULY
<S> <C> <C> <C>
ISSUE DATE: 12/27/96
CERTIFICATE BALANCE AT ISSUE: $146,707,211.48
BALANCES FROM LAST FISCAL MONTH-END:
PRINCIPAL DOLLARS $136,531,666.56 $136,303,112.63
$136,069,687.62
UNITS 418 418
418
PRINCIPAL POOL COLLECTIONS:
SCHEDULED PRINCIPAL COLLECTED DUE CURRENT MONTH
212,553.34 214,042.52 215,573.03
UNSCHEDULED PRINCIPAL COLLECTION/REVERSALS 16,000.59
19,382.48 42,536.05
LIQUIDATIONS-IN-FULL 0.00 0.00
1,055,456.38
PRINCIPAL BALANCE SALE ADJUSTMENTS 0.00
0.00 0.00
NET PRINCIPAL DISTRIBUTED 228,553.93 233,425.01
1,313,565.46
CAPITAL LOSS (PRINCIPAL WRITTEN OFF): 0.00
0.00 0.00
BALANCES CURRENT FISCAL MONTH-END:
PRINCIPAL DOLLARS 136,303,112.63 136,069,687.62
134,756,122.16
UNITS 418 418
414
SCHEDULED INTEREST AT MORTGAGE RATE: 928,400.52
926,908.50 925,383.60
UNSCHEDULED INTEREST AT MORTGAGE RATE:
UNSCHEDULED INTEREST COLLECTION/REVERSALS 1,964.70
(18.12) 8.76
INTEREST SALE ADJUSTMENTS 0.00 0.00
0.00
INTEREST ACCRUAL ADJUSTMENT 0.00 0.00
0.00
INTEREST UNCOLLECTED ON LIQUIDATION 0.00
0.00 0.00
INTEREST UNCOLLECTED ON NON-EARNING ASSETS 0.00
0.00 0.00
NET UNSCHEDULED INTEREST DISTRIBUTED 1,964.70
(18.12) 8.76
OTHER:
LOAN CONVERSION FEE 0.00 0.00
0.00
EXPENSE REIMBURSEMENTS 0.00 0.00
0.00
GAIN ON LIQUIDATIONS 0.00 0.00
0.00
HAZARD INSURANCE PREMIUM REFUNDS 0.00
0.00 0.00
NET OTHER DISTRIBUTIONS 0.00 0.00
0.00
SCHEDULED SERVICING FEE EXPENSES: 32,082.84
32,030.60 31,976.79
UNSCHEDULED SERVICING FEES:
UNSCHEDULED SERVICE FEE COLLECTIONS/REVERSALS 76.31
(0.50) 0.70
SERVICING FEES SALE ADJUSTMENTS 0.00 0.00
0.00
SERVICING FEES ACCRUAL ADJUSTMENTS 0.00
0.00 0.00
SERVICING FEES UNCOLLECTED ON LIQUIDATIONS 0.00
0.00 0.00
SERVICING FEES UNCOLLECTED - NON-EARNING ASSETS 0.00
0.00 0.00
NET UNSCHEDULED SERVICING FEE DISTRIBUTED 76.31
(0.50) 0.70
MISCELLANEOUS EXPENSES: 0.00 0.00
0.00
NET FUNDS DISTRIBUTED $1,126,760.00 $1,128,285.29
$2,206,980.33
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMSC SERIES 1996-4 (1386)
FISCAL 1997 AUGUST SEPTEMBER
OCTOBER NOVEMBER
<S> <C> <C> <C>
<C>
BALANCES FROM LAST FISCAL YEAR-END:
PRINCIPAL DOLLARS $134,756,122.16 $132,292,003.93
$129,193,954.59 $126,296,974.93
UNITS 414 406 399
390
PRINCIPAL POOL COLLECTIONS:
SCHEDULED PRINCIPAL COLLECTED DUE CURRENT MONTH 216,017.53
215,384.99 214,463.35 211,548.49
UNSCHEDULED PRINCIPAL COLLECTION/REVERSALS 35,060.21
46,544.62 59,244.63 55,599.05
LIQUIDATIONS-IN-FULL 2,213,040.49 2,836,119.73
2,623,271.68 3,219,628.38
PRINCIPAL BALANCE SALE ADJUSTMENTS 0.00 0.00
0.00 0.00
NET PRINCIPAL DISTRIBUTED 2,464,118.23 3,098,049.34
2,896,979.66 3,486,775.92
CAPITAL LOSS (PRINCIPAL WRITTEN OFF): 0.00 0.00
0.00 0.00
BALANCES CURRENT FISCAL YEAR-END:
PRINCIPAL DOLLARS 132,292,003.93 129,193,954.59
126,296,974.93 122,810,199.01
UNITS 406 399 390
380
SCHEDULED INTEREST AT MORTGAGE RATE: 916,447.64
899,460.39 877,686.27 858,074.31
UNSCHEDULED INTEREST AT MORTGAGE RATE:
UNSCHEDULED INTEREST COLLECTION/REVERSALS 1,453.75
0.00 (0.21) 0.07
INTEREST SALE ADJUSTMENTS 0.00 0.00
0.00 0.00
INTEREST ACCRUAL ADJUSTMENT 0.00 0.00
0.00 0.00
INTEREST UNCOLLECTED ON LIQUIDATION 0.00
0.00 0.00 0.00
INTEREST UNCOLLECTED ON NON-EARNING ASSETS 0.00
0.00 0.00 0.00
NET UNSCHEDULED INTEREST DISTRIBUTED 1,453.75
0.00 (0.21) 0.07
OTHER:
LOAN CONVERSION FEE 0.00 0.00
0.00 0.00
EXPENSE REIMBURSEMENTS 0.00 0.00
0.00 0.00
GAIN ON LIQUIDATIONS 0.00 0.00
0.00 0.00
HAZARD INSURANCE PREMIUM REFUNDS 0.00
0.00 0.00 0.00
NET OTHER DISTRIBUTIONS 0.00 0.00
0.00 0.00
SCHEDULED SERVICING FEE EXPENSES: 31,711.47 31,063.73
30,332.97 29,671.19
UNSCHEDULED SERVICING FEES:
UNSCHEDULED SERVICE FEE COLLECTIONS/REVERSALS 0.00
0.00 0.00 0.00
SERVICING FEES SALE ADJUSTMENTS 0.00 0.00
0.00 0.00
SERVICING FEES ACCRUAL ADJUSTMENTS 0.00 0.00
0.00 0.00
SERVICING FEES UNCOLLECTED ON LIQUIDATIONS 0.00
0.00 0.00 0.00
SERVICING FEES UNCOLLECTED - NON-EARNING ASSETS 0.00
0.00 0.00 0.00
NET UNSCHEDULED SERVICING FEE DISTRIBUTED 0.00
0.00 0.00 0.00
MISCELLANEOUS EXPENSES: 0.00 0.00
0.00 0.00
NET FUNDS DISTRIBUTED $3,350,308.15 $3,966,446.00
$3,744,332.75 $4,315,179.11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMSC SERIES 1996-4 (1386)
FISCAL 1997 DECEMBER TOTAL
<S> <C> <C>
BALANCES FROM LAST FISCAL YEAR-END:
PRINCIPAL DOLLARS $122,810,199.01 $146,707,211.48
UNITS 380 445
PRINCIPAL POOL COLLECTIONS:
SCHEDULED PRINCIPAL COLLECTED DUE CURRENT MONTH
210,018.19 2,565,616.46
UNSCHEDULED PRINCIPAL COLLECTION/REVERSALS 23,851.83
437,048.67
LIQUIDATIONS-IN-FULL 2,644,737.91 23,772,955.26
PRINCIPAL BALANCE SALE ADJUSTMENTS 0.00
0.00
NET PRINCIPAL DISTRIBUTED 2,878,607.93 26,775,620.40
CAPITAL LOSS (PRINCIPAL WRITTEN OFF): 0.00
0.00
BALANCES CURRENT FISCAL YEAR-END:
PRINCIPAL DOLLARS 119,931,591.08 119,931,591.08
UNITS 371 371
SCHEDULED INTEREST AT MORTGAGE RATE: 833,544.40
11,063,284.73
UNSCHEDULED INTEREST AT MORTGAGE RATE:
UNSCHEDULED INTEREST COLLECTION/REVERSALS 0.00
3,476.72
INTEREST SALE ADJUSTMENTS 0.00 0.00
INTEREST ACCRUAL ADJUSTMENT 0.00 0.00
INTEREST UNCOLLECTED ON LIQUIDATION 0.00
0.00
INTEREST UNCOLLECTED ON NON-EARNING ASSETS 0.00
0.00
NET UNSCHEDULED INTEREST DISTRIBUTED 0.00
3,476.72
OTHER:
LOAN CONVERSION FEE 0.00 0.00
EXPENSE REIMBURSEMENTS 0.00 0.00
GAIN ON LIQUIDATIONS 0.00 0.00
HAZARD INSURANCE PREMIUM REFUNDS 0.00
0.00
NET OTHER DISTRIBUTIONS 0.00 0.00
SCHEDULED SERVICING FEE EXPENSES: 28,825.72
382,220.57
UNSCHEDULED SERVICING FEES:
UNSCHEDULED SERVICE FEE COLLECTIONS/REVERSALS 0.00
77.99
SERVICING FEES SALE ADJUSTMENTS 0.00 0.00
SERVICING FEES ACCRUAL ADJUSTMENTS 0.00
0.00
SERVICING FEES UNCOLLECTED ON LIQUIDATIONS 0.00
0.00
SERVICING FEES UNCOLLECTED - NON-EARNING ASSETS 0.00
0.00
NET UNSCHEDULED SERVICING FEE DISTRIBUTED 0.00
77.99
MISCELLANEOUS EXPENSES: 0.00 0.00
NET FUNDS DISTRIBUTED $3,683,326.61 $37,460,083.29
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PNC MORTGAGE SECURITIES CORP.
MASTER SERVICING
MORTGAGE PASS-THROUGH CERTIFICATES
12/1997 DISTRIBUTION REPORT
PROCESSING MONTH: 11/1997
SERIES 1996-4 (1386) WEIGHTED AVERAGE PC RATE: 7.8551
- ----------------------------------------------------------------------------------------
<CAPTION>
INSURANCE RESERVES*
- -------------------
COVERAGE
INSURANCE TYPE ORIGINAL BALANCE CLAIMS IN PROGRESS CLAIMS PAID
ADJUSTMENTS REMAINING
-------------- ---------------- ------------------ ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
MPI $0.00 $0.00 $0.00 $0.00 $0.00
SPECIAL HAZARD $2,613,196.00 $0.00 $0.00 $0.00 $2,613,196.00
BANKRUPTCY BOND
SINGLE-UNITS $50,000.00 $0.00 $0.00 $0.00 $50,000.00
MULTI-UNITS $0.00 $0.00 $0.00 $0.00 $0.00
MORTGAGE
REPURCHASE $2,934,144.00 $0.00 $0.00 $0.00 $2,934,144.00
<CAPTION>
DELINQUENT INSTALLMENTS
- -----------------------
ONE TWO THREE
----------------------- ---------------------- ----------------------
COUNT PRIN BALANCE COUNT PRIN BALANCE COUNT PRIN
BALANCE
----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C>
4 $1,094,495.98 0 $0.00 0 $0.00
IN FORECLOSURE ACQUIRED
----------------------- ----------------------
COUNT PRIN BALANCE COUNT PRIN BALANCE
----------------------- ----------------------
<S> <C> <C> <C>
2 $662,930.36 0 $0.00
</TABLE>
The Class B-1, Class B-2, Class B-3 (the "Senior Subordinate Certificates"),
Class B-4, Class B-5 and Class B-6 Certificates (the "Junior Subordinate Cer-
tificates" and, together with the Senior Subordinate Certificates, the
"Subordinate Certificates") are subordinate in right of payment and provide
credit support, special hazard, bankruptcy and fraud coverage (collectively
"Coverage") to the Class IA-1, Class IA-2, Class IA-3, Class IIA-1, Class
IIA-2, Class IIA-3, Class IIA-4, Class IIA-5, Class IIA-6, Class IIA-7,
Class IX, Class IIX, Class IP, Class IIP, Class R, Class R-1, and Class
R-2 Certificates (the "Senior Certificates") to the extent described in the
prospectus supplement (the "Prospectus Supplement") pursuant to which the
Senior Certificates and the Senior Subordinate Certificates, were offered.
In addition, the Junior Subordinate Certificates are subordinate in right of
payment and provide Coverage to the Senior Subordinate Certificates, the
Class B-3 Certificates are subordinate in right of payment and provide
Coverage to the Class B-1 and Class B-2 Certificates and the Class B-2
Certificates are subordinate in right of payment and provide Coverage to
the Class B-1 Certificates, in each case to the extent described in the
Prospectus Supplement.
The Class Principal Balances of the Subordinate Certificates immediately
after the principal and interest distribution on December 26, 1997 are as
follows:
<TABLE>
<CAPTION>
CLASS CLASS PRINCIPAL BALANCE
<S> <C> <C>
B-1 $1,799,972.20
B-2 $1,799,972.22
B-3 $719,988.90
B-4 $431,993.71
B-5 $503,992.02
B-6 $503,993.06
Total $5,759,912.11
</TABLE>
The amount of the special hazard, bankruptcy and fraud coverage, as of the
above referenced date is $2,613,196.00, $50,000.00 and $2,934,144.00,
respectively.
<PAGE>
Exhibit 99.2
[Ernst & Young LLP Letterhead]
Report of Independent Auditors on Agreement With
U.S. Bank National Association
Audit Committee
PNC Bank Corp.
We have audited, in accordance with generally accepted auditing standards,
the consolidated balance sheet of PNC Bank Corp. and subsidiaries (including
PNC Mortgage Securities Corp. (PNCMSC)) as of December 31, 1997, and the
related consolidated statements of income, changes in shareholders' equity,
and cash flows for the year then ended, and have issued our report thereon
dated January 23, 1998.
In connection with our audit of the consolidated financial statements referred
to above, nothing came to our attention that caused us to believe that PNCMSC
failed to comply with the terms, covenants, provisions, or conditions of the
sections of the agreements between PNCMSC and U.S. Bank National Association
(U.S. Bank), as listed for each series of certificates described in the
accompanying schedule, insofar as they relate to accounting matters. However,
our audit of the consolidated financial statements was not directed primarily
toward obtaining knowledge of noncompliance.
This report is intended solely for use by the audit committee, management, and
U.S. Bank, acting as trustee or custodian, as applicable, and should not be used
for any other purpose. However, this report may become a matter of public
record as a result of being included as an exhibit to certain Form 10-Ks that
are prepared by PNCMSC and filed with the Securities and Exchange Commission
on behalf of the trusts that are established in connection with the series of
certificates listed on the accompanying schedule.
\s\Ernst & Young LLP
--------------------
January 23, 1998
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
<PAGE>
<TABLE>
<CAPTION>
Schedule of Agreements With
U.S. Bank National Association
Description Sections
- ----------- --------
<S> <C>
PARTICIPATION AND SERVICING AGREEMENT, Participation (a)
Certificates Conventional Residential Fixed Rate
Mortgage Loans, Series 1993-PA2b, Dated as of November
1, 1993.
POOLING AND SERVICING AGREEMENT, $151,911,197.42, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1993-12, Cut-Off Date: December 1, 1993. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $230,592,119.02, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1994-1 (Certificate Trust), Mortgage Trust 3.11, 3.12,
Pass-Through Certificates, Series 1994-1 (Mortgage Trust), 3.13
Cut-Off Date: January 1, 1994.
POOLING AND SERVICING AGREEMENT, $139,416,667.25, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1994-2, Cut-Off Date: April 1, 1994. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $293,549,022.70, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1994-3, Cut-Off Date: July 1, 1994. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $71,005,304.01, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1994-4, Cut-Off Date: August 1, 1994. 3.11, 3.12,
3.13
PARTICIPATION AND SERVICING AGREEMENT, Dated as of (a)
February 1, 1994, Series 1994 PA-1, Mortgage Participa-
tion Certificates, Closing Date: February 18, 1994,
Cut-Off Date: February 1, 1994.
PARTICIPATION AND SERVICING AGREEMENT, Dated as of (a)
July 1, 1994, Series 1994 PA-2, Mortgage Participation
Certificates.
POOLING AND SERVICING AGREEMENT, $116,318,874.96, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1995-1, Cut-Off Date: February 1, 1995. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $269,988,933.11, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1995-2 (Certificate Trust), Mortgage Trust 3.11, 3.12,
Pass-Through Certificates, Series 1995-2 (Mortgage Trust), 3.13
Cut-Off Date: September 1, 1995.
PARTICIPATION AND SERVICING AGREEMENT, Dated as of June (a)
1, 1995, Series 1995 PA-1, Mortgage Participation Certi-
ficates, Closing Date: June 30, 1995, Cut-Off Date:
June 1, 1995.
PARTICIPATION AND SERVICING AGREEMENT, Dated as of (a)
October 1, 1995, Series 1995 PA-2, Mortgage Participation
Certificates, Closing Date: October 31, 1995, Cut-Off
Date: October 1, 1995.
POOLING AND SERVICING AGREEMENT, $68,101,510.34, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1995 PR-1, Cut-Off Date: September 1, 1995. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $79,829,153.84, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1995-3, Cut-Off Date: November 1, 1995. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $86,542,998.26, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1996-2, Cut-Off Date: June 1, 1996. 3.11, 3.12
3.13
WHOLE LOAN CERTIFICATE SALE AND SERVICING AGREEMENT, (a)
Dated as of January 1, 1996, Whole Loan Certificates,
Series 1996 PA-1, Closing Date: January 31, 1996, Cut-Off
Date: January 1, 1996
PARTICIPATION AND SERVICING AGREEMENT, Dated as of January (a)
1, 1996, Mortgage Participation Certificates, Series 1996
PA-2, Closing Date: January 31, 1996, Cut-Off Date:
January 1, 1996
PARTICIPATION AND SERVICING AGREEMENT, Dated as of February (a)
1, 1996, Mortgage Participation Certificates, Series 1996
PA-5, Closing Date: February 26, 1996, Cut-Off Date:
February 1, 1996
PARTICIPATION AND SERVICING AGREEMENT, Dated as of March (a)
1, 1996, Mortgage Participation Certificates, Series 1996
PA-6, Closing Date: March 29, 1996, Cut-Off Date: March
1, 1996
SALE AND SERVICING AGREEMENT, Dated as of October 1, 1996, (a)
Mortgage Ownership Certificates, Series 1996 PA-10, Closing
Date: October 24, 1996, Cut-Off Date: October 1, 1996
POOLING AND SERVICING AGREEMENT, $174,193,827.06, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1996-3 and Mortgage Trust Pass-Through Cer- 3.11, 3.12,
tificates, Series 1996-3, Cut-Off Date: February 1, 1996. 3.13
POOLING AND SERVICING AGREEMENT, $146,707,211.48, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certifi- 3.04, 3.05,
cates, Series 1996-4, First Level Mortgage Pass-Through 3.11, 3.12,
Certificates, Series 1996-4, and Mortgage Trust Pass- 3.13
Through Certificates, Series 1996-4, Cut-Off Date:
June 1, 1996.
POOLING AND SERVICING AGREEMENT, $148,501,921.58, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997-1, Cut-Off Date: January 1, 1997. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $292,197,087.18, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997-4, Cut-Off Date: June 1, 1997. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $350,143,810.79, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997-5, Cut-Off Date: September 1, 1997. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $177,376,357.45, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997-2, Cut-Off Date: February 1, 1997. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $511,030,337.02, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997-3, Cut-Off Date: April 1, 1997. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $30,964,111.77, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997 PR-1 and Mortgage Trust Pass-Through 3.11, 3.12,
Certificates, Series 1997 PR-1, Cut-Off Date: June 1, 1997 3.13
POOLING AND SERVICING AGREEMENT, $695,684,820, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997-6, Cut-Off Date: September 1, 1997. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $937,999,464.84, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997-2, Cut-Off Date: October 1, 1997. 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $836,949,642.78, PNC 3.02, 3.03,
Mortgage Securities Corp., Mortgage Pass-Through Certi- 3.04, 3.05,
ficates, Series 1997-8, Cut-Off Date: November 1, 1997. 3.11, 3.12,
3.13
</TABLE>
(a) Servicing in compliance with the terms of this agreement.
