MORGAN STANLEY CAPITAL I INC, S-3/A, 1998-02-11

MORGAN STANLEY CAPITAL I INC
S-3/A, 1998-02-11
ASSET-BACKED SECURITIES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 11, 1998

REGISTRATION STATEMENT NO. 333-45467
-----

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------

AMENDMENT NO. 1
TO

FORM S-3 REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------

MORGAN STANLEY CAPITAL I INC.
(Exact name of registrant as specified in its charter)

Delaware 13-3291626
(State of incorporation) (I.R.S. Employer
Identification No.)

1585 Broadway
New York, New York 10036
(212) 296-7000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)

--------------------

DAVID R. WARREN
President
1585 Broadway
New York, New York 10036
(212) 296-7000
(Name and address, including zip code, and telephone
number, including area code, of agent for service)

--------------------

Copy to:

CARLOS RODRIGUEZ, ESQ. GEORGE PETROW, ESQ.
Brown & Wood LLP Sidley & Austin
One World Trade Center 875 Third Avenue
New York, New York 10048 New York, New York 10022
(212) 839-5300 (212) 906-2000

GEOFFREY K. HURLEY, ESQ. MICHAEL GAMBRO, ESQ.
Latham & Watkins Cadwalader, Wickersham & Taft
885 Third Avenue 100 Maiden Lane
Suite 1000 New York, New York 10038
New York, New York 10022-4802 (212) 504-6000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. ( )

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. (X)

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the sane offering. ( ) ---------------

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ( ) ------------------------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ( )

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE

Proposed Maximum Proposed Maximum
Title of Securities Amount Offering Price Aggregate Amount of
Being Registered Being Registered Per Unit(1) Offering Price(1) Registration Fee(2)
- --------------------------------------- ---------------- ----------------- ------------------ ----------------
<S> <C> <C> <C> <C>

Mortgage Pass-Through Certificates . . $9,000,000,000 100% $9,000,000,000 $2,655,000

</TABLE>

(1) Estimated solely for the purpose of determining the registration fee.
(2) Previously paid.

Pursuant to Rule 429 of the Securities and Exchange Commission's Rules
and Regulations under the Securities Act of 1933, the Prospectuses and
Prospectus Supplements contained in this Registration Statement also relate
to the Registrant's registration statement No. 33-45042 as previously filed
by the Registrant on Form S-11, No. 33-46723 as previously filed by the
Registrant on Form S-3 to Form S-11 and No. 333-26667 as previously filed by
the Registrant on Form S-3 to Form S-11.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.

____ of ____ pages.

This Registration Statement contains: (1) a base prospectus and form of
prospectus supplement to be used in connection with the offering of
certificates that will represent beneficial ownership interests in trust
funds consisting of one or more segregated pools of various types of single
family residential mortgage loans, securities collateralized by such loans,
and/or government securities (the version 1 prospectus); and (2) a base
prospectus and form of prospectus supplement to be used in connection with
the offering of certificates that will represent beneficial ownership
interests in trust funds consisting of one or more segregated pools of
various types of multifamily or commercial mortgage loans, securities
collateralized by such loans, and/or government securities (the version 2
prospectus).

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus supplement and the prospectus to which it
relates shall not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any State in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.

(VERSION 1)

SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1998

$________________
PROSPECTUS SUPPLEMENT
(To Prospectus dated ____, 199_)

Morgan Stanley Capital I Inc..
Depositor

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES _______

The Series 199_-_ Mortgage Pass-Through Certificates (the
"Certificates") will consist of ____ classes of Certificates, designated as
the Class ( ) Certificates, Class ( ) Certificates and Class ( ) Certificates
(the Class ( ) Certificates, collectively, the "Subordinate Certificates").
It is a condition of the issuance of the Class ( ) Certificates that they be
rated (not lower than) "_______________" by _________________.

The Certificates will represent in the aggregate the entire beneficial
interest in a trust fund (the "Trust Fund") to be established by Morgan
Stanley Capital I Inc. (the "Depositor"). The Trust Fund will consist
primarily of (a pool (the "Mortgage Pool") of (conventional), (fixed rate)
(adjustable rate) mortgage loans, with terms to maturity of not more than ___
years (the "Mortgage Loans"), secured by first (and/or junior) liens on one-
to four-family residential properties,) (mortgage participations, mortgage
pass-through certificates, mortgage-backed securities evidencing interests
therein or secured thereby (the "MBS"),) (and) (certain direct obligations of
the United States, agencies thereof or agencies created thereby (the
"Government Securities")). The Mortgage Loans were originated or acquired by
___________ (the "Mortgage Asset Seller") and will be sold to the Depositor
on or prior to the date of initial issuance of the Certificates.

The Class ( ) Certificates will evidence approximately an initial ___%
undivided interest in the Trust Fund and the Subordinate Certificates, in the
aggregate, will evidence approximately an initial ___% undivided interest in
the Trust Fund. Only the Class ( ) Certificates are being offered hereby.

INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, CERTAIN RISKS SET FORTH
UNDER THE CAPTION "RISK FACTORS" HEREIN AND IN THE PROSPECTUS.

(The MBS will (consist of) (include) the following series and classes of
securities: (identify title(s) and class(es) of MBS)(, including (title(s)
and class(es) of MBS).) (The (title(s) and class(es) of MBS) are
(subordinate) (interest-only) securities.) (See "Summary--The MBS."))

(The yield to investors in the (interest-only) Certificates will be
(extremely) sensitive to the rate and timing of principal payments (including
prepayments, repurchases, defaults and liquidations) in the Mortgage Loans
which may fluctuate significantly over time. An (extremely) rapid rate of
principal payments on the Mortgage Loans could result in the failure of
investors in the (interest-only) Certificates to recover their initial
investments.)

(As more fully described herein, each Mortgage Loan provides for
periodic adjustments (which may occur monthly, quarterly, semi-annually or
annually) of the mortgage interest rate (the "Mortgage Rate") thereon and the
monthly payment due thereon, in each case subject to the limitations
described herein. Accordingly, a significant increase in the Mortgage Rate
and the amount of the scheduled monthly payment due thereafter may result,
which may increase the likelihood of default on and prepayment of such
Mortgage Loan. In most cases, because the Mortgage Rate on a Mortgage Loan
will be subject to adjustment monthly, while the monthly payment due thereon
will be subject to adjustment annually, in each case subject to the
limitations described herein, and because the application of payment caps
limits adjustments to the monthly payments on certain Mortgage Loans, the
Mortgage Loans (and consequently the Class ( ) Certificates) may be subject
to accelerated, reduced or negative amortization.

-----------------------

Morgan Stanley & Co.
Incorporated

- -----------, 19--

Certain of the Mortgage Loans continue to be in an initial fixed interest
rate period and have not experienced the first adjustment to their respective
Mortgage Rates.) The characteristics of the Mortgage Loans are more fully
described herein under "Description of the Mortgage Pool."

Distributions on the Class ( ) Certificates will be made, to the extent
of available funds, on the __th day of each (month) (__) or, if any such day
is not a business day, on the next succeeding business day, beginning in
__________ (each, a "Distribution Date"). (As more fully described herein,
distributions allocable to interest, if any, on the Class ( ) Certificates on
each Distribution Date will be based on the (applicable) (then-applicable
variable) pass-through rate (the "Pass-Through Rate") and the aggregate
(principal balance (the "Certificate Balance")) (notional balance (the
"Notional Balance")) of such class (or each component thereof) outstanding
immediately prior to such Distribution Date. (The Pass-Through Rate
applicable to the Class ( ) Certificates from time to time will equal the
(sum of __% and the Index (as defined herein) subject to certain limitations)
(weighted average of the Class ( ) Remittance Rates (as defined herein) on
the Mortgage Loans. The Pass-Through Rate for the Class ( ) Certificates on
the first Distribution Date will be _% per annum and is expected to change
thereafter (because the weighted average of the Class ( ) Remittance Rates is
expected to change for succeeding Distribution Dates.) Distributions in
respect of principal, if any, of the Class ( ) Certificates will be made as
described herein under "Description of the Certificates -- Distributions --
Priority" and "--Calculations of Principal".)

(_______________ will act as master servicer of the Mortgage Loans (the
"Master Servicer"). The obligations of the Master Servicer with respect to
the Certificates will be limited to its contractual servicing obligations and
the obligation under certain circumstances to make Advances to the
Certificateholders. If the Master Servicer fails to make any such Advance or
otherwise fails to perform its servicing obligations, the Trustee will be
obligated to assume such servicing obligations and to make such Advance to
the extent described herein. See "Description of the Certificates --
Advances" herein. (The only) obligation of the Depositor with respect to the
Certificates will be to obtain from the Mortgage Asset Seller certain
representations and warranties with respect to the Mortgage Loans and to
assign to the Trustee the obligation of the Mortgage Asset Seller to
repurchase or substitute for any Mortgage Loan as to which there exists an
uncured material breach of any such representation or warranty.)

----------------------

PROCEEDS OF THE ASSETS IN THE TRUST FUND ARE THE SOLE SOURCE OF PAYMENTS ON
THE CLASS ( ) CERTIFICATES. THE CLASS ( ) CERTIFICATES DO NOT REPRESENT AN
INTEREST IN OR OBLIGATION OF THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE
OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE CLASS ( ) CERTIFICATES
NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY
OR INSTRUMENTALITY OR BY THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR
ANY OF THEIR AFFILIATES.

-------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

(THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.)

---------------------------

An election will (not) be made to treat the Trust Fund as a "real estate
mortgage investment conduit" (a "REMIC") for federal income tax purposes.
(The Class ( ) Certificates will constitute "regular interests" in the
REMIC.) See "Certain Federal Income Tax Consequences" herein and in the
Prospectus.

The yield to maturity on the Class ( ) Certificates will depend on the
rate and timing of principal payments (including prepayments, defaults and
liquidations) on the Mortgage Loans. See "Risk Factors" herein and "Risk
Factors -- Average Life of Certificates; Prepayments; Yields" and "Yield
Considerations" in the Prospectus. As further described herein, losses on
the Mortgage Loans will be allocated to the Subordinate Certificates prior to
allocation to the Class ( ) Certificates. See "Description of the
Certificates -- Distributions -- Priority" herein.

There is currently no secondary market for the Class ( ) Certificates.
Morgan Stanley & Co. Incorporated (the "Underwriter") currently expects to
make a secondary market in the Class ( ) Certificates, but has no obligation
to do so. There can be no assurance that such a market will develop or, if
it does develop, that it will continue. See "Plan of Distribution" herein.

The Class ( ) Certificates offered hereby will be purchased by the
Underwriter from the Depositor and will be offered by the Underwriter from
time to time to the public in negotiated transactions or otherwise at varying
prices to be determined at the time of sale. Proceeds to the Depositor from
the sale of the Class ( ) Certificates will be ___% of the initial aggregate
principal balance thereof as of ____________ 1, 199_ (the "Cut-off Date")
plus accrued interest from the Cut-off Date, before deducting expenses
payable by the Depositor.

The Class ( ) Certificates are offered subject to prior sale, when, as
and if accepted by the Underwriter, and subject to approval of certain legal
matters by __________, counsel for the Underwriter. It is expected that
delivery of the Class ( ) Certificates (in book-entry form) (in registered,
certified form) will be made on or about ___________, 199_, (through the
facilities of The Depository Trust Company) (at the offices of the
Underwriter, New York, New York) against payment therefor in immediately
available funds.

-----------------------------------

THE CLASS ( ) CERTIFICATES OFFERED BY THIS PROSPECTUS SUPPLEMENT
CONSTITUTE PART OF A SEPARATE SERIES OF CERTIFICATES ISSUED BY THE DEPOSITOR
AND ARE BEING OFFERED PURSUANT TO ITS PROSPECTUS DATED _______________, 199_,
OF WHICH THIS PROSPECTUS SUPPLEMENT IS A PART AND WHICH ACCOMPANIES THIS
PROSPECTUS SUPPLEMENT. THE PROSPECTUS CONTAINS IMPORTANT INFORMATION
REGARDING THIS OFFERING WHICH IS NOT CONTAINED HEREIN, AND PROSPECTIVE
INVESTORS ARE URGED TO READ THE PROSPECTUS AND THIS PROSPECTUS SUPPLEMENT IN
FULL. SALES OF THE CLASS ( ) CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE
PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.

TABLE OF CONTENTS

Page
----

Prospectus Supplement

Summary S
Risk Factors S
Description of the Mortgage Pool S
Description of the Certificates S
Pooling and Servicing Agreement S
Use of Proceeds S
Certain Federal Income Tax Consequences S
ERISA Considerations S
Legal Investment S
Plan of Distribution S
Legal Matters S
Rating S

Prospectus

Prospectus Supplement
Available Information
Incorporation of Certain Information by Reference
Summary of Prospectus
Risk Factors
Description of the Trust Funds
Use of Proceeds
Yield Considerations
The Depositor
Description of the Certificates
Description of the Agreements
Description of Credit Support
Certain Legal Aspects of Mortgage Loans
Certain Federal Income Tax Consequences
State Tax Considerations
ERISA Considerations
Legal Investment
Plan of Distribution
Legal Matters
Financial Information
Rating
Index of Principal Definitions

-----------------------------------

UNTIL ______________, 199_, ALL DEALERS EFFECTING TRANSACTIONS IN THE
CLASS ( ) CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION,
MAY BE REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO
WHICH IT RELATES. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION
OF DEALERS TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

---------------------------------------

No dealer, salesman, or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus Supplement and the accompanying Prospectus in connection with the
offer contained in this Prospectus Supplement and the accompanying
Prospectus, and, if given, such information or representations must not be
relied upon as having been authorized by the Issuer, the Depositor or the
Underwriter. This Prospectus Supplement and the accompanying Prospectus
shall not constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer or solicitation in such jurisdiction.
The delivery of this Prospectus Supplement and the accompanying Prospectus at
any time does not imply that the information herein is correct as of any time
subsequent to the date hereof.

SUMMARY OF PROSPECTUS SUPPLEMENT

The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and in
the accompanying Prospectus. Certain capitalized terms used in this Summary
are defined elsewhere in this Prospectus Supplement or in the Prospectus.

Title of Certificates Mortgage Pass-Through Certificates, Series
199_-_, (the "Certificates").

Depositor Morgan Stanley Capital I Inc., a Delaware
corporation and a wholly-owned limited purpose
finance subsidiary of Morgan Stanley Group Inc.
See "The Depositor" in the Prospectus.

Master Servicer ____________, a _____________. See "Pooling and
Servicing Agreement -- The Master Servicer"
herein.

(Sub-Servicers _______________, a ________________)

Trustee _____________, a ____________________.

Cut-off Date ____________ 1, 199_.

Closing Date ______________ 1, 199_.

Distribution Dates Distributions on the Certificates will be made
by the Trustee, to the extent of available
funds, on the __ day of each (month) ( ) or, if
any such __ day is not a business day, then on
the next succeeding business day, beginning in
________ 19__ (each, a "Distribution Date"), to
the holders of record as of the close of
business on the (last business day of the month
preceding the month) of each such distribution
(each, a "Record Date"). Notwithstanding the
above, the final distribution on any
Certificate will be made after due notice by
the Trustee of the pendency of such
distribution and only upon presentation and
surrender of such Certificates at the location
to be specified in such notice.

(Registration of the
Class ( ) Certificates The Class ( ) Certificates will be represented
by one or more global certificates registered
in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"). No person
acquiring an interest in the Class ( )
Certificates (any such person, a "Class ( )
Certificate Owner") will be entitled to receive
a Certificate of such class in fully
registered, certificated form (a "Definitive
Class ( ) Certificate"), except under the
limited circumstances described in the
Prospectus under "Description of the
Certificates-Book-entry Registration and
Definitive Certificates". Instead, DTC will
effect payments and transfers in respect of the
Class ( ) Certificates by means of its
electronic recordkeeping services, acting
through certain participating organizations
("Participants"). This may result in certain
delays in receipt of payments by an investor
and may restrict an investor's ability to
pledge its securities. Unless and until
Definitive Class ( ) Certificates are issued,
all references herein to the rights of holders
of a Class ( ) Certificate are to the rights of
Class ( ) Certificate Owners of such class as
they may be exercised through DTC and its
Participants, except as otherwise specified
herein. See "Description of the Certificates-
General" herein and "Description of the
Certificates-Book-Entry Registration and
Definitive Certificates" in the Prospectus.)

Denominations The Class ( ) Certificates will be issuable (on
the book-entry records of DTC and its
Participants) (in registered, certified form)
in denominations of $_______ and integral
multiples of $_____________ in excess thereof(,
with one Certificate of such class evidencing
an additional amount equal to the remainder of
the Certificate Balance thereof).

(The Mortgage Pool The Mortgage Pool will consist of ((conven-
tional), (fixed rate) (adjustable rate)
Mortgage Loans secured by first (and/or junior)
liens on one- to four-family residential
properties (the "Mortgaged Properties") located
in __ different states,) (mortgage
participations, mortgage pass-through
certificates, mortgage-backed securities
evidencing interests therein or secured thereby
(the "MBS"),) (and) (certain direct obligations
of the United States, agencies thereof or
agencies created thereby (the "Government
Securities")). (The Mortgage Loans will have
an aggregate principal balance as of the
Cut-off Date of $_________ and individual
principal balances at origination of at least
$______________ but not more than $__________,
with an average principal balance at
origination of approximately $_________. The
Mortgage Loans will have terms to maturity from
the date of origination or modification of not
more than ____ years, and a weighted average
remaining term to maturity of approximately
_____ months as of the Cut-off Date. The
Mortgage Loans will bear interest at Mortgage
Rates of at least _____% per annum but not more
than _____% per annum, with a weighted average
Mortgage Rate of approximately ____% per annum
as of the Cut-off Date. The Mortgage Loans

will be acquired by the Depositor on or before
the Closing Date. In connection with its
acquisition of the Mortgage Loans, the
Depositor will be assigned (and will in turn
assign to the Trustee for the benefit of the
holders of the Certificates) certain rights in
respect of representations and warranties
described herein that were made by the Mortgage
Asset Seller.)

(_____ of the Mortgage Loans, representing _____% of
the Mortgage Loans by aggregate principal balance as
of the Cut-off Date, provide for scheduled payments
of principal and/or interest ("Monthly Payments") to
be due on the _____ day of each month; the remainder
of the Mortgage Loans provide for Monthly Payments
to be due on (identify day or days) of each month
(the date in any month on which a Monthly Payment on
a Mortgage Loan is first due, the "Due Date"). (The
rate per annum at which interest accrues on each
Mortgage Loan is subject to adjustment on specified
Due Dates (each such date, an "Interest Rate
Adjustment Date") by adding a fixed percentage
amount (a "Gross Margin") to the value of the
then-applicable Index (as described below) subject,
in the case of substantially all of the Mortgage
Loans, to limitations on the periodic adjustment of
the related Mortgage Rate, and to maximum and
minimum lifetime Mortgage Rates, as described
herein. ___ of the Mortgage Loans, representing
___% of the Mortgage Loans by aggregate principal
balance as of the Cut-off Date, provide for Interest
Rate Adjustment Dates to occur (monthly); the
remainder of the Mortgage Loans provide for
adjustments to the Mortgage Rate to occur quarterly,
semi-annually or annually. (Each of the Mortgage
Loans provides for an initial fixed interest rate
period;) --------- of the Mortgage Loans,
representing _____% of the Mortgage Loans by
aggregate principal balance as of the Cut-off Date,
have not yet experienced their first Interest Rate
Adjustment Date. The latest initial Interest Rate
Adjustment Date for any Mortgage Loan is scheduled
to occur on ________.))

(The amount of the Monthly Payment on each Mortgage
Loan is also subject to adjustment on specified Due
Dates (each such date, a "Payment Adjustment Date")
to an amount that would amortize the outstanding
principal balance of the Mortgage Loan over its then
remaining amortization schedule and pay interest at
the applicable Mortgage Rate, subject, in the case
of several Mortgage Loans, to payment caps, which
limit the amount by which the Monthly Payment may
adjust on any Payment Adjustment Date as described
herein. _______ of the Mortgage Loans, representing
__% of the Mortgage Loans (by aggregate principal
balance as of the Cut-off Date, provide for Payment
Adjustment Dates to occur annually, while the
remainder of the Mortgage Loans provide for
adjustments of the Monthly Payment to occur monthly,
quarterly or semi-annually.)

(Only in the case of --------- Mortgage Loans,
representing ____% of the Mortgage Loans by
aggregate principal balance as of the Cut-off Date,
does a Payment Adjustment Date immediately follow
each Interest Rate Adjustment Date. As a result,
and because the application of payment caps may
limit the amount by which the Monthly Payments may
adjust in respect of certain Mortgage Loans, the
amount of a Monthly Payment may be more or less than
the amount necessary to amortize the remaining
principal balance of the Mortgage Loan over its then
remaining amortization schedule and pay interest at
the then-applicable Mortgage Rate. Accordingly,
Mortgage Loans may be subject to slower amortization
(if the Monthly Payment due on a Due Date is
sufficient to pay interest accrued to such Due Date
at the then-applicable Mortgage Rate but is not
sufficient to reduce principal in accordance with
the applicable amortization schedule), to negative
amortization (if interest accrued to a Due Date at
the applicable Mortgage Rate is greater than the
entire Monthly Payment due on such Due Date) or to
accelerated amortization (if the Monthly Payment due
on a Due Date is greater than the amount necessary
to pay interest accrued to such Due Date at the
then-applicable Mortgage Rate and to reduce
principal in accordance with the applicable
amortization schedule).)

(__ Mortgage Loans, representing ____% of the
Mortgage Loans by aggregate principal balance as of
the Cut-off Date, permit negative amortization.
Substantially all of the Mortgage Loans that permit
negative amortization contain provisions that limit
the extent to which the amount of their respective
original principal balances may be exceeded as a
result thereof.)

(__ Mortgage Loans, representing ____% of the
Mortgage Loans by aggregate principal balance as of
the Cut-off Date, provide for monthly payments of
principal based on amortization schedules
significantly longer than the remaining term of such
Mortgage Loans, thereby leaving substantial
outstanding principal amounts due and payable (each
such payment, a "Balloon Payment") on their
respective maturity dates, unless prepaid prior
thereto.)

For a further description of the Mortgage Loans, see
"Description of the Mortgage Pool" herein.)

(The MBS (Title and issuer of underlying securities, amount
deposited or pledged, amount originally issued,
maturity date, interest rate, (redemption
provisions), description of other material terms.)

(The Index As of any Interest Rate Adjustment Date, the Index
used to determine the Mortgage Rate on each Mortgage
Loan will be the ____________. See "Description of
the Mortgage Pool -- The Index" herein.)

(Conversion of
Mortgage Loans Approximately __% of the Mortgage Loans (by
aggregate principal balance as of the Cut-off Date)
(the "Convertible Mortgage Loans") provide that, at
the option of the related Mortgagors, the adjustable
interest rate on such Mortgage Loans may be
converted to a fixed interest rate, provided that
certain conditions have been satisfied. Upon
notification from a Mortgagor of such Mortgagor's
intent to convert from an adjustable interest rate
to a fixed interest rate, and prior to the
conversion of any such Mortgage Loan, the related
Warrantying Party (as defined herein) will be
obligated to purchase the Converting Mortgage Loan
(as defined herein) at the Conversion Price (as
defined herein). (In the event of a failure by a
Subservicer to purchase a "Converting Mortgage
Loan"), the Master Servicer is required to use its
best efforts to purchase such Converted Mortgage Loan
(as defined herein) from the Mortgage Pool at the
Conversion Price during the one-month period
following the date of conversion.) In the event
that neither the related Warrantying Party nor
Party nor the Master Servicer purchases a Converting
or Converted Mortgage Loan, the Mortgage Pool will
thereafter include both fixed-rate and adjustable-
rate Mortgage Loans. See "Certain Yield and
Prepayment Considerations" herein.)

The Class ( )
Certificates The Class ( ) Certificates will be issued
pursuant to a Pooling and Servicing Agreement, to
to be dated as of the Cut-off Date, among the
Depositor, the Master Servicer and the Trustee (the
"Pooling and Servicing Agreement"). The Class ( )
Certificates have an initial Certificate Balance
of $_______ (the initial "Class ( ) Balance"),
representing an initial interest of approximately
___% in a trust fund (the "Trust Fund"), which will
consist primarily of the Mortgage Pool (The Class
( ) Certificates will not have a Certificate
Balance.)

Distributions on the Class ( ) Certificates will be
made on the ____ day of each (month) (__) or, if
such day is not a business day, on the succeeding
business day, beginning on ____________ __, 199_
(each, a "Distribution Date"). Distributions on
each Distribution Date will be made by check or wire
transfer of immediately available funds, as provided
in the Pooling and Servicing Agreement, to the Class
( ) Certificateholders of record as of the (last
business day of the month preceding the month) of
such Distribution Date (each, a "Record Date"),
except that the final distribution on the Class ( )
Certificates will be made only upon presentation and
surrender of the Class ( ) Certificates at the
office or agency specified in the Pooling and
Servicing Agreement. (As more specifically
described herein, the Class ( ) Balance will be
adjusted from time to time on each Distribution Date
to reflect any additions thereto resulting from
allocations of Mortgage Loan negative amortization
to the Class ( ) Certificates and any reductions
thereof resulting from distributions of principal of
the Class ( ) Certificates. As further described
herein, interest shall accrue on the Class ( )
Balance at a Pass-Through Rate thereon.

Pass-Through Rate on
the Class ( )
Certificates (The Pass-Through Rate on the Class ( ) Certificates
is fixed and is set forth on the cover hereof.)
(The Pass-Through Rate on the Class ( )
Certificates will be equal to the weighted average
of the Class ( ) Remittance Rates in effect from
time to time on the Mortgage Assets. The Class ( )
Remittance Rate in effect for any Mortgage Assets as
of any date of determination (is equal to the excess
of the Mortgage Rate thereon over __% per annum)
((i) prior to its first Interest Rate Adjustment
Date is equal to the related Mortgage Rate then
in effect minus __ basis points (the "Net Mortgage
Rate") and (ii) from and after its first Interest
Rate Adjustment Date is equal to the related
Mortgage Rate then in effect minus the excess of the
related Gross Margin over __ basis points.)) (The
Class ( ) Certificates (or a component thereof) will
not be entitled to distributions of interest and
will not have a Pass-Through Rate.) (Describe any
other method used to calculate the Pass-Through
Rate.)

Interest Distributions
on the Class ( )
Certificates Holders of the Class ( ) Certificates will be
entitled to receive on each Distribution Date,
to the extent of the Available Distribution
Amount for such Distribution Date,
distributions allocable to interest in an
aggregate amount (the "Class ( ) Interest
Distribution Amount") equal to thirty days'
interest accrued on the Class ( ) Balance)
(Class ( ) Notional Amount) outstanding
immediately prior to such Distribution Date at
the then-applicable Pass-Through Rate less the
Class ( ) Certificates' allocable share
(calculated as described herein) of ((i) the
aggregate amount of negative amortization in
respect of the Mortgage Loans for their
respective Due Dates occurring during the
related Due Period and (ii)) the aggregate
portion of Prepayment Interest Shortfalls
incurred during the related Due Period that was
not covered by the application of the Master
Servicer's servicing compensation for the
related Due Period. (The amount, if any, by
which the Class ( ) Interest Distribution
Amount for any Distribution Date is reduced as
a result of negative amortization on the
Mortgage Loans shall constitute the "Class
Negative Amortization" for such Distribution
Date in respect of the Class ( ) Certificates
and shall be added to the Class ( ) Balance on
such Distribution Date.) (The Class ( )
Notional Amount will equal the (sum of the)
Class ( ) Balance. The Class ( ) Notional
Amount does not entitle the Class ( )
Certificates (or a component thereof) to any
distributions of principal.) If the Available
Distribution Amount for any Distribution Date
is less than the Class ( ) Interest
Distribution Amount for such Distribution Date,
the shortfall will be part of the Class ( )
Interest Distribution Amount distributable to

holders of Class ( ) Certificates on subsequent
Distribution Dates, to the extent of available
funds.

The Available Distribution Amount for any
Distribution Date generally includes: (i) scheduled
payments on the Mortgage Assets due during or prior
to the related Due Period and collected as of the
related Determination Date (to the extent not
distributed on previous Distribution Dates) and
certain unscheduled payments and other collections
on the Mortgage Assets collected during the related
Due Period, net of amounts payable or reimbursable
to the Master Servicer therefrom; (ii) any Advances
made by the Master Servicer for the related
Distribution Date; and (iii) that portion of the
Master Servicer's servicing compensation for the
related Due Period applied to cover Prepayment
Interest Shortfalls incurred during the related Due
Period. See " Description of the Certificates --
Distributions -- Calculations of Interest" herein.

Principal
Distributions on
the Class ( )
Certificates Holders of the Class ( ) Certificates will be
entitled to receive on each Distribution Date,
to the extent of the balance of the Available
Distribution Amount remaining after the payment
of the Class ( ) Interest Distribution Amount
for such Distribution Date, distributions in
respect of principal in an amount (the "Class (
) Principal Distribution Amount") generally
equal to the aggregate of (i) the then Class (
) Scheduled Principal Distribution Percentage
(calculated as described herein) of all
scheduled payments of principal (including the
principal portion of any Balloon Payments) due
on the Mortgage Loans during or, if and to the
extent not previously received or advanced and
distributed on prior Distribution Dates, prior
to the related Due Period that were paid by the
mortgagors as of the related Determination Date
or advanced by the Master Servicer in respect
of such Distribution Date, (ii) (the Senior
Accelerated Percentage of) (all principal
prepayments received during the related Due
Period and (iii), to the extent not previously
advanced (the (lesser of the) Class ( )
Scheduled Principal Distribution Percentage of
the Stated Principal Balance of the Mortgage
Loans) (and the) (Senior Accelerated Percentage
of any unscheduled principal recoveries
received during the related Due Period in
respect of the Mortgage Loans, whether in the
form of liquidation proceeds, insurance
proceeds, condemnation proceeds or amounts
received as a result of the purchase of any
Mortgage Loan out of the Trust Fund.))
Distributions in respect of principal of the
Class ( ) Certificates on any Distribution Date
shall be limited to the sum of (i) the Class (
) Balance outstanding immediately prior to such
Distribution Date and (ii) the Class Negative
Amortization, if any, for such Distribution
Date in respect of the Class ( ) Certificates.

(Initially, the "Senior Accelerated
Percentage" will equal 100% thereafter, as
further described herein, the Senior
Accelerated Percentage may be reduced under
certain circumstances.) See "Description of
the Certificates --Distributions --
Calculations of Principal" herein. (The Class
( ) Certificates do not have a Certificate
Balance and are therefore not entitled to any
principal distributions).

Advances The Master Servicer is required to make
advances ("Advances") in respect of delinquent
Monthly Payments on the Mortgage Loans, subject
to the limitations described herein. The
Trustee will be obligated to make any such
Advance if the Master Servicer fails in its
obligation to do so, to the extent provided in
the Pooling and Servicing Agreement. See
"Description of the Certificates -- Advances"
herein and "Description of the Certificates --
Advances in Respect of Delinquencies" in the
Prospectus.

Subordination The rights of holders of the Subordinate
Certificates to receive distributions of
amounts collected on the Mortgage Loans will be
subordinate, to the extent described herein, to
the rights of holders of the Class ( )
Certificates. This subordination is intended
to enhance the likelihood of receipt by the
holders of the Class ( ) Certificates of the
full amount of the Class ( ) Interest
Distribution Amount and the (ultimate receipt
of principal equal to the initial Class ( )
Balance). The protection afforded to the
holders of the Class ( ) Certificates by means
of the subordination, to the extent provided
herein, will be accomplished by the application
of the Available Distribution Amount to the
Class ( ) Certificates prior to the application
thereof to the Subordinate Certificates (and by
reducing the Class ( ) Interest Distribution
Amount and the Class ( ) Balance by an amount
equal to the interest portion and the principal
portion, respectively, Realized Losses
allocated to such class). See "Description of
the Certificates -- Subordination" herein.

(The Subordinate
Certificates The Class ( ) Certificates have an initial
Certificate Balance of $____________ (the
initial "Class ( ) Balance") and the Class ( )
Certificates have an initial Certificate
Balance of $________ (the initial "Class ( )
Balance"), representing ____% and _____%,
respectively, of the Mortgage Loans by
aggregate principal balance as of the Cut-off
Date. Interest shall accrue on the Class ( )
Balance and Class ( ) Balance at a Pass-Through
Rate equal to (____% per annum) (the weighted
average of the Net Mortgage Rates in effect
from time to time on the Mortgage Loans).

(The Class ( ) Certificates, which have no
Pass-Through Rate and initially have a Certificate

Balance of $______________ (the initial "Class ( )
Balance"), represent the right to receive on any
Distribution Date the balance, if any, of the
Available Distribution Amount remaining after the
payment of all interest and principal due on the
other Classes of Certificates. Subsequent to the
first Distribution Date, the Class ( ) Balance will
equal the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans over the sum
of the Class ( ) Balance, Class ( ) Balance and
Class ( ) Balance.)

(TheSubordinate Certificatesare notoffered hereby.))

(Special Prepayment
Considerations The rate of principal payments on the Class (
) Certificates collectively will depend on the
rate and timing of principal payments
(including prepayments, defaults and
liquidations) on the Mortgage Loans. As is the
case with mortgage-backed securities generally,
the Class ( ) Certificates are subject to
substantial inherent cash-flow uncertainties
because the Mortgage Loans may be prepaid at
any time. Generally, when prevailing interest
rates are increasing, prepayment rates on
mortgage loans tend to decrease, resulting in a
reduced return of principal to investors at a
time when reinvestment at such higher
prevailing rates would be desirable.
Conversely, when prevailing interest rates are
declining, prepayment rates on mortgage loans
tend to increase, resulting in a greater return
of principal to investors at a time when
reinvestment at comparable yields may not be
possible.

(The multiple class structure of the Class ( )
Certificates results in the allocation of
prepayments among certain classes as follows (to be
included as appropriate):

(SEQUENTIALLY PAYING CLASSES: (All) classes of the
Class ( ) Certificates are subject to various
priorities for payment of principal as described
herein. Distributions on classes having an earlier
priority of payment will be immediately affected by
the prepayment speed of the Mortgage Loans early in
the life of the Mortgage Pool. Distributions on
classes with a later priority of payment will not be
directly affected by the prepayment speed until such
time as principal is distributable on such classes;
however, the timing of commencement of principal
distributions and the weighted average lives of such
classes will be affected by the prepayment speed
experienced both before and after the commencement
of principal distributions on such classes.)

discussed herein, actual principal distributions are
likely to deviate from the described amounts,
because it is highly unlikely that the actual
prepayment speed of the Mortgage Loans each month
will remain at or near ___% (SPA)(CPR).) If the
prepayment speed of the Mortgage Loans is
consistently higher than ___% of (SPA)(CPR), then
the (Companion) Certificates will be retired before
all of the (Scheduled) Certificates are retired, and
the rate of principal distributions and the weighted
average lives of the remaining (Scheduled)
Certificates will become significantly more
sensitive to changes in the prepayment speed of the
Mortgage Loans and principal distributions thereon
will be more likely to deviate from the described
amounts.)

((COMPANION) CERTIFICATES: Because of the
application of amounts available for principal
distributions among the Class ( ), Class ( ) and
Class ( ) Certificates in any given month, first
to the (Scheduled) Certificates up to the described
amounts and then to the (Companion) Certificates,
the rate of principal distributions and the weighted
average lives of the (Companion) Certificates will
be extremely sensitive to changes in the prepayment
speed of the Mortgage Loans. The weighted average
lives of the (Companion) Certificates will be
significantly more sensitive to changes in the
prepayment speed than that of the (Scheduled)
Certificates or a fractional undivided interest in
the Mortgage Loans.))

(Special Yield
Considerations The yield to maturity on each respective class
of the Class ( ) Certificates will depend on
the rate and timing of principal payments
(including prepayments, defaults and
liquidations) on the Mortgage Loans and the
allocation thereof (and of any losses on the
Mortgage Loans) to reduce the Certificate
Principal Balance (or Notional Amount) of such
class, as well as other factors such as the
Pass-Through Rate (and any adjustments thereto)
and the purchase price for such Certificates.
The yield to investors on any class of Class
( ) Certificates will be adversely affected
by any allocation thereto of prepayment
interest shortfalls on the Mortgage Loans,
which are expected to result from the
distribution of interest only to the date of
prepayment (rather than a full month's
interest) in connection with prepayments in
full, and the lack of any distribution of
interest on the amount of any partial
prepayments.

In general, if a Class ( ) Certificate is
purchased at a premium and principal distributions
thereon occur at a rate faster than anticipated at
the time of purchase, the investor's actual yield to
maturity will be lower than that assumed at the time
of purchase. Conversely, if a Class ( )
Certificate is purchased at a discount and principal
distributions thereon occur at a rate slower than

that assumed at the time of purchase, the investor's
actual yield to maturity will be lower than that
originally anticipated.

The Class ( ) Certificates were structured based
on a number of assumptions, including a prepayment
assumption of ___% (SPA)(CPR) and weighted average
lives corresponding thereto as set forth herein
under "Special Prepayment Considerations." The
yield assumptions for the respective classes of
Offered Certificates will vary as determined at the
time of sale.

(The multiple class structure of the Senior
Certificates causes the yields of certain classes to
be particularly sensitive to changes in the
prepayment speed of the Mortgage Loans and other
factors, as follows (to be included as
appropriate):)

(INTEREST STRIP AND INVERSE FLOATER CLASSES: The
yield to investors on the (identify classes) will be
extremely sensitive to the rate and timing of
principal payments on the Mortgage Loans (including
prepayments, defaults and liquidations), which may
fluctuate significantly over time. A rapid rate of
principal payments on the Mortgage Loans could
result in the failure of investors in the (identify
interest strip and inverse floater strip classes) to
recover their initial investments, and a slower than
anticipated rate of principal payments on the
Mortgage Loans could adversely affect the yield to
investors on the (identify non-strip inverse floater
classes).)

((VARIABLE STRIP) CERTIFICATES. In addition to the
foregoing, the yield on the (Variable Strip)
Certificates will be materially adversely affected
to a greater extent than the yields on the other
Class ( ) Certificates if the Mortgage Loans with
higher Mortgage Rates prepay faster than the
Mortgage Loans with lower Mortgage Rates, because
holders of the (Variable Strip) Certificates
generally have rights to relatively larger portions
of interest payments on the Mortgage Loans with
higher Mortgage Rates than on Mortgage Loans with
lower Mortgage Rates.)

(ADJUSTABLE RATE (INCLUDING INVERSE FLOATER)
CLASSES: The yield on the (identify floating rate
classes) will be sensitive, and the yield on the
(identify inverse floater classes) will be extremely
sensitive, to fluctuations in the level of (the
index). THE PASS-THROUGH RATE ON THE (IDENTIFY
INVERSE FLOATER CLASSES) WILL VARY INVERSELY WITH,
AND AT A MULTIPLE OF, (THE INDEX).)

(Inverse floater companion classes: In addition to
the foregoing, in the event of relatively low
prevailing interest rates (including (the index) and
relatively high rates of principal prepayments over
an extended period, while investors in the (identify
inverse floater companion classes) may then be
experiencing a high current yield on such
Certificates, such yield may be realized only over a
relatively short period, and it is unlikely that

such investors would be able to reinvest such
principal prepayments on such Certificates at a
comparable yield.)

(RESIDUAL CERTIFICATES: Holders of the Residual
Certificates are entitled to receive distributions
of principal and interest as described herein;
however, holders of such Certificates may have tax
liabilities with respect to their Certificates
during the early years of their term that
substantially exceed the principal and interest
payable thereon during such periods. (In addition,
such distributions will be reduced to the extent
that they are subject to United States federal
income tax withholding.)))

Optional Termination At its option, the Master Servicer may purchase
all of the Mortgage Assets, and thereby effect
termination of the Trust Fund and early
retirement of the then outstanding
Certificates, on any Distribution Date on which
the aggregate Stated Principal Balance of the
Mortgage Loans remaining in the Trust Fund is
less than __% of the aggregate principal
balance of such Mortgage Loans as of the
Cut-off Date. (At its option, the Master
Servicer may also purchase any Class ( )
Certificates on any Distribution Date on which
the Class ( ) Balance is less than ___% of the
original balance thereof.) See "Pooling and
Servicing Agreement -- Termination" herein and
"Description of the Certificates --
Termination" in the Prospectus.

Certain Federal Income
Tax Consequences (An election will be made to treat the Trust
Fund as a real estate mortgage investment
conduit ("REMIC") for federal income tax
purposes. Upon the issuance of the Class ( )
Certificates, Brown & Wood LLP or Latham &
Watkins, counsel to the Depositor, will deliver
its opinion generally to the effect that
assuming compliance with all provisions of the
Pooling and Servicing Agreement, for federal
income tax purposes, the Trust Fund will
qualify as a REMIC under Sections 860A through
860G of the Internal Revenue Code of 1986 (the
"Code").

For federal income tax purposes, the Class ( )
Certificates will be the sole class of "residual
interests" in the REMIC and the Class ( ), Class ( )
and Class ( ) Certificates will be the "regular
interests" in the REMIC and will be treated as debt
instruments of the REMIC.

The Class ( ) Certificates (may(will))(will not) be
treated as having been issued with original issue
discount for federal income tax purposes. The
prepayment assumption that will be used for purposes
of computing the accrual of original issue discount,
market discount and premium, if any, for federal
income tax purposes will be equal to a (constant
prepayment rate ("CPR")) (standard prepayment
assumption ("SPA")) of ____%. However, no

representation is made that the Mortgage Loans will
prepay at that rate or at any other rate.)

For further information regarding the federal income
tax consequences of investing in the Class ( )
Certificates, see "Certain Federal Income Tax
Consequences" herein and in the Prospectus.)

ERISA Considerations (A fiduciary of any employee benefit plan or
other retirement arrangement subject to the
Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of
the Code should review carefully with its legal
advisors whether the purchase or holding of
Class ( ) Certificates could give rise to a
transaction that is prohibited or is not
otherwise permitted either under ERISA or
Section 4975 of the Code or whether there
exists any statutory or administrative
exemption applicable to an investment therein.)
(The U.S. Department of Labor has issued an
individual exemption, Prohibited Transaction
Exemption 90-24, to the Underwriter that
generally exempts from the application of
certain of the prohibited transaction
provisions of Section 406 of ERISA, and the
excise taxes imposed on such prohibited
transactions by Section 4975(a) and (b) of the
Code and Section 502(i) of ERISA, transactions
relating to the purchase, sale and holding of
pass-through certificates underwritten by the
Underwriter such as the Class ( ) Certificates
and the servicing and operation of asset pools
such as the Trust Fund, provided that certain
conditions are satisfied. A fiduciary of any
employee benefit plan subject to ERISA or the
Code should consult with its legal advisors
regarding the requirements of ERISA and the
Code.) See "ERISA Considerations" herein and
in the Prospectus.

Rating It is a condition to the issuance of the Class ( )
Certificates that they be rated (not lower than)
"___" by --------------. A security rating is not a
recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time
by the assigning rating organization. A security
rating does not address the frequency of prepayments
(whether voluntary or involuntary) of Mortgage
Loans, or the corresponding effect on yield to
investors. (The rating of the Class ( )
Certificates does not address the possibility that
the holders of such Certificates may fail to fully
recover their initial investments.) See "Risk
Factors" and "Rating" herein and "Yield
Considerations" in the Prospectus.

Legal Investment The appropriate characterization of the Class (
) Certificates under various legal investment
restrictions, and thus the ability of investors
subject to these restrictions to purchase the
Class ( ) Certificates, may be subject to
significant interpretative uncertainties. The
Class ( ) Certificates (will) (will not) be
"mortgage related securities" within the
meaning of the Secondary Mortgage Market

Enhancement Act of 1984 (so long as they are
rated in at least the second highest rating
category by the Rating Agency, and, as such,
are legal investments for certain entities to
the extent provided in SMMEA). Accordingly,
investors should consult their own legal
advisors to determine whether and to what
extent the Class ( ) Certificates constitute
legal investments for them. See "Legal
Investment" herein and in the Prospectus.

RISK FACTORS

(Description will depend on the particulars of the Mortgage Assets)

Special Prepayment Considerations. The rate and timing of principal
payments on the Class ( ) Certificates will depend, among other things, on
the rate and timing of principal payments (including prepayments, defaults,
liquidations and purchases of Mortgage Assets due to a breach of
representation and warranty) on the Mortgage Assets. The rate at which
principal prepayments occur on the Mortgage Loans will be affected by a
variety of factors, including, without limitation, the terms of the Mortgage
Loans, the level of prevailing interest rates, the availability of mortgage
credit and economic, demographic, geographic, tax, legal and other factors.
In general, however, if prevailing interest rates fall significantly below
the Mortgage Rates on the Mortgage Loans, such Mortgage Loans are likely to
be the subject of higher principal prepayments than if prevailing rates
remain at or above the rates borne by such Mortgage Loans. (The rate of
principal payments on the Class ( ) Certificates will correspond to the rate
of principal payments on the Mortgage Loans and is likely to be affected by
the Lock-out Periods and Prepayment Premium Provisions applicable to the
Mortgage Loans and by the extent to which the Master Servicer is able to
enforce such provisions. Mortgage loans with a lock-out period or a
prepayment premium provision, to the extent enforceable, generally would be
expected to experience a lower rate of principal prepayments than otherwise
identical mortgage loans without such provisions, with shorter lock-out
periods or with lower prepayment premiums.) (As is the case with
mortgage-backed securities generally, the Class ( ) Certificates are subject
to substantial inherent cashflow uncertainties because the Mortgage Loans may
be prepaid at any time.)

(As described herein, prior to reduction of the Class ( ) Balance to
zero, all principal prepayments on and other unscheduled recoveries of
principal of the Mortgage Loans will be allocated to the Class ( )
Certificates. To the extent that no prepayments or other unscheduled
recoveries of principal are distributed on the Subordinate Certificates, the
subordination afforded the Class ( ) Certificates by the Subordinate
Certificates, in the absence of offsetting losses on the Mortgage Loans
allocated thereto, will be increased.)

See "Description of the Certificates -- Distributions -- Priority" and
"Certain Yield, Prepayment and Maturity Considerations" herein and "Yield
Considerations" in the Prospectus.

Special Yield Considerations. The yield to maturity on the Class ( )
Certificates will depend, among other things, on the rate and timing of
principal payments (including prepayments, defaults, liquidations and
purchases of Mortgage Loans due to a breach of representation and warranty)
on the Mortgage Loans and the allocation thereof to reduce the Certificate
Balance of such class. (The yield to maturity on the Class ( ) Certificates
will also depend on changes in the Index and the effect of any maximum
lifetime Mortgage Rate, minimum lifetime Mortgage Rate, Payment Cap and
Periodic Rate Cap applicable to each Mortgage Loan.) The yield to investors
on the Class ( ) Certificates will be adversely affected by any allocation
thereto of Prepayment Interest Shortfalls on the Mortgage Loans, which are
expected to result from the distribution of interest only to the date of
prepayment (rather than a full month's interest) in connection with
prepayments in full, and the lack of any distribution of interest on the
amount of any partial prepayments. Neither the Certificates not the Mortgage
Loans are guaranteed by any governmental entity or private insurer.

In general, if a Certificate is purchased at a premium and principal
distributions thereon occur at a rate faster than anticipated at the time of
purchase, the investor's actual yield to maturity will be lower than that
assumed at the time of purchase. Conversely, if a Certificate is purchased
at a discount and principal distributions thereon occur at a rate slower than
that assumed at the time of purchase, the investor's actual yield to maturity
will be lower than assumed at the time of purchase.

See "Certain Federal Income Tax Consequences" herein and in the
Prospectus and "Yield Considerations" in the Prospectus.

(Risks Associated with Certain of the Mortgage Loans and Mortgaged
Properties.) (Description of type of property.)

(Because the Mortgage Loans are adjustable rate mortgage loans, the
Mortgage Rates and Monthly Payments will increase in a rising interest rate
environment, perhaps without a corresponding increase in the mortgagors'
income. In such event, the related mortgagor's ability to make Monthly
Payments may be impaired, and a mortgagor payment default would be more
likely to occur.)

Effect of Mortgagor Defaults. The aggregate amount of distributions on
the Class ( ) Certificates, the yield to maturity of the Class ( )
Certificates, the rate of principal payments on the Class ( ) Certificates
and the weighted average life of the Class ( ) Certificates will be affected
by the rate and the timing of delinquencies and defaults on the Mortgage
Loans. If a purchaser of a Class ( ) Certificate calculates its anticipated
yield based on an assumed rate of default and amount of losses on the
Mortgage Loans that is lower than the default rate and amount of losses
actually experienced and such additional losses are allocable to such class
of Certificates, such purchaser's actual yield to maturity will be lower than
that so calculated and could, under certain extreme scenarios, be negative.
The timing of any loss on a liquidated Mortgage Loan will also affect the
actual yield to maturity of the Class ( ) Certificates to which a portion of
such loss is allocable, even if the rate of defaults and severity of losses
are consistent with an investor's expectations. In general, the earlier a
loss borne by an investor occurs, the greater is the effect on such
investor's yield to maturity.

As and to the extent described herein, the Master Servicer will be
entitled to receive interest on unreimbursed Advances and unreimbursed
servicing expenses that (i) are recovered out of amounts received on the
Mortgage Loan as to which such Advances were made or such servicing expenses
were incurred, which amounts are in the form of liquidation proceeds,
insurance proceeds, condemnation proceeds or amounts paid in connection with
the purchase of such Mortgage Loan out of the Trust Fund or (ii) are
determined to be nonrecoverable Advances. The Master Servicer's right to
receive such payments of interest are prior to the rights of
Certificateholders to receive distributions on the Certificates and,
consequently, may result in losses being allocated to the Class ( )
Certificates that would not otherwise have resulted absent the accrual of
such interest.

Even if losses on the Mortgage Loans are not borne by an investor in the
Class ( ) Certificates, such losses may affect the weighted average life and
yield to maturity of such investor's Certificates. Losses on the Mortgage
Loans, to the extent not allocated to the Class ( ) Certificates, may result
in a higher percentage ownership interest evidenced by such Certificates than
would otherwise have resulted absent such loss. The consequent effect on the
weighted average life and yield to maturity of the Class ( ) Certificates
will depend upon the characteristics of the remaining Mortgage Loans.

Regardless of whether losses ultimately result, delinquencies and
defaults on the Mortgage Loans may significantly delay the receipt of
payments by the holder of a Class ( ) Certificate, to the extent that
Advances or the subordination of another class of Certificates does not fully
offset the effects of any such delinquency or default. The Scheduled
Principal Distribution Amount and the Unscheduled Principal Distribution
Amount generally consist of, as more fully described herein, principal of the
Mortgage Loans actually collected or advanced. The Master Servicer has the
ability to extend and modify Mortgage Loans that are in default or as to
which a payment default is imminent, including the ability to extend the date
on which a Balloon Payment is due by up to __ months, subject to certain
conditions described in the Pooling and Servicing Agreement. The Master
Servicer's obligation to make Advances in respect of a Mortgage Loan that is
delinquent as to its Balloon Payment is limited, however, to the extent
described under "Description of the Certificates -- Advances". Until such
time as any Mortgage Loan delinquent in respect of its Balloon Payment is
liquidated, the entitlement of the holders of Class ( ) Certificates on each
Distribution Date in respect of principal of such Mortgage Loan will be
limited to the Class ( ) Scheduled Principal Distribution Percentage of that
portion of the Available Distribution Amount that represents the principal
portion of (i) any payment made by the related mortgagor under a forbearance
arrangement or (ii) any related Advance made by the Master Servicer.
Consequently, any delay in the receipt of a Balloon Payment that is payable,
in whole or in part, to holders of Class ( ) Certificates will extend the
weighted average life of the Class ( ) Certificates.

As described under "Description of the Certificates -- Distributions"
herein, if the portion of Available Distribution Amount distributable in
respect of interest on the Class ( ) Certificates on any Distribution Date is
less than the Distributable Certificate Interest then payable for such class,
the shortfall will be distributable to holders of such class of Certificates
on subsequent Distribution Dates, to the extent of available funds. Any such
shortfall will not bear interest and will therefore negatively affect the
yield to maturity of such class of Certificates for so long as it is
outstanding.

(The following paragraphs will be included in the event any of the Mortgage
Loans are acquired from the Resolution Trust Corporation:)

(Troubled Originators. The Mortgage Loans were originated or purchased
by the (Originating Institutions), each of which is subject to an RTC
receivership. It is possible that the financial difficulties experienced by
the (Originating Institutions) may have adversely affected either or both of
(i) the standards and procedures pursuant to which the Mortgage Loans were
originated or purchased by such (Originating Institutions) and (ii) the
manner in which such Mortgage Loans have been serviced prior to assumption of
servicing responsibilities by the Master Servicer. The Mortgage Loans will
be acquired by the Depositor on or before the Closing Date from the Mortgage
Asset Seller, which acquired the Mortgage Loans from the RTC in its capacity
as receiver of each of the associations pursuant to a certain commercial
mortgage loan sale agreement, dated ______, 199_ (as amended, the "Loan Sale
Agreement"). Pursuant to the Loan Sale Agreement, the RTC as receiver of the
(Originating Institutions), has made certain representations and warranties
regarding the Mortgage Loans and is obligated to cure such breaches or
repurchase those Mortgage Loans as to which there is a breach of such
representations and warranties. The RTC repurchase price for the Mortgage
Loans is par plus accrued interest at the related Mortgage Rate(,except in
the case of --------- Mortgage Loans as to which a repurchase for a breach of
the representation and warranty relating to certain environmental matters
would be accomplished at a price that initially is discounted but increases
to par over approximately __ years). See "Description of the Mortgage Pool -
- - Representations and Warranties of the Originating Institutions" herein.
The RTC, acting in its corporate capacity, has guaranteed such obligations of

the RTC, acting in its capacity as receiver. The agreement pursuant to which
such guarantee was made by the RTC is hereinafter referred to as the
"Guarantee Agreement".)

(Limited Information. The information set forth in this Prospectus
Supplement with respect to the Mortgage Loans is derived from books and
records of the (Originating Institutions), as well as a limited review of the
credit and legal files relating to the Mortgage Loans. Accordingly,
available information does not permit the Depositor to determine fully the
origination, credit appraisal and underwriting practices of the originators
of the Mortgage Loans. Furthermore, it is possible that this Prospectus
Supplement does not contain material information regarding the Mortgage Loans
that would have been disclosed if the structure and personnel of the
(Originating Institutions) had not been affected by such institutions having
been placed in receivership. While the Depositor has undertaken a limited
review of the records and files related to the Mortgage Loans in connection
with the issuance of the Class ( ) Certificates the Mortgage Loans have not
been "re-underwritten" or subjected to the type of review that would
typically be made in respect of a newly originated mortgage loan.))

DESCRIPTION OF THE (MORTGAGE POOL) (MBS)

GENERAL

The Trust Fund will consist primarily of (___ (conventional), (fixed
interest) (adjustable interest) rate Mortgage Loans with an aggregate
principal balance as of the Cut-off Date, after deducting payments of
principal due on such date, of $____________,) (mortgage participations,
mortgage pass-through certificates, mortgage-backed securities evidencing
interests therein or secured thereby (the "MBS"),) (and) (certain direct
obligations of the United States, agencies thereof or agencies created
thereby (the "Government Securities")). Each Mortgage Loan is evidenced by a
promissory note (a "Mortgage Note") and secured by a mortgage, deed of trust
or other similar security instrument (a "Mortgage" creating a first fee lien
on a one- to four- family residential property (a "Mortgaged Property"). The
Mortgaged Properties consist of (description of one- to four-family
residential properties). (Because no evaluation of any mortgagor's financial
condition has been conducted, investors should consider all of the Mortgage
Loans to be non-recourse loans so that, in the event of mortgagor default,
recourse may be had only against the specific property and such limited other
assets as have been pledged to secure a Mortgage Loan, and not against the
mortgagor's other assets.) All percentages of the Mortgage Loans described
herein are approximate percentages (except as otherwise indicated) by
aggregate principal balance as of the Cut-off Date.)

(The Mortgage Loans to be included in the Trust Fund will have been
originated or acquired by ________________ (the "Mortgage Asset Seller") and
will comply with the underwriting criteria described herein. The Depositor
will purchase the Mortgage Loans to be included in the Mortgage Pool on or
before the Closing Date from the Mortgage Asset Seller pursuant to a seller's
agreement (the "Seller's Agreement"), to be dated as of ____________, 199_
between the Mortgage Asset Seller and the Depositor. The Depositor will
cause the Mortgage Loans in the Mortgage Pool to be assigned to
_______________, as Trustee, pursuant to the Pooling and Servicing Agreement.
_____________, in its capacity as Master Servicer, will service the Mortgage
Loans pursuant to the Pooling and Servicing Agreement.

Pooling and Servicing Agreement the Depositor will assign all its right,
title and interest in such representations, warranties and covenants
(including ____________________'s repurchase or substitution obligation) to
the Trustee for the Trust Fund. The Depositor will make (no) representations
or warranties with respect to the Mortgage Loans and will have no obligation
to repurchase or substitute for Mortgage Loans with deficient documentation
(or which are otherwise defective). _____________, as seller of the Mortgage
Loans to the Depositor, is selling such Mortgage Loans without recourse and,
accordingly, in such capacity, will have no obligations with respect to the
certificates other than pursuant to such representations, warranties,
covenants and repurchase obligations. See "Description of the Agreements --
Representations and Warranties; Repurchases" in the Prospectus.)

(THE MBS

(Title and issuer of underlying securities, amount deposited or pledged,
amount originally issued, maturity date, interest rate, (redemption
provisions), together with description of other material terms.)

(Description of principal and interest distributions on the MBS.)

(Description of advances by the servicer of the mortgage loans
underlying the MBS.)

(Description of effect on the MBS of allocation of losses on the
underlying mortgage loans.)

As to each series of MBS included in the Trust Fund, the various classes
of certificates from such series ((including classes not in the Trust Fund
but from the same series as classes that are in the Trust Fund) are listed,
together with the related pass-through rates and certain other information
applicable thereto, in Annex B hereto.)

(CONVERTIBLE MORTGAGE LOANS

____% of the Mortgage Loans ("Convertible Mortgage Loans") provide that,
at the option of the related Mortgagors, the adjustable interest rate on such
Mortgage Loans may be converted to a fixed interest rate. The first month in
which any of the Mortgage Loans may convert is ____________, and the last
month in which any of the Mortgage Loans may convert is _____________. Upon
conversion, the Mortgage Rate will be converted to a fixed interest rate
determined in accordance with the formula set forth in the related Mortgage
Note which formula is intended to result in a Mortgage Rate which is not less
than the then current market interest rate (subject to applicable usury
laws). After such conversion, the monthly payments of principal and interest
will be adjusted to provide for full amortization over the remaining term to
scheduled maturity. Upon notification from a Mortgagor of such Mortgagor's
intent to convert from an adjustable interest rate to a fixed interest rate
and prior to the conversion of any such Mortgage Loan (a "Converting Mortgage
Loan"), the related Warrantying Party will be obligated to purchase the
Converting Mortgage Loan at a price equal to the outstanding principal
balance thereof plus accrued interest thereon net of any subservicing fees
(the "Conversion Price"). In the event of a failure by a Warrantying Party
to purchase a converting Mortgage Loan, the Master Servicer is required to
use its best efforts to purchase such Mortgage Loan following its conversion
(a "Converted Mortgage Loan") during the one-month period following the date
of conversion at the Conversion Price.

In the event that the related Warrantying Party fails to purchase a
Converting Mortgage Loan and the Master Servicer does not purchase a
Converted Mortgage Loan, neither the Depositor nor any of its affiliates nor
any other entity is obligated to purchase or arrange for the purchase of any
Converted Mortgage Loan. Any such Converted Mortgage Loan will remain in the
Mortgage Pool as a fixed-rate Mortgage Loan and will result in the Mortgage
Pool's having both fixed rate and adjustable rate Mortgage Loans. See
"Certain Yield and Prepayment Considerations" herein.

Following the purchase of any Converted Mortgage Loan as described
above, the purchaser will be entitled to receive an assignment from the
Trustee of such Mortgage Loan and the purchaser will thereafter own such
Mortgage Loan free of any further obligation to the Trustee or the
Certificateholders with respect thereto.)

(THE INDEX

As of any Payment Adjustment Date, the Index applicable to the
determination of the related Mortgage Rate will be a per annum rate equal to
______________, as most recently available as of the date ---- days prior to
the Payment Adjustment Date (the "Index"). Such average yields reflect the
yields for the week prior to that week in which the information is reported.
In the event that the Index is no longer available, an index reasonably
acceptable to the Trustee that is based on comparable information will be
selected by the Master Servicer.

The Index is currently calculated based on information reported in
___________. Listed below are the weekly average yields on actively traded
______________ as reported in ____________ on the date that would have been
applicable to mortgage loans having the following adjustment dates for the
indicated years. Such average yields may fluctuate significantly from week
to week as well as over longer periods and may not increase or decrease in a
constant pattern from period to period. The following does not purport to be
representative of future average yields. No assurance can be given as to the
average yields on such _______________ on any Payment Adjustment Date or
during the life of any Mortgage Loan.)

(name of Index)

Adjustment Date 1990 1991 1992 1993 1994 1995
- -------------- ---- ---- ---- ---- ---- ----

January ( ) . . . . . .
February ( ). . . . . .
March ( ) . . . . . . .
April ( ) . . . . . . .
May ( ) . . . . . . . .
June ( ). . . . . . . .
July ( ). . . . . . . .
August ( ). . . . . . .
September ( ) . . . . .
October ( ) . . . . . .
November ( ). . . . . .
December ( ). . . . . .

CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS

(Approximately ___% of the Mortgage Loans have Due Dates that occur on
the ___ day of each month; approximately ___% of the Mortgage Loans have Due
Dates that occur on the ___ day of each month; approximately _____% of the
Mortgage Loans have Due Dates that occur on the ___ day of each month; and
the remainder of the Mortgage Loans have Due Dates that occur on the
fifteenth day of each month.)

$_________; (vii) original terms to scheduled maturity ranging from
_____ months to _________ months; (viii) a weighted average original
term to scheduled maturity of _____ months; (ix) remaining terms to
scheduled maturity ranging from ____ months to _____ months; (x) a weighted
average remaining term to scheduled maturity of ________ months; (xi)
Cut-off Date Loan-to-Value ("LTV") Ratios ranging from ______% to
________%; (xii) a weighted average Cut-off Date LTV Ratio of _____%;
(xiii) as to the _______% of the Mortgage Loans to which such
characteristic applies, (A) minimum lifetime Mortgage Rates ranging
from ____% per annum to ______ % per annum and (B) a weighted average
minimum lifetime Mortgage Rate of _______% per annum; and (xiv) as
to the__________% of Mortgage Loans to which such characteristic
applies and for which it may be currently calculated, (A) maximum
lifetime Mortgage Rate ranging from _______% per annum to ________%
per annum and (B) a weighted average maximum lifetime Mortgage Rate
of _________% per annum.)

(___% of the Mortgage Loans provide for Balloon Payments on their
respective maturity dates. Loans providing for Balloon Payments involve a
greater degree of risk than self-amortizing loans. See "Risk Factors --
Balloon Payments" in the Prospectus.)

(The Mortgage Rate on each Mortgage Loan is subject to adjustment on
each Interest Rate Adjustment Date by adding the related Gross Margin to the
value of the Index (described below) as most recently announced a specified
number of days prior to such Interest Rate Adjustment Date, subject, in the
case of substantially all of the Mortgage Loans, to minimum and maximum
lifetime Mortgage Rates, with ranges specified below. The Mortgage Rates on
the Mortgage Loans generally are adjusted monthly; however, certain of the
Mortgage Loans provide for Interest Rate Adjustment Dates to occur quarterly
(___% of the Mortgage Loans), semi-annually (---% of the Mortgage Loans) or
annually (____% of the Mortgage Loans). Each of the Mortgage Loans provided
for an initial fixed interest rate period; ---------- Mortgage Loans,
representing ___% of the Mortgage Loans, have not experienced their first
Interest Rate Adjustment Dates. The latest initial Interest Rate Adjustment
Date for any Mortgage Loan is to occur in -----------------------------------
- -----------------------------.)

(Subject to the Payment Caps described below, the amount of the Monthly
Payment on each Mortgage Loan adjusts periodically on each Payment Adjustment
Date to an amount that would fully amortize the principal balance of the
Mortgage Loan over its then remaining amortization schedule and pay interest
at the Mortgage Rate in effect during the one month period preceding such
Payment Adjustment Date. Approximately __% of the Mortgage Loans provide
that an adjustment of the amount of the Monthly Payment on a Payment
Adjustment Date may not result in a Monthly Payment that increases by more
than ___% (nor, in some cases, decreases by more than ____%) of the amount of
the Monthly Payment in effect immediately prior to such Payment Adjustment
Date (each such provision, a "Payment Cap"); however, certain of those
Mortgage Loans also provide that the Payment Cap will not apply on certain
Payment Adjustment Dates or if the application thereof would result in the
principal balance of the Mortgage Loan exceeding (through negative
amortization) by a specified percentage the original principal balance
thereof. Generally, the related Mortgage Note provides that if, as a result
of negative amortization, the respective principal balance of the Mortgage
Loan reaches an amount specified therein (which as to most Mortgage Loans is
not greater than _% of the Mortgage Loan principal balance as of the
origination date thereof), the amount of the Monthly Payments due thereunder
will be increased as necessary to prevent further negative amortization.

(Only in the case of _____% of the Mortgage Loans does a Payment
Adjustment Date immediately follow each Interest Rate Adjustment Date. As a
result, and because application of Payment Caps may limit the amount by which
the Monthly Payments due on certain of the Mortgage Loans may adjust, the
amount of a Monthly Payment may be more or less than the amount necessary to
amortize the Mortgage Loan principal balance over the then remaining
amortization schedule at the applicable Mortgage Rate. Accordingly, Mortgage
Loans may be subject to slower amortization (if the Monthly Payment due on a
Due Date is sufficient to pay interest accrued to such Due Date at the
applicable Mortgage Rate but is not sufficient to reduce principal in
accordance with the applicable amortization schedule), to negative
amortization (if interest accrued to a Due Date at the applicable Mortgage
Rate is greater than the entire Monthly Payment due on such Due Date) or to
accelerated amortization (if the Monthly Payment due on a Due Date is greater
than the amount necessary to pay interest accrued to such Due Date at the
applicable Mortgage Rate and to reduce principal in accordance with the
applicable amortization schedule).)

(No Mortgage Loan currently prohibits principal prepayments; however,
certain of the Mortgage Loans impose fees or penalties ("Prepayment
Premiums") in connection with full or partial prepayments. Although
Prepayment Premiums are payable to the Master Servicer as additional
servicing compensation, the Master Servicer may waive the payment of any
Prepayment Premium only in connection with a principal prepayment that is
proposed to be made during the three month period prior to the scheduled
maturity of the related Mortgage Loan, or under certain other limited
circumstances.)

The following table sets forth the range of Mortgage Rates on the
Mortgage Loans as of the Cut-off Date:

Mortgage Rates as of the Cut-off Date
-------------------------------------

Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Mortgage Rate Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Mortgage Rate:

</TABLE>

Note: Percentage totals may not add due to rounding.

The following table sets forth the types of Mortgaged Properties
securing the Mortgage Loans:

Property Type
-------------

Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Type Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------

</TABLE>

Note: Percentage totals may not add due to rounding.

(The following table sets forth the range of Gross Margins for the
Mortgage Loans:)

(Gross Margins)
---------------

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Mortgage Rate:

</TABLE>

Note: Percentage totals may not add due to rounding.

(The following table sets forth the frequency of adjustments to the
Mortgage Rates on the Mortgage Loans as of the Cut-off Date:)

(Frequency of Adjustments to Mortgage Rates)
------------------------------------------

Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Frequency (A) Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Frequency of
Adjustments to
Mortgage Rate:

</TABLE>

Note: Percentage totals may not add due to rounding.

(A) _______ or ___% of Mortgage Loans have not experienced their first
Interest Rate Adjustment Date.

(The following table sets forth the frequency of adjustments to the
Monthly Payments on the Mortgage Loans as of the Cut-off Date:)

(Frequency of Adjustments to Monthly Payments)
---------------------------------------------

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Frequency of
Adjustments to
Mortgage Rate:

</TABLE>

Note: Percentage totals may not add due to rounding.

(The following table sets forth the range of maximum lifetime Mortgage
Rates for the Mortgage Loans:)

(Maximum Lifetime Mortgage Rates)
---------------------------------

Percent by
Aggregate Aggregate
Maximum Number of Percent Principal Principal
Lifetime Mortgage by Balance as of Balance as of
Mortgage Rate Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Maximum Lifetime
Mortgage Rate:

</TABLE>

Note: Percentage totals may not add due to rounding.

(A) Represents Mortgage Loans without a lifetime rate cap.
(B) The lifetime rate caps for these Mortgage Loans are based upon the Index
as determined at a future point in time plus a fixed percentage.
Therefore, the rate is not determinable as of the Cut-off Date.
(C) This calculation does not include the ____ Mortgage Loans without a
lifetime rate cap or the ---- Mortgage Loans with lifetime rate caps
which are currently not determinable.

(The following table sets forth the range of minimum lifetime Mortgage
Rates on the Mortgage Loans:)

(Minimum Lifetime Mortgage Rates)
---------------------------------

Percent by
Aggregate Aggregate
Minimum Number of Percent Principal Principal
Lifetime Mortgage by Balance as of Balance as of
Mortgage Rate Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Minimum Lifetime
Mortgage Rate:

</TABLE>

Note: Percentage totals may not add due to rounding.

(A) Represents Mortgage Loans without interest rate floors.
(B) This calculation does not include the ---- Mortgage Loans without
interest rate floors.

The following table sets forth the range of principal balances of the
Mortgage Loans as of the Cut-off Date:

Principal Balances as of the Cut-off Date
-----------------------------------------

Percent by
Principal Aggregate Aggregate
Balance Number of Percent Principal Principal
as of the Mortgage by Balance as of Balance as of
Cut-off Date Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------
Average Principal Balance
as of the
Cut-off Date:

</TABLE>

Note: Percentage totals may not add due to rounding.

The following tables set forth the original and remaining terms to
maturity (in months) of the Mortgage Loans:

Original Term to Maturity in Months
-----------------------------------

Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Original Term Mortgage by Balance as of Balance as of
in Months Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Original Term to Maturity:

</TABLE>

Note: Percentage totals may not add due to rounding.

The following tables set forth the purpose for which the Mortgage Loan
was originated, (the type of program under which it was originated and the
occupancy type).

Mortgage Loan Purpose
---------------------

Percent by
Aggregate Aggregate
Remaining Number of Percent Principal Principal
Term in Mortgage by Balance as of Balance as of
Months Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Original Term to Maturity:

</TABLE>

Note: Percentage totals may not add due to rounding.

(Mortgage Loan Documentation Program)
-------------------------------------

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Original Term to Maturity:

</TABLE>

Note: Percentage totals may not add due to rounding.

Mortgage Loan Occupancy Type
----------------------------

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Original Term to Maturity:

</TABLE>

Note: Percentage totals may not add due to rounding.

Remaining Term to Maturity in Months
------------------------------------

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average
Remaining Term to Maturity:

</TABLE>

Note: Percentage totals may not add due to rounding.

The following tables set forth the respective years in which the
Mortgage Loans were originated and are scheduled to mature:

Mortgage Loan Year of Origination
---------------------------------

Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Year Loans Number the Cut-off Date the Cut-off Date
- ------------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------

</TABLE>

Note: Percentage totals may not add due to rounding.

Mortgage Loan Year of Scheduled Maturity
----------------------------------------

Total ------ 100.00% $ 100.00%
------- ------- -------

</TABLE>

Note: Percentage totals may not add due to rounding.

The following table sets forth the range of Original LTV Ratios of the
Mortgage Loans. An "Original LTV Ratio" is a fraction, expressed as a
percentage, the numerator of which is the principal balance of a Mortgage
Loan on the date of its origination, and the denominator of which is (in
general) the lesser of (i) the appraised value of the related Mortgaged
Property as determined by an appraisal thereof obtained in connection with
the origination of such Mortgage Loan and (ii) the sale price of such
Mortgaged Property at the time of such origination. There can be no
assurance that the value (determined through an appraisal or otherwise) of a
Mortgaged Property determined after origination of the related Mortgage Loan
will be equal to or greater than the value thereof (determined through an
appraisal or otherwise) obtained in connection with the origination. As a
result, there can be no assurance that the loan-to-value ratio for any
Mortgage Loan determined at any time following origination thereof will be
lower than the Original LTV Ratio, notwithstanding any positive amortization
of such Mortgage Loan.

Original LTV Ratios
-------------------

Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Original Mortgage by Balance as of Balance as of
LTV Ratio Loans Number the Cut-off Date the Cut-off Date
--------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------
Weighted Average Original
LTV Ratio:

</TABLE>

Note: Percentage totals may not add due to rounding.

The Mortgage Loans are secured by Mortgaged Properties in ---------
different states. The table below sets forth the states in which the
Mortgaged Properties are located:

Geographic Distribution
-----------------------

Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
State Loans Number the Cut-off Date the Cut-off Date
----- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------

</TABLE>

Note: Percentage totals may not add due to rounding.
(regional breakdown to be provided as appropriate)

No more than ___% of the Mortgage Loans will be secured by Mortgaged
Properties located in any one zip code.

(___% of the Mortgage Loans provide that upon any principal prepayment
of a Mortgage Loan, whether made voluntarily or involuntarily, the related
Mortgagor will be required to pay a prepayment premium or yield maintenance
Penalty (a "Prepayment Premium") in the amount set forth in the following
table.)

(Mortgage Loan Prepayment Premiums)
----------------------------------

Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Prepayment Mortgage by Balance as of Balance as of
Premium Loans Number the Cut-off Date the Cut-off Date
---------- --------- ------- ---------------- ----------------
<S> <C> <C> <C> <C>

Total ------ 100.00% $ 100.00%
------- ------- -------

</TABLE>

Note: Percentage totals may not add due to rounding.

Set forth in Annex A to this Prospectus Supplement are certain
individual characteristics of the Mortgage Loans.

UNDERWRITING STANDARDS

All of the Mortgage Loans were originated or acquired by _______,
generally in accordance with the underwriting criteria described herein.

(Description of underwriting standards.)

ADDITIONAL INFORMATION

The description in this Prospectus Supplement of the Mortgage Pool and
the Mortgaged Properties is based upon the Mortgage Pool as expected to be
constituted at the close of business on the Cut-off Date, as adjusted for the
scheduled principal payments due on or before such date. Prior to the
issuance of the Class ( ) Certificates, a Mortgage Loan may be removed from
the Mortgage Pool as a result of incomplete documentation or otherwise, if
the Depositor deems such removal necessary or appropriate and may be prepaid
at any time. A limited number of other mortgage loans may be included in the
Mortgage Pool prior to the issuance of the Class ( ) Certificates unless
including such mortgage loans would materially alter the characteristics of
the Mortgage Pool as described herein. The Depositor believes that the
information set forth herein will be representative of the characteristics of
the Mortgage Pool as it will be constituted at the time the Class ( )
Certificates are issued, although the range of Mortgage Rates and maturities
and certain other characteristics of the Mortgage Loans in the Mortgage Pool
may vary.

A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the Class ( ) Certificates and will be filed, together with the
Pooling and Servicing Agreement, with the Securities and Exchange Commission
within fifteen days after the initial issuance of the Class ( ) Certificates.
In the event Mortgage Loans are removed from or added to the Mortgage Pool as
set forth in the preceding paragraph, such removal or addition will be noted
in the Form 8-K.

DESCRIPTION OF THE CERTIFICATES

GENERAL

The Certificates will be issued pursuant to the Pooling and Servicing
Agreement and will consist of ____ classes to be designated as the Class ( )
Certificates, the Class ( ) Certificates, the Class ( ) Certificates and the
Class ( ) Certificates. The Class ( ), Class ( ) and Class ( ) Certificates
(the "Subordinate Certificates") will be subordinate to the Class ( )
Certificates, as described herein. The Certificates represent in the
aggregate the entire beneficial ownership interest in a Trust Fund consisting
of: (i) the Mortgage Loans and all payments under and proceeds of the
Mortgage Loans received after the Cut-off Date (exclusive of payments of
principal and interest due on or before the Cut-off Date); (ii) any Mortgaged
Property acquired on behalf of the Trust Fund through foreclosure or deed in
lieu of foreclosure (upon acquisition, an "REO Property"); (iii) such funds
or assets as from time to time are deposited in the Certificate Account and
any account established in connection with REO Properties (the "REO
Account"); and (iv) the rights of the mortgagee under all insurance policies
with respect to the Mortgage Loans. Only the Class ( ) Certificates are
offered hereby.

The Class ( ) Certificates will have an initial (Certificate Balance)
(Notional Balance) of $__________. The Class ( ) Certificates represent ___%
of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date. The Class ( ) Certificates will have an initial Certificate Balance of
$__________, representing ___% of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date. The Class ( ) Certificates will have
an initial Certificate Balance of $__________, representing ___% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The initial Certificate Balance of the Class ( ) Certificates will be (zero).
The Certificate Balance of any class of Certificates outstanding at any time
represents the maximum amount which the holders thereof are entitled to
receive as distributions allocable to principal from the cash flow on the
Mortgage Loans and the other assets in the Trust Fund. The respective
Certificate Balances of the Class ( ), Class ( ) and Class ( ) Certificates
(respectively, the "Class ( ) Balance", "Class ( ) Balance" and "Class ( )
Balance") will in each case be (i) reduced by amounts actually distributed on
such class of Certificates that are allocable to principal and ((ii)
increased by amounts allocated to such class of Certificates in respect of
negative amortization on the Mortgage Loans (Describe Notional Balance.))
(The Certificate Balance of the Class ( ) Certificates (the "Class ( )
Balance") will at any time equal the aggregate Stated Principal Balance of
the Mortgage Loans minus the sum of the Class ( ) Balance, Class ( ) Balance
and Class ( ) Balance.) The Stated Principal Balance of any Mortgage Loan at
any date of determination will equal (a) the Cut-off Date Balance of such
Mortgage Loan, plus ((b) any negative amortization added to the principal
balance of such Mortgage Loan on any Due Date after the Cut-off Date to and
including the Due Date in the Due Period for the most recently preceding
Distribution Date), minus (c) the sum of (i) the principal portion of each
Monthly Payment due on such Mortgage Loan after the Cut-off Date, to the
extent received from the mortgagor or advanced by the Master Servicer and
distributed to holders of the Certificates before such date of determination,
(ii) all principal prepayments and other unscheduled collections of principal
received with respect to such Mortgage Loan, to the extent distributed to
holders of the Certificates before such date of determination, and (iii) any
reduction in the outstanding principal balance of such Mortgage Loan
resulting out of a bankruptcy proceeding for the related mortgagor.

(None of the Class ( ) Certificates are offered hereby.)

DISTRIBUTIONS

Method, Timing and Amount. Distributions on the Certificates will be
made on the ____ day of each month or, if such ____ day is not a business
day, then on the next succeeding business day, commencing in
____________________ 199_ (each, a " Distribution Date" ) . All
distributions (other than the final distribution on any Certificate) will be
made by the Master Servicer to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be
the (last business day of the month) preceding the month in which the related
Distribution Date occurs. Such distributions will be made by wire transfer
in immediately available funds to the account specified by the
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Master Servicer
with wiring instructions no less than five business days prior to the related
Record Date and is the registered owner of Certificates the aggregate initial
principal amount of which is at least $ , or otherwise by check mailed to
such Certificateholder. The final distribution on any Certificate will be
made in like manner, but only upon presentment or surrender of such
Certificate at the location specified in the notice to the holder thereof of
such final distribution. All distributions made with respect to a class of
Certificates on each Distribution Date will be allocated pro rata among the
outstanding Certificates of such class based on their respective Percentage
Interests. The Percentage Interest evidenced by any Class ( ) Certificate is
equal to the initial denomination thereof as of the Closing Date, divided by
the initial Certificate Balance for such class. The aggregate distribution
to be made on the Certificates on any Distribution Date shall equal the
Available Distribution Amount.

The "Available Distribution Amount" for any Distribution Date is an
amount equal to (a) the sum of (i) the amount on deposit in the Certificate
Account as of the close of business on the related Determination Date, (ii)
the aggregate amount of any Advances made by the Master Servicer in respect
of such Distribution Date and (iii) the aggregate amount deposited by the
Master Servicer in the Certificate Account in respect of such Distribution
Date in connection with Prepayment Interest Shortfalls incurred during the
related Due Period, net of (b) the portion of the amount described in clause
(a)(i) hereof that represents (i) Monthly Payments due on a Due Date
subsequent to the end of the related Due Period, (ii) any voluntary principal
prepayments and other unscheduled recoveries on the Mortgage Loans received
after the end of the related Due Period or (iii) any amounts payable or
reimbursable therefrom to any person.

Priority. On each Distribution Date, the Master Servicer shall apply
amounts on deposit in the Certificate Account, to the extent of the Available
Distribution Amount, first, to distributions of interest to holders of the
Class ( ) Certificates, in the amount equal to all Distributable Certificate
Interest in respect of the Class ( ) Certificates for such Distribution Date
and, to the extent not previously distributed, for all preceding Distribution
Dates and second, to distributions of principal to holders of the Class ( )
Certificates, in an amount, not to exceed the sum of the Class ( ) Balance
outstanding immediately prior to such Distribution Date (and any Class
Negative Amortization in respect of the Class ( ) Certificates for such
Distribution Date), equal to the sum of (A) the then Class ( ) Scheduled
Principal Distribution Percentage of the Scheduled Principal Distribution
Amount for such Distribution Date and (B) the Unscheduled Principal
Distribution Amount for such Distribution Date.

On or after the reduction of the Class ( ) Balance to zero, the
Available Distribution Amount will be paid solely to the holders of the
Subordinate Certificates.

Calculations of Interest. The "Distributable Certificate Interest" in
respect of the Class ( ) Certificates for any Distribution Date represents
that portion of the Accrued Certificate Interest in respect of such class of
Certificates for such Distribution Date that is net of such class's allocable
share of (i) the aggregate portion of any Prepayment Interest Shortfalls
resulting from voluntary principal prepayments on the Mortgage Loans during
the related Due Period (that are not covered by the application of servicing
compensation of the Master Servicer for the related Due Period (such
uncovered aggregate portion, as to such Distribution Date,) the "Net
Aggregate Prepayment Interest Shortfall")(; and (ii) the aggregate of any
negative amortization in respect of the Mortgage Loans for their respective
Due Dates during the related Due Period (the aggregate of such negative
amortization, as to such Distribution Date, the "Aggregate Mortgage Loan
Negative Amortization").)

The "Accrued Certificate Interest" in respect of the Class ( )
Certificates for any Distribution Date is equal to thirty days' interest
accrued during the related Interest Accrual Period at the Pass-Through Rate
applicable to such class of Certificates for such Distribution Date accrued
on the related (Certificate Balance) (Classes ( ) Notional Amount)
outstanding immediately prior to such Distribution Date. The Pass-Through
Rate applicable to the Class ( ) Certificates for any Distribution Date (is
fixed and is set forth on the cover hereof) (will equal the weighted average
of the Class ( ) Remittance Rates in effect for the Mortgage Assets as of the
commencement of the related Due Period (as to such Distribution Date, the
"Weighted Average Class ( ) Remittance Rate"). The "Class ( ) Remittance
Rate" in effect for any Mortgage Loan as of any date of determination (a)
prior to its first Interest Rate Adjustment Date, is equal to the related
Mortgage Rate then in effect minus ---- basis points and (b) from and after
its first Interest Rate Adjustment Date, is equal to the related Mortgage
Rate then in effect minus the excess of the related Gross Margin over ----
basis points. The "Interest Accrual Period" for the Certificates is the
calendar month preceding the month in which the Distribution Date occurs.)
(is equal to the excess of the Mortgage Rate thereon over ____% per annum.)
(The Class ( ) Notional Amount will equal the (sum of the Class ( ) Balance.
The Class ( ) Notional Amount does not entitle the Class ( ) Certificate (or
a component thereof) to any distribution of principal.)

The portion of Net Aggregate Prepayment Interest Shortfall (and the
Aggregate Mortgage Loan Negative Amortization) for any Distribution Date that
will be allocated to the Class ( ) Certificates on such Distribution Date
will be equal to the then applicable Class ( ) Interest Allocation
Percentage. The "Class ( ) Interest Allocation Percentage" for any
Distribution Date will equal a fraction, expressed as a percentage, the
numerator of which is equal to the product of (a) the Class ( ) Balance ((net
of any Uncovered Portion thereof)) outstanding immediately prior to such
Distribution Date, multiplied by (b) the Pass-Through Rate for the Class ( )
Certificates for such Distribution Date, and the denominator of which is the
product of (x) the aggregate Stated Principal Balance of the Mortgage Loans
outstanding immediately prior to such Distribution Date, multiplied by (y)
the Weighted Average Net Mortgage Rate for such Distribution Date. The "Net
Mortgage Rate" in effect for any Mortgage Loan as of any date of
determination is equal to the related Mortgage Rate then in effect minus ----
basis points. (The "Uncovered Portion" of the Class ( ) Balance, as of any
date of determination, is the portion thereof representing the excess, if
any, of (a) the Class ( ) Balance then outstanding, over (b) the aggregate
Stated Principal Balance of the Mortgage Loans then outstanding.)

(The Class ( ) Certificates (or a component thereof) will not be
entitled to distributions of interest and will not have a Pass-Through Rate.)

Calculations of Principal. Holders of the Class ( ) Certificates will
be entitled to receive on each Distribution Date, to the extent of the
balance of the Available Distribution Amount remaining after the payment of
the Class ( ) Interest Distribution Amount for such Distribution Date an
amount equal to the Class ( ) Principal Distribution Amount. The "Class ( )
Principal Distribution Amount" for any Distribution Date will equal the sum
of (i) the product of the Scheduled Principal Distribution Amount and the
Class ( ) Scheduled Principal Distribution Percentage, (ii) the product of
the Senior Accelerated Percentage and all principal prepayments received
during the related Due Period and, (iii) to the extent not previously
advanced, (the lesser of the Class ( ) Scheduled Principal Distribution
Percentage of the Stated Principal Balance of the Mortgage Loans and the
Senior Accelerated Percentage of the Unscheduled Principal Distribution
Amount net of any prepayment amounts described in clause (ii) above. The
"Scheduled Principal Distribution Amount" for any Distribution Date is equal
to the aggregate of the principal portions of all Monthly Payments, including
Balloon Payments, due during or, if and to the extent not previously received
or advanced and distributed to Certificateholders on a preceding Distribution
Date, prior to the related Due Period, in each case to the extent paid by the
related mortgagor or advanced by the Master Servicer and included in the
Available Distribution Amount for such Distribution Date. The principal
portion of any Advances in respect of a Mortgage Loan delinquent as to its
Balloon Payment will constitute advances in respect of the principal portion
of such Balloon Payment.

(The portion of the Class ( ) Principal Distribution Amount payable on
any Distribution Date shall be allocated to the Class ( ) Certificates as
follows: (Describe distributions which may be concurrent or sequential and
among different classes and may be based on a schedule of payments sometimes
referred to as a Schedule of PAC, TAC or Scheduled Balances for some and not
other classes.))

(The Class ( ) Scheduled Principal Distribution Percentage for any
Distribution Date represents the portion of the Scheduled Principal
Distribution Amount for such Distribution Date payable (subject to the
payment priorities described herein) on the Class ( ) Certificates. The
"Class ( ) Scheduled Principal Distribution Percentage" for any Distribution
Date will equal the lesser of (a) 100% and (b) a fraction, expressed as a
percentage, the numerator of which is the Class ( ) Balance outstanding
immediately prior to such Distribution Date, and the denominator of which is
the lesser of (i) the sum of the Class ( ) Balance, the Class ( ) Balance and
the Class ( ) Balance and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans, in either case outstanding immediately prior to such
Distribution Date.)

The "Unscheduled Principal Distribution Amount" for any Distribution
Date is equal to the sum of: (a) all voluntary principal prepayments
received on the Mortgage Loans during the related Due Period; and (b) the
excess, if any, of (i) all unscheduled recoveries received on the Mortgage
Loans during the related Due Period, whether in the form of liquidation
proceeds, condemnation proceeds, insurance proceeds or amounts paid in
connection with the purchase of a Mortgage Loan out of the Trust Fund,
exclusive in each case of any portion thereof payable or reimbursable to the
Master Servicer in connection with the related Mortgage Loan, over (ii) the
respective portions of the net amounts described in the immediately preceding
clause (i) needed to cover interest (at the applicable Net Mortgage Rate in
effect from time to time) on the related Mortgage Loan from the date to which
interest was previously paid or advanced through the Due Date for such
Mortgage Loan in the related Due Period ((exclusive of any portion of such
interest added to the principal balance of such Mortgage Loan as negative
amortization).)

(The "Class Negative Amortization" in respect of any class of
Certificates for any Distribution Date is equal to such class' allocable
share of the Aggregate Mortgage Loan Negative Amortization for such
Distribution Date.)

SUBORDINATION

In order to maximize the likelihood of distribution in full of the
Class ( ) Interest Distribution Amount and the Class ( ) Scheduled Principal
Distribution Amount, on each Distribution Date, holders of the Class ( )
Certificates have a right to distributions of the Available Distribution
Amount that is prior to the rights of the holders of the Subordinate
Certificates, to the extent necessary to satisfy the Class Interest
Distribution Amount and the Class ( ) Scheduled Principal Distribution
Amount.

(The entitlement to the Class ( ) Certificates of the (entire) (a larger
percentage under certain circumstances of) Unscheduled Principal Distribution
Amount will accelerate the amortization of the Class ( ) Certificates
relative to the actual amortization of the Mortgage Loans.)

(To the extent that the Class ( ) Certificates are amortized faster
than the Mortgage Loans, without taking into account losses on the Mortgage
Loans, the percentage interest evidenced by the Class ( ) Certificates in the
Trust Fund will be decreased (with a corresponding increase in the interest
in the Trust Fund evidenced by the Subordinate Certificates), thereby
increasing, relative to their respective Certificate Balances, the
Subordinate --------- afforded the Class ( ) Certificates by the Subordinate
Certificates.)

(The principal portion of any Realized Losses will be allocated first in
reduction of the Subordinate Certificates (in the order specified here) and
then to the Class ( ) Certificates (in the order specified here). Any losses
realized on a Mortgage Loan that is finally liquidated equal to the excess of
the Stated Principal Balance of such Mortgage Loan remaining, if any, plus
interest thereon through the last day of the month in which such Mortgage
Loan was finally liquidated, after application of all amounts received (net
of amounts reimbursable to the Master Servicer or any Sub-Servicer for
Advances and expenses, including attorneys' fees) towards interest and
principal owing on the Mortgage Loan, is referred to herein as a "Realized
Loss.")

ADVANCES

On the business day immediately preceding each Distribution Date, the
Master Servicer will be obligated to make advances (each, an "Advance") out
of its own funds, or funds held in the Certificate Account that are not
required to be part of the Available Distribution Amount for such
Distribution Date, in an amount equal to the aggregate of ((i)) all
Monthly Payments (net of the Servicing Fee), (other than Balloon Payments,)
which were due on the Mortgage Loans during the related Due Period and
delinquent as of the related Determination Date (and (ii) in the case of each
Mortgage Loan delinquent in respect of its Balloon Payment as of the related
Determination Date, an amount sufficient to amortize fully the principal
portion of such Balloon Payment over the remaining amortization term of such
Mortgage Loan and to pay interest at the Net Mortgage Rate in effect for such
Mortgage Loan for the one month period preceding its Due Date in the related
Due Period (but only to the extent that the related mortgagor has not made a
payment sufficient to cover such amount under any forbearance arrangement
that has been included in the Available Distribution Amount for such
Distribution Date)). The Master Servicer's obligations to make Advances in
respect of any Mortgage Loan will continue through liquidation of such
Mortgage Loan and out of its own funds from any amounts collected in respect
of the Mortgage Loan as to which such Advance was made, whether in the form
of late payments, insurance proceeds, liquidation proceeds, condemnation
proceeds or amounts paid in connection with the purchase of such Mortgage
Loan. Notwithstanding the foregoing, the Master Servicer will be obligated
to make any Advance only to the extent that it determines in its reasonable
good faith judgment that, if made, would be recoverable out of general funds
on deposit in the Certificate Account. Any failure by the Master Servicer to
make an Advance as required under the Pooling and Servicing Agreement will
constitute an event of default thereunder, in which case the trustee will be
obligated to make any such Advance, in accordance with the terms of the
Pooling and Servicing Agreement.

CERTAIN YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

The yield to maturity on the Class ( ) Certificates will be affected by
the rate of principal payments on the Mortgage Loans including, for this
purpose, prepayments, which may include amounts received by virtue of
repurchase, condemnation, insurance or foreclosure. The yield to maturity on
the Class ( ) Certificates will also be affected by the level of the Index.
The rate of principal payments on the Class ( ) Certificates will correspond
to the rate of principal payments (including prepayments) on the related
Mortgage Loans.

(Description of factors affecting yield, prepayment and maturity of the
Mortgage Loans and Class ( ) Certificates depending upon characteristics of
the Mortgage Loans.)

WEIGHTED AVERAGE LIFE OF THE CLASS ( ) CERTIFICATES

Weighted average life refers to the average amount of time from the date
of issuance of a security until each dollar of principal of such security
will be repaid to the investor. The weighted average life of the Class ( )
Certificates will be influenced by the rate at which principal payments
(including scheduled payments, principal prepayments and payments made
pursuant to any applicable policies of insurance) on the Mortgage Loans are
made. Principal payments on the Mortgage Loans may be in the form of
scheduled amortization or prepayments (for this purpose, the term
"prepayment" includes prepayments and liquidations due to a default or other
dispositions of the Mortgage Loans).

The table of Percent of Initial Certificate Balance Outstanding for the
Class ( ) Certificates at the respective percentages of (CPR) (SPA) set forth
below indicates the weighted average life of such Certificates and sets forth
the percentage of the initial principal amount of such Certificates that
would be outstanding after each of the dates shown at the indicated
percentages of (CPR)(SPA). The table has been prepared on the basis of the
following assumptions regarding the characteristics of the Mortgage Loans:
(i) an outstanding principal balance of $_________, a remaining amortization
term of ___ months and a term to balloon of ___ months: (ii) an interest rate
equal to ____% per annum until the ---- Due Date and thereafter an interest
rate equal to ---% per annum (at an assumed Index of ____%) and Monthly
Payments that would fully amortize the remaining balance of the Mortgage Loan
over its remaining amortization term; (iii) the Mortgage Loans prepay at the
indicated percentage of (CPR)(SPA); (iv) the maturity date of each of the
Balloon Mortgage Loans is not extended; (v) distributions on the Class ( )
Certificates are received in cash, on the 25th day of each month, commencing
in_____________; (vi) no defaults or delinquencies in, or modifications,
waivers or amendments respecting, the payment by the mortgagors of principal
and interest on the Mortgage Loans occur; (vii) the initial Certificate
Balance of the Class ( ) Certificates is $________; (viii) prepayments
represent payment in full of individual Mortgage Loans and are received on
the respective Due Dates and include 30 days' interest thereon; (ix) there
are no repurchases of Mortgage Loans due to breaches of any representation
and warranty or otherwise; (x) the Class ( ) Certificates are purchased on
________; (xi) the Servicing Fee is ____% per annum; and (xii) the Index on
each Interest Rate Adjustment Date is ________% per annum.

Based on the foregoing assumptions, the table indicates the weighted
average life of the Class ( ) Certificates and sets forth the percentages of
the initial Certificate Balance of the Class ( ) Certificates that would be
outstanding after the Distribution Date in ___________ of each of the years
indicated, at various percentages of (CPR)(SPA). Neither (CPR)(SPA) nor any
other prepayment model or assumption purports to be a historical description
of prepayment experience or a prediction of the anticipated rate of
prepayment of any pool of mortgage loans, including the Mortgage Loans
included in the Mortgage Pool. Variations in the actual prepayment
experience and the balance of the Mortgage Loans that prepay may increase or
decrease the percentage of initial Certificate Balance (and weighted average
life) shown in the following table. Such variations may occur even if the
average prepayment experience of all such Mortgage Loans is the same as any
of the specified assumptions.

Percent of Initial Class ( ) Certificate Balance Outstanding
at the Following Percentages of (CPR)(SPA)

Distribution Date
- -----------------

<TABLE>
<CAPTION>
Initial Percent . . . . . . . . . . . . . . ___% __% __% __% __% __%
<S> <C> <C> <C> <C> <C> <C>
____________ 25, 1993 . . . . . . . . . . .
____________ 25, 1994 . . . . . . . . . . .
____________ 25, 1995 . . . . . . . . . . .
____________ 25, 1996 . . . . . . . . . . .
____________ 25, 1997 . . . . . . . . . . .
____________ 25, 1998 . . . . . . . . . . .
____________ 25, 1999 . . . . . . . . . . .
____________ 25, 2000 . . . . . . . . . . .
____________ 25, 2001 . . . . . . . . . . .
____________ 25, 2002 . . . . . . . . . . .
____________ 25, 2003 . . . . . . . . . . .

</TABLE>

Weighted Average Life
(Years) (+) . . . . . . . . . . . .

+ The weighted average life of the Class ( ) Certificates is determined by
(i) multiplying the amount of each distribution of principal by the
number of years from the date of issuance to the related Distribution
Date, (ii) adding the results and (iii) dividing the sum by the total
principal distributions on such class of Certificates.

(Class ( ) Yield Consideration)

(Will describe assumption for various scenarios showing sensitivity of
certain classes to prepayment and default risks and set forth resulting
yield.)

POOLING AND SERVICING AGREEMENT

GENERAL

The Certificates will be issued pursuant to a Pooling and Servicing
Agreement to be dated as of ____________ 1, 199_ (the "Pooling and Servicing
Agreement"), by and among the Depositor, the Master Servicer and the Trustee.

Reference is made to the Prospectus for important information in
addition to that set forth herein regarding the terms and conditions of the
Pooling and Servicing Agreement and the Class ( ) Certificates. The
Depositor will provide to a prospective or actual Class ( ) Certificateholder
without charge, upon written request, a copy (without exhibits) of the
Pooling and Servicing Agreement. Requests should be addressed to Morgan
Stanley & Co. Incorporated, ____________________________ New York, New York
_____.

ASSIGNMENT OF THE MORTGAGE LOANS

On or prior to the Closing Date, the Depositor will assign or cause to
be assigned the Mortgage Loans, without recourse, to the Trustee for the
benefit of the Certificateholders. Prior to the Closing Date, the Depositor
will, as to each Mortgage Loan, deliver to the Trustee (or the custodian
hereinafter referred to), among other things, the following documents
(collectively, as to such Mortgage Loan, the "Mortgage File"): (i) the
original or, if accompanied by a "lost note" affidavit, a copy of the
Mortgage Note, endorsed by ____________________ which transferred such
Mortgage Loan, without recourse, in blank or to the order of Trustee; (ii)
the original Mortgage or a certified copy thereof, and any intervening
assignments thereof, or certified copies of such intervening assignments, in
each case with evidence of recording thereon; (iii) an assignment of the
Mortgage, executed by the ____________________ which transferred such
Mortgage Loan, in blank or to the order of the Trustee, in recordable form;
(iv) assignments of any related assignment of leases, rents and profits and
any related security agreement (if, in either case, such item is a document
separate from the Mortgage), executed by ____________________ which
transferred such Mortgage Loan, in blank or to the order of the Trustee; (v)
originals or certified copies of all assumption, modification and
substitution agreements in those instances where the terms or provisions of
the Mortgage or Mortgage Note have been modified or the Mortgage or Mortgage
Note has been assumed; and (vi) the originals or certificates of a lender's
title insurance policy issued on the date of the origination of such Mortgage
Loan or, with respect to each Mortgage Loan not covered by a lender's title
insurance policy, an attorney's opinion of title given by an attorney
licensed to practice law in the jurisdiction where the Mortgaged Property is
located. The Pooling and Servicing Agreement will require the Depositor
promptly (and in any event within _____ days of the Closing Date) to cause
each assignment of the Mortgage described in clause (iii) above to be
submitted for recording in the real property records of the jurisdiction in
which the related Mortgaged Property is located. Any such assignment
delivered in blank will be completed to the order of the Trustee prior to
recording. The Pooling and Servicing Agreement will also require the
Depositor to cause the endorsements on the Mortgage Notes delivered in blank
to be completed to the order of the Trustee.

THE MASTER SERVICER

General. ____________________, a __________________ corporation, will
act as Master Servicer (in such capacity, the "Master Servicer") for the
Certificates pursuant to the Pooling and Servicing Agreement. The Master
Servicer(, a wholly-owned subsidiary of __________,) (is engaged in the
mortgage banking business and, as such, originates, purchases, sells and
services mortgage loans. _________________ primarily originates mortgage
loans through a branch system consisting of _______________________ offices
in __________ states, and through mortgage loan brokers.)

The executive offices of the Master Servicer are located at
_______________, telephone number (__)__________.

Delinquency and Foreclosure Experience. The following tables set forth
certain information concerning the delinquency experience (including pending
foreclosures) on one- to four- family residential mortgage loans included in
the Master Servicer's servicing portfolio (which includes mortgage loans that
are subserviced by others). The indicated periods of delinquency are based
on the number of days past due on a contractual basis. No mortgage loan is
considered delinquent for these purposes until 31 days past due on a
contractual basis.

<TABLE>
<CAPTION>
As of December 31, 19 As of December 31, 19 As of , 19
------------------------ ------------------------ -----------------
By Dollar By Dollar By Dollar
By No. of Amount By No. of Amount of By No. of Amount of
Loans Loans Loans Loans Loans Loans
----- ----- ----- ----- ----- -----
(Dollar Amount in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Total Portfolio ________ $_______ ________ $______ ______ $________

Period of Delinquency
31 to 59 days
60 to 89 days
90 days or more ________ ________ ________ ________ _______ _______
Total Delinquent Loans ________ $______ ________ $_______ _______ $______

Percent of Portfolio % % % % % %

Foreclosures pending (1)

Percent of Portfolio % % % % % %

Foreclosures

Percent of Portfolio % % % % % %

</TABLE>
____________________
(1) Includes bankruptcies which preclude foreclosure.

There can be no assurance that the delinquency and foreclosure
experience of the Mortgage Loans comprising the Mortgage Pool will correspond
to the delinquency and foreclosure experience of the Master Servicer's
mortgage portfolio set forth in the foregoing tables. The aggregate
delinquency and foreclosure experience on the Mortgage Loans comprising the
Mortgage Pool will depend on the results obtained over the life of the
Mortgage Pool.

CERTIFICATE ACCOUNT

The Master Servicer is required to deposit on a daily basis all amounts
received with respect to the Mortgage Loans of the Mortgage Pool, net of its
servicing compensation, into a separate Certificate Account maintained with
____________. Interest or other income earned on funds in the Certificate
Account will be paid to the Master Servicer as additional servicing
compensation. See "Description of the Trust Funds -- Mortgage Assets" and
"Description of the Agreements -- Certificate Account and Other Collection
Accounts" in the Prospectus.

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES
(Include description of Servicing Standard)
- --------------------------------------------------------

servicing compensation. The Master Servicer is obligated to pay certain
ongoing expenses associated with the Mortgage Pool and incurred by the Master
Servicer in connection with its responsibilities under the Agreement. See
"Description of the Agreements -- Retained Interest; Servicing Compensation
and Payment of Expenses" in the Prospectus for information regarding other
possible compensation payable to the Master Servicer and for information
regarding expenses payable by the Master Servicer (and "Certain Federal
Income Tax Consequences" herein regarding certain taxes payable by the Master
Servicer).

REPORTS TO CERTIFICATEHOLDERS

On each Distribution Date the Master Servicer shall furnish to each

a statement setting forth certain information with respect to the Mortgage
Loans and the Certificates required pursuant to the Pooling and Servicing
Agreement. In addition, within a reasonable period of time after each
calendar year, the Master Servicer shall furnish to each person who at any
time during such calendar year was the holder of a Certificate a statement
containing certain information with respect to the Certificates required
pursuant to the Pooling and Servicing Agreement, aggregated for such calendar
year or portion thereof during which such person was a Certificateholder.
See "Description of the Certificates -- Reports to Certificateholders" in the
Prospectus.

VOTING RIGHTS

At all times during the term of this Agreement, the Voting Rights shall
be allocated among the Classes of Certificateholders in proportion to the
respective Certificate Balances of their Certificates ((net, in the case of
the Class ( ), Class ( ) and Class ( ) Certificates, of any Uncovered Portion
of the related Certificate Balance)). Voting Rights allocated to a class of
Certificateholders shall be allocated among such Certificateholders in
proportion to the Percentage Interests evidenced by their respective
Certificates.

TERMINATION

The obligations created by the Pooling and Servicing Agreement will
terminate following the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan or REO Property subject thereto, and
(ii) the purchase of all of the assets of the Trust Fund by the Master
Servicer. Written notice of termination of the Pooling and Servicing
Agreement will be given to each Certificateholder, and the final distribution
will be made only upon surrender and cancellation of the Certificates at the
office of the Certificate Registrar specified in such notice of termination.
In no event, however, will the trust created by the Pooling and Servicing
Agreement continue beyond the expiration of 21 years from the death of the
survivor of certain persons named in such Pooling and Servicing Agreement.

Any such purchase by the Master Servicer of all the Mortgage Loans and
other assets in the Trust Fund is required to be made at a price equal to the
greater of (1) the aggregate fair market value of all the Mortgage Loans and
REO Properties then included in the Trust Fund, as mutually determined by the
Master Servicer and the Trustee, and (2) the excess of (a) the sum of (i) the
aggregate Purchase Price of all the Mortgage Loans then included in the Trust
Fund and (ii) the fair market value of all REO Properties then included in
the Trust Fund, as determined by an appraiser mutually agreed upon by the
Master Servicer and the Trustee, over (b) the aggregate of amounts payable or
reimbursable to the Master Servicer under the Pooling and Servicing
Agreement. Such purchase will effect early retirement of the then
outstanding Class ( ) Certificates, but the right of the Master Servicer to
effect such termination is subject to the requirement that the aggregate
Stated Principal Balance of the Mortgage Loans then in the Trust Fund is less
than __% of the aggregate principal balance of the Mortgage Loans as of the
Cut-off Date. (In addition, the Master Servicer may at its option purchase
any class or classes of Class ( ) Certificates with a Certificate Balance
less than __% of the original balance thereof at a price equal to such
Certificate Balance plus accrued interest through _________.)

USE OF PROCEEDS

The net proceeds from the sale of Class ( ) Certificates will be used by
the Depositor to pay the purchase price of the Mortgage Loans.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

Upon the issuance of the Class ( ) Certificates, Brown & Wood LLP or
Latham & Watkins, counsel to the Depositor, will deliver its opinion
generally to the effect that, assuming compliance with all provisions of the
Pooling and Servicing Agreement, for federal income tax purposes, the Trust
Fund will qualify as a REMIC under the Code.

For federal income tax purposes, the Class ( ) Certificates will be the
sole class of "residual interests" in the REMIC and the Class ( ), Class ( )
and Class ( ) Certificates will be the "regular interests" in the REMIC and
will be treated as debt instruments of the REMIC.

See "Certain Federal Income Tax Consequences -- REMICS" in the
Prospectus.

(The Class ( ) Certificates (may)(will not) be treated as having been
issued with original issue discount for federal income tax reporting
purposes. The prepayment assumption that will be used in determining the
rate of accrual of original issue discount, market discount and premium, if
any, for federal income tax purposes will be based on the assumption that
subsequent to the date of any determination the Mortgage Loans will prepay at
a rate equal to ___% (CPR)(SPA). No representation is made that the Mortgage
Loans will prepay at that rate or at any other rate. See "Certain Federal
Income Tax Consequences -- REMICS -- Taxation of Owners of REMIC Regular
Certificates" and "--Original Issue Discount" in the Prospectus.)

The Class ( ) Certificates may be treated for federal income tax
purposes as having been issued at a premium. Whether any holder of such a
class of Certificates will be treated as holding a certificate with
amortizable bond premium will depend on such Certificateholder's purchase
price and the distributions remaining to be made on such Certificate at the
time of its acquisition by such Certificateholder. Holders of such class of
Certificates should consult their own tax advisors regarding the possibility
of making an election to amortize such premium. See "Certain Federal Income
Tax Consequences -- REMICS -- Taxation of Owners of REMIC Regular
Certificates" and "-- Premium" in the Prospectus.

(The Class ( ) Certificates will be treated as assets described in
Section 7701(a)(19)(C) of the Code) and "real estate assets" within the
meaning of Section 856(c)(4)(A) of the Code generally in the same proportion
that the assets of the REMIC underlying such Certificates would be so
treated.) (In addition, interest (including original issue discount) on the
Class ( ) Certificates will be interests described in Section 856(c)(3)(B) of
the Code to the extent that such Class ( ) Certificates are treated as "real
estate assets" under Section 856(c)(4)(A) of the Code.) (Moreover, the Class
( ) Certificates will be "obligation(s) . . . which . . .(are)
principally secured by an interest in real property" within the meaning of
Section 860G(a)(3)(C) of the Code.) (The Class ( ) Certificates will not be
considered to represent an interest in "loans . . . secured by an interest
in real property" within the meaning of Section 7701 (a)(19)(C)(v) of the
Code.) See "Certain Federal Income Tax Consequences -- REMICS --
Characterization of Investments in REMIC Certificates" in the Prospectus.

For further information regarding the federal income tax consequences of
investing in the Class ( ) Certificates, see "Certain Federal Income Tax
Consequences -- REMICS" in the Prospectus.

ERISA CONSIDERATIONS

(A fiduciary of any employee benefit plan or other retirement plans and
arrangements, including individual retirement accounts and annuities, Keogh
plans and collective investment funds and separate accounts and certain
insurance company general accounts in which such plans, accounts or
arrangements are invested, that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA" and an "ERISA Plan"), or Section
4975 of the Code (together with an ERISA Plan, "Plans") should carefully
review with its legal advisors whether the purchase or holding of Class ( )
Certificates could give rise to a transaction that is prohibited or is not
otherwise permitted either under ERISA or Section 4975 of the Code.

(The U.S. Department of Labor issued an individual exemption, Prohibited
Transaction Exemption (90-24) (the "Exemption"), (on May 17, 1990) to Morgan
Stanley & Co. Incorporated, which generally exempts from the application of
the prohibited transaction provisions of Section 406 of ERISA, and the excise
taxes imposed on such prohibited transactions pursuant to Sections 4975(a)
and (b) of the Code and Section 501(i) of ERISA, certain transactions, among
others, relating to the servicing and operation of mortgage pools and the
purchase, sale and holding of mortgage pass-through certificates underwritten
by an Underwriter (as hereinafter defined), provided that certain conditions
set forth in the Exemption are satisfied. For purposes of this Section
"ERISA Considerations", the term "Underwriter" shall include (a) Morgan
Stanley & Co. Incorporated, (b) any person directly or indirectly, through
one or more intermediaries, controlling, controlled by or under common
control with Morgan Stanley & Co. Incorporated and (c) any member of the
underwriting syndicate or selling group of which a person described in (a) or
(b) is a manager or co-manager with respect to the Class ( ) Certificates.

The Exemption sets forth six general conditions which must be satisfied
for a transaction involving the purchase, sale and holding of the Class ( )
Certificates or a transaction in connection with the servicing, operation and
management of the Trust Fund to be eligible for exemptive relief thereunder.
First, the acquisition of the Class ( ) Certificates by a Plan, must be on
terms that are at least as favorable to the Plan as they would be in an
arm's-length transaction with an unrelated party. Second, the rights and
interests evidenced by the Class ( ) Certificates must not be subordinate to
the rights and interests evidenced by the other certificates of the Trust
with respect to the right to receive payment in the event of default or
delinquencies in underlying assets of the Trust. Third, the Class ( )
Certificates at the time of acquisition by the Plan must be rated in one of
the three highest generic rating categories by Standard & Poor's Corporation,
Moody's Investors Service, Inc., Duff & Phelps Credit Rating Co. or Fitch
Investors Service, Inc. Fourth, the Trustee cannot be an affiliate of any
member of the "Restricted Group", which consists of any Underwriter, the
Depositor, the Master Servicer, each sub-servicer and any mortgagor with
respect to Mortgage Loans constituting more than 5% of the aggregate
unamortized principal balance of the Mortgage Loans as of the date of initial
issuance of the Class ( ) Certificates. Fifth, the sum of all payments made
to and retained by the Underwriter must represent not more than reasonable
compensation for underwriting the Class ( ) Certificates; the sum of all
payments made to and retained by the Underwriter must represent not more than
reasonable compensation for underwriting the Class ( ) Certificates; the sum
of all payments made to and retained by the Depositor pursuant to the
assignment of the Mortgage Loans to the Trust Fund must represent not more
than the fair market value of such obligations; and the sum of all payments
made to and retained by the Master Servicer and any sub-servicer must
represent not more than reasonable compensation for such person's services
under the Agreement and reimbursement of such person's reasonable expenses in
connection therewith. Sixth, the investing Plan must be an accredited
investor as defined in Rule 501(a)(1) of Regulation D of the Securities and
Exchange Commission under the Securities Act of 1933, as amended.

Because the Class ( ) Certificates are not subordinate to any other
class of Certificates with respect to the right to receive payment in the
event of default or delinquencies on the underlying assets of the Trust, the
second general condition set forth above is satisfied with respect to such
Certificates. It is a condition of the issuance of the Class ( )
Certificates that they be rated (not lower than) "____" by
___________________. A fiduciary of a Plan contemplating purchasing a Class
( ) Certificate in the secondary market must make its own determination that
at the time of such acquisition, the Class ( ) Certificates continue to
satisfy the third general condition set forth above. The Depositor expects
that the fourth general condition set forth above will be satisfied with
respect to the Class ( ) Certificates. A fiduciary of a Plan contemplating
purchasing a Class ( ) Certificate must make its own determination that the
first, third, fifth and sixth general conditions set forth above will be
satisfied with respect to such Class ( ) Certificate.

Before purchasing a Class ( ) Certificate, a fiduciary of a Plan should
itself confirm (a) that such Certificates constitute "certificates" for
purposes of the Exemption and (b) that the specific and general conditions of
the Exemption and the other requirements set forth in the Exemption would be
satisfied. In addition to making its own determination as to the
availability of the exemptive relief provided in the Exemption, the Plan
fiduciary should consider the availability of any other prohibited
transaction exemptions, in particular, Prohibited Transaction Class Exemption
83-1. See "ERISA Considerations" in the Prospectus.

Any Plan fiduciary considering whether to purchase a Class ( )
Certificate on behalf of a Plan should consult with its counsel regarding the
applicability of the fiduciary responsibility and prohibited transaction
provisions of ERISA and the Code to such investment. Prospective purchasers
that are insurance companies should consult with their counsel regarding
whether the United States Supreme Court's decision in the case of John
Hancock v. Harris Trust Savings Bank, 510 U.S. 86 (1993) --------------------
- --------------
affects their ability to make purchases of Class () Certificates and the
extent to which Prohibited Transaction Class Exemption 95-60 may be
available. See "ERISA Considerations" in the Prospectus.

LEGAL INVESTMENT

The Class ( ) Certificates (will) (will not) constitute "mortgage
related securities" for purposes of the Secondary Mortgage Market Enhancement
Act of 1984 ("SMMEA") (so long as they are rated in at least the second
highest rating category by the Rating Agency, and, as such, are legal
investments for certain entities to the extent provided in SMMEA). SMMEA
provided that states could override its provisions on legal investment and
restrict or condition investment in mortgage related securities by taking
statutory action on or prior to October 3, 1991. Certain states have enacted
legislation which overrides the preemption provisions of SMMEA.

The Depositor makes no representations as to the proper characterization
of the Class ( ) Certificates for legal investment or other purposes, or as
to the ability of particular investors to purchase the Class ( ) Certificates
under applicable legal investment restrictions. These uncertainties may
adversely affect the liquidity of the Class ( ) Certificates. Accordingly,
all institutions whose investment activities are subject to legal investment
laws and regulations, regulatory capital requirements or review by regulatory
authorities should consult with their own legal advisors in determining
whether and to what extent the Class ( ) Certificates constitute a legal
investment under SMMEA or is subject to investment, capital or other
restrictions.

See "Legal Investment" in the Prospectus.

PLAN OF DISTRIBUTION

Subject to the terms and conditions set forth in the Underwriting
Agreement between the Depositor and the Underwriter, the Class ( )
Certificates will be purchased from the Depositor by the Underwriter, an
affiliate of the Depositor, upon issuance. Distribution of the Class ( )
Certificates will be made by the Underwriter from time to time in negotiated
transactions or otherwise at varying prices to be determined at the time of
sale. Proceeds to the Depositor from the Certificates will be __% of the
initial aggregate principal balance thereof as of the Cut-off Date, plus
accrued interest from the Cut-off Date at a rate of __% per annum, before
deducting expenses payable by the Depositor. In connection with the purchase
and sale of the Class ( ) Certificates, the Underwriter may be deemed to have
received compensation from the Depositor in the form of underwriting
discounts.

The Depositor also has been advised by the Underwriter that it, through
one or more of its affiliates currently expects to make a market in the Class
( ) Certificates offered hereby; however, it has no obligation to do so, any
market making may be discontinued at any time, and there can be no assurance
that an active public market for the Class ( ) Certificates will develop.

The Depositor has agreed to indemnify the Underwriter against, or make
contributions to the Underwriter with respect to, certain liabilities,
including liabilities under the Securities Act of 1933.

LEGAL MATTERS

Certain legal matters will be passed upon for the Depositor by Brown &
Wood LLP, New York, New York or Latham & Watkins, New York, New York and for
the Underwriter by ____________________.

RATING

It is a condition to issuance that the Class ( ) Certificates be rated
(not lower than) "______" by ________________. However, no person is
obligated to maintain the rating on the Class ( ) Certificates, and
_______________ is not obligated to monitor its rating following the Closing
Date.

________________'s ratings on mortgage pass-through certificates address
the likelihood of the receipt by holders thereof of payments to which they
are entitled. _____________'s ratings take into consideration the credit
quality of the mortgage pool, structural and legal aspects associated with
the certificates, and the extent to which the payment stream in the mortgage
pool is adequate to make payments required under the certificates.
_________________'s rating on the Class ( ) Certificates does not, however,
constitute a statement regarding frequency of prepayments on the Mortgage
Loans. (The rating of the Class ( ) Certificates does not address the
possibility that the holders of such Certificates may fail to fully recover
their initial investments.) See "Risk Factors" herein.

There can be no assurance as to whether any rating agency not requested
to rate the Class ( ) Certificates will nonetheless issue a rating and, if
so, what such rating would be. A rating assigned to the Class ( )
Certificates by a rating agency that has not been requested by the Depositor
to do so may be lower than the rating assigned by ________________'s pursuant
to the Depositor's request.

The rating of the Class ( ) Certificates should be evaluated
independently from similar ratings on other types of securities. A security
rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time by the assigning rating agency.

ANNEX A

(CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS)

(Attach Mortgage Loan Schedule that details relevant and available
information regarding the Mortgage Loans, such as the information included
under the following headings:

1. Loan ID number 19. Next rate change

2. Original balance 20. First payment change

3. Current balance 21. Next payment change

4. Current rate 22. Rate adjustment frequency

5. Current payment 23. Payment adjustment frequency

6. Note date 24. Period payment cap

7. Original term 25. Life rate cap

8. Remaining term 26. Life rate floor

9. Maturity date 27. Negative amortization
cap percent

10. Amortization 28. Negative amortization cap
amount

11. Origination appraisal 29. LTV and current balances based
upon the Appraised Value)
12. Name of borrower

13. Street

14. City

15. State

16. Zip code

17. Rate index

18. First rate change

ANNEX B

(TITLE, SERIES OF MBS)
TERM SHEET

<S> <C> <C> <C>
CUT-OFF DATE: ( ) MORTGAGE POOL CUT-OFF DATE BALANCE: $( )
DATE OF INITIAL ISSUANCE: ( ) REFERENCE DATE BALANCE: $( )
RELATED TRUSTEE: ( ) PERCENT OF ORIGINAL MORTGAGE POOL REMAINING ( )%
MATURITY DATE: ( ) AS OF REFERENCE DATE:

</TABLE>

<TABLE>
<CAPTION>
Initial
Class Certificate
of Pass-Through Principal
Certificates Rate Balance Features
------------ ------------ ----------- -------- '
<S> <C> <C> <C> <C>

( ) ( )% $( ) ( )

</TABLE>

(First MBS Distribution Date on which the MBS may receive a portion of
prepayments: (date))

<S> <C> <C> <C>
MINIMUM SERVICING FEE RATE:* ( )% per annum AS OF DATE OF
MAXIMUM SERVICING FEE RATE:* ( )% per annum INITIAL ISSUANCE
----------------

SPECIAL HAZARD AMOUNT: $( )
FRAUD LOSS AMOUNT: $( )
BANKRUPTCY AMOUNT: $( )

</TABLE>

<S> <C> <C>
As of As of Date of
Delivery Date Initial Issuance
SENIOR PERCENTAGE ( )% ( )%
SUBORDINATE PERCENTAGE ( )% ( )%

</TABLE>

<S> <C> <C> <C>
Ratings: Rating Agency Class Voting Rights:
------------- ----- --------------

( ) ( )
( )
( )
( )

</TABLE>

(VERSION 1)
PROSPECTUS

SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1998

MORTGAGE PASS-THROUGH CERTIFICATES
(Issuable in Series)

MORGAN STANLEY CAPITAL I INC.
Depositor
________

The Certificates offered hereby and by Supplements to this Prospectus
(the "Offered Certificates") will be offered from time to time in one or more
series. Each series of Certificates will represent in the aggregate the
entire beneficial ownership interest in a trust fund (with respect to any
series, the "Trust Fund") consisting of one or more segregated pools of
various types of single family mortgage loans (the "Mortgage Loans"),
mortgage participations, mortgage pass-through certificates, mortgage-backed
securities evidencing interests therein or secured thereby (the "MBS"),
certain direct obligations of the United States, agencies thereof or agencies
created thereby (the "Government Securities") or a combination of Mortgage
Loans, MBS and/or Government Securities (with respect to any series,
collectively, "Assets"). The Mortgage Loans and MBS are collectively referred
to herein as the "Mortgage Assets." If so specified in the related Prospectus
Supplement, the Trust Fund for a series of Certificates may include letters
of credit, insurance policies, guarantees, reserve funds or other types of
credit support, or any combination thereof (with respect to any series,
collectively, "Credit Support"), and currency or interest rate exchange
agreements and other financial assets, or any combination thereof (with
respect to any series, collectively, "Cash Flow Agreements"). See
"Description of the Trust Funds," "Description of the Certificates" and
"Description of Credit Support."

Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based
on fixed, variable or adjustable rates; (ii) be senior or subordinate to one
or more other classes of Certificates in respect of certain distributions on
the Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be
entitled to interest distributions, with disproportionately low, nominal or
no principal distributions; (v) provide for distributions of accrued interest
thereon commencing only following the occurrence of certain events, such as
the retirement of one or more other classes of Certificates of such series;
(vi) provide for distributions of principal sequentially, based on specified
payment schedules or other methodologies; and/or (vii) provide for
distributions based on a combination of two or more components thereof with
one or more of the characteristics described in this paragraph, to the extent
of available funds, in each case as described in the related Prospectus
Supplement. Any such classes may include classes of Offered Certificates. See
"Description of the Certificates."

Principal and interest with respect to Certificates will be
distributable monthly, quarterly, semi-annually or at such other intervals
and on the dates specified in the related Prospectus Supplement.
Distributions on the Certificates of any series will be made only from the
assets of the related Trust Fund.

The Certificates of each series will not represent an obligation of or
interest in the Depositor, Morgan Stanley & Co. Incorporated, any Master
Servicer, any Sub-Servicer or any of their respective affiliates, except to
the limited extent described herein and in the related Prospectus Supplement.
Neither the Certificates nor any assets in the related Trust Fund will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person, unless otherwise provided in the related Prospectus Supplement.
The assets in each Trust Fund will be held in trust for the benefit of the
holders of the related series of Certificates pursuant to a Pooling and
Servicing Agreement or a Trust Agreement, as more fully described herein.

The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including prepayments,
repurchase and defaults) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption "Yield
Considerations" herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein
and in the related Prospectus Supplement.

Prospective investors should review the information appearing under the
caption "Risk Factors" herein and such information as may be set forth under
the caption "Risk Factors" in the related Prospectus Supplement before
purchasing any Offered Certificate.

If so provided in the related Prospectus Supplement, one or more
elections may be made to treat the related Trust Fund or a designated portion
thereof as a "real estate mortgage investment conduit" for federal income tax
purposes. See also "Certain Federal Income Tax Consequences" herein.
________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR THE RELATED PROSPECTUS
SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
________

INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, CERTAIN RISKS SET FORTH
UNDER THE CAPTION "RISK FACTORS" HEREIN AND IN THE RELATED PROSPECTUS
SUPPLEMENT.

Prior to issuance there will have been no market for the Certificates of
any series and there can be no assurance that a secondary market for any
Offered Certificates will develop or that, if it does develop, it will
continue. This Prospectus may not be used to consummate sales of the Offered
Certificates of any series unless accompanied by the Prospectus Supplement
for such series.

Offers of the Offered Certificates may be made through one or more
different methods, including offerings through underwriters, as more fully
described under "Plan of Distribution" herein and in the related Prospectus
Supplement.
________

MORGAN STANLEY & CO.
INCORPORATED

February 11, 1998

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus and the accompanying prospectus
supplement to which it relates shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.

Until 90 days after the date of each Prospectus Supplement, all dealers
effecting transactions in the Offered Certificates covered by such Prospectus
Supplement, whether or not participating in the distribution thereof, may be
required to deliver such Prospectus Supplement and this Prospectus. This is
in addition to the obligation of dealers to deliver a Prospectus and
Prospectus Supplement when acting as underwriters and with respect to their
unsold allotments or subscriptions.

PROSPECTUS SUPPLEMENT

As more particularly described herein, the Prospectus Supplement
relating to the Offered Certificates of each series will, among other things,
set forth with respect to such Certificates, as appropriate: (i) a
description of the class or classes of Certificates, the payment provisions
with respect to each such class and the Pass-Through Rate or method of
determining the Pass-Through Rate with respect to each such class; (ii) the
aggregate principal amount and distribution dates relating to such series
and, if applicable, the initial and final scheduled distribution dates for
each class; (iii) information as to the assets comprising the Trust Fund,
including the general characteristics of the assets included therein,
including the Mortgage Assets and any Credit Support and Cash Flow Agreements
(with respect to the Certificates of any series, the "Trust Assets");
(iv) the circumstances, if any, under which the Trust Fund may be subject to
early termination; (v) additional information with respect to the method of
distribution of such Certificates; (vi) whether one or more REMIC elections
will be made and designation of the regular interests and residual interests;
(vii) the aggregate original percentage ownership interest in the Trust Fund
to be evidenced by each class of Certificates; (viii) information as to any
Master Servicer, any Sub-Servicer and the Trustee, as applicable;
(ix) information as to the nature and extent of subordination with respect to
any class of Certificates that is subordinate in right of payment to any
other class; and (x) whether such Certificates will be initially issued in
definitive or book-entry form.

AVAILABLE INFORMATION

The Depositor has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (of which this Prospectus forms a
part) under the Securities Act of 1933, as amended, with respect to the
Offered Certificates. This Prospectus and the Prospectus Supplement relating
to each series of Certificates contain summaries of the material terms of the
documents referred to herein and therein, but do not contain all of the
information set forth in the Registration Statement pursuant to the rules and
regulations of the Commission. For further information, reference is made to
such Registration Statement and the exhibits thereto. Such Registration
Statement and exhibits can be inspected and copied at prescribed rates at the
public reference facilities maintained by the Commission at its Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its
Regional Offices located as follows: Chicago Regional Office, Northwest
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661; and New York
Regional Office, Seven World Trade Center, New York, New York 10048.

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and any
Prospectus Supplement with respect hereto and, if given or made, such
information or representations must not be relied upon. This Prospectus and
any Prospectus Supplement with respect hereto do not constitute an offer to
sell or a solicitation of an offer to buy any securities other than the
Offered Certificates or an offer of the Offered Certificates to any person in
any state or other jurisdiction in which such offer would be unlawful. The
delivery of this Prospectus at any time does not imply that information
herein is correct as of any time subsequent to its date; however, if any
material change occurs while this Prospectus is required by law to be
delivered, this Prospectus will be amended or supplemented accordingly.

A Master Servicer or the Trustee will be required to mail to holders of
Offered Certificates of each series periodic unaudited reports concerning the
related Trust Fund. Unless and until definitive Certificates are issued, or
unless otherwise provided in the related Prospectus Supplement, such reports
will be sent on behalf of the related Trust Fund to Cede & Co. ("Cede"), as
nominee of The Depository Trust Company ("DTC") and registered holder of the
Offered Certificates, pursuant to the applicable Agreement. Such reports may
be available to holders of interests in the Certificates (the
"Certificateholders") upon request to their respective DTC participants. See
"Description of the Certificates-Reports to Certificateholders" and
"Description of the Agreements-Evidence as to Compliance." The Depositor will
file or cause to be filed with the Commission such periodic reports with
respect to each Trust Fund as are required under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations of
the Commission thereunder.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

There are incorporated herein by reference all documents and reports
filed or caused to be filed by the Depositor with respect to a Trust Fund
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to
the termination of an offering of Offered Certificates evidencing interests
therein. The Depositor will provide or cause to be provided without charge to
each person to whom this Prospectus is delivered in connection with the
offering of one or more classes of Offered Certificates, a copy of any or all
documents or reports incorporated herein by reference, in each case to the
extent such documents or reports relate to one or more of such classes of
such Offered Certificates, other than the exhibits to such documents (unless
such exhibits are specifically incorporated by reference in such documents).
Requests to the Depositor should be directed in writing to Morgan Stanley
Capital I Inc., c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, 37th
Floor, New York, New York 10036, Attention: David R. Warren, or by telephone
at (212) 761-4700. The Depositor has determined that its financial
statements are not material to the offering of any Offered Certificates.

TABLE OF CONTENTS

PAGE

PROSPECTUS SUPPLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 2

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 2

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE . . . . . . . . . . . . 3

SUMMARY OF PROSPECTUS . . . . . . . . . . . . . . . . . . . . . . . . . . 5

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

DESCRIPTION OF THE TRUST FUNDS . . . . . . . . . . . . . . . . . . . . . 17

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

YIELD CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 21

THE DEPOSITOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

DESCRIPTION OF THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . 26

DESCRIPTION OF THE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 33

DESCRIPTION OF CREDIT SUPPORT . . . . . . . . . . . . . . . . . . . . . . 48

CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS . . . . . . . . . . . . . . . . . 50

CERTAIN FEDERAL INCOME TAX CONSEQUENCES . . . . . . . . . . . . . . . . . 60

STATE TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . 84

ERISA CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 84

LEGAL INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . 88

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 89

RATING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

INDEX OF PRINCIPAL DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 90

SUMMARY OF PROSPECTUS

The following summary of certain pertinent information is qualified in
its entirety by reference to the more detailed information appearing
elsewhere in this Prospectus and by reference to the information with respect
to each series of Certificates contained in the Prospectus Supplement to be
prepared and delivered in connection with the offering of such series. An
Index of Principal Definitions is included at the end of this Prospectus.

Title of Certificates . . . . Mortgage Pass-Through Certificates, issuable
in series (the "Certificates").
Depositor . . . . . . . . . . Morgan Stanley Capital I Inc., a wholly-owned
subsidiary of Morgan Stanley Group Inc. See
"The Depositor."
Master Servicer . . . . . . . The master servicer or master servicers (each,
a "Master Servicer"), if any, or a servicer
for substantially all the Mortgage Loans for
each series of Certificates, which servicer or
master servicer(s) may be affiliates of the
Depositor, will be named in the related
Prospectus Supplement. See "Description of the
Agreements-General" and "-Collection and Other
Servicing Procedures."
Trustee . . . . . . . . . . . The trustee (the "Trustee") for each series of
Certificates will be named in the related
Prospectus Supplement. See "Description of the
Agreements-The Trustee."
The Trust Assets . . . . . . Each series of Certificates will represent in
the aggregate the entire beneficial ownership
interest in a Trust Fund consisting primarily
of:
(a) Mortgage Assets . . The Mortgage Assets with respect to each
series of Certificates will consist of a pool
of single family loans (collectively, the
"Mortgage Loans") and mortgage participations,
mortgage pass-through certificates or other
mortgage-backed securities evidencing
interests in or secured by Mortgage Loans
(collectively, the "MBS") or a combination of
Mortgage Loans and MBS. The Mortgage Loans
will not be guaranteed or insured by the
Depositor or any of its affiliates or, unless
otherwise provided in the Prospectus
Supplement, by any governmental agency or
instrumentality or other person. The Mortgage
Loans will be secured by first and/or junior
liens on one- to four-family residential
properties or security interests in shares
issued by cooperative housing corporations.
The Mortgaged Properties may be located in any
one of the fifty states, the District of
Columbia or the Commonwealth of Puerto Rico.
The Prospectus Supplement will indicate
additional jurisdictions, if any, in which the
Mortgaged Properties may be located. Unless
otherwise provided in the related Prospectus
Supplement, all Mortgage Loans will have
individual principal balances at origination
of not less than $25,000 and original terms to
maturity of not more than 40 years. All
Mortgage Loans will have been originated by
persons other than the Depositor, and all
Mortgage Assets will have been purchased,
either directly or indirectly, by the
Depositor on or before the date of initial
issuance of the related series of
Certificates. The related Prospectus
Supplement will indicate if any such persons
are affiliates of the Depositor.
Each Mortgage Loan may provide for accrual of
interest thereon at an interest rate (a
"Mortgage Rate") that is fixed over its term
or that adjusts from time to time, or that may
be converted from an adjustable to a fixed
Mortgage Rate, or from a fixed to an
adjustable Mortgage Rate, from time to time at
the mortgagor's election, in each case as
described in the related Prospectus
Supplement. Adjustable Mortgage Rates on the
Mortgage Loans in a Trust Fund may be based on
one or more indices. Each Mortgage Loan may
provide for scheduled payments to maturity,
payments that adjust from time to time to
accommodate changes in the Mortgage Rate or to
reflect the occurrence of certain events, and
may provide for negative amortization or
accelerated amortization, in each case as
described in the related Prospectus
Supplement. Each Mortgage Loan may be fully
amortizing or require a balloon payment due on
its stated maturity date, in each case as
described in the related Prospectus
Supplement. Each Mortgage Loan may contain
prohibitions on prepayment or require payment
of a premium or a yield maintenance penalty in
connection with a prepayment, in each case as
described in the related Prospectus
Supplement. The Mortgage Loans may provide for
payments of principal, interest or both, on
due dates that occur monthly, quarterly,
semi-annually or at such other interval as is
specified in the related Prospectus
Supplement. See "Description of the Trust
Funds-Assets."

(b) Government Securities If so provided in the related Prospectus
Supplement, the Trust Fund may include, in
addition to Mortgage Assets, certain direct
obligations of the United States, agencies
thereof or agencies created thereby which
provide for payment of interest and/or
principal (collectively, "Government
Securities").

(c) Collection Accounts Each Trust Fund will include one or more
accounts established and maintained on behalf
of the Certificateholders into which the
person or persons designated in the related
Prospectus Supplement will, to the extent
described herein and in such Prospectus
Supplement, deposit all payments and
collections received or advanced with respect
to the Mortgage Assets and other assets in the
Trust Fund. Such an account may be maintained
as an interest bearing or a non-interest
bearing account, and funds held therein may be
held as cash or invested in certain
short-term, investment grade obligations, in
each case as described in the related
Prospectus Supplement. See "Description of the
Agreements-Certificate Account and Other
Collection Accounts."

(d) Credit Support . . . If so provided in the related Prospectus
Supplement, partial or full protection against
certain defaults and losses on the Mortgage
Assets in the related Trust Fund may be
provided to one or more classes of
Certificates of the related series in the form
of subordination of one or more other classes
of Certificates of such series, which other
classes may include one or more classes of
Offered Certificates, or by one or more other
types of credit support, such as a letter of
credit, insurance policy, guarantee, reserve
fund or another type of credit support, or a
combination thereof (any such coverage with
respect to the Certificates of any series,
"Credit Support"). The amount and types of
coverage, the identification of the entity
providing the coverage (if applicable) and
related information with respect to each type
of Credit Support, if any, will be described
in the Prospectus Supplement for a series of
Certificates. The Prospectus Supplement for
any series of Certificates evidencing an
interest in a Trust Fund that includes MBS
will describe any similar forms of credit
support that are provided by or with respect
to, or are included as part of the trust fund
evidenced by or providing security for, such
MBS. See "Risk Factors-Credit Support
Limitations" and "Description of Credit
Support."

(e) Cash Flow Agreements If so provided in the related Prospectus
Supplement, the Trust Fund may include
guaranteed investment contracts pursuant to
which moneys held in the funds and accounts
established for the related series will be
invested at a specified rate. The Trust Fund
may also include certain other agreements,
such as interest rate exchange agreements,
interest rate cap or floor agreements,
currency exchange agreements or similar
agreements provided to reduce the effects of
interest rate or currency exchange rate
fluctuations on the Assets or on one or more
classes of Certificates. (Currency exchange
agreements might be included in the Trust Fund
if some or all of the Mortgage Assets (such as
Mortgage Loans secured by Mortgaged Properties
located outside the United States) were
denominated in a non-United States currency.)
The principal terms of any such guaranteed
investment contract or other agreement (any
such agreement, a "Cash Flow Agreement"),
including, without limitation, provisions
relating to the timing, manner and amount of
payments thereunder and provisions relating to
the termination thereof, will be described in
the Prospectus Supplement for the related
series. In addition, the related Prospectus
Supplement will provide certain information
with respect to the obligor under any such
Cash Flow Agreement. The Prospectus Supplement
for any series of Certificates evidencing an
interest in a Trust Fund that includes MBS
will describe any cash flow agreements that
are included as part of the trust fund
evidenced by or providing security for such
MBS. See "Description of the Trust Funds-Cash
Flow Agreements."

Description of Certificates . Each series of Certificates evidencing an
interest in a Trust Fund that includes
Mortgage Loans as part of its assets will be
issued pursuant to a pooling and servicing
agreement, and each series of Certificates
evidencing an interest in a Trust Fund that
does not include Mortgage Loans will be issued
pursuant to a trust agreement. Pooling and
servicing agreements and trust agreements are
referred to herein as the "Agreements." Each
series of Certificates will include one or
more classes. Unless otherwise specified in
the related Prospectus Supplement, each series
of Certificates (including any class or
classes of Certificates of such series not
offered hereby) will represent in the
aggregate the entire beneficial ownership
interest in the Trust Fund. See "-
Distributions on Certificates" and
"Description of the Certificates-General."
Each class of Certificates (other than certain
Stripped Interest Certificates, as defined
below) will have a stated principal amount (a
"Certificate Balance") and (other than certain
Stripped Principal Certificates, as defined
below), will accrue interest thereon based on
a fixed, variable or adjustable interest rate
(a "Pass-Through Rate"). The related
Prospectus Supplement will specify the
Certificate Balance, if any, and the
Pass-Through Rate for each class of
Certificates or, in the case of a variable or
adjustable Pass-Through Rate, the method for
determining the Pass-Through Rate.

Distributions on
Certificates . . . . . . . . Each series of Certificates will consist of
one or more classes of Certificates that may
(i) provide for the accrual of interest
thereon based on fixed, variable or adjustable
rates; (ii) be senior (collectively, "Senior
Certificates") or subordinate (collectively,
"Subordinate Certificates") to one or more
other classes of Certificates in respect of
certain distributions on the Certificates;
(iii) be entitled to principal distributions,
with disproportionately low, nominal or no
interest distributions (collectively,
"Stripped Principal Certificates"); (iv) be
entitled to interest distributions, with
disproportionately low, nominal or no
principal distributions (collectively,
"Stripped Interest Certificates"); (v) provide
for distributions of accrued interest thereon
commencing only following the occurrence of
certain events, such as the retirement of one
or more other classes of Certificates of such
series (collectively, "Accrual Certificates");
(vi) provide for distributions of principal
sequentially, based on specified payment
schedules or other methodologies;
and/or (vii) provide for distributions based
on a combination of two or more components
thereof with one or more of the
characteristics described in this paragraph,
including a Stripped Principal Certificate
component and a Stripped Interest Certificate
component, to the extent of available funds,
in each case as described in the related
Prospectus Supplement. If so specified in the
related Prospectus Supplement, distributions
on one or more classes of a series of
Certificates may be limited to collections
from a designated portion of the Whole Loans
in the related Mortgage Pool (each such
portion of Whole Loans, a "Mortgage Loan
Group"). See "Description of the
Certificates--General." Any such classes may
include classes of Offered Certificates. With
respect to Certificates with two or more
components, references herein to Certificate
Balance, notional amount and Pass-Through Rate
refer to the principal balance, if any,
notional amount, if any, and the Pass-Through
Rate, if any, for any such component.

The Certificates will not be guaranteed or
insured by the Depositor or any of its
affiliates, by any governmental agency or
instrumentality or by any other person, unless
otherwise provided in the related Prospectus
Supplement. See "Risk Factors-Limited Assets"
and "Description of the Certificates."

(a) Interest . . . . . . Interest on each class of Offered Certificates
(other than Stripped Principal Certificates
and certain classes of Stripped Interest
Certificates) of each series will accrue at
the applicable Pass-Through Rate on the
outstanding Certificate Balance thereof and
will be distributed to Certificateholders as
provided in the related Prospectus Supplement
(each of the specified dates on which
distributions are to be made, a "Distribution
Date"). Distributions with respect to interest
on Stripped Interest Certificates may be made
on each Distribution Date on the basis of a
notional amount as described in the related
Prospectus Supplement. Distributions of
interest with respect to one or more classes
of Certificates may be reduced to the extent
of certain delinquencies, losses, prepayment
interest shortfalls, and other contingencies
described herein and in the related Prospectus
Supplement. See "Risk Factors-Average Life of
Certificates; Prepayments; Yields," "Yield
Considerations" and "Description of the
Certificates-Distributions of Interest on the
Certificates."

(b) Principal . . . . . The Certificates of each series initially will
have an aggregate Certificate Balance no
greater than the outstanding principal balance
of the Assets as of, unless the related
Prospectus Supplement provides otherwise, the
close of business on the first day of the
month of formation of the related Trust Fund
(the "Cut-off Date"), after application of
scheduled payments due on or before such date,
whether or not received. The Certificate
Balance of a Certificate outstanding from time
to time represents the maximum amount that the
holder thereof is then entitled to receive in
respect of principal from future cash flow on
the assets in the related Trust Fund. Unless
otherwise provided in the related Prospectus
Supplement, distributions of principal will be
made on each Distribution Date to the class or
classes of Certificates entitled thereto until
the Certificate Balances of such Certificates
have been reduced to zero. Unless otherwise
specified in the related Prospectus
Supplement, distributions of principal of any
class of Certificates will be made on a pro
rata basis among all of the Certificates of
such class or by random selection, as
described in the related Prospectus Supplement
or otherwise established by the related
Trustee. Stripped Interest Certificates with
no Certificate Balance will not receive
distributions in respect of principal. See
"Description of the Certificates-Distributions
of Principal of the Certificates."

Advances . . . . . . . . . . Unless otherwise provided in the related
Prospectus Supplement, the Master Servicer
will be obligated as part of its servicing
responsibilities to make certain advances that
in its good faith judgment it deems
recoverable with respect to delinquent
scheduled payments on the Whole Loans in such
Trust Fund. Neither the Depositor nor any of
its affiliates will have any responsibility to
make such advances. Advances made by a Master
Servicer are reimbursable generally from
subsequent recoveries in respect of such Whole
Loans and otherwise to the extent described
herein and in the related Prospectus
Supplement. If and to the extent provided in
the Prospectus Supplement for any series, the
Master Servicer will be entitled to receive
interest on its outstanding advances, payable
from amounts in the related Trust Fund. The
Prospectus Supplement for any series of
Certificates evidencing an interest in a Trust
Fund that includes MBS will describe any
corresponding advancing obligation of any
person in connection with such MBS. See
"Description of the Certificates-Advances in
Respect of Delinquencies."

Termination . . . . . . . . . If so specified in the related Prospectus
Supplement, a series of Certificates may be
subject to optional early termination through
the repurchase of the Assets in the related
Trust Fund by the party specified therein,
under the circumstances and in the manner set
forth therein. If so provided in the related
Prospectus Supplement, upon the reduction of
the Certificate Balance of a specified class
or classes of Certificates by a specified
percentage or amount or on and after a date
specified in such Prospectus Supplement, the
party specified therein will solicit bids for
the purchase of all of the Assets of the Trust
Fund, or of a sufficient portion of such
Assets to retire such class or classes, or
purchase such Assets at a price set forth in
the related Prospectus Supplement. In
addition, if so provided in the related
Prospectus Supplement, certain classes of
Certificates may be purchased subject to
similar conditions. See "Description of the
Certificates-Termination."
Registration of Certificates If so provided in the related Prospectus
Supplement, one or more classes of the Offered
Certificates will initially be represented by
one or more Certificates registered in the
name of Cede & Co., as the nominee of DTC. No
person acquiring an interest in Offered
Certificates so registered will be entitled to
receive a definitive certificate representing
such person's interest except in the event
that definitive certificates are issued under
the limited circumstances described herein.
See "Risk Factors-Book-Entry Registration" and
"Description of the Certificates-Book-Entry
Registration and Definitive Certificates."

Tax Status of the The Certificates of each series will
Certificates . . . . . . constitute either (i) "regular interests"
("REMIC Regular Certificates") and "residual
interests" ("REMIC Residual Certificates") in
a Trust Fund treated as a REMIC under
Sections 860A through 860G of the Code, or
(ii) interests ("Grantor Trust Certificates")
in a Trust Fund treated as a grantor trust
under applicable provisions of the Code.

(a) REMIC . . . . . . . REMIC Regular Certificates generally will be
treated as debt obligations of the applicable
REMIC for federal income tax purposes. Certain
REMIC Regular Certificates may be issued with
original issue discount for federal income tax
purposes. See "Certain Federal Income Tax
Consequences" in the Prospectus Supplement.

A portion (or, in certain cases, all) of the
income from REMIC Residual Certificates (i)
may not be offset by any losses from other
activities of the holder of such REMIC
Residual Certificates, (ii) may be treated as
unrelated business taxable income for holders
of REMIC Residual Certificates that are
subject to tax on unrelated business taxable
income (as defined in Section 511 of the
Code), and (iii) may be subject to foreign
withholding rules. See "Certain Federal
Income Tax Consequences-REMICs-Taxation of
Owners of REMIC Residual Certificates".

The Offered Certificates will be treated as
(i) assets described in section 7701(a)(19)(C)
of the Internal Revenue Code of 1986, as
amended (the "Code") and (ii) "real estate
assets" within the meaning of section
856(c)(4)(A) of the Code, in each case to the
extent described herein and in the Prospectus.
See "Certain Federal Income Tax Consequences"
herein and in the Prospectus.

(b) Grantor Trust . . . If no election is made to treat the Trust Fund
relating to a Series of Certificates as a real
estate mortgage investment conduit ("REMIC"),
the Trust Fund will be classified as a grantor
trust and not as an association taxable as a
corporation for federal income tax purposes,
and therefore holders of Certificates will be
treated as the owners of undivided pro rata
interests in the Mortgage Pool or pool of
securities and any other assets held by the
Trust Fund.

Investors are advised to consult their tax
advisors and to review "Certain Federal Income
Tax Consequences" herein and in the related
Prospectus Supplement.

ERISA Considerations . . . . A fiduciary of an employee benefit plan and
certain other retirement plans and
arrangements, including individual retirement
accounts, annuities, Keogh plans, and
collective investment funds and separate
accounts in which such plans, accounts,
annuities or arrangements are invested, that
is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code should carefully
review with its legal advisors whether the
purchase or holding of Offered Certificates
could give rise to a transaction that is
prohibited or is not otherwise permissible
either under ERISA or Section 4975 of the
Code. See "ERISA Considerations" herein and in
the related Prospectus Supplement. Certain
classes of Certificates may not be transferred
unless the Trustee and the Depositor are
furnished with a letter of representations or
an opinion of counsel to the effect that such
transfer will not result in a violation of the
prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee, the
Depositor or the Master Servicer to additional
obligations. See "Description of the
Certificates-General" and "ERISA
Considerations".

Legal Investment . . . . . . Unless otherwise specified in the related
Prospectus Supplement, each class of Offered
Certificates will constitute "mortgage-related
securities" for purposes of the Secondary
Mortgage Market Enhancement Act of 1984
("SMMEA"). However, institutions whose
investment activities are subject to legal
investment laws and regulations or review by
certain regulatory authorities may be subject
to restrictions on investment in certain
classes of the Offered Certificates. See
"Legal Investment" herein and in the related
Prospectus Supplement.

Rating . . . . . . . . . . . At the date of issuance, as to each series,
each class of Offered Certificates will be
rated not lower than investment grade by one
or more nationally recognized statistical
rating agencies (each, a "Rating Agency"). See
"Rating" herein and in the related Prospectus
Supplement.

RISK FACTORS

Investors should consider, in connection with the purchase of Offered
Certificates, among other things, the following factors and certain other
factors as may be set forth in "Risk Factors" in the related Prospectus
Supplement.

LIMITED LIQUIDITY

There can be no assurance that a secondary market for the Certificates
of any series will develop or, if it does develop, that it will provide
holders with liquidity of investment or will continue while Certificates of
such series remain outstanding. The market value of Certificates will
fluctuate with changes in prevailing rates of interest. Consequently, sale of
Certificates by a holder in any secondary market that may develop may be at a
discount from 100% of their original principal balance or from their purchase
price. Furthermore, secondary market purchasers may look only hereto, to the
related Prospectus Supplement and to the reports to Certificateholders
delivered pursuant to the related Agreement as described herein under the
heading "Description of the Certificates-Reports to Certificateholders", "-
Book-Entry Registration and Definitive Certificates" and "Description of the
Agreements-Evidence as to Compliance" for information concerning the
Certificates. Except to the extent described herein and in the related
Prospectus Supplement, Certificateholders will have no redemption rights and
the Certificates are subject to early retirement only under certain specified
circumstances described herein and in the related Prospectus Supplement. See
"Description of the Certificates-Termination". Morgan Stanley & Co.
Incorporated currently expects to make a secondary market in the Offered
Certificates, but has no obligation to do so.

LIMITED ASSETS

The Certificates will not represent an interest in or obligation of the
Depositor, the Master Servicer or any of their affiliates. The only
obligations with respect to the Certificates or the Assets will be the
obligations (if any) of the Warrantying Party (as defined herein) pursuant to
certain limited representations and warranties made with respect to the
Mortgage Loans, the Master Servicer's and any Sub-Servicer's servicing
obligations under the related Pooling and Servicing Agreement (including the
limited obligation to make certain advances in the event of delinquencies on
the Mortgage Loans, but only to the extent deemed recoverable) and, if and to
the extent expressly described in the related Prospectus Supplement, certain
limited obligations of the Master Servicer in connection with an agreement to
purchase or act as remarketing agent with respect to a convertible ARM Loan
(as defined herein) upon conversion to a fixed rate. Since certain
representations and warranties with respect to the Mortgage Assets may have
been made and/or assigned in connection with transfers of such Mortgage
Assets prior to the Closing Date, the rights of the Trustee and the
Certificateholders with respect to such representations or warranties will be
limited to their rights as an assignee thereof. Unless otherwise specified in
the related Prospectus Supplement, none of the Depositor, the Master Servicer
or any affiliate thereof will have any obligation with respect to
representations or warranties made by any other entity. Unless otherwise
specified in the related Prospectus Supplement, neither the Certificates nor
the underlying Mortgage Assets will be guaranteed or insured by any
governmental agency or instrumentality, or by the Depositor, the Master
Servicer, any Sub-Servicer or any of their affiliates. Proceeds of the
assets included in the related Trust Fund for each series of Certificates
(including the Assets and any form of credit enhancement) will be the sole
source of payments on the Certificates, and there will be no recourse to the
Depositor or any other entity in the event that such proceeds are
insufficient or otherwise unavailable to make all payments provided for under
the Certificates.

Unless otherwise specified in the related Prospectus Supplement, a
series of Certificates will not have any claim against or security interest
in the Trust Funds for any other series. If the related Trust Fund is
insufficient to make payments on such Certificates, no other assets will be
available for payment of the deficiency. Additionally, certain amounts
remaining in certain funds or accounts, including the Certificate Account and
any accounts maintained as Credit Support, may be withdrawn under certain
conditions, as described in the related Prospectus Supplement. In the event
of such withdrawal, such amounts will not be available for future payment of
principal of or interest on the Certificates. If so provided in the
Prospectus Supplement for a series of Certificates consisting of one or more
classes of Subordinate Certificates, on any Distribution Date in respect of
which losses or shortfalls in collections on the Assets have been incurred,
the amount of such losses or shortfalls will be borne first by one or more
classes of the Subordinate Certificates, and, thereafter, by the remaining
classes of Certificates in the priority and manner and subject to the
limitations specified in such Prospectus Supplement.

AVERAGE LIFE OF CERTIFICATES; PREPAYMENTS; YIELDS

Prepayments (including those caused by defaults) on the Mortgage Assets
in any Trust Fund generally will result in a faster rate of principal
payments on one or more classes of the related Certificates than if payments
on such Mortgage Assets were made as scheduled. Thus, the prepayment
experience on the Mortgage Assets may affect the average life of each class
of related Certificates. The rate of principal payments on pools of mortgage
loans varies between pools and from time to time is influenced by a variety
of economic, demographic, geographic, social, tax, legal and other factors.
There can be no assurance as to the rate of prepayment on the Mortgage Assets
in any Trust Fund or that the rate of payments will conform to any model
described herein or in any Prospectus Supplement. If prevailing interest
rates fall significantly below the applicable mortgage interest rates,
principal prepayments are likely to be higher than if prevailing rates remain
at or above the rates borne by the Mortgage Loans underlying or comprising
the Mortgage Assets in any Trust Fund. As a result, the actual maturity of
any class of Certificates could occur significantly earlier than expected. A
series of Certificates may include one or more classes of Certificates with
priorities of payment and, as a result, yields on other classes of
Certificates, including classes of Offered Certificates, of such series may
be more sensitive to prepayments on Mortgage Assets. A series of Certificates
may include one or more classes offered at a significant premium or discount.
Yields on such classes of Certificates will be sensitive, and in some cases
extremely sensitive, to prepayments on Mortgage Assets and, where the amount
of interest payable with respect to a class is disproportionately high, as
compared to the amount of principal, as with certain classes of Stripped
Interest Certificates, a holder might, in some prepayment scenarios, fail to
recoup its original investment. A series of Certificates may include one or
more classes of Certificates, including classes of Offered Certificates, that
provide for distribution of principal thereof from amounts attributable to
interest accrued but not currently distributable on one or more classes of
Accrual Certificates and, as a result, yields on such Certificates will be
sensitive to (a) the provisions of such Accrual Certificates relating to the
timing of distributions of interest thereon and (b) if such Accrual
Certificates accrue interest at a variable or adjustable Pass-Through Rate,
changes in such rate. See "Yield Considerations" herein and, if applicable,
in the related Prospectus Supplement.

LIMITED NATURE OF RATINGS

Any rating assigned by a Rating Agency to a class of Certificates will
reflect such Rating Agency's assessment solely of the likelihood that holders
of Certificates of such class will receive payments to which such
Certificateholders are entitled under the related Agreement. Such rating will
not constitute an assessment of the likelihood that principal prepayments
(including those caused by defaults) on the related Mortgage Assets will be
made, the degree to which the rate of such prepayments might differ from that
originally anticipated or the likelihood of early optional termination of the
series of Certificates. Such rating will not address the possibility that
prepayment at higher or lower rates than anticipated by an investor may cause
such investor to experience a lower than anticipated yield or that an
investor purchasing a Certificate at a significant premium might fail to
recoup its initial investment under certain prepayment scenarios. Each
Prospectus Supplement will identify any payment to which holders of Offered
Certificates of the related series are entitled that is not covered by the
applicable rating.

The amount, type and nature of credit support, if any, established with
respect to a series of Certificates will be determined on the basis of
criteria established by each Rating Agency rating classes of such series.
Such criteria are sometimes based upon an actuarial analysis of the behavior
of mortgage loans in a larger group. Such analysis is often the basis upon
which each Rating Agency determines the amount of credit support required
with respect to each such class. There can be no assurance that the
historical data supporting any such actuarial analysis will accurately
reflect future experience nor any assurance that the data derived from a
large pool of mortgage loans accurately predicts the delinquency, foreclosure
or loss experience of any particular pool of Mortgage Assets. No assurance
can be given that values of any Mortgaged Properties have remained or will
remain at their levels on the respective dates of origination of the related
Mortgage Loans. Moreover, there is no assurance that appreciation of real
estate values generally will limit loss experiences on the Mortgaged
Properties. If the single family residential real estate market should
experience an overall decline in property values such that the outstanding
principal balances of the Mortgage Loans underlying or comprising the
Mortgage Assets in a particular Trust Fund and any secondary financing on the
related Mortgaged Properties become equal to or greater than the value of the
Mortgaged Properties, the rates of delinquencies, foreclosures and losses
could be higher than those now generally experienced by institutional
lenders. In addition, adverse economic conditions (which may or may not
affect real property values) may affect the timely payment by mortgagors of
scheduled payments of principal and interest on the Mortgage Loans and,
accordingly, the rates of delinquencies, foreclosures and losses with respect
to any Trust Fund. To the extent that such losses are not covered by the
Credit Support, if any, described in the related Prospectus Supplement, such
losses will be borne, at least in part, by the holders of one or more classes
of the Certificates of the related series. See "Description of Credit
Support" and "Rating."

RISKS ASSOCIATED WITH MORTGAGE LOANS AND MORTGAGED PROPERTIES

An investment in securities such as the Certificates which generally
represent interests in mortgage loans may be affected by, among other things,
a decline in real estate values and changes in the mortgagors' financial
condition. No assurance can be given that values of the Mortgaged Properties
have remained or will remain at their levels on the dates of origination of
the related Mortgage Loans. If the residential real estate market should
experience an overall decline in property values such that the outstanding
balances of the Mortgage Loans, and any secondary financing on the Mortgaged
Properties, become equal to or greater than the value of the Mortgaged
Properties, the actual rates of delinquencies, foreclosures and losses could
be higher than those now generally experienced in the mortgage lending
industry. In addition, in the case of Mortgage Loans that are subject to
negative amortization, due to the addition to principal balance of deferred
interest, the principal balances of such Mortgage Loans could be increased to
an amount equal to or in excess of the value of the underlying Mortgaged
Properties, thereby increasing the likelihood of default. To the extent that
such losses are not covered by the applicable credit enhancement, holders of
Certificates of the series evidencing interests in the related Mortgage Loans
will bear all risk of loss resulting from default by mortgagors and will have
to look primarily to the value of the Mortgaged Properties for recovery of
the outstanding principal and unpaid interest on the defaulted Mortgage
Loans. Certain of the types of Mortgage Loans may involve additional
uncertainties not present in traditional types of loans. For example, certain
of the Mortgage Loans provide for escalating or variable payments by the
mortgagor under the Mortgage Loan, as to which the mortgagor is generally
qualified on the basis of the initial payment amount. In some instances the
Mortgagor's income may not be sufficient to enable them to continue to make
their loan payments as such payments increase and thus the likelihood of
default will increase. In addition to the foregoing, certain geographic
regions of the United States from time to time will experience weaker
regional economic conditions and housing markets, and, consequently, will
experience higher rates of loss and delinquency than will be experienced on
mortgage loans generally. The Mortgage Loans underlying certain series of
Certificates may be concentrated in these regions, and such concentration may
present risk considerations in addition to those generally present for
similar mortgage-backed securities without such concentration. Furthermore,
the rate of default on Mortgage Loans that are refinance or limited
documentation mortgage loans, and on Mortgage Loans with high Loan-to-Value
Ratios, may be higher than for other types of Mortgage Loans. Additionally,
a decline in the value of the Mortgaged Properties will increase the risk of
loss particularly with respect to any related junior Mortgage Loans. See "-
Junior Mortgage Loans."

If applicable, certain legal aspects of the Mortgage Loans for a series
of Certificates may be described in the related Prospectus Supplement. See
also "Certain Legal Aspects of Mortgage Loans" herein.

BALLOON PAYMENTS

Certain of the Mortgage Loans (the "Balloon Mortgage Loans") as of the
Cut-off Date may not be fully amortizing over their terms to maturity and,
thus, will require substantial principal payments (i.e., balloon payments) at
their stated maturity. Mortgage Loans with balloon payments involve a greater
degree of risk because the ability of a mortgagor to make a balloon payment
typically will depend upon its ability either to timely refinance the loan or
to timely sell the related Mortgaged Property. The ability of a mortgagor to
accomplish either of these goals will be affected by a number of factors,
including the level of available mortgage interest rates at the time of sale
or refinancing, the mortgagor's equity in the related Mortgaged Property, the
financial condition of the mortgagor, tax laws, prevailing general economic
conditions and the availability of credit for single family real properties
generally.

JUNIOR MORTGAGE LOANS

Certain of the Mortgage Loans may be secured by junior liens and the
related first liens may not be included in the Mortgage Pool. The primary
risk to holders of Mortgage Loans secured by junior liens is the possibility
that adequate funds will not be received in connection with a foreclosure of
the related first lien to satisfy fully both the first lien and the Mortgage
Loan. In the event that a holder of the first lien forecloses on a Mortgaged
Property, the proceeds of the foreclosure or similar sale will be applied
first to the payment of court costs and fees in connection with the
foreclosure, second to real estate taxes, third in satisfaction of all
principal, interest, prepayment or acceleration penalties, if any, and any
other sums due and owing to the holder of the first lien. The claims of the
holder of the first lien will be satisfied in full out of proceeds of the
liquidation of the Mortgage Loan, if such proceeds are sufficient, before the
Trust Fund as holder of the junior lien receives any payments in respect of
the Mortgage Loan. If the Master Servicer were to foreclose on any Mortgage
Loan, it would do so subject to any related first lien. In order for the
debt related to the Mortgage Loan to be paid in full at such sale, a bidder
at the foreclosure sale of such Mortgage Loan would have to bid an amount
sufficient to pay off all sums due under the Mortgage Loan and the first lien
or purchase the Mortgaged Property subject to the first lien. In the event
that such proceeds from a foreclosure or similar sale of the related
Mortgaged Property were insufficient to satisfy both loans in the aggregate,
the Trust Fund, as the holder of the junior lien, and, accordingly, holders
of the Certificates, would bear the risk of delay in distributions while a
deficiency judgment against the borrower was being obtained and the risk of
loss if the deficiency judgment were not realized upon. Moreover, deficiency
judgments may not be available in certain jurisdictions. In addition, a
junior mortgagee may not foreclose on the property securing a junior mortgage
unless it forecloses subject to the first mortgage.

OBLIGOR DEFAULT

If so specified in the related Prospectus Supplement, in order to
maximize recoveries on defaulted Whole Loans, a Master Servicer or a
Sub-Servicer will be permitted (within prescribed parameters) to extend and
modify Whole Loans that are in default or as to which a payment default is
imminent, including in particular with respect to balloon payments. While
any such entity generally will be required to determine that any such
extension or modification is reasonably likely to produce a greater recovery
on a present value basis than liquidation, there can be no assurance that
such flexibility with respect to extensions or modifications will increase
the present value of receipts from or proceeds of Whole Loans that are in
default or as to which a payment default is imminent.

CREDIT SUPPORT LIMITATIONS

The Prospectus Supplement for a series of Certificates will describe any
Credit Support in the related Trust Fund, which may include letters of
credit, insurance policies, guarantees, reserve funds or other types of
credit support, or combinations thereof. Use of Credit Support will be
subject to the conditions and limitations described herein and in the related
Prospectus Supplement. Moreover, such Credit Support may not cover all
potential losses or risks; for example, Credit Support may or may not cover
fraud or negligence by a mortgage loan originator or other parties.

A series of Certificates may include one or more classes of Subordinate
Certificates (which may include Offered Certificates), if so provided in the
related Prospectus Supplement. Although subordination is intended to reduce
the risk to holders of Senior Certificates of delinquent distributions or
ultimate losses, the amount of subordination will be limited and may decline
under certain circumstances. In addition, if principal payments on one or
more classes of Certificates of a series are made in a specified order of
priority, any limits with respect to the aggregate amount of claims under any
related Credit Support may be exhausted before the principal of the lower
priority classes of Certificates of such series has been repaid. As a result,
the impact of significant losses and shortfalls on the Assets may fall
primarily upon those classes of Certificates having a lower priority of
payment. Moreover, if a form of Credit Support covers more than one series of
Certificates (each, a "Covered Trust"), holders of Certificates evidencing an
interest in a Covered Trust will be subject to the risk that such Credit
Support will be exhausted by the claims of other Covered Trusts.

The amount of any applicable Credit Support supporting one or more
classes of Offered Certificates, including the subordination of one or more
classes of Certificates, will be determined on the basis of criteria
established by each Rating Agency rating such classes of Certificates based
on an assumed level of defaults, delinquencies, other losses or other
factors. There can, however, be no assurance that the loss experience on the
related Mortgage Assets will not exceed such assumed levels. See "-Limited
Nature of Ratings," "Description of the Certificates" and "Description of
Credit Support."

Regardless of the form of credit enhancement provided, the amount of
coverage will be limited in amount and in most cases will be subject to
periodic reduction in accordance with a schedule or formula. The Master
Servicer will generally be permitted to reduce, terminate or substitute all
or a portion of the credit enhancement for any series of Certificates, if the
applicable Rating Agency indicates that the then-current rating thereof will
not be adversely affected. The rating of any series of Certificates by any
applicable Rating Agency may be lowered following the initial issuance
thereof as a result of the downgrading of the obligations of any applicable
credit support provider, or as a result of losses on the related Mortgage
Assets substantially in excess of the levels contemplated by such Rating
Agency at the time of its initial rating analysis. None of the Depositor,
the Master Servicer or any of their affiliates will have any obligation to
replace or supplement any credit enhancement, or to take any other action to
maintain any rating of any series of Certificates.

SUBORDINATION OF THE SUBORDINATE CERTIFICATES; EFFECT OF LOSSES ON THE ASSETS

The rights of Subordinate Certificateholders to receive distributions to
which they would otherwise be entitled with respect to the Assets will be
subordinate to the rights of the Master Servicer (to the extent that the
Master Servicer is paid its servicing fee, including any unpaid servicing
fees with respect to one or more prior Due Periods, and is reimbursed for
certain unreimbursed advances and unreimbursed liquidation expenses) and the
Senior Certificateholders to the extent described herein. As a result of the
foregoing, investors must be prepared to bear the risk that they may be
subject to delays in payment and may not recover their initial investments in
the Subordinate Certificates. See "Description of the Certificates--
General" and "--Allocation of Losses and Shortfalls."

The yields on the Subordinate Certificates may be extremely sensitive to
the loss experience of the Assets and the timing of any such losses. If the
actual rate and amount of losses experienced by the Assets exceed the rate
and amount of such losses assumed by an investor, the yields to maturity on
the Subordinate Certificates may be lower than anticipated.

ENFORCEABILITY

Mortgages may contain a due-on-sale clause, which permits the lender to
accelerate the maturity of the Mortgage Loan if the mortgagor sells,
transfers or conveys the related Mortgaged Property or its interest in the
Mortgaged Property. Mortgages may also include a debt-acceleration clause,
which permits the lender to accelerate the debt upon a monetary or
non-monetary default of the mortgagor. Such clauses are generally
enforceable subject to certain exceptions. The courts of all states will
enforce clauses providing for acceleration in the event of a material payment
default. The equity courts of any state, however, may refuse the foreclosure
of a mortgage or deed of trust when an acceleration of the indebtedness would
be inequitable or unjust or the circumstances would render the acceleration
unconscionable.

ERISA CONSIDERATIONS

Generally, ERISA applies to investments made by employee benefit plans
and transactions involving the assets of such plans. Due to the complexity of
regulations which govern such plans, prospective investors that are subject
to ERISA are urged to consult their own counsel regarding consequences under
ERISA of acquisition, ownership and disposition of the Offered Certificates
of any series. In particular, investors that are insurance companies should
consult with their counsel with respect to the United States Supreme Court
case, John Hancock Mutual Life Insurance Co. v. Harris Trust & Savings Bank.
See "ERISA Considerations."

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS REGARDING REMIC RESIDUAL
CERTIFICATES

Except as provided in the Prospectus Supplement, REMIC Residual
Certificates, if offered hereunder, are anticipated to have "phantom income"
associated with them. That is, taxable income is anticipated to be allocated
to the REMIC Residual Certificates in the early years of the existence of the
related REMIC, even if the REMIC Residual Certificates receive no
distributions from the related REMIC, with a corresponding amount of losses
allocated to the REMIC Residual Certificates in later years. Accordingly,
the present value of the tax detriments associated with the REMIC Residual
Certificates may significantly exceed the present value of the tax benefits
related thereto, and the REMIC Residual Certificates may have a negative
"value." Moreover, the REMIC Residual Certificates will in effect be
allocated an amount of gross income equal to the non-interest expenses of the
REMIC, but such expenses will be deductible by holders of the REMIC Residual
Certificates that are individuals only as itemized deductions (and be subject
to all the limitations applicable to itemized deductions). Accordingly,
investment in the REMIC Residual Certificates will generally not be suitable
for individuals or for certain pass-through entities, such as partnerships or
S corporations, that have individuals as partners or shareholders. In
addition, REMIC Residual Certificates are subject to certain restrictions on
transfer. Finally, prospective purchasers of a REMIC Residual Certificate
should be aware that recently issued final regulations provide restrictions
on the ability to mark-to-market certain "negative value" REMIC residual
interests. See "Certain Federal Income Tax Consequences--REMICs."

CONTROL

Under certain circumstances, the consent or approval of the holders of a
specified percentage of the aggregate Certificate Balance of all outstanding
Certificates of a series or a similar means of allocating decision-making
under the related Agreement ("Voting Rights") will be required to direct, and
will be sufficient to bind all Certificateholders of such series to, certain
actions, including directing the Master Servicer with respect to actions to
be taken with respect to certain Mortgage Loans and REO Properties and
amending the related Agreement in certain circumstances. See "Description of
the Agreements-Events of Default," "-Rights Upon Event of Default," "-
Amendment" and "-List of Certificateholders."

BOOK-ENTRY REGISTRATION

If so provided in the Prospectus Supplement, one or more classes of the
Certificates will be initially represented by one or more certificates
registered in the name of Cede, the nominee for DTC, and will not be
registered in the names of the Certificateholders or their nominees. Because
of this, unless and until Definitive Certificates are issued,
Certificateholders will not be recognized by the Trustee as
"Certificateholders" (as that term is to be used in the related Agreement).
Hence, until such time, Certificateholders will be able to exercise the
rights of Certificateholders only indirectly through DTC and its
participating organizations. See "Description of the Certificates-Book-Entry
Registration and Definitive Certificates."

DESCRIPTION OF THE TRUST FUNDS

ASSETS

The primary assets of each Trust Fund (the "Assets") will include
(i) single family mortgage loans (the "Mortgage Loans"), (ii) mortgage
participations, pass-through certificates or other mortgage-backed securities
evidencing interests in or secured by one or more Mortgage Loans or other
similar participations, certificates or securities ("MBS"), (iii) direct
obligations of the United States, agencies thereof or agencies created
thereby which are not subject to redemption prior to maturity at the option
of the issuer and are (a) interest-bearing securities, (b) non-interest-
bearing securities, (c) originally interest-bearing securities from which
coupons representing the right to payment of interest have been removed, or
(d) interest-bearing securities from which the right to payment of principal
has been removed (the "Government Securities"), or (iv) a combination of
Mortgage Loans, MBS and Government Securities. As used herein, "Mortgage
Loans" refers to both whole Mortgage Loans and Mortgage Loans underlying MBS.
Mortgage Loans that secure, or interests in which are evidenced by, MBS are
herein sometimes referred to as Underlying Mortgage Loans. Mortgage Loans
that are not Underlying Mortgage Loans are sometimes referred to as "Whole
Loans." Any mortgage participations, pass-through certificates or other
asset-backed certificates in which an MBS evidences an interest or which
secure an MBS are sometimes referred to herein also as MBS or as "Underlying
MBS." Mortgage Loans and MBS are sometimes referred to herein as "Mortgage
Assets." The Mortgage Assets will not be guaranteed or insured by Morgan
Stanley Capital I Inc. (the "Depositor") or any of its affiliates or, unless
otherwise provided in the Prospectus Supplement, by any governmental agency
or instrumentality or by any other person. Each Asset will be selected by the
Depositor for inclusion in a Trust Fund from among those purchased, either
directly or indirectly, from a prior holder thereof (an "Asset Seller"),
which may be an affiliate of the Depositor and, with respect to Mortgage
Assets, which prior holder may or may not be the originator of such Mortgage
Loan or the issuer of such MBS.

Unless otherwise specified in the related Prospectus Supplement, the
Certificates will be entitled to payment only from the assets of the related
Trust Fund and will not be entitled to payments in respect of the assets of
any other trust fund established by the Depositor. If specified in the
related Prospectus Supplement, the assets of a Trust Fund will consist of
certificates representing beneficial ownership interests in another trust
fund that contains the Assets.

MORTGAGE LOANS

General

Unless otherwise specified in the related Prospectus Supplement, the
Mortgage Loans will be secured by (i) liens on Mortgaged Properties
consisting of one- to four-family residential properties or (ii) security
interests in shares issued by private cooperative housing corporations
("Cooperatives") or (ii) Mortgaged Properties located, unless otherwise
specified in the related Prospectus Supplement, in any one of the fifty
states, the District of Columbia or the Commonwealth of Puerto Rico. To the
extent specified in the related Prospectus Supplement, the Mortgage Loans
will be secured by first and/or junior mortgages or deeds of trust or other
similar security instruments creating a first or junior lien on Mortgaged
Property. The Mortgaged Properties may include apartments owned by
Cooperatives. The Mortgaged Properties may include leasehold interests in
properties, the title to which is held by third party lessors. Unless
otherwise specified in the Prospectus Supplement, the term of any such
leasehold shall exceed the term of the related mortgage note by at least five
years. Each Mortgage Loan will have been originated by a person (the
"Originator") other than the Depositor. The related Prospectus Supplement
will indicate if any Originator is an affiliate of the Depositor. The
Mortgage Loans will be evidenced by promissory notes (the "Mortgage Notes")
secured by mortgages or deeds of trust (the "Mortgages") creating a lien on
the Mortgaged Properties.

Loan-to-Value Ratio

The "Loan-to-Value Ratio" of a Mortgage Loan at any given time is the
ratio (expressed as a percentage) of the then outstanding principal balance
of the Mortgage Loan to the Value of the related Mortgaged Property. The
"Value" of a Mortgaged Property, other than with respect to Refinance Loans,
is generally the lesser of (a) the appraised value determined in an appraisal
obtained by the originator at origination of such loan and (b) the sales
price for such property. "Refinance Loans" are loans made to refinance
existing loans. Unless otherwise set forth in the related Prospectus
Supplement, the Value of the Mortgaged Property securing a Refinance Loan is
the appraised value thereof determined in an appraisal obtained at the time
of origination of the Refinance Loan. The Value of a Mortgaged Property as of
the date of initial issuance of the related series of Certificates may be
less than the value at origination and will fluctuate from time to time based
upon changes in economic conditions and the real estate market.

Mortgage Loan Information in Prospectus Supplements

Each Prospectus Supplement will contain information, as of the date of
such Prospectus Supplement and to the extent then applicable and specifically
known to the Depositor, with respect to the Mortgage Loans, including (i) the
aggregate outstanding principal balance and the largest, smallest and average
outstanding principal balance of the Mortgage Loans as of the applicable
Cut-off Date, (ii) the type of property securing the Mortgage Loans,
(iii) the weighted average (by principal balance) of the original and
remaining terms to maturity of the Mortgage Loans, (iv) the earliest and
latest origination date and maturity date of the Mortgage Loans, (v) the
weighted average (by principal balance) of the Loan-to-Value Ratios at
origination of the Mortgage Loans, (vi) the Mortgage Rates or range of
Mortgage Rates and the weighted average Mortgage Rate borne by the Mortgage
Loans, (vii) the state or states in which most of the Mortgaged Properties
are located, (viii) information with respect to the prepayment provisions, if
any, of the Mortgage Loans, (ix) the weighted average Retained Interest, if
any, (x) with respect to Mortgage Loans with adjustable Mortgage Rates ("ARM
Loans"), the index, the frequency of the adjustment dates, the highest,
lowest and weighted average note margin and pass-through margin, and the
maximum Mortgage Rate or monthly payment variation at the time of any
adjustment thereof and over the life of the ARM Loan and the frequency of
such monthly payment adjustments, and (xi) information regarding the payment
characteristics of the Mortgage Loans, including without limitation balloon
payment and other amortization provisions. If specific information
respecting the Mortgage Loans is not known to the Depositor at the time
Certificates are initially offered, more general information of the nature
described above will be provided in the Prospectus Supplement, and specific
information will be set forth in a report which will be available to
purchasers of the related Certificates at or before the initial issuance
thereof and will be filed as part of a Current Report on Form 8-K with the
Securities and Exchange Commission within fifteen days after such initial
issuance.

Payment Provisions of the Mortgage Loans

Unless otherwise specified in the related Prospectus Supplement, all of
the Mortgage Loans will (i) have individual principal balances at origination
of not less than $25,000, (ii) have original terms to maturity of not more
than 40 years and (iii) provide for payments of principal, interest or both,
on due dates that occur monthly, quarterly or semi-annually or at such other
interval as is specified in the related Prospectus Supplement. Each Mortgage
Loan may provide for no accrual of interest or for accrual of interest
thereon at an interest rate (a "Mortgage Rate") that is fixed over its term
or that adjusts from time to time, or that may be converted from an
adjustable to a fixed Mortgage Rate, or from a fixed to an adjustable
Mortgage Rate, from time to time pursuant to an election or as otherwise
specified on the related Mortgage Note, in each case as described in the
related Prospectus Supplement. Each Mortgage Loan may provide for scheduled
payments to maturity or payments that adjust from time to time to accommodate
changes in the Mortgage Rate or to reflect the occurrence of certain events,
and may provide for negative amortization or accelerated amortization, in
each case as described in the related Prospectus Supplement. Each Mortgage
Loan may be fully amortizing or require a balloon payment due on its stated
maturity date, in each case as described in the related Prospectus
Supplement. Each Mortgage Loan may contain prohibitions on prepayment (a
"Lock-out Period" and, the date of expiration thereof, a "Lock-out Date") or
require payment of a premium or a yield maintenance penalty (a "Prepayment
Premium") in connection with a prepayment, in each case as described in the
related Prospectus Supplement. In the event that holders of any class or
classes of Offered Certificates will be entitled to all or a portion of any
Prepayment Premiums collected in respect of Mortgage Loans, the related
Prospectus Supplement will specify the method or methods by which any such
amounts will be allocated.

MBS

Any MBS will have been issued pursuant to a participation and servicing
agreement, a pooling and servicing agreement, a trust agreement, an indenture
or similar agreement (an "MBS Agreement"). A seller (the "MBS Issuer") and/or
servicer (the "MBS Servicer") of the underlying Mortgage Loans (or Underlying
MBS) will have entered into the MBS Agreement with a trustee or a custodian
under the MBS Agreement (the "MBS Trustee"), if any, or with the original
purchaser of the interest in the underlying Mortgage Loans or MBS evidenced
by the MBS.

Distributions of any principal or interest, as applicable, will be made
on MBS on the dates specified in the related Prospectus Supplement. The MBS
may be issued in one or more classes with characteristics similar to the
classes of Certificates described in this Prospectus. Any principal or
interest distributions will be made on the MBS by the MBS Trustee or the MBS
Servicer. The MBS Issuer or the MBS Servicer or another person specified in
the related Prospectus Supplement may have the right or obligation to
repurchase or substitute assets underlying the MBS after a certain date or
under other circumstances specified in the related Prospectus Supplement.

Enhancement in the form of reserve funds, subordination or other forms
of credit support similar to that described for the Certificates under
"Description of Credit Support" may be provided with respect to the MBS. The
type, characteristics and amount of such credit support, if any, will be a
function of certain characteristics of the Mortgage Loans or Underlying MBS
evidenced by or securing such MBS and other factors and generally will have
been established for the MBS on the basis of requirements of either any
Rating Agency that may have assigned a rating to the MBS or the initial
purchasers of the MBS.

The Prospectus Supplement for a series of Certificates evidencing
interests in Mortgage Assets that include MBS will specify, to the extent
available, (i) the aggregate approximate initial and outstanding principal
amount or notional amount, as applicable, and type of the MBS to be included
in the Trust Fund, (ii) the original and remaining term to stated maturity of
the MBS, if applicable, (iii) whether such MBS is entitled only to interest
payments, only to principal payments or to both, (iv) the pass-through or
bond rate of the MBS or formula for determining such rates, if any, (v) the
applicable payment provisions for the MBS, including, but not limited to, any
priorities, payment schedules and subordination features, (vi) the MBS
Issuer, MBS Servicer and MBS Trustee, as applicable, (vii) certain
characteristics of the credit support, if any, such as subordination, reserve
funds, insurance policies, letters of credit or guarantees relating to the
related Underlying Mortgage Loans, the Underlying MBS or directly to such
MBS, (viii) the terms on which the related Underlying Mortgage Loans or
Underlying MBS for such MBS or the MBS may, or are required to, be purchased
prior to their maturity, (ix) the terms on which Mortgage Loans or Underlying
MBS may be substituted for those originally underlying the MBS, (x) the
servicing fees payable under the MBS Agreement, (xi) the type of information
in respect of the Underlying Mortgage Loans described under "-Mortgage Loans-
Mortgage Loan Information in Prospectus Supplements" above, and the type of
information in respect of the Underlying MBS described in this paragraph,
(xii) the characteristics of any cash flow agreements that are included as
part of the trust fund evidenced or secured by the MBS and (xiii) whether the
MBS is in certificated form, book-entry form or held through a depository
such as The Depository Trust Company or the Participants Trust Company.

GOVERNMENT SECURITIES

The Prospectus Supplement for a series of Certificates evidencing
interests in Assets of a Trust Fund that include Government Securities will
specify, to the extent available, (i) the aggregate approximate initial and
outstanding principal amounts or notional amounts, as applicable, and types
of the Government Securities to be included in the Trust Fund, (ii) the
original and remaining terms to stated maturity of the Government Securities,
(iii) whether such Government Securities are entitled only to interest
payments, only to principal payments or to both, (iv) the interest rates of
the Government Securities or the formula to determine such rates, if any, (v)
the applicable payment provisions for the Government Securities and (vi) to
what extent, if any, the obligation evidenced thereby is backed by the full
faith and credit of the United States.

ACCOUNTS

Each Trust Fund will include one or more accounts established and
maintained on behalf of the Certificateholders into which the person or
persons designated in the related Prospectus Supplement will, to the extent
described herein and in such Prospectus Supplement deposit all payments and
collections received or advanced with respect to the Assets and other assets
in the Trust Fund. Such an account may be maintained as an interest bearing
or a non-interest bearing account, and funds held therein may be held as cash
or invested in certain short-term, investment grade obligations, in each case
as described in the related Prospectus Supplement. See "Description of the
Agreement-Certificate Account and Other Collection Accounts."

CREDIT SUPPORT

If so provided in the related Prospectus Supplement, partial or full
protection against certain defaults and losses on the Assets in the related
Trust Fund may be provided to one or more classes of Certificates in the
related series in the form of subordination of one or more other classes of
Certificates in such series or by one or more other types of credit support,
such as a letter of credit, insurance policy, guarantee, reserve fund or
another type of credit support, or a combination thereof (any such coverage
with respect to the Certificates of any series, "Credit Support"). The amount
and types of coverage, the identification of the entity providing the
coverage (if applicable) and related information with respect to each type of
Credit Support, if any, will be described in the Prospectus Supplement for a
series of Certificates. See "Risk Factors-Credit Support Limitations" and
"Description of Credit Support."

CASH FLOW AGREEMENTS

If so provided in the related Prospectus Supplement, the Trust Fund may
include guaranteed investment contracts pursuant to which moneys held in the
funds and accounts established for the related series will be invested at a
specified rate. The Trust Fund may also include certain other agreements,
such as interest rate exchange agreements, interest rate cap or floor
agreements, currency exchange agreements or similar agreements provided to
reduce the effects of interest rate or currency exchange rate fluctuations on
the Assets or on one or more classes of Certificates. (Currency exchange
agreements might be included in the Trust Fund if some or all of the Mortgage
Assets (such as Mortgage Loans secured by Mortgaged Properties located
outside the United States) were denominated in a non-United States currency.)
The principal terms of any such guaranteed investment contract or other
agreement (any such agreement, a "Cash Flow Agreement"), including, without
limitation, provisions relating to the timing, manner and amount of payments
thereunder and provisions relating to the termination thereof, will be
described in the Prospectus Supplement for the related series. In addition,
the related Prospectus Supplement will provide certain information with
respect to the obligor under any such Cash Flow Agreement.

USE OF PROCEEDS

The net proceeds to be received from the sale of the Certificates will
be applied by the Depositor to the purchase of Assets and to pay for certain
expenses incurred in connection with such purchase of Assets and sale of
Certificates. The Depositor expects to sell the Certificates from time to
time, but the timing and amount of offerings of Certificates will depend on a
number of factors, including the volume of Assets acquired by the Depositor,
prevailing interest rates, availability of funds and general market
conditions.

YIELD CONSIDERATIONS

GENERAL

The yield on any Offered Certificate will depend on the price paid by
the Certificateholder, the Pass-Through Rate of the Certificate, the receipt
and timing of receipt of distributions on the Certificate and the weighted
average life of the Assets in the related Trust Fund (which may be affected
by prepayments, defaults, liquidations or repurchases). See "Risk Factors."

PASS-THROUGH RATE

Certificates of any class within a series may have fixed, variable or
adjustable Pass-Through Rates, which may or may not be based upon the
interest rates borne by the Assets in the related Trust Fund. The Prospectus
Supplement with respect to any series of Certificates will specify the
Pass-Through Rate for each class of such Certificates or, in the case of a
variable or adjustable Pass-Through Rate, the method of determining the
Pass-Through Rate; the effect, if any, of the prepayment of any Mortgage
Asset on the Pass-Through Rate of one or more classes of Certificates; and
whether the distributions of interest on the Certificates of any class will
be dependent, in whole or in part, on the performance of any obligor under a
Cash Flow Agreement.

The effective yield to maturity to each holder of Certificates entitled
to payments of interest will be below that otherwise produced by the
applicable Pass-Through Rate and purchase price of such Certificate because,
while interest may accrue on each Asset during a certain period, the
distribution of such interest will be made on a day which may be several
days, weeks or months following the period of accrual.

TIMING OF PAYMENT OF INTEREST

Each payment of interest on the Certificates (or addition to the
Certificate Balance of a class of Accrual Certificates) on a Distribution
Date will include interest accrued during the Interest Accrual Period for
such Distribution Date. As indicated above under "-The Pass-Through Rate," if
the Interest Accrual Period ends on a date other than a Distribution Date for
the related series, the yield realized by the holders of such Certificates
may be lower than the yield that would result if the Interest Accrual Period
ended on such Distribution Date. In addition, if so specified in the related
Prospectus Supplement, interest accrued for an Interest Accrual Period for
one or more classes of Certificates may be calculated on the assumption that
distributions of principal (and additions to the Certificate Balance of
Accrual Certificates) and allocations of losses on the Assets may be made on
the first day of the Interest Accrual Period for a Distribution Date and not
on such Distribution Date. Such method would produce a lower effective yield
than if interest were calculated on the basis of the actual principal amount
outstanding during an Interest Accrual Period. The Interest Accrual Period
for any class of Offered Certificates will be described in the related
Prospectus Supplement.

PAYMENTS OF PRINCIPAL; PREPAYMENTS

The yield to maturity on the Certificates will be affected by the rate
of principal payments on the Assets (including principal prepayments on
Mortgage Loans resulting from both voluntary prepayments by the mortgagors
and involuntary liquidations). The rate at which principal prepayments occur
on the Mortgage Loans will be affected by a variety of factors, including,
without limitation, the terms of the Mortgage Loans, the level of prevailing
interest rates, the availability of mortgage credit and economic,
demographic, geographic, tax, legal and other factors. In general, however,
if prevailing interest rates fall significantly below the Mortgage Rates on
the Mortgage Loans comprising or underlying the Assets in a particular Trust
Fund, such Mortgage Loans are likely to be the subject of higher principal
prepayments than if prevailing rates remain at or above the rates borne by
such Mortgage Loans. In this regard, it should be noted that certain Assets
may consist of Mortgage Loans with different Mortgage Rates and the stated
pass-through or pay-through interest rate of certain MBS may be a number of
percentage points higher or lower than certain of the underlying Mortgage
Loans. The rate of principal payments on some or all of the classes of
Certificates of a series will correspond to the rate of principal payments on
the Assets in the related Trust Fund and is likely to be affected by the
existence of Lock-out Periods and Prepayment Premium provisions of the
Mortgage Loans underlying or comprising such Assets, and by the extent to
which the servicer of any such Mortgage Loan is able to enforce such
provisions. Mortgage Loans with a Lock-out Period or a Prepayment Premium
provision, to the extent enforceable, generally would be expected to
experience a lower rate of principal prepayments than otherwise identical
Mortgage Loans without such provisions, with shorter Lock-out Periods or with
lower Prepayment Premiums.

If the purchaser of a Certificate offered at a discount calculates its
anticipated yield to maturity based on an assumed rate of distributions of
principal that is faster than that actually experienced on the Assets, the
actual yield to maturity will be lower than that so calculated. Conversely,
if the purchaser of a Certificate offered at a premium calculates its
anticipated yield to maturity based on an assumed rate of distributions of
principal that is slower than that actually experienced on the Assets, the
actual yield to maturity will be lower than that so calculated. In either
case, if so provided in the Prospectus Supplement for a series of
Certificates, the effect on yield on one or more classes of the Certificates
of such series of prepayments of the Assets in the related Trust Fund may be
mitigated or exacerbated by any provisions for sequential or selective
distribution of principal to such classes.

When a full prepayment is made on a Mortgage Loan, the mortgagor is
charged interest on the principal amount of the Mortgage Loan so prepaid for
the number of days in the month actually elapsed up to the date of the
prepayment. Unless otherwise specified in the related Prospectus Supplement,
the effect of prepayments in full will be to reduce the amount of interest
paid in the following month to holders of Certificates entitled to payments
of interest because interest on the principal amount of any Mortgage Loan so
prepaid will be paid only to the date of prepayment rather than for a full
month. Unless otherwise specified in the related Prospectus Supplement, a
partial prepayment of principal is applied so as to reduce the outstanding
principal balance of the related Mortgage Loan as of the Due Date in the
month in which such partial prepayment is received. As a result, unless
otherwise specified in the related Prospectus Supplement, the effect of a
partial prepayment on a Mortgage Loan will be to reduce the amount of
interest passed through to holders of Certificates in the month following the
receipt of such partial prepayment by an amount equal to one month's interest
at the applicable Pass-Through Rate on the prepaid amount.

The timing of changes in the rate of principal payments on the Mortgage
Assets may significantly affect an investor's actual yield to maturity, even
if the average rate of distributions of principal is consistent with an
investor's expectation. In general, the earlier a principal payment is
received on the Mortgage Assets and distributed on a Certificate, the greater
the effect on such investor's yield to maturity. The effect on an investor's
yield of principal payments occurring at a rate higher (or lower) than the
rate anticipated by the investor during a given period may not be offset by a
subsequent like decrease (or increase) in the rate of principal payments.

PREPAYMENTS-MATURITY AND WEIGHTED AVERAGE LIFE

The rates at which principal payments are received on the Assets
included in or comprising a Trust Fund and the rate at which payments are
made from any Credit Support or Cash Flow Agreement for the related series of
Certificates may affect the ultimate maturity and the weighted average life
of each class of such series. Prepayments on the Mortgage Loans comprising or
underlying the Mortgage Assets in a particular Trust Fund will generally
accelerate the rate at which principal is paid on some or all of the classes
of the Certificates of the related series.

If so provided in the Prospectus Supplement for a series of
Certificates, one or more classes of Certificates may have a final scheduled
Distribution Date, which is the date on or prior to which the Certificate
Balance thereof is scheduled to be reduced to zero, calculated on the basis
of the assumptions applicable to such series set forth therein.

Weighted average life refers to the average amount of time that will
elapse from the date of issue of a security until each dollar of principal of
such security will be repaid to the investor. The weighted average life of a
class of Certificates of a series will be influenced by the rate at which
principal on the Mortgage Loans comprising or underlying the Mortgage Assets
is paid to such class, which may be in the form of scheduled amortization or
prepayments (for this purpose, the term "prepayment" includes prepayments, in
whole or in part, and liquidations due to default).

In addition, the weighted average life of the Certificates may be
affected by the varying maturities of the Mortgage Loans comprising or
underlying the MBS. If any Mortgage Loans comprising or underlying the Assets
in a particular Trust Fund have actual terms to maturity of less than those
assumed in calculating final scheduled Distribution Dates for the classes of
Certificates of the related series, one or more classes of such Certificates
may be fully paid prior to their respective final scheduled Distribution
Dates, even in the absence of prepayments. Accordingly, the prepayment
experience of the Assets will, to some extent, be a function of the mix of
Mortgage Rates and maturities of the Mortgage Loans comprising or underlying
such Assets. See "Description of the Trust Funds."

Prepayments on loans are also commonly measured relative to a prepayment
standard or model, such as the Constant Prepayment Rate ("CPR") prepayment
model or the Standard Prepayment Assumption ("SPA") prepayment model, each as
described below. CPR represents a constant assumed rate of prepayment each
month relative to the then outstanding principal balance of a pool of loans
for the life of such loans. SPA represents an assumed rate of prepayment each
month relative to the then outstanding principal balance of a pool of loans.
A prepayment assumption of 100% of SPA assumes prepayment rates of 0.2% per
annum of the then outstanding principal balance of such loans in the first
month of the life of the loans and an additional 0.2% per annum in each month
thereafter until the thirtieth month. Beginning in the thirtieth month and in
each month thereafter during the life of the loans, 100% of SPA assumes a
constant prepayment rate of 6% per annum each month.

Neither CPR nor SPA nor any other prepayment model or assumption
purports to be a historical description of prepayment experience or a
prediction of the anticipated rate of prepayment of any pool of loans,
including the Mortgage Loans underlying or comprising the Mortgage Assets.

In general, if interest rates fall below the Mortgage Rates on fixed-
rate Mortgage Loans, the rate of prepayment would be expected to increase.

The Prospectus Supplement with respect to each series of Certificates
will contain tables, if applicable, setting forth the projected weighted
average life of each class of Offered Certificates of such series and the
percentage of the initial Certificate Balance of each such class that would
be outstanding on specified Distribution Dates based on the assumptions
stated in such Prospectus Supplement, including assumptions that prepayments
on the Mortgage Loans comprising or underlying the related Assets are made at
rates corresponding to various percentages of CPR, SPA or at such other rates
specified in such Prospectus Supplement. Such tables and assumptions are
intended to illustrate the sensitivity of weighted average life of the
Certificates to various prepayment rates and will not be intended to predict
or to provide information that will enable investors to predict the actual
weighted average life of the Certificates. It is unlikely that prepayment of
any Mortgage Loans comprising or underlying the Mortgage Assets for any
series will conform to any particular level of CPR, SPA or any other rate
specified in the related Prospectus Supplement.

OTHER FACTORS AFFECTING WEIGHTED AVERAGE LIFE

Type of Mortgage Asset

If so specified in the related Prospectus Supplement, a number of
Mortgage Loans may have balloon payments due at maturity, and because the
ability of a mortgagor to make a balloon payment typically will depend upon
its ability either to refinance the loan or to sell the related Mortgaged
Property, there is a risk that a number of Mortgage Loans having balloon
payments may default at maturity. In the case of defaults, recovery of
proceeds may be delayed by, among other things, bankruptcy of the mortgagor
or adverse conditions in the market where the property is located. In order
to minimize losses on defaulted Mortgage Loans, the servicer may, to the
extent and under the circumstances set forth in the related Prospectus
Supplement, be permitted to modify Mortgage Loans that are in default or as
to which a payment default is imminent. Any defaulted balloon payment or
modification that extends the maturity of a Mortgage Loan will tend to extend
the weighted average life of the Certificates, thereby lengthening the period
of time elapsed from the date of issuance of a Certificate until it is
retired.

With respect to certain Mortgage Loans, including ARM Loans, the
Mortgage Rate at origination may be below the rate that would result if the
index and margin relating thereto were applied at origination. Under the
applicable underwriting standards, the mortgagor under each Mortgage Loan
generally will be qualified on the basis of the Mortgage Rate in effect at
origination. The repayment of any such Mortgage Loan may thus be dependent on
the ability of the mortgagor to make larger level monthly payments following
the adjustment of the Mortgage Rate. In addition, certain Mortgage Loans may
be subject to temporary buydown plans ("Buydown Mortgage Loans") pursuant to
which the monthly payments made by the mortgagor during the early years of
the Mortgage Loan will be less than the scheduled monthly payments thereon
(the "Buydown Period"). The periodic increase in the amount paid by the
mortgagor of a Buydown Mortgage Loan during or at the end of the applicable
Buydown Period may create a greater financial burden for the mortgagor, who
might not have otherwise qualified for a mortgage, and may accordingly
increase the risk of default with respect to the related Mortgage Loan.

The Mortgage Rates on certain ARM Loans subject to negative amortization
generally adjust monthly and their amortization schedules adjust less
frequently. During a period of rising interest rates as well as immediately
after origination (initial Mortgage Rates are generally lower than the sum of
the applicable index at origination and the related margin over such index at
which interest accrues), the amount of interest accruing on the principal
balance of such Mortgage Loans may exceed the amount of the minimum scheduled
monthly payment thereon. As a result, a portion of the accrued interest on
negatively amortizing Mortgage Loans may be added to the principal balance
thereof and will bear interest at the applicable Mortgage Rate. The addition
of any such deferred interest to the principal balance of any related class
or classes of Certificates will lengthen the weighted average life thereof
and may adversely affect yield to holders thereof, depending upon the price
at which such Certificates were purchased. In addition, with respect to
certain ARM Loans subject to negative amortization, during a period of
declining interest rates, it might be expected that each minimum scheduled
monthly payment on such a Mortgage Loan would exceed the amount of scheduled
principal and accrued interest on the principal balance thereof, and since
such excess will be applied to reduce the principal balance of the related
class or classes of Certificates, the weighted average life of such
Certificates will be reduced and may adversely affect yield to holders
thereof, depending upon the price at which such Certificates were purchased.

Defaults

The rate of defaults on the Mortgage Loans will also affect the rate and
timing of principal payments on the Assets and thus the yield on the
Certificates. In general, defaults on mortgage loans are expected to occur
with greater frequency in their early years. The rate of default on Mortgage
Loans which are refinance or limited documentation mortgage loans, and on
Mortgage Loans with high Loan-to-Value Ratios, may be higher than for other
types of Mortgage Loans. Furthermore, the rate and timing of prepayments,
defaults and liquidations on the Mortgage Loans will be affected by the
general economic condition of the region of the country in which the related
Mortgage Properties are located. The risk of delinquencies and loss is
greater and prepayments are less likely in regions where a weak or
deteriorating economy exists, as may be evidenced by, among other factors,
increasing unemployment or falling property values.

Foreclosures

Refinancing

At the request of a mortgagor, the Master Servicer or a Sub-Servicer may
allow the refinancing of a Mortgage Loan in any Trust Fund by accepting
prepayments thereon and permitting a new loan secured by a mortgage on the
same property. In the event of such a refinancing, the new loan would not be
included in the related Trust Fund and, therefore, such refinancing would
have the same effect as a prepayment in full of the related Mortgage Loan. A
Sub-Servicer or the Master Servicer may, from time to time, implement
programs designed to encourage refinancing. Such programs may include,
without limitation, modifications of existing loans, general or targeted
solicitations, the offering of pre-approved applications, reduced origination
fees or closing costs, or other financial incentives. In addition, Sub-
Servicers may encourage the refinancing of Mortgage Loans, including
defaulted Mortgage Loans, that would permit creditworthy borrowers to assume
the outstanding indebtedness of such Mortgage Loans.

Due-on-Sale Clauses

Acceleration of mortgage payments as a result of certain transfers of
underlying Mortgaged Property is another factor affecting prepayment rates
that may not be reflected in the prepayment standards or models used in the
relevant Prospectus Supplement. A number of the Mortgage Loans comprising or
underlying the Assets may include "due-on-sale" clauses that allow the holder
of the Mortgage Loans to demand payment in full of the remaining principal
balance of the Mortgage Loans upon sale, transfer or conveyance of the
related Mortgaged Property. With respect to any Whole Loans, unless otherwise
provided in the related Prospectus Supplement, the Master Servicer will
generally enforce any due-on-sale clause to the extent it has knowledge of
the conveyance or proposed conveyance of the underlying Mortgaged Property
and it is entitled to do so under applicable law; provided, however, that the
Master Servicer will not take any action in relation to the enforcement of
any due-on-sale provision which would adversely affect or jeopardize coverage
under any applicable insurance policy. See "Certain Legal Aspects of Mortgage
Loans--Due-on-Sale Clauses" and "Description of the Agreements--Due-on-Sale
Provisions."

THE DEPOSITOR

Morgan Stanley Capital I Inc., the Depositor, is a direct wholly-owned
subsidiary of Morgan Stanley Group Inc. and was incorporated in the State of
Delaware on January 28, 1985. The principal executive offices of the
Depositor are located at 1585 Broadway, 37th Floor, New York, New York 10036.
Its telephone number is (212) 761-4700.

The Depositor does not have, nor is it expected in the future to have,
any significant assets.

DESCRIPTION OF THE CERTIFICATES

GENERAL

The Certificates of each series (including any class of Certificates not
offered hereby) will represent the entire beneficial ownership interest in
the Trust Fund created pursuant to the related Agreement. Each series of
Certificates will consist of one or more classes of Certificates that may
(i) provide for the accrual of interest thereon based on fixed, variable or
adjustable rates; (ii) be senior (collectively, "Senior Certificates") or
subordinate (collectively, "Subordinate Certificates") to one or more other
classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions (collectively,
"Stripped Principal Certificates"); (iv) be entitled to interest
distributions, with disproportionately low, nominal or no principal
distributions (collectively, "Stripped Interest Certificates"); (v) provide
for distributions of accrued interest thereon commencing only following the
occurrence of certain events, such as the retirement of one or more other
classes of Certificates of such series (collectively, "Accrual
Certificates"); (vi) provide for payments of principal sequentially, based on
specified payment schedules, from only a portion of the Assets in such Trust
Fund or based on specified calculations, to the extent of available funds, in
each case as described in the related Prospectus Supplement; and/or (vii)
provide for distributions based on a combination of two or more components
thereof with one or more of the characteristics described in this paragraph
including a Stripped Principal Certificate component and a Stripped Interest
Certificate component. If so specified in the related Prospectus Supplement,
distributions on one or more classes of a series of Certificates may be
limited to collections from a designated portion of the Whole Loans in the
related Mortgage Pool (each such portion of Whole Loans, a "Mortgage Loan
Group"). Any such classes may include classes of Offered Certificates.

Each class of Offered Certificates of a series will be issued in minimum
denominations corresponding to the Certificate Balances or, in case of
Stripped Interest Certificates, notional amounts or percentage interests
specified in the related Prospectus Supplement. The transfer of any Offered
Certificates may be registered and such Certificates may be exchanged without
the payment of any service charge payable in connection with such
registration of transfer or exchange, but the Depositor or the Trustee or any
agent thereof may require payment of a sum sufficient to cover any tax or
other governmental charge. One or more classes of Certificates of a series
may be issued in definitive form ("Definitive Certificates") or in book-entry
form ("Book-Entry Certificates"), as provided in the related Prospectus
Supplement. See "Risk Factors--Book-Entry Registration" and "Description of
the Certificates-Book-Entry Registration and Definitive Certificates."
Definitive Certificates will be exchangeable for other Certificates of the
same class and series of a like aggregate Certificate Balance, notional
amount or percentage interest but of different authorized denominations. See
"Risk Factors--Limited Liquidity" and "Limited Assets."

DISTRIBUTIONS

Distributions on the Certificates of each series will be made by or on
behalf of the Trustee on each Distribution Date as specified in the related
Prospectus Supplement from the Available Distribution Amount for such series
and such Distribution Date. Except as otherwise specified in the related
Prospectus Supplement, distributions (other than the final distribution) will
be made to the persons in whose names the Certificates are registered at the
close of business on the last business day of the month preceding the month
in which the Distribution Date occurs (the "Record Date"), and the amount of
each distribution will be determined as of the close of business on the date
specified in the related Prospectus Supplement (the "Determination Date").
All distributions with respect to each class of Certificates on each
Distribution Date will be allocated pro rata among the outstanding
Certificates in such class or by random selection, as described in the
related Prospectus Supplement or otherwise established by the related
Trustee. Payments will be made either by wire transfer in immediately
available funds to the account of a Certificateholder at a bank or other
entity having appropriate facilities therefor, if such Certificateholder has
so notified the Trustee or other person required to make such payments no
later than the date specified in the related Prospectus Supplement (and, if
so provided in the related Prospectus Supplement, holds Certificates in the
requisite amount specified therein), or by check mailed to the address of the
person entitled thereto as it appears on the Certificate Register; provided,
however, that the final distribution in retirement of the Certificates
(whether Definitive Certificates or Book-Entry Certificates) will be made
only upon presentation and surrender of the Certificates at the location
specified in the notice to Certificateholders of such final distribution.

AVAILABLE DISTRIBUTION AMOUNT

All distributions on the Certificates of each series on each
Distribution Date will be made from the Available Distribution Amount
described below, in accordance with the terms described in the related
Prospectus Supplement. Unless provided otherwise in the related Prospectus
Supplement, the "Available Distribution Amount" for each Distribution Date
equals the sum of the following amounts:

(i) the total amount of all cash on deposit in the related Certificate
Account as of the corresponding Determination Date, exclusive of:

(a) all scheduled payments of principal and interest collected but
due on a date subsequent to the related Due Period (unless the
related Prospectus Supplement provides otherwise, a "Due Period"
with respect to any Distribution Date will commence on the second
day of the month in which the immediately preceding Distribution
Date occurs, or the day after the Cut-off Date in the case of the
first Due Period, and will end on the first day of the month of the
related Distribution Date),

(b) unless the related Prospectus Supplement provides otherwise, all
prepayments, together with related payments of the interest thereon
and related Prepayment Premiums, Liquidation Proceeds, Insurance
Proceeds and other unscheduled recoveries received subsequent to the
related Due Period, and

(c) all amounts in the Certificate Account that are due or
reimbursable to the Depositor, the Trustee, an Asset Seller, a
Sub-Servicer, the Master Servicer or any other entity as specified
in the related Prospectus Supplement or that are payable in respect
of certain expenses of the related Trust Fund;

(ii) if the related Prospectus Supplement so provides, interest or
investment income on amounts on deposit in the Certificate Account,
including any net amounts paid under any Cash Flow Agreements;

(iii) all advances made by a Master Servicer or any other entity as
specified in the related Prospectus Supplement with respect to such
Distribution Date;

(iv) if and to the extent the related Prospectus Supplement so
provides, amounts paid by a Master Servicer or any other entity as
specified in the related Prospectus Supplement with respect to interest
shortfalls resulting from prepayments during the related Prepayment
Period; and

(v) unless the related Prospectus Supplement provides otherwise, to the
extent not on deposit in the related Certificate Account as of the
corresponding Determination Date, any amounts collected under, from or
in respect of any Credit Support with respect to such Distribution Date.

As described below, the entire Available Distribution Amount will be
distributed among the related Certificates (including any Certificates not
offered hereby) on each Distribution Date, and accordingly will be released
from the Trust Fund and will not be available for any future distributions.

DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES

Each class of Certificates (other than classes of Stripped Principal
Certificates that have no Pass-Through Rate) may have a different
Pass-Through Rate, which will be a fixed, variable or adjustable rate at
which interest will accrue on such class or a component thereof (the "Pass-
Through Rate"). The related Prospectus Supplement will specify the
Pass-Through Rate for each class or component or, in the case of a variable
or adjustable Pass-Through Rate, the method for determining the Pass-Through
Rate. Unless otherwise specified in the related Prospectus Supplement,
interest on the Certificates will be calculated on the basis of a 360-day
year consisting of twelve 30-day months.

Distributions of interest in respect of the Certificates of any class
will be made on each Distribution Date (other than any class of Accrual
Certificates, which will be entitled to distributions of accrued interest
commencing only on the Distribution Date, or under the circumstances,
specified in the related Prospectus Supplement, and any class of Stripped
Principal Certificates that are not entitled to any distributions of
interest) based on the Accrued Certificate Interest for such class and such
Distribution Date, subject to the sufficiency of the portion of the Available
Distribution Amount allocable to such class on such Distribution Date. Prior
to the time interest is distributable on any class of Accrual Certificates,
the amount of Accrued Certificate Interest otherwise distributable on such
class will be added to the Certificate Balance thereof on each Distribution
Date. With respect to each class of Certificates and each Distribution Date
(other than certain classes of Stripped Interest Certificates), "Accrued
Certificate Interest" will be equal to interest accrued for a specified
period on the outstanding Certificate Balance thereof immediately prior to
the Distribution Date, at the applicable Pass-Through Rate, reduced as
described below. Unless otherwise provided in the Prospectus Supplement,
Accrued Certificate Interest on Stripped Interest Certificates will be equal
to interest accrued for a specified period on the outstanding notional amount
thereof immediately prior to each Distribution Date, at the applicable
Pass-Through Rate, reduced as described below. The method of determining the
notional amount for any class of Stripped Interest Certificates will be
described in the related Prospectus Supplement. Reference to notional amount
is solely for convenience in certain calculations and does not represent the
right to receive any distributions of principal. Unless otherwise provided in
the related Prospectus Supplement, the Accrued Certificate Interest on a
series of Certificates will be reduced in the event of prepayment interest
shortfalls, which are shortfalls in collections of interest for a full
accrual period resulting from prepayments prior to the due date in such
accrual period on the Mortgage Loans comprising or underlying the Mortgage
Assets in the Trust Fund for such series. The particular manner in which such
shortfalls are to be allocated among some or all of the classes of
Certificates of that series will be specified in the related Prospectus
Supplement. The related Prospectus Supplement will also describe the extent
to which the amount of Accrued Certificate Interest that is otherwise
distributable on (or, in the case of Accrual Certificates, that may otherwise
be added to the Certificate Balance of) a class of Offered Certificates may
be reduced as a result of any other contingencies, including delinquencies,
losses and deferred interest on or in respect of the Mortgage Loans
comprising or underlying the Mortgage Assets in the related Trust Fund.
Unless otherwise provided in the related Prospectus Supplement, any reduction
in the amount of Accrued Certificate Interest otherwise distributable on a
class of Certificates by reason of the allocation to such class of a portion
of any deferred interest on the Mortgage Loans comprising or underlying the
Mortgage Assets in the related Trust Fund will result in a corresponding
increase in the Certificate Balance of such class. See "Risk Factors--Average
Life of Certificates; Prepayments; Yields" and "Yield Considerations."

DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES

The Certificates of each series, other than certain classes of Stripped
Interest Certificates, will have a "Certificate Balance" which, at any time,
will equal the then maximum amount that the holder will be entitled to
receive in respect of principal out of the future cash flow on the Assets and
other assets included in the related Trust Fund. The outstanding Certificate
Balance of a Certificate will be reduced to the extent of distributions of
principal thereon from time to time and, if and to the extent so provided in
the related Prospectus Supplement, by the amount of losses incurred in
respect of the related Assets, may be increased in respect of deferred
interest on the related Mortgage Loans to the extent provided in the related
Prospectus Supplement and, in the case of Accrual Certificates prior to the
Distribution Date on which distributions of interest are required to
commence, will be increased by any related Accrued Certificate Interest.
Unless otherwise provided in the related Prospectus Supplement, the initial
aggregate Certificate Balance of all classes of Certificates of a series will
not be greater than the outstanding aggregate principal balance of the
related Assets as of the applicable Cut-off Date. The initial aggregate
Certificate Balance of a series and each class thereof will be specified in
the related Prospectus Supplement. Unless otherwise provided in the related
Prospectus Supplement, distributions of principal will be made on each
Distribution Date to the class or classes of Certificates entitled thereto in
accordance with the provisions described in such Prospectus Supplement until
the Certificate Balance of such class has been reduced to zero. Stripped
Interest Certificates with no Certificate Balance are not entitled to any
distributions of principal.

COMPONENTS

To the extent specified in the related Prospectus Supplement,
distribution on a class of Certificates may be based on a combination of two
or more different components as described under "--General" above. To such
extent, the descriptions set forth under "--Distributions of Interests on the
Certificates" and "--Distributions of Principal of the Certificates" above
also relate to components of such a class of Certificates. In such case,
reference in such sections to Certificate Balance and Pass-Through Rate refer
to the principal balance, if any, of any such component and the Pass-Through
Rate, if any, on any such component, respectively.

DISTRIBUTIONS ON THE CERTIFICATES OF PREPAYMENT PREMIUMS

If so provided in the related Prospectus Supplement, Prepayment Premiums
that are collected on the Mortgage Assets in the related Trust Fund will be
distributed on each Distribution Date to the class or classes of Certificates
entitled thereto in accordance with the provisions described in such
Prospectus Supplement.

ALLOCATION OF LOSSES AND SHORTFALLS

If so provided in the Prospectus Supplement for a series of Certificates
consisting of one or more classes of Subordinate Certificates, on any
Distribution Date in respect of which losses or shortfalls in collections on
the Mortgage Assets have been incurred, the amount of such losses or
shortfalls will be borne first by a class of Subordinate Certificates in the
priority and manner and subject to the limitations specified in such
Prospectus Supplement. See "Description of Credit Support" for a description
of the types of protection that may be included in a Trust Fund against
losses and shortfalls on Mortgage Assets comprising such Trust Fund.

ADVANCES IN RESPECT OF DELINQUENCIES

With respect to any series of Certificates evidencing an interest in a
Trust Fund, unless otherwise provided in the related Prospectus Supplement,
the Master Servicer or another entity described therein will be required as
part of its servicing responsibilities to advance on or before each
Distribution Date its own funds or funds held in the Certificate Account that
are not included in the Available Distribution Amount for such Distribution
Date, in an amount equal to the aggregate of payments of principal (other
than any balloon payments) and interest (net of related servicing fees and
Retained Interest) that were due on the Whole Loans in such Trust Fund during
the related Due Period and were delinquent on the related Determination Date,
subject to the Master Servicer's (or another entity's) good faith
determination that such advances will be reimbursable from Related Proceeds
(as defined below). In the case of a series of Certificates that includes one
or more classes of Subordinate Certificates and if so provided in the related
Prospectus Supplement, the Master Servicer's (or another entity's) advance
obligation may be limited only to the portion of such delinquencies necessary
to make the required distributions on one or more classes of Senior
Certificates and/or may be subject to the Master Servicer's (or another
entity's) good faith determination that such advances will be reimbursable
not only from Related Proceeds but also from collections on other Assets
otherwise distributable on one or more classes of such Subordinate
Certificates. See "Description of Credit Support."

Advances are intended to maintain a regular flow of scheduled interest
and principal payments to holders of the class or classes of Certificates
entitled thereto, rather than to guarantee or insure against losses. Unless
otherwise provided in the related Prospectus Supplement, advances of the
Master Servicer's (or another entity's) funds will be reimbursable only out
of related recoveries on the Mortgage Loans (including amounts received under
any form of Credit Support) respecting which such advances were made (as to
any Mortgage Loan, "Related Proceeds") and, if so provided in the Prospectus
Supplement, out of any amounts otherwise distributable on one or more classes
of Subordinate Certificates of such series; provided, however, that any such
advance will be reimbursable from any amounts in the Certificate Account
prior to any distributions being made on the Certificates to the extent that
the Master Servicer (or such other entity) shall determine in good faith that
such advance (a "Nonrecoverable Advance") is not ultimately recoverable from
Related Proceeds or, if applicable, from collections on other Assets
otherwise distributable on such Subordinate Certificates. If advances have
been made by the Master Servicer from excess funds in the Certificate
Account, the Master Servicer is required to replace such funds in the
Certificate Account on any future Distribution Date to the extent that funds
in the Certificate Account on such Distribution Date are less than payments
required to be made to Certificateholders on such date. If so specified in
the related Prospectus Supplement, the obligations of the Master Servicer (or
another entity) to make advances may be secured by a cash advance reserve
fund, a surety bond, a letter of credit or another form of limited guaranty.
If applicable, information regarding the characteristics of, and the identity
of any obligor on, any such surety bond, will be set forth in the related
Prospectus Supplement.

If and to the extent so provided in the related Prospectus Supplement,
the Master Servicer (or another entity) will be entitled to receive interest
at the rate specified therein on its outstanding advances and will be
entitled to pay itself such interest periodically from general collections on
the Assets prior to any payment to Certificateholders or as otherwise
provided in the related Agreement and described in such Prospectus
Supplement.

The Prospectus Supplement for any series of Certificates evidencing an
interest in a Trust Fund that includes MBS will describe any corresponding
advancing obligation of any person in connection with such MBS.

REPORTS TO CERTIFICATEHOLDERS

Unless otherwise provided in the Prospectus Supplement, with each
distribution to holders of any class of Certificates of a series, the Master
Servicer or the Trustee, as provided in the related Prospectus Supplement,
will forward or cause to be forwarded to each such holder, to the Depositor
and to such other parties as may be specified in the related Agreement, a
statement setting forth, in each case to the extent applicable and available:

(i) the amount of such distribution to holders of Certificates of such
class applied to reduce the Certificate Balance thereof;

(ii) the amount of such distribution to holders of Certificates of
such class allocable to Accrued Certificate Interest;

(iii) the amount of such distribution allocable to Prepayment
Premiums;

(iv) the amount of related servicing compensation received by a
Master Servicer (and, if payable directly out of the related Trust Fund, by
any Sub-Servicer) and such other customary information as any such Master
Servicer or the Trustee deems necessary or desirable, or that a
Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;

(v) the aggregate amount of advances included in such distribution, and
the aggregate amount of unreimbursed advances at the close of business on
such Distribution Date;

(vi) the aggregate principal balance of the Assets at the close of
business on such Distribution Date;

(vii) the number and aggregate principal balance of Whole Loans in
respect of which (a) one scheduled payment is delinquent, (b) two scheduled
payments are delinquent, (c) three or more scheduled payments are delinquent
and (d) foreclosure proceedings have been commenced;

(viii) with respect to any Whole Loan liquidated during the related Due
Period, (a) the portion of such liquidation proceeds payable or reimbursable
to the Master Servicer (or any other entity) in respect of such Mortgage Loan
and (b) the amount of any loss to Certificateholders;

(ix) with respect to each REO Property relating to a Whole Loan and
included in the Trust Fund as of the end of the related Due Period, (a) the
loan number of the related Mortgage Loan and (b) the date of acquisition;

(x) with respect to each REO Property relating to a Whole Loan and
included in the Trust Fund as of the end of the related Due Period, (a) the
book value, (b) the principal balance of the related Mortgage Loan
immediately following such Distribution Date (calculated as if such Mortgage
Loan were still outstanding taking into account certain limited modifications
to the terms thereof specified in the Agreement), (c) the aggregate amount of
unreimbursed servicing expenses and unreimbursed advances in respect thereof
and (d) if applicable, the aggregate amount of interest accrued and payable
on related servicing expenses and related advances;

(xi) with respect to any such REO Property sold during the related
Due Period (a) the aggregate amount of sale proceeds, (b) the portion of such
sales proceeds payable or reimbursable to the Master Servicer in respect of
such REO Property or the related Mortgage Loan and (c) the amount of any loss
to Certificateholders in respect of the related Mortgage Loan;

(xii) the aggregate Certificate Balance or notional amount, as the
case may be, of each class of Certificates (including any class of
Certificates not offered hereby) at the close of business on such
Distribution Date, separately identifying any reduction in such Certificate
Balance due to the allocation of any loss and increase in the Certificate
Balance of a class of Accrual Certificates in the event that Accrued
Certificate Interest has been added to such balance;

(xiii) the aggregate amount of principal prepayments made during the
related Due Period;

(xiv) the amount deposited in the reserve fund, if any, on such
Distribution Date;

(xv) the amount remaining in the reserve fund, if any, as of the
close of business on such Distribution Date;

(xvi) the aggregate unpaid Accrued Certificate Interest, if any, on
each class of Certificates at the close of business on such Distribution
Date;

(xvii) in the case of Certificates with a variable Pass-Through Rate,
the Pass-Through Rate applicable to such Distribution Date, and, if
available, the immediately succeeding Distribution Date, as calculated in
accordance with the method specified in the related Prospectus Supplement;

(xviii) in the case of Certificates with an adjustable Pass-Through
Rate, for statements to be distributed in any month in which an adjustment
date occurs, the adjustable Pass-Through Rate applicable to such Distribution
Date and the immediately succeeding Distribution Date as calculated in
accordance with the method specified in the related Prospectus Supplement;

(xix) as to any series which includes Credit Support, the amount of
coverage of each instrument of Credit Support included therein as of the
close of business on such Distribution Date; and

(xx) the aggregate amount of payments by the mortgagors of
(a) default interest, (b) late charges and (c) assumption and modification
fees collected during the related Due Period.

In the case of information furnished pursuant to subclauses (i)-(iv)
above, the amounts shall be expressed as a dollar amount per minimum
denomination of Certificates or for such other specified portion thereof. In
addition, in the case of information furnished pursuant to subclauses (i),
(ii), (xii), (xvi) and (xvii) above, such amounts shall also be provided with
respect to each component, if any, of a class of Certificates. The Master
Servicer or the Trustee, as specified in the related Prospectus Supplement,
will forward or cause to be forwarded to each holder, to the Depositor and to
such other parties as may be specified in the Agreement, a copy of any
statements or reports received by the Master Servicer or the Trustee, as
applicable, with respect to any MBS. The Prospectus Supplement for each
series of Offered Certificates will describe any additional information to be
included in reports to the holders of such Certificates.

Within a reasonable period of time after the end of each calendar year,
the Master Servicer or the Trustee, as provided in the related Prospectus
Supplement, shall furnish to each person who at any time during the calendar
year was a holder of a Certificate a statement containing the information set
forth in subclauses (i)-(iv) above, aggregated for such calendar year or the
applicable portion thereof during which such person was a Certificateholder.
Such obligation of the Master Servicer or the Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information shall
be provided by the Master Servicer or the Trustee pursuant to any
requirements of the Code as are from time to time in force. See "Description
of the Certificates--Book-Entry Registration and Definitive Certificates."

TERMINATION

The obligations created by the related Agreement for each series of
Certificates will terminate upon the payment to Certificateholders of that
series of all amounts held in the Certificate Account or by the Master
Servicer, if any, or the Trustee and required to be paid to them pursuant to
such Agreement following the earlier of (i) the final payment or other
liquidation of the last Asset subject thereto or the disposition of all
property acquired upon foreclosure of any Whole Loan subject thereto and
(ii) the purchase of all of the assets of the Trust Fund by the party
entitled to effect such termination, under the circumstances and in the
manner set forth in the related Prospectus Supplement. In no event, however,
will the trust created by the Agreement continue beyond the date specified in
the related Prospectus Supplement. Written notice of termination of the
Agreement will be given to each Certificateholder, and the final distribution
will be made only upon presentation and surrender of the Certificates at the
location to be specified in the notice of termination.

If so specified in the related Prospectus Supplement, a series of
Certificates may be subject to optional early termination through the
repurchase of the assets in the related Trust Fund by the party specified
therein, under the circumstances and in the manner set forth therein. If so
provided in the related Prospectus Supplement, upon the reduction of the
Certificate Balance of a specified class or classes of Certificates by a
specified percentage or amount, the party specified therein will solicit bids
for the purchase of all assets of the Trust Fund, or of a sufficient portion
of such assets to retire such class or classes or purchase such class or
classes at a price set forth in the related Prospectus Supplement, in each
case, under the circumstances and in the manner set forth therein.

BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES

If so provided in the related Prospectus Supplement, one or more classes
of the Offered Certificates of any series will be issued as Book-Entry
Certificates, and each such class will be represented by one or more single
Certificates registered in the name of a nominee for the depository, The
Depository Trust Company ("DTC").

Unless otherwise provided in the related Prospectus Supplement,
investors that are not Participants or Indirect Participants but desire to
purchase, sell or otherwise transfer ownership of, or other interests in,
Book-Entry Certificates may do so only through Participants and Indirect
Participants. In addition, such investors ("Certificate Owners") will receive
all distributions on the Book-Entry Certificates through DTC and its
Participants. Under a book-entry format, Certificate Owners will receive
payments after the related Distribution Date because, while payments are
required to be forwarded to Cede & Co., as nominee for DTC ("Cede"), on each
such date, DTC will forward such payments to its Participants which
thereafter will be required to forward them to Indirect Participants or
Certificate Owners. Unless otherwise provided in the related Prospectus
Supplement, the only "Certificateholder" (as such term is used in the
Agreement) will be Cede, as nominee of DTC, and the Certificate Owners will
not be recognized by the Trustee as Certificateholders under the Agreement.
Certificate Owners will be permitted to exercise the rights of
Certificateholders under the related Agreement only indirectly through the
Participants who in turn will exercise their rights through DTC.

Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers among
Participants on whose behalf it acts with respect to the Book-Entry
Certificates and is required to receive and transmit distributions of
principal of and interest on the Book-Entry Certificates. Participants and
Indirect Participants with which Certificate Owners have accounts with
respect to the Book-Entry Certificates similarly are required to make
book-entry transfers and receive and transmit such payments on behalf of
their respective Certificate Owners.

Because DTC can act only on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a
Certificate Owner to pledge its interest in the Book-Entry Certificates to
persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of its interest in the Book-Entry Certificates, may
be limited due to the lack of a physical certificate evidencing such
interest.

DTC has advised the Depositor that it will take any action permitted to
be taken by a Certificateholder under an Agreement only at the direction of
one or more Participants to whose account with DTC interests in the
Book-Entry Certificates are credited.

Unless otherwise specified in the related Prospectus Supplement,
Certificates initially issued in book-entry form will be issued in fully
registered, certificated form to Certificate Owners or their nominees
("Definitive Certificates"), rather than to DTC or its nominee only if
(i) the Depositor advises the Trustee in writing that DTC is no longer
willing or able to properly discharge its responsibilities as depository with
respect to the Certificates and the Depositor is unable to locate a qualified
successor or (ii) the Depositor, at its option, elects to terminate the
book-entry system through DTC.

Upon the occurrence of either of the events described in the immediately
preceding paragraph, DTC is required to notify all Participants of the
availability through DTC of Definitive Certificates for the Certificate
Owners. Upon surrender by DTC of the certificate or certificates representing
the Book-Entry Certificates, together with instructions for reregistration,
the Trustee will issue (or cause to be issued) to the Certificate Owners
identified in such instructions the Definitive Certificates to which they are
entitled, and thereafter the Trustee will recognize the holders of such
Definitive Certificates as Certificateholders under the Agreement.

DESCRIPTION OF THE AGREEMENTS

The Certificates of each series evidencing interests in a Trust Fund
including Whole Loans will be issued pursuant to a Pooling and Servicing
Agreement among the Depositor, a Master Servicer (or Master Servicers) and
the Trustee. The Certificates of each series evidencing interests in a Trust
Fund not including Whole Loans will be issued pursuant to a Trust Agreement
between the Depositor and a Trustee. Any Master Servicer and the Trustee
with respect to any series of Certificates will be named in the related
Prospectus Supplement. In any series of Certificates for which there are
multiple Master Servicers, there will also be multiple Mortgage Loan Groups,
each corresponding to a particular Master Servicer; and, if the related
Prospectus Supplement so specifies, the servicing obligations of each such
Master Servicer will be limited to the Whole Loans in such corresponding
Mortgage Loan Group. In lieu of appointing a Master Servicer, a servicer may
be appointed pursuant to the Pooling and Servicing Agreement for any Trust
Fund. Such servicer will service all or a significant number of Whole Loans
directly without a Sub-Servicer. Unless otherwise specified in the related
Prospectus Supplement, the obligations of any such servicer shall be
commensurate with those of the Master Servicer described herein. References
in this prospectus to Master Servicer and its rights and obligations, unless
otherwise specified in the related Prospectus Supplement, shall be deemed to
also be references to any servicer servicing Whole Loans directly. A manager
or administrator may be appointed pursuant to the Trust Agreement for any
Trust Fund to administer such Trust Fund. The provisions of each Agreement
will vary depending upon the nature of the Certificates to be issued
thereunder and the nature of the related Trust Fund. A form of a Pooling and
Servicing Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. Any Trust Agreement will
generally conform to the form of Pooling and Servicing Agreement filed
herewith, but will not contain provisions with respect to the servicing and
maintenance of Whole Loans. The following summaries describe certain
provisions that may appear in each Agreement. The Prospectus Supplement for a
series of Certificates will describe any provision of the Agreement relating
to such series that materially differs from the description thereof contained
in this Prospectus. The summaries do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all of the
provisions of the Agreement for each Trust Fund and the description of such
provisions in the related Prospectus Supplement. As used herein with respect
to any series, the term "Certificate" refers to all of the Certificates of
that series, whether or not offered hereby and by the related Prospectus
Supplement, unless the context otherwise requires. The Depositor will provide
a copy of the Agreement (without exhibits) relating to any series of
Certificates without charge upon written request of a holder of a Certificate
of such series addressed to Morgan Stanley Capital I Inc., c/o Morgan Stanley
& Co. Incorporated, 1585 Broadway, New York, New York 10036. Attention:
David R. Warren.

ASSIGNMENT OF ASSETS; REPURCHASES

At the time of issuance of any series of Certificates, the Depositor
will assign (or cause to be assigned) to the designated Trustee the Assets to
be included in the related Trust Fund, together with all principal and
interest to be received on or with respect to such Assets after the Cut-off
Date, other than principal and interest due on or before the Cut-off Date and
other than any Retained Interest. The Trustee will, concurrently with such
assignment, deliver the Certificates to the Depositor in exchange for the
Assets and the other assets comprising the Trust Fund for such series. Each
Mortgage Asset will be identified in a schedule appearing as an exhibit to
the related Agreement. Unless otherwise provided in the related Prospectus
Supplement, such schedule will include detailed information (i) in respect of
each Whole Loan included in the related Trust Fund, including without
limitation, the address of the related Mortgaged Property and type of such
property, the Mortgage Rate and, if applicable, the applicable index, margin,
adjustment date and any rate cap information, the original and remaining term
to maturity, the original and outstanding principal balance and balloon
payment, if any, the Value and Loan-to-Value Ratio as of the date indicated
and payment and prepayment provisions, if applicable, and (ii) in respect of
each MBS included in the related Trust Fund, including without limitation,
the MBS Issuer, MBS Servicer and MBS Trustee, the pass-through or bond rate
or formula for determining such rate, the issue date and original and
remaining term to maturity, if applicable, the original and outstanding
principal amount and payment provisions, if applicable.

With respect to each Whole Loan, the Depositor will deliver or cause to
be delivered to the Trustee (or to the custodian hereinafter referred to)
certain loan documents, which unless otherwise specified in the related
Prospectus Supplement will include the original Mortgage Note endorsed,
without recourse, in blank or to the order of the Trustee, the original
Mortgage (or a certified copy thereof) with evidence of recording indicated
thereon and an assignment of the Mortgage to the Trustee in recordable form.
Notwithstanding the foregoing, a Trust Fund may include Mortgage Loans where
the original Mortgage Note is not delivered to the Trustee if the Depositor
delivers to the Trustee or the custodian a copy or a duplicate original of
the Mortgage Note, together with an affidavit certifying that the original
thereof has been lost or destroyed. With respect to such Mortgage Loans, the
Trustee (or its nominee) may not be able to enforce the Mortgage Note against
the related borrower. Unless otherwise specified in the related Prospectus
Supplement, the Asset Seller will be required to agree to repurchase, or
substitute for, each such Mortgage Loan that is subsequently in default if
the enforcement thereof or of the related Mortgage is materially adversely
affected by the absence of the original Mortgage Note. Unless otherwise
provided in the related Prospectus Supplement, the related Agreement will
require the Depositor or another party specified therein to promptly cause
each such assignment of Mortgage to be recorded in the appropriate public
office for real property records, except in the State of California or in
other states where, in the opinion of counsel acceptable to the Trustee, such
recording is not required to protect the Trustee's interest in the related
Whole Loan against the claim of any subsequent transferee or any successor to
or creditor of the Depositor, the Master Servicer, the relevant Asset Seller
or any other prior holder of the Whole Loan.

The Trustee (or a custodian) will review such Whole Loan documents
within a specified period of days after receipt thereof, and the Trustee (or
a custodian) will hold such documents in trust for the benefit of the
Certificateholders. Unless otherwise specified in the related Prospectus
Supplement, if any such document is found to be missing or defective in any
material respect, the Trustee (or such custodian) shall immediately notify
the Master Servicer and the Depositor, and the Master Servicer shall
immediately notify the relevant Asset Seller. If the Asset Seller cannot cure
the omission or defect within a specified number of days after receipt of
such notice, then unless otherwise specified in the related Prospectus
Supplement, the Asset Seller will be obligated, within a specified number of
days of receipt of such notice, to repurchase the related Whole Loan from the
Trustee at the Purchase Price or substitute for such Mortgage Loan. There can
be no assurance that an Asset Seller will fulfill this repurchase or
substitution obligation, and neither the Master Servicer nor the Depositor
will be obligated to repurchase or substitute for such Mortgage Loan if the
Asset Seller defaults on its obligation. Unless otherwise specified in the
related Prospectus Supplement, this repurchase or substitution obligation
constitutes the sole remedy available to the Certificateholders or the
Trustee for omission of, or a material defect in, a constituent document. To
the extent specified in the related Prospectus Supplement, in lieu of curing
any omission or defect in the Asset or repurchasing or substituting for such
Asset, the Asset Seller may agree to cover any losses suffered by the Trust
Fund as a result of such breach or defect.

With respect to each Government Security or MBS in certificated form,
the Depositor will deliver or cause to be delivered to the Trustee (or the
custodian) the original certificate or other definitive evidence of such
Government Security or MBS, as applicable, together with bond power or other
instruments, certifications or documents required to transfer fully such
Government Security or MBS, as applicable, to the Trustee for the benefit of
the Certificateholders. With respect to each Government Security or MBS in
uncertificated or book-entry form or held through a "clearing corporation"
within the meaning of the UCC, the Depositor and the Trustee will cause such
Government Security or MBS to be registered directly or on the books of such
clearing corporation or of a financial intermediary in the name of the
Trustee for the benefit of the Certificateholders. Unless otherwise provided
in the related Prospectus Supplement, the related Agreement will require that
either the Depositor or the Trustee promptly cause any MBS and Government
Securities in certificated form not registered in the name of the Trustee to
be re-registered, with the applicable persons, in the name of the Trustee.

REPRESENTATIONS AND WARRANTIES; REPURCHASES

Unless otherwise provided in the related Prospectus Supplement the
Depositor will, with respect to each Whole Loan, make or assign certain
representations and warranties, as of a specified date (the person making
such representations and warranties, the "Warrantying Party") covering, by
way of example, the following types of matters: (i) the accuracy of the
information set forth for such Whole Loan on the schedule of Assets appearing
as an exhibit to the related Agreement; (ii) the existence of title insurance
insuring the lien priority of the Whole Loan; (iii) the authority of the
Warrantying Party to sell the Whole Loan; (iv) the payment status of the
Whole Loan and the status of payments of taxes, assessments and other charges
affecting the related Mortgaged Property; (v) the existence of customary
provisions in the related Mortgage Note and Mortgage to permit realization
against the Mortgaged Property of the benefit of the security of the
Mortgage; and (vi) the existence of hazard and extended perils insurance
coverage on the Mortgaged Property.

Any Warrantying Party, if other than the Depositor, shall be an Asset
Seller or an affiliate thereof or such other person acceptable to the
Depositor and shall be identified in the related Prospectus Supplement.

Representations and warranties made in respect of a Whole Loan may have
been made as of a date prior to the applicable Cut-off Date. A substantial
period of time may have elapsed between such date and the date of initial
issuance of the related series of Certificates evidencing an interest in such
Whole Loan. Unless otherwise specified in the related Prospectus Supplement,
in the event of a breach of any such representation or warranty, the
Warrantying Party will be obligated to reimburse the Trust Fund for losses
caused by any such breach or either cure such breach or repurchase or replace
the affected Whole Loan as described below. Since the representations and
warranties may not address events that may occur following the date as of
which they were made, the Warrantying Party will have a reimbursement, cure,
repurchase or substitution obligation in connection with a breach of such a
representation and warranty only if the relevant event that causes such
breach occurs prior to such date. Such party would have no such obligations
if the relevant event that causes such breach occurs after such date.

Unless otherwise provided in the related Prospectus Supplement, each
Agreement will provide that the Master Servicer and/or Trustee will be
required to notify promptly the relevant Warrantying Party of any breach of
any representation or warranty made by it in respect of a Whole Loan that
materially and adversely affects the value of such Whole Loan or the
interests therein of the Certificateholders. If such Warrantying Party cannot
cure such breach within a specified period following the date on which such
party was notified of such breach, then such Warrantying Party will be
obligated to repurchase such Whole Loan from the Trustee within a specified
period from the date on which the Warrantying Party was notified of such
breach, at the Purchase Price therefor. As to any Whole Loan, unless
otherwise specified in the related Prospectus Supplement, the "Purchase
Price" is equal to the sum of the unpaid principal balance thereof, plus
unpaid accrued interest thereon at the Mortgage Rate from the date as to
which interest was last paid to the due date in the Due Period in which the
relevant purchase is to occur, plus certain servicing expenses that are
reimbursable to the Master Servicer. If so provided in the Prospectus
Supplement for a series, a Warrantying Party, rather than repurchase a Whole
Loan as to which a breach has occurred, will have the option, within a
specified period after initial issuance of such series of Certificates, to
cause the removal of such Whole Loan from the Trust Fund and substitute in
its place one or more other Whole Loans, in accordance with the standards
described in the related Prospectus Supplement. If so provided in the
Prospectus Supplement for a series, a Warrantying Party, rather than
repurchase or substitute a Whole Loan as to which a breach has occurred, will
have the option to reimburse the Trust Fund or the Certificateholders for any
losses caused by such breach. Unless otherwise specified in the related
Prospectus Supplement, this reimbursement, repurchase or substitution
obligation will constitute the sole remedy available to holders of
Certificates or the Trustee for a breach of representation by a Warrantying
Party.

Neither the Depositor (except to the extent that it is the Warrantying
Party) nor the Master Servicer will be obligated to purchase or substitute
for a Whole Loan if a Warrantying Party defaults on its obligation to do so,
and no assurance can be given that Warrantying Parties will carry out such
obligations with respect to Whole Loans.

Unless otherwise provided in the related Prospectus Supplement the
Warrantying Party will, with respect to a Trust Fund that includes Government
Securities or MBS, make or assign certain representations or warranties, as
of a specified date, with respect to such Government Securities or MBS,
covering (i) the accuracy of the information set forth therefor on the
schedule of Assets appearing as an exhibit to the related Agreement and (ii)
the authority of the Warrantying Party to sell such Assets. The related
Prospectus Supplement will describe the remedies for a breach thereof.

A Master Servicer will make certain representations and warranties
regarding its authority to enter into, and its ability to perform its
obligations under, the related Agreement. A breach of any such representation
of the Master Servicer which materially and adversely affects the interests
of the Certificateholders and which continues unremedied for thirty days
after the giving of written notice of such breach to the Master Servicer by
the Trustee or the Depositor, or to the Master Servicer, the Depositor and
the Trustee by the holders of Certificates evidencing not less than 25% of
the Voting Rights (unless otherwise specified in the related Prospectus
Supplement), will constitute an Event of Default under such Pooling and
Servicing Agreement. See "Events of Default" and "Rights Upon Event of
Default."

CERTIFICATE ACCOUNT AND OTHER COLLECTION ACCOUNTS

General

The Master Servicer and/or the Trustee will, as to each Trust Fund,
establish and maintain or cause to be established and maintained one or more
separate accounts for the collection of payments on the related Assets
(collectively, the "Certificate Account"), which must be either (i) an
account or accounts the deposits in which are insured by the Bank Insurance
Fund or the Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation ("FDIC") (to the limits established by the FDIC) and
the uninsured deposits in which are otherwise secured such that the
Certificateholders have a claim with respect to the funds in the Certificate
Account or a perfected first priority security interest against any
collateral securing such funds that is superior to the claims of any other
depositors or general creditors of the institution with which the Certificate
Account is maintained or (ii) otherwise maintained with a bank or trust
company, and in a manner, satisfactory to the Rating Agency or Agencies
rating any class of Certificates of such series. The collateral eligible to
secure amounts in the Certificate Account is limited to United States
government securities and other investment grade obligations specified in the
Agreement ("Permitted Investments"). A Certificate Account may be maintained
as an interest bearing or a non-interest bearing account and the funds held
therein may be invested pending each succeeding Distribution Date in certain
short-term Permitted Investments. Unless otherwise provided in the related
Prospectus Supplement, any interest or other income earned on funds in the
Certificate Account will be paid to a Master Servicer or its designee as
additional servicing compensation. The Certificate Account may be maintained
with an institution that is an affiliate of the Master Servicer, if
applicable, provided that such institution meets the standards imposed by the
Rating Agency or Agencies. If permitted by the Rating Agency or Agencies and
so specified in the related Prospectus Supplement, a Certificate Account may
contain funds relating to more than one series of mortgage pass-through
certificates and may contain other funds respecting payments on mortgage
loans belonging to the Master Servicer or serviced or master serviced by it
on behalf of others.

Deposits

A Master Servicer or the Trustee will deposit or cause to be deposited
in the Certificate Account for one or more Trust Funds on a daily basis,
unless otherwise provided in the related Agreement, the following payments
and collections received, or advances made, by the Master Servicer or the
Trustee or on its behalf subsequent to the Cut-off Date (other than payments
due on or before the Cut-off Date, and exclusive of any amounts representing
a Retained Interest):

(i) all payments on account of principal, including principal
prepayments, on the Assets;

(ii) all payments on account of interest on the Assets, including any
default interest collected, in each case net of any portion thereof retained
by a Master Servicer or a Sub-Servicer as its servicing compensation and net
of any Retained Interest;

(iii) all proceeds of the hazard insurance policies to be maintained
in respect of each Mortgaged Property securing a Whole Loan in the Trust Fund
(to the extent such proceeds are not applied to the restoration of the
property or released to the mortgagor in accordance with the normal servicing
procedures of a Master Servicer or the related Sub-Servicer, subject to the
terms and conditions of the related Mortgage and Mortgage Note)
(collectively, "Insurance Proceeds") and all other amounts received and
retained in connection with the liquidation of defaulted Mortgage Loans in
the Trust Fund, by foreclosure or otherwise ("Liquidation Proceeds"),
together with the net proceeds on a monthly basis with respect to any
Mortgaged Properties acquired for the benefit of Certificateholders by
foreclosure or by deed in lieu of foreclosure or otherwise;

(iv) any amounts paid under any instrument or drawn from any fund
that constitutes Credit Support for the related series of Certificates as
described under "Description of Credit Support";

(v) any advances made as described under "Description of the
Certificates--Advances in Respect of Delinquencies";

(vi) any amounts paid under any Cash Flow Agreement, as described
under "Description of the Trust Funds--Cash Flow Agreements";

(vii) all proceeds of any Asset or, with respect to a Whole Loan,
property acquired in respect thereof purchased by the Depositor, any Asset
Seller or any other specified person as described under "Assignment of
Assets; Repurchases" and "Representations and Warranties; Repurchases," all
proceeds of any defaulted Mortgage Loan purchased as described under
"Realization Upon Defaulted Whole Loans," and all proceeds of any Asset
purchased as described under "Description of the Certificates Termination"
(also, "Liquidation Proceeds");

(viii) any amounts paid by a Master Servicer to cover certain interest
shortfalls arising out of the prepayment of Whole Loans in the Trust Fund as
described under "Description of the Agreements--Retained Interest; Servicing
Compensation and Payment of Expenses";

(ix) to the extent that any such item does not constitute additional
servicing compensation to a Master Servicer, any payments on account of
modification or assumption fees, late payment charges or Prepayment Premiums
on the Mortgage Assets;

(x) all payments required to be deposited in the Certificate Account
with respect to any deductible clause in any blanket insurance policy
described under "Hazard Insurance Policies";
(xi) any amount required to be deposited by a Master Servicer or the
Trustee in connection with losses realized on investments for the benefit of
the Master Servicer or the Trustee, as the case may be, of funds held in the
Certificate Account; and

(xii) any other amounts required to be deposited in the Certificate
Account as provided in the related Agreement and described in the related
Prospectus Supplement.

Withdrawals

A Master Servicer or the Trustee may, from time to time, unless
otherwise provided in the related Agreement and described in the related
Prospectus Supplement, make withdrawals from the Certificate Account for each
Trust Fund for any of the following purposes:

(i) to make distributions to the Certificateholders on each Distribution
Date;

(ii) to reimburse a Master Servicer for unreimbursed amounts advanced
as described under "Description of the Certificates--Advances in Respect of
Delinquencies," such reimbursement to be made out of amounts received which
were identified and applied by the Master Servicer as late collections of
interest (net of related servicing fees and Retained Interest) on and
principal of the particular Whole Loans with respect to which the advances
were made or out of amounts drawn under any form of Credit Support with
respect to such Whole Loans;

(iii) to reimburse a Master Servicer for unpaid servicing fees earned
and certain unreimbursed servicing expenses incurred with respect to Whole
Loans and properties acquired in respect thereof, such reimbursement to be
made out of amounts that represent Liquidation Proceeds and Insurance
Proceeds collected on the particular Whole Loans and properties, and net
income collected on the particular properties, with respect to which such
fees were earned or such expenses were incurred or out of amounts drawn under
any form of Credit Support with respect to such Whole Loans and properties;

(iv) to reimburse a Master Servicer for any advances described in
clause (ii) above and any servicing expenses described in clause (iii) above
which, in the Master Servicer's good faith judgment, will not be recoverable
from the amounts described in clauses (ii) and (iii), respectively, such
reimbursement to be made from amounts collected on other Assets or, if and to
the extent so provided by the related Agreement and described in the related
Prospectus Supplement, just from that portion of amounts collected on other
Assets that is otherwise distributable on one or more classes of Subordinate
Certificates, if any, remain outstanding, and otherwise any outstanding class
of Certificates, of the related series;

(v) if and to the extent described in the related Prospectus Supplement,
to pay a Master Servicer interest accrued on the advances described in clause
(ii) above and the servicing expenses described in clause (iii) above while
such remain outstanding and unreimbursed;

(vi) to reimburse a Master Servicer, the Depositor, or any of their
respective directors, officers, employees and agents, as the case may be, for
certain expenses, costs and liabilities incurred thereby, as and to the
extent described under "Certain Matters Regarding a Master Servicer and the
Depositor";

(vii) if and to the extent described in the related Prospectus
Supplement, to pay (or to transfer to a separate account for purposes of
escrowing for the payment of) the Trustee's fees;

(viii) to reimburse the Trustee or any of its directors, officers,
employees and agents, as the case may be, for certain expenses, costs and
liabilities incurred thereby, as and to the extent described under "Certain
Matters Regarding the Trustee";

(ix) unless otherwise provided in the related Prospectus Supplement,
to pay a Master Servicer, as additional servicing compensation, interest and
investment income earned in respect of amounts held in the Certificate
Account;

(x) to pay the person entitled thereto any amounts deposited in the
Certificate Account that were identified and applied by the Master Servicer
as recoveries of Retained Interest;

(xi) to pay for costs reasonably incurred in connection with the
proper management and maintenance of any Mortgaged Property acquired for the
benefit of Certificateholders by foreclosure or by deed in lieu of
foreclosure or otherwise, such payments to be made out of income received on
such property;

(xii) if one or more elections have been made to treat the Trust Fund
or designated portions thereof as a REMIC, to pay any federal, state or local
taxes imposed on the Trust Fund or its assets or transactions, as and to the
extent described under "Certain Federal Income Tax Consequences--REMICS--
Prohibited Transactions Tax and Other Taxes";

(xiii) to pay for the cost of an independent appraiser or other expert
in real estate matters retained to determine a fair sale price for a
defaulted Whole Loan or a property acquired in respect thereof in connection
with the liquidation of such Whole Loan or property;

(xiv) to pay for the cost of various opinions of counsel obtained
pursuant to the related Agreement for the benefit of Certificateholders;

(xv) to pay for the costs of recording the related Agreement if such
recordation materially and beneficially affects the interests of
Certificateholders, provided that such payment shall not constitute a waiver
with respect to the obligation of the Warrantying Party to remedy any breach
of representation or warranty under the Agreement;

(xvi) to pay the person entitled thereto any amounts deposited in the
Certificate Account in error, including amounts received on any Asset after
its removal from the Trust Fund whether by reason of purchase or substitution
as contemplated by "Assignment of Assets; Repurchase" and "Representations
and Warranties; Repurchases" or otherwise;

(xvii) to make any other withdrawals permitted by the related Agreement
and described in the related Prospectus Supplement; and

(xviii) to clear and terminate the Certificate Account at the
termination of the Trust Fund.

Other Collection Accounts

Notwithstanding the foregoing, if so specified in the related Prospectus
Supplement, the Agreement for any series of Certificates may provide for the
establishment and maintenance of a separate collection account into which the
Master Servicer or any related Sub-Servicer will deposit on a daily basis the
amounts described under "--Deposits" above for one or more series of
Certificates. Any amounts on deposit in any such collection account will be
withdrawn therefrom and deposited into the appropriate Certificate Account by
a time specified in the related Prospectus Supplement. To the extent
specified in the related Prospectus Supplement, any amounts which could be
withdrawn from the Certificate Account as described under "--Withdrawals"
above, may also be withdrawn from any such collection account. The
Prospectus Supplement will set forth any restrictions with respect to any
such collection account, including investment restrictions and any
restrictions with respect to financial institutions with which any such
collection account may be maintained.

COLLECTION AND OTHER SERVICING PROCEDURES

The Master Servicer, directly or through Sub-Servicers, is required to
make reasonable efforts to collect all scheduled payments under the Whole
Loans and will follow or cause to be followed such collection procedures as
it would follow with respect to mortgage loans that are comparable to the
Whole Loans and held for its own account, provided such procedures are
consistent with (i) the terms of the related Agreement and any related hazard
insurance policy or instrument of Credit Support included in the related
Trust Fund described herein or under "Description of Credit Support,"
(ii) applicable law and (iii) the general servicing standard specified in the
related Prospectus Supplement or, if no such standard is so specified, its
normal servicing practices (in either case, the "Servicing Standard"). In
connection therewith, the Master Servicer will be permitted in its discretion
to waive any late payment charge or penalty interest in respect of a late
Whole Loan payment.

Each Master Servicer will also be required to perform other customary
functions of a servicer of comparable loans, including maintaining hazard
insurance policies as described herein and in any related Prospectus
Supplement, and filing and settling claims thereunder; maintaining escrow or
impoundment accounts of mortgagors for payment of taxes, insurance and other
items required to be paid by any mortgagor pursuant to the Whole Loan;
processing assumptions or substitutions in those cases where the Master
Servicer has determined not to enforce any applicable due-on-sale clause;
attempting to cure delinquencies; supervising foreclosures; inspecting and
managing Mortgaged Properties under certain circumstances; and maintaining
accounting records relating to the Whole Loans. Unless otherwise specified in
the related Prospectus Supplement, the Master Servicer will be responsible
for filing and settling claims in respect of particular Whole Loans under any
applicable instrument of Credit Support. See "Description of Credit Support."

The Master Servicer may agree to modify, waive or amend any term of any
Whole Loan in a manner consistent with the Servicing Standard so long as the
modification, waiver or amendment will not (i) affect the amount or timing of
any scheduled payments of principal or interest on the Whole Loan or (ii) in
its judgment, materially impair the security for the Whole Loan or reduce the
likelihood of timely payment of amounts due thereon. The Master Servicer also
may agree to any modification, waiver or amendment that would so affect or
impair the payments on, or the security for, a Whole Loan if, unless
otherwise provided in the related Prospectus Supplement, (i) in its judgment,
a material default on the Whole Loan has occurred or a payment default is
imminent and (ii) in its judgment, such modification, waiver or amendment is
reasonably likely to produce a greater recovery with respect to the Whole
Loan on a present value basis than would liquidation. The Master Servicer is
required to notify the Trustee in the event of any modification, waiver or
amendment of any Whole Loan.

SUB-SERVICERS

A Master Servicer may delegate its servicing obligations in respect of
the Whole Loans to third-party servicers (each, a "Sub-Servicer"), but such
Master Servicer will remain obligated under the related Agreement. Each
sub-servicing agreement between a Master Servicer and a Sub-Servicer (a
"Sub-Servicing Agreement") must be consistent with the terms of the related
Agreement and must provide that, if for any reason the Master Servicer for
the related series of Certificates is no longer acting in such capacity, the
Trustee or any successor Master Servicer may assume the Master Servicer's
rights and obligations under such Sub-Servicing Agreement.

Unless otherwise provided in the related Prospectus Supplement, the
Master Servicer will be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to the related Agreement is sufficient to pay such fees. However, a
Sub- Servicer may be entitled to a Retained Interest in certain Whole Loans.
Each Sub-Servicer will be reimbursed by the Master Servicer for certain
expenditures which it makes, generally to the same extent the Master Servicer
would be reimbursed under an Agreement. See "Retained Interest, Servicing
Compensation and Payment of Expenses."

REALIZATION UPON DEFAULTED WHOLE LOANS

A mortgagor's failure to make required payments may reflect inadequate
income or the diversion of that income from the service of payments due under
the Mortgage Loan, and may call into question such mortgagor's ability to
make timely payment of taxes and to pay for necessary maintenance of the
related Mortgaged Property. Unless otherwise provided in the related
Prospectus Supplement, the Master Servicer is required to monitor any Whole
Loan which is in default, contact the mortgagor concerning the default,
evaluate whether the causes of the default can be cured over a reasonable
period without significant impairment of the value of the Mortgaged Property,
initiate corrective action in cooperation with the mortgagor if cure is
likely, inspect the Mortgaged Property and take such other actions as are
consistent with the Servicing Standard. A significant period of time may
elapse before the Master Servicer is able to assess the success of such
corrective action or the need for additional initiatives.

The time within which the Master Servicer makes the initial
determination of appropriate action, evaluates the success of corrective
action, develops additional initiatives, institutes foreclosure proceedings
and actually forecloses (or takes a deed to a Mortgaged Property in lieu of
foreclosure) on behalf of the Certificateholders, may vary considerably
depending on the particular Whole Loan, the Mortgaged Property, the
mortgagor, the presence of an acceptable party to assume the Whole Loan and
the laws of the jurisdiction in which the Mortgaged Property is located.
Under federal bankruptcy law, the Master Servicer in certain cases may not be
permitted to accelerate a Whole Loan or to foreclose on a Mortgaged Property
for a considerable period of time. See "Certain Legal Aspects of Mortgage
Loans."

Any Agreement relating to a Trust Fund that includes Whole Loans may
grant to the Master Servicer and/or the holder or holders of certain classes
of Certificates a right of first refusal to purchase from the Trust Fund at a
predetermined purchase price any such Whole Loan as to which a specified
number of scheduled payments thereunder are delinquent. Any such right
granted to the holder of an Offered Certificate will be described in the
related Prospectus Supplement. The related Prospectus Supplement will also
describe any such right granted to any person if the predetermined purchase
price is less than the Purchase Price described under "Representations and
Warranties; Repurchases."

If so specified in the related Prospectus Supplement, the Master
Servicer may offer to sell any defaulted Whole Loan described in the
preceding paragraph and not otherwise purchased by any person having a right
of first refusal with respect thereto, if and when the Master Servicer
determines, consistent with the Servicing Standard, that such a sale would
produce a greater recovery on a present value basis than would liquidation
through foreclosure or similar proceeding. The related Agreement will provide
that any such offering be made in a commercially reasonable manner for a
specified period and that the Master Servicer accept the highest cash bid
received from any person (including itself, an affiliate of the Master
Servicer or any Certificateholder) that constitutes a fair price for such
defaulted Whole Loan. In the absence of any bid determined in accordance with
the related Agreement to be fair, the Master Servicer shall proceed with
respect to such defaulted Mortgage Loan as described below. Any bid in an
amount at least equal to the Purchase Price described under "Representations
and Warranties; Repurchases" will in all cases be deemed fair.

Unless otherwise provided in the related Prospectus Supplement, if
title to any Mortgaged Property is acquired by a Trust Fund as to which a
REMIC election has been made, the Master Servicer, on behalf of the Trust
Fund, will be required to sell the Mortgaged Property by the close of the
third calendar year following the year of acquisition, unless (i) the
Internal Revenue Service grants an extension of time to sell such property or
(ii) the Trustee receives an opinion of independent counsel to the effect
that the holding of the property by the Trust Fund beyond the close of the
third calendar year following the year after its acquisition will not result
in the imposition of a tax on the Trust Fund or cause the Trust Fund to fail
to qualify as a REMIC under the Code at any time that any Certificate is
outstanding. Subject to the foregoing, the Master Servicer will be required
to (i) solicit bids for any Mortgaged Property so acquired in such a manner
as will be reasonably likely to realize a fair price for such property and
(ii) accept the first (and, if multiple bids are contemporaneously received,
the highest) cash bid received from any person that constitutes a fair price.

The limitations imposed by the related Agreement and the REMIC
provisions of the Code (if a REMIC election has been made with respect to the
related Trust Fund) on the ownership and management of any Mortgaged Property
acquired on behalf of the Trust Fund may result in the recovery of an amount
less than the amount that would otherwise be recovered. See "Certain Legal
Aspects of Mortgage Loans--Foreclosure."

If recovery on a defaulted Whole Loan under any related instrument of
Credit Support is not available, the Master Servicer nevertheless will be
obligated to follow or cause to be followed such normal practices and
procedures as it deems necessary or advisable to realize upon the defaulted
Whole Loan. If the proceeds of any liquidation of the property securing the
defaulted Whole Loan are less than the outstanding principal balance of the
defaulted Whole Loan plus interest accrued thereon at the Mortgage Rate plus
the aggregate amount of expenses incurred by the Master Servicer in
connection with such proceedings and which are reimbursable under the
Agreement, the Trust Fund will realize a loss in the amount of such
difference. The Master Servicer will be entitled to withdraw or cause to be
withdrawn from the Certificate Account out of the Liquidation Proceeds
recovered on any defaulted Whole Loan, prior to the distribution of such
Liquidation Proceeds to Certificateholders, amounts representing its normal
servicing compensation on the Whole Loan, unreimbursed servicing expenses
incurred with respect to the Whole Loan and any unreimbursed advances of
delinquent payments made with respect to the Whole Loan.

If any property securing a defaulted Whole Loan is damaged and proceeds,
if any, from the related hazard insurance policy are insufficient to restore
the damaged property to a condition sufficient to permit recovery under the
related instrument of Credit Support, if any, the Master Servicer is not
required to expend its own funds to restore the damaged property unless it
determines (i) that such restoration will increase the proceeds to
Certificateholders on liquidation of the Whole Loan after reimbursement of
the Master Servicer for its expenses and (ii) that such expenses will be
recoverable by it from related Insurance Proceeds or Liquidation Proceeds.

As servicer of the Whole Loans, a Master Servicer, on behalf of itself,
the Trustee and the Certificateholders, will present claims to the obligor
under each instrument of Credit Support, and will take such reasonable steps
as are necessary to receive payment or to permit recovery thereunder with
respect to defaulted Whole Loans.

If a Master Servicer or its designee recovers payments under any
instrument of Credit Support with respect to any defaulted Whole Loan, the
Master Servicer will be entitled to withdraw or cause to be withdrawn from
the Certificate Account out of such proceeds, prior to distribution thereof
to Certificateholders, amounts representing its normal servicing compensation
on such Whole Loan, unreimbursed servicing expenses incurred with respect to
the Whole Loan and any unreimbursed advances of delinquent payments made with
respect to the Whole Loan. See "Hazard Insurance Policies" and "Description
of Credit Support."

HAZARD INSURANCE POLICIES

Unless otherwise specified in the related Prospectus Supplement, each
Agreement for a Trust Fund that includes Whole Loans will require the Master
Servicer to cause the mortgagor on each Whole Loan to maintain a hazard
insurance policy providing for such coverage as is required under the related
Mortgage or, if any Mortgage permits the holder thereof to dictate to the
mortgagor the insurance coverage to be maintained on the related Mortgaged
Property, then such coverage as is consistent with the Servicing Standard.
Unless otherwise specified in the related Prospectus Supplement, such
coverage will be in general in an amount equal to the lesser of the principal
balance owing on such Whole Loan and the amount necessary to fully compensate
for any damage or loss to the improvements on the Mortgaged Property on a
replacement cost basis, but in either case not less than the amount necessary
to avoid the application of any co-insurance clause contained in the hazard
insurance policy. The ability of the Master Servicer to assure that hazard
insurance proceeds are appropriately applied may be dependent upon its being
named as an additional insured under any hazard insurance policy and under
any other insurance policy referred to below, or upon the extent to which
information in this regard is furnished by mortgagors. All amounts collected
by the Master Servicer under any such policy (except for amounts to be
applied to the restoration or repair of the Mortgaged Property or released to
the mortgagor in accordance with the Master Servicer's normal servicing
procedures, subject to the terms and conditions of the related Mortgage and
Mortgage Note) will be deposited in the Certificate Account. The Agreement
will provide that the Master Servicer may satisfy its obligation to cause
each mortgagor to maintain such a hazard insurance policy by the Master
Servicer's maintaining a blanket policy insuring against hazard losses on the
Whole Loans. If such blanket policy contains a deductible clause, the Master
Servicer will be required to deposit in the Certificate Account all sums that
would have been deposited therein but for such clause.

In general, the standard form of fire and extended coverage policy
covers physical damage to or destruction of the improvements of the property
by fire, lightning, explosion, smoke, windstorm and hail, and riot, strike
and civil commotion, subject to the conditions and exclusions specified in
each policy. Although the policies relating to the Whole Loans will be
underwritten by different insurers under different state laws in accordance
with different applicable state forms, and therefore will not contain
identical terms and conditions, the basic terms thereof are dictated by
respective state laws, and most such policies typically do not cover any
physical damage resulting from war, revolution, governmental actions, floods
and other water-related causes, earth movement (including earthquakes,
landslides and mudflows), wet or dry rot, vermin, domestic animals and
certain other kinds of uninsured risks.

The hazard insurance policies covering the Mortgaged Properties securing
the Whole Loans will typically contain a co-insurance clause that in effect
requires the insured at all times to carry insurance of a specified
percentage (generally 80% to 90%) of the full replacement value of the
improvements on the property in order to recover the full amount of any
partial loss. If the insured's coverage falls below this specified
percentage, such clause generally provides that the insurer's liability in
the event of partial loss does not exceed the lesser of (i) the replacement
cost of the improvements less physical depreciation and (ii) such proportion
of the loss as the amount of insurance carried bears to the specified
percentage of the full replacement cost of such improvements.

Each Agreement for a Trust Fund that includes Whole Loans will require
the Master Servicer to cause the mortgagor on each Whole Loan to maintain all
such other insurance coverage with respect to the related Mortgaged Property
as is consistent with the terms of the related Mortgage and the Servicing
Standard, which insurance may typically include flood insurance (if the
related Mortgaged Property was located at the time of origination in a
federally designated flood area).

Any cost incurred by the Master Servicer in maintaining any such
insurance policy will be added to the amount owing under the Mortgage Loan
where the terms of the Mortgage Loan so permit; provided, however, that the
addition of such cost will not be taken into account for purposes of
calculating the distribution to be made to Certificateholders. Such costs may
be recovered by the Master Servicer or Sub-Servicer, as the case may be, from
the Collection Account, with interest thereon, as provided by the Agreement.

Under the terms of the Whole Loans, mortgagors will generally be
required to present claims to insurers under hazard insurance policies
maintained on the related Mortgaged Properties. The Master Servicer, on
behalf of the Trustee and Certificateholders, is obligated to present or
cause to be presented claims under any blanket insurance policy insuring
against hazard losses on Mortgaged Properties securing the Whole Loans.
However, the ability of the Master Servicer to present or cause to be
presented such claims is dependent upon the extent to which information in
this regard is furnished to the Master Servicer by mortgagors.

FIDELITY BONDS AND ERRORS AND OMISSIONS INSURANCE

Unless otherwise specified in the related Prospectus Supplement, each
Agreement will require that the Master Servicer obtain and maintain in effect
a fidelity bond or similar form of insurance coverage (which may provide
blanket coverage) or any combination thereof insuring against loss occasioned
by fraud, theft or other intentional misconduct of the officers, employees
and agents of the Master Servicer. The related Agreement will allow the
Master Servicer to self-insure against loss occasioned by the errors and
omissions of the officers, employees and agents of the Master Servicer so
long as certain criteria set forth in the Agreement are met.

DUE-ON-SALE PROVISIONS

Certain of the Whole Loans may contain clauses requiring the consent of
the mortgagee to any sale or other transfer of the related Mortgaged
Property, or due-on-sale clauses entitling the mortgagee to accelerate
payment of the Whole Loan upon any sale, transfer or conveyance of the
related Mortgaged Property. Unless otherwise provided in the related
Prospectus Supplement, the Master Servicer will generally enforce any due-on-
sale clause to the extent it has knowledge of the conveyance or proposed
conveyance of the underlying Mortgaged Property and it is entitled to do so
under applicable law; provided, however, that the Master Servicer will not
take any action in relation to the enforcement of any due-on-sale provision
which would adversely affect or jeopardize coverage under any applicable
insurance policy. Unless otherwise specified in the related Prospectus
Supplement, any fee collected by or on behalf of the Master Servicer for
entering into an assumption agreement will be retained by or on behalf of the
Master Servicer as additional servicing compensation. See "Certain Legal
Aspects of Mortgage Loans Due-on-Sale and Due-on-Encumbrance."

RETAINED INTEREST; SERVICING COMPENSATION AND PAYMENT OF EXPENSES

The Prospectus Supplement for a series of Certificates will specify
whether there will be any Retained Interest in the Assets, and, if so, the
initial owner thereof. If so, the Retained Interest will be established on a
loan-by-loan basis and will be specified on an exhibit to the related
Agreement. A "Retained Interest" in an Asset represents a specified portion
of the interest payable thereon. The Retained Interest will be deducted from
mortgagor payments as received and will not be part of the related Trust
Fund.

Unless otherwise specified in the related Prospectus Supplement, the
Master Servicer's and a Sub-Servicer's primary servicing compensation with
respect to a series of Certificates will come from the periodic payment to it
of a portion of the interest payment on each Asset. Since any Retained
Interest and a Master Servicer's primary compensation are percentages of the
principal balance of each Asset, such amounts will decrease in accordance
with the amortization of the Assets. The Prospectus Supplement with respect
to a series of Certificates evidencing interests in a Trust Fund that
includes Whole Loans may provide that, as additional compensation, the Master
Servicer or the Sub-Servicers may retain all or a portion of assumption fees,
modification fees, late payment charges or Prepayment Premiums collected from
mortgagors and any interest or other income which may be earned on funds held
in the Certificate Account or any account established by a Sub-Servicer
pursuant to the Agreement.

The Master Servicer may, to the extent provided in the related
Prospectus Supplement, pay from its servicing compensation certain expenses
incurred in connection with its servicing and managing of the Assets,
including, without limitation, payment of the fees and disbursements of the
Trustee and independent accountants, payment of expenses incurred in
connection with distributions and reports to Certificateholders, and payment
of any other expenses described in the related Prospectus Supplement. Certain
other expenses, including certain expenses relating to defaults and
liquidations on the Whole Loans and, to the extent so provided in the related
Prospectus Supplement, interest thereon at the rate specified therein may be
borne by the Trust Fund.

If and to the extent provided in the related Prospectus Supplement, the
Master Servicer may be required to apply a portion of the servicing
compensation otherwise payable to it in respect of any Due Period to certain
interest shortfalls resulting from the voluntary prepayment of any Whole
Loans in the related Trust Fund during such period prior to their respective
due dates therein.

EVIDENCE AS TO COMPLIANCE

Each Agreement relating to Assets which include Whole Loans will provide
that on or before a specified date in each year, beginning with the first
such date at least six months after the related Cut-off Date, a firm of
independent public accountants will furnish a statement to the Trustee to the
effect that, on the basis of the examination by such firm conducted
substantially in compliance with either the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
the Federal Home Loan Mortgage Corporation ("FHLMC"), the servicing by or on
behalf of the Master Servicer of mortgage loans under pooling and servicing
agreements substantially similar to each other (including the related
Agreement) was conducted in compliance with the terms of such agreements
except for any significant exceptions or errors in records that, in the
opinion of the firm, either the Audit Program for Mortgages serviced for
FHLMC, or paragraph 4 of the Uniform Single Attestation Program for Mortgage
Bankers, requires it to report. In rendering its statement such firm may
rely, as to matters relating to the direct servicing of mortgage loans by
Sub-Servicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for FHLMC
(rendered within one year of such statement) of firms of independent public
accountants with respect to the related Sub-Servicer.

Each such Agreement will also provide for delivery to the Trustee, on or
before a specified date in each year, of an annual statement signed by two
officers of the Master Servicer to the effect that the Master Servicer has
fulfilled its obligations under the Agreement throughout the preceding
calendar year or other specified twelve-month period.

Unless otherwise provided in the related Prospectus Supplement, copies
of such annual accountants' statement and such statements of officers will be
obtainable by Certificateholders without charge upon written request to the
Master Servicer at the address set forth in the related Prospectus
Supplement.

CERTAIN MATTERS REGARDING A MASTER SERVICER AND THE DEPOSITOR

The Master Servicer, if any, or a servicer for substantially all the
Whole Loans under each Agreement will be named in the related Prospectus
Supplement. The entity serving as Master Servicer (or as such servicer) may
be an affiliate of the Depositor and may have other normal business
relationships with the Depositor or the Depositor's affiliates. Reference
herein to the Master Servicer shall be deemed to be to the servicer of
substantially all of the Whole Loans, if applicable.

Unless otherwise specified in the related Prospectus Supplement, the
related Agreement will provide that the Master Servicer may resign from its
obligations and duties thereunder only upon a determination that its duties
under the Agreement are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities
carried on by it, the other activities of the Master Servicer so causing such
a conflict being of a type and nature carried on by the Master Servicer at
the date of the Agreement. No such resignation will become effective until
the Trustee or a successor servicer has assumed the Master Servicer's
obligations and duties under the Agreement.

Unless otherwise specified in the related Prospectus Supplement, each
Agreement will further provide that neither any Master Servicer, the
Depositor nor any director, officer, employee, or agent of a Master Servicer
or the Depositor will be under any liability to the related Trust Fund or
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to the Agreement; provided, however, that
neither a Master Servicer, the Depositor nor any such person will be
protected against any breach of a representation, warranty or covenant made
in such Agreement, or against any liability specifically imposed thereby, or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of obligations
or duties thereunder or by reason of reckless disregard of obligations and
duties thereunder. Unless otherwise specified in the related Prospectus
Supplement, each Agreement will further provide that any Master Servicer, the
Depositor and any director, officer, employee or agent of a Master Servicer
or the Depositor will be entitled to indemnification by the related Trust
Fund and will be held harmless against any loss, liability or expense
incurred in connection with any legal action relating to the Agreement or the
Certificates; provided, however, that such indemnification will not extend to
any loss, liability or expense (i) specifically imposed by such Agreement or
otherwise incidental to the performance of obligations and duties thereunder,
including, in the case of a Master Servicer, the prosecution of an
enforcement action in respect of any specific Whole Loan or Whole Loans
(except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to such Agreement); (ii) incurred in connection with
any breach of a representation, warranty or covenant made in such Agreement;
(iii) incurred by reason of misfeasance, bad faith or gross negligence in the
performance of obligations or duties thereunder, or by reason of reckless
disregard of such obligations or duties; (iv) incurred in connection with any
violation of any state or federal securities law; or (v) imposed by any
taxing authority if such loss, liability or expense is not specifically
reimbursable pursuant to the terms of the related Agreement. In addition,
each Agreement will provide that neither any Master Servicer nor the
Depositor will be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its respective responsibilities under
the Agreement and which in its opinion may involve it in any expense or
liability. Any such Master Servicer or the Depositor may, however, in its
discretion undertake any such action which it may deem necessary or desirable
with respect to the Agreement and the rights and duties of the parties
thereto and the interests of the Certificateholders thereunder. In such
event, the legal expenses and costs of such action and any liability
resulting therefrom will be expenses, costs and liabilities of the
Certificateholders, and the Master Servicer or the Depositor, as the case may
be, will be entitled to be reimbursed therefor and to charge the Certificate
Account.

Any person into which the Master Servicer or the Depositor may be merged
or consolidated, or any person resulting from any merger or consolidation to
which the Master Servicer or the Depositor is a party, or any person
succeeding to the business of the Master Servicer or the Depositor, will be
the successor of the Master Servicer or the Depositor, as the case may be,
under the related Agreement.

EVENTS OF DEFAULT

Unless otherwise provided in the related Prospectus Supplement for a
Trust Fund that includes Whole Loans, Events of Default under the related
Agreement will include (i) any failure by the Master Servicer to distribute
or cause to be distributed to Certificateholders, or to remit to the Trustee
for distribution to Certificateholders, any required payment; (ii) any
failure by the Master Servicer duly to observe or perform in any material
respect any of its other covenants or obligations under the Agreement which
continues unremedied for thirty days after written notice of such failure has
been given to the Master Servicer by the Trustee or the Depositor, or to the
Master Servicer, the Depositor and the Trustee by the holders of Certificates
evidencing not less than 25% of the Voting Rights; (iii) any breach of a
representation or warranty made by the Master Servicer under the Agreement
which materially and adversely affects the interests of Certificateholders
and which continues unremedied for thirty days after written notice of such
breach has been given to the Master Servicer by the Trustee or the Depositor,
or to the Master Servicer, the Depositor and the Trustee by the holders of
Certificates evidencing not less than 25% of the Voting Rights; and
(iv) certain events of insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings and certain actions by or on
behalf of the Master Servicer indicating its insolvency or inability to pay
its obligations. Material variations to the foregoing Events of Default
(other than to shorten cure periods or eliminate notice requirements) will be
specified in the related Prospectus Supplement. Unless otherwise specified in
the related Prospectus Supplement, the Trustee shall, not later than the
later of 60 days after the occurrence of any event which constitutes or, with
notice or lapse of time or both, would constitute an Event of Default and
five days after certain officers of the Trustee become aware of the
occurrence of such an event, transmit by mail to the Depositor and all
Certificateholders of the applicable series notice of such occurrence, unless
such default shall have been cured or waived.

RIGHTS UPON EVENT OF DEFAULT

So long as an Event of Default under an Agreement remains unremedied,
the Depositor or the Trustee may, and at the direction of holders of
Certificates evidencing not less than 51% of the Voting Rights, the Trustee
shall, terminate all of the rights and obligations of the Master Servicer
under the Agreement and in and to the Mortgage Loans (other than as a
Certificateholder or as the owner of any Retained Interest), whereupon the
Trustee will succeed to all of the responsibilities, duties and liabilities
of the Master Servicer under the Agreement (except that if the Trustee is
prohibited by law from obligating itself to make advances regarding
delinquent mortgage loans, or if the related Prospectus Supplement so
specifies, then the Trustee will not be obligated to make such advances) and
will be entitled to similar compensation arrangements. Unless otherwise
specified in the related Prospectus Supplement, in the event that the Trustee
is unwilling or unable so to act, it may or, at the written request of the
holders of Certificates entitled to at least 51% of the Voting Rights, it
shall appoint, or petition a court of competent jurisdiction for the
appointment of, a loan servicing institution acceptable to the Rating Agency
with a net worth at the time of such appointment of at least $15,000,000 to
act as successor to the Master Servicer under the Agreement. Pending such
appointment, the Trustee is obligated to act in such capacity. The Trustee
and any such successor may agree upon the servicing compensation to be paid,
which in no event may be greater than the compensation payable to the Master
Servicer under the Agreement.

Unless otherwise described in the related Prospectus Supplement, the
holders of Certificates representing at least 66 2/3% of the Voting Rights
allocated to the respective classes of Certificates affected by any Event of
Default will be entitled to waive such Event of Default; provided, however,
that an Event of Default involving a failure to distribute a required payment
to Certificateholders described in clause (i) under "Events of Default" may
be waived only by all of the Certificateholders. Upon any such waiver of an
Event of Default, such Event of Default shall cease to exist and shall be
deemed to have been remedied for every purpose under the Agreement.

No Certificateholder will have the right under any Agreement to
institute any proceeding with respect thereto unless such holder previously
has given to the Trustee written notice of default and unless the holders of
Certificates evidencing not less than 25% of the Voting Rights have made
written request upon the Trustee to institute such proceeding in its own name
as Trustee thereunder and have offered to the Trustee reasonable indemnity,
and the Trustee for sixty days has neglected or refused to institute any such
proceeding. The Trustee, however, is under no obligation to exercise any of
the trusts or powers vested in it by any Agreement or to make any
investigation of matters arising thereunder or to institute, conduct or
defend any litigation thereunder or in relation thereto at the request, order
or direction of any of the holders of Certificates covered by such Agreement,
unless such Certificateholders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby.

AMENDMENT

Each Agreement may be amended by the parties thereto, without the
consent of any of the holders of Certificates covered by the Agreement,
(i) to cure any ambiguity, (ii) to correct, modify or supplement any
provision therein which may be inconsistent with any other provision therein,
(iii) to make any other provisions with respect to matters or questions
arising under the Agreement which are not inconsistent with the provisions
thereof, or (iv) to comply with any requirements imposed by the Code;
provided that such amendment (other than an amendment for the purpose
specified in clause (iv) above) will not (as evidenced by an opinion of
counsel to such effect) adversely affect in any material respect the
interests of any holder of Certificates covered by the Agreement. Unless
otherwise specified in the related Prospectus Supplement, each Agreement may
also be amended by the Depositor, the Master Servicer, if any, and the
Trustee, with the consent of the holders of Certificates affected thereby
evidencing not less than 51% of the Voting Rights, for any purpose; provided,
however, that unless otherwise specified in the related Prospectus
Supplement, no such amendment may (i) reduce in any manner the amount of or
delay the timing of, payments received or advanced on Mortgage Loans which
are required to be distributed on any Certificate without the consent of the
holder of such Certificate, (ii) adversely affect in any material respect the
interests of the holders of any class of Certificates in a manner other than
as described in (i), without the consent of the holders of all Certificates
of such class or (iii) modify the provisions of such Agreement described in
this paragraph without the consent of the holders of all Certificates covered
by such Agreement then outstanding. However, with respect to any series of
Certificates as to which a REMIC election is to be made, the Trustee will not
consent to any amendment of the Agreement unless it shall first have received
an opinion of counsel to the effect that such amendment will not result in
the imposition of a tax on the related Trust Fund or cause the related Trust
Fund to fail to qualify as a REMIC at any time that the related Certificates
are outstanding.

THE TRUSTEE

The Trustee under each Agreement will be named in the related Prospectus
Supplement. The commercial bank, national banking association, banking
corporation or trust company serving as Trustee may have a banking
relationship with the Depositor and its affiliates and with any Master
Servicer and its affiliates.

DUTIES OF THE TRUSTEE

The Trustee will make no representations as to the validity or
sufficiency of any Agreement, the Certificates or any Asset or related
document and is not accountable for the use or application by or on behalf of
any Master Servicer of any funds paid to the Master Servicer or its designee
in respect of the Certificates or the Assets, or deposited into or withdrawn
from the Certificate Account or any other account by or on behalf of the
Master Servicer. If no Event of Default has occurred and is continuing, the
Trustee is required to perform only those duties specifically required under
the related Agreement. However, upon receipt of the various certificates,
reports or other instruments required to be furnished to it, the Trustee is
required to examine such documents and to determine whether they conform to
the requirements of the Agreement.

CERTAIN MATTERS REGARDING THE TRUSTEE

Unless otherwise specified in the related Prospectus Supplement, the
Trustee and any director, officer, employee or agent of the Trustee shall be
entitled to indemnification out of the Certificate Account for any loss,
liability or expense (including costs and expenses of litigation, and of
investigation, counsel fees, damages, judgments and amounts paid in
settlement) incurred in connection with the Trustee's (i) enforcing its
rights and remedies and protecting the interests, and enforcing the rights
and remedies, of the Certificateholders during the continuance of an Event of
Default, (ii) defending or prosecuting any legal action in respect of the
related Agreement or series of Certificates, (iii) being the mortgagee of
record with respect to the Mortgage Loans in a Trust Fund and the owner of
record with respect to any Mortgaged Property acquired in respect thereof for
the benefit of Certificateholders, or (iv) acting or refraining from acting
in good faith at the direction of the holders of the related series of
Certificates entitled to not less than 25% (or such higher percentage as is
specified in the related Agreement with respect to any particular matter) of
the Voting Rights for such series; provided, however, that such
indemnification will not extend to any loss, liability or expense that
constitutes a specific liability of the Trustee pursuant to the related
Agreement, or to any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence on the part of the Trustee in the
performance of its obligations and duties thereunder, or by reason of its
reckless disregard of such obligations or duties, or as may arise from a
breach of any representation, warranty or covenant of the Trustee made
therein.

RESIGNATION AND REMOVAL OF THE TRUSTEE

The Trustee may at any time resign from its obligations and duties under
an Agreement by giving written notice thereof to the Depositor, the Master
Servicer, if any, and all Certificateholders. Upon receiving such notice of
resignation, the Depositor is required promptly to appoint a successor
trustee acceptable to the Master Servicer, if any. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor trustee.

If at any time the Trustee shall cease to be eligible to continue as
such under the related Agreement, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Depositor may remove the Trustee and appoint a successor trustee
acceptable to the Master Servicer, if any. Holders of the Certificates of any
series entitled to at least 51% of the Voting Rights for such series may at
any time remove the Trustee without cause and appoint a successor trustee.

Any resignation or removal of the Trustee and appointment of a successor
trustee shall not become effective until acceptance of appointment by the
successor trustee.

DESCRIPTION OF CREDIT SUPPORT

GENERAL

For any series of Certificates, Credit Support may be provided with
respect to one or more classes thereof or the related Assets. Credit Support
may be in the form of the subordination of one or more classes of
Certificates, letters of credit, insurance policies, guarantees, the
establishment of one or more reserve funds or another method of Credit
Support described in the related Prospectus Supplement, or any combination of
the foregoing. If so provided in the related Prospectus Supplement, any form
of Credit Support may be structured so as to be drawn upon by more than one
series to the extent described therein.

Unless otherwise provided in the related Prospectus Supplement for a
series of Certificates, the Credit Support will not provide protection
against all risks of loss and will not guarantee repayment of the entire
Certificate Balance of the Certificates and interest thereon. If losses or
shortfalls occur that exceed the amount covered by Credit Support or that are
not covered by Credit Support, Certificateholders will bear their allocable
share of deficiencies. Moreover, if a form of Credit Support covers more than
one series of Certificates (each, a "Covered Trust"), holders of Certificates
evidencing interests in any of such Covered Trusts will be subject to the
risk that such Credit Support will be exhausted by the claims of other
Covered Trusts prior to such Covered Trust receiving any of its intended
share of such coverage.

If Credit Support is provided with respect to one or more classes of
Certificates of a series, or the related Assets, the related Prospectus
Supplement will include a description of (a) the nature and amount of
coverage under such Credit Support, (b) any conditions to payment thereunder
not otherwise described herein, (c) the conditions (if any) under which the
amount of coverage under such Credit Support may be reduced and under which
such Credit Support may be terminated or replaced and (d) the material
provisions relating to such Credit Support. Additionally, the related
Prospectus Supplement will set forth certain information with respect to the
obligor under any instrument of Credit Support, including (i) a brief
description of its principal business activities, (ii) its principal place of
business, place of incorporation and the jurisdiction under which it is
chartered or licensed to do business, (iii) if applicable, the identity of
regulatory agencies that exercise primary jurisdiction over the conduct of
its business and (iv) its total assets, and its stockholders' or
policyholders' surplus, if applicable, as of the date specified in the
Prospectus Supplement. See "Risk Factors--Credit Support Limitations."

SUBORDINATE CERTIFICATES

If so specified in the related Prospectus Supplement, one or more
classes of Certificates of a series may be Subordinate Certificates. To the
extent specified in the related Prospectus Supplement, the rights of the
holders of Subordinate Certificates to receive distributions of principal and
interest from the Certificate Account on any Distribution Date will be
subordinated to such rights of the holders of Senior Certificates. If so
provided in the related Prospectus Supplement, the subordination of a class
may apply only in the event of (or may be limited to) certain types of losses
or shortfalls. The related Prospectus Supplement will set forth information
concerning the amount of subordination of a class or classes of Subordinate
Certificates in a series, the circumstances in which such subordination will
be applicable and the manner, if any, in which the amount of subordination
will be effected.

CROSS-SUPPORT PROVISIONS

If the Assets for a series are divided into separate groups, each
supporting a separate class or classes of Certificates of a series, credit
support may be provided by cross-support provisions requiring that
distributions be made on Senior Certificates evidencing interests in one
group of Mortgage Assets prior to distributions on Subordinate Certificates
evidencing interests in a different group of Mortgage Assets within the Trust
Fund. The Prospectus Supplement for a series that includes a cross-support
provision will describe the manner and conditions for applying such
provisions.

INSURANCE OR GUARANTEES WITH RESPECT TO THE WHOLE LOANS

If so provided in the Prospectus Supplement for a series of
Certificates, the Whole Loans in the related Trust Fund will be covered for
various default risks by insurance policies or guarantees. A copy of any such
material instrument for a series will be filed with the Commission as an
exhibit to a Current Report on Form 8-K to be filed within 15 days of
issuance of the Certificates of the related series.

LETTER OF CREDIT

If so provided in the Prospectus Supplement for a series of
Certificates, deficiencies in amounts otherwise payable on such Certificates
or certain classes thereof will be covered by one or more letters of credit,
issued by a bank or financial institution specified in such Prospectus
Supplement (the "L/C Bank"). Under a letter of credit, the L/C Bank will be
obligated to honor draws thereunder in an aggregate fixed dollar amount, net
of unreimbursed payments thereunder, generally equal to a percentage
specified in the related Prospectus Supplement of the aggregate principal
balance of the Mortgage Assets on the related Cut-off Date or of the initial
aggregate Certificate Balance of one or more classes of Certificates. If so
specified in the related Prospectus Supplement, the letter of credit may
permit draws in the event of only certain types of losses and shortfalls. The
amount available under the letter of credit will, in all cases, be reduced to
the extent of the unreimbursed payments thereunder and may otherwise be
reduced as described in the related Prospectus Supplement. The obligations of
the L/C Bank under the letter of credit for each series of Certificates will
expire at the earlier of the date specified in the related Prospectus
Supplement or the termination of the Trust Fund. A copy of any such letter of
credit for a series will be filed with the Commission as an exhibit to a
Current Report on Form 8-K to be filed within 15 days of issuance of the
Certificates of the related series.

INSURANCE POLICIES AND SURETY BONDS

If so provided in the Prospectus Supplement for a series of
Certificates, deficiencies in amounts otherwise payable on such Certificates
or certain classes thereof will be covered by insurance policies and/or
surety bonds provided by one or more insurance companies or sureties. Such
instruments may cover, with respect to one or more classes of Certificates of
the related series, timely distributions of interest and/or full
distributions of principal on the basis of a schedule of principal
distributions set forth in or determined in the manner specified in the
related Prospectus Supplement. A copy of any such instrument for a series
will be filed with the Commission as an exhibit to a Current Report on Form
8-K to be filed with the Commission within 15 days of issuance of the
Certificates of the related series.

RESERVE FUNDS

If so provided in the Prospectus Supplement for a series of
Certificates, deficiencies in amounts otherwise payable on such Certificates
or certain classes thereof will be covered by one or more reserve funds in
which cash, a letter of credit, Permitted Investments, a demand note or a
combination thereof will be deposited, in the amounts so specified in such
Prospectus Supplement. The reserve funds for a series may also be funded over
time by depositing therein a specified amount of the distributions received
on the related Assets as specified in the related Prospectus Supplement.

Amounts on deposit in any reserve fund for a series, together with the
reinvestment income thereon, if any, will be applied for the purposes, in the
manner, and to the extent specified in the related Prospectus Supplement. A
reserve fund may be provided to increase the likelihood of timely
distributions of principal of and interest on the Certificates. If so
specified in the related Prospectus Supplement, reserve funds may be
established to provide limited protection against only certain types of
losses and shortfalls. Following each Distribution Date amounts in a reserve
fund in excess of any amount required to be maintained therein may be
released from the reserve fund under the conditions and to the extent
specified in the related Prospectus Supplement and will not be available for
further application to the Certificates.

Moneys deposited in any Reserve Funds will be invested in Permitted
Investments, except as otherwise specified in the related Prospectus
Supplement. Unless otherwise specified in the related Prospectus Supplement,
any reinvestment income or other gain from such investments will be credited
to the related Reserve Fund for such series, and any loss resulting from such
investments will be charged to such Reserve Fund. However, such income may be
payable to any related Master Servicer or another service provider as
additional compensation. The Reserve Fund, if any, for a series will not be a
part of the Trust Fund unless otherwise specified in the related Prospectus
Supplement.

Additional information concerning any Reserve Fund will be set forth in
the related Prospectus Supplement, including the initial balance of such
Reserve Fund, the balance required to be maintained in the Reserve Fund, the
manner in which such required balance will decrease over time, the manner of
funding such Reserve Fund, the purposes for which funds in the Reserve Fund
may be applied to make distributions to Certificateholders and use of
investment earnings from the Reserve Fund, if any.

CREDIT SUPPORT WITH RESPECT TO MBS

If so provided in the Prospectus Supplement for a series of
Certificates, the MBS in the related Trust Fund and/or the Mortgage Loans
underlying such MBS may be covered by one or more of the types of Credit
Support described herein. The related Prospectus Supplement will specify as
to each such form of Credit Support the information indicated above with
respect thereto, to the extent such information is material and available.

CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS

The following discussion contains summaries, which are general in
nature, of certain legal aspects of loans secured by single-family
residential properties. Because such legal aspects are governed primarily by
applicable state law (which laws may differ substantially), the summaries do
not purport to be complete nor to reflect the laws of any particular state,
nor to encompass the laws of all states in which the security for the
Mortgage Loans is situated. The summaries are qualified in their entirety by
reference to the applicable federal and state laws governing the Mortgage
Loans. See "Description of the Trust Funds--Assets."

GENERAL

All of the Mortgage Loans are loans evidenced by a note or bond and
secured by instruments granting a security interest in real property which
may be mortgages, deeds of trust, security deeds or deeds to secure debt,
depending upon the prevailing practice and law in the state in which the
Mortgaged Property is located. Mortgages, deeds of trust and deeds to secure
debt are herein collectively referred to as "mortgages." Any of the foregoing
types of mortgages will create a lien upon, or grant a title interest in, the
subject property, the priority of which will depend on the terms of the
particular security instrument, as well as separate, recorded, contractual
arrangements with others holding interests in the mortgaged property, the
knowledge of the parties to such instrument as well as the order of
recordation of the instrument in the appropriate public recording office.
However, recording does not generally establish priority over governmental
claims for real estate taxes and assessments and other charges imposed under
governmental police powers.

TYPES OF MORTGAGE INSTRUMENTS

A mortgage either creates a lien against or constitutes a conveyance of
real property between two parties-a mortgagor (the borrower and usually the
owner of the subject property) and a mortgagee (the lender). In contrast, a
deed of trust is a three-party instrument, among a trustor (the equivalent of
a mortgagor), a trustee to whom the mortgaged property is conveyed, and a
beneficiary (the lender) for whose benefit the conveyance is made. As used in
this Prospectus, unless the context otherwise requires, "mortgagor" includes
the trustor under a deed of trust and a grantor under a security deed or a
deed to secure debt. Under a deed of trust, the mortgagor grants the
property, irrevocably until the debt is paid, in trust, generally with a
power of sale as security for the indebtedness evidenced by the related note.
A deed to secure debt typically has two parties. By executing a deed to
secure debt, the grantor conveys title to, as opposed to merely creating a
lien upon, the subject property to the grantee until such time as the
underlying debt is repaid, generally with a power of sale as security for the
indebtedness evidenced by the related mortgage note. In case the mortgagor
under a mortgage is a land trust, there would be an additional party because
legal title to the property is held by a land trustee under a land trust
agreement for the benefit of the mortgagor. At origination of a mortgage loan
involving a land trust, the mortgagor executes a separate undertaking to make
payments on the mortgage note. The mortgagee's authority under a mortgage,
the trustee's authority under a deed of trust and the grantee's authority
under a deed to secure debt are governed by the express provisions of the
mortgage, the law of the state in which the real property is located, certain
federal laws (including, without limitation, the Soldiers' and Sailors' Civil
Relief Act of 1940) and, in some cases, in deed of trust transactions, the
directions of the beneficiary.

INTEREST IN REAL PROPERTY

The real property covered by a mortgage, deed of trust, security deed or
deed to secure debt is most often the fee estate in land and improvements.
However, such an instrument may encumber other interests in real property
such as a tenant's interest in a lease of land or improvements, or both, and
the leasehold estate created by such lease. An instrument covering an
interest in real property other than the fee estate requires special
provisions in the instrument creating such interest or in the mortgage, deed
of trust, security deed or deed to secure debt, to protect the mortgagee
against termination of such interest before the mortgage, deed of trust,
security deed or deed to secure debt is paid. Unless otherwise specified in
the Prospectus Supplement, the Depositor or the Asset Seller will make
certain representations and warranties in the Agreement with respect to any
Mortgage Loans that are secured by an interest in a leasehold estate. Such
representation and warranties, if applicable, will be set forth in the
Prospectus Supplement.

COOPERATIVE LOANS

If specified in the Prospectus Supplement relating to a series of
Offered Certificate, the Mortgage Loans may also consist of cooperative
apartment loans ("Cooperative Loans") secured by security interests in shares
issued by a cooperative housing corporation (a "Cooperative") and in the
related proprietary leases or occupancy agreements granting exclusive rights
to occupy specific dwelling units in the cooperatives' buildings. The
security agreement will create a lien upon, or grant a title interest in, the
property which it covers, the priority of which will depend on the terms of
the particular security agreement as well as the order of recordation of the
agreement in the appropriate recording office. Such a lien or title interest
is not prior to the lien for real estate taxes and assessments and other
charges imposed under governmental police powers.

Each cooperative owns in fee or has a leasehold interest in all the
real property and owns in fee or leases the building and all separate
dwelling units therein. The cooperative is directly responsible for property
management and, in most cases, payment of real estate taxes, other
governmental impositions and hazard and liability insurance. If there is a
blanket mortgage or mortgages on the cooperative apartment building or
underlying land, as is generally the case, or an underlying lease of the
land, as is the case in some instances, the cooperative, as property
mortgagor, or lessee, as the case may be, is also responsible for meeting
these mortgage or rental obligations. A blanket mortgage is ordinarily
incurred by the cooperative in connection with either the construction or
purchase of the cooperative's apartment building or obtaining of capital by
the cooperative. The interest of the occupant under proprietary leases or
occupancy agreements as to which that cooperative is the landlord are
generally subordinate to the interest of the holder of a blanket mortgage and
to the interest of the holder of a land lease. If the cooperative is unable
to meet the payment obligations (i) arising under a blanket mortgage, the
mortgagee holding a blanket mortgage could foreclose on that mortgage and
terminate all subordinate proprietary leases and occupancy agreements or (ii)
arising under its land lease, the holder of the landlord's interest under the
land lease could terminate it and all subordinate proprietary leases and
occupancy agreements. Also, a blanket mortgage on a cooperative may provide
financing in the form of a mortgage that does not fully amortize, with a
significant portion of principal being due in one final payment at maturity.
The inability of the cooperative to refinance a mortgage and its consequent
inability to make such final payment could lead to foreclosure by the
mortgagee. Similarly, a land lease has an expiration date and the inability
of the cooperative to extend its term or, in the alternative, to purchase the
land could lead to termination of the cooperatives's interest in the property
and termination of all proprietary leases and occupancy agreement. In either
event, a foreclosure by the holder of a blanket mortgage or the termination
of the underlying lease could eliminate or significantly diminish the value
of any collateral held by the lender that financed the purchase by an
individual tenant stockholder of cooperative shares or, in the case of the
Mortgage Loans, the collateral securing the Cooperative Loans.

The cooperative is owned by tenant-stockholders who, through ownership
of stock or shares in the corporation, receive proprietary lease or occupancy
agreements which confer exclusive rights to occupy specific units.
Generally, a tenant-stockholder of a cooperative must make a monthly payment
to the cooperative representing such tenant-stockholder's pro rata share of
the cooperative's payments for its blanket mortgage, real property taxes,
maintenance expenses and other capital or ordinary expenses. An ownership
interest in a cooperative and accompanying occupancy rights are financed
through a cooperative share loan evidenced by a promissory note and secured
by an assignment of and a security interest in the occupancy agreement or
proprietary lease and a security interest in the related cooperative shares.
The lender generally takes possession of the share certificate and a
counterpart of the proprietary lease or occupancy agreement and a financing
statement covering the proprietary lease or occupancy agreement and the
cooperative shares is filed in the appropriate state and local offices to
perfect the lender's interest in its collateral. Subject to the limitations
discussed below, upon default of the tenant-stockholder, the lender may sue
for judgment on the promissory note, dispose of the collateral at a public or
private sale or otherwise proceed against the collateral or tenant-
stockholder as an individual as provided in the security agreement covering
the assignment of the proprietary lease or occupancy agreement and the pledge
of cooperative shares. See "Foreclosure--Cooperatives" below.

FORECLOSURE

General

Foreclosure is a legal procedure that allows the mortgagee to recover
its mortgage debt by enforcing its rights and available legal remedies under
the mortgage. If the mortgagor defaults in payment or performance of its
obligations under the note or mortgage, the mortgagee has the right to
institute foreclosure proceedings to sell the mortgaged property at public
auction to satisfy the indebtedness.

Foreclosure procedures with respect to the enforcement of a mortgage
vary from state to state. Two primary methods of foreclosing a mortgage are
judicial foreclosure and non-judicial foreclosure pursuant to a power of sale
granted in the mortgage instrument. There are several other foreclosure
procedures available in some states that are either infrequently used or
available only in certain limited circumstances, such as strict foreclosure.

Judicial Foreclosure

A judicial foreclosure proceeding is conducted in a court having
jurisdiction over the mortgaged property. Generally, the action is initiated
by the service of legal pleadings upon all parties having an interest of
record in the real property. Delays in completion of the foreclosure may
occasionally result from difficulties in locating defendants. When the
lender's right to foreclose is contested, the legal proceedings can be
time-consuming. Upon successful completion of a judicial foreclosure
proceeding, the court generally issues a judgment of foreclosure and appoints
a referee or other officer to conduct a public sale of the mortgaged
property, the proceeds of which are used to satisfy the judgment. Such sales
are made in accordance with procedures that vary from state to state.

Equitable Limitations on Enforceability of Certain Provisions

United States courts have traditionally imposed general equitable
principles to limit the remedies available to a mortgagee in connection with
foreclosure. These equitable principles are generally designed to relieve the
mortgagor from the legal effect of mortgage defaults, to the extent that such
effect is perceived as harsh or unfair. Relying on such principles, a court
may alter the specific terms of a loan to the extent it considers necessary
to prevent or remedy an injustice, undue oppression or overreaching, or may
require the lender to undertake affirmative and expensive actions to
determine the cause of the mortgagor's default and the likelihood that the
mortgagor will be able to reinstate the loan. In some cases, courts have
substituted their judgment for the lender's and have required that lenders
reinstate loans or recast payment schedules in order to accommodate
mortgagors who are suffering from a temporary financial disability. In other
cases, courts have limited the right of the lender to foreclose if the
default under the mortgage is not monetary, e.g., the mortgagor failed to
maintain the mortgaged property adequately or the mortgagor executed a junior
mortgage on the mortgaged property. The exercise by the court of its equity
powers will depend on the individual circumstances of each case presented to
it. Finally, some courts have been faced with the issue of whether federal or
state constitutional provisions reflecting due process concerns for adequate
notice require that a mortgagor receive notice in addition to
statutorily-prescribed minimum notice. For the most part, these cases have
upheld the reasonableness of the notice provisions or have found that a
public sale under a mortgage providing for a power of sale does not involve
sufficient state action to afford constitutional protections to the
mortgagor.

Non-Judicial Foreclosure/Power of Sale

Foreclosure of a deed of trust is generally accomplished by a
non-judicial trustee's sale pursuant to the power of sale granted in the deed
of trust. A power of sale is typically granted in a deed of trust. It may
also be contained in any other type of mortgage instrument. A power of sale
allows a non-judicial public sale to be conducted generally following a
request from the beneficiary/lender to the trustee to sell the property upon
any default by the mortgagor under the terms of the mortgage note or the
mortgage instrument and after notice of sale is given in accordance with the
terms of the mortgage instrument, as well as applicable state law. In some
states, prior to such sale, the trustee under a deed of trust must record a
notice of default and notice of sale and send a copy to the mortgagor and to
any other party who has recorded a request for a copy of a notice of default
and notice of sale. In addition, in some states the trustee must provide
notice to any other party having an interest of record in the real property,
including junior lienholders. A notice of sale must be posted in a public
place and, in most states, published for a specified period of time in one or
more newspapers. The mortgagor or junior lienholder may then have the right,
during a reinstatement period required in some states, to cure the default by
paying the entire actual amount in arrears (without acceleration) plus the
expenses incurred in enforcing the obligation. In other states, the mortgagor
or the junior lienholder is not provided a period to reinstate the loan, but
has only the right to pay off the entire debt to prevent the foreclosure
sale. Generally, the procedure for public sale, the parties entitled to
notice, the method of giving notice and the applicable time periods are
governed by state law and vary among the states. Foreclosure of a deed to
secure debt is also generally accomplished by a non-judicial sale similar to
that required by a deed of trust, except that the lender or its agent, rather
than a trustee, is typically empowered to perform the sale in accordance with
the terms of the deed to secure debt and applicable law.

Public Sale

A junior mortgagee may not foreclose on the property securing the junior
mortgage unless it forecloses subject to senior mortgages and any other prior
liens, in which case it may be obliged to make payments on the senior
mortgages to avoid their foreclosure. In addition, in the event that the
foreclosure of a junior mortgage triggers the enforcement of a "due-on-sale"
clause contained in a senior mortgage, the junior mortgagee may be required
to pay the full amount of the senior mortgage to avoid its foreclosure.
Accordingly, with respect to those Mortgage Loans, if any, that are junior
mortgage loans, if the lender purchases the property the lender's title will
be subject to all senior mortgages, prior liens and certain governmental
liens.

The proceeds received by the referee or trustee from the sale are
applied first to the costs, fees and expenses of sale and then in
satisfaction of the indebtedness secured by the mortgage under which the sale
was conducted. Any proceeds remaining after satisfaction of senior mortgage
debt are generally payable to the holders of junior mortgages and other liens
and claims in order of their priority, whether or not the mortgagor is in
default. Any additional proceeds are generally payable to the mortgagor. The
payment of the proceeds to the holders of junior mortgages may occur in the
foreclosure action of the senior mortgage or a subsequent ancillary
proceeding or may require the institution of separate legal proceedings by
such holders.

REO Properties

If title to any Mortgaged Property is acquired by the Trustee on behalf
of the Certificateholders, the Master Servicer or any related Sub-servicer or
the Special Servicer, on behalf of such holders, will be required to sell the
Mortgaged Property by the close of the third calendar year following the year
of acquisition, unless (i) the Internal Revenue Service grants an extension
of time to sell such property (an "REO Extension") or (ii) it obtains an
opinion of counsel generally to the effect that the holding of the property
beyond the close of the third calendar year after its acquisition will not
result in the imposition of a tax on the Trust Fund or cause any REMIC
created pursuant to the Pooling and Servicing Agreement to fail to qualify as
a REMIC under the Code. Subject to the foregoing, the Master Servicer or any
related Sub-servicer or the Special Servicer will generally be required to
solicit bids for any Mortgaged Property so acquired in such a manner as will
be reasonably likely to realize a fair price for such property. The Master
Servicer or any related Sub-servicer or the Special Servicer may retain an
independent contractor to operate and manage any REO Property; however, the
retention of an independent contractor will not relieve the Master Servicer
or any related Sub-servicer or the Special Servicer of its obligations with
respect to such REO Property.

In general, the Master Servicer or any related Sub-servicer or the
Special Servicer or an independent contractor employed by the Master Servicer
or any related Sub-servicer or the Special Servicer at the expense of the
Trust Fund will be obligated to operate and manage any Mortgaged Property
acquired as REO Property in a manner that would, to the extent commercially
feasible, maximize the Trust Fund's net after-tax proceeds from such
property. After the Master Servicer or any related Sub-servicer or the
Special Servicer reviews the operation of such property and consults with the
Trustee to determine the Trust Fund's federal income tax reporting position
with respect to the income it is anticipated that the Trust Fund would derive
from such property, the Master Servicer or any related Sub-servicer or the
Special Servicer could determine (particularly in the case of an REO Property
that is a hospitality or residential health care facility) that it would not
be commercially feasible to manage and operate such property in a manner that
would avoid the imposition of a tax on "net income from foreclosure
property," within the meaning of Section 857(b)(4)(B) of the Code or a tax on
"prohibited transactions" under Section 860F of the Code (either such tax
referred to herein as an "REO Tax"). To the extent that income the Trust
Fund receives from an REO Property is subject to a tax on (i) "net income
from foreclosure property" such income would be subject to federal income tax
at the highest marginal corporate tax rate (currently 35%) or (ii)
"prohibited transactions," such income would be subject to federal income tax
at a 100% rate. The determination as to whether income from an REO Property
would be subject to an REO Tax will depend on the specific facts and
circumstances relating to the management and operation of each REO Property.
Generally, income from an REO Property that is directly operated by the
Master Servicer or any related Sub-servicer or the Special Servicer would be
apportioned and classified as "service" or "non-service" income. The
"service" portion of such income could be subject to federal income tax
either at the highest marginal corporate tax rate or at the 100% rate on
"prohibited transactions," and the "non-service" portion of such income could
be subject to federal income tax at the highest marginal corporate tax rate
or, although it appears unlikely, at the 100% rate applicable to "prohibited
transactions." Any REO Tax imposed on the Trust Fund's income from an REO
Property would reduce the amount available for distribution to
Certificateholders. Certificateholders are advised to consult their tax
advisors regarding the possible imposition of REO Taxes in connection with
the operation of commercial REO Properties by REMICs. See "Certain Federal
Income Tax Consequences" herein and "Certain Federal Income Tax Consequences-
REMICs" in the Prospectus.

Rights of Redemption

The purposes of a foreclosure action are to enable the mortgagee to
realize upon its security and to bar the mortgagor, and all persons who have
an interest in the property which is subordinate to the mortgage being
foreclosed, from exercise of their "equity of redemption." The doctrine of
equity of redemption provides that, until the property covered by a mortgage
has been sold in accordance with a properly conducted foreclosure and
foreclosure sale, those having an interest which is subordinate to that of
the foreclosing mortgagee have an equity of redemption and may redeem the
property by paying the entire debt with interest. In addition, in some
states, when a foreclosure action has been commenced, the redeeming party
must pay certain costs of such action. Those having an equity of redemption
must generally be made parties and joined in the foreclosure proceeding in
order for their equity of redemption to be cut off and terminated.

The equity of redemption is a common-law (non-statutory) right which
exists prior to completion of the foreclosure, is not waivable by the
mortgagor, must be exercised prior to foreclosure sale and should be
distinguished from the post-sale statutory rights of redemption. In some
states, after sale pursuant to a deed of trust or foreclosure of a mortgage,
the mortgagor and foreclosed junior lienors are given a statutory period in
which to redeem the property from the foreclosure sale. In some states,
statutory redemption may occur only upon payment of the foreclosure sale
price. In other states, redemption may be authorized if the former mortgagor
pays only a portion of the sums due. The effect of a statutory right of
redemption is to diminish the ability of the lender to sell the foreclosed
property. The exercise of a right of redemption would defeat the title of any
purchaser from a foreclosure sale or sale under a deed of trust.
Consequently, the practical effect of the redemption right is to force the
lender to maintain the property and pay the expenses of ownership until the
redemption period has expired. In some states, a post-sale statutory right of
redemption may exist following a judicial foreclosure, but not following a
trustee's sale under a deed of trust.

Under the REMIC Provisions currently in effect, property acquired by
foreclosure generally must not be held beyond the close of the third calendar
year following the year of acquisition. Unless otherwise provided in the
related Prospectus Supplement, with respect to a series of Certificates for
which an election is made to qualify the Trust Fund or a part thereof as a
REMIC, the Agreement will permit foreclosed property to be held beyond the
close of the third calendar year following the year of acquisition if the
Internal Revenue Service grants an extension of time within which to sell
such property or independent counsel renders an opinion to the effect that
holding such property for such additional period is permissible under the
REMIC Provisions.

Cooperative Loans

The cooperative shares owned by the tenant-stockholder and pledged to
the lender are, in almost all cases, subject to restrictions on transfer as
set forth in the Cooperative's Certificate of Incorporation and By-laws, as
well as the proprietary lease or occupancy agreement, and may be cancelled by
the cooperative for failure by the tenant-stockholder to pay rent or other
obligations or charges owed by such tenant-stockholder, including mechanics'
liens against the cooperative apartment building incurred by such tenant-
stockholder. The proprietary lease or occupancy agreement generally permit
the Cooperative to terminate such lease or agreement in the event an obligor
fails to make payments or defaults in the performance of covenants required
thereunder. Typically, the lender and the Cooperative enter into a
recognition agreement which establishes the rights and obligations of both
parties in the event of a default by the tenant-stockholder under the
proprietary lease or occupancy agreement will usually constitute a default
under the security agreement between the lender and the tenant-stockholder.

The recognition agreement generally provides that, in the event that the
tenant-stockholder has defaulted under the proprietary lease or occupancy
agreement, the Cooperative will take no action to terminate such lease or
agreement until the lender has been provided with an opportunity to cure the
default. The recognition agreement typically provides that if the
proprietary lease or occupancy agreement is terminated, the Cooperative will
recognize the lender's lien against proceeds from the sale of the Cooperative
apartment, subject, however, to the Cooperative's right to sums due under
such proprietary lease or occupancy agreement. The total amount owed to the
Cooperative by the tenant-stockholder, which the lender generally cannot
restrict and does not monitor, could reduce the value of the collateral below
the outstanding principal balance of the Cooperative Loan and accrued and
unpaid interest thereon.

Recognition agreements also provide that in the event of a foreclosure
on a Cooperative Loan, the lender must obtain the approval or consent of the
Cooperative as required by the proprietary lease before transferring the
Cooperative shares or assigning the proprietary lease. Generally, the lender
is not limited in any rights it may have to dispossess the tenant-
stockholders.

In some states, foreclosure on the Cooperative shares is accomplished by
a sale in accordance with the provisions of Article 9 of the UCC and the
security agreement relating to those shares. Article 9 of the UCC requires
that a sale be conducted in a "commercially reasonable" manner. Whether a
foreclosure sale has been conducted in a "commercially reasonable" manner
will depend on the facts in each case. In determining commercial
reasonableness, a court will look to the notice given the debtor and the
method, manner, time, place and terms of the foreclosure. Generally, a sale
conducted according to the usual practice of banks selling similar collateral
will be considered reasonably conducted.

Article 9 of the UCC provides that the proceeds of the sale will be
applied first to pay the costs and expenses of the sale and then to satisfy
the indebtedness secured by the lender's security interest. The recognition
agreement, however, generally provides that the lender's right to
reimbursement is subject to the right of the Cooperatives to receive sums due
under the proprietary lease or occupancy agreement. If there are proceeds
remaining, the lender must account to the tenant-stockholder for the surplus.
Conversely, if a portion of the indebtedness remains unpaid, the tenant-
stockholder is generally responsible for the deficiency.

In the case of foreclosure on a building which was converted from a
rental building to a building owned by a Cooperative under a non-eviction
plan, some states require that a purchaser at a foreclosure sale take the
property subject to rent control and rent stabilization laws which apply to
certain tenants who elected to remain in the building was so converted.

JUNIOR MORTGAGES

Some of the Mortgage Loans may be secured by junior mortgages or deeds
of trust, which are subordinate to first mortgages or deeds of trust held by
other lenders. The rights of the Trust Fund as the holder of a junior deed of
trust or a junior mortgage are subordinate in lien and in payment to those of
the holder of the senior mortgage or deed of trust, including the prior
rights of the senior mortgagee or beneficiary to receive and apply hazard
insurance and condemnation proceeds and, upon default of the mortgagor, to
cause a foreclosure on the property. Upon completion of the foreclosure
proceedings by the holder of the senior mortgage or the sale pursuant to the
deed of trust, the junior mortgagee's or junior beneficiary's lien will be
extinguished unless the junior lienholder satisfies the defaulted senior loan
or asserts its subordinate interest in a property in foreclosure proceedings.
See "-Foreclosure" herein.

Furthermore, because the terms of the junior mortgage or deed of trust
are subordinate to the terms of the first mortgage or deed of trust, in the
event of a conflict between the terms of the first mortgage or deed of trust
and the junior mortgage or deed of trust, the terms of the first mortgage or
deed of trust will generally govern. Upon a failure of the mortgagor or
trustor to perform any of its obligations, the senior mortgagee or
beneficiary, subject to the terms of the senior mortgage or deed of trust,
may have the right to perform the obligation itself. Generally, all sums so
expended by the mortgagee or beneficiary become part of the indebtedness
secured by the mortgage or deed of trust. To the extent a first mortgagee
expends such sums, such sums will generally have priority over all sums due
under the junior mortgage.

ANTI-DEFICIENCY LEGISLATION AND OTHER LIMITATIONS ON LENDERS

Statutes in some states limit the right of a beneficiary under a deed of
trust or a mortgagee under a mortgage to obtain a deficiency judgment
against the mortgagor following foreclosure or sale under a deed of trust. A
deficiency judgment would be a personal judgment against the former mortgagor
equal to the difference between the net amount realized upon the public sale
of the real property and the amount due to the lender. Some states require
the lender to exhaust the security afforded under a mortgage by foreclosure
in an attempt to satisfy the full debt before bringing a personal action
against the mortgagor. In certain other states, the lender has the option of
bringing a personal action against the mortgagor on the debt without first
exhausting such security; however, in some of these states, the lender,
following judgment on such personal action, may be deemed to have elected a
remedy and may be precluded from exercising remedies with respect to the
security. In some cases, a lender will be precluded from exercising any
additional rights under the note or mortgage if it has taken any prior
enforcement action. Consequently, the practical effect of the election
requirement, in those states permitting such election, is that lenders will
usually proceed against the security first rather than bringing a personal
action against the mortgagor. Finally, other statutory provisions limit any
deficiency judgment against the former mortgagor following a judicial sale to
the excess of the outstanding debt over the fair market value of the property
at the time of the public sale. The purpose of these statutes is generally
to prevent a lender from obtaining a large deficiency judgment against the
former mortgagor as a result of low or no bids at the judicial sale.

In addition to laws limiting or prohibiting deficiency judgments,
numerous other federal and state statutory provisions, including the federal
bankruptcy laws and state laws affording relief to debtors, may interfere
with or affect the ability of the secured mortgage lender to realize upon
collateral or enforce a deficiency judgment. For example, with respect to
federal bankruptcy law, a court with federal bankruptcy jurisdiction may
permit a debtor through his or her Chapter 11 or Chapter 13 rehabilitative
plan to cure a monetary default in respect of a mortgage loan on a debtor's
residence by paying arrearages within a reasonable time period and
reinstating the original mortgage loan payment schedule even though the
lender accelerated the mortgage loan and final judgment of foreclosure had
been entered in state court (provided no sale of the residence had yet
occurred) prior to the filing of the debtor's petition. Some courts with
federal bankruptcy jurisdiction have approved plans, based on the particular
facts of the reorganization case, that effected the curing of a mortgage loan
default by paying arrearages over a number of years.

Courts with federal bankruptcy jurisdiction have also indicated that the
terms of a mortgage loan secured by property of the debtor may be modified.
These courts have allowed modifications that include reducing the amount of
each monthly payment, changing the rate of interest, altering the repayment
schedule, forgiving all or a portion of the debt and reducing the lender's
security interest to the value of the residence, thus leaving the lender a
general unsecured creditor for the difference between the value of the
residence and the outstanding balance of the loan. Generally, however, the
terms of a mortgage loan secured only by a mortgage on real property that is
the debtor's principal residence may not be modified pursuant to a plan
confirmed pursuant to Chapter 11 or Chapter 13 except with respect to
mortgage payment arrearages, which may be cured within a reasonable time
period.

Certain tax liens arising under the Internal Revenue Code of 1986, as
amended, may in certain circumstances provide priority over the lien of a
mortgage or deed of trust. In addition, substantive requirements are imposed
upon mortgage lenders in connection with the origination and the servicing of
mortgage loans by numerous federal and some state consumer protection laws.
These laws include the federal Truth-in-Lending Act, Real Estate Settlement
Procedures Act, Equal Credit Opportunity Act, Fair Credit Billing Act, Fair
Credit Reporting Act and related statutes. These federal laws impose
specific statutory liabilities upon lenders who originate mortgage loans and
who fail to comply with the provisions of the law. In some cases this
liability may affect assignees of the mortgage loans.

Generally, Article 9 of the UCC governs foreclosure on Cooperative
shares and the related proprietary lease or occupancy agreement. Some courts
have interpreted section 9-504 of the UCC to prohibit a deficiency award
unless the creditor establishes that the sale of the collateral (which, in
the case of a Cooperative Loan, would be the shares of the Cooperative and
the related proprietary lease or occupancy agreement) was conducted in a
commercially reasonable manner.

ENVIRONMENTAL LEGISLATION

Certain states impose a statutory lien for associated costs on property
that is the subject of a cleanup action by the state on account of hazardous
wastes or hazardous substances released or disposed of on the property. Such
a lien will generally have priority over all subsequent liens on the property
and, in certain of these states, will have priority over prior recorded liens
including the lien of a mortgage. In addition, under federal environmental
legislation and under state law in a number of states, a secured party that
takes a deed in lieu of foreclosure or acquires a mortgaged property at a
foreclosure sale or becomes involved in the operation or management of a
property so as to be deemed an "owner" or "operator" of the property may be
liable for the costs of cleaning up a contaminated site. Although such costs
could be substantial, it is unclear whether they would be imposed on a lender
(such as a Trust Fund) secured by residential real property. In the event
that title to a Mortgaged Property securing a Mortgage Loan in a Trust Fund
was acquired by the Trust Fund and cleanup costs were incurred in respect of
the Mortgaged Property, the holders of the related series of Certificates
might realize a loss if such costs were required to be paid by the Trust
Fund.

DUE-ON-SALE CLAUSES

Unless the related Prospectus Supplement indicates otherwise, the
Mortgage Loans will contain due-on-sale clauses. These clauses generally
provide that the lender may accelerate the maturity of the loan if the
mortgagor sells, transfers or conveys the related Mortgaged Property. The
enforceability of due-on-sale clauses has been the subject of legislation or
litigation in many states and, in some cases, the enforceability of these
clauses was limited or denied. However, with respect to certain loans the
Garn-St Germain Depository Institutions Act of 1982 preempts state
constitutional, statutory and case law that prohibits the enforcement of
due-on-sale clauses and permits lenders to enforce these clauses in
accordance with their terms, subject to certain limited exceptions. Due-on-
sale clauses contained in mortgage loans originated by federal savings and
loan associations of federal savings banks are fully enforceable pursuant to
regulations of the United States Federal Home Loan Bank Board, as succeeded
by the Office of Thrift Supervision, which preempt state law restrictions on
the enforcement of such clauses. Similarly, "due-on-sale" clauses in
mortgage loans made by national banks and federal credit unions are now fully
enforceable pursuant to preemptive regulations of the Comptroller of the
Currency and the National Credit Union Administration, respectively.

The Garn-St. Germain Act also sets forth nine specific instances in
which a mortgage lender covered by the act (including federal savings and
loan associations and federal savings banks) may not exercise a "due-on-sale"
clause, notwithstanding the fact that a transfer of the property may have
occurred. These include intra-family transfers, certain transfers by
operation of law, leases of fewer than three years and the creation of a
junior encumbrance. Regulations promulgated under the Garn-St Germain Act
also prohibit the imposition of a prepayment penalty upon the acceleration of
a loan pursuant to a due-on-sale clause. The inability to enforce a
"due-on-sale" clause may result in a mortgage that bears an interest rate
below the current market rate being assumed by a new home buyer rather than
being paid off, which may affect the average life of the Mortgage Loans and
the number of Mortgage Loans which may extend to maturity.

PREPAYMENT CHARGES

Under certain state laws, prepayment charges may not be imposed after a
certain period of time following the origination of mortgage loans secured by
liens encumbering owner-occupied residential properties, if such loans are
paid prior to maturity. Since many of the Mortgaged Properties will be
owner-occupied, it is anticipated that prepayment charges may not be imposed
with respect to many of the Mortgage Loans. The absence of such a restraint
on prepayment, particularly with respect to fixed rate Mortgage Loans having
higher Mortgage Rates, may increase the likelihood of refinancing or other
early retirement of such loans.

SUBORDINATE FINANCING

Where a mortgagor encumbers mortgaged property with one or more junior
liens, the senior lender is subjected to additional risk. First, the
mortgagor may have difficulty servicing and repaying multiple loans. In
addition, if the junior loan permits recourse to the mortgagor (as junior
loans often do) and the senior loan does not, a mortgagor may be more likely
to repay sums due on the junior loan than those on the senior loan. Second,
acts of the senior lender that prejudice the junior lender or impair the
junior lender's security may create a superior equity in favor of the junior
lender. For example, if the mortgagor and the senior lender agree to an
increase in the principal amount of or the interest rate payable on the
senior loan, the senior lender may lose its priority to the extent any
existing junior lender is harmed or the mortgagor is additionally burdened.
Third, if the mortgagor defaults on the senior loan and/or any junior loan or
loans, the existence of junior loans and actions taken by junior lenders can
impair the security available to the senior lender and can interfere with or
delay the taking of action by the senior lender. Moreover, the bankruptcy of
a junior lender may operate to stay foreclosure or similar proceedings by the
senior lender.

APPLICABILITY OF USURY LAWS

Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980, enacted in March 1980 ("Title V"), provides that state usury
limitations shall not apply to certain types of residential first mortgage
loans originated by certain lenders after March 31, 1980. A similar federal
statute was in effect with respect to mortgage loans made during the first
three months of 1980. The Office of Thrift Supervision is authorized to
issue rules and regulations and to publish interpretations governing
implementation of Title V. The statute authorized any state to reimpose
interest rate limits by adopting, before April 1, 1983, a law or
constitutional provision that expressly rejects application of the federal
law. In addition, even where Title V is not so rejected, any state is
authorized by the law to adopt a provision limiting discount points or other
charges on mortgage loans covered by Title V. Certain states have taken
action to reimpose interest rate limits and/or to limit discount points or
other charges.

The Depositor has been advised by counsel that a court interpreting
Title V would hold that residential first mortgage loans that are originated
on or after January 1, 1980 are subject to federal preemption. Therefore, in
a state that has not taken the requisite action to reject application of
Title V or to adopt a provision limiting discount points or other charges
prior to origination of such mortgage loans, any such limitation under such
state's usury law would not apply to such mortgage loans.

In any state in which application of Title V has been expressly rejected
or a provision limiting discount points or other charges is adopted, no
mortgage loan originated after the date of such state action will be eligible
for inclusion in a Trust Fund unless (i) such mortgage loan provides for such
interest rate, discount points and charges as are permitted in such state or
(ii) such mortgage loan provides that the terms thereof shall be construed in
accordance with the laws of another state under which such interest rate,
discount points and charges would not be usurious and the mortgagor's counsel
has rendered an opinion that such choice of law provision would be given
effect.

Statutes differ in their provisions as to the consequences of a usurious
loan. One group of statutes requires the lender to forfeit the interest due
above the applicable limit or impose a specified penalty. Under this
statutory scheme, the mortgagor may cancel the recorded mortgage or deed of
trust upon paying its debt with lawful interest, and the lender may
foreclose, but only for the debt plus lawful interest. A second group of
statutes is more severe. A violation of this type of usury law results in
the invalidation of the transaction, thereby permitting the mortgagor to
cancel the recorded mortgage or deed of trust without any payment or
prohibiting the lender from foreclosing.

ALTERNATIVE MORTGAGE INSTRUMENTS

Alternative mortgage instruments, including adjustable rate mortgage
loans and early ownership mortgage loans, originated by non-federally
chartered lenders have historically been subject to a variety of
restrictions. Such restrictions differed from state to state, resulting in
difficulties in determining whether a particular alternative mortgage
instrument originated by a state-chartered lender was in compliance with
applicable law. These difficulties were alleviated substantially as a result
of the enactment of Title VIII of the Garn-St Germain Act ("Title VIII").
Title VIII provides that, notwithstanding any state law to the contrary,
state-chartered banks may originate alternative mortgage instruments in
accordance with regulations promulgated by the Comptroller of the Currency
with respect to origination of alternative mortgage instruments by national
banks; state-chartered credit unions may originate alternative mortgage
instruments in accordance with regulations promulgated by the National Credit
Union Administration with respect to origination of alternative mortgage
instruments by federal credit unions; and all other non-federally chartered
housing creditors, including state-chartered savings and loan associations,
state-chartered savings banks and mutual savings banks and mortgage banking
companies, may originate alternative mortgage instruments in accordance with
the regulations promulgated by the Federal Home Loan Bank Board, predecessor
to the Office of Thrift Supervision, with respect to origination of
alternative mortgage instruments by federal savings and loan associations.
Title VIII provides that any state may reject applicability of the provisions
of Title VIII by adopting, prior to October 15, 1985, a law or constitutional
provision expressly rejecting the applicability of such provisions. Certain
states have taken such action.

SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940

Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended (the "Relief Act"), a mortgagor who enters military service after
the origination of such mortgagor's Mortgage Loan (including a mortgagor who
was in reserve status and is called to active duty after origination of the
Mortgage Loan), may not be charged interest (including fees and charges)
above an annual rate of 6% during the period of such mortgagor's active duty
status, unless a court orders otherwise upon application of the lender. The
Relief Act applies to mortgagors who are members of the Army, Navy, Air
Force, Marines, National Guard, Reserves, Coast Guard and officers of the
U.S. Public Health Service assigned to duty with the military. Because the
Relief Act applies to mortgagors who enter military service (including
reservists who are called to active duty) after origination of the related
Mortgage Loan, no information can be provided as to the number of loans that
may be affected by the Relief Act. Application of the Relief Act would
adversely affect, for an indeterminate period of time, the ability of any
servicer to collect full amounts of interest on certain of the Mortgage
Loans. Any shortfalls in interest collections resulting from the application
of the Relief Act would result in a reduction of the amounts distributable to
the holders of the related series of Certificates, and would not be covered
by advances or, unless otherwise specified in the related Prospectus
Supplement, any form of Credit Support provided in connection with such
Certificates. In addition, the Relief Act imposes limitations that would
impair the ability of the servicer to foreclose on an affected Mortgage Loan
during the mortgagor's period of active duty status, and, under certain
circumstances, during an additional three month period thereafter. Thus, in
the event that such a Mortgage Loan goes into default, there may be delays
and losses occasioned thereby.

FORFEITURES IN DRUG AND RICO PROCEEDINGS

Federal law provides that property owned by persons convicted of
drug-related crimes or of criminal violations of the Racketeer Influenced and
Corrupt Organizations ("RICO") statute can be seized by the government if the
property was used in, or purchased with the proceeds of, such crimes. Under
procedures contained in the Comprehensive Crime Control Act of 1984 (the
"Crime Control Act"), the government may seize the property even before
conviction. The government must publish notice of the forfeiture proceeding
and may give notice to all parties "known to have an alleged interest in the
property," including the holders of mortgage loans.

A lender may avoid forfeiture of its interest in the property if it
establishes that: (i) its mortgage was executed and recorded before
commission of the crime upon which the forfeiture is based, or (ii) the
lender was, at the time of execution of the mortgage, "reasonably without
cause to believe" that the property was used in, or purchased with the
proceeds of, illegal drug or RICO activities.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary of the anticipated material federal income tax
consequences of the purchase, ownership and disposition of Offered
Certificates is based on the advice of Latham & Watkins or Brown & Wood LLP,
counsel to the Depositor. This summary is based on laws, regulations,
including the REMIC regulations promulgated by the Treasury Department (the
"REMIC Regulations"), rulings and decisions now in effect or (with respect to
regulations) proposed, all of which are subject to change either
prospectively or retroactively. This summary does not address the federal
income tax consequences of an investment in Certificates applicable to all
categories of investors, some of which (for example, banks and insurance
companies) may be subject to special rules. Prospective investors should
consult their tax advisors regarding the federal, state, local and any other
tax consequences to them of the purchase, ownership and disposition of
Certificates.

GENERAL

The federal income tax consequences to Certificateholders will vary
depending on whether an election is made to treat the Trust Fund relating to
a particular Series of Certificates as a REMIC under the Code. The
Prospectus Supplement for each Series of Certificates will specify whether a
REMIC election will be made.

GRANTOR TRUST FUNDS

If a REMIC election is not made, Latham & Watkins or Brown & Wood LLP
will deliver its opinion that the Trust Fund will not be classified as an
association taxable as a corporation and that each such Trust Fund will be
classified as a grantor trust under subpart E, Part I of subchapter J of
Chapter 1 of Subtitle A of the Code. In this case, owners of Certificates
will be treated for federal income tax purposes as owners of a portion of the
Trust Fund's assets as described below.

A. SINGLE CLASS OF GRANTOR TRUST CERTIFICATES

Characterization. The Trust Fund may be created with one class of
Grantor Trust Certificates. In this case, each Grantor Trust
Certificateholder will be treated as the owner of a pro rata undivided
interest in the interest and principal portions of the Trust Fund represented
by the Grantor Trust Certificates and will be considered the equitable owner
of a pro rata undivided interest in each of the Mortgage Assets in the Pool.
Any amounts received by a Grantor Trust Certificateholder in lieu of amounts
due with respect to any Mortgage Asset because of a default or delinquency in
payment will be treated for federal income tax purposes as having the same
character as the payments they replace.

Each Grantor Trust Certificateholder will be required to report on its
federal income tax return in accordance with such Grantor Trust
Certificateholder's method of accounting its pro rata share of the entire
income from the Mortgage Loans in the Trust Fund represented by Grantor Trust
Certificates, including interest, original issue discount ("OID"), if any,
prepayment fees, assumption fees, any gain recognized upon an assumption and
late payment charges received by the Master Servicer. Under Code Sections
162 or 212 each Grantor Trust Certificateholder will be entitled to deduct
its pro rata share of servicing fees, prepayment fees, assumption fees, any
loss recognized upon an assumption and late payment charges retained by the
Master Servicer, provided that such amounts are reasonable compensation for
services rendered to the Trust Fund. Grantor Trust Certificateholders that
are individuals, estates or trusts will be entitled to deduct their share of
expenses as itemized deductions only to the extent such expenses plus all
other Code Section 212 expenses exceed two percent of its adjusted gross
income. In addition, the amount of itemized deductions otherwise allowable
for the taxable year for an individual whose adjusted gross income exceeds
the applicable amount under Code Section 68(b) (which amount will be adjusted
for inflation) will be reduced by the lesser of (i) 3% of the excess of
adjusted gross income over the applicable amount and (ii) 80% of the amount
of itemized deductions otherwise allowable for such taxable year. In
general, a Grantor Trust Certificateholder using the cash method of
accounting must take into account its pro rata share of income and deductions
as and when collected by or paid to the Master Servicer or, with respect to
original issue discount or certain other income items for which the
Certificateholder has made an election, as such amounts are accrued by the
Trust Fund on a constant interest basis, and will be entitled to claim its
pro rata share of deductions (subject to the foregoing limitations) when such
amounts are paid or such Certificateholder would otherwise be entitled to
claim such deductions had it held the Mortgage Assets directly. A Grantor
Trust Certificateholder using an accrual method of accounting must take into
account its pro rata share of income as payment becomes due or is paid to the
Master Servicer, whichever is earlier, and may deduct its pro rata share of
expense items (subject to the foregoing limitations) when such amounts are
paid or such Certificateholder otherwise would be entitled to claim such
deductions had it held the Mortgage Assets directly. If the servicing fees
paid to the Master Servicer are deemed to exceed reasonable servicing
compensation, the amount of such excess could be considered as an ownership
interest retained by the Master Servicer (or any person to whom the Master
Servicer assigned for value all or a portion of the servicing fees) in a
portion of the interest payments on the Mortgage Assets. The Mortgage Assets
would then be subject to the "coupon stripping" rules of the Code discussed
below.

Unless otherwise specified in the related Prospectus Supplement or
otherwise provided below, as to each Series of Certificates counsel to the
Depositor will have advised the Depositor that:

(i) a Grantor Trust Certificate owned by a "domestic building and
loan association" within the meaning of Code Section 7701(a)(19)
representing principal and interest payments on Mortgage Assets will be
considered to represent "loans . . . secured by an interest in real
property which is . . . residential property" within the meaning of
Code Section 7701(a)(19)(C)(v), to the extent that the Mortgage Assets
represented by that Grantor Trust Certificate are of a type described in
such Code section;

(ii) a Grantor Trust Certificate owned by a real estate investment
trust representing an interest in Mortgage Assets will be considered to
represent "real estate assets" within the meaning of Code Section
856(c)(4)(A), and interest income on the Mortgage Assets will be
considered "interest on obligations secured by mortgages on real
property" within the meaning of Code Section 856(c)(3)(B), to the extent
that the Mortgage Assets represented by that Grantor Trust Certificate
are of a type described in such Code section; and

(iii) a Grantor Trust Certificate owned by a REMIC will represent
"obligation(s) ... which (are) principally secured by an interest in
real property" within the meaning of Code Section 860G(a)(3).

The Small Business Job Protection Act of 1996, as part of the repeal of
the bad debt reserve method for thrift institutions, repealed the application
of Code Section 593(d) to any taxable year beginning after December 31, 1995.

Stripped Bonds and Coupons. Certain Trust Funds may consist of
Government Securities that constitute "stripped bonds" or "stripped coupons"
as those terms are defined in section 1286 of the Code, and, as a result,
such assets would be subject to the stripped bond provisions of the Code.
Under these rules, such Government Securities are treated as having original
issue discount based on the purchase price and the stated redemption price at
maturity of each Security. As such, Grantor Trust Certificateholders would
be required to include in income their pro rata share of the original issue
discount on each Government Security recognized in any given year on an
economic accrual basis even if the Grantor Trust Certificateholder is a cash
method taxpayer. Accordingly, the sum of the income includible to the
Grantor Trust Certificateholder in any taxable year may exceed amounts
actually received during such year.

Buydown Loans. The assets constituting certain Trust Funds may include
Buydown Loans. The characterization of any investment in Buydown Loans will
depend upon the precise terms of the related buydown agreement, but to the
extent that such Buydown Loans are secured in part by a bank account or other
personal property, they may not be treated in their entirety as assets
described in the foregoing sections of the Code. There are no directly
applicable precedents with respect to the federal income tax treatment or the
characterization of investments in Buydown Loans. Accordingly, Grantor Trust
Certificateholders should consult their own tax advisors with respect to the
characterization of investments in Grantor Trust Certificates representing an
interest in a Trust Fund that includes Buydown Loans.

Premium. The price paid for a Grantor Trust Certificate by a holder
will be allocated to such holder's undivided interest in each Mortgage Asset
based on each Mortgage Asset's relative fair market value, so that such
holder's undivided interest in each Mortgage Asset will have its own tax
basis. A Grantor Trust Certificateholder that acquires an interest in
Mortgage Assets at a premium may elect to amortize such premium under a
constant interest method, provided that the underlying mortgage loans with
respect to such Mortgage Assets were originated after September 27, 1985.
Premium allocable to mortgage loans originated on or before September 27,
1985 should be allocated among the principal payments on such mortgage loans
and allowed as an ordinary deduction as principal payments are made.
Amortizable bond premium will be treated as an offset to interest income on
such Grantor Trust Certificate. The basis for such Grantor Trust Certificate
will be reduced to the extent that amortizable premium is applied to offset
interest payments. It is not clear whether a reasonable prepayment
assumption should be used in computing amortization of premium allowable
under Code Section 171. A Certificateholder that makes this election for a
Certificate that is acquired at a premium will be deemed to have made an
election to amortize bond premium with respect to all debt instruments having
amortizable bond premium that such Certificateholder acquires during the year
of the election or thereafter.

If a premium is not subject to amortization using a reasonable
prepayment assumption, the holder of a Grantor Trust Certificate acquired at
a premium should recognize a loss if a Mortgage Loan (or an underlying
mortgage loan with respect to a Mortgage Asset) prepays in full, equal to the
difference between the portion of the prepaid principal amount of such
Mortgage Loan (or underlying mortgage loan) that is allocable to the
Certificate and the portion of the adjusted basis of the Certificate that is
allocable to such Mortgage Loan (or underlying mortgage loan). If a
reasonable prepayment assumption is used to amortize such premium, it appears
that such a loss would be available, if at all, only if prepayments have
occurred at a rate faster than the reasonable assumed prepayment rate. It is
not clear whether any other adjustments would be required to reflect
differences between an assumed prepayment rate and the actual rate of
prepayments.

On December 30, 1997, the Internal Revenue Service (the "IRS")
issued final regulations (the "Amortizable Bond Premium Regulations") dealing
with amortizable bond premium. These regulations, which generally are
effective for bonds issued or acquired on or after March 2, 1998 (or, for
holders making an election for the taxable year that includes March 2, 1998
or any subsequent taxable year, shall apply to bonds held on or after the
first day of the taxable year of the election). The Amortizable Bond Premium
Regulations specifically do not apply to prepayable debt instruments or any
pool of debt instruments the yield on which may be affected by prepayments,
such as the Trust Fund, which are subject to Section 1272(a)(6) of the Code.
Absent further guidance from the IRS and unless otherwise specified in the
related Prospectus Supplement, the Trustee will account for amortizable bond
premium in the manner described above. Prospective purchasers should consult
their tax advisors regarding amortizable bond premium and the Amortizable
Bond Premium Regulations.

Original Issue Discount. The IRS has stated in published rulings that,
in circumstances similar to those described herein, the special rules of the
Code relating to original issue discount ("OID") (currently Code Sections
1271 through 1273 and 1275) and Treasury regulations issued on January 27,
1994, under such Sections (the "OID Regulations"), will be applicable to a
Grantor Trust Certificateholder's interest in those Mortgage Assets meeting
the conditions necessary for these sections to apply. Rules regarding
periodic inclusion of OID income are applicable to mortgages of corporations
originated after May 27, 1969, mortgages of noncorporate mortgagors (other
than individuals) originated after July 1, 1982, and mortgages of individuals
originated after March 2, 1984. Such OID could arise by the financing of
points or other charges by the originator of the mortgages in an amount
greater than a statutory de minimis exception to the extent that the points
are not currently deductible under applicable Code provisions or are not for
services provided by the lender. OID generally must be reported as ordinary
gross income as it accrues under a constant interest method. See "--Multiple
Classes of Grantor Trust Certificates--Accrual of Original Issue Discount"
below.

Market Discount. A Grantor Trust Certificateholder that acquires an
undivided interest in Mortgage Assets may be subject to the market discount
rules of Code Sections 1276 through 1278 to the extent an undivided interest
in a Mortgage Asset is considered to have been purchased at a "market
discount." Generally, the amount of market discount is equal to the excess
of the portion of the principal amount of such Mortgage Asset allocable to
such holder's undivided interest over such holder's tax basis in such
interest. Market discount with respect to a Grantor Trust Certificate will
be considered to be zero if the amount allocable to the Grantor Trust
Certificate is less than 0.25% of the Grantor Trust Certificate's stated
redemption price at maturity multiplied by the weighted average maturity
remaining after the date of purchase. Treasury regulations implementing the
market discount rules have not yet been issued; therefore, investors should
consult their own tax advisors regarding the application of these rules and
the advisability of making any of the elections allowed under Code Sections
1276 through 1278.

The Code provides that any principal payment (whether a scheduled
payment or a prepayment) or any gain on disposition of a market discount bond
acquired by the taxpayer after October 22, 1986 shall be treated as ordinary
income to the extent that it does not exceed the accrued market discount at
the time of such payment. The amount of accrued market discount for purposes
of determining the tax treatment of subsequent principal payments or
dispositions of the market discount bond is to be reduced by the amount so
treated as ordinary income.

The Code also grants the Treasury Department authority to issue
regulations providing for the computation of accrued market discount on debt
instruments, the principal of which is payable in more than one installment.
While the Treasury Department has not yet issued regulations, rules described
in the relevant legislative history will apply. Under those rules, the
holder of a market discount bond may elect to accrue market discount either
on the basis of a constant interest rate or according to one of the following
methods. If a Grantor Trust Certificate is issued with OID, the amount of
market discount that accrues during any accrual period would be equal to the
product of (i) the total remaining market discount and (ii) a fraction, the
numerator of which is the OID accruing during the period and the denominator
of which is the total remaining OID at the beginning of the accrual period.
For Grantor Trust Certificates issued without OID, the amount of market
discount that accrues during a period is equal to the product of (i) the
total remaining market discount and (ii) a fraction, the numerator of which
is the amount of stated interest paid during the accrual period and the
denominator of which is the total amount of stated interest remaining to be
paid at the beginning of the accrual period. For purposes of calculating
market discount under any of the above methods in the case of instruments
(such as the Grantor Trust Certificates) that provide for payments that may
be accelerated by reason of prepayments of other obligations securing such
instruments, the same prepayment assumption applicable to calculating the
accrual of OID will apply. Because the regulations described above have not
been issued, it is impossible to predict what effect those regulations might
have on the tax treatment of a Grantor Trust Certificate purchased at a
discount or premium in the secondary market.

A holder who acquired a Grantor Trust Certificate at a market discount
also may be required to defer a portion of its interest deductions for the
taxable year attributable to any indebtedness incurred or continued to
purchase or carry such Grantor Trust Certificate purchased with market
discount. For these purposes, the de minimis rule referred to above applies.
Any such deferred interest expense would not exceed the market discount that
accrues during such taxable year and is, in general, allowed as a deduction
not later than the year in which such market discount is includible in
income. If such holder elects to include market discount in income currently
as it accrues on all market discount instruments acquired by such holder in
that taxable year or thereafter, the interest deferral rule described above
will not apply.

Election to Treat All Interest as OID. The OID Regulations permit a
Certificateholder to elect to accrue all interest, discount (including de
minimis market or original issue discount) and premium in income as interest,
based on a constant yield method for Certificates acquired on or after April
4, 1994. If such an election were to be made with respect to a Grantor Trust
Certificate with market discount, the Certificateholder would be deemed to
have made an election to include in income currently market discount with
respect to all other debt instruments having market discount that such
Certificateholder acquires during the year of the election or thereafter.
Similarly, a Certificateholder that makes this election for a Certificate
that is acquired at a premium will be deemed to have made an election to
amortize bond premium with respect to all debt instruments having amortizable
bond premium that such Certificateholder owns or acquires. See "Premium"
herein. The election to accrue interest, discount and premium on a constant
yield method with respect to a Certificate is irrevocable.

Anti-abuse Rule. The IRS can apply or depart from the rules contained
in the OID Regulations as necessary or appropriate to achieve a reasonable
result where a principal purpose in structuring a Mortgage Asset, Mortgage
Loan or Grantor Trust Certificate or the effect of applying the otherwise
applicable rules is to achieve a result that is unreasonable in light of the
purposes of the applicable statutes (which generally are intended to achieve
the clear reflection of income for both issuers and holders of debt
instruments).

B. MULTIPLE CLASSES OF GRANTOR TRUST CERTIFICATES

1. Stripped Bonds and Stripped Coupons

Pursuant to Code Section 1286, the separation of ownership of the right
to receive some or all of the interest payments on an obligation from
ownership of the right to receive some or all of the principal payments
results in the creation of "stripped bonds" with respect to principal
payments and "stripped coupons" with respect to interest payments. For
purposes of Code Sections 1271 through 1288, Code Section 1286 treats a
stripped bond or a stripped coupon as an obligation issued on the date that
such stripped interest is created. If a Trust Fund is created with two
classes of Grantor Trust Certificates, one class of Grantor Trust
Certificates may represent the right to principal and interest, or principal
only, on all or a portion of the Mortgage Assets (the "Stripped Bond
Certificates"), while the second class of Grantor Trust Certificates may
represent the right to some or all of the interest on such portion (the
"Stripped Coupon Certificates").

Servicing fees in excess of reasonable servicing fees ("excess
servicing") will be treated under the stripped bond rules. If the excess
servicing fee is less than 100 basis points (i.e., 1% interest on the
Mortgage Asset principal balance) or the Certificates are initially sold with
a de minimis discount (assuming no prepayment assumption is required), any
non-de minimis discount arising from a subsequent transfer of the
Certificates should be treated as market discount. The IRS appears to
require that reasonable servicing fees be calculated on a Mortgage Asset by
Mortgage Asset basis, which could result in some Mortgage Assets being
treated as having more than 100 basis points of interest stripped off. See
"--Non-REMIC Certificates" and "Multiple Classes of Grantor Trust
Certificates--Stripped Bonds and Stripped Coupons" herein.

Although not entirely clear, a Stripped Bond Certificate generally
should be treated as an interest in Mortgage Assets issued on the day such
Certificate is purchased for purposes of calculating any OID. Generally, if
the discount on a Mortgage Asset is larger than a de minimis amount (as
calculated for purposes of the OID rules) a purchaser of such a Certificate
will be required to accrue the discount under the OID rules of the Code. See
"--Non-REMIC Certificates" and "--Single Class of Grantor Trust Certificates-
- -Original Issue Discount" herein. However, a purchaser of a Stripped Bond
Certificate will be required to account for any discount on the Mortgage
Assets as market discount rather than OID if either (i) the amount of OID
with respect to the Mortgage Assets is treated as zero under the OID de
minimis rule when the Certificate was stripped or (ii) no more than 100 basis
points (including any amount of servicing fees in excess of reasonable
servicing fees) is stripped off of the Trust Fund's Mortgage Assets.
Pursuant to Revenue Procedure 91-49, issued on August 8, 1991, purchasers of
Stripped Bond Certificates using an inconsistent method of accounting must
change their method of accounting and request the consent of the IRS to the
change in their accounting method on a statement attached to their first
timely tax return filed after August 8, 1991.

The precise tax treatment of Stripped Coupon Certificates is
substantially uncertain. The Code could be read literally to require that
OID computations be made for each payment from each Mortgage Asset. Unless
otherwise specified in the related Prospectus Supplement, all payments from a
Mortgage Asset underlying a Stripped Coupon Certificate will be treated as a
single installment obligation subject to the OID rules of the Code, in which
case, all payments from such Mortgage Asset would be included in the Mortgage
Asset's stated redemption price at maturity for purposes of calculating
income on such Certificate under the OID rules of the Code.

It is unclear under what circumstances, if any, the prepayment of
Mortgage Assets will give rise to a loss to the holder of a Stripped Bond
Certificate purchased at a premium or a Stripped Coupon Certificate. If such
Certificate is treated as a single instrument (rather than an interest in
discrete mortgage loans) and the effect of prepayments is taken into account
in computing yield with respect to such Grantor Trust Certificate, it appears
that no loss will be available as a result of any particular prepayment
unless prepayments occur at a rate faster than the assumed prepayment rate.
However, if such Certificate is treated as an interest in discrete Mortgage
Assets, or if no prepayment assumption is used, then when a Mortgage Asset is
prepaid, the holder of such Certificate should be able to recognize a loss
equal to the portion of the adjusted issue price of such Certificate that is
allocable to such Mortgage Asset.

Holders of Stripped Bond Certificates and Stripped Coupon Certificates
are urged to consult with their own tax advisors regarding the proper
treatment of these Certificates for federal income tax purposes.

Treatment of Certain Owners. Several Code sections provide beneficial
treatment to certain taxpayers that invest in Mortgage Assets of the type
that make up the Trust Fund. With respect to these Code sections, no
specific legal authority exists regarding whether the character of the
Grantor Trust Certificates, for federal income tax purposes, will be the same
as that of the underlying Mortgage Assets. While Code Section 1286 treats a
stripped obligation as a separate obligation for purposes of the Code
provisions addressing OID, it is not clear whether such characterization
would apply with regard to these other Code sections. Although the issue is
not free from doubt, each class of Grantor Trust Certificates, unless
otherwise specified in the related Prospectus Supplement, should be
considered to represent "real estate assets" within the meaning of Code
Section 856(c)(4)(A) and "loans . . . secured by, an interest in real
property which is . . . residential real property" within the meaning of
Code Section 7701(a)(19)(C)(v), and interest income attributable to Grantor
Trust Certificates should be considered to represent "interest on obligations
secured by mortgages on real property" within the meaning of Code Section
856(c)(3)(B), provided that in each case the underlying Mortgage Assets and
interest on such Mortgage Assets qualify for such treatment. Prospective
purchasers to which such characterization of an investment in Certificates is
material should consult their own tax advisors regarding the characterization
of the Grantor Trust Certificates and the income therefrom. Grantor Trust
Certificates will be "obligation(s) ... which (are) principally secured, by
an interest in real property" within the meaning of Code Section
860G(a)(3)(A).

2. Grantor Trust Certificates Representing Interests in Loans Other
Than ARM Loans

The original issue discount rules of Code Sections 1271 through 1275
will be applicable to a Certificateholder's interest in those Mortgage Assets
as to which the conditions for the application of those sections are met.
Rules regarding periodic inclusion of original issue discount in income are
applicable to mortgages of corporations originated after May 27, 1969,
mortgages of noncorporate mortgagors (other than individuals) originated
after July 1, 1982, and mortgages of individuals originated after March 2,
1984. Under the OID Regulations, such original issue discount could arise by
the charging of points by the originator of the mortgage in an amount greater
than the statutory de minimis exception, including a payment of points that
is currently deductible by the borrower under applicable Code provisions, or
under certain circumstances, by the presence of "teaser" rates on the
Mortgage Assets. OID on each Grantor Trust Certificate must be included in
the owner's ordinary income for federal income tax purposes as it accrues, in
accordance with a constant interest method that takes into account the
compounding of interest, in advance of receipt of the cash attributable to
such income. The amount of OID required to be included in an owner's income
in any taxable year with respect to a Grantor Trust Certificate representing
an interest in Mortgage Assets other than Mortgage Assets with interest rates
that adjust periodically ("ARM Loans") likely will be computed as described
below under "--Accrual of Original Issue Discount." The following discussion
is based in part on the OID Regulations and in part on the provisions of the
Tax Reform Act of 1986 (the "1986 Act"). The OID Regulations generally are
effective for debt instruments issued on or after April 4, 1994, but may be
relied upon as authority with respect to debt instruments, such as the
Grantor Trust Certificates, issued after December 21, 1992. Alternatively,
proposed Treasury regulations issued December 21, 1992 may be treated as
authority for debt instruments issued after December 21, 1992 and prior to
April 4, 1994, and proposed Treasury regulations issued in 1986 and 1991 may
be treated as authority for instruments issued before December 21, 1992. In
applying these dates, the issued date of the Mortgage Assets should be used,
or, in the case of Stripped Bond Certificates or Stripped Coupon
Certificates, the date such Certificates are acquired. The holder of a
Certificate should be aware, however, that neither the proposed OID
Regulations nor the OID Regulations adequately address certain issues
relevant to prepayable securities.

Under the Code, the Mortgage Assets underlying the Grantor Trust
Certificate will be treated as having been issued on the date they were
originated with an amount of OID equal to the excess of such Mortgage Asset's
stated redemption price at maturity over its issue price. The issue price of
a Mortgage Asset is generally the amount lent to the mortgagee, which may be
adjusted to take into account certain loan origination fees. The stated
redemption price at maturity of a Mortgage Asset is the sum of all payments
to be made on such Mortgage Asset other than payments that are treated as
qualified stated interest payments. The accrual of this OID, as described
below under "--Accrual of Original Issue Discount," will, unless otherwise
specified in the related Prospectus Supplement, utilize the original yield to
maturity of the Grantor Trust Certificate calculated based on a reasonable
assumed prepayment rate for the mortgage loans underlying the Grantor Trust
Certificates (the "Prepayment Assumption") on the issue date of such Grantor
Trust Certificate, and will take into account events that occur during the
calculation period. The Prepayment Assumption will be determined in the
manner prescribed by regulations that have not yet been issued. In the
absence of such regulations, the Prepayment Assumption used will be the
prepayment assumption that is used in determining the offering price of such
Certificate. No representation is made that any Certificate will prepay at
the Prepayment Assumption or at any other rate. The prepayment assumption
contained in the Code literally only applies to debt instruments
collateralized by other debt instruments that are subject to prepayment
rather than direct ownership interests in such debt instruments, such as the
Certificates represent. However, no other legal authority provides guidance
with regard to the proper method for accruing OID on obligations that are
subject to prepayment, and, until further guidance is issued, the Master
Servicer intends to calculate and report OID under the method described
below.

Accrual of Original Issue Discount. Generally, the owner of a Grantor
Trust Certificate must include in gross income the sum of the "daily
portions," as defined below, of the OID on such Grantor Trust Certificate for
each day on which it owns such Certificate, including the date of purchase
but excluding the date of disposition. In the case of an original owner, the
daily portions of OID with respect to each component generally will be
determined as set forth under the OID Regulations. A calculation will be
made by the Master Servicer or such other entity specified in the related
Prospectus Supplement of the portion of OID that accrues during each
successive monthly accrual period (or shorter period from the date of
original issue) that ends on the day in the calendar year corresponding to
each of the Distribution Dates on the Grantor Trust Certificates (or the day
prior to each such date). This will be done, in the case of each full month
accrual period, by (i) adding (a) the present value at the end of the accrual
period (determined by using as a discount factor the original yield to
maturity of the respective component under the Prepayment Assumption) of all
remaining payments to be received under the Prepayment Assumption on the
respective component and (b) any payments included in the stated redemption
price at maturity received during such accrual period, and (ii) subtracting
from that total the "adjusted issue price" of the respective component at the
beginning of such accrual period. The adjusted issue price of a Grantor
Trust Certificate at the beginning of the first accrual period is its issue
price; the adjusted issue price of a Grantor Trust Certificate at the
beginning of a subsequent accrual period is the adjusted issue price at the
beginning of the immediately preceding accrual period plus the amount of OID
allocable to that accrual period reduced by the amount of any payment other
than a payment of qualified stated interest made at the end of or during that
accrual period. The OID accruing during such accrual period will then be
divided by the number of days in the period to determine the daily portion of
OID for each day in the period. With respect to an initial accrual period
shorter than a full monthly accrual period, the daily portions of OID must be
determined according to an appropriate allocation under any reasonable
method.

Original issue discount generally must be reported as ordinary gross
income as it accrues under a constant interest method that takes into account
the compounding of interest as it accrues rather than when received.
However, the amount of original issue discount includible in the income of a
holder of an obligation is reduced when the obligation is acquired after its
initial issuance at a price greater than the sum of the original issue price
and the previously accrued original issue discount, less prior payments of
principal. Accordingly, if such Mortgage Assets acquired by a
Certificateholder are purchased at a price equal to the then unpaid principal
amount of such Mortgage Asset, no original issue discount attributable to the
difference between the issue price and the original principal amount of such
Mortgage Asset (i.e. points) will be includible by such holder. Other
original issue discount on the Mortgage Assets (e.g., that arising from a
"teaser" rate) would still need to be accrued.

3. Grantor Trust Certificates Representing Interests in ARM Loans

The OID Regulations do not address the treatment of instruments, such as
the Grantor Trust Certificates, which represent interests in ARM Loans.
Additionally, the IRS has not issued guidance under the Code's coupon
stripping rules with respect to such instruments. In the absence of any
authority, the Master Servicer will report OID on Grantor Trust Certificates
attributable to ARM Loans ("Stripped ARM Obligations") to holders in a manner
it believes is consistent with the rules described above under the heading "-
- -Grantor Trust Certificates Representing Interests in Loans Other Than ARM
Loans" and with the OID Regulations. In general, application of these rules
may require inclusion of income on a Stripped ARM Obligation in advance of
the receipt of cash attributable to such income. Further, the addition of
interest deferred by reason of negative amortization ("Deferred Interest") to
the principal balance of an ARM Loan may require the inclusion of such amount
in the income of the Grantor Trust Certificateholder when such amount
accrues. Furthermore, the addition of Deferred Interest to the Grantor Trust
Certificate's principal balance will result in additional income (including
possibly OID income) to the Grantor Trust Certificateholder over the
remaining life of such Grantor Trust Certificates.

Because the treatment of Stripped ARM Obligations is uncertain,
investors are urged to consult their tax advisors regarding how income will
be includible with respect to such Certificates.

C. SALE OR EXCHANGE OF A GRANTOR TRUST CERTIFICATE

Sale or exchange of a Grantor Trust Certificate prior to its maturity
will result in gain or loss equal to the difference, if any, between the
amount received and the owner's adjusted basis in the Grantor Trust
Certificate. Such adjusted basis generally will equal the seller's purchase
price for the Grantor Trust Certificate, increased by the OID included in the
seller's gross income with respect to the Grantor Trust Certificate, and
reduced by principal payments on the Grantor Trust Certificate previously
received by the seller. Such gain or loss will be capital gain or loss to an
owner for which a Grantor Trust Certificate is a "capital asset" within the
meaning of Code Section 1221, and will be long-term or short-term depending
on whether the Grantor Trust Certificate has been owned for the long-term
capital gain holding period (currently more than one year).

The Taxpayer Relief Act of 1997 (the "Act") reduces the maximum rates on
long-term capital gains recognized on capital assets held by individual
taxpayers for more than eighteen months as of the date of disposition (and
would further reduce the maximum rates on such gains in the year 2001 and
thereafter for certain individual taxpayers who meet specified conditions).
The capital gains rate for capital assets held by individual taxpayers for
more than twelve months but not more than eighteen months was not changed by
the Act. The Act does not change the capital gains rates for corporations.
Prospective investors should consult their own tax advisors concerning these
tax law changes.

It is possible that capital gain realized by holders of one or more
classes of Grantor Trust Certificates could be considered gain realized upon
the disposition of property that was part of a "conversion transaction." A
sale of a Grantor Trust Certificate will be part of a conversion transaction
if substantially all of the holder's expected return is attributable to the
time value of the holder's net investment, and (i) the holder entered the
contract to sell the Grantor Trust Certificate substantially
contemporaneously with acquiring the Grantor Trust Certificate, (ii) the
Grantor Trust Certificate is part of a straddle, (iii) the Grantor Trust
Certificate is marketed or sold as producing capital gain, or (iv) other
transactions to be specified in Treasury regulations that have not yet been
issued. If the sale or other disposition of a Grantor Trust Certificate is
part of a conversion transaction, all or any portion of the gain realized
upon the sale or other disposition would be treated as ordinary income
instead of capital gain.

Grantor Trust Certificates will be "evidences of indebtedness" within
the meaning of Code Section 582(c)(1), so that gain or loss recognized from
the sale of a Grantor Trust Certificate by a bank or a thrift institution to
which such section applies will be treated as ordinary income or loss.

D. NON-U.S. PERSONS

Generally, to the extent that a Grantor Trust Certificate evidences
ownership in underlying Mortgage Assets that were issued on or before July
18, 1984, interest or OID paid by the person required to withhold tax under
Code Section 1441 or 1442 to (i) an owner that is not a U.S. Person (as
defined below) or (ii) a Grantor Trust Certificateholder holding on behalf of
an owner that is not a U.S. Person will be subject to federal income tax,
collected by withholding, at a rate of 30% or such lower rate as may be
provided for interest by an applicable tax treaty, unless such income is
effectively connected with a U.S. trade or business of such owner or
beneficial owner. Accrued OID recognized by the owner on the sale or
exchange of such a Grantor Trust Certificate also will be subject to federal
income tax at the same rate. Generally, such payments would not be subject
to withholding to the extent that a Grantor Trust Certificate evidences
ownership in Mortgage Assets issued after July 18, 1984, by natural persons
if such Grantor Trust Certificateholder complies with certain identification
requirements (including delivery of a statement, signed by the Grantor Trust
Certificateholder under penalties of perjury, certifying that such Grantor
Trust Certificateholder is not a U.S. Person and providing the name and
address of such Grantor Trust Certificateholder). To the extent payments to
Grantor Trust Certificateholders that are not U.S. Persons are payments of
"contingent interest" on the underlying Mortgage Assets, or such Grantor
Trust Certificateholder is ineligible for the exemption described in the
preceding sentence, the 30% withholding tax will apply unless such
withholding taxes are reduced or eliminated by an applicable tax treaty and
such holder meets the eligibility and certification requirements necessary to
obtain the benefits of such treaty. Additional restrictions apply to
Mortgage Assets of where the mortgagor is not a natural person in order to
qualify for the exemption from withholding. If capital gain derived from the
sale, retirement or other disposition of a Grantor Trust Certificate is
effectively connected with a U.S. trade or business of a Grantor Trust
Certificateholder that is not a U.S. Person, such Certificateholder will be
taxed on the net gain under the graduated U.S. federal income tax rates
applicable to U.S. Persons (and, with respect to Grantor Trust Certificates
held by or on behalf of corporations, also may be subject to branch profits
tax). In addition, if the Trust Fund acquires a United States real property
interest through foreclosure, deed in lieu of foreclosure or otherwise on a
Mortgage Asset secured by such an interest (which for this purpose includes
real property located in the United States and the Virgin Islands), a Grantor
Trust Certificateholder that is not a U.S. Person will potentially be subject
to federal income tax on any gain attributable to such real property interest
that is allocable to such holder. Non-U.S. Persons should consult their tax
advisors regarding the application to them of the foregoing rules.

As used herein, a "U.S. Person" means a citizen or resident of the
United States, a corporation or a partnership organized in or under the laws
of the United States or any political subdivision thereof (other than a
partnership that is not treated as a U.S. Person under any applicable
Treasury regulations), an estate the income of which from sources outside the
United States is includible in gross income for federal income tax purposes
regardless of its connection with the conduct of a trade or business within
the United States or a trust if a court within the United States is able to
exercise primary supervision of the administration of the trust and one or
more U.S. Persons have the authority to control all substantial decisions of
the trust. In addition, certain trusts treated as U.S. Persons before August
20, 1996 may elect to continue to be so treated to the extent provided in
regulations.

E. INFORMATION REPORTING AND BACKUP WITHHOLDING

The Master Servicer will furnish or make available, within a reasonable
time after the end of each calendar year, to each person who was a
Certificateholder at any time during such year, such information as may be
deemed necessary or desirable to assist Certificateholders in preparing their
federal income tax returns, or to enable holders to make such information
available to beneficial owners or financial intermediaries that hold such
Certificates as nominees on behalf of beneficial owners. If a holder,
beneficial owner, financial intermediary or other recipient of a payment on
behalf of a beneficial owner fails to supply a certified taxpayer
identification number or if the Secretary of the Treasury determines that
such person has not reported all interest and dividend income required to be
shown on its federal income tax return, 31% backup withholding may be
required with respect to any payments to registered owners who are not
"exempt recipients." In addition, upon the sale of a Grantor Trust
Certificate to (or through) a broker, the broker must withhold 31% of the
entire purchase price, unless either (i) the broker determines that the
seller is a corporation or other exempt recipient, or (ii) the seller
provides, in the required manner, certain identifying information and, in the
case of a non-U.S. Person, certifies that such seller is a Non-U.S. Person,
and certain other conditions are met. Such as sale must also be reported by
the broker to the IRS, unless either (a) the broker determines that the
seller is an exempt recipient or (b) the seller certifies its non-U.S. Person
status (and certain other conditions are met). Certification of the
registered owner's non-U.S. Person status normally would be made on IRS Form
W-8 under penalties of perjury, although in certain cases it may be possible
to submit other documentary evidence. Any amounts deducted and withheld from
a distribution to a recipient would be allowed as a credit against such
recipient's federal income tax liability.

On October 6, 1997, the Treasury Department issued new regulations (the
"New Regulations") which make certain modifications to the withholding,
backup withholding and information reporting rules described above. The New
Regulations attempt to unify certification requirements and modify reliance
standards. The New Regulations will generally be effective for payments made
after December 31, 1998, subject to certain transition rules. Prospective
investors are urged to consult their own tax advisors regarding the New
Regulations.

REMICS

The Trust Fund relating to a Series of Certificates may elect to be
treated as a REMIC. Qualification as a REMIC requires ongoing compliance
with certain conditions. Although a REMIC is not generally subject to
federal income tax (see, however "--Taxation of Owners of REMIC Residual
Certificates" and "--Prohibited Transactions" below), if a Trust Fund with
respect to which a REMIC election is made fails to comply with one or more of
the ongoing requirements of the Code for REMIC status during any taxable
year, including the implementation of restrictions on the purchase and
transfer of the residual interests in a REMIC as described below under
"Taxation of Owners of REMIC Residual Certificates," the Code provides that a
Trust Fund will not be treated as a REMIC for such year and thereafter. In
that event, such entity may be taxable as a separate corporation, and the
related Certificates (the "REMIC Certificates") may not be accorded the
status or given the tax treatment described below. While the Code authorizes
the Treasury Department to issue regulations providing relief in the event of
an inadvertent termination of the status of a trust fund as a REMIC, no such
regulations have been issued. Any such relief, moreover, may be accompanied
by sanctions, such as the imposition of a corporate tax on all or a portion
of the REMIC's income for the period in which the requirements for such
status are not satisfied. With respect to each Trust Fund that elects REMIC
status, Latham & Watkins or Brown & Wood LLP will deliver its opinion
generally to the effect that, under then existing law and assuming compliance
with all provisions of the related Pooling and Servicing Agreement, such
Trust Fund will qualify as a REMIC, and the related Certificates will be
considered to be regular interests ("REMIC Regular Certificates") or a sole
class of residual interests ("REMIC Residual Certificates") in the REMIC.
The related Prospectus Supplement for each Series of Certificates will
indicate whether the Trust Fund will make a REMIC election and whether a
class of Certificates will be treated as a regular or residual interest in
the REMIC.

In general, with respect to each Series of Certificates for which a
REMIC election is made, (i) Certificates held by a thrift institution taxed
as a "domestic building and loan association" will constitute assets
described in Code Section 7701(a)(19)(C); (ii) Certificates held by a real
estate investment trust will constitute "real estate assets" within the
meaning of Code Section 856(c)(4)(A); and (iii) interest on Certificates held
by a real estate investment trust will be considered "interest on obligations
secured by mortgages on real property" within the meaning of Code Section
856(c)(3)(B). If less than 95% of the REMIC's assets are assets qualifying
under any of the foregoing Code sections, the Certificates will be qualifying
assets only to the extent that the REMIC's assets are qualifying assets.

In some instances the Mortgage Assets may not be treated entirely as
assets described in the foregoing sections. See, in this regard, the
discussion of Buydown Loans contained in "--Non-REMIC Certificates--Single
Class of Grantor Trust Certificates" above. REMIC Certificates held by a
real estate investment trust will not constitute "Government Securities"
within the meaning of Code Section 856(c)(4)(A), and REMIC Certificates held
by a regulated investment company will not constitute "Government Securities"
within the meaning of Code Section 851(b)(4)(A)(ii). REMIC Certificates held
by certain financial institutions will constitute "evidences of indebtedness"
within the meaning of Code Section 582(c)(1).

A "qualified mortgage" for REMIC purposes is any obligation (including
certificates of participation in such an obligation) that is principally
secured by an interest in real property and that is transferred to the REMIC
within a prescribed time period in exchange for regular or residual interests
in the REMIC. The REMIC Regulations provide that manufactured housing or
mobile homes (not including recreational vehicles, campers or similar
vehicles) that are "single family residences" under Code Section 25(e)(10)
will qualify as real property without regard to state law classifications.
Under Code Section 25(e)(10), a single family residence includes any
manufactured home that has a minimum of 400 square feet of living space and a
minimum width in excess of 102 inches and that is of a kind customarily used
at a fixed location.

Tiered REMIC Structures. For certain Series of Certificates, two or
more separate elections may be made to treat designated portions of the
related Trust Fund as REMICs (respectively, the "Subsidiary REMIC" and the
"Master REMIC") for federal income tax purposes. Upon the issuance of any
such Series of Certificates, Latham & Watkins or Brown & Wood LLP, counsel to
the Depositor, will deliver its opinion generally to the effect that,
assuming compliance with all provisions of the related Agreement, the Master
REMIC as well as any Subsidiary REMIC will each qualify as a REMIC, and the
REMIC Certificates issued by the Master REMIC and the Subsidiary REMIC or
REMICs, respectively, will be considered to evidence ownership of regular
interests ("REMIC Regular Certificates") or residual interests ("REMIC
Residual Certificates") in the related REMIC within the meaning of the REMIC
provisions.

Other than the residual interest in a Subsidiary REMIC, only REMIC
Certificates issued by the Master REMIC will be offered hereunder. The
Subsidiary REMIC or REMICs and the Master REMIC will be treated as one REMIC
solely for purposes of determining whether the REMIC Certificates will be (i)
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Code;
(ii) "loans secured by an interest in real property" under Section
7701(a)(19)(C) of the Code; and (iii) whether the income on such Certificates
is interest described in Section 856(c)(3)(B) of the Code.

A. TAXATION OF OWNERS OF REMIC REGULAR CERTIFICATES

General. Except as otherwise stated in this discussion, REMIC Regular
Certificates will be treated for federal income tax purposes as debt
instruments issued by the REMIC and not as ownership interests in the REMIC
or its assets. Moreover, holders of REMIC Regular Certificates that
otherwise report income under a cash method of accounting will be required to
report income with respect to REMIC Regular Certificates under an accrual
method.

Original Issue Discount and Premium. The REMIC Regular Certificates may
be issued with OID. Generally, such OID, if any, will equal the difference
between the "stated redemption price at maturity" of a REMIC Regular
Certificate and its "issue price." Holders of any class of Certificates
issued with OID will be required to include such OID in gross income for
federal income tax purposes as it accrues, in accordance with a constant
interest method based on the compounding of interest as it accrues rather
than in accordance with receipt of the interest payments. The following
discussion is based in part on the OID Regulations and in part on the
provisions of the Tax Reform Act of 1986 (the "1986 Act"). Holders of REMIC
Regular Certificates (the "REMIC Regular Certificateholders") should be
aware, however, that the OID Regulations do not adequately address certain
issues relevant to prepayable securities, such as the REMIC Regular
Certificates.

Rules governing OID are set forth in Code Sections 1271 through 1273 and
1275. These rules require that the amount and rate of accrual of OID be
calculated based on the Prepayment Assumption and the anticipated
reinvestment rate, if any, relating to the REMIC Regular Certificates and
prescribe a method for adjusting the amount and rate of accrual of such
discount where the actual prepayment rate differs from the Prepayment
Assumption. Under the Code, the Prepayment Assumption must be determined in
the manner prescribed by regulations, which regulations have not yet been
issued. The legislative history of the 1986 Act (the "Legislative History")
provides, however, that Congress intended the regulations to require that the
Prepayment Assumption be the prepayment assumption that is used in
determining the initial offering price of such REMIC Regular Certificates.
The Prospectus Supplement for each Series of REMIC Regular Certificates will
specify the Prepayment Assumption to be used for the purpose of determining
the amount and rate of accrual of OID. No representation is made that the
REMIC Regular Certificates will prepay at the Prepayment Assumption or at any
other rate.

In general, each REMIC Regular Certificate will be treated as a single
installment obligation issued with an amount of OID equal to the excess of
its "stated redemption price at maturity" over its "issue price." The issue
price of a REMIC Regular Certificate is the first price at which a
substantial amount of REMIC Regular Certificates of that class are first sold
to the public (excluding bond houses, brokers, underwriters or wholesalers).
If less than a substantial amount of a particular class of REMIC Regular
Certificates is sold for cash on or prior to the date of their initial
issuance (the "Closing Date"), the issue price for such class will be treated
as the fair market value of such class on the Closing Date. The issue price
of a REMIC Regular Certificate also includes the amount paid by an initial
Certificateholder for accrued interest that relates to a period prior to the
issue date of the REMIC Regular Certificate. The stated redemption price at
maturity of a REMIC Regular Certificate includes the original principal
amount of the REMIC Regular Certificate, but generally will not include
distributions of interest if such distributions constitute "qualified stated
interest." Qualified stated interest generally means interest payable at a
single fixed rate or qualified variable rate (as described below) provided
that such interest payments are unconditionally payable at intervals of one
year or less during the entire term of the REMIC Regular Certificate.
Interest is payable at a single fixed rate only if the rate appropriately
takes into account the length of the interval between payments.
Distributions of interest on REMIC Regular Certificates with respect to which
Deferred Interest will accrue will not constitute qualified stated interest
payments, and the stated redemption price at maturity of such REMIC Regular
Certificates includes all distributions of interest as well as principal
thereon.

Where the interval between the issue date and the first Distribution
Date on a REMIC Regular Certificate is longer than the interval between
subsequent Distribution Dates, the greater of any original issue discount
(disregarding the rate in the first period) and any interest foregone during
the first period is treated as the amount by which the stated redemption
price at maturity of the Certificate exceeds its issue price for purposes of
the de minimis rule described below. The OID Regulations suggest that all
interest on a long first period REMIC Regular Certificate that is issued with
non-de minimis OID, as determined under the foregoing rule, will be treated
as OID. Where the interval between the issue date and the first Distribution
Date on a REMIC Regular Certificate is shorter than the interval between
subsequent Distribution Dates, interest due on the first Distribution Date in
excess of the amount that accrued during the first period would be added to
the Certificates stated redemption price at maturity. REMIC Regular
Certificateholders should consult their own tax advisors to determine the
issue price and stated redemption price at maturity of a REMIC Regular
Certificate.

Under the de minimis rule, OID on a REMIC Regular Certificate will be
considered to be zero if such OID is less than 0.25% of the stated redemption
price at maturity of the REMIC Regular Certificate multiplied by the weighted
average maturity of the REMIC Regular Certificate. For this purpose, the
weighted average maturity of the REMIC Regular Certificate is computed as the
sum of the amounts determined by multiplying the number of full years (i.e.,
rounding down partial years) from the issue date until each distribution in
reduction of stated redemption price at maturity is scheduled to be made by a
fraction, the numerator of which is the amount of each distribution included
in the stated redemption price at maturity of the REMIC Regular Certificate
and the denominator of which is the stated redemption price at maturity of
the REMIC Regular Certificate. Although currently unclear, it appears that
the schedule of such distributions should be determined in accordance with
the Prepayment Assumption. The Prepayment Assumption with respect to a
Series of REMIC Regular Certificates will be set forth in the related
Prospectus Supplement. Holders generally must report de minimis OID pro rata
as principal payments are received, and such income will be capital gain if
the REMIC Regular Certificate is held as a capital asset. However, accrual
method holders may elect to accrue all de minimis OID as well as market
discount under a constant interest method.

The Prospectus Supplement with respect to a Trust Fund may provide for
certain REMIC Regular Certificates to be issued at prices significantly
exceeding their principal amounts or based on notional principal balances
(the "Super-Premium Certificates"). The income tax treatment of such REMIC
Regular Certificates is not entirely certain. For information reporting
purposes, the Trust Fund intends to take the position that the stated
redemption price at maturity of such REMIC Regular Certificates is the sum of
all payments to be made on such REMIC Regular Certificates determined under
the Prepayment Assumption, with the result that such REMIC Regular
Certificates would be issued with OID. The calculation of income in this
manner could result in negative original issue discount (which delays future
accruals of OID rather than being immediately deductible) when prepayments on
the Mortgage Assets exceed those estimated under the Prepayment Assumption.
The IRS might contend, however, that certain contingent payment rules
contained in final regulations issued on June 11, 1996, with respect to
original issue discount, should apply to such Certificates. Although such
rules are not applicable to instruments governed by Code Section 1272(a)(6),
they represent the only guidance regarding the current views of the IRS with
respect to contingent payment instruments. In the alternative, the IRS could
assert that the stated redemption price at maturity of such REMIC Regular
Certificates should be limited to their principal amount (subject to the
discussion below under "--Accrued Interest Certificates"), so that such REMIC
Regular Certificates would be considered for federal income tax purposes to
be issued at a premium. If such a position were to prevail, the rules
described below under "--Taxation of Owners of REMIC Regular Certificates--
Premium" would apply. It is unclear when a loss may be claimed for any
unrecovered basis for a Super-Premium Certificate. It is possible that a
holder of a Super-Premium Certificate may only claim a loss when its
remaining basis exceeds the maximum amount of future payments, assuming no
further prepayments or when the final payment is received with respect to
such Super-Premium Certificate.

Under the REMIC Regulations, if the issue price of a REMIC Regular
Certificate (other than REMIC Regular Certificate based on a notional amount)
does not exceed 125% of its actual principal amount, the interest rate is not
considered disproportionately high. Accordingly, such REMIC Regular
Certificate generally should not be treated as a Super-Premium Certificate
and the rules described below under "--REMIC Regular Certificates--Premium"
should apply. However, it is possible that holders of REMIC Regular
Certificates issued at a premium, even if the premium is less than 25% of
such Certificate's actual principal balance, will be required to amortize the
premium under an original issue discount method or contingent interest method
even though no election under Code Section 171 is made to amortize such
premium.

Generally, a REMIC Regular Certificateholder must include in gross
income the "daily portions," as determined below, of the OID that accrues on
a REMIC Regular Certificate for each day a Certificateholder holds the REMIC
Regular Certificate, including the purchase date but excluding the
disposition date. In the case of an original holder of a REMIC Regular
Certificate, a calculation will be made of the portion of the OID that
accrues during each successive period ("an accrual period") that ends on the
day in the calendar year corresponding to a Distribution Date (or if
Distribution Dates are on the first day or first business day of the
immediately preceding month, interest may be treated as payable on the last
day of the immediately preceding month) and begins on the day after the end
of the immediately preceding accrual period (or on the issue date in the case
of the first accrual period). This will be done, in the case of each full
accrual period, by (i) adding (a) the present value at the end of the accrual
period (determined by using as a discount factor the original yield to
maturity of the REMIC Regular Certificates as calculated under the Prepayment
Assumption) of all remaining payments to be received on the REMIC Regular
Certificates under the Prepayment Assumption and (b) any payments included in
the stated redemption price at maturity received during such accrual period,
and (ii) subtracting from that total the adjusted issue price of the REMIC
Regular Certificates at the beginning of such accrual period. The adjusted
issue price of a REMIC Regular Certificate at the beginning of the first
accrual period is its issue price; the adjusted issue price of a REMIC
Regular Certificate at the beginning of a subsequent accrual period is the
adjusted issue price at the beginning of the immediately preceding accrual
period plus the amount of OID allocable to that accrual period and reduced by
the amount of any payment other than a payment of qualified stated interest
made at the end of or during that accrual period. The OID accrued during an
accrual period will then be divided by the number of days in the period to
determine the daily portion of OID for each day in the accrual period. The
calculation of OID under the method described above will cause the accrual of
OID to either increase or decrease (but never below zero) in a given accrual
period to reflect the fact that prepayments are occurring faster or slower
than under the Prepayment Assumption. With respect to an initial accrual
period shorter than a full accrual period, the daily portions of OID may be
determined according to an appropriate allocation under any reasonable
method.

A subsequent purchaser of a REMIC Regular Certificate issued with OID
who purchases the REMIC Regular Certificate at a cost less than the remaining
stated redemption price at maturity will also be required to include in gross
income the sum of the daily portions of OID on that REMIC Regular
Certificate. In computing the daily portions of OID for such a purchaser (as
well as an initial purchaser that purchases at a price higher than the
adjusted issue price but less than the stated redemption price at maturity),
however, the daily portion is reduced by the amount that would be the daily
portion for such day (computed in accordance with the rules set forth above)
multiplied by a fraction, the numerator of which is the amount, if any, by
which the price paid by such holder for that REMIC Regular Certificate
exceeds the following amount: (a) the sum of the issue price plus the
aggregate amount of OID that would have been includible in the gross income
of an original REMIC Regular Certificateholder (who purchased the REMIC
Regular Certificate at its issue price), less (b) any prior payments included
in the stated redemption price at maturity, and the denominator of which is
the sum of the daily portions for that REMIC Regular Certificate for all days
beginning on the date after the purchase date and ending on the maturity date
computed under the Prepayment Assumption. A holder who pays an acquisition
premium instead may elect to accrue OID by treating the purchase as a
purchase at original issue.

Variable Rate REMIC Regular Certificates. REMIC Regular Certificates
may provide for interest based on a variable rate. Interest based on a
variable rate will constitute qualified stated interest and not contingent
interest if, generally, (i) such interest is unconditionally payable at least
annually, (ii) the issue price of the debt instrument does not exceed the
total noncontingent principal payments and (iii) interest is based on a
"qualified floating rate," an "objective rate," a combination of a single
fixed rate and one or more "qualified floating rates," one "qualified inverse
floating rate," or a combination of "qualified floating rates " that do not
operate in a manner that significantly accelerates or defers interest
payments on such REMIC Regular Certificate.

The amount of OID with respect to a REMIC Regular Certificate bearing a
variable rate of interest will accrue in the manner described above under "--
Original Issue Discount and Premium" by assuming generally that the index
used for the variable rate will remain fixed throughout the term of the
Certificate. Appropriate adjustments are made for the actual variable rate.

Although unclear at present, the Depositor intends to treat interest on
a REMIC Regular Certificate that is a weighted average of the net interest
rates on Mortgage Loans as qualified stated interest. In such case, the
weighted average rate used to compute the initial pass-through rate on the
REMIC Regular Certificates will be deemed to be the index in effect through
the life of the REMIC Regular Certificates. It is possible, however, that
the IRS may treat some or all of the interest on REMIC Regular Certificates
with a weighted average rate as taxable under the rules relating to
obligations providing for contingent payments. Such treatment may effect the
timing of income accruals on such REMIC Regular Certificates.

Election to Treat All Interest as OID. The OID Regulations permit a
Certificateholder to elect to accrue all interest, discount (including de
minimis market discount or original issue discount) and premium in income as
interest, based on a constant yield method. If such an election were to be
made with respect to a REMIC Regular Certificate with market discount, the
Certificateholder would be deemed to have made an election to include in
income currently market discount with respect to all other debt instruments
having market discount that such Certificateholder acquires during the year
of the election or thereafter. Similarly, a Certificateholder that makes
this election for a Certificate that is acquired at a premium will be deemed
to have made an election to amortize bond premium with respect to all debt
instruments having amortizable bond premium that such Certificateholder owns
or acquires. See "-- REMIC Regular Certificates--Premium" herein. The
election to accrue interest, discount and premium on a constant yield method
with respect to a Certificate is irrevocable.

Market Discount. A purchaser of a REMIC Regular Certificate may also be
subject to the market discount provisions of Code Sections 1276 through 1278.
Under these provisions and the OID Regulations, "market discount" equals the
excess, if any, of (i) the REMIC Regular Certificate's stated principal
amount or, in the case of a REMIC Regular Certificate with OID, the adjusted
issue price (determined for this purpose as if the purchaser had purchased
such REMIC Regular Certificate from an original holder) over (ii) the price
for such REMIC Regular Certificate paid by the purchaser. A
Certificateholder that purchases a REMIC Regular Certificate at a market
discount will recognize income upon receipt of each distribution representing
amounts included in such certificate's stated redemption price at maturity.
In particular, under Section 1276 of the Code such a holder generally will be
required to allocate each such distribution first to accrued market discount
not previously included in income, and to recognize ordinary income to that
extent. A Certificateholder may elect to include market discount in income
currently as it accrues rather than including it on a deferred basis in
accordance with the foregoing. If made, such election will apply to all
market discount bonds acquired by such Certificateholder on or after the
first day of the first taxable year to which such election applies.

Market discount with respect to a REMIC Regular Certificate will be
considered to be zero if the amount allocable to the REMIC Regular
Certificate is less than 0.25% of such REMIC Regular Certificate's stated
redemption price at maturity multiplied by such REMIC Regular Certificate's
weighted average maturity remaining after the date of purchase. If market
discount on a REMIC Regular Certificate is considered to be zero under this
rule, the actual amount of market discount must be allocated to the remaining
principal payments on the REMIC Regular Certificate, and gain equal to such
allocated amount will be recognized when the corresponding principal payment
is made. Treasury regulations implementing the market discount rules have
not yet been issued; therefore, investors should consult their own tax
advisors regarding the application of these rules and the advisability of
making any of the elections allowed under Code Sections 1276 through 1278.

The Code provides that any principal payment (whether a scheduled
payment or a prepayment) or any gain on disposition of a market discount bond
acquired by the taxpayer after October 22, 1986, shall be treated as ordinary
income to the extent that it does not exceed the accrued market discount at
the time of such payment. The amount of accrued market discount for purposes
of determining the tax treatment of subsequent principal payments or
dispositions of the market discount bond is to be reduced by the amount so
treated as ordinary income.

The Code also grants authority to the Treasury Department to issue
regulations providing for the computation of accrued market discount on debt
instruments, the principal of which is payable in more than one installment.
Until such time as regulations are issued by the Treasury, rules described in
the Legislative History will apply. Under those rules, the holder of a
market discount bond may elect to accrue market discount either on the basis
of a constant interest method rate or according to one of the following
methods. For REMIC Regular Certificates issued with OID, the amount of
market discount that accrues during a period is equal to the product of (i)
the total remaining market discount and (ii) a fraction, the numerator of
which is the OID accruing during the period and the denominator of which is
the total remaining OID at the beginning of the period. For REMIC Regular
Certificates issued without OID, the amount of market discount that accrues
during a period is equal to the product of (a) the total remaining market
discount and (b) a fraction, the numerator of which is the amount of stated
interest paid during the accrual period and the denominator of which is the
total amount of stated interest remaining to be paid at the beginning of the
period. For purposes of calculating market discount under any of the above
methods in the case of instruments (such as the REMIC Regular Certificates)
that provide for payments that may be accelerated by reason of prepayments of
other obligations securing such instruments, the same Prepayment Assumption
applicable to calculating the accrual of OID will apply.

A holder who acquired a REMIC Regular Certificate at a market discount
also may be required to defer a portion of its interest deductions for the
taxable year attributable to any indebtedness incurred or continued to
purchase or carry such Certificate purchased with market discount. For these
purposes, the de minimis rule referred to above applies. Any such deferred
interest expense would not exceed the market discount that accrues during
such taxable year and is, in general, allowed as a deduction not later than
the year in which such market discount is includible in income. If such
holder elects to include market discount in income currently as it accrues on
all market discount instruments acquired by such holder in that taxable year
or thereafter, the interest deferral rule described above will not apply.

Premium. A purchaser of a REMIC Regular Certificate that purchases the
REMIC Regular Certificate at a cost (not including accrued qualified stated
interest) greater than its remaining stated redemption price at maturity will
be considered to have purchased the REMIC Regular Certificate at a premium
and may elect to amortize such premium under a constant yield method. A
Certificateholder that makes this election for a Certificate that is acquired
at a premium will be deemed to have made an election to amortize bond premium
with respect to all debt instruments having amortizable bond premium that
such Certificateholder acquires during the year of the election or
thereafter. It is not clear whether the Prepayment Assumption would be taken
into account in determining the life of the REMIC Regular Certificate for
this purpose. However, the Legislative History states that the same rules
that apply to accrual of market discount (which rules require use of a
Prepayment Assumption in accruing market discount with respect to REMIC
Regular Certificates without regard to whether such Certificates have OID)
will also apply in amortizing bond premium under Code Section 171. The Code
provides that amortizable bond premium will be allocated among the interest
payments on such REMIC Regular Certificates and will be applied as an offset
against such interest payment. On June 27, 1996, the IRS published in the
Federal Register proposed regulations on the amortization of bond premium.
The foregoing discussion is based in part on such proposed regulations. On
December 30, 1997, the IRS issued the Amortizable Bond Premium Regulations,
which generally are effective for bonds acquired on or after March 2, 1998
or, for holders making an election to amortize bond premium as described
above for the taxable year that includes March 2, 1998 or any subsequent
taxable year, will apply to bonds held on or after the first day of the
taxable year in which the election is made. Neither the proposed regulations
nor the final regulations, by their express terms, apply to prepayable
securities described in Section 1272(a)(6) of the Code, such as the REMIC
Regular Certificates. Certificateholders should consult their tax advisors
regarding the possibility of making an election to amortize any such bond
premium.

Deferred Interest. Certain classes of REMIC Regular Certificates may
provide for the accrual of Deferred Interest with respect to one or more ARM
Loans. Any Deferred Interest that accrues with respect to a class of REMIC
Regular Certificates will constitute income to the holders of such
Certificates prior to the time distributions of cash with respect to such
Deferred Interest are made. It is unclear, under the OID Regulations,
whether any of the interest on such Certificates will constitute qualified
stated interest or whether all or a portion of the interest payable on such
Certificates must be included in the stated redemption price at maturity of
the Certificates and accounted for as OID (which could accelerate such
inclusion). Interest on REMIC Regular Certificates must in any event be
accounted for under an accrual method by the holders of such Certificates
and, therefore, applying the latter analysis may result only in a slight
difference in the timing of the inclusion in income of interest on such REMIC
Regular Certificates.

Effects of Defaults and Delinquencies. Certain Series of Certificates
may contain one or more classes of Subordinated Certificates, and in the
event there are defaults or delinquencies on the Mortgage Assets, amounts
that would otherwise be distributed on the Subordinated Certificates may
instead be distributed on the Senior Certificates. Subordinated
Certificateholders nevertheless will be required to report income with
respect to such Certificates under an accrual method without giving effect to
delays and reductions in distributions on such Subordinated Certificates
attributable to defaults and delinquencies on the Mortgage Assets, except to
the extent that it can be established that such amounts are uncollectible.
As a result, the amount of income reported by a Subordinated
Certificateholder in any period could significantly exceed the amount of cash
distributed to such holder in that period. The holder will eventually be
allowed a loss (or will be allowed to report a lesser amount of income) to
the extent that the aggregate amount of distributions on the Subordinated
Certificate is reduced as a result of defaults and delinquencies on the
Mortgage Assets. Timing and characterization of such losses is discussed in
"--REMIC Regular Certificates--Treatment of Realized Losses" below.

Sale, Exchange or Redemption. If a REMIC Regular Certificate is sold,
exchanged, redeemed or retired, the seller will recognize gain or loss equal
to the difference between the amount realized on the sale, exchange,
redemption, or retirement and the seller's adjusted basis in the REMIC
Regular Certificate. Such adjusted basis generally will equal the cost of
the REMIC Regular Certificate to the seller, increased by any OID and market
discount included in the seller's gross income with respect to the REMIC
Regular Certificate, and reduced (but not below zero) by payments included in
the stated redemption price at maturity previously received by the seller and
by any amortized premium. Similarly, a holder who receives a payment that is
part of the stated redemption price at maturity of a REMIC Regular
Certificate will recognize gain equal to the excess, if any, of the amount of
the payment over the holder's adjusted basis in the REMIC Regular
Certificate. A REMIC Regular Certificateholder who receives a final payment
that is less than the holder's adjusted basis in the REMIC Regular
Certificate will generally recognize a loss. Except as provided in the
following paragraph and as provided under "--Market Discount" above, any such
gain or loss will be capital gain or loss, provided that the REMIC Regular
Certificate is held as a "capital asset" (generally, property held for
investment) within the meaning of Code Section 1221.

Gain from the sale or other disposition of a REMIC Regular Certificate
that might otherwise be capital gain will be treated as ordinary income to
the extent that such gain does not exceed the excess, if any, of (i) the
amount that would have been includible in such holder's income with respect
to the REMIC Regular Certificate had income accrued thereon at a rate equal
to 110% of the AFR as defined in Code Section 1274(d) determined as of the
date of purchase of such REMIC Regular Certificate, over (ii) the amount
actually includible in such holder's income. Gain from the sale or other
disposition of a REMIC Regular Certificate that might otherwise be capita
gain will be treated as ordinary income if the REMIC Regular Certificate is
held as part of a "conversion transaction" as defined in Code section
1258(c), up to the amount of interest that would have accrued on the REMIC
Regular Certificateholder's net investment in the conversion transaction at
120% of the appropriate applicable federal rate under Code section 1274(d) in
effect at the time the taxpayer entered into the transaction minus any amount
previously treated as ordinary income with respect to any prior disposition
of property that was held as part of such transaction, or if the REMIC
Regular Certificate is held as part of a straddle. Potential investors
should consult their tax advisors with respect to tax consequences of
ownership and disposition of an investment in REMIC Regular Certificates in
their particular circumstances.

The Certificates will be "evidences of indebtedness" within the meaning
of Code Section 582(c)(1), so that gain or loss recognized from the sale of a
REMIC Regular Certificate by a bank or a thrift institution to which such
section applies will be ordinary income or loss.

The REMIC Regular Certificate information reports will include a
statement of the adjusted issue price of the REMIC Regular Certificate at the
beginning of each accrual period. In addition, the reports will include
information necessary to compute the accrual of any market discount that may
arise upon secondary trading of REMIC Regular Certificates. Because exact
computation of the accrual of market discount on a constant yield method
would require information relating to the holder's purchase price which the
REMIC may not have, it appears that the information reports will only require
information pertaining to the appropriate proportionate method of accruing
market discount.

The Act reduces the maximum rates on long-term capital gains recognized
on capital assets held by individual taxpayers for more than eighteen months
as of the date of disposition (and would further reduce the maximum rates on
such gains in the year 2001 and thereafter for certain individual taxpayers
who meet specified conditions). The capital gains rate for capital assets
held by individual taxpayers for more than twelve months but not more than
eighteen months was not changed by the Act. The Act does not change the
capital gains rates for corporations. Prospective investors should consult
their own tax advisors concerning these tax law changes.

Accrued Interest Certificates. Certain of the REMIC Regular
Certificates ("Payment Lag Certificates") may provide for payments of
interest based on a period that corresponds to the interval between
Distribution Dates but that ends prior to each such Distribution Date. The
period between the Closing Date for Payment Lag Certificates and their first
Distribution Date may or may not exceed such interval. Purchasers of Payment
Lag Certificates for which the period between the Closing Date and the first
Distribution Date does not exceed such interval could pay upon purchase of
the REMIC Regular Certificates accrued interest in excess of the accrued
interest that would be paid if the interest paid on the Distribution Date
were interest accrued from Distribution Date to Distribution Date. If a
portion of the initial purchase price of a REMIC Regular Certificate is
allocable to interest that has accrued prior to the issue date ("pre-issuance
accrued interest") and the REMIC Regular Certificate provides for a payment
of stated interest on the first payment date (and the first payment date is
within one year of the issue date) that equals or exceeds the amount of the
pre-issuance accrued interest, then the REMIC Regular Certificates' issue
price may be computed by subtracting from the issue price the amount of pre-
issuance accrued interest, rather than as an amount payable on the REMIC
Regular Certificate. However, it is unclear under this method how the OID
Regulations treat interest on Payment Lag Certificates. Therefore, in the
case of a Payment Lag Certificate, the Trust Fund intends to include accrued
interest in the issue price and report interest payments made on the first
Distribution Date as interest to the extent such payments represent interest
for the number of days that the Certificateholder has held such Payment Lag
Certificate during the first accrual period.

Investors should consult their own tax advisors concerning the treatment
for federal income tax purposes of Payment Lag Certificates.

Non-Interest Expenses of the REMIC. Under temporary Treasury
regulations, if the REMIC is considered to be a "single-class REMIC," a
portion of the REMIC's servicing, administrative and other non-interest
expenses will be allocated as a separate item to those REMIC Regular
Certificateholders that are "pass-through interest holders."
Certificateholders that are pass-through interest holders should consult
their own tax advisors about the impact of these rules on an investment in
the REMIC Regular Certificates. See "Pass-Through of Non-Interest Expenses
of the REMIC" under "Taxation of Owners of REMIC Residual Certificates"
below.

Treatment of Realized Losses. Although not entirely clear, it appears
that holders of REMIC Regular Certificates that are corporations should in
general be allowed to deduct as an ordinary loss any loss sustained during
the taxable year on account of any such Certificates becoming wholly or
partially worthless, and that, in general, holders of Certificates that are
not corporations should be allowed to deduct as a short-term capital loss any
loss sustained during the taxable year on account of any such Certificates
becoming wholly worthless. Although the matter is not entirely clear, non-
corporate holders of Certificates may be allowed a bad debt deduction at such
time that the principal balance of any such Certificate is reduced to reflect
realized losses resulting from any liquidated Mortgage Assets. The Internal
Revenue Service, however, could take the position that non-corporate holders
will be allowed a bad debt deduction to reflect realized losses only after
all Mortgage Assets remaining in the related Trust Fund have been liquidated
or the Certificates of the related Series have been otherwise retired.
Potential investors and holders of the Certificates are urged to consult
their own tax advisors regarding the appropriate timing, amount and character
of any loss sustained with respect to such Certificates, including any loss
resulting from the failure to recover previously accrued interest or discount
income. Special loss rules are applicable to banks and thrift institutions,
including rules regarding reserves for bad debts. Such taxpayers are advised
to consult their tax advisors regarding the treatment of losses on
Certificates.

Non-U.S. Persons. Generally, payments of interest (including any
payment with respect to accrued OID) on the REMIC Regular Certificates to a
REMIC Regular Certificateholder who is not a U.S. Person and is not engaged
in a trade or business within the United States will not be subject to
federal withholding tax if (i) such REMIC Regular Certificateholder does not
actually or constructively own 10 percent or more of the combined voting
power of all classes of equity in the issuer; (ii) such REMIC Regular
Certificateholder is not a controlled foreign corporation (within the meaning
of Code Section 957) related to the issuer; and (iii) such REMIC Regular
Certificateholder complies with certain identification requirements
(including delivery of a statement, signed by the REMIC Regular
Certificateholder under penalties of perjury, certifying that such REMIC
Regular Certificateholder is a foreign person and providing the name and
address of such REMIC Regular Certificateholder). If a REMIC Regular
Certificateholder is not exempt from withholding, distributions of interest
to such holder, including distributions in respect of accrued OID, may be
subject to a 30% withholding tax, subject to reduction under any applicable
tax treaty. If the interest on a REMIC Regular Certificate is effectively
connected with the conduct by a holder that is a non-U.S. Person of a trade
or business in the United States, then such holder will not be subject to the
30% withholding tax on gross income therefrom but will be subject to U.S.
income tax at regular graduated rates on its net income and, if such holder
is a corporation, may be subject to U.S. branch profits tax as well.

Further, a REMIC Regular Certificate will not be included in the estate
of a non-resident alien individual and will not be subject to United States
estate taxes. However, Certificateholders who are non-resident alien
individuals should consult their tax advisors concerning this question.

REMIC Regular Certificateholders who are not U.S. Persons and persons
related to such holders should not acquire any REMIC Residual Certificates,
and holders of REMIC Residual Certificates (the "REMIC Residual
Certificateholder") and persons related to REMIC Residual Certificateholders
should not acquire any REMIC Regular Certificates without consulting their
tax advisors as to the possible adverse tax consequences of doing so. In
addition, the IRS may assert that non-U.S Persons that own directly or
indirectly, a greater than 10% interest in any Mortgagor, and foreign
corporations that are "controlled foreign corporations" as to the United
States of which such a Mortgagor is a "United States shareholder" within the
meaning of Section 951(b) of the Code, are subject to United States
withholding tax on interest distributed to them to the extent of interest
concurrently paid by the related Mortgagor.

Information Reporting and Backup Withholding. The Master Servicer will
furnish or make available, within a reasonable time after the end of each
calendar year, to each person who was a REMIC Regular Certificateholder at
any time during such year, such information as may be deemed necessary or
desirable to assist REMIC Regular Certificateholders in preparing their
federal income tax returns, or to enable holders to make such information
available to beneficial owners or financial intermediaries that hold such
REMIC Regular Certificates on behalf of beneficial owners. If a holder,
beneficial owner, financial intermediary or other recipient of a payment on
behalf of a beneficial owner fails to supply a certified taxpayer
identification number or if the Secretary of the Treasury determines that
such person has not reported all interest and dividend income required to be
shown on its federal income tax return, 31% backup withholding may be
required with respect to any payments with respect to any payments to
registered owners who are not "exempt recipients." In addition, upon the
sale of a REMIC Regular Certificate to (or through) a broker, the broker must
withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient, or
(ii) the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Person, certifies that such seller
is a Non-U.S. Person, and certain other conditions are met. Such as sale
must also be reported by the broker to the IRS, unless either (a) the broker
determines that the seller is an exempt recipient or (b) the seller certifies
its non-U.S. Person status (and certain other conditions are met).
Certification of the registered owner's non-U.S. Person status normally would
be made on IRS Form W-8 under penalties of perjury, although in certain cases
it may be possible to submit other documentary evidence. Any amounts
deducted and withheld from a distribution to a recipient would be allowed as
a credit against such recipient's federal income tax liability.

On October 6, 1997, the Treasury Department issued the New Regulations,
which make certain modifications to the withholding, backup withholding and
information reporting rules described above. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally be effective for payments made after December 31,
1998, subject to certain transition rules. Prospective investors are urged
to consult their own tax advisors regarding the New Regulations.

B. TAXATION OF OWNERS OF REMIC RESIDUAL CERTIFICATES

Allocation of the Income of the REMIC to the REMIC Residual
Certificates. The REMIC will not be subject to federal income tax except
with respect to income from prohibited transactions and certain other
transactions. See "--Prohibited Transactions and Other Taxes" below.
Instead, each original holder of a REMIC Residual Certificate will report on
its federal income tax return, as ordinary income, its share of the taxable
income of the REMIC for each day during the taxable year on which such holder
owns any REMIC Residual Certificates. The taxable income of the REMIC for
each day will be determined by allocating the taxable income of the REMIC for
each calendar quarter ratably to each day in the quarter. Such a holder's
share of the taxable income of the REMIC for each day will be based on the
portion of the outstanding REMIC Residual Certificates that such holder owns
on that day. The taxable income of the REMIC will be determined under an
accrual method and will be taxable to the holders of REMIC Residual
Certificates without regard to the timing or amounts of cash distributions by
the REMIC. Ordinary income derived from REMIC Residual Certificates will be
"portfolio income" for purposes of the taxation of taxpayers subject to the
limitations on the deductibility of "passive losses." As residual interests,
the REMIC Residual Certificates will be subject to tax rules, described
below, that differ from those that would apply if the REMIC Residual
Certificates were treated for federal income tax purposes as direct ownership
interests in the Certificates or as debt instruments issued by the REMIC.

A REMIC Residual Certificateholder may be required to include taxable
income from the REMIC Residual Certificate in excess of the cash distributed.
For example, a structure where principal distributions are made serially on
regular interests (that is, a fast-pay, slow-pay structure) may generate such
a mismatching of income and cash distributions (that is, "phantom income").
This mismatching may be caused by the use of certain required tax accounting
methods by the REMIC, variations in the prepayment rate of the underlying
Mortgage Assets and certain other factors. Depending upon the structure of a
particular transaction, the aforementioned factors may significantly reduce
the after-tax yield of a REMIC Residual Certificate to a REMIC Residual
Certificateholder or cause the REMIC Residual Certificate to have negative
"value." Investors should consult their own tax advisors concerning the
federal income tax treatment of a REMIC Residual Certificate and the impact
of such tax treatment on the after-tax yield of a REMIC Residual Certificate.

A subsequent REMIC Residual Certificateholder also will report on its
federal income tax return amounts representing a daily share of the taxable
income of the REMIC for each day that such REMIC Residual Certificateholder
owns such REMIC Residual Certificate. Those daily amounts generally would
equal the amounts that would have been reported for the same days by an
original REMIC Residual Certificateholder, as described above. The
Legislative History indicates that certain adjustments may be appropriate to
reduce (or increase) the income of a subsequent holder of a REMIC Residual
Certificate that purchased such REMIC Residual Certificate at a price greater
than (or less than) the adjusted basis such REMIC Residual Certificate would
have in the hands of an original REMIC Residual Certificateholder. See
"--Sale or Exchange of REMIC Residual Certificates" below. It is not clear,
however, whether such adjustments will in fact be permitted or required and,
if so, how they would be made. The REMIC Regulations do not provide for any
such adjustments.

Taxable Income of the REMIC Attributable to Residual Interests. The
taxable income of the REMIC will reflect a netting of (i) the income from the
Mortgage Assets and the REMIC's other assets and (ii) the deductions allowed
to the REMIC for interest and OID on the REMIC Regular Certificates and,
except as described above under "--Taxation of Owners of REMIC Regular
Certificates--Non-Interest Expenses of the REMIC," other expenses. REMIC
taxable income is generally determined in the same manner as the taxable
income of an individual using the accrual method of accounting, except that
(i) the limitations on deductibility of investment interest expense and
expenses for the production of income do not apply, (ii) all bad loans will
be deductible as business bad debts, and (iii) the limitation on the
deductibility of interest and expenses related to tax-exempt income will
apply. The REMIC's gross income includes interest, original issue discount
income, and market discount income, if any, on the Mortgage Loans, reduced by
amortization of any premium on the Mortgage Loans, plus income on
reinvestment of cash flows and reserve assets, plus any cancellation of
indebtedness income upon allocation of realized losses to the REMIC Regular
Certificates. Note that the timing of cancellation of indebtedness income
recognized by REMIC Residual Certificateholders resulting from defaults and
delinquencies on Mortgage Assets may differ from the time of the actual loss
on the Mortgage Asset. The REMIC's deductions include interest and original
issue discount expense on the REMIC Regular Certificates, servicing fees on
the Mortgage Loans, other administrative expenses of the REMIC and realized
losses on the Mortgage Loans. The requirement that REMIC Residual
Certificateholders report their pro rata share of taxable income or net loss
of the REMIC will continue until there are no Certificates of any class of
the related Series outstanding.

For purposes of determining its taxable income, the REMIC will have an
initial aggregate tax basis in its assets equal to the sum of the issue
prices of the REMIC Regular Certificates and the REMIC Residual Certificates
(or, if a class of Certificates is not sold initially, its fair market
value). Such aggregate basis will be allocated among the Mortgage Assets and
other assets of the REMIC in proportion to their respective fair market
value. A Mortgage Asset will be deemed to have been acquired with discount
or premium to the extent that the REMIC's basis therein is less than or
greater than its principal balance, respectively. Any such discount (whether
market discount or OID) will be includible in the income of the REMIC as it
accrues, in advance of receipt of the cash attributable to such income, under
a method similar to the method described above for accruing OID on the REMIC
Regular Certificates. The REMIC may elect under Code Section 171 to amortize
any premium on the Mortgage Assets. Premium on any Mortgage Asset to which
such election applies would be amortized under a constant yield method. It
is not clear whether the yield of a Mortgage Asset would be calculated for
this purpose based on scheduled payments or taking account of the Prepayment
Assumption. Additionally, such an election would not apply to the yield with
respect to any underlying mortgage loan originated on or before September 27,
1985. Instead, premium with respect to such a mortgage loan would be
allocated among the principal payments thereon and would be deductible by the
REMIC as those payments become due.

The REMIC will be allowed a deduction for interest and OID on the REMIC
Regular Certificates. The amount and method of accrual of OID will be
calculated for this purpose in the same manner as described above with
respect to REMIC Regular Certificates except that the 0.25% per annum de
minimis rule and adjustments for subsequent holders described therein will
not apply.

A REMIC Residual Certificateholder will not be permitted to amortize the
cost of the REMIC Residual Certificate as an offset to its share of the
REMIC's taxable income. However, REMIC taxable income will not include cash
received by the REMIC that represents a recovery of the REMIC's basis in its
assets, and, as described above, the issue price of the REMIC Residual
Certificates will be added to the issue price of the REMIC Regular
Certificates in determining the REMIC's initial basis in its assets. See "--
Sale or Exchange of REMIC Residual Certificates" below. For a discussion of
possible adjustments to income of a subsequent holder of a REMIC Residual
Certificate to reflect any difference between the actual cost of such REMIC
Residual Certificate to such holder and the adjusted basis such REMIC
Residual Certificate would have in the hands of an original REMIC Residual
Certificateholder, see "--Allocation of the Income of the REMIC to the REMIC
Residual Certificates" above.

Net Losses of the REMIC. The REMIC will have a net loss for any
calendar quarter in which its deductions exceed its gross income. Such net
loss would be allocated among the REMIC Residual Certificateholders in the
same manner as the REMIC's taxable income. The net loss allocable to any
REMIC Residual Certificate will not be deductible by the holder to the extent
that such net loss exceeds such holder's adjusted basis in such REMIC
Residual Certificate. Any net loss that is not currently deductible by
reason of this limitation may only be used by such REMIC Residual
Certificateholder to offset its share of the REMIC's taxable income in future
periods (but not otherwise). The ability of REMIC Residual
Certificateholders that are individuals or closely held corporations to
deduct net losses may be subject to additional limitations under the Code.

Mark to Market Rules. Prospective purchasers of a REMIC Residual
Certificate should be aware that the IRS finalized regulations (the "Mark-to-
Market Regulations") which provide that a REMIC Residual Certificate acquired
after January 3, 1995 cannot be marked to market. The Mark-to-Market
Regulations replaced the temporary regulations which allowed a Residual
Certificate to be marked to market provided that it was not a "negative
value" residual interest and did not have the same economic effect as a
"negative value" residual interest.

Pass-Through of Non-Interest Expenses of the REMIC. As a general rule,
all of the fees and expenses of a REMIC will be taken into account by holders
of the REMIC Residual Certificates. In the case of a single class REMIC,
however, the expenses and a matching amount of additional income will be
allocated, under temporary Treasury regulations, among the REMIC Regular
Certificateholders and the REMIC Residual Certificateholders on a daily basis
in proportion to the relative amounts of income accruing to each
Certificateholder on that day. In general terms, a single class REMIC is one
that either (i) would qualify, under existing Treasury regulations, as a
grantor trust if it were not a REMIC (treating all interests as ownership
interests, even if they would be classified as debt for federal income tax
purposes) or (ii) is similar to such a trust and is structured with the
principal purpose of avoiding the single class REMIC rules. Unless otherwise
stated in the applicable Prospectus Supplement, the expenses of the REMIC
will be allocated to holders of the related REMIC Residual Certificates in
their entirety and not to holders of the related REMIC Regular Certificates.

In the case of individuals (or trusts, estates or other persons that
compute their income in the same manner as individuals) who own an interest
in a REMIC Regular Certificate or a REMIC Residual Certificate directly or
through a pass-through interest holder that is required to pass miscellaneous
itemized deductions through to its owners or beneficiaries (e.g. a
partnership, an S corporation or a grantor trust), such expenses will be
deductible under Code Section 67 only to the extent that such expenses, plus
other "miscellaneous itemized deductions" of the individual, exceed 2% of
such individual's adjusted gross income. In addition, Code Section 68
provides that the amount of itemized deductions otherwise allowable for an
individual whose adjusted gross income exceeds a certain amount (the
"Applicable Amount") will be reduced by the lesser of (i) 3% of the excess of
the individual's adjusted gross income over the Applicable Amount or (ii) 80%
of the amount of itemized deductions otherwise allowable for the taxable
year. The amount of additional taxable income recognized by REMIC Residual
Certificateholders who are subject to the limitations of either Code Section
67 or Code Section 68 may be substantial. Further, holders (other than
corporations) subject to the alternative minimum tax may not deduct
miscellaneous itemized deductions in determining such holders' alternative
minimum taxable income. The REMIC is required to report to each pass-through
interest holder and to the IRS such holder's allocable share, if any, of the
REMIC's non-interest expenses. The term "pass-through interest holder"
generally refers to individuals, entities taxed as individuals and certain
pass-through entities, but does not include real estate investment trusts.
REMIC Residual Certificateholders that are pass-through interest holders
should consult their own tax advisors about the impact of these rules on an
investment in the REMIC Residual Certificates.

Excess Inclusions. A portion of the income on a REMIC Residual
Certificate (referred to in the Code as an "excess inclusion") for any
calendar quarter will be subject to federal income tax in all events. Thus,
for example, an excess inclusion (i) may not, except as described below, be
offset by any unrelated losses, deductions or loss carryovers of a REMIC
Residual Certificateholder; (ii) will be treated as "unrelated business
taxable income" within the meaning of Code Section 512 if the REMIC Residual
Certificateholder is a pension fund or any other organization that is subject
to tax only on its unrelated business taxable income (see "--Tax-Exempt
Investors" below); and (iii) is not eligible for any reduction in the rate of
withholding tax in the case of a REMIC Residual Certificateholder that is a
foreign investor. See "--Non-U.S. Persons" below.

Except as discussed in the following paragraph, with respect to any
REMIC Residual Certificateholder, the excess inclusions for any calendar
quarter is the excess, if any, of (i) the income of such REMIC Residual
Certificateholder for that calendar quarter from its REMIC Residual
Certificate over (ii) the sum of the "daily accruals" (as defined below) for
all days during the calendar quarter on which the REMIC Residual
Certificateholder holds such REMIC Residual Certificate. For this purpose,
the daily accruals with respect to a REMIC Residual Certificate are
determined by allocating to each day in the calendar quarter its ratable
portion of the product of the "adjusted issue price" (as defined below) of
the REMIC Residual Certificate at the beginning of the calendar quarter and
120 percent of the "Federal long-term rate" in effect at the time the REMIC
Residual Certificate is issued. For this purpose, the "adjusted issue price"
of a REMIC Residual Certificate at the beginning of any calendar quarter
equals the issue price of the REMIC Residual Certificate, increased by the
amount of daily accruals for all prior quarters, and decreased (but not below
zero) by the aggregate amount of payments made on the REMIC Residual
Certificate before the beginning of such quarter. The "federal long-term
rate" is an average of current yields on Treasury securities with a remaining
term of greater than nine years, computed and published monthly by the IRS.

In the case of any REMIC Residual Certificates held by a real estate
investment trust, the aggregate excess inclusions with respect to such REMIC
Residual Certificates, reduced (but not below zero) by the real estate
investment trust taxable income (within the meaning of Code Section
857(b)(2), excluding any net capital gain), will be allocated among the
shareholders of such trust in proportion to the dividends received by such
shareholders from such trust, and any amount so allocated will be treated as
an excess inclusion with respect to a REMIC Residual Certificate as if held
directly by such shareholder. Regulated investment companies, common trust
funds and certain cooperatives are subject to similar rules.

The Small Business Job Protection Act of 1996 has eliminated the special
rule permitting Section 593 institutions ("thrift institutions") to use net
operating losses and other allowable deductions to offset their excess
inclusion income from REMIC residual certificates that have "significant
value" within the meaning of the REMIC Regulations, effective for taxable
years beginning after December 31, 1995, except with respect to residual
certificates continuously held by a thrift institution since November 1,
1995.

In addition, the Small Business Job Protection Act of 1996 provides
three rules for determining the effect on excess inclusions on the
alternative minimum taxable income of a residual holder. First, alternative
minimum taxable income for such residual holder is determined without regard
to the special rule that taxable income cannot be less than excess
inclusions. Second, the amount of any alternative minimum tax net operating
loss deductions must be computed without regard to any excess inclusions.
Third, a residual holder's alternative minimum taxable income for a tax year
cannot be less than excess inclusions for the year. The effect of this last
statutory amendment is to prevent the use of nonrefundable tax credits to
reduce a taxpayer's income tax below its tentative minimum tax computed only
on excess inclusions. These rules are effective for tax years beginning
after December 31, 1986, unless a residual holder elects to have such rules
apply only to tax years beginning after August 20, 1996.

Payments. Any distribution made on a REMIC Residual Certificate to a
REMIC Residual Certificateholder will be treated as a non-taxable return of
capital to the extent it does not exceed the REMIC Residual
Certificateholder's adjusted basis in such REMIC Residual Certificate. To
the extent a distribution exceeds such adjusted basis, it will be treated as
gain from the sale of the REMIC Residual Certificate.

Sale or Exchange of REMIC Residual Certificates. If a REMIC Residual
Certificate is sold or exchanged, the seller will generally recognize gain or
loss equal to the difference between the amount realized on the sale or
exchange and its adjusted basis in the REMIC Residual Certificate (except
that the recognition of loss may be limited under the "wash sale" rules
described below). A holder's adjusted basis in a REMIC Residual Certificate
generally equals the cost of such REMIC Residual Certificate to such REMIC
Residual Certificateholder, increased by the taxable income of the REMIC that
was included in the income of such REMIC Residual Certificateholder with
respect to such REMIC Residual Certificate, and decreased (but not below
zero) by the net losses that have been allowed as deductions to such REMIC
Residual Certificateholder with respect to such REMIC Residual Certificate
and by the distributions received thereon by such REMIC Residual
Certificateholder. In general, any such gain or loss will be capital gain or
loss provided the REMIC Residual Certificate is held as a capital asset.
However, REMIC Residual Certificates will be "evidences of indebtedness"
within the meaning of Code Section 582(c)(1), so that gain or loss recognized
from sale of a REMIC Residual Certificate by a bank or thrift institution to
which such section applies would be ordinary income or loss.

Except as provided in Treasury regulations yet to be issued, if the
seller of a REMIC Residual Certificate reacquires such REMIC Residual
Certificate, or acquires any other REMIC Residual Certificate, any residual
interest in another REMIC or similar interest in a "taxable mortgage pool"
(as defined in Code Section 7701(i)) during the period beginning six months
before, and ending six months after, the date of such sale, such sale will be
subject to the "wash sale" rules of Code Section 1091. In that event, any
loss realized by the REMIC Residual Certificateholder on the sale will not be
deductible, but, instead, will increase such REMIC Residual
Certificateholder's adjusted basis in the newly acquired asset.

PROHIBITED TRANSACTIONS AND OTHER TAXES

The Code imposes a tax on REMICs equal to 100% of the net income derived
from "prohibited transactions" (the "Prohibited Transactions Tax"). In
general, subject to certain specified exceptions, a prohibited transaction
means the disposition of a Mortgage Asset, the receipt of income from a
source other than a Mortgage Asset or certain other permitted investments,
the receipt of compensation for services, or gain from the disposition of an
asset purchased with the payments on the Mortgage Assets for temporary
investment pending distribution on the Certificates. It is not anticipated
that the Trust Fund for any Series of Certificates will engage in any
prohibited transactions in which it would recognize a material amount of net
income.

In addition, certain contributions to a Trust Fund as to which an
election has been made to treat such Trust Fund as a REMIC made after the day
on which such Trust Fund issues all of its interests could result in the
imposition of a tax on the Trust Fund equal to 100% of the value of the
contributed property (the "Contributions Tax"). No Trust Fund for any Series
of Certificates will accept contributions that would subject it to such tax.

In addition, a Trust Fund as to which an election has been made to treat
such Trust Fund as a REMIC may also be subject to federal income tax at the
highest corporate rate on "net income from foreclosure property," determined
by reference to the rules applicable to real estate investment trusts. "Net
income from foreclosure property" generally means income from foreclosure
property other than qualifying income for a real estate investment trust.

Where any Prohibited Transactions Tax, Contributions Tax, tax on net
income from foreclosure property or state or local income or franchise tax
that may be imposed on a REMIC relating to any Series of Certificates arises
out of or results from (i) a breach of the related Servicer's, Trustee's or
Depositor's obligations, as the case may be, under the related Agreement for
such Series, such tax will be borne by such Servicer, Trustee or Depositor,
as the case may be, out of its own funds or (ii) the Depositor's obligation
to repurchase a Mortgage Loan, such tax will be borne by the Depositor. In
the event that such Servicer, Trustee or Depositor, as the case may be, fails
to pay or is not required to pay any such tax as provided above, such tax
will be payable out of the Trust Fund for such Series and will result in a
reduction in amounts available to be distributed to the Certificateholders of
such Series.

LIQUIDATION AND TERMINATION

If the REMIC adopts a plan of complete liquidation, within the meaning
of Code Section 860F(a)(4)(A)(i), which may be accomplished by designating in
the REMIC's final tax return a date on which such adoption is deemed to
occur, and sells all of its assets (other than cash) within a 90-day period
beginning on such date, the REMIC will not be subject to any Prohibited
Transaction Tax, provided that the REMIC credits or distributes in
liquidation all of the sale proceeds plus its cash (other than the amounts
retained to meet claims) to holders of Regular and REMIC Residual
Certificates within the 90-day period.

The REMIC will terminate shortly following the retirement of the REMIC
Regular Certificates. If a REMIC Residual Certificateholder's adjusted basis
in the REMIC Residual Certificate exceeds the amount of cash distributed to
such REMIC Residual Certificateholder in final liquidation of its interest,
then it would appear that the REMIC Residual Certificateholder would be
entitled to a loss equal to the amount of such excess. It is unclear whether
such a loss, if allowed, will be a capital loss or an ordinary loss.

ADMINISTRATIVE MATTERS

Solely for the purpose of the administrative provisions of the Code, the
REMIC generally will be treated as a partnership and the REMIC Residual
Certificateholders will be treated as the partners. Certain information will
be furnished quarterly to each REMIC Residual Certificateholder who held a
REMIC Residual Certificate on any day in the previous calendar quarter.

Each REMIC Residual Certificateholder is required to treat items on its
return consistently with their treatment on the REMIC's return, unless the
REMIC Residual Certificateholder either files a statement identifying the
inconsistency or establishes that the inconsistency resulted from incorrect
information received from the REMIC. The IRS may assert a deficiency
resulting from a failure to comply with the consistency requirement without
instituting an administrative proceeding at the REMIC level. The REMIC does
not intend to register as a tax shelter pursuant to Code Section 6111 because
it is not anticipated that the REMIC will have a net loss for any of the
first five taxable years of its existence. Any person that holds a REMIC
Residual Certificate as a nominee for another person may be required to
furnish the REMIC, in a manner to be provided in Treasury regulations, with
the name and address of such person and other information.

TAX-EXEMPT INVESTORS

Any REMIC Residual Certificateholder that is a pension fund or other
entity that is subject to federal income taxation only on its "unrelated
business taxable income" within the meaning of Code Section 512 will be
subject to such tax on that portion of the distributions received on a REMIC
Residual Certificate that is considered an excess inclusion. See "--Taxation
of Owners of REMIC Residual Certificates--Excess Inclusions" above.

RESIDUAL CERTIFICATE PAYMENTS-NON-U.S. PERSONS

Amounts paid to REMIC Residual Certificateholders who are not U.S.
Persons (see "--Taxation of Owners of REMIC Regular Certificates--Non-U.S.
Persons" above) are treated as interest for purposes of the 30% (or lower
treaty rate) United States withholding tax. Amounts distributed to holders
of REMIC Residual Certificates should qualify as "portfolio interest,"
subject to the conditions described in "--Taxation of Owners of REMIC Regular
Certificates" above, but only to the extent that the underlying mortgage
loans were originated after July 18, 1984. Furthermore, the rate of
withholding on any income on a REMIC Residual Certificate that is excess
inclusion income will not be subject to reduction under any applicable tax
treaties. See "--Taxation of Owners of REMIC Residual Certificates--Excess
Inclusions" above. If the portfolio interest exemption is unavailable, such
amount will be subject to United States withholding tax when paid or
otherwise distributed (or when the REMIC Residual Certificate is disposed of)
under rules similar to those for withholding upon disposition of debt
instruments that have OID. The Code, however, grants the Treasury Department
authority to issue regulations requiring that those amounts be taken into
account earlier than otherwise provided where necessary to prevent avoidance
of tax (for example, where the REMIC Residual Certificates do not have
significant value). See "--Taxation of Owners of REMIC Residual
Certificates--Excess Inclusions" above. If the amounts paid to REMIC
Residual Certificateholders that are not U.S. Persons are effectively
connected with their conduct of a trade or business within the United States,
the 30% (or lower treaty rate) withholding will not apply. Instead, the
amounts paid to such non-U.S. Person will be subject to U.S. federal income
taxation at regular graduated rates. For special restrictions on the
transfer of REMIC Residual Certificates, see "--Tax-Related Restrictions on
Transfers of REMIC Residual Certificates" below.

REMIC Regular Certificateholders and persons related to such holders
should not acquire any REMIC Residual Certificates, and REMIC Residual
Certificateholders and persons related to REMIC Residual Certificateholders
should not acquire any REMIC Regular Certificates, without consulting their
tax advisors as to the possible adverse tax consequences of such acquisition.

TAX-RELATED RESTRICTIONS ON TRANSFERS OF REMIC RESIDUAL CERTIFICATES

Disqualified Organizations. An entity may not qualify as a REMIC unless
there are reasonable arrangements designed to ensure that residual interests
in such entity are not held by "disqualified organizations" (as defined
below). Further, a tax is imposed on the transfer of a residual interest in
a REMIC to a "disqualified organization." The amount of the tax equals the
product of (A) an amount (as determined under the REMIC Regulations) equal to
the present value of the total anticipated "excess inclusions" with respect
to such interest for periods after the transfer and (ii) the highest marginal
federal income tax rate applicable to corporations. The tax is imposed on
the transferor unless the transfer is through an agent (including a broker or
other middleman) for a disqualified organization, in which event the tax is
imposed on the agent. The person otherwise liable for the tax shall be
relieved of liability for the tax if the transferee furnished to such person
an affidavit that the transferee is not a disqualified organization and, at
the time of the transfer, such person does not have actual knowledge that the
affidavit is false. A "disqualified organization" means (A) the United
States, any State, possession or political subdivision thereof, any foreign
government, any international organization or any agency or instrumentality
of any of the foregoing (provided that such term does not include an
instrumentality if all its activities are subject to tax and, except for
FHLMC, a majority of its board of directors is not selected by any such
governmental agency), (B) any organization (other than certain farmers'
cooperatives) generally exempt from federal income taxes unless such
organization is subject to the tax on "unrelated business taxable income" and
(C) a rural electric or telephone cooperative.

A tax is imposed on a "pass-through entity" (as defined below) holding a
residual interest in a REMIC if at any time during the taxable year of the
pass-through entity a disqualified organization is the record holder of an
interest in such entity. The amount of the tax is equal to the product of
(A) the amount of excess inclusions for the taxable year allocable to the
interest held by the disqualified organization and (B) the highest marginal
federal income tax rate applicable to corporations. The pass-through entity
otherwise liable for the tax, for any period during which the disqualified
organization is the record holder of an interest in such entity, will be
relieved of liability for the tax if such record holder furnishes to such
entity an affidavit that such record holder is not a disqualified
organization and, for such period, the pass-through entity does not have
actual knowledge that the affidavit is false. For this purpose, a
"pass-through entity" means (i) a regulated investment company, real estate
investment trust or common trust fund, (ii) a partnership, trust or estate
and (iii) certain cooperatives. Except as may be provided in Treasury
regulations not yet issued, any person holding an interest in a pass-through
entity as a nominee for another will, with respect to such interest, be
treated as a pass-through entity. Electing large partnerships (generally,
non-service partnerships with 100 or more members electing to be subject to
simplified IRS reporting provisions under Code sections 771 through 777) will
be taxable on excess inclusion income as if all partners were disqualified
organizations.

In order to comply with these rules, the Agreement will provide that no
record or beneficial ownership interest in a REMIC Residual Certificate may
be purchased, transferred or sold, directly or indirectly, without the
express written consent of the Master Servicer. The Master Servicer will
grant such consent to a proposed transfer only if it receives the following:
(i) an affidavit from the proposed transferee to the effect that it is not a
disqualified organization and is not acquiring the REMIC Residual Certificate
as a nominee or agent for a disqualified organization and (ii) a covenant by
the proposed transferee to the effect that the proposed transferee agrees to
be bound by and to abide by the transfer restrictions applicable to the REMIC
Residual Certificate.

Noneconomic REMIC Residual Certificates. The REMIC Regulations
disregard, for federal income tax purposes, any transfer of a Noneconomic
REMIC Residual Certificate to a "U.S. Person," as defined above, unless no
significant purpose of the transfer is to enable the transferor to impede the
assessment or collection of tax. A Noneconomic REMIC Residual Certificate is
any REMIC Residual Certificate (including a REMIC Residual Certificate with a
positive value at issuance) unless, at the time of transfer, taking into
account the Prepayment Assumption and any required or permitted clean up
calls or required liquidation provided for in the REMIC's organizational
documents, (i) the present value of the expected future distributions on the
REMIC Residual Certificate at least equals the product of the present value
of the anticipated excess inclusions and the highest corporate income tax
rate in effect for the year in which the transfer occurs and (ii) the
transferor reasonably expects that the transferee will receive distributions
from the REMIC at or after the time at which taxes accrue on the anticipated
excess inclusions in an amount sufficient to satisfy the accrued taxes. A
significant purpose to impede the assessment or collection of tax exists if
the transferor, at the time of the transfer, either knew or should have known
that the transferee would be unwilling or unable to pay taxes due on its
share of the taxable income of the REMIC. A transferor is presumed not to
have such knowledge if (i) the transferor conducted a reasonable
investigation of the transferee and (ii) the transferee acknowledges to the
transferor that the residual interest may generate tax liabilities in excess
of the cash flow and the transferee represents that it intends to pay such
taxes associated with the residual interest as they become due. If a
transfer of a Noneconomic REMIC Residual Certificate is disregarded, the
transferor would continue to be treated as the owner of the REMIC Residual
Certificate and would continue to be subject to tax on its allocable portion
of the net income of the REMIC.

Foreign Investors. The REMIC Regulations provide that the transfer of a
REMIC Residual Certificate that has a "tax avoidance potential" to a "foreign
person" will be disregarded for federal income tax purposes. This rule
appears to apply to a transferee who is not a U.S. Person unless such
transferee's income in respect of the REMIC Residual Certificate is
effectively connected with the conduct of a United Sates trade or business.
A REMIC Residual Certificate is deemed to have a tax avoidance potential
unless, at the time of transfer, the transferor reasonably expect that the
REMIC will distribute to the transferee amounts that will equal at least 30
percent of each excess inclusion, and that such amounts will be distributed
at or after the time the excess inclusion accrues and not later than the end
of the calendar year following the year of accrual. If the non-U.S. Person
transfers the REMIC Residual Certificate to a U.S. Person, the transfer will
be disregarded, and the foreign transferor will continue to be treated as the
owner, if the transfer has the effect of allowing the transferor to avoid tax
on accrued excess inclusions. The provisions in the REMIC Regulations
regarding transfers of REMIC Residual Certificates that have tax avoidance
potential to foreign persons are effective for all transfers after June 30,
1992. The Pooling and Servicing Agreement will provide that no record or
beneficial ownership interest in a REMIC Residual Certificate may be
transferred, directly or indirectly, to a non-U.S. Person unless such person
provides the Trustee with a duly completed IRS Form 4224 and the Trustee
consents to such transfer in writing.

Any attempted transfer or pledge in violation of the transfer
restrictions shall be absolutely null and void and shall vest no rights in
any purported transferee. Investors in REMIC Residual Certificates are
advised to consult their own tax advisors with respect to transfers of the
REMIC Residual Certificates and, in addition, pass-through entities are
advised to consult their own tax advisors with respect to any tax which may
be imposed on a pass-through entity.

STATE TAX CONSIDERATIONS

In addition to the federal income tax consequences described in "Certain
Federal Income Tax Consequences," potential investors should consider the
state income tax consequences of the acquisition, ownership, and disposition
of the Offered Certificates. State income tax law may differ substantially
from the corresponding federal law, and this discussion does not purport to
describe any aspect of the income tax laws of any state. Therefore, potential
investors should consult their own tax advisors with respect to the various
tax consequences of investments in the Offered Certificates.

ERISA CONSIDERATIONS

GENERAL

The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), imposes certain restrictions on employee benefit plans subject to
ERISA ("Plans") and on persons who are parties in interest or disqualified
persons ("parties in interest") with respect to such Plans. Certain employee
benefit plans, such as governmental plans and church plans (if no election
has been made under Section 410(d) of the Code), are not subject to the
restrictions of ERISA, and assets of such plans may be invested in the
Certificates without regard to the ERISA considerations described below,
subject to other applicable federal and state law. However, any such
governmental or church plan which is qualified under Section 401(a) of the
Code and exempt from taxation under Section 501(a) of the Code is subject to
the prohibited transaction rules set forth in Section 503 of the Code.

Investments by Plans are subject to ERISA's general fiduciary
requirements, including the requirement of investment prudence and
diversification and the requirement that a Plan's investments be made in
accordance with the documents governing the Plan.

PROHIBITED TRANSACTIONS

General

Section 406 of ERISA prohibits parties in interest with respect to a
Plan from engaging in certain transactions involving a Plan and its assets
unless a statutory or administrative exemption applies to the transaction.
Section 4975 of the Code imposes certain excise taxes (or, in some cases, a
civil penalty may be assessed pursuant to Section 502(i) of ERISA) on parties
in interest which engage in non-exempt prohibited transactions.

The United States Department of Labor ("Labor") has issued a final
regulation (29 C.F.R. Section 2510.3-101) containing rules for determining
what constitutes the assets of a Plan. This regulation provides that, as a
general rule, the underlying assets and properties of corporations,
partnerships, trusts and certain other entities in which a Plan makes an
"equity investment" will be deemed for purposes of ERISA to be assets of the
Plan unless certain exceptions apply.

Under the terms of the regulation, the Trust may be deemed to hold plan
assets by reason of a Plan's investment in a Certificate; such plan assets
would include an undivided interest in the Mortgage Loans and any other
assets held by the Trust. In such an event, the Asset Seller, the Master
Servicer, the Trustee, any insurer of the Mortgage Assets and other persons,
in providing services with respect to the assets of the Trust, may be parties
in interest, subject to the fiduciary responsibility provisions of Title I of
ERISA, including the prohibited transaction provisions of Section 406 of
ERISA (and of Section 4975 of the Code), with respect to transactions
involving such assets unless such transactions are subject to a statutory or
administrative exemption.

The regulations contain a de minimis safe-harbor rule that exempts any
entity from plan assets status as long as the aggregate equity investment in
such entity by plans is not significant. For this purpose, equity
participation in the entity will be significant if immediately after any
acquisition of any equity interest in the entity, "benefit plan investors" in
the aggregate, own at least 25% of the value of any class of equity interest.
"Benefit plan investors" are defined as Plans as well as employee benefit
plans not subject to ERISA (e.g., governmental plans). The 25% limitation
must be met with respect to each class of certificates, regardless of the
portion of total equity value represented by such class, on an ongoing basis.

Availability of Underwriter's Exemption for Certificates

Labor has granted to Morgan Stanley & Co. Incorporated Prohibited
Transaction Exemption 90-24, Exemption Application No. D-8019, 55 Fed. Reg.
20548 (1990) (the "Exemption") which exempts from the application of the
prohibited transaction rules transactions relating to: (1) the acquisition,
sale and holding by Plans of certain certificates representing an undivided
interest in certain asset-backed pass-through trusts, with respect to which
Morgan Stanley & Co. Incorporated or any of its affiliates is the sole
underwriter or the manager or co-manager of the underwriting syndicate; and
(2) the servicing, operation and management of such asset-backed pass-through
trusts, provided that the general conditions and certain other conditions set
forth in the Exemption are satisfied.

General Conditions of the Exemption. Section II of the Exemption sets
forth the following general conditions which must be satisfied before a
transaction involving the acquisition, sale and holding of the Certificates
or a transaction in connection with the servicing, operation and management
of the Trust may be eligible for exemptive relief thereunder:

(1) The acquisition of the Certificates by a Plan is on terms
(including the price for such Certificates) that are at least as
favorable to the investing Plan as they would be in an arm's-length
transaction with an unrelated party;

(2) The rights and interests evidenced by the Certificates acquired
by the Plan are not subordinated to the rights and interests evidenced
by other certificates of the Trust;

(3) The Certificates acquired by the Plan have received a rating at
the time of such acquisition that is in one of the three highest generic
rating categories from any of Duff & Phelps Inc., Fitch Investors
Service, Inc., Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group.

(4) The Trustee is not an affiliate of the Underwriter, the Asset
Seller, the Master Servicer, any insurer of the Mortgage Assets, any
borrower whose obligations under one or more Mortgage Loans constitute
more than 5% of the aggregate unamortized principal balance of the
assets in the Trust, or any of their respective affiliates (the
"Restricted Group");

(5) The sum of all payments made to and retained by the Underwriter
in connection with the distribution of the Certificates represents not
more than reasonable compensation for underwriting such Certificates;
the sum of all payments made to and retained by the Asset Seller
pursuant to the sale of the Mortgage Loans to the Trust represents not
more than the fair market value of such Mortgage Loans; the sum of all
payments made to and retained by the Master Servicer represent not more
than reasonable compensation for the Master Servicer's services under
the Pooling Agreement and reimbursement of the Master Servicer's
reasonable expenses in connection therewith; and

(6) The Plan investing in the Certificates is an "accredited
investor" as defined in Rule 501(a)(1) of Regulation D of the Securities
and Exchange Commission under the Securities Act of 1933 as amended.

Before purchasing a Certificate, a fiduciary of a Plan should itself
confirm (a) that the Certificates constitute "certificates" for purposes of
the Exemption and (b) that the specific and general conditions set forth in
the Exemption and the other requirements set forth in the Exemption would be
satisfied. The Exemption will apply to Certificates purchased by Plans
during a "pre-funding period," if any, in which additional Mortgage Loans
will be added to the Trust, provided certain conditions in the Exemption are
satisfied. The Prospectus Supplement for each Series of Certificates will
specify whether there is a "pre-funding period" and whether such additional
conditions will be satisfied.

REVIEW BY PLAN FIDUCIARIES

Any Plan fiduciary considering whether to purchase any Certificates on
behalf of a Plan should consult with its counsel regarding the applicability
of the fiduciary responsibility and prohibited transaction provisions of
ERISA and the Code to such investment. Among other things, before purchasing
any Certificates, a fiduciary of a Plan subject to the fiduciary
responsibility provisions of ERISA or an employee benefit plan subject to the
prohibited transaction provisions of the Code should make its own
determination as to the availability of the exemptive relief provided in the
Exemption, and also consider the availability of any other prohibited
transaction exemptions. In particular, in connection with a contemplated
purchase of Certificates representing a beneficial ownership interest in a
pool of single family residential first mortgage loans, such Plan fiduciary
should consider the availability of the Exemption or Prohibited Transaction
Class Exemption 83-1 ("PTCE 83-1") for certain transactions involving
mortgage pool investment trusts. The Prospectus Supplement with respect to a
series of Certificates may contain additional information regarding the
application of the Exemption, PTCE 83-1, or any other exemption, with respect
to the Certificates offered thereby.

LEGAL INVESTMENT

Each class of Offered Certificates will be rated at the date of issuance
in one of the four highest rating categories by at least one Rating Agency.
Unless otherwise specified in the related Prospectus Supplement, each such
class that is rated in one of the two highest rating categories by at least
one Rating Agency will constitute "mortgage related securities" ("SMMEA
Certificates") for purposes of the Secondary Mortgage Market Enhancement Act
of 1984 ("SMMEA") and, as such, will constitute legal investments for
persons, trusts, corporations, partnerships, associations, business trusts
and business entities (including, but not limited to, state chartered savings
banks, commercial banks, savings and loan associations and insurance
companies, as well as trustees and state government employee retirement
systems) created pursuant to or existing under the laws of the United States
or of any state (including the District of Columbia and Puerto Rico) whose
authorized investments are subject to state regulation to the same extent
that, under applicable law, obligations issued by or guaranteed as to
principal and interest by the United States or any agency or instrumentality
thereof constitute legal investments for such entities. Alaska, Arkansas,
Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Kansas,
Maryland, Michigan, Missouri, Nebraska, New Hampshire, New York, North
Carolina, Ohio, South Dakota, Utah, Virginia and West Virginia enacted
legislation before the October 4, 1991 cutoff established by SMMEA for such
enactments, limiting to varying extents the ability of certain entities (in
particular, insurance companies) to invest in mortgage related securities, in
most cases by requiring the affected investors to rely solely upon existing
state law, and not SMMEA. Investors affected by such legislation will be
authorized to invest in SMMEA Certificates only to the extent provided in
such legislation. SMMEA provides, however, that in no event will the
enactment of any such legislation affect the validity of any contractual
commitment to purchase, hold or invest in "mortgage related securities," or
require the sale or other disposition of such securities, so long as such
contractual commitment was made or such securities acquired prior to the
enactment of such legislation.

SMMEA also amended the legal investment authority of federally chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal with "mortgage
related securities" without limitation as to the percentage of their assets
represented thereby, federal credit unions may invest in such securities, and
national banks may purchase such securities for their own account without
regard to the limitations generally applicable to investment securities set
forth in 12 U.S.C. 24 (Seventh), subject in each case to such regulations as
the applicable federal regulatory authority may prescribe. In this
connection, federal credit unions should review the National Credit Union
Administration ("NCUA") Letter to Credit Unions No. 96, as modified by Letter
to Credit Unions No. 108, which includes guidelines to assist federal credit
unions in making investment decisions for mortgage related securities, and
the NCUA's regulation "Investment and Deposit Activities" (12 C.F.R. Part
703), which sets forth certain restrictions on investment by federal credit
unions in mortgage related securities.

Institutions where investment activities are subject to legal investment
laws or regulations or review by certain regulatory authorities may be
subject to restrictions on investment in certain classes of Offered
Certificates. Any financial institution which is subject to the jurisdiction
of the Comptroller of the Currency, the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation ("FDIC"), the
Office of Thrift Supervision ("OTS"), the NCUA or other federal or state
agencies with similar authority should review any applicable rules,
guidelines and regulations prior to purchasing any Offered Certificate. The
Federal Financial Institutions Examination Council, for example, has issued a
Supervisory Policy Statement on Securities Activities effective February 11,
1992 (the "Policy Statement") setting forth guidelines for and significant
restrictions on investments in "high-risk mortgage securities." The Policy
Statement has been adopted by the Comptroller of the Currency, the Federal
Reserve Board, the FDIC, the OTS and the NCUA (with certain modifications),
with respect to the depository institutions that they regulate. The Policy
Statement generally indicates that a mortgage derivative product will be
deemed to be high risk if it exhibits greater price volatility than a
standard fixed rate thirty-year mortgage security. According to the Policy
Statement, prior to purchase, a depository institution will be required to
determine whether a mortgage derivative product that it is considering
acquiring is high-risk, and if so that the proposed acquisition would reduce
the institution's overall interest rate risk. Reliance on analysis and
documentation obtained from a securities dealer or other outside party
without internal analysis by the institution would be unacceptable. There
can be no assurance that any classes of Offered Certificates will not be
treated as high-risk under the Policy Statement.

The predecessor to the OTS issued a bulletin, entitled, "Mortgage
Derivative Products and Mortgage Swaps", which is applicable to thrift
institutions regulated by the OTS. The bulletin established guidelines for
the investment by savings institutions in certain "high-risk" mortgage
derivative securities and limitations on the use of such securities by
insolvent, undercapitalized or otherwise "troubled" institutions. According
to the bulletin, such "high-risk" mortgage derivative securities include
securities having certain specified characteristics, which may include
certain classes of Certificates. In accordance with Section 402 of the
Financial Institutions Reform, Recovery and Enhancement Act of 1989, the
foregoing bulletin will remain in effect unless and until modified,
terminated, set aside or superseded by the FDIC. Similar policy statements
have been issued by regulators having jurisdiction over the types of
depository institutions.

In September 1993 the National Association of Insurance Commissioners
released a draft model investment law (the "Model Law") which sets forth
model investment guidelines for the insurance industry. Institutions subject
to insurance regulatory authorities may be subject to restrictions on
investment similar to those set forth in the Model Law and other
restrictions.

If specified in the related Prospectus Supplement, other classes of
Offered Certificates offered pursuant to this Prospectus will not constitute
"mortgage related securities" under SMMEA. The appropriate characterization
of this Offered Certificate under various legal investment restrictions, and
thus the ability of investors subject to these restrictions to purchase such
Offered Certificates, may be subject to significant interpretive
uncertainties.

Except as to the status of SMMEA Certificates identified in the
Prospectus Supplement for a series as "mortgage related securities" under
SMMEA, the Depositor will make no representations as to the proper
characterization of the Offered Certificates for legal investment or
financial institution regulatory purposes, or as to the ability of particular
investors to purchase any Offered Certificates under applicable legal
investment restrictions. The uncertainties described above (and any
unfavorable future determinations concerning legal investment or financial
institution regulatory characteristics of the Offered Certificates) may
adversely affect the liquidity of the Offered Certificates.

The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines or agreements generally
governing investments made by a particular investor, including, but not
limited to, "prudent investor" provisions, percentage-of-assets limits and
provisions which may restrict or prohibit investment in securities which are
not "interest bearing" or "income paying."

There may be other restrictions on the ability of certain investors,
including depository institutions, either to purchase Offered Certificates or
to purchase Offered Certificates representing more than a specified
percentage of the investor's assets. Accordingly, all investors whose
investment activities are subject to legal investment laws and regulations,
regulatory capital requirements or review by regulatory authorities should
consult with their own legal advisors in determining whether and to what
extent the Offered Certificates of any class constitute legal investments or
are subject to investment, capital or other restrictions, and, if applicable,
whether SMMEA has been overridden in any jurisdiction relevant to such
investor.

PLAN OF DISTRIBUTION

The Offered Certificates offered hereby and by the Supplements to this
Prospectus will be offered in series. The distribution of the Certificates
may be effected from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying
prices to be determined at the time of sale or at the time of commitment
therefor. If so specified in the related Prospectus Supplement, the Offered
Certificates will be distributed in a firm commitment underwriting, subject
to the terms and conditions of the underwriting agreement, by Morgan Stanley
& Co. Incorporated ("Morgan Stanley") acting as underwriter with other
underwriters, if any, named therein. In such event, the Prospectus Supplement
may also specify that the underwriters will not be obligated to pay for any
Offered Certificates agreed to be purchased by purchasers pursuant to
purchase agreements acceptable to the Depositor. In connection with the sale
of Offered Certificates, underwriters may receive compensation from the
Depositor or from purchasers of Offered Certificates in the form of
discounts, concessions or commissions. The Prospectus Supplement will
describe any such compensation paid by the Depositor.

Alternatively, the Prospectus Supplement may specify that Offered
Certificates will be distributed by Morgan Stanley acting as agent or in some
cases as principal with respect to Offered Certificates that it has
previously purchased or agreed to purchase. If Morgan Stanley acts as agent
in the sale of Offered Certificates, Morgan Stanley will receive a selling
commission with respect to such Offered Certificates, depending on market
conditions, expressed as a percentage of the aggregate Certificate Balance or
notional amount of such Offered Certificates as of the Cut-off Date. The
exact percentage for each series of Certificates will be disclosed in the
related Prospectus Supplement. To the extent that Morgan Stanley elects to
purchase Offered Certificates as principal, Morgan Stanley may realize losses
or profits based upon the difference between its purchase price and the sales
price. The Prospectus Supplement with respect to any series offered other
than through underwriters will contain information regarding the nature of
such offering and any agreements to be entered into between the Depositor and
purchasers of Offered Certificates of such series.

The Depositor will indemnify Morgan Stanley and any underwriters against
certain civil liabilities, including liabilities under the Securities Act of
1933, or will contribute to payments Morgan Stanley and any underwriters may
be required to make in respect thereof.

In the ordinary course of business, Morgan Stanley and the Depositor may
engage in various securities and financing transactions, including repurchase
agreements to provide interim financing of the Depositor's mortgage loans
pending the sale of such mortgage loans or interests therein, including the
Certificates.

Offered Certificates will be sold primarily to institutional investors.
Purchasers of Offered Certificates, including dealers, may, depending on the
facts and circumstances of such purchases, be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 in connection with reoffers
and sales by them of Offered Certificates. Certificateholders should consult
with their legal advisors in this regard prior to any such reoffer or sale.

As to each series of Certificates, only those classes rated in an
investment grade rating category by any Rating Agency will be offered hereby.
Any non-investment-grade class may be initially retained by the Depositor,
and may be sold by the Depositor at any time in private transactions.

LEGAL MATTERS

Certain legal matters in connection with the Certificates, including
certain federal income tax consequences, will be passed upon for the
Depositor by Latham & Watkins or Brown & Wood LLP, New York, New York.

FINANCIAL INFORMATION

A new Trust Fund will be formed with respect to each series of
Certificates and no Trust Fund will engage in any business activities or have
any assets or obligations prior to the issuance of the related series of
Certificates. Accordingly, no financial statements with respect to any Trust
Fund will be included in this Prospectus or in the related Prospectus
Supplement.

RATING

It is a condition to the issuance of any class of Offered Certificates
that they shall have been rated not lower than investment grade, that is, in
one of the four highest rating categories, by a Rating Agency.

Ratings on mortgage pass-through certificates address the likelihood of
receipt by certificateholders of all distributions on the underlying mortgage
loans. These ratings address the structural, legal and issuer-related aspects
associated with such certificates, the nature of the underlying mortgage
loans and the credit quality of the guarantor, if any. Ratings on mortgage
pass-through certificates do not represent any assessment of the likelihood
of principal prepayments by mortgagors or of the degree by which such
prepayments might differ from those originally anticipated. As a result,
certificateholders might suffer a lower than anticipated yield, and, in
addition, holders of stripped interest certificates in extreme cases might
fail to recoup their initial investments.

A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time by the
assigning rating organization. Each security rating should be evaluated
independently of any other security rating.

INDEX OF PRINCIPAL DEFINITIONS

PAGE(S) ON WHICH
TERM IS DEFINED
TERMS IN THE PROSPECTUS

Accrual Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 8, 26
Accrued Certificate Interest . . . . . . . . . . . . . . . . . . . . . . 28
ARM Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 65
Asset Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 17
Available Distribution Amount . . . . . . . . . . . . . . . . . . . . . . 27
Balloon Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . 14
Book-Entry Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 26
Buydown Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . 24
Buydown Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Cash Flow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 21
Cede . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 32
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Certificate Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Certificate Balance . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 28
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 17
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Contributions Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Covered Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 48
CPR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Credit Support . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 6, 20
Cut-off Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . 26, 33
Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 32
Due Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 84
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 87
Grantor Trust Certificates . . . . . . . . . . . . . . . . . . . . . . . 10
Indirect Participants . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
L/C Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Liquidation Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Loan-to-Value Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Lock-out Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Lock-out Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
MBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 5, 17
MBS Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
MBS Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
MBS Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
MBS Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Mortgage Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 5, 17
Mortgage Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Nonrecoverable Advance . . . . . . . . . . . . . . . . . . . . . . . . . 29
Offered Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Originator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Pass-Through Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 27
Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Prepayment Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Prepayment Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Rating Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Refinance Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Related Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Relief Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
REMIC Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
REMIC Regular Certificates . . . . . . . . . . . . . . . . . . . . . 10, 68
REMIC Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
REMIC Residual Certificates . . . . . . . . . . . . . . . . . . . . . 10, 68
Restricted Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Retained Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Senior Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 26
Servicing Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SMMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 86
SPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Stripped Interest Certificates . . . . . . . . . . . . . . . . . . . . 8, 26
Stripped Principal Certificates . . . . . . . . . . . . . . . . . . . . 8, 26
Sub-Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Sub-Servicing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 40
Subordinate Certificates . . . . . . . . . . . . . . . . . . . . . . . 7, 26
Title V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Trust Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Underlying MBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Warrantying Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

(VERSION 2)

SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1998

$________________
PROSPECTUS SUPPLEMENT
(To Prospectus dated ____, 199_)
Morgan Stanley Capital I Inc..
Depositor

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES _______

The Certificates will represent in the aggregate the entire beneficial
interest in a trust fund (the "Trust Fund") to be established by Morgan
Stanley Capital I Inc. (the "Depositor"). The Trust Fund will consist
primarily of (a pool (the "Mortgage Pool") of (fixed rate) (adjustable rate)
mortgage loans, with terms to maturity of not more than ___ years (the
"Mortgage Loans"), secured by (first and/or junior) liens on
(multifamily)(commercial) properties,) (mortgage participations, mortgage
pass-through certificates, mortgaged-backed securities evidencing interests
therein or secured thereby (the "MBS"),) (and) (certain direct obligations of
the United States, agencies thereof or agencies created thereby (the
"Government Securities")). The Mortgage Loans were originated or acquired by
___________ (the "Mortgage Asset Seller") and will be sold to the Depositor
on or prior to the date of initial issuance of the Certificates.

INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, CERTAIN RISKS SET FORTH
UNDER THE CAPTION "RISK FACTORS" HEREIN AND IN THE PROSPECTUS.

(The yield to investors in the (interest-only) Certificates will be
(extremely) sensitive to the rate and timing of principal payments (including
prepayments, repurchases, defaults and liquidations) in the Mortgage Loans,
which may fluctuate significantly over time. An (extremely) rapid rate of
principal payments on the Mortgage Loans could result in the failure of
investors in the (interest-only) Certificates to recover their initial
investments.)

------------------------

Morgan Stanley & Co.
Incorporated

- -----------------, 19--

----------------------

-------------------------

(THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.)
---------------------------

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TABLE OF CONTENTS
Page
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Prospectus Supplement

Prospectus

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SUMMARY OF PROSPECTUS SUPPLEMENT

Title of Certificates. . . . Mortgage Pass-Through Certificates, Series
199_-_, (the "Certificates").

Depositor. . . . . . Morgan Stanley Capital I Inc., a Delaware corporation
and a wholly-owned limited purpose finance subsidiary of
Morgan Stanley Group Inc. See "The Depositor" in the
Prospectus.

Master Servicer. . . _______________, a ________________. See "Pooling and
Servicing Agreement -- The Master Servicer" herein.

(Sub-Servicers . . . _______________, a ________________)

(Special Servicers. . _______________, a ________________)

Trustee. . . . . . _____________, a ____________________.

Cut-off Date. . . . .____________ 1, 199_.

Closing Date. . . . .______________ 1, 199_.

Distribution Dates. . . .Distributions on the Certificates will be made by
the Trustee, to the extent of available funds, on
the __ day of each (month) ( ) or, if any such __
day is not a business day, then on the next
succeeding business day, beginning in ________ 19__
(each, a "Distribution Date"), to the holders of
record as of the close of business on the (last
business day of the month preceding the month) of
each such distribution (each, a "Record Date").
Notwithstanding the above, the final distribution on
any Certificate will be made after due notice by the
Trustee of the pendency of such distribution and
only upon presentation and surrender of such
Certificates at the location to be specified in such
notice.
(Registration of
the Class
( ) Certificates. . . .The Class ( ) Certificates will be represented by
one or more global certificates registered in the
name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"). No person acquiring an
interest in the Class ( ) Certificates (any such
person, a "Class ( ) Certificate Owner") will be
entitled to receive a Certificate of such class in
fully registered, certificated form (a "Definitive
Class ( ) Certificate"), except under the limited
circumstances described in the Prospectus under
"Description of the Certificates-Book-entry
Registration and Definitive Certificates". Instead,
DTC will effect payments and transfers in respect of
the Class ( ) Certificates by means of its
electronic recordkeeping services, acting through
certain participating organizations
("Participants"). This may result in certain delays
in receipt of payments by an investor and may
restrict an investor's ability to pledge its
securities. Unless and until Definitive Class ( )
Certificates are issued, all references herein to
the rights of holders of a Class ( ) Certificate are
to the rights of Class ( ) Certificate Owners of
such class as they may be exercised through DTC and
its Participants, except as otherwise specified
herein. See "Description of the Certificates-
General" herein and "Description of the
Certificates-Book-Entry Registration and Definitive
Certificates" in the Prospectus.)

Denominations. . . . . . The Class ( ) Certificates will be issuable (on the
book-entry records of DTC and its Participants) (in
registered, certified form) in denominations of
$_______ and integral multiples of $_____________ in
excess thereof(, with one Certificate of such class
evidencing an additional amount equal to the
remainder of the Certificate Balance thereof).

(The Mortgage Pool. . . .The Mortgage Pool will consist of ((fixed rate)
(adjustable rate) Mortgage Loans secured by (first)
(junior) liens on (multifamily) (commercial)
properties (the "Mortgaged Properties") located in
__ different states,) (mortgage participations,
mortgage pass-through certificates, mortgaged-backed
securities evidencing interests therein or secured
thereby (the "MBS"),) (and) (certain direct
obligations of the United States, agencies thereof
or agencies created thereby (the "Government
Securities")). (The Mortgage Loans will have an
aggregate principal balance as of the Cut-off Date
of $_________ and individual principal balances at
origination of at least $______________ but not more
than $__________, with an average principal balance
at origination of approximately $_________. The
Mortgage Loans will have terms to maturity from the
date of origination or modification of not more than
____ years, and a weighted average remaining term to
maturity of approximately _____ months as of the
Cut-off Date. The Mortgage Loans will bear interest
at Mortgage Rates of at least _____% per annum but
not more than _____% per annum, with a weighted
average Mortgage Rate of approximately ____% per
annum as of the Cut-off Date. The Mortgage Loans
will be acquired by the Depositor on or before the
Closing Date. In connection with its acquisition of
the Mortgage Loans, the Depositor will be assigned
(and will in turn assign to the Trustee for the
benefit of the holders of the Certificates) certain
rights in respect of representations and warranties
described herein that were made by the Mortgage
Asset Seller.)

Adjustment Dates to occur (monthly); the remainder of
the Mortgage Loans provide for adjustments to the
Mortgage Rate to occur quarterly, semi-annually or
annually. (Each of the Mortgage Loans provides for an
initial fixed interest rate period;) --------- of the
Mortgage Loans, representing _____% of the Mortgage
Loans by aggregate principal balance as of the Cut-off
Date, have not yet experienced their first Interest Rate
Adjustment Date. The latest initial Interest Rate
Adjustment Date for any Mortgage Loan is scheduled to
occur on ________.))

(The amount of the Monthly Payment on each Mortgage Loan
is also subject to adjustment on specified Due Dates
(each such date, a "Payment Adjustment Date") to an
amount that would amortize the outstanding principal
balance of the Mortgage Loan over its then remaining
amortization schedule and pay interest at the applicable
Mortgage Rate, subject, in the case of several Mortgage
Loans, to payment caps, which limit the amount by which
the Monthly Payment may adjust on any Payment Adjustment
Date as described herein. _______ of the Mortgage
Loans, representing __% of the Mortgage Loans (by
aggregate principal balance as of the Cut-off Date,
provide for Payment Adjustment Dates to occur annually,
while the remainder of the Mortgage Loans provide for
adjustments of the Monthly Payment to occur monthly,
quarterly or semi-annually.)

(Only in the case of --------- Mortgage Loans,
representing ____% of the Mortgage Loans by aggregate
principal balance as of the Cut-off Date, does a Payment
Adjustment Date immediately follow each Interest Rate
Adjustment Date. As a result, and because the
application of payment caps may limit the amount by
which the Monthly Payments may adjust in respect of
certain Mortgage Loans, the amount of a Monthly Payment
may be more or less than the amount necessary to
amortize the remaining principal balance of the Mortgage
Loan over its then remaining amortization schedule and
pay interest at the then-applicable Mortgage Rate.
Accordingly, Mortgage Loans may be subject to slower
amortization (if the Monthly Payment due on a Due Date
is sufficient to pay interest accrued to such Due Date
at the then-applicable Mortgage Rate but is not
sufficient to reduce principal in accordance with the
applicable amortization schedule), to negative
amortization (if interest accrued to a Due Date at the
applicable Mortgage Rate is greater than the entire
Monthly Payment due on such Due Date) or to accelerated
amortization (if the Monthly Payment due on a Due Date
is greater than the amount necessary to pay interest
accrued to such Due Date at the then-applicable Mortgage
Rate and to reduce principal in accordance with the
applicable amortization schedule).)

(__ Mortgage Loans, representing ____% of the Mortgage
Loans by aggregate principal balance as of the Cut-off
Date, permit negative amortization. Substantially all
of the Mortgage Loans that permit negative amortization
contain provisions that limit the extent to which the
amount of their respective original principal balances
may be exceeded as a result thereof.)

(----- Mortgage Loans, representing ---% of the Mortgage
Loans by aggregate principal balance as of the Cut-off
Date, provide for monthly payments of principal based on
amortization schedules significantly longer than the
remaining term of such Mortgage Loans, thereby leaving
substantial outstanding principal amounts due and
payable (each such payment, a "Balloon Payment") on
their respective maturity dates, unless prepaid prior
thereto.)

For a further description of the Mortgage Loans, see
"Description of the Mortgage Pool" herein.)

(The MBS . . . . . . . . (Title and issuer of underlying securities, amount
deposited or pledged, amount originally issued,
maturity date, interest rate, (redemption
provisions), description of other material terms.)

(The Index . . . . . As of any Interest Rate Adjustment Date, the Index used
to determine the Mortgage Rate on each Mortgage Loan
will be the ____________. See "Description of the
Mortgage Pool -- The Index" herein.)

The Class ( )
Certificates. . . The Class ( ) Certificates will be issued pursuant to a
Pooling and Servicing Agreement, to be dated as of the
Cut-off Date, among the Depositor, the Master Servicer
and the Trustee (the "Pooling and Servicing Agreement").
The Class ( ) Certificates have an initial Certificate
Balance of $_______ (the initial "Class ( ) Balance"),
representing an initial interest of approximately ___%
in a trust fund (the "Trust Fund"), which will consist
primarily of the Mortgage Pool (The Class ( )
Certificates will not have a Certificate Balance.)

Pooling and Servicing Agreement, to the Class ( )
Certificateholders of record as of the (last business
day of the month preceding the month) of such
Distribution Date (each, a "Record Date"), except that
the final distribution on the Class ( ) Certificates
will be made only upon presentation and surrender of the
Class ( ) Certificates at the office or agency specified
in the Pooling and Servicing Agreement. (As more
specifically described herein, the Class ( ) Balance
will be adjusted from time to time on each Distribution
Date to reflect any additions thereto resulting from
allocations of Mortgage Loan negative amortization to
the Class ( ) Certificates and any reductions thereof
resulting from distributions of principal of the Class (
) Certificates. As further described herein, interest
shall accrue on the Class ( ) Balance at a Pass-Through
Rate thereon.

Pass-Through Rate
on the Class ( )
Certificates . . . . . (The Pass-Through Rate on the Class ( ) Certificates
is fixed and is set forth on the cover hereof.)
(The Pass-Through Rate on the Class ( )
Certificates will be equal to the weighted average
of the Class ( ) Remittance Rates in effect from
of any date of determination (is equal to the excess
of the Mortgage Rate thereon over __% per annum)
((i) prior to its first Interest Rate Adjustment
Date is equal to the related Mortgage Rate then
in effect minus __ basis points (the "Net Mortgage
Rate") and (ii) from and after its first Interest
Rate Adjustment Date is equal to the related
Mortgage Rate then in effect minus the excess of the
related Gross Margin over __ basis points.)) (The
Class ( ) Certificates (or a component thereof) will
not be entitled to distributions of interest and
will not have a Pass-Through Rate.) (Describe any
other method used to calculate the Pass-Through
Rate.)

Interest
Distributions
on the Class ( )
Certificates. . . . . Holders of the Class ( ) Certificates will be
entitled to receive on each Distribution Date, to
the extent of the Available Distribution Amount for
such Distribution Date, distributions allocable to
interest in an aggregate amount (the "Class ( )
Interest Distribution Amount") equal to thirty days'
interest accrued on the Class ( ) Balance) (Class (
) Notional Amount) outstanding immediately prior to
such Distribution Date at the then-applicable Pass-
Through Rate less the Class ( ) Certificates'
allocable share (calculated as described herein) of
((i) the aggregate amount of negative amortization
in respect of the Mortgage Loans for their
respective Due Dates occurring during the related
Due Period and (ii)) the aggregate portion of
Prepayment Interest Shortfalls incurred during the
related Due Period that was not covered by the
application of the Master Servicer's servicing
compensation for the related Due Period. (The
amount, if any, by which the Class ( ) Interest
Distribution Amount for any Distribution Date is
reduced as a result of negative amortization on the
Mortgage Loans shall constitute the "Class Negative
Amortization" for such Distribution Date in respect
of the Class ( ) Certificates and shall be added to
the Class ( ) Balance on such Distribution Date.)
(The Class ( ) Notional Amount will equal the (sum
of the) Class ( ) Balance. The Class ( ) Notional
Amount does not entitle the Class ( ) Certificates
(or a component thereof) to any distributions of
principal.) If the Available Distribution Amount
for any Distribution Date is less than the Class ( )
Interest Distribution Amount for such Distribution
Date, the shortfall will be part of the Class ( )
Interest Distribution Amount distributable to
holders of Class ( ) Certificates on subsequent
Distribution Dates, to the extent of available
funds.

The Available Distribution Amount for any Distribution
Date generally includes: (i) scheduled payments on the
Mortgage Assets due during or prior to the related Due
Period and collected as of the related Determination
Date (to the extent not distributed on previous
Distribution Dates) and certain unscheduled payments and
other collections on the Mortgage Assets collected
during the related Due Period, net of amounts payable or
reimbursable to the Master Servicer therefrom; (ii) any
Advances made by the Master Servicer for the related
Distribution Date; and (iii) that portion of the Master
Servicer's servicing compensation for the related Due
Period applied to cover Prepayment Interest Shortfalls
incurred during the related Due Period. See "
Description of the Certificates -- Distributions --
Calculations of Interest" herein.

Principal
Distributions
on the Class ( )
Certificates . . . . . Holders of the Class ( ) Certificates will be
entitled to receive on each Distribution Date, to
the extent of the balance of the Available
Distribution Amount remaining after the payment of
the Class ( ) Interest Distribution Amount for such
Distribution Date, distributions in respect of
principal in an amount (the "Class ( ) Principal
Distribution Amount") generally equal to the
aggregate of (i) the then Class ( ) Scheduled
Principal Distribution Percentage (calculated as
described herein) of all scheduled payments of
principal (including the principal portion of any
Balloon Payments) due on the Mortgage Loans during
or, if and to the extent not previously received or
advanced and distributed on prior Distribution
Dates, prior to the related Due Period that were
paid by the mortgagors as of the related
Determination Date or advanced by the Master
Servicer in respect of such Distribution Date, (ii)
(the Senior Accelerated Percentage of) (all
principal prepayments received during the related
Due Period and (iii), to the extent not previously
advanced (the (lesser of the) Class ( ) Scheduled
Principal Distribution Percentage of the Stated
Principal Balance of the Mortgage Loans) (and the)
(Senior Accelerated Percentage of any unscheduled
principal recoveries received during the related Due
Period in respect of the Mortgage Loans, whether in
the form of liquidation proceeds, insurance
proceeds, condemnation proceeds or amounts received
as a result of the purchase of any Mortgage Loan out
of the Trust Fund.)) Distributions in respect of
principal of the Class ( ) Certificates on any
Distribution Date shall be limited to the sum of (i)
the Class ( ) Balance outstanding immediately prior
to such Distribution Date and (ii) the Class
Negative Amortization, if any, for such Distribution
Date in respect of the Class ( ) Certificates.
(Initially, the "Senior Accelerated Percentage"
will equal 100% thereafter, as further described
herein, the Senior Accelerated Percentage may be
reduced under certain circumstances.) See
"Description of the Certificates --Distributions --
Calculations of Principal" herein. (The Class ( )
Certificates do not have a Certificate Balance and
are therefore not entitled to any principal
distributions).

Advances . . . . . . . . The Master Servicer is required to make advances
("Advances") in respect of delinquent Monthly
Payments on the Mortgage Loans, subject to the
limitations described herein. The Trustee will be
obligated to make any such Advance if the Master
Servicer fails in its obligation to do so, to the
extent provided in the Pooling and Servicing
Agreement. See "Description of the Certificates --
Advances" herein and "Description of the
Certificates -- Advances in Respect of
Delinquencies" in the Prospectus.

Subordination . . . . . The rights of holders of the Subordinate
Certificates to receive distributions of amounts
collected on the Mortgage Loans will be subordinate,
to the extent described herein, to the rights of
holders of the Class ( ) Certificates. This
subordination is intended to enhance the likelihood
of receipt by the holders of the Class ( )
Certificates of the full amount of the Class ( )
Interest Distribution Amount and the (ultimate
receipt of principal equal to the initial Class ( )
Balance). The protection afforded to the
holders of the Class ( ) Certificates by means of
the subordination, to the extent provided herein,
will be accomplished by the application of the
Available Distribution Amount to the Class ( )
Certificates prior to the application thereof to the
Subordinate Certificates (and by reducing the Class
( ) Interest Distribution Amount and the Class ( )
Balance by an amount equal to the interest portion
and the principal portion, respectively, Realized
Losses allocated to such class). See "Description
of the Certificates -- Subordination" herein.

(The Subordinate
Certificates. . . . . The Class ( ) Certificates have an initial
Certificate Balance of $____________ (the initial
"Class ( ) Balance") and the Class ( ) Certificates
have an initial Certificate Balance of $________
(the initial "Class ( ) Balance"), representing
____% and _____%, respectively, of the Mortgage
Loans by aggregate principal balance as of the
Cut-off Date. Interest shall accrue on the Class (
) Balance and Class ( ) Balance at a Pass-Through
Rate equal to (____% per annum) (the weighted
average of the Net Mortgage Rates in effect from
time to time on the Mortgage Loans).

(The Class ( ) Certificates, which have no Pass-Through
Rate and initially have a Certificate Balance of
$______________ (the initial "Class ( ) Balance"),
represent the right to receive on any Distribution Date
the balance, if any, of the Available Distribution
Amount remaining after the payment of all interest and
principal due on the other Classes of Certificates.
Subsequent to the first Distribution Date, the Class ( )
Balance will equal the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans over the
sum of the Class ( ) Balance, Class ( ) Balance and
Class ( ) Balance.)

(The Subordinate Certificates are not offered hereby.))

(Special
Prepayment
Considerations . . . . The rate of principal payments on the Class ( )
Certificates collectively will depend on the rate
and timing of principal payments (including
prepayments, defaults and liquidations) on the
Mortgage Loans. As is the case with mortgage-backed
securities generally, the Class ( ) Certificates
are subject to substantial inherent cash-flow
uncertainties because the Mortgage Loans may be
prepaid at any time. Generally, when prevailing
interest rates are increasing, prepayment rates on
mortgage loans tend to decrease, resulting in a
reduced return of principal to investors at a time
when reinvestment at such higher prevailing rates
would be desirable. Conversely, when prevailing
interest rates are declining, prepayment rates on
mortgage loans tend to increase, resulting in a
greater return of principal to investors at a time
when reinvestment at comparable yields may not be
possible.

(The multiple class structure of the Class ( )
Certificates results in the allocation of prepayments
among certain classes as follows (to be included as
appropriate):

(SEQUENTIALLY PAYING CLASSES: (All) classes of the
Class ( ) Certificates are subject to various
priorities for payment of principal as described herein.
Distributions on classes having an earlier priority of
payment will be immediately affected by the prepayment
speed of the Mortgage Loans early in the life of the
Mortgage Pool. Distributions on classes with a later
priority of payment will not be directly affected by the
prepayment speed until such time as principal is
distributable on such classes; however, the timing of
commencement of principal distributions and the weighted
average lives of such classes will be affected by the
prepayment speed experienced both before and after the
commencement of principal distributions on such
classes.)

((SCHEDULED) CERTIFICATES: Principal distributions on
the (Scheduled) Certificates will be payable in amounts
determined based on schedules as described herein,
provided that the prepayment speed of the Mortgage Loans
each month remains (at a constant level of) (between
approximately ___% CPR (as defined herein) and) ___%
CPR. (However, as discussed herein, actual principal
distributions are likely to deviate from the described
amounts, because it is highly unlikely that the actual
prepayment speed of the Mortgage Loans each month will
remain at or near ___% CPR.) If the prepayment speed of
the Mortgage Loans is consistently higher than ___% CPR,
then the (Companion) Certificates will be retired before
all of the (Scheduled) Certificates are retired, and the
rate of principal distributions and the weighted average
lives of the remaining (Scheduled) Certificates will
become significantly more sensitive to changes in the
prepayment speed of the Mortgage Loans and principal
distributions thereon will be more likely to deviate
from the described amounts.)

((COMPANION) CERTIFICATES: Because of the application
of amounts available for principal distributions among
the Class ( ), Class ( ) and Class ( )
Certificates in any given month, first to the
(Scheduled) Certificates up to the described amounts and
then to the (Companion) Certificates, the rate of
principal distributions and the weighted average lives
of the (Companion) Certificates will be extremely
sensitive to changes in the prepayment speed of the
Mortgage Loans. The weighted average lives of the
(Companion) Certificates will be significantly more
sensitive to changes in the prepayment speed than that
of the (Scheduled) Certificates or a fractional
undivided interest in the Mortgage Loans.))

(Special Yield
Considerations . . The yield to maturity on each respective class of
the Class ( ) Certificates will depend on the rate
and timing of principal payments (including
prepayments, defaults and liquidations) on the
Mortgage Loans and the allocation thereof (and of
any losses on the Mortgage Loans) to reduce the
Certificate Principal Balance (or Notional Amount)
of such class, as well as other factors such as the
Pass-Through Rate (and any adjustments thereto) and
the purchase price for such Certificates. The yield
to investors on any class of Class ( )
Certificates will be adversely affected by any
allocation thereto of prepayment interest shortfalls
on the Mortgage Loans, which are expected to result
from the distribution of interest only to the date
of prepayment (rather than a full month's interest)
in connection with prepayments in full, and the lack
of any distribution of interest on the amount of any
partial prepayments.

In general, if a Class ( ) Certificate is purchased at
a premium and principal distributions thereon occur at a
rate faster than anticipated at the time of purchase,
the investor's actual yield to maturity will be lower
than that assumed at the time of purchase. Conversely,
if a Class ( ) Certificate is purchased at a discount
and principal distributions thereon occur at a rate
slower than that assumed at the time of purchase, the
investor's actual yield to maturity will be lower than
that originally anticipated.

The Class ( ) Certificates were structured
based on a number of assumptions, including a
prepayment assumption of ___% CPR and weighted

average lives corresponding thereto as set
forth herein under "Special Prepayment
Considerations." The yield assumptions for the
respective classes of Offered Certificates will
vary as determined at the time of sale.

(The multiple class structure of the Senior
Certificates causes the yields of certain
classes to be particularly sensitive to changes
in the prepayment speed of the Mortgage Loans
and other factors, as follows (to be included
as appropriate):)

(INTEREST STRIP AND INVERSE FLOATER CLASSES:
The yield to investors on the (identify
classes) will be extremely sensitive to the
rate and timing of principal payments on the
Mortgage Loans (including prepayments, defaults
and liquidations), which may fluctuate
significantly over time. A rapid rate of
principal payments on the Mortgage Loans could
result in the failure of investors in the
(identify interest strip and inverse floater
strip classes) to recover their initial
investments, and a slower than anticipated rate
of principal payments on the Mortgage Loans
could adversely affect the yield to investors
on the (identify non-strip inverse floater
classes).)

((VARIABLE STRIP) CERTIFICATES. In addition to
the foregoing, the yield on the (Variable
Strip) Certificates will be materially
adversely affected to a greater extent than the
yields on the other Class ( ) Certificates if
the Mortgage Loans with higher Mortgage Rates
prepay faster than the Mortgage Loans with
lower Mortgage Rates, because holders of the
(Variable Strip) Certificates generally have
rights to relatively larger portions of
interest payments on the Mortgage Loans with
higher Mortgage Rates than on Mortgage Loans
with lower Mortgage Rates.)

(ADJUSTABLE RATE (INCLUDING INVERSE FLOATER)
CLASSES: The yield on the (identify floating
rate classes) will be sensitive, and the yield
on the (identify inverse floater classes) will
be extremely sensitive, to fluctuations in the
level of (the index). THE PASS-THROUGH RATE ON
THE (IDENTIFY INVERSE FLOATER CLASSES) WILL
VARY INVERSELY WITH, AND AT A MULTIPLE OF, (THE
INDEX).)

(Inverse floater companion classes: In
addition to the foregoing, in the event of
relatively low prevailing interest rates
(including (the index) and relatively high
rates of principal prepayments over an extended
period, while investors in the (identify
inverse floater companion classes) may then be
experiencing a high current yield on such
Certificates, such yield may be realized only
over a relatively short period, and it is
unlikely that such investors would be able to
reinvest such principal prepayments on such
Certificates at a comparable yield.)

(RESIDUAL CERTIFICATES: Holders of the
Residual Certificates are entitled to receive
distributions of principal and interest as
described herein; however, holders of such
Certificates may have tax liabilities with
respect to their Certificates during the early
years of their term that substantially exceed
the principal and interest payable thereon
during such periods. (In addition, such
distributions will be reduced to the extent
that they are subject to United States federal
income tax withholding.)))

Optional Termination . . . . At its option, the Master Servicer may purchase
all of the Mortgage Assets, and thereby effect
termination of the Trust Fund and early
retirement of the then outstanding
Certificates, on any Distribution Date on which
the aggregate Stated Principal Balance of the
Mortgage Loans remaining in the Trust Fund is
less than __% of the aggregate principal
balance of such Mortgage Loans as of the
Cut-off Date. (At its option, the Master
Servicer may also purchase any Class ( )
Certificates on any Distribution Date on which
the Class ( ) Balance is less than ___% of the
original balance thereof.) See "Pooling and
Servicing Agreement -- Termination" herein and
"Description of the Certificates --
Termination" in the Prospectus.

Certain Federal Income Tax
Consequences . . . (An election will be made to treat the Trust Fund as a
real estate mortgage investment conduit ("REMIC") for
federal income tax purposes. Upon the issuance of the
Class ( ) Certificates, Brown & Wood LLP or Sidley &
Austin or Latham & Watkins or Cadwalader, Wickersham &
Taft, counsel to the Depositor, will deliver its opinion
generally to the effect that assuming compliance with
all provisions of the Pooling and Servicing Agreement,
for federal income tax purposes, the Trust Fund will
qualify as a REMIC under Sections 860A through 860G of
the Internal Revenue Code of 1986 (the "Code").

For federal income tax purposes, the Class ( ) Certificates will
be the sole class of "residual interests" in the REMIC and the
Class ( ), Class ( ) and Class ( ) Certificates will be the
"regular interests" in the REMIC and will be treated as debt
instruments of the REMIC.

The Class ( ) Certificates (may(will))(will not) be treated as
having been issued with original issue discount for federal
income tax purposes. The prepayment assumption that will be
used for purposes of computing the accrual of original issue
discount, market discount and premium, if any, for federal
income tax purposes will be equal to a constant prepayment rate
("CPR") of ____%. However, no representation is made that the
Mortgage Loans will prepay at that rate or at any other rate.)

For further information regarding the federal income tax
consequences of investing in the Class ( ) Certificates, see
"Certain Federal Income Tax Consequences" herein and in the
Prospectus.)

ERISA Considerations . . . . (A fiduciary of any employee benefit plan or
other retirement arrangement subject to the
Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of
the Code should review carefully with its legal
advisors whether the purchase or holding of
Class ( ) Certificates could give rise to a
transaction that is prohibited or is not
otherwise permitted either under ERISA or
Section 4975 of the Code or whether there
exists any statutory or administrative
exemption applicable to an investment therein.)
(The U.S. Department of Labor has issued an
individual exemption, Prohibited Transaction
Exemption 90-24, to the Underwriter that
generally exempts from the application of
certain of the prohibited transaction
provisions of Section 406 of ERISA, and the
excise taxes imposed on such prohibited
transactions by Section 4975(a) and (b) of the
Code and Section 502(i) of ERISA, transactions
relating to the purchase, sale and holding of
pass-through certificates underwritten by the
Underwriter such as the Class ( ) Certificates
and the servicing and operation of asset pools
such as the Trust Fund, provided that certain
conditions are satisfied. A fiduciary of any
employee benefit plan subject to ERISA or the
Code should consult with its legal advisors
regarding the requirements of ERISA and the
Code.) See "ERISA Considerations" herein and
in the Prospectus.

Rating . . . It is a condition to the issuance of the Class ( ) Certificates
that they be rated (not lower than) "___" by --------------. A
security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any
time by the assigning rating organization. A security rating
does not address the frequency of prepayments (whether voluntary
or involuntary) of Mortgage Loans, or the corresponding effect
on yield to investors. (The rating of the Class ( )
Certificates does not address the possibility that the holders
of such Certificates may fail to fully recover their initial
investments.) See "Risk Factors" and "Rating" herein and "Yield
Considerations" in the Prospectus.

Legal Investment . . . . The appropriate characterization of the Class ( )
Certificates under various legal investment
restrictions, and thus the ability of investors
subject to these restrictions to purchase the Class
( ) Certificates, may be subject to significant
interpretative uncertainties. The Class ( )
Certificates (will) (will not) be "mortgage related
securities" within the meaning of the Secondary
Mortgage Market Enhancement Act of 1984 (so long as
they are rated in at least the second highest rating
category by the Rating Agency, and, as such, are
legal investments for certain entities to the extent
provided in SMMEA). Accordingly, investors should
consult their own legal advisors to determine
whether and to what extent the Class ( )
Certificates constitute legal investments for them.
See "Legal Investment" herein and in the
Prospectus.

RISK FACTORS
(Description will depend on the particulars of the Mortgage Assets)

See "Description of the Certificates -- Distributions -- Priority" and
"Certain Yield, Prepayment and Maturity Considerations" herein and "Yield
Considerations" in the Prospectus.

See "Certain Federal Income Tax Consequences" herein and in the
Prospectus and "Yield Considerations" in the Prospectus.

(Risks Associated with Certain of the Mortgage Loans and Mortgaged
Properties.) (Description of type of property, lease provisions, nature of
tenants and operating income.)

(Because the Mortgage Loans are adjustable rate mortgage loans, the
Mortgage Rates and Monthly Payments will increase in a rising interest rate
environment, perhaps without a corresponding increase in the mortgagors' net
operating income. In such event, as the Debt Service Coverage Ratios (as
defined herein) for such Mortgage Loans decrease, the related mortgagor's
ability to make Monthly Payments may be impaired, and a mortgagor payment
default would be more likely to occur.)

(The following paragraphs will be included in the event any of the Mortgage
Loans are acquired from the Resolution Trust Corporation:)

DESCRIPTION OF THE (MORTGAGE POOL) (MBS)

GENERAL

The Trust Fund will consist primarily of (___ (fixed interest)
(adjustable interest) rate Mortgage Loans with an aggregate principal balance
as of the Cut-off Date, after deducting payments of principal due on such
date, of $____________,) (mortgage participations, mortgage pass-through
certificates, mortgaged-backed securities evidencing interests therein or
secured thereby (the "MBS"),) (and) (certain direct obligations of the United
States, agencies thereof or agencies created thereby (the "Government
Securities")). (Each Mortgage Loan is evidenced by a promissory note (a
"Mortgage Note") and secured by a mortgage, deed of trust or other similar
security instrument (a "Mortgage" creating a (first)(junior) fee lien on a
(multifamily)(commercial) property (a "Mortgaged Property"). The Mortgaged
Properties consist of (description of commercial or multifamily residential
properties). (Because no evaluation of any mortgagor's financial condition
has been conducted, investors should consider all of the Mortgage Loans to be
non-recourse loans so that, in the event of mortgagor default, recourse may
be had only against the specific property and such limited other assets as
have been pledged to secure a Mortgage Loan, and not against the mortgagor's
other assets.) All percentages of the Mortgage Loans described herein are
approximate percentages (except as otherwise indicated) by aggregate
principal balance as of the Cut-off Date.)

Under the Seller's Agreement, _______________, as seller of the Mortgage
Loans to the Depositor, will make certain representations, warranties and
covenants to the Depositor relating to, among other things, the due execution
and enforceability of the Seller's Agreement and certain characteristics of
the Mortgage Loans, and will be obligated to repurchase or substitute for any
Mortgage Loans as to which there exists deficient documentation or an uncured
material breach of any such representation, warranty or covenant. Under the
Pooling and Servicing Agreement the Depositor will assign all its right,
title and interest in such representations, warranties and covenants
(including ____________________'s repurchase or substitution obligation) to
the Trustee for the Trust Fund. The Depositor will make (no) representations
or warranties with respect to the Mortgage Loans and will have no obligation
to repurchase or substitute for Mortgage Loans with deficient documentation
(or which are otherwise defective). _____________, as seller of the Mortgage
Loans to the Depositor, is selling such Mortgage Loans without recourse and,
accordingly, in such capacity, will have no obligations with respect to the
certificates other than pursuant to such representations, warranties,
covenants and repurchase obligations. See "Description of the Agreements --
Representations and Warranties; Repurchases" in the Prospectus.)

(THE MBS

(Description of principal and interest distributions on the MBS.)

(Description of advances by the servicer of the mortgage loans
underlying the MBS.)

(Description of effect on the MBS of allocation of losses on the
underlying mortgage loans.)

(THE INDEX

(name of Index)

Adjustment Date 1990 1991 1992 1993 1994 1995
- --------------- --- --- --- --- ---- ----
January ( )
February ( )
March ( )
April ( )
May ( )
June ( )
July ( )
August ( )
September ( )
October ( )
November ( )
December ( )

CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS

(As of the Cut-off Date, the Mortgage Loans had the following
characteristics: (i) Mortgage Rates ranging from _____% per annum to _______%
per annum; (ii) a weighted average Mortgage Rate of ______% per annum; (iii)
Gross Margins ranging from ____ basis points to ______ basis points; (iv) a
weighted average Gross Margin of ____ basis points; (v) principal balances
ranging from $_______ to $______; (vi) an average principal balance of
$_________; (vii) original terms to scheduled maturity ranging from _____
months to _________ months; (viii) a weighted average original term to
scheduled maturity of _____ months; (ix) remaining terms to scheduled
maturity ranging from ____ months to _____ months; (x) a weighted average
remaining term to scheduled maturity of ________ months; (xi) Cut-off Date
Loan-to-Value ("LTV") Ratios ranging from ______% to ________%; (xii) a
weighted average Cut-off Date LTV Ratio of _____%; (xiii) as to the _______%
of the Mortgage Loans to which such characteristic applies, (A) minimum
lifetime Mortgage Rates ranging from ____% per annum to ______ % per annum
and (B) a weighted average minimum lifetime Mortgage Rate of _______% per
annum; (xiv) as to the__________% of Mortgage Loans to which such
characteristic applies and for which it may be currently calculated, (A)
maximum lifetime Mortgage Rate ranging from _______% per annum to ________%
per annum and (B) a weighted average maximum lifetime Mortgage Rate of
_________% per annum; (xv) Cut-off Date Debt Service Coverage Ratios ranging
from ______% to _____% and (xvi) a weighted average Cut-off Date Debt Service
Coverage Ratio of _________%.)

The following table sets forth the range of Mortgage Rates on the
Mortgage Loans as of the Cut-off Date:

Mortgage Rates as of the Cut-off Date
------------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Mortgage Rate Loans Number the Cut-off Date the Cut-off Date
<S> <C> <C>

Total 100.00% $ 100.00%

</TABLE>

Weighted Average
Mortgage Rate:

Note: Percentage totals may not add due to rounding.

The following table sets forth the types of Mortgaged Properties
securing the Mortgage Loans:

Property Type
-------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Type Loans Number the Cut-off Date the Cut-off Date
- --- ---------- ------- ---------------- ----------------
<S> <C> <C> <C>

Total 100.00% $ 100.00%

</TABLE>

Note: Percentage totals may not add due to rounding.

(The following table sets forth the range of Gross Margins for the
Mortgage Loans:)

(Gross Margins)
------------
<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Mortgage Rate Loans Number the Cut-off Date the Cut-off Date
- ------------- -------- ------- ---------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average
Gross Margin:

Note: Percentage totals may not add due to rounding.

(The following table sets forth the frequency of adjustments to the
Mortgage Rates on the Mortgage Loans as of the Cut-off Date:)

(Frequency of Adjustments to Mortgage Rates)
------------------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Frequency(A) Loans Number the Cut-off Date the Cut-off Date
- ------------ ---------- -------- ---------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average
Frequency of
Adjustments to
Mortgage Rate:

Note: Percentage totals may not add due to rounding.

(A) _______ or ___% of Mortgage Loans have not experienced their first
Interest Rate Adjustment Date.

(The following table sets forth the frequency of adjustments to the
Monthly Payments on the Mortgage Loans as of the Cut-off Date:)

(Frequency of Adjustments to Monthly Payments)
--------------------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Frequency (A) Loans Number the Cut-off Date the Cut-off Date
- ------------- ---------- -------- ---------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average
Frequency of
Adjustments to
Monthly Payments:

Note: Percentage totals may not add due to rounding.

(The following table sets forth the range of maximum lifetime Mortgage
Rates for the Mortgage Loans:)

(Maximum Lifetime Mortgage Rates)
---------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Maximum Number of Percent Principal Principal
Lifetime Mortgage by Balance as of Balance as of
Mortgage Rate Loans Number the Cut-off Date the Cut-off Date
- -------------------- ---------- --------- ---------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average
Maximum Lifetime
Mortgage Rate:

Note: Percentage totals may not add due to rounding.

(The following table sets forth the range of minimum lifetime Mortgage
Rates on the Mortgage Loans:)

(Minimum Lifetime Mortgage Rates)
---------------------------
<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Minimum Number of Percent Principal Principal
Lifetime Mortgage by Balance as of Balance as of
Mortgage Rate Loans Number the Cut-off Date the Cut-off Date
------------- ---------- -------- ---------------- -----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average
Minimum Lifetime
Mortgage Rate:

Note: Percentage totals may not add due to rounding.

(A) Represents Mortgage Loans without interest rate floors.
(B) This calculation does not include the ---- Mortgage Loans without
interest rate floors.

The following table sets forth the range of principal balances of the
Mortgage Loans as of the Cut-off Date:

Principal Balances as of the Cut-off Date
----------------------------------
<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Principal Balance Number of Percent Principal Principal
as of the Mortgage by Balance as of Balance as of
Cut-off Date Loans Number the Cut-off Date the Cut-off Date
------------------- ----------- -------- ------------------ ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Average Principal Balance
as of the
Cut-off Date:

Note: Percentage totals may not add due to rounding.

The following tables set forth the original and remaining terms to
maturity (in months) of the Mortgage Loans:

Original Term to Maturity in Months
-----------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Original Mortgage by Balance as of Balance as of
Term in Months Loans Number the Cut-off Date the Cut-off Date
- ----------------- --------- -------- ---------------- -----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average
Original Term to Maturity:

Note: Percentage totals may not add due to rounding.

Remaining Term to Maturity in Months
------------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Remaining Number of Percent Principal Principal
Term in Mortgage by Balance as of Balance as of
Months Loans Number the Cut-off Date the Cut-off Date
---------- ------------- ------- ----------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average Remaining
Term to Maturity:

Note: Percentage totals may not add due to rounding.

The following tables set forth the respective years in which the
Mortgage Loans were originated and are scheduled to mature:

Mortgage Loan Year of Origination
---------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Year Loans Number the Cut-off Date the Cut-off Date
---------- --------- ------- ---------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Note: Percentage totals may not add due to rounding.

Mortgage Loan Year of Scheduled Maturity
---------------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
Year Loans Number the Cut-off Date the Cut-off Date
----- ----------- --------- ----------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Note: Percentage totals may not add due to rounding.

The following table sets forth the range of Original LTV Ratios of the
Mortgage Loans. An "Original LTV Ratio" is a fraction, expressed as a
percentage, the numerator of which is the principal balance of a Mortgage
Loan on the date of its origination, and the denominator of which is (in
general) the lesser of (i) the appraised value of the related Mortgaged
Property as determined by an appraisal thereof obtained in connection with
the origination of such Mortgage Loan and (ii), the sale price of such
Mortgaged Property at the time of such origination. There can be no
assurance that the value (determined through an appraisal or otherwise) of a
Mortgaged Property determined after origination of the related Mortgage Loan
will be equal to or greater than the value thereof (determined through an
appraisal or otherwise) obtained in connection with the origination. As a
result, there can be no assurance that the loan-to-value ratio for any
Mortgage Loan determined at any time following origination thereof will be
lower than the Original LTV Ratio, notwithstanding any positive amortization
of such Mortgage Loan.

Original LTV Ratios
-------------------
<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Original Mortgage by Balance as of Balance as of
LTV Ratio Loans Number the Cut-off Date the Cut-off Date
---------- ---------- -------- ---------------- -----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average Original
LTV Ratio:

Note: Percentage totals may not add due to rounding.

The following table sets forth the range of Debt Service Coverage Ratios
for the Mortgage Loans. The "Debt Service Coverage Ratio" for any Mortgage
Loan is the ratio of Net Operating Income produced by the related Mortgaged
Property for the period covered by the annual operating statement to the
amounts of principal, interest and other sums due under such Mortgage Loan
for the same period. "Net Operating Income" is the rent from all leases
under which the tenants have taken occupancy at the time of calculation
(including only rents prior to expiration for those leases whose terms expire
within one year of the calculation and pass-through for utilities and
excluding all free rent) less operating expenses (such as utilities,
administrative expenses, repairs and maintenance) and less fixed expenses
(such as insurance, real estate and other taxes to be paid by mortgagor).
The annual operating statements for the Mortgaged Properties used in
preparing the following table were obtained from the respective mortgagors.
The information contained therein was unaudited, and the Depositor has made
no attempt to verify its accuracy. The last day of the twelve-month period
covered by each such operating statement is set forth in Annex A with respect
to the related Mortgage Loan. (Certain of the Mortgaged Properties have
relatively short operating histories, and such performance may be less
indicative of future performance than in the case of a property with a stable
operating history over an extended period of time. However, even with
respect to Mortgaged Properties with longer operating histories, operating
income produced by Mortgaged Properties in the past should not be construed
as indicative of the future performance of any Mortgaged Property. (Annual
operating statements for any year following 19__ could not be obtained with
respect to _______ of the Mortgaged Properties and, consequently, the Debt
Service Coverage Ratios for the related Mortgage Loans were not calculated.
As a result, no conclusions should be drawn as to those ---- Mortgage Loans
on the basis of the information set forth below.)

Debt Service Coverage Ratios as of the Cut-off Date
---------------------------------------------------
<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Debt Service Number of Percent Principal Principal
Coverage Mortgage by Balance as of Balance as of
Ratio Loans Number the Cut-off Date the Cut-off Date
--------------- ------------- ---------- ---------------- -----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Weighted Average
Debt Service Coverage
Ratio:

Note: Percentage totals may not add due to rounding.

(A) The debt service coverage ratios for these loans were not calculated due
to a lack of operating statements with respect to years after 19__.
(B) This calculation does not include the ____ Mortgage Loans where debt
service coverage ratios were not calculated.

The Mortgage Loans are secured by Mortgaged Properties in ---------
different states. The table below sets forth the states in which the
Mortgaged Properties are located:

Geographic Distribution
-------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Mortgage by Balance as of Balance as of
State Loans Number the Cut-off Date the Cut-off Date
----- --------- ------- ----------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Note: Percentage totals may not add due to rounding.
(regional breakdown to be provided as appropriate)

(____% of the Mortgage Loans prohibit the prepayment thereof until a
date specified in the related Mortgage Note (such period, the "Lock-out
Period" and the date of expiration thereof, the "Lock-out Date"). The
following table sets forth the Lock-out Dates for such Mortgage Loans.)

(Mortgage Loan Lock-out Dates)
-----------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Lock-out Mortgage by Balance as of Balance as of
Date Loans Number the Cut-off Date the Cut-off Date
- ---------------- ---------- ------- ----------------- ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Note: Percentage totals may not add due to rounding.

(Mortgage Loan Prepayment Premiums)
-----------------------------

<TABLE>
<CAPTION>
Percent by
Aggregate Aggregate
Number of Percent Principal Principal
Prepayment Mortgage by Balance as of Balance as of
Premium Loans Number the Cut-off Date the Cut-off Date
--------------- ---------- ----------- ------------------ ----------------
<S> <C> <C> <C>
Total 100.00% $ 100.00%

</TABLE>

Note: Percentage totals may not add due to rounding.

Set forth in Annex A to this Prospectus Supplement are certain
individual characteristics of the Mortgage Loans.

UNDERWRITING STANDARDS

All of the Mortgage Loans were originated or acquired by _______,
generally in accordance with the underwriting criteria described herein.

(Description of underwriting standards.)

ADDITIONAL INFORMATION

DESCRIPTION OF THE CERTIFICATES

GENERAL

(None of the Class ( ) Certificates are offered hereby.)

DISTRIBUTIONS

On or after the reduction of the Class ( ) Balance to zero, the
Available Distribution Amount will be paid solely to the holders of the
Subordinate Certificates.

(The Class ( ) Certificates (or a component thereof) will not be
entitled to distributions of interest and will not have a Pass-Through Rate.)

SUBORDINATION

(The principal portion of any Realized Losses will be allocated first in
reduction of the Subordinate Certificates (in the order specified here) and
then to the Class ( ) Certificates (in the order specified here). Any losses
realized on a Mortgage Loan that is finally liquidated equal to the excess of
the Stated Principal Balance of such Mortgage Loan remaining, if any, plus
interest thereon through the last day of the month in which such Mortgage
Loan was finally liquidated, after application of all amounts received (net
of amounts reimbursable to the Master Servicer, any Sub-Servicer or any
Special Servicer for Advances and expenses, including attorneys' fees)
towards interest and principal owing on the Mortgage Loan, is referred to
herein as a "Realized Loss.")

ADVANCES

On the business day immediately preceding each Distribution Date, the
Master Servicer will be obligated to make advances (each, an "Advance") out
of its own funds, or funds held in the Certificate Account that are not
required to be part of the Available Distribution Amount for such
Distribution Date, in an amount equal to the aggregate of (i) all Monthly
Payments (net of the Servicing Fee), other than Balloon Payments, which were
due on the Mortgage Loans during the related Due Period and delinquent as of
the related Determination Date and (ii) in the case of each Mortgage Loan
delinquent in respect of its Balloon Payment as of the related Determination
Date, an amount sufficient to amortize fully the principal portion of such
Balloon Payment over the remaining amortization term of such Mortgage Loan
and to pay interest at the Net Mortgage Rate in effect for such Mortgage Loan
for the one month period preceding its Due Date in the related Due Period
(but only to the extent that the related mortgagor has not made a payment
sufficient to cover such amount under any forbearance arrangement that has
been included in the Available Distribution Amount for such Distribution
Date). The Master Servicer's obligations to make Advances in respect of any
Mortgage Loan will continue through liquidation of such Mortgage Loan and out
of its own funds from any amounts collected in respect of the Mortgage Loan
as to which such Advance was made, whether in the form of late payments,
insurance proceeds, liquidation proceeds, condemnation proceeds or amounts
paid in connection with the purchase of such Mortgage Loan. Notwithstanding
the foregoing, the Master Servicer will be obligated to make any Advance only
to the extent that it determines in its reasonable good faith judgment that,
if made, would be recoverable out of general funds on deposit in the
Certificate Account. Any failure by the Master Servicer to make an Advance
as required under the Pooling and Servicing Agreement will constitute an
event of default thereunder, in which case the trustee will be obligated to
make any such Advance, in accordance with the terms of the Pooling and
Servicing Agreement.

CERTAIN YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

(Description of factors affecting yield, prepayment and maturity of the
Mortgage Loans and Class ( ) Certificates depending upon characteristics of
the Mortgage Loans.)

WEIGHTED AVERAGE LIFE OF THE CLASS ( ) CERTIFICATES

The table of Percent of Initial Certificate Balance Outstanding for the
Class ( ) Certificates at the respective percentages of CPR set forth below
indicates the weighted average life of such Certificates and sets forth the
percentage of the initial principal amount of such Certificates that would be
outstanding after each of the dates shown at the indicated percentages of
CPR. The table has been prepared on the basis of the following assumptions
regarding the characteristics of the Mortgage Loans: (i) an outstanding
principal balance of $_________, a remaining amortization term of ___ months
and a term to balloon of ___ months: (ii) an interest rate equal to ____% per
annum until the ---- Due Date and thereafter an interest rate equal to ---%
per annum (at an assumed Index of ____%) and Monthly Payments that would
fully amortize the remaining balance of the Mortgage Loan over its remaining
amortization term; (iii) the Mortgage Loans prepay at the indicated
percentage of CPR; (iv) the maturity date of each of the Balloon Mortgage
Loans is not extended; (v) distributions on the Class ( ) Certificates are
received in cash, on the 25th day of each month, commencing in_____________;
(vi) no defaults or delinquencies in, or modifications, waivers or amendments
respecting, the payment by the mortgagors of principal and interest on the
Mortgage Loans occur; (vii) the initial Certificate Balance of the Class ( )
Certificates is $________; (viii) prepayments represent payment in full of
individual Mortgage Loans and are received on the respective Due Dates and
include 30 days' interest thereon; (ix) there are no repurchases of Mortgage
Loans due to breaches of any representation and warranty or otherwise; (x)
the Class ( ) Certificates are purchased on ________; (xi) the Servicing Fee
is ____% per annum; and (xii) the Index on each Interest Rate Adjustment Date
is ________% per annum.

Based on the foregoing assumptions, the table indicates the weighted
average life of the Class ( ) Certificates and sets forth the percentages of
the initial Certificate Balance of the Class ( ) Certificates that would be
outstanding after the Distribution Date in ___________ of each of the years
indicated, at various percentages of CPR. Neither CPR nor any other
prepayment model or assumption purports to be a historical description of
prepayment experience or a prediction of the anticipated rate of prepayment
of any pool of mortgage loans, including the Mortgage Loans included in the
Mortgage Pool. Variations in the actual prepayment experience and the
balance of the Mortgage Loans that prepay may increase or decrease the
percentage of initial Certificate Balance (and weighted average life) shown
in the following table. Such variations may occur even if the average
prepayment experience of all such Mortgage Loans is the same as any of the
specified assumptions.

Percent of Initial Class ( ) Certificate Balance Outstanding
at the Following Percentages of CPR

Distribution Date
- -----------------

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Initial Percent . . . . . . . . . . . . . . ___% __% __% __% __% __%

____________ 25, 1993 . . . . . . . . . . .
____________ 25, 1994 . . . . . . . . . . .
____________ 25, 1995 . . . . . . . . . . .
____________ 25, 1996 . . . . . . . . . . .
____________ 25, 1997 . . . . . . . . . . .
____________ 25, 1998 . . . . . . . . . . .
____________ 25, 1999 . . . . . . . . . . .
____________ 25, 2000 . . . . . . . . . . .
____________ 25, 2001 . . . . . . . . . . .
____________ 25, 2002 . . . . . . . . . . .
____________ 25, 2003 . . . . . . . . . . .

</TABLE>

Weighted Average Life
(Years) (+) . . . . . . . . . . . .

(Class ( ) Yield Consideration)

(Will describe assumption for various scenarios showing sensitivity of
certain classes to prepayment and default risks and set forth resulting
yield.)

POOLING AND SERVICING AGREEMENT

GENERAL

ASSIGNMENT OF THE MORTGAGE LOANS

On or prior to the Closing Date, the Depositor will assign or cause to
be assigned the Mortgage Loans, without recourse, to the Trustee for the
benefit of the Certificateholders. Prior to the Closing Date, the Depositor
will, as to each Mortgage Loan, deliver to the Trustee (or the custodian
hereinafter referred to), among other things, the following documents
(collectively, as to such Mortgage Loan, the "Mortgage File"): (i) the
original or, if accompanied by a "lost note" affidavit, a copy of the
Mortgage Note, endorsed by ____________________ which transferred such
Mortgage Loan, without recourse, in blank or to the order of Trustee; (ii)
the original Mortgage or a certified copy thereof, and any intervening
assignments thereof, or certified copies of such intervening assignments, in
each case with evidence of recording thereon; (iii) originals or certified
copies of any related assignment of leases, rents and profits and any related
security agreement (if, in either case, such item is a document separate from
the Mortgage) and any intervening assignments of each such document or
instrument; (iv) an assignment of the Mortgage, executed by the
____________________ which transferred such Mortgage Loan, in blank or to the
order of the Trustee, in recordable form; (v) assignments of any related
assignment of leases, rents and profits and any related security agreement
(if, in either case, such item is a document separate from the Mortgage),
executed by ____________________ which transferred such Mortgage Loan, in
blank or to the order of the Trustee; (vi) originals or certified copies of
all assumption, modification and substitution agreements in those instances
where the terms or provisions of the Mortgage or Mortgage Note have been
modified or the Mortgage or Mortgage Note has been assumed; and (vii) the
originals or certificates of a lender's title insurance policy issued on the
date of the origination of such Mortgage Loan or, with respect to each
Mortgage Loan not covered by a lender's title insurance policy, an attorney's
opinion of title given by an attorney licensed to practice law in the
jurisdiction where the Mortgaged Property is located. The Pooling and
Servicing Agreement will require the Depositor promptly (and in any event
within _____ days of the Closing Date) to cause each assignment of the
Mortgage described in clause (iv) above to be submitted for recording in the
real property records of the jurisdiction in which the related Mortgaged
Property is located. Any such assignment delivered in blank will be
completed to the order of the Trustee prior to recording. The Pooling and
Servicing Agreement will also require the Depositor to cause the endorsements
on the Mortgage Notes delivered in blank to be completed to the order of the
Trustee.

THE MASTER SERVICER

The executive offices of the Master Servicer are located at
_______________, telephone number (__)__________.

Delinquency and Foreclosure Experience. The following tables set forth
certain information concerning the delinquency experience (including pending
foreclosures) on (multifamily)(commercial) mortgage loans included in the
Master Servicer's servicing portfolio (which includes mortgage loans that are
subserviced by others). The indicated periods of delinquency are based on
the number of days past due on a contractual basis. No mortgage loan is
considered delinquent for these purposes until 31 days past due on a
contractual basis.

<TABLE>
<CAPTION>
As of December 31, 19 As of December 31, 19 As of , 19
------------------------ ----------------------- ---------------------
By Dollar Amount By Dollar Amount By Dollar
By No. of Loans of Loans By No. of Loans of Loans By No. of Loans Amount of Loans
--------------- --------------- --------------- ---------------- --------------- ---------------
(Dollar Amount in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Total Portfolio ________ ________ $______ ________ $________
$______
Period of Delinquency
31 to 59 days
60 to 89 days
90 days or more ________ ________ ________ ________ ________ ________
Total Delinquent Loans ________ $______ _________ $______ _________
$______
Percent of Portfolio % % % % %
%
Foreclosures pending (1)
Percent of Portfolio % % % % %
%
Foreclosures
Percent of Portfolio % % % % %
%

</TABLE>

____________________
(1) Includes bankruptcies which preclude foreclosure.

(SPECIAL SERVICERS

The Master Servicer is permitted, at its own expense, to utilize agents
or attorneys in performing any of its obligations under the Pooling and
Servicing Agreement, but will not thereby be relieved of any such obligation,
and will be responsible for the acts and omissions of any such agents or
attorneys.

The Master Servicer currently intends to engage (_____________)
("__________"), a _____________ corporation, as its agent to perform certain
servicing functions primarily related to property inspections, foreclosure
and the operation and sale of REO Property. See "Description of the
Agreements -- Realization Upon Defaulted Whole Loans" in the Prospectus.
____________________________ is (describe organization) of
(multifamily)(commercial) properties and has extensive experience in the
(describe relevant experience) of (multifamily) (commercial) properties.)

CERTIFICATE ACCOUNT

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES
(Include description of Servicing Standard)
----------------------------------

The principal compensation to be paid to the Master Servicer in respect
of its master servicing activities will be the Servicing Fee. The Servicing
Fee will be payable monthly only from amounts received in respect of interest
on each Mortgage Loan, will accrue at the Servicing Fee Rate and will be
computed on the basis of the same principal amount and for the same period
respecting which any related interest payment on such Mortgage Loan is
computed. The (weighted average) Servicing Fee Rate (with respect to each
Mortgage Loan) equals ---% per annum. (The principal compensation to be paid
to the Special Servicer in respect of its special servicing activities will
be the Special Servicing Fee. The Special Servicing Fee will be payable
monthly only from amounts received in respect of interest on each Specially
Serviced Mortgage Loan, will accrue at the Special Servicing Fee Rate and
will be computed on the basis of the same principal amount for the same
period respecting which any related interest payment on such Mortgage Loan is
computed. The Special Servicing Fee Rate with respect to each Specially
Serviced Mortgage Loan equals ___% per annum.) (As further compensation for
its servicing activities, the Special Servicer shall also be entitled to
receive (i) the Liquidation Fee for the procurement (directly or through an
agent thereof) of a purchaser in connection with the liquidation of a
Mortgaged Property securing any defaulted Mortgage Loan, out of related
liquidation proceeds, provided that the payment of such Liquidation Fee would
not be a violation of, and would not subject the Trustee or the Trust Fund to
liability under, any state or local statute, regulation or other requirement
(including without limitation, those governing the licensing of real estate
brokers or salesmen), and (ii) the Management Fee in connection with the
operation and management of any REO Property, out of related revenues. Any
"Liquidation Fee" payable to the Special Servicer will be equal to __% (if
the relevant sale occurs at a foreclosure sale, trustee's sale or other
similar proceeding) or __% (if the relevant sale occurs subsequent to such
Mortgaged Property's having become an REO Property), as applicable, of the
gross liquidation proceeds. The "Management Fee" in respect of any REO
Property is payable to the Special Servicer monthly and is equal to __% of
the gross revenues derived from such REO Property.)

As additional servicing compensation, the Master Servicer is entitled to
retain all assumption fees, prepayment penalties and late payment charges, to
the extent collected from mortgagors, together with any interest or other
income earned on funds held in the Certificate Account and any escrow
accounts. The Servicing Standard requires the Master Servicer to, among
other things, diligently service and administer the Mortgage Loans on behalf
of the Trustee and in the best interests of the Certificateholders, but
without regard to the Master Servicer's right to receive such additional
servicing compensation. The Master Servicer is obligated to pay certain
ongoing expenses associated with the Mortgage Pool and incurred by the Master
Servicer in connection with its responsibilities under the Agreement. See
"Description of the Agreements -- Retained Interest; Servicing Compensation
and Payment of Expenses" in the Prospectus for information regarding other
possible compensation payable to the Master Servicer and for information
regarding expenses payable by the Master Servicer (and "Certain Federal
Income Tax Consequences" herein regarding certain taxes payable by the Master
Servicer).

REPORTS TO CERTIFICATEHOLDERS

On each Distribution Date the Master Servicer shall furnish to each
Certificateholder, to the Depositor, to the Trustee and to the Rating Agency
a statement setting forth certain information with respect to the Mortgage
Loans and the Certificates required pursuant to the Pooling and Servicing
Agreement. In addition, within a reasonable period of time after each
calendar year, the Master Servicer shall furnish to each person who at any
time during such calendar year was the holder of a Certificate a statement
containing certain information with respect to the Certificates required
pursuant to the Pooling and Servicing Agreement, aggregated for such calendar
year or portion thereof during which such person was a Certificateholder.
See "Description of the Certificates -- Reports to Certificateholders" in the
Prospectus.

VOTING RIGHTS

TERMINATION

USE OF PROCEEDS

The net proceeds from the sale of Class ( ) Certificates will be used by
the Depositor to pay the purchase price of the Mortgage Loans.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

Upon the issuance of the Class ( ) Certificates, Brown & Wood LLP or
Sidley & Austin or Latham & Watkins or Cadwalader, Wickersham & Taft, counsel
to the Depositor, will deliver its opinion generally to the effect that,
assuming compliance with all provisions of the Pooling and Servicing
Agreement, for federal income tax purposes, the Trust Fund will qualify as a
REMIC under the Code.

For federal income tax purposes, the Class ( ) Certificates will be the
sole class of "residual interests" in the REMIC and the Class ( ), Class ( )
and Class ( ) Certificates will be the "regular interests" in the REMIC and
will be treated as debt instruments of the REMIC.

See "Certain Federal Income Tax Consequences -- REMICS" in the
Prospectus.

(The Class ( ) Certificates (may)(will not) be treated as having been
issued with original issue discount for federal income tax reporting
purposes. The prepayment assumption that will be used in determining the
rate of accrual of original issue discount, market discount and premium, if
any, for federal income tax purposes will be based on the assumption that
subsequent to the date of any determination the Mortgage Loans will prepay at
a rate equal to ___% CPR. No representation is made that the Mortgage Loans
will prepay at that rate or at any other rate. See "Certain Federal Income
Tax Consequences -- REMICS -- Taxation of Owners of REMIC Regular
Certificates" and "--Original Issue Discount" in the Prospectus.)

For further information regarding the federal income tax consequences of
investing in the Class ( ) Certificates, see "Certain Federal Income Tax
Consequences -- REMICS" in the Prospectus.

ERISA CONSIDERATIONS

(A fiduciary of any employee benefit plan or other retirement plans and
arrangements, including individual retirement accounts and annuities, Keogh
plans and collective investment funds and separate accounts and certain
insurance company general accounts in which such plans, accounts or
arrangements are invested, that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code
should carefully review with its legal advisors whether the purchase or
holding of Class ( ) Certificates could give rise to a transaction that is
prohibited or is not otherwise permitted either under ERISA or Section 4975
of the Code.

The Exemption sets forth six general conditions which must be satisfied
for a transaction involving the purchase, sale and holding of the Class ( )
Certificates or a transaction in connection with the servicing, operation and
management of the Trust Fund to be eligible for exemptive relief thereunder.
First, the acquisition of the Class ( ) Certificates by certain employee
benefit plans subject to ERISA or Section 4975 of the Code (each, a "Plan"),
must be on terms (including the price for such Certificates) that are at
least as favorable to the Plan as they would be in an arm's-length
transaction with an unrelated party. Second, the rights and interests
evidenced by the Class ( ) Certificates must not be subordinate to the rights
and interests evidenced by the other certificates of the Trust with respect
to the right to receive payment in the event of default or delinquencies in
the underlying assets of the Trust. Third, the Class ( ) Certificates at the
time of acquisition by the Plan must be rated in one of the three highest
generic rating categories by Standard & Poor's Corporation, Moody's Investors
Service, Inc., Duff & Phelps Credit Rating Co. or Fitch Investors Service,
Inc. Fourth, the Trustee cannot be an affiliate of any member of the
"Restricted Group", which consists of any Underwriter, the Depositor, the
Asset Seller, the Master Servicer, each sub-servicer and any mortgagor with
respect to Mortgage Loans constituting more than 5% of the aggregate
unamortized principal balance of the Mortgage Loans as of the date of initial
issuance of the Class ( ) Certificates. Fifth, the sum of all payments made
to and retained by the Underwriter must represent not more than reasonable
compensation for underwriting the Class ( ) Certificates; the sum of all
payments made to and retained by the Underwriter must represent not more than
reasonable compensation for underwriting the Class ( ) Certificates; the sum
of all payments made to and retained by the Depositor pursuant to the
assignment of the Mortgage Loans to the Trust Fund must represent not more
than the fair market value of such obligations; and the sum of all payments
made to and retained by the Master Servicer and any sub-servicer must
represent not more than reasonable compensation for such person's services
under the Agreement and reimbursement of such person's reasonable expenses in
connection therewith. Sixth, the investing Plan must be an accredited
investor as defined in Rule 501(a)(1) of Regulation D of the Securities and
Exchange Commission under the Securities Act of 1933, as amended.

Because the Class ( ) Certificates are not subordinate to any other
class of Certificates with respect to the right to receive payment in the
event of default or delinquencies on the underlying assets of the Trust, the
second general condition set forth above is satisfied with respect to such
Certificates. It is a condition of the issuance of the Class ( )
Certificates that they be rated (not lower than) "_____" by
___________________. A fiduciary of a Plan contemplating purchasing a Class
( ) Certificate in the secondary market must make its own determination that
at the time of such acquisition, the Class ( ) Certificates continue to
satisfy the third general condition set forth above. The Depositor expects
that the fourth general condition set forth above will be satisfied with
respect to the Class ( ) Certificates. A fiduciary of a Plan contemplating
purchasing a Class ( ) Certificate must make its own determination that the
first, third, fifth and sixth general conditions set forth above will be
satisfied with respect to such Class ( ) Certificate.

Any Plan fiduciary considering whether to purchase a Class ( )
Certificate on behalf of a Plan should consult with its counsel regarding the
applicability of the fiduciary responsibility and prohibited transaction
provisions of ERISA and the Code to such investment. Prospective purchasers
that are insurance companies should consult with their counsel regarding
whether the Uni ted States
Supreme Court's decision in the case of John Hancock v. Harris Trust Savings
Bank, 510 U.S. 86 (1993) ----------------------------------
affects their ability to make purchases of Class ( ) Certificates and the
extent to which Prohibited Transaction Class Exemption 95-60 may be
available. See "ERISA Considerations" in the Prospectus.

LEGAL INVESTMENT

The Class ( ) Certificates (will) (will not) constitute "mortgage
related securities" for purposes of the Secondary Mortgage Market Enhancement
Act of 1984 ("SMMEA") so long as they are rated in at least the second
highest rating category by the Rating Agency, and, as such, are legal
investments for certain entities to the extent provided in SMMEA). SMMEA
provided that states could override its provisions on legal investment and
restrict or condition investment in mortgage related securities by taking
statutory action on or prior to October 3, 1991. Certain states have enacted
legislation which overrides the preemption provisions of SMMEA.

See "Legal Investment" in the Prospectus.

PLAN OF DISTRIBUTION

The Depositor has agreed to indemnify the Underwriter against, or make
contributions to the Underwriter with respect to, certain liabilities,
including liabilities under the Securities Act of 1933.

LEGAL MATTERS

Certain legal matters will be passed upon for the Depositor by Sidley &
Austin, New York, New York or Brown & Wood LLP, New York, New York or Latham
& Watkins, New York, New York or Cadwalader, Wickersham & Taft, New York, New
York, and for the Underwriter by ____________________.

RATING

ANNEX A

(CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS)

(Attach Mortgage Loan Schedule that details relevant and available
information regarding the Mortgage Loans, such as the information included
under the following headings:

1. Loan ID number 20. Next rate change

2. Original balance 21. First payment change

3. Current balance 22. Next payment change

4. Current rate 23. Rate adjustment frequency

5. Current payment 24. Payment adjustment frequency

6. Note date 25. Period payment cap

7. Original term 26. Life rate cap

8. Remaining term 27. Life rate floor

9. Maturity date 28. Negative amortization
cap percent

10. Amortization 29. Negative amortization cap
amount

11. Origination appraisal 30. Annualized recent net
operating income

12. Borrowing entity 31. Most recent net operating
income year

13. Property name 32. Most recent debt service

coverage ratio

14. Street 33. LTV and current balances based
upon the Appraised Value)
15. City

16. State

17. Zip code

18. Rate index

19. First rate change

ANNEX B

(TITLE, SERIES OF MBS)
TERM SHEET

<TABLE>
<CAPTION>
<S> <C> <C> <C>
CUT-OFF DATE: ( ) MORTGAGE POOL CUT-OFF DATE BALANCE: $( )
DATE OF INITIAL ISSUANCE: ( ) REFERENCE DATE BALANCE: $( )
RELATED TRUSTEE: ( ) PERCENT OF ORIGINAL MORTGAGE POOL REMAINING ( )%
MATURITY DATE: ( ) AS OF REFERENCE DATE:

</TABLE>

Initial
Class Pass-Through Certificate
of Certificates Rate Principal Balance Features

( ) ( )% $( ) ( )

(First MBS Distribution Date on which the MBS may receive a portion of
prepayments: (date)

MINIMUM SERVICING FEE RATE:* ( )% per annum
MAXIMUM SERVICING FEE RATE:* ( )% per annum
AS OF DATE OF
INITIAL ISSUANCE
<S> <C> <C>
__________________
* Combined Related Master Servicing and Subservicing Fee Rate SPECIAL HAZARD AMOUNT: $( )
FRAUD LOSS AMOUNT: $( )
BANKRUPTCY AMOUNT: $( )
</TABLE>
AS OF DATE OF AS OF
INITIAL ISSUANCE DELIVERY DATE
----------------- -------------
SENIOR PERCENTAGE: ( )% ( )%
SUBORDINATE PERCENTAGE: ( )% ( )%

CLASS RATING AGENCY VOTING RIGHTS:

RATINGS: ( ) ( ) ( )
( ) ( )
( ) ( )

Morgan Stanley Capital I Inc.
-----------------------------

(VERSION 2)

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus and the accompanying prospectus
supplement to which it relates shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.

PROSPECTUS

SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1998

Mortgage Pass-Through Certificates
(Issuable in Series)
Morgan Stanley Capital I Inc.
Depositor

The Certificates offered hereby and by Supplements to this Prospectus
(the "Offered Certificates") will be offered from time to time in one or more
series. Each series of Certificates will represent in the aggregate the
entire beneficial ownership interest in a trust fund (with respect to any
series, the "Trust Fund") consisting of one or more segregated pools of
various types of multifamily or commercial mortgage loans (the "Mortgage
Loans"), mortgage participations, mortgage pass-through certificates,
mortgage-backed securities evidencing interests therein or secured thereby
(the "MBS"), certain direct obligations of the United States, agencies
thereof or agencies created thereby (the "Government Securities") or a
combination of Mortgage Loans, MBS and/or Government Securities (with respect
to any series, collectively, "Assets"). If so specified in the related
Prospectus Supplement, some or all of the Mortgage Loans will include
assignments of the leases of the related Mortgaged Properties (as defined
herein) and/or assignments of the rental payments due from the lessees under
such leases (each type of assignment, a "Lease Assignment"). A significant or
the sole source of payments on certain Commercial Loans (as defined herein)
and, therefore, of distributions on certain series of Certificates, will be
such rent payments. The Mortgage Loans and MBS are collectively referred to
herein as the "Mortgage Assets." If so specified in the related Prospectus
Supplement, the Trust Fund for a series of Certificates may include letters
of credit, insurance policies, guarantees, reserve funds or other types of
credit support, or any combination thereof (with respect to any series,
collectively, "Credit Support"), and currency or interest rate exchange
agreements and other financial assets, or any combination thereof (with
respect to any series, collectively, "Cash Flow Agreements"). See
"Description of the Trust Funds," "Description of the Certificates" and
"Description of Credit Support."

Investors should consider, among other things, certain risks set forth
under the caption "Risk Factors" herein and in the related Prospectus
Supplement.

Offers of the Offered Certificates may be made through one or more
different methods, including offerings through underwriters, as more
fully described under "Plan of Distribution" herein and in the related
Prospectus Supplement.

MORGAN STANLEY & CO.
INCORPORATED

February 11, 1998

Principal and interest with respect to Certificates will be
distributable monthly, quarterly, semi-annually or at such other
intervals and on the dates specified in the related Prospectus
Supplement. Distributions on the Certificates of any series will be
made only from the assets of the related Trust Fund.

The Certificates of each series will not represent an obligation
of or interest in the Depositor, Morgan Stanley & Co. Incorporated, any
Master Servicer, any Sub-Servicer, any Special Servicer or any of their
respective affiliates, except to the limited extent described herein
and in the related Prospectus Supplement. Neither the Certificates nor
any assets in the related Trust Fund will be guaranteed or insured by
any governmental agency or instrumentality or by any other person,
unless otherwise provided in the related Prospectus Supplement. The
assets in each Trust Fund will be held in trust for the benefit of the
holders of the related series of Certificates pursuant to a Pooling and
Servicing Agreement or a Trust Agreement, as more fully described
herein.

The yield on each class of Certificates of a series will be
affected by, among other things, the rate of payment of principal
(including prepayments, repurchase and defaults) on the Mortgage Assets
in the related Trust Fund and the timing of receipt of such payments as
described under the caption "Yield Considerations" herein and in the
related Prospectus Supplement. A Trust Fund may be subject to early
termination under the circumstances described herein and in the related
Prospectus Supplement.

Prospective investors should review the information appearing
under the caption "Risk Factors" herein and such information as may be
set forth under the caption "Risk Factors" in the related Prospectus
Supplement before purchasing any Offered Certificate.

If so provided in the related Prospectus Supplement, one or more
elections may be made to treat the related Trust Fund or a designated
portion thereof as a "real estate mortgage investment conduit" for
federal income tax purposes. See also "Certain Federal Income Tax
Consequences" herein.

Until 90 days after the date of each Prospectus Supplement, all
dealers effecting transactions in the Offered Certificates covered by
such Prospectus Supplement, whether or not participating in the
distribution thereof, may be required to deliver such Prospectus
Supplement and this Prospectus. This is in addition to the obligation
of dealers to deliver a Prospectus and Prospectus Supplement when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

PROSPECTUS SUPPLEMENT

As more particularly described herein, the Prospectus Supplement
relating to the Offered Certificates of each series will, among other
things, set forth with respect to such Certificates, as appropriate:
(i) a description of the class or classes of Certificates, the payment
provisions with respect to each such class and the Pass-Through Rate or
method of determining the Pass-Through Rate with respect to each such
class; (ii) the aggregate principal amount and distribution dates
relating to such series and, if applicable, the initial and final
scheduled distribution dates for each class; (iii) information as to
the assets comprising the Trust Fund, including the general
characteristics of the assets included therein, including the Mortgage
Assets and any Credit Support and Cash Flow Agreements (with respect to
the Certificates of any series, the "Trust Assets"); (iv) the
circumstances, if any, under which the Trust Fund may be subject to
early termination; (v) additional information with respect to the
method of distribution of such Certificates; (vi) whether one or more
REMIC elections will be made and designation of the regular interests
and residual interests; (vii) the aggregate original percentage
ownership interest in the Trust Fund to be evidenced by each class of
Certificates; (viii) information as to any Master Servicer, any
Sub-Servicer, any Special Servicer (or provision for the appointment
thereof) and the Trustee, as applicable; (ix) information as to the
nature and extent of subordination with respect to any class of
Certificates that is subordinate in right of payment to any other
class; and (x) whether such Certificates will be initially issued in
definitive or book-entry form.

AVAILABLE INFORMATION

This Prospectus and the Prospectus Supplement relating to each series
of Certificates contain summaries of the material terms of the
documents referred to herein and therein, but do not contain all of the
information set forth in the Registration Statement pursuant to the
rules and regulations of the Commission. For further information,
reference is made to such Registration Statement and the exhibits
thereto. Such Registration Statement and exhibits can be inspected and
copied at prescribed rates at the public reference facilities
maintained by the Commission at its Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at its Regional Offices
located as follows: Chicago Regional Office, Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661; and New York Regional Office,
Seven World Trade Center, New York, New York 10048.

To the extent described in the related Prospectus Supplement, some
or all of the Mortgage Loans may be secured by an assignment of the
lessors' (i.e., the related mortgagors') rights in one or more leases
(each, a "Lease") of the related Mortgaged Property. Unless otherwise
specified in the related Prospectus Supplement, no series of
Certificates will represent interests in or obligations of any lessee
(each, a "Lessee") under a Lease. If indicated, however, in the
Prospectus Supplement for a given series, a significant or the sole
source of payments on the Mortgage Loans in such series, and,
therefore, of distributions on such Certificates, will be rental
payments due from the Lessees under the Leases. Under such
circumstances, prospective investors in the related series of
Certificates may wish to consider publicly available information, if
any, concerning the Lessees. Reference should be made to the related
Prospectus Supplement for information concerning the Lessees and
whether any such Lessees are subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended.

No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus and
any Prospectus Supplement with respect hereto and, if given or made,
such information or representations must not be relied upon. This
Prospectus and any Prospectus Supplement with respect hereto do not
constitute an offer to sell or a solicitation of an offer to buy any
securities other than the Offered Certificates or an offer of the
Offered Certificates to any person in any state or other jurisdiction
in which such offer would be unlawful. The delivery of this Prospectus
at any time does not imply that information herein is correct as of any
time subsequent to its date; however, if any material change occurs
while this Prospectus is required by law to be delivered, this
Prospectus will be amended or supplemented accordingly.

A Master Servicer or the Trustee will be required to mail to
holders of Offered Certificates of each series periodic unaudited
reports concerning the related Trust Fund. Unless and until definitive
Certificates are issued, or unless otherwise provided in the related
Prospectus Supplement, such reports will be sent on behalf of the
related Trust Fund to Cede & Co. ("Cede"), as nominee of The Depository
Trust Company ("DTC") and registered holder of the Offered
Certificates, pursuant to the applicable Agreement. Such reports may be
available to holders of interests in the Certificates (the
"Certificateholders") upon request to their respective DTC
participants. See "Description of the Certificates--Reports to
Certificateholders" and "Description of the Agreements--Evidence as to
Compliance." The Depositor will file or cause to be filed with the
Commission such periodic reports with respect to each Trust Fund as are
required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

There are incorporated herein by reference all documents and
reports filed or caused to be filed by the Depositor with respect to a
Trust Fund pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, prior to the termination of an offering of Offered
Certificates evidencing interests therein. The Depositor will provide
or cause to be provided without charge to each person to whom this
Prospectus is delivered in connection with the offering of one or more
classes of Offered Certificates, a copy of any or all documents or
reports incorporated herein by reference, in each case to the extent
such documents or reports relate to one or more of such classes of such
Offered Certificates, other than the exhibits to such documents (unless
such exhibits are specifically incorporated by reference in such
documents). Requests to the Depositor should be directed in writing to
Morgan Stanley Capital I Inc., c/o Morgan Stanley & Co. Incorporated,
1585 Broadway, 37th Floor, New York, New York 10036, Attention: John E.
Westerfield, or by telephone at (212) 761-4700. The Depositor has
determined that its financial statements are not material to the
offering of any Offered Certificates.

TABLE OF CONTENTS

<TABLE>
<CAPTION> PAGE
<S> <C>
PROSPECTUS SUPPLEMENT 2
AVAILABLE INFORMATION 3
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 4
SUMMARY OF PROSPECTUS 5
RISK FACTORS 13
DESCRIPTION OF THE TRUST FUNDS 20
USE OF PROCEEDS 26
YIELD CONSIDERATIONS 27
THE DEPOSITOR 30
DESCRIPTION OF THE CERTIFICATES 30
DESCRIPTION OF THE AGREEMENTS 38
DESCRIPTION OF CREDIT SUPPORT 55
CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS AND THE LEASES 57
CERTAIN FEDERAL INCOME TAX CONSEQUENCES 74
STATE TAX CONSIDERATIONS 98
ERISA CONSIDERATIONS 99
LEGAL INVESTMENT 101
PLAN OF DISTRIBUTION 103
LEGAL MATTERS 103
FINANCIAL INFORMATION 103
RATING 104
INDEX OF PRINCIPAL DEFINITIONS 105

</TABLE>

SUMMARY OF PROSPECTUS

The following summary of certain pertinent information is
qualified in its entirety by reference to the more detailed information
appearing elsewhere in this Prospectus and by reference to the
information with respect to each series of Certificates contained in
the Prospectus Supplement to be prepared and delivered in connection
with the offering of such series. An Index of Principal Definitions is
included at the end of this Prospectus.

Title of Certificates

Mortgage Pass-Through Certificates, issuable in series (the
"Certificates").

Depositor

Morgan Stanley Capital I Inc., a wholly-owned subsidiary of Morgan
Stanley Group Inc. See "The Depositor."

Master Servicer

The master servicer (the "Master Servicer"), if any, for each series of
Certificates, which may be an affiliate of the Depositor, will be named
in the related Prospectus Supplement. See "Description of the
Agreements--Collection and Other Servicing Procedures."

Special Servicer

The special servicer (the "Special Servicer"), if any, for each series
of Certificates, which may be an affiliate of the Depositor, will be
named, or the circumstances in accordance with which a Special Servicer
will be appointed will be described, in the related Prospectus
Supplement. See "Description of the Agreements--Special Servicers."

Trustee

The trustee (the "Trustee") for each series of Certificates will be
named in the related Prospectus Supplement. See "Description of the
Agreements--The Trustee."

The Trust Assets

Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:

(a) Mortgage Assets

The Mortgage Assets with respect to each series of Certificates will
consist of a pool of multifamily and/or commercial mortgage loans
(collectively, the "Mortgage Loans") and mortgage participations,
mortgage pass-through certificates or other mortgage-backed securities
evidencing interests in or secured by Mortgage Loans (collectively, the
"MBS") or a combination of Mortgage Loans and MBS. The Mortgage Loans
will not be guaranteed or insured by the Depositor or any of its
affiliates or, unless otherwise provided in the Prospectus Supplement,
by any governmental agency or instrumentality or other person. As more
specifically described herein, the Mortgage Loans will be secured by
first or junior liens on, or security interests in, properties
consisting of (i) residential properties consisting of five or more
rental or cooperatively-owned dwelling units (the "Multifamily
Properties") or (ii) office buildings, shopping centers, retail stores,
hotels or motels, nursing homes, hospitals or other health-care related
facilities, mobile home parks, warehouse facilities, mini-warehouse
facilities or self-storage facilities, industrial plants, congregate
care facilities, mixed use or other types of commercial properties (the
"Commercial Properties"). The term "Mortgaged Properties" shall refer
to Multifamily Properties or Commercial Properties, or both.

To the extent described in the related Prospectus Supplement, some or
all of the Mortgage Loans may also be secured by an assignment of one
or more leases (each, a "Lease") of one or more lessees (each, a
"Lessee") of all or a portion of the related Mortgaged Properties.
Unless otherwise specified in the related Prospectus Supplement, a
significant or the sole source of payments on certain Commercial Loans
(as defined herein) will be the rental payments due under the related
Leases. In certain circumstances, with respect to Commercial
Properties, the material terms and conditions of the related Leases may
be set forth in the related Prospectus Supplement. See "Description of
the Trust Funds--Mortgage Loans--Leases" and "Risk Factors--Limited
Assets" herein.

The Mortgaged Properties may be located in any one of the fifty states,
the District of Columbia or the Commonwealth of Puerto Rico. The
Prospectus Supplement will indicate additional jurisdictions, if any,
in which the Mortgaged Properties may be located. Unless otherwise
provided in the related Prospectus Supplement, all Mortgage Loans will
have individual principal balances at origination of not less than
$25,000 and original terms to maturity of not more than 40 years. All
Mortgage Loans will have been originated by persons other than the
Depositor, and all Mortgage Assets will have been purchased, either
directly or indirectly, by the Depositor on or before the date of
initial issuance of the related series of Certificates. The related
Prospectus Supplement will indicate if any such persons are affiliates
of the Depositor.

Each Mortgage Loan may provide for no accrual of interest or for
accrual of interest thereon at an interest rate (a "Mortgage Rate")
that is fixed over its term or that adjusts from time to time, or that
may be converted from an adjustable to a fixed Mortgage Rate, or from a
fixed to an adjustable Mortgage Rate, from time to time at the
mortgagor's election, in each case as described in the related
Prospectus Supplement. Adjustable Mortgage Rates on the Mortgage Loans
in a Trust Fund may be based on one or more indices. Each Mortgage Loan
may provide for scheduled payments to maturity, payments that adjust
from time to time to accommodate changes in the Mortgage Rate or to
reflect the occurrence of certain events, and may provide for negative
amortization or accelerated amortization, in each case as described in
the related Prospectus Supplement. Each Mortgage Loan may be fully
amortizing or require a balloon payment due on its stated maturity
date, in each case as described in the related Prospectus Supplement.
Each Mortgage Loan may contain prohibitions on prepayment or require
payment of a premium or a yield maintenance penalty in connection with
a prepayment, in each case as described in the related Prospectus
Supplement. The Mortgage Loans may provide for payments of principal,
interest or both, on due dates that occur monthly, quarterly,
semi-annually or at such other interval as is specified in the related
Prospectus Supplement. See "Description of the Trust Funds--Assets."

(b) Government Securities

If so provided in the related Prospectus Supplement, the Trust Fund may
include, in addition to Mortgage Assets, certain direct obligations of
the United States, agencies thereof or agencies created thereby which
provide for payment of interest and/or principal (collectively,
"Government Securities").

Each Trust Fund will include one or more accounts established and
maintained on behalf of the Certificateholders into which the person or
persons designated in the related Prospectus Supplement will, to the
extent described herein and in such Prospectus Supplement, deposit all
payments and collections received or advanced with respect to the
Mortgage Assets and other assets in the Trust Fund. Such an account may
be maintained as an interest bearing or a non-interest bearing account,
and funds held therein may be held as cash or invested in certain
short-term, investment grade obligations, in each case as described in
the related Prospectus Supplement. See "Description of the
Agreements--Certificate Account and Other Collection Accounts."

(d) Credit Support

If so provided in the related Prospectus Supplement, partial or full
protection against certain defaults and losses on the Mortgage Assets
in the related Trust Fund may be provided to one or more classes of
Certificates of the related series in the form of subordination of one
or more other classes of Certificates of such series, which other
classes may include one or more classes of Offered Certificates, or by
one or more other types of credit support, such as a letter of credit,
insurance policy, guarantee, reserve fund or another type of credit
support, or a combination thereof (any such coverage with respect to
the Certificates of any series, "Credit Support"). The amount and types
of coverage, the identification of the entity providing the coverage
(if applicable) and related information with respect to each type of
Credit Support, if any, will be described in the Prospectus Supplement
for a series of Certificates. The Prospectus Supplement for any series
of Certificates evidencing an interest in a Trust Fund that includes
MBS will describe any similar forms of credit support that are provided
by or with respect to, or are included as part of the trust fund
evidenced by or providing security for, such MBS. See "Risk
Factors--Credit Support Limitations" and "Description of Credit
Support."

(e) Cash Flow Agreements

If so provided in the related Prospectus Supplement, the Trust Fund may
include guaranteed investment contracts pursuant to which moneys held
in the funds and accounts established for the related series will be
invested at a specified rate. The Trust Fund may also include certain
other agreements, such as interest rate exchange agreements, interest
rate cap or floor agreements, currency exchange agreements or similar
agreements provided to reduce the effects of interest rate or currency
exchange rate fluctuations on the Assets or on one or more classes of
Certificates. (Currency exchange agreements might be included in the
Trust Fund if some or all of the Mortgage Assets (such as Mortgage
Loans secured by Mortgaged Properties located outside the United
States) were denominated in a non-United States currency.) The
principal terms of any such guaranteed investment contract or other
agreement (any such agreement, a "Cash Flow Agreement"), including,
without limitation, provisions relating to the timing, manner and
amount of payments thereunder and provisions relating to the
termination thereof, will be described in the Prospectus Supplement for
the related series. In addition, the related Prospectus Supplement will
provide certain information with respect to the obligor under any such
Cash Flow Agreement. The Prospectus Supplement for any series of
Certificates evidencing an interest in a Trust Fund that includes MBS
will describe any cash flow agreements that are included as part of the
trust fund evidenced by or providing security for such MBS. See
"Description of the Trust Funds--Cash Flow Agreements." Description of
Certificates.

Distributions on Certificates

Each series of Certificates evidencing an interest in a Trust Fund that
includes Mortgage Loans as part of its assets will be issued pursuant
to a pooling and servicing agreement, and each series of Certificates
evidencing an interest in a Trust Fund that does not include Mortgage
Loans will be issued pursuant to a trust agreement. Pooling and
servicing agreements and trust agreements are referred to herein as the
"Agreements." Each series of Certificates will include one or more
classes. Each series of Certificates (including any class or classes of
Certificates of such series not offered hereby) will represent in the
aggregate the entire beneficial ownership interest in the Trust Fund.
Each class of Certificates (other than certain Stripped Interest
Certificates, as defined below) will have a stated principal amount (a
"Certificate Balance") and (other than certain Stripped Principal
Certificates, as defined below), will accrue interest thereon based on
a fixed, variable or adjustable interest rate (a "Pass-Through Rate").
The related Prospectus Supplement will specify the Certificate Balance,
if any, and the Pass-Through Rate for each class of Certificates or, in
the case of a variable or adjustable Pass-Through Rate, the method for
determining the Pass-Through Rate.

Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon
based on fixed, variable or adjustable rates; (ii) be senior
(collectively, "Senior Certificates") or subordinate (col-lectively,
"Subordinate Certificates") to one or more other classes of
Certificates in respect of certain distributions on the Certificates;
(iii) be entitled to principal distributions, with disproportionately
low, nominal or no interest distributions (collectively, "Stripped
Principal Certificates"); (iv) be entitled to interest distributions,
with disproportionately low, nominal or no principal distributions
(collectively, "Stripped Interest Certificates"); (v) provide for
distributions of accrued interest thereon commencing only following the
occurrence of certain events, such as the retirement of one or more
other classes of Certificates of such series (collectively, "Accrual
Certificates"); (vi) provide for distributions of principal
sequentially, based on specified payment schedules or other
methodologies; and/or (vii) provide for distributions based on a
combination of two or more components thereof with one or more of the
characteristics described in this paragraph, including a Stripped
Principal Certificate component and a Stripped Interest Certificate
component, to the extent of available funds, in each case as described
in the related Prospectus Supplement. Any such classes may include
classes of Offered Certificates. With respect to Certificates with two
or more components, references herein to Certificate Balance, notional
amount and Pass-Through Rate refer to the principal balance, if any,
notional amount, if any, and the Pass-Through Rate, if any, for any
such component.

The Certificates will not be guaranteed or insured by the Depositor or
any of its affiliates, by any governmental agency or instrumentality or
by any other person, unless otherwise provided in the related
Prospectus Supplement. See "Risk Factors--Limited Assets" and
"Description of the Certificates."

(a) Interest

Interest on each class of Offered Certificates (other than Stripped
Principal Certificates and certain classes of Stripped Interest
Certificates) of each series will accrue at the applicable Pass-Through
Rate on the outstanding Certificate Balance thereof and will be
distributed to Certificateholders as provided in the related Prospectus
Supplement (each of the specified dates on which distributions are to
be made, a "Distribution Date"). Distributions with respect to interest
on Stripped Interest Certificates may be made on each Distribution Date
on the basis of a notional amount as described in the related
Prospectus Supplement. Distributions of interest with respect to one or
more classes of Certificates may be reduced to the extent of certain
delinquencies, losses, prepayment interest shortfalls, and other
contingencies described herein and in the related Prospectus
Supplement. See "Risk Factors--Average Life of Certificates;
Prepayments; Yields," "Yield Considerations" and "Description of the
Certificates--Distributions of Interest on the Certificates."

(b) Principal

The Certificates of each series initially will have an aggregate
Certificate Balance no greater than the outstanding principal balance
of the Assets as of, unless the related Prospectus Supplement provides
otherwise, the close of business on the first day of the month of
formation of the related Trust Fund (the "Cut-off Date"), after
application of scheduled payments due on or before such date, whether
or not received. The Certificate Balance of a Certificate outstanding
from time to time represents the maximum amount that the holder thereof
is then entitled to receive in respect of principal from future cash
flow on the assets in the related Trust Fund. Unless otherwise provided
in the related Prospectus Supplement, distributions of principal will
be made on each Distribution Date to the class or classes of
Certificates entitled thereto until the Certificate Balances of such
Certificates have been reduced to zero. Unless otherwise specified in
the related Prospectus Supplement, distributions of principal of any
class of Certificates will be made on a pro rata basis among all of the
Certificates of such class or by random selection, as described in the
related Prospectus Supplement or otherwise established by the related
Trustee. Stripped Interest Certificates with no Certificate Balance
will not receive distributions in respect of principal. See
"Description of the Certificates--Distributions of Principal of the
Certificates."

Advances

Unless otherwise provided in the related Prospectus Supplement, the
Master Servicer will be obligated as part of its servicing
responsibilities to make certain advances that in its good faith
judgment it deems recoverable with respect to delinquent scheduled
payments on the Whole Loans in such Trust Fund. Neither the Depositor
nor any of its affiliates will have any responsibility to make such
advances. Advances made by a Master Servicer are reimbursable generally
from subsequent recoveries in respect of such Whole Loans and otherwise
to the extent described herein and in the related Prospectus
Supplement. If and to the extent provided in the Prospectus Supplement
for any series, the Master Servicer will be entitled to receive
interest on its outstanding advances, payable from amounts in the
related Trust Fund. The Prospectus Supplement for any series of

Certificates evidencing an interest in a Trust Fund that includes MBS
will describe any corresponding advancing obligation of any person in
connection with such MBS. See "Description of the
Certificates--Advances in Respect of Delinquencies."

Termination

If so specified in the related Prospectus Supplement, a series of
Certificates may be subject to optional early termination through the
repurchase of the Assets in the related Trust Fund by the party
specified therein, under the circumstances and in the manner set forth
therein. If so provided in the related Prospectus Supplement, upon the
reduction of the Certificate Balance of a specified class or classes of
Certificates by a specified percentage or amount or on and after a date
specified in such Prospectus Supplement, the party specified therein
will solicit bids for the purchase of all of the Assets of the Trust
Fund, or of a sufficient portion of such Assets to retire such class or
classes, or purchase such Assets at a price set forth in the related
Prospectus Supplement. In addition, if so provided in the related
Prospectus Supplement, certain classes of Certificates may be purchased
subject to similar conditions. See "Description of the
Certificates--Termination."

Registration of Certificates

If so provided in the related Prospectus Supplement, one or more
classes of the Offered Certificates will initially be represented by
one or more Certificates registered in the name of Cede & Co., as the
nominee of DTC. No person acquiring an interest in Offered Certificates
so registered will be entitled to receive a definitive certificate
representing such person's interest except in the event that definitive
certificates are issued under the limited circumstances described
herein. See "Risk Factors--Book-Entry Registration" and "Description of
the Certificates--Book-Entry Registration and Definitive Certificates."

Tax Status of the Certificates

The Certificates of each series will constitute either (i) "regular
interests" ("REMIC Regular Certificates") and "residual interests"
("REMIC Residual Certificates") in a Trust Fund treated as a REMIC
under Sections 860A through 860G of the Code, or (ii) interests
("Grantor Trust Certificates") in a Trust Fund treated as a grantor
trust under applicable provisions of the Code.

(a) REMIC

REMIC Regular Certificates generally will be treated as debt
obligations of the applicable REMIC for federal income tax purposes.
Certain REMIC Regular Certificates may be issued with original issue
discount for federal income tax purposes. See "Certain Federal Income
Tax Consequences" in the Prospectus Supplement.

A portion (or, in certain cases, all) of the income from REMIC Residual
Certificates (i) may not be offset by any losses from other activities
of the holder of such REMIC Residual Certificates, (ii) may be treated
as unrelated business taxable income for holders of REMIC Residual
Certificates that are subject to tax on unrelated business taxable
income (as defined in Section 511 of the Code), and (iii) may be
subject to foreign withholding rules. See "Certain Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Residual
Certificates".

The Offered Certificates will be treated as (i) assets described in
section 7701(a)(19)(C) of the Internal Revenue Code of 1986, as amended
(the "Code") and (ii) "real estate assets" within the meaning of
section 856(c)(4)(A) of the Code, in each case to the extent described
herein and in the Prospectus. See "Certain Federal Income Tax
Consequences" herein and in the Prospectus.

(b) Grantor Trust

If no election is made to treat the Trust Fund relating to a Series of
Certificates as a real estate mortgage investment conduit ("REMIC"),
the Trust Fund will be classified as a grantor trust and not as an
association taxable as a corporation for federal income tax purposes,
and therefore holders of Certificates will be treated as the owners of
undivided pro rata interests in the Mortgage Pool or pool of securities
and any other assets held by the Trust Fund.

Investors are advised to consult their tax advisors and to review
"Certain Federal Income Tax Consequences" herein and in the related
Prospectus Supplement.

ERISA Considerations

A fiduciary of an employee benefit plan or other retirement plan or
arrangement, including an individual retirement account or annuity or a
Keogh plan, and any collective investment fund or insurance company
general or separate account in which such plans, accounts, annuities or
arrangements are invested, that is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code should carefully review with its legal
advisors whether the purchase or holding of Offered Certificates could
give rise to a transaction that is prohibited or is not otherwise
permissible either under ERISA or Section 4975 of the Code. See "ERISA
Considerations" herein and in the related Prospectus Supplement. To the
extent specified in the related Prospectus Supplement, certain classes
of Certificates may not be transferred unless the Trustee and the
Depositor are furnished with a letter of representations or an opinion
of counsel to the effect that such transfer will not result in a
violation of the prohibited transaction provisions of ERISA and the
Code, will not cause the assets of the Trust to be deemed "plan assets"
for purposes of ERISA and the Code and will not subject the Trustee,
the Depositor or the Master Servicer to additional obligations. See
"ERISA Considerations" herein and in the related Prospectus Supplement.

Legal Investment

The related Prospectus Supplement will specify whether any class or
classes of the Offered Certificates will constitute "mortgage related
securities" for purposes of the Secondary Mortgage Market Enhancement
Act of 1984, as amended. Investors whose investment authority is
subject to legal restrictions should consult their own legal advisors
to determine whether and to what extent the Offered Certificates
constitute legal investments for them. See "Legal Investment" herein
and in the related Prospectus Supplement.

Rating

At the date of issuance, as to each series, each class of Offered
Certificates will be rated not lower than investment grade by one or
more nationally recognized statistical rating agencies (each, a "Rating
Agency"). See "Rating" herein and in the related Prospectus Supplement.

RISK FACTORS

Investors should consider, in connection with the purchase of
Offered Certificates, among other things, the following factors and
certain other factors as may be set forth in "Risk Factors" in the
related Prospectus Supplement.

Limited Liquidity

There can be no assurance that a secondary market for the
Certificates of any series will develop or, if it does develop, that it
will provide holders with liquidity of investment or will continue
while Certificates of such series remain outstanding. Any such
secondary market may provide less liquidity to investors than any
comparable market for securities evidencing interests in single family
mortgage loans. The market value of Certificates will fluctuate with
changes in prevailing rates of interest. Consequently, sale of
Certificates by a holder in any secondary market that may develop may
be at a discount from 100% of their original principal balance or from
their purchase price. Furthermore, secondary market purchasers may look
only hereto, to the related Prospectus Supplement and to the reports to
Certificateholders delivered pursuant to the related Agreement as
described herein under the heading "Description of the
Certificates--Reports to Certificateholders", "--Book-Entry
Registration and Definitive Certificates" and "Description of the
Agreements--Evidence as to Compliance" for information concerning the
Certificates. Except to the extent described herein and in the related
Prospectus Supplement, Certificateholders will have no redemption
rights and the Certificates are subject to early retirement only under
certain specified circumstances described herein and in the related
Prospectus Supplement. See "Description of the
Certificates--Termination". Morgan Stanley & Co. Incorporated currently
expects to make a secondary market in the Offered Certificates, but has
no obligation to do so.

Limited Assets

The Certificates will not represent an interest in or obligation
of the Depositor, the Master Servicer, or any of their affiliates.
The only obligations with respect to the Certificates or the
Assets will be the obligations (if any) of the Warrantying Party
(as defined herein) pursuant to certain limited representations
and warranties made with respect to the Mortgage Loans, the Master
Servicer's, any Special Servicer's and any Sub-Servicer's
servicing obligations under the related Pooling and Servicing
Agreement (including the limited obligation to make certain
advances in the event of delinquencies on the Mortgage Loans, but
only to the extent deemed recoverable). Since certain
representations and warranties with respect to the Mortgage Assets
may have been made and/or assigned in connection with transfers of
such Mortgage Assets prior to the Closing Date, the rights of the
Trustee and the Certificateholders with respect to such
representations or warranties will be limited to their rights as
an assignee thereof. Unless otherwise specified in the related
Prospectus Supplement, none of the Depositor, the Master Servicer
or any affiliate thereof will have any obligation with respect to
representations or warranties made by any other entity. Unless
otherwise specified in the related Prospectus Supplement, neither
the Certificates nor the underlying Mortgage Assets will be
guaranteed or insured by any governmental agency or
instrumentality, or by the Depositor, the Master Servicer, any
Special Servicer, any Sub-Servicer or any of their affiliates.
Proceeds of the assets included in the related Trust Fund for each
series of Certificates (including the Assets and any form of
credit enhancement) will be the sole source of payments on the
Certificates, and there will be no recourse to the Depositor or
any other entity in the event that such proceeds are insufficient
or otherwise unavailable to make all payments provided for under
the Certificates.

Unless otherwise specified in the related Prospectus Supplement, a
series of Certificates will not have any claim against or security
interest in the Trust Funds for any other series. If the related Trust
Fund is insufficient to make payments on such Certificates, no other
assets will be available for payment of the deficiency. Additionally,
certain amounts remaining in certain funds or accounts, including the
Certificate Account and any accounts maintained as Credit Support, may
be withdrawn under certain conditions, as described in the related
Prospectus Supplement. In the event of such withdrawal, such amounts
will not be available for future payment of principal of or interest on
the Certificates. If so provided in the Prospectus Supplement for a
series of Certificates consisting of one or more classes of Subordinate
Certificates, on any Distribution Date in respect of which losses or
shortfalls in collections on the Assets have been incurred, the amount
of such losses or shortfalls will be borne first by one or more classes
of the Subordinate Certificates, and, thereafter, by the remaining
classes of Certificates in the priority and manner and subject to the
limitations specified in such Prospectus Supplement.

Average Life of Certificates; Prepayments; Yields

Prepayments (including those caused by defaults) on the Mortgage
Assets in any Trust Fund generally will result in a faster rate of
principal payments on one or more classes of the related Certificates
than if payments on such Mortgage Assets were made as scheduled. Thus,
the prepayment experience on the Mortgage Assets may affect the average
life of each class of related Certificates. The rate of principal
payments on pools of mortgage loans varies between pools and from time
to time is influenced by a variety of economic, demographic,
geographic, social, tax, legal and other factors. There can be no
assurance as to the rate of prepayment on the Mortgage Assets in any
Trust Fund or that the rate of payments will conform to any model
described herein or in any Prospectus Supplement. If prevailing
interest rates fall significantly below the applicable mortgage
interest rates, principal prepayments are likely to be higher than if
prevailing rates remain at or above the rates borne by the Mortgage
Loans underlying or comprising the Mortgage Assets in any Trust Fund.
As a result, the actual maturity of any class of Certificates could
occur significantly earlier than expected. A series of Certificates may
include one or more classes of Certificates with priorities of payment
and, as a result, yields on other classes of Certificates, including
classes of Offered Certificates, of such series may be more sensitive
to prepayments on Mortgage Assets. A series of Certificates may include
one or more classes offered at a significant premium or discount.
Yields on such classes of Certificates will be sensitive, and in some
cases extremely sensitive, to prepayments on Mortgage Assets and, where
the amount of interest payable with respect to a class is
disproportionately high, as compared to the amount of principal, as
with certain classes of Stripped Interest Certificates, a holder might,
in some prepayment scenarios, fail to recoup its original investment. A
series of Certificates may include one or more classes of Certificates,
including classes of Offered Certificates, that provide for
distribution of principal thereof from amounts attributable to interest
accrued but not currently distributable on one or more classes of
Accrual Certificates and, as a result, yields on such Certificates will
be sensitive to (a) the provisions of such Accrual Certificates
relating to the timing of distributions of interest thereon and (b) if
such Accrual Certificates accrue interest at a variable or adjustable
Pass-Through Rate, changes in such rate. See "Yield Considerations"
herein and, if applicable, in the related Prospectus Supplement.

Limited Nature of Ratings

Any rating assigned by a Rating Agency to a class of Certificates
will reflect such Rating Agency's assessment solely of the likelihood
that holders of Certificates of such class will receive payments to
which such Certificateholders are entitled under the related Agreement.
Such rating will not constitute an assessment of the likelihood that
principal prepayments (including those caused by defaults) on the
related Mortgage Assets will be made, the degree to which the rate of
such prepayments might differ from that originally anticipated or the
likelihood of early optional termination of the series of Certificates.
Such rating will not address the possibility that prepayment at higher
or lower rates than anticipated by an investor may cause such investor
to experience a lower than anticipated yield or that an investor
purchasing a Certificate at a significant premium might fail to recoup
its initial investment under certain prepayment scenarios. Each
Prospectus Supplement will identify any payment to which holders of
Offered Certificates of the related series are entitled that is not
covered by the applicable rating.

The amount, type and nature of credit support, if any, established
with respect to a series of Certificates will be determined on the
basis of criteria established by each Rating Agency rating classes of
such series. Such criteria are sometimes based upon an actuarial
analysis of the behavior of mortgage loans in a larger group. Such
analysis is often the basis upon which each Rating Agency determines
the amount of credit support required with respect to each such class.
There can be no assurance that the historical data supporting any such
actuarial analysis will accurately reflect future experience nor any
assurance that the data derived from a large pool of mortgage loans
accurately predicts the delinquency, foreclosure or loss experience of
any particular pool of Mortgage Assets. No assurance can be given that
values of any Mortgaged Properties have remained or will remain at
their levels on the respective dates of origination of the related
Mortgage Loans. Moreover, there is no assurance that appreciation of
real estate values generally will limit loss experiences on the
Mortgaged Properties. If the commercial or multifamily residential real
estate markets should experience an overall decline in property values
such that the outstanding principal balances of the Mortgage Loans
underlying or comprising the Mortgage Assets in a particular Trust Fund
and any secondary financing on the related Mortgaged Properties become
equal to or greater than the value of the Mortgaged Properties, the
rates of delinquencies, foreclosures and losses could be higher than
those now generally experienced by institutional lenders. In addition,
adverse economic conditions (which may or may not affect real property
values) may affect the timely payment by mortgagors of scheduled
payments of principal and interest on the Mortgage Loans and,
accordingly, the rates of delinquencies, foreclosures and losses with
respect to any Trust Fund. To the extent that such losses are not
covered by the Credit Support, if any, described in the related
Prospectus Supplement, such losses will be borne, at least in part, by
the holders of one or more classes of the Certificates of the related
series. See "Description of Credit Support" and "Rating."

Risks Associated with Mortgage Loans and Mortgaged Properties

Mortgage loans made with respect to multifamily or commercial
property may entail risks of delinquency and foreclosure, and risks of
loss in the event thereof, that are greater than similar risks
associated with single family property. See "Description of the Trust
Funds--Assets." The ability of a mortgagor to repay a loan secured by
an income-producing property typically is dependent primarily upon the
successful operation of such property rather than any independent
income or assets of the mortgagor; thus, the value of an
income-producing property is directly related to the net operating
income derived from such property. In contrast, the ability of a
mortgagor to repay a single family loan typically is dependent
primarily upon the mortgagor's household income, rather than the
capacity of the property to produce income; thus, other than in
geographical areas where employment is dependent upon a particular
employer or an industry, the mortgagor's income tends not to reflect
directly the value of such property. A decline in the net operating
income of an income-producing property will likely affect both the
performance of the related loan as well as the liquidation value of
such property, whereas a decline in the income of a mortgagor on a
single family property will likely affect the performance of the
related loan but may not affect the liquidation value of such property.
Moreover, a decline in the value of a Mortgaged Property will increase
the risk of loss particularly with respect to any related junior
Mortgage Loan. See "--Junior Mortgage Loans."

The performance of a mortgage loan secured by an income-producing
property leased by the mortgagor to tenants as well as the liquidation
value of such property may be dependent upon the business operated by
such tenants in connection with such property, the creditworthiness of
such tenants or both; the risks associated with such loans may be
offset by the number of tenants or, if applicable, a diversity of types
of business operated by such tenants.

It is anticipated that a substantial portion of the Mortgage Loans
included in any Trust Fund will be nonrecourse loans or loans for which
recourse may be restricted or unenforceable, as to which, in the event
of mortgagor default, recourse may be had only against the specific
property and such other assets, if any, as have been pledged to secure
the related Mortgage
Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no
assurance that such recourse will ensure a recovery in respect of a
defaulted Mortgage Loan greater than the liquidation value of the
related Mortgaged Property.

Further, the concentration of default, foreclosure and loss risks
in individual mortgagors or Mortgage Loans in a particular Trust Fund
or the related Mortgaged Properties will generally be greater than for
pools of single family loans both because the Mortgage Assets in a
Trust Fund will generally consist of a smaller number of loans than
would a single family pool of comparable aggregate unpaid principal
balance and because of the higher principal balance of individual
Mortgage Loans. Mortgage Assets in a Trust Fund may consist of only a
limited number of Mortgage Loans and/or relate to Leases to only a
single Lessee or a limited number of Lessees.

If applicable, certain legal aspects of the Mortgage Loans for a
series of Certificates may be described in the related Prospectus
Supplement. See also "Certain Legal Aspects of the Mortgage Loans and
the Leases" herein.

Risks Associated with Commercial Loans and Leases

If so described in the related Prospectus Supplement, each
mortgagor under a Commercial Loan may be an entity created by the owner
or purchaser of the related Commercial Property solely to own or
purchase such property, in part to isolate the property from the debts
and liabilities of such owner or purchaser. Unless otherwise specified,
each such Commercial Loan will represent a nonrecourse obligation of
the related mortgagor secured by the lien of the related Mortgage and
the related Lease Assignments. Whether or not such loans are recourse
or nonrecourse obligations, it is not expected that the mortgagors will
have any significant assets other than the Commercial Properties and
the related Leases, which will be pledged to the Trustee under the
related Agreement. Therefore, the payment of amounts due on any such
Commercial Loans, and, consequently, the payment of principal of and
interest on the related Certificates, will depend primarily or solely
on rental payments by the Lessees. Such rental payments will, in turn,
depend on continued occupancy by, and/or the creditworthiness of, such
Lessees, which in either case may be adversely affected by a general
economic downturn or an adverse change in their financial condition.
Moreover, to the extent a Commercial Property was designed for the
needs of a specific type of tenant (e.g., a nursing home, hospital,
hotel or motel), the value of such property in the event of a default
by the Lessee or the early termination of such Lease may be adversely
affected because of difficulty in re-leasing the property to a suitable
substitute lessee or, if re-leasing to such a substitute is not
possible, because of the cost of altering the property for another more
marketable use. As a result, without the benefit of the Lessee's
continued support of the Commercial Property, and absent significant
amortization of the Commercial Loan, if such loan is foreclosed on and
the Commercial Property liquidated following a lease default, the net
proceeds might be insufficient to cover the outstanding principal and
interest owing on such loan, thereby increasing the risk that holders
of the Certificates will suffer some loss.

Balloon Payments

Certain of the Mortgage Loans (the "Balloon Mortgage Loans") as of
the Cut-off Date may not be fully amortizing over their terms to
maturity and, thus, will require substantial principal payments (i.e.,
balloon payments) at their stated maturity. Mortgage Loans with balloon
payments involve a greater degree of risk because the ability of a
mortgagor to make a balloon payment typically will depend upon its
ability either to timely refinance the loan or to timely sell the
related Mortgaged Property. The ability of a mortgagor to accomplish
either of these goals will be affected by a number of factors,
including the level of available mortgage interest rates at the time of
sale or refinancing, the mortgagor's equity in the related Mortgaged
Property, the financial condition and operating history of the
mortgagor and the related Mortgaged Property, tax laws, rent control
laws (with respect to certain Multifamily Properties and mobile home
parks), reimbursement rates (with respect to certain hospitals, nursing
homes and convalescent homes), renewability of operating licenses,
prevailing general economic conditions and the availability of credit
for commercial or multifamily real properties, as the case may be,
generally.

Junior Mortgage Loans

To the extent specified in the related Prospectus Supplement,
certain of the Mortgage Loans may be secured primarily by junior
mortgages. In the case of liquidation, Mortgage Loans secured by junior
mortgages are entitled to satisfaction from proceeds that remain from
the sale of the related Mortgaged Property after the mortgage loans
senior to such Mortgage Loans have been satisfied. If there are not
sufficient funds to satisfy such junior Mortgage Loans and senior
mortgage loans, such Mortgage Loan would suffer a loss and,
accordingly, one or more classes of Certificates would bear such loss.
Therefore, any risks of deficiencies associated with first Mortgage
Loans will be greater with respect to junior Mortgage Loans. See
"--Risks Associated with Mortgage Loans and Mortgaged Properties."

Obligor Default

If so specified in the related Prospectus Supplement, in order to
maximize recoveries on defaulted Whole Loans, a Master Servicer, a
Sub-Servicer or a Special Servicer will be permitted (within prescribed
parameters) to extend and modify Whole Loans that are in default or as
to which a payment default is imminent, including in particular with
respect to balloon payments. In addition, a Master Servicer, a
Sub-Servicer or a Special Servicer may receive a workout fee based on
receipts from or proceeds of such Whole Loans. While any such entity
generally will be required to determine that any such extension or
modification is reasonably likely to produce a greater recovery on a
present value basis than liquidation, there can be no assurance that
such flexibility with respect to extensions or modifications or payment
of a workout fee will increase the present value of receipts from or
proceeds of Whole Loans that are in default or as to which a payment
default is imminent. Additionally, if so specified in the related
Prospectus Supplement, certain of the Mortgage Loans included in the
Mortgage Pool for a Series may have been subject to workouts or similar
arrangements following periods of delinquency and default.

Mortgagor Type

Mortgage Loans made to partnerships, corporations or other
entities may entail risks of loss from delinquency and foreclosure that
are greater than those of single family mortgage loans. The mortgagor's
sophistication and form of organization may increase the likelihood of
protracted litigation or bankruptcy in default situations.

Credit Support Limitations

The Prospectus Supplement for a series of Certificates will
describe any Credit Support in the related Trust Fund, which may
include letters of credit, insurance policies, guarantees, reserve
funds or other types of credit support, or combinations thereof. Use of
Credit Support will be subject to the conditions and limitations
described herein and in the related Prospectus Supplement. Moreover,
such Credit Support may not cover all potential losses or risks; for
example, Credit Support may or may not cover fraud or negligence by a
mortgage loan originator or other parties.

A series of Certificates may include one or more classes of
Subordinate Certificates (which may include Offered Certificates), if
so provided in the related Prospectus Supplement. Although
subordination is intended to reduce the risk to holders of Senior
Certificates of delinquent distributions or ultimate losses, the amount
of subordination will be limited and may decline under certain
circumstances. In addition, if principal payments on one or more
classes of Certificates of a series are made in a specified order of
priority, any limits with respect to the aggregate amount of claims
under any related Credit Support may be exhausted before the principal
of the lower priority classes of Certificates of such series has been
repaid. As a result, the impact of significant losses and shortfalls on
the Assets may fall primarily upon those classes of Certificates having
a lower priority of payment. Moreover, if a form of Credit Support
covers more than one series of Certificates (each, a "Covered Trust"),
holders of Certificates evidencing an interest in a Covered Trust will
be subject to the risk that such Credit Support will be exhausted by
the claims of other Covered Trusts.

The amount of any applicable Credit Support supporting one or more
classes of Offered Certificates, including the subordination of one or
more classes of Certificates, will be determined on the basis of
criteria established by each Rating Agency rating such classes of
Certificates based on an assumed level of defaults, delinquencies,
other losses or other factors. There can, however, be no assurance that
the loss experience on the related Mortgage Assets will not exceed such
assumed levels. See "--Limited Nature of Ratings," "Description of the
Certificates" and "Description of Credit Support."

Regardless of the form of credit enhancement provided, the amount
of coverage will be limited in amount and in most cases will be subject
to periodic reduction in accordance with a schedule or formula. The
Master Servicer will generally be permitted to reduce, terminate or
substitute all or a portion of the credit enhancement for any series of
Certificates, if the applicable Rating Agency indicates that the
then-current rating thereof will not be adversely affected. The rating
of any series of Certificates by any applicable Rating Agency may be
lowered following the initial issuance thereof as a result of the
downgrading of the obligations of any applicable credit support
provider, or as a result of losses on the related Mortgage Assets
substantially in excess of the levels contemplated by such Rating
Agency at the time of its initial rating analysis. None of the
Depositor, the Master Servicer or any of their affiliates will have any
obligation to replace or supplement any credit enhancement, or to take
any other action to maintain any rating of any series of Certificates.

Subordination of the Subordinate Certificates; Effect of Losses on the
Assets

The rights of Subordinate Certificateholders to receive
distributions to which they would otherwise be entitled with respect to
the Assets will be subordinate to the rights of the Master Servicer (to
the extent that the Master Servicer is paid its servicing fee,
including any unpaid servicing fees with respect to one or more prior
Due Periods, and is reimbursed for certain unreimbursed advances and
unreimbursed liquidation expenses) and the Senior Certificateholders to
the extent described herein. As a result of the foregoing, investors
must be prepared to bear the risk that they may be subject to delays in
payment and may not recover their initial investments in the
Subordinate Certificates. See "Description of the
Certificates--General" and "--Allocation of Losses and Shortfalls."

The yields on the Subordinate Certificates may be extremely
sensitive to the loss experience of the Assets and the timing of any
such losses. If the actual rate and amount of losses experienced by the
Assets exceed the rate and amount of such losses assumed by an
investor, the yields to maturity on the Subordinate Certificates may be
lower than anticipated.

Enforceability

Mortgages may contain a due-on-sale clause, which permits the
lender to accelerate the maturity of the Mortgage Loan if the mortgagor
sells, transfers or conveys the related Mortgaged Property or its
interest in the Mortgaged Property. Mortgages may also include a
debt-acceleration clause, which permits the lender to accelerate the
debt upon a monetary or non-monetary default of the mortgagor. Such
clauses are generally enforceable subject to certain exceptions. The
courts of all states will enforce clauses providing for acceleration in
the event of a material payment default. The equity courts of any
state, however, may refuse the foreclosure of a mortgage or deed of
trust when an acceleration of the indebtedness would be inequitable or
unjust or the circumstances would render the acceleration
unconscionable.

If so specified in the related Prospectus Supplement, the Mortgage
Loans will be secured by an assignment of leases and rents pursuant to
which the mortgagor typically assigns its right, title and interest as
landlord under the leases on the related Mortgaged Property and the
income derived therefrom to the lender as further security for the
related Mortgage Loan, while retaining a license to collect rents for
so long as there is no default. In the event the mortgagor defaults,
the license terminates and the lender is entitled to collect rents.
Such assignments are typically not perfected as security interests
prior to actual possession of the cash flows. Some state laws may
require that the lender take possession of the Mortgaged Property and
obtain a judicial appointment of a receiver before becoming entitled to
collect the rents. In addition, if bankruptcy or similar proceedings
are commenced by or in respect of the mortgagor, the lender's ability
to collect the rents may be adversely affected. See "Certain Legal
Aspects of the Mortgage Loans and the Leases--Leases and Rents."

Environmental Risks

Real property pledged as security for a mortgage loan may be
subject to certain environmental risks. Under the laws of certain
states, contamination of a property may give rise to a lien on the
property to assure the costs of cleanup. In several states, such a lien
has priority over the lien of an existing mortgage against such
property. In addition, under the laws of some states and under the
federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA") a lender may be liable, as an "owner"
or "operator," for costs of addressing releases or threatened releases
of hazardous substances that require remedy at a property, if agents or
employees of the lender have become sufficiently involved in the
operations of the mortgagor, regardless of whether or not the
environmental damage or threat was caused by a prior owner. A lender
also risks such liability on foreclosure of the mortgage. Unless
otherwise specified in the related Prospectus Supplement, each Pooling
and Servicing Agreement will provide that none of the Master Servicer,
the Sub-Servicer or the Special Servicer, acting on behalf of the Trust
Fund, may acquire title to a Mortgaged Property securing a Mortgage
Loan or take over its operation unless the Master Servicer has
previously determined, based upon a report prepared by a person who
regularly conducts environmental audits, that: (i) the Mortgaged
Property is in compliance with applicable environmental laws, and there
are no circumstances present at the Mortgaged Property relating to the
use, management or disposal of any hazardous substances, hazardous
materials, wastes, or petroleum based materials for which
investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation; or (ii) if the Mortgaged Property is not so in compliance
or such circumstances are so present, then it would be in the best
economic interest of the Trust Fund to acquire title to the Mortgaged
Property and further to take such actions as would be necessary and
appropriate to effect such compliance and/or respond to such
circumstances. See "Certain Legal Aspects of the Mortgage Loans and the
Leases--Environmental Legislation."

ERISA Considerations

Certain Federal Income Tax Considerations Regarding REMIC Residual
Certificates

Except as provided in the Prospectus Supplement, REMIC Residual
Certificates, if offered hereunder, are anticipated to have "phantom
income" associated with them. That is, taxable income is anticipated to
be allocated to the REMIC Residual Certificates in the early years of
the existence of the related REMIC, even if the REMIC Residual
Certificates receive no distributions from the related REMIC, with a
corresponding amount of losses allocated to the REMIC Residual
Certificates in later years. Accordingly, the present value of the tax
detriments associated with the REMIC Residual Certificates may
significantly exceed the present value of the tax benefits related
thereto, and the REMIC Residual Certificates may have a negative
"value." Moreover, the REMIC Residual Certificates will in effect be
allocated an amount of gross income equal to the non-interest expenses
of the REMIC, but such expenses will be deductible by holders of the
REMIC Residual Certificates that are individuals only as itemized
deductions (and be subject to all the limitations applicable to
itemized deductions). Accordingly, investment in the REMIC Residual
Certificates will generally not be suitable for individuals or for
certain pass-through entities, such as partnerships or S corporations,
that have individuals as partners or shareholders. In addition, REMIC
Residual Certificates are subject to certain restrictions on transfer.
Finally, prospective purchasers of a REMIC Residual Certificate should
be aware that recently issued final regulations provide restrictions on
the ability to mark-to-market certain "negative value" REMIC residual
interests. See "Certain Federal Income Tax Consequences--REMICs."

Control

Under certain circumstances, the consent or approval of the
holders of a specified percentage of the aggregate Certificate Balance
of all outstanding Certificates of a series or a similar means of
allocating decision-making under the related Agreement ("Voting
Rights") will be required to direct, and will be sufficient to bind all
Certificateholders of such series to, certain actions, including
directing the Special Servicer or the Master Servicer with respect to
actions to be taken with respect to certain Mortgage Loans and REO
Properties and amending the related Agreement in certain circumstances.
See "Description of the Agreements--Events of Default," "--Rights Upon
Event of Default," "--Amendment" and "--List of Certificateholders."

Book-Entry Registration

If so provided in the Prospectus Supplement, one or more classes
of the Certificates will be initially represented by one or more
certificates registered in the name of Cede, the nominee for DTC, and
will not be registered in the names of the Certificateholders or their
nominees. Because of this, unless and until Definitive Certificates are
issued, Certificateholders will not be recognized by the Trustee as
"Certificateholders" (as that term is to be used in the related
Agreement). Hence, until such time, Certificateholders will be able to
exercise the rights of Certificateholders only indirectly through DTC
and its participating organizations. See "Description of the
Certificates--Book-Entry Registration and Definitive Certificates."

DESCRIPTION OF THE TRUST FUNDS
Assets

The primary assets of each Trust Fund (the "Assets") will include
(i) multifamily and/or commercial mortgage loans (the "Mortgage
Loans"), (ii) mortgage participations, pass-through certificates or
other mortgage-backed securities evidencing interests in or secured by
one or more Mortgage Loans or other similar participations,
certificates or securities ("MBS"), (iii) direct obligations of the
United States, agencies thereof or agencies created thereby which are
not subject to redemption prior to maturity at the option of the issuer
and are (a) interest-bearing securities, (b) non-interest-bearing
securities, (c) originally interest-bearing securities from which
coupons representing the right to payment of interest have been
removed, or (d) interest-bearing securities from which the right to
payment of principal has been removed (the "Government Securities"), or
(iv) a combination of Mortgage Loans, MBS and Government Securities. As
used herein, "Mortgage Loans" refers to both whole Mortgage Loans and
Mortgage Loans underlying MBS. Mortgage Loans that secure, or interests
in which are evidenced by, MBS are herein sometimes referred to as
Underlying Mortgage Loans. Mortgage Loans that are not Underlying
Mortgage Loans are sometimes referred to as "Whole Loans." Any mortgage
participations, pass-through certificates or other
asset-backed certificates in which an MBS evidences an interest or
which secure an MBS are sometimes referred to herein also as MBS or as
"Underlying MBS." Mortgage Loans and MBS are sometimes referred to
herein as "Mortgage Assets." The Mortgage Assets will not be guaranteed
or insured by Morgan Stanley Capital I Inc. (the "Depositor") or any of
its affiliates or, unless otherwise provided in the Prospectus
Supplement, by any governmental agency or instrumentality or by any
other person. Each Asset will be selected by the Depositor for
inclusion in a Trust Fund from among those purchased, either directly
or indirectly, from a prior holder thereof (an "Asset Seller"), which
may be an affiliate of the Depositor and, with respect to Mortgage
Assets, which prior holder may or may not be the originator of such
Mortgage Loan or the issuer of such MBS.

Unless otherwise specified in the related Prospectus Supplement,
the Certificates will be entitled to payment only from the assets of
the related Trust Fund and will not be entitled to payments in respect
of the assets of any other trust fund established by the Depositor. If
specified in the related Prospectus Supplement, the assets of a Trust
Fund will consist of certificates representing beneficial ownership
interests in another trust fund that contains the Assets.

Mortgage Loans

General

The Mortgage Loans will be secured by liens on, or security
interests in, Mortgaged Properties consisting of (i) residential
properties consisting of five or more rental or cooperatively-owned
dwelling units in high-rise, mid-rise or garden apartment buildings
("Multifamily Properties" and the related loans, "Multifamily Loans")
or (ii) office buildings, shopping centers, retail stores, hotels or
motels, nursing homes, hospitals or other health care-related
facilities, mobile home parks, warehouse facilities, mini-warehouse
facilities or self-storage facilities, industrial plants, congregate
care facilities, mixed use or other types of commercial properties
("Commercial Properties" and the related loans, "Commercial Loans")
located, unless otherwise specified in the related Prospectus
Supplement, in any one of the fifty states, the District of Columbia or
the Commonwealth of Puerto Rico. To the extent specified in the related
Prospectus Supplement, the Mortgage Loans will be secured by first or
junior mortgages or deeds of trust or other similar security
instruments creating a first or junior lien on Mortgaged Property.
Multifamily Property may include mixed commercial and residential
structures and may include apartment buildings owned by private
cooperative housing corporations ("Cooperatives"). The Mortgaged
Properties may include leasehold interests in properties, the title to
which is held by third party lessors. Unless otherwise specified in the
Prospectus Supplement, the term of any such leasehold will exceed the
term of the related mortgage note by at least five years. Each Mortgage
Loan will have been originated by a person (the "Originator") other
than the Depositor. The related Prospectus Supplement will indicate if
any Originator is an affiliate of the Depositor. The Mortgage Loans
will be evidenced by promissory notes (the "Mortgage Notes") secured by
mortgages or deeds of trust (the "Mortgages") creating a lien on the
Mortgaged Properties. Mortgage Loans will generally also be secured by
an assignment of leases and rents and/or operating or other cash flow
guarantees relating to the Mortgage Loan.

Leases

To the extent specified in the related Prospectus Supplement, the
Commercial Properties may be leased to Lessees that respectively occupy
all or a portion of such properties. Pursuant to a Lease Assignment,
the related mortgagor may assign its rights, title and interest as
lessor under each Lease and the income derived therefrom to the related
mortgagee, while retaining a license to collect the rents for so long
as there is no default. If the mortgagor defaults, the license
terminates and the mortgagee or its agent is entitled to collect the
rents from the related Lessee or Lessees for application to the
monetary obligations of the mortgagor. State law may limit or restrict
the enforcement of the Lease Assignments by a mortgagee until it takes
possession of the related Mortgaged Property and/or a receiver is
appointed. See "Certain Legal Aspects of the Mortgage Loans and the
Leases--Leases and Rents." Alternatively, to the extent specified in
the related Prospectus Supplement, the mortgagor and the mortgagee may
agree that payments under Leases are to be made directly to the Master
Servicer.

To the extent described in the related Prospectus Supplement, the
Leases may require the Lessees to pay rent that is sufficient in the
aggregate to cover all scheduled payments of principal and interest on
the related Mortgage Loans and, in certain cases, their pro rata share
of the operating expenses, insurance premiums and real estate taxes
associated with the Mortgaged Properties. Certain of the Leases may
require the mortgagor to bear costs associated with structural repairs
and/or the maintenance of the exterior or other portions of the
Mortgaged Property or provide for certain limits on the aggregate
amount of operating expenses, insurance premiums, taxes and other
expenses that the Lessees are required to pay. If so specified in the
related Prospectus Supplement, under certain circumstances the Lessees
may be permitted to set off their rental obligations against the
obligations of the mortgagors under the Leases. In those cases where
payments under the Leases (net
of any operating expenses payable by the mortgagors) are insufficient
to pay all of the scheduled principal and interest on the related
Mortgage Loans, the mortgagors must rely on other income or sources
(including security deposits) generated by the related Mortgaged
Property to make payments on the related Mortgage Loan. To the extent
specified in the related Prospectus Supplement, some Commercial
Properties may be leased entirely to one Lessee. In such cases, absent
the availability of other funds, the mortgagor must rely entirely on
rent paid by such Lessee in order for the mortgagor to pay all of the
scheduled principal and interest on the related Commercial Loan. To the
extent specified in the related Prospectus Supplement, certain of the
Leases may expire prior to the stated maturity of the related Mortgage
Loan. In such cases, upon expiration of the Leases the mortgagors will
have to look to alternative sources of income, including rent payment
by any new Lessees or proceeds from the sale or refinancing of the
Mortgaged Property, to cover the payments of principal and interest due
on such Mortgage Loans unless the Lease is renewed. As specified in the
related Prospectus Supplement, certain of the Leases may provide that
upon the occurrence of a casualty affecting a Mortgaged Property, the
Lessee will have the right to terminate its Lease, unless the
mortgagor, as lessor, is able to cause the Mortgaged Property to be
restored within a specified period of time. Certain Leases may provide
that it is the lessor's responsibility, while other Leases provide that
it is the Lessee's responsibility, to restore the Mortgaged Property
after a casualty to its original condition. Certain Leases may provide
a right of termination to the related Lessee if a taking of a material
or specified percentage of the leased space in the Mortgaged Property
occurs, or if the ingress or egress to the leased space has been
materially impaired.

Default and Loss Considerations with Respect to the Mortgage Loans

Mortgage loans secured by commercial and multifamily properties
are markedly different from owner-occupied single family mortgage
loans. The repayment of loans secured by commercial or multifamily
properties is typically dependent upon the successful operation of such
property rather than upon the liquidation value of the real estate.
Unless otherwise specified in the Prospectus Supplement, the Mortgage
Loans will be non-recourse loans, which means that, absent special
facts, the mortgagee may look only to the Net Operating Income from the
property for repayment of the mortgage debt, and not to any other of
the mortgagor's assets, in the event of the mortgagor's default.
Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the
risk of default on such a loan. The "Debt Service Coverage Ratio" of a
Mortgage Loan at any given time is the ratio of the Net Operating
Income for a twelve-month period to the annualized scheduled payments
on the Mortgage Loan. "Net Operating Income" means, for any given
period, unless otherwise specified in the related Prospectus
Supplement, the total operating revenues derived from a Mortgaged
Property during such period, minus the total operating expenses
incurred in respect of such Mortgaged Property during such period other
than (i) non-cash items such as depreciation and amortization, (ii)
capital expenditures and (iii) debt service on loans secured by the
Mortgaged Property. The Net Operating Income of a Mortgaged Property
will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.

As the primary component of Net Operating Income, rental income
(as well as maintenance payments from tenant-stockholders of a
Cooperative) is subject to the vagaries of the applicable real estate
market and/or business climate. Properties typically leased, occupied
or used on a short-term basis, such as health care-related facilities,
hotels and motels, and mini-warehouse and self-storage facilities, tend
to be affected more rapidly by changes in market or business conditions
than do properties leased, occupied or used for longer periods, such as
(typically) warehouses, retail stores, office buildings and industrial
plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant.
Accordingly, a decline in the financial condition of the mortgagor or
single tenant, as applicable, may have a disproportionately greater
effect on the Net Operating Income from such Mortgaged Properties than
would be the case with respect to Mortgaged Properties with multiple
tenants.

Changes in the expense components of Net Operating Income due to
the general economic climate or economic conditions in a locality or
industry segment, such as increases in interest rates, real estate and
personal property tax rates and other operating expenses, including
energy costs; changes in governmental rules, regulations and fiscal
policies, including environmental legislation; and acts of God may also
affect the risk of default on the related Mortgage Loan. As may be
further described in the related Prospectus Supplement, in some cases
leases of Mortgaged Properties may provide that the Lessee, rather than
the mortgagor, is responsible for payment of some or all of these
expenses; however, because leases are subject to default risks as well
when a tenant's income is insufficient to cover its rent and operating
expenses, the existence of such "net of expense" provisions will only
temper, not eliminate, the impact of expense increases on the
performance of the related Mortgage Loan. See "--Leases" above.

While the duration of leases and the existence of any "net of
expense" provisions are often viewed as the primary considerations in
evaluating the credit risk of mortgage loans secured by certain
income-producing properties, such risk may

be affected equally or to a greater extent by changes in government
regulation of the operator of the property. Examples of the latter
include mortgage loans secured by health care-related facilities and
hospitals, the income from which and the operating expenses of which
are subject to state and/or federal regulations, such as Medicare and
Medicaid, and multifamily properties and mobile home parks, which may
be subject to state or local rent control regulation and, in certain
cases, restrictions on changes in use of the property. Low-and
moderate-income housing in particular may be subject to legal
limitations and regulations but, because of such regulations, may also
be less sensitive to fluctuations in market rents generally.

The Debt Service Coverage Ratio should not be relied upon as the
sole measure of the risk of default of any loan, however, since other
factors may outweigh a high Debt Service Coverage Ratio. With respect
to a Balloon Mortgage Loan, for example, the risk of default as a
result of the unavailability of a source of funds to finance the
related balloon payment at maturity on terms comparable to or better
than those of such Balloon Mortgage Loans could be significant even
though the related Debt Service Coverage Ratio is high.

The liquidation value of any Mortgaged Property may be adversely
affected by risks generally incident to interests in real property,
including declines in rental or occupancy rates. Lenders generally use
the Loan-to-Value Ratio of a mortgage loan as a measure of risk of loss
if a property must be liquidated upon a default by the mortgagor.

Appraised values of income-producing properties may be based on
the market comparison method (recent resale value of comparable
properties at the date of the appraisal), the cost replacement method
(the cost of replacing the property at such date), the income
capitalization method (a projection of value based upon the property's
projected net cash flow), or upon a selection from or interpolation of
the values derived from such methods. Each of these appraisal methods
presents analytical challenges. It is often difficult to find truly
comparable properties that have recently been sold; the replacement
cost of a property may have little to do with its current market value;
and income capitalization is inherently based on inexact projections of
income and expense and the selection of an appropriate capitalization
rate. Where more than one of these appraisal methods are used and
create significantly different results, or where a high Loan-to-Value
Ratio accompanies a high Debt Service Coverage Ratio (or vice versa),
the analysis of default and loss risks is even more difficult.

While the Depositor believes that the foregoing considerations are
important factors that generally distinguish the Multifamily and
Commercial Loans from single family mortgage loans and provide insight
to the risks associated with income-producing real estate, there is no
assurance that such factors will in fact have been considered by the
Originators of the Multifamily and Commercial Loans, or that, for any
of such Mortgage Loans, they are complete or relevant. See "Risk
Factors--Risks Associated with Mortgage Loans and Mortgaged
Properties," "--Balloon Payments," "--Junior Mortgage Loans,"
"--Obligor Default" and "--Mortgagor Type."

Loan-to-Value Ratio

The "Loan-to-Value Ratio" of a Mortgage Loan at any given time is
the ratio (expressed as a percentage) of the then outstanding principal
balance of the Mortgage Loan to the Value of the related Mortgaged
Property. The "Value" of a Mortgaged Property, other than with respect
to Refinance Loans, is generally the lesser of (a) the appraised value
determined in an appraisal obtained by the originator at origination of
such loan and (b) the sales price for such property. "Refinance Loans"
are loans made to refinance existing loans. Unless otherwise set forth
in the related Prospectus Supplement, the Value of the Mortgaged
Property securing a Refinance Loan is the appraised value thereof
determined in an appraisal obtained at the time of origination of the
Refinance Loan. The Value of a Mortgaged Property as of the date of
initial issuance of the related series of Certificates may be less than
the value at origination and will fluctuate from time to time based
upon changes in economic conditions and the real estate market.

Mortgage Loan Information in Prospectus Supplements

Each Prospectus Supplement will contain information, as of the
date of such Prospectus Supplement and to the extent then applicable
and specifically known to the Depositor, with respect to the Mortgage
Loans, including (i) the aggregate outstanding principal balance and
the largest, smallest and average outstanding principal balance of the
Mortgage Loans as of the applicable Cut-off Date, (ii) the type of
property securing the Mortgage Loans (e.g., Multifamily Property or
Commercial Property and the type of property in each such category),
(iii) the weighted average (by principal balance) of the original and
remaining terms to maturity of the Mortgage Loans, (iv) the earliest
and latest origination date and maturity date of the Mortgage Loans,
(v) the weighted average (by principal balance) of the Loan-to-Value
Ratios at origination of the Mortgage Loans, (vi) the Mortgage Rates or
range of Mortgage Rates and the weighted average Mortgage Rate borne by
the Mortgage
Loans, (vii) the state or states in which most of the Mortgaged
Properties are located, (viii) information with respect to the
prepayment provisions, if any, of the Mortgage Loans, (ix) the weighted
average Retained Interest, if any, (x) with respect to Mortgage Loans
with adjustable Mortgage Rates ("ARM Loans"), the index, the frequency
of the adjustment dates, the highest, lowest and weighted average note
margin and pass-through margin, and the maximum Mortgage Rate or
monthly payment variation at the time of any adjustment thereof and
over the life of the ARM Loan and the frequency of such monthly payment
adjustments, (xi) the Debt Service Coverage Ratio either at origination
or as of a more recent date (or both) and (xii) information regarding
the payment characteristics of the Mortgage Loans, including without
limitation balloon payment and other amortization provisions. The
related Prospectus Supplement will also contain certain information
available to the Depositor with respect to the provisions of leases and
the nature of tenants of the Mortgaged Properties and other information
referred to in a general manner under "--Mortgage Loans--Default and
Loss Considerations with Respect to the Mortgage Loans" above. If
specific information respecting the Mortgage Loans is not known to the
Depositor at the time Certificates are initially offered, more general
information of the nature described above will be provided in the
Prospectus Supplement, and specific information will be set forth in a
report which will be available to purchasers of the related
Certificates at or before the initial issuance thereof and will be
filed as part of a Current Report on Form 8-K with the Securities and
Exchange Commission within fifteen days after such initial issuance.

Payment Provisions of the Mortgage Loans

Unless otherwise specified in the related Prospectus Supplement,
all of the Mortgage Loans will (i) have individual principal balances
at origination of not less than $25,000, (ii) have original terms to
maturity of not more than 40 years and (iii) provide for payments of
principal, interest or both, on due dates that occur monthly, quarterly
or semi-annually or at such other interval as is specified in the
related Prospectus Supplement. Each Mortgage Loan may provide for no
accrual of interest or for accrual of interest thereon at an interest
rate (a "Mortgage Rate") that is fixed over its term or that adjusts
from time to time, or that may be converted from an adjustable to a
fixed Mortgage Rate, or from a fixed to an adjustable Mortgage Rate,
from time to time pursuant to an election or as otherwise specified on
the related Mortgage Note, in each case as described in the related
Prospectus Supplement. Each Mortgage Loan may provide for scheduled
payments to maturity or payments that adjust from time to time to
accommodate changes in the Mortgage Rate or to reflect the occurrence
of certain events, and may provide for negative amortization or
accelerated amortization, in each case as described in the related
Prospectus Supplement. Each Mortgage Loan may be fully amortizing or
require a balloon payment due on its stated maturity date, in each case
as described in the related Prospectus Supplement. Each Mortgage Loan
may contain prohibitions on prepayment (a "Lock-out Period" and the
date of expiration thereof, a "Lock-out Date") or require payment of a
premium or a yield maintenance penalty (a "Prepayment Premium") in
connection with a prepayment, in each case as described in the related
Prospectus Supplement. In the event that holders of any class or
classes of Offered Certificates will be entitled to all or a portion of
any Prepayment Premiums collected in respect of Mortgage Loans, the
related Prospectus Supplement will specify the method or methods by
which any such amounts will be allocated. A Mortgage Loan may also
contain provisions entitling the mortgagee to a share of profits
realized from the operation or disposition of the Mortgaged Property
("Equity Participations"), as described in the related Prospectus
Supplement. In the event that holders of any class or classes of
Offered Certificates will be entitled to all or a portion of an Equity
Participation, the related Prospectus Supplement will specify the terms
and provisions of the Equity Participation and the method or methods by
which distributions in respect thereof will be allocated among such
Certificates.

MBS

Any MBS will have been issued pursuant to a participation and
servicing agreement, a pooling and servicing agreement, a trust
agreement, an indenture or similar agreement (an "MBS Agreement"). A
seller (the "MBS Issuer") and/or servicer (the "MBS Servicer") of the
underlying Mortgage Loans (or Underlying MBS) will have entered into
the MBS Agreement with a trustee or a custodian under the MBS Agreement
(the "MBS Trustee"), if any, or with the original purchaser of the
interest in the underlying Mortgage Loans or MBS evidenced by the MBS.

Distributions of any principal or interest, as applicable, will be
made on MBS on the dates specified in the related Prospectus
Supplement. The MBS may be issued in one or more classes with
characteristics similar to the classes of Certificates described in
this Prospectus. Any principal or interest distributions will be made
on the MBS by the MBS Trustee or the MBS Servicer. The MBS Issuer or
the MBS Servicer or another person specified in the related Prospectus
Supplement may have the right or obligation to repurchase or substitute
assets underlying the MBS after a certain date or under other
circumstances specified in the related Prospectus Supplement.

Enhancement in the form of reserve funds, subordination or other
forms of credit support similar to that described for the
Certificates under "Description of Credit Support" may be provided
with respect to the MBS. The type, characteristics and amount of
such credit support, if any, will be a function of certain
characteristics of the Mortgage Loans or Underlying MBS evidenced
by or securing such MBS and other factors and generally will have
been established for the MBS on the basis of requirements of
either any Rating Agency that may have assigned a rating to the
MBS or the initial purchasers of the MBS.

The Prospectus Supplement for a series of Certificates evidencing
interests in Mortgage Assets that include MBS will specify, to the
extent available, (i) the aggregate approximate initial and outstanding
principal amount or notional amount, as applicable, and type of the MBS
to be included in the Trust Fund, (ii) the original and remaining term
to stated maturity of the MBS, if applicable, (iii) whether such MBS is
entitled only to interest payments, only to principal payments or to
both, (iv) the pass-through or bond rate of the MBS or formula for
determining such rates, if any, (v) the applicable payment provisions
for the MBS, including, but not limited to, any priorities, payment
schedules and subordination features, (vi) the MBS Issuer, MBS Servicer
and MBS Trustee, as applicable, (vii) certain characteristics of the
credit support, if any, such as subordination, reserve funds, insurance
policies, letters of credit or guarantees relating to the related
Underlying Mortgage Loans, the Underlying MBS or directly to such MBS,
(viii) the terms on which the related Underlying Mortgage Loans or
Underlying MBS for such MBS or the MBS may, or are required to, be
purchased prior to their maturity, (ix) the terms on which Mortgage
Loans or Underlying MBS may be substituted for those originally
underlying the MBS, (x) the servicing fees payable under the MBS
Agreement, (xi) the type of information in respect of the Underlying
Mortgage Loans described under "--Mortgage Loans--Mortgage Loan
Information in Prospectus Supplements" above, and the type of
information in respect of the Underlying MBS described in this
paragraph, (xii) the characteristics of any cash flow agreements that
are included as part of the trust fund evidenced or secured by the MBS
and (xiii) whether the MBS is in certificated form, book-entry form or
held through a depository such as The Depository Trust Company or the
Participants Trust Company.

Government Securities

The Prospectus Supplement for a series of Certificates evidencing
interests in Assets of a Trust Fund that include Government Securities
will specify, to the extent available, (i) the aggregate approximate
initial and outstanding principal amounts or notional amounts, as
applicable, and types of the Government Securities to be included in
the Trust Fund, (ii) the original and remaining terms to stated
maturity of the Government Securities, (iii) whether such Government
Securities are entitled only to interest payments, only to principal
payments or to both, (iv) the interest rates of the Government
Securities or the formula to determine such rates, if any, (v) the
applicable payment provisions for the Government Securities and (vi) to
what extent, if any, the obligation evidenced thereby is backed by the
full faith and credit of the United States.

Accounts

Each Trust Fund will include one or more accounts established and
maintained on behalf of the Certificateholders into which the person or
persons designated in the related Prospectus Supplement will, to the
extent described herein and in such Prospectus Supplement deposit all
payments and collections received or advanced with respect to the
Assets and other assets in the Trust Fund. Such an account may be
maintained as an interest bearing or a non-interest bearing account,
and funds held therein may be held as cash or invested in certain
short-term, investment grade obligations, in each case as described in
the related Prospectus Supplement. See "Description of the
Agreement--Certificate Account and Other Collection Accounts."

Credit Support

If so provided in the related Prospectus Supplement, partial or
full protection against certain defaults and losses on the Assets in
the related Trust Fund may be provided to one or more classes of
Certificates in the related series in the form of subordination of one
or more other classes of Certificates in such series or by one or more
other types of credit support, such as a letter of credit, insurance
policy, guarantee, reserve fund or another type of credit support, or a
combination thereof (any such coverage with respect to the Certificates
of any series, "Credit Support"). The amount and types of coverage, the
identification of the entity providing the coverage (if applicable) and
related information with respect to each type of Credit Support, if
any, will be described in the Prospectus Supplement for a series of
Certificates. See "Risk Factors--Credit Support Limitations" and
"Description of Credit Support."

Cash Flow Agreements

If so provided in the related Prospectus Supplement, the Trust
Fund may include guaranteed investment contracts pursuant to which
moneys held in the funds and accounts established for the related
series will be invested at a specified rate. The Trust Fund may
also include certain other agreements, such as interest rate
exchange agreements, interest rate cap or floor agreements,
currency exchange agreements or similar agreements provided to
reduce the effects of interest rate or currency exchange rate
fluctuations on the Assets or on one or more classes of
Certificates. (Currency exchange agreements might be included in
the Trust Fund if some or all of the Mortgage Assets (such as
Mortgage Loans secured by Mortgaged Properties located outside the
United States) were denominated in a non-United States currency.)
The principal terms of any such guaranteed investment contract or
other agreement (any such agreement, a "Cash Flow Agreement"),
including, without limitation, provisions relating to the timing,
manner and amount of payments thereunder and provisions relating
to the termination thereof, will be described in the Prospectus
Supplement for the related series. In addition, the related
Prospectus Supplement will provide certain information with
respect to the obligor under any such Cash Flow Agreement.

USE OF PROCEEDS

The net proceeds to be received from the sale of the Certificates
will be applied by the Depositor to the purchase of Assets and to pay
for certain expenses incurred in connection with such purchase of
Assets and sale of Certificates. The Depositor expects to sell the
Certificates from time to time, but the timing and amount of offerings
of Certificates will depend on a number of factors, including the
volume of Assets acquired by the Depositor, prevailing interest rates,
availability of funds and general market conditions.

YIELD CONSIDERATIONS

General

The yield on any Offered Certificate will depend on the price paid
by the Certificateholder, the Pass-Through Rate of the Certificate, the
receipt and timing of receipt of distributions on the Certificate and
the weighted average life of the Assets in the related Trust Fund
(which may be affected by prepayments, defaults, liquidations or
repurchases). See "Risk Factors."

Pass-Through Rate

Certificates of any class within a series may have fixed, variable
or adjustable Pass-Through Rates, which may or may not be based upon
the interest rates borne by the Assets in the related Trust Fund. The
Prospectus Supplement with respect to any series of Certificates will
specify the Pass-Through Rate for each class of such Certificates or,
in the case of a variable or adjustable Pass-Through Rate, the method
of determining the Pass-Through Rate; the effect, if any, of the
prepayment of any Mortgage Asset on the Pass-Through Rate of one or
more classes of Certificates; and whether the distributions of interest
on the Certificates of any class will be dependent, in whole or in
part, on the performance of any obligor under a Cash Flow Agreement.

The effective yield to maturity to each holder of Certificates
entitled to payments of interest will be below that otherwise produced
by the applicable Pass-Through Rate and purchase price of such
Certificate because, while interest may accrue on each Asset during a
certain period, the distribution of such interest will be made on a day
which may be several days, weeks or months following the period of
accrual.

Timing of Payment of Interest

Each payment of interest on the Certificates (or addition to the
Certificate Balance of a class of Accrual Certificates) on a
Distribution Date will include interest accrued during the Interest
Accrual Period for such Distribution Date. As indicated above under
"--Pass-Through Rate," if the Interest Accrual Period ends on a date
other than a Distribution Date for the related series, the yield
realized by the holders of such Certificates may be lower than the
yield that would result if the Interest Accrual Period ended on such
Distribution Date. In addition, if so specified in the related
Prospectus Supplement, interest accrued for an Interest Accrual Period
for one or more classes of Certificates may be calculated on the
assumption that distributions of principal (and additions to the
Certificate Balance of Accrual Certificates) and allocations of losses
on the Assets may be made on the first day of the Interest Accrual
Period for a Distribution Date and not on such Distribution Date. Such
method would produce a lower effective yield than if interest were
calculated on the basis of the actual principal amount outstanding
during an Interest Accrual Period. The Interest Accrual Period for any
class of Offered Certificates will be described in the related
Prospectus Supplement.

Payments of Principal; Prepayments

The yield to maturity on the Certificates will be affected by the
rate of principal payments on the Assets (including principal
prepayments on Mortgage Loans resulting from both voluntary prepayments
by the mortgagors and involuntary liquidations). Such payments may be
directly dependent upon the payments on Leases underlying such Mortgage
Loans. The rate at which principal prepayments occur on the Mortgage
Loans will be affected by a variety of factors, including, without
limitation, the terms of the Mortgage Loans, the level of prevailing
interest rates, the availability of mortgage credit and economic,
demographic, geographic, tax, legal and other factors. In general,
however, if prevailing interest rates fall significantly below the
Mortgage Rates on the Mortgage Loans comprising or underlying the
Assets in a particular Trust Fund, such Mortgage Loans are likely to be
the subject of higher principal prepayments than if prevailing rates
remain at or above the rates borne by such Mortgage Loans. In this
regard, it should be noted that certain Assets may consist of Mortgage
Loans with different Mortgage Rates and the stated pass-through or
pay-through interest rate of certain MBS may be a number of percentage
points higher or lower than certain of the underlying Mortgage Loans.
The rate of principal payments on some or all of the classes of
Certificates of a series will correspond to the rate of principal
payments on the Assets in the related Trust Fund and is likely to be
affected by the existence of Lock-out Periods and Prepayment Premium
provisions of the Mortgage Loans underlying or comprising such Assets,
and by the extent to which the servicer of any such Mortgage Loan is
able to enforce such provisions. Mortgage Loans with a Lock-out Period
or a Prepayment Premium provision, to the extent enforceable, generally
would be expected to experience a lower rate of principal prepayments
than otherwise identical Mortgage Loans without such provisions, with
shorter Lock-out Periods or with lower Prepayment Premiums.

If the purchaser of a Certificate offered at a discount calculates
its anticipated yield to maturity based on an assumed rate of
distributions of principal that is faster than that actually
experienced on the Assets, the actual yield to maturity will be lower
than that so calculated. Conversely, if the purchaser of a Certificate
offered at a premium calculates its anticipated yield to maturity based
on an assumed rate of distributions of principal that is slower than
that actually experienced on the Assets, the actual yield to maturity
will be lower than that so calculated. In either case, if so provided
in the Prospectus Supplement for a series of Certificates, the effect
on yield on one or more classes of the Certificates of such series of
prepayments of the Assets in the related Trust Fund may be mitigated or
exacerbated by any provisions for sequential or selective distribution
of principal to such classes.

When a full prepayment is made on a Mortgage Loan, the mortgagor
is charged interest on the principal amount of the Mortgage Loan so
prepaid for the number of days in the month actually elapsed up to the
date of the prepayment. Unless otherwise specified in the related
Prospectus Supplement, the effect of prepayments in full will be to
reduce the amount of interest paid in the following month to holders of
Certificates entitled to payments of interest because interest on the
principal amount of any Mortgage Loan so prepaid will be paid only to
the date of prepayment rather than for a full month. Unless otherwise
specified in the related Prospectus Supplement, a partial prepayment of
principal is applied so as to reduce the outstanding principal balance
of the related Mortgage Loan as of the Due Date in the month in which
such partial prepayment is received. As a result, unless otherwise
specified in the related Prospectus Supplement, the effect of a partial
prepayment on a Mortgage Loan will be to reduce the amount of interest
passed through to holders of Certificates in the month following the
receipt of such partial prepayment by an amount equal to one month's
interest at the applicable Pass-Through Rate on the prepaid amount.

The timing of changes in the rate of principal payments on the
Mortgage Assets may significantly affect an investor's actual yield to
maturity, even if the average rate of distributions of principal is
consistent with an investor's expectation. In general, the earlier a
principal payment is received on the Mortgage Assets and distributed on
a Certificate, the greater the effect on such investor's yield to
maturity. The effect on an investor's yield of principal payments
occurring at a rate higher (or lower) than the rate anticipated by the
investor during a given period may not be offset by a subsequent like
decrease (or increase) in the rate of principal payments.

Prepayments--Maturity and Weighted Average Life

The rates at which principal payments are received on the Assets
included in or comprising a Trust Fund and the rate at which payments
are made from any Credit Support or Cash Flow Agreement for the related
series of Certificates may affect the ultimate maturity and the
weighted average life of each class of such series. Prepayments on the
Mortgage Loans comprising or underlying the Mortgage Assets in a
particular Trust Fund will generally accelerate the rate at which
principal is paid on some or all of the classes of the Certificates of
the related series.

If so provided in the Prospectus Supplement for a series of
Certificates, one or more classes of Certificates may have a final
scheduled Distribution Date, which is the date on or prior to which the
Certificate Balance thereof is scheduled to be reduced to zero,
calculated on the basis of the assumptions applicable to such series
set forth therein.

Weighted average life refers to the average amount of time that
will elapse from the date of issue of a security until each dollar of
principal of such security will be repaid to the investor. The weighted
average life of a class of Certificates of a series will be influenced
by the rate at which principal on the Mortgage Loans comprising or
underlying the Mortgage Assets is paid to such class, which may be in
the form of scheduled amortization or prepayments (for this purpose,
the term "prepayment" includes prepayments, in whole or in part, and
liquidations due to default).

In addition, the weighted average life of the Certificates may be
affected by the varying maturities of the Mortgage Loans comprising or
underlying the MBS. If any Mortgage Loans comprising or underlying the
Assets in a particular Trust Fund have actual terms to maturity of less
than those assumed in calculating final scheduled Distribution Dates
for the classes of Certificates of the related series, one or more
classes of such Certificates may be fully paid prior to their
respective final scheduled Distribution Dates, even in the absence of
prepayments. Accordingly, the prepayment experience of the Assets will,
to some extent, be a function of the mix of Mortgage Rates and
maturities of the Mortgage Loans comprising or underlying such Assets.
See "Description of the Trust Funds."

Prepayments on loans are also commonly measured relative to a
prepayment standard or model, such as the Constant Prepayment Rate
("CPR") prepayment model. CPR represents a constant assumed rate of
prepayment each month relative to the then outstanding principal
balance of a pool of loans for the life of such loans.

Neither CPR nor any other prepayment model or assumption purports
to be a historical description of prepayment experience or a prediction
of the anticipated rate of prepayment of any pool of loans, including
the Mortgage Loans underlying or comprising the Mortgage Assets.
Moreover, CPR was developed based upon historical prepayment experience
for single family loans. Thus, it is likely that prepayment of any
Mortgage Loans comprising or underlying the Mortgage Assets for any
series will not conform to any particular level of CPR.

The Depositor is not aware of any meaningful publicly available
prepayment statistics for multifamily or commercial mortgage loans.

The Prospectus Supplement with respect to each series of
Certificates will contain tables, if applicable, setting forth the
projected weighted average life of each class of Offered Certificates
of such series and the percentage of the initial Certificate Balance of
each such class that would be outstanding on specified Distribution
Dates based on the assumptions stated in such Prospectus Supplement,
including assumptions that prepayments on the Mortgage Loans comprising
or underlying the related Assets are made at rates corresponding to
various percentages of CPR or at such other rates specified in such
Prospectus Supplement. Such tables and assumptions are intended to
illustrate the sensitivity of weighted average life of the Certificates
to various prepayment rates and will not be intended to predict or to
provide information that will enable investors to predict the actual
weighted average life of the Certificates. It is unlikely that
prepayment of any Mortgage Loans comprising or underlying the Mortgage
Assets for any series will conform to any particular level of CPR or
any other rate specified in the related Prospectus Supplement.

Other Factors Affecting Weighted Average Life

Type of Mortgage Asset

A number of Mortgage Loans may have balloon payments due at
maturity, and because the ability of a mortgagor to make a balloon
payment typically will depend upon its ability either to refinance the
loan or to sell the related Mortgaged Property, there is a risk that a
number of Mortgage Loans having balloon payments may default at
maturity, or that the servicer may extend the maturity of such a
Mortgage Loan in connection with a workout. In the case of defaults,
recovery of proceeds may be delayed by, among other things, bankruptcy
of the mortgagor or adverse conditions in the market where the property
is located. In order to minimize losses on defaulted Mortgage Loans,
the servicer may, to the extent and under the circumstances set forth
in the related Prospectus Supplement, be permitted to modify Mortgage
Loans that are in default or as to which a payment default is imminent.
Any defaulted balloon payment or modification that extends the maturity
of a
Mortgage Loan will tend to extend the weighted average life of the
Certificates, thereby lengthening the period of time elapsed from the
date of issuance of a Certificate until it is retired.

Foreclosures and Payment Plans

The number of foreclosures and the principal amount of the
Mortgage Loans comprising or underlying the Mortgage Assets that are
foreclosed in relation to the number and principal amount of Mortgage
Loans that are repaid in accordance with their terms will affect the
weighted average life of the Mortgage Loans comprising or underlying
the Mortgage Assets and that of the related series of Certificates.
Servicing decisions made with respect to the Mortgage Loans, including
the use of payment plans prior to a demand for acceleration and the
restructuring of Mortgage Loans in bankruptcy proceedings, may also
have an effect upon the payment patterns of particular Mortgage Loans
and thus the weighted average life of the Certificates.

Due-on-Sale and Due-on-Encumbrance Clauses

Acceleration of mortgage payments as a result of certain transfers
of or the creation of encumbrances upon underlying Mortgaged Property
is another factor affecting prepayment rates that may not be reflected
in the prepayment standards or models used in the relevant Prospectus
Supplement. A number of the Mortgage Loans comprising or underlying the
Assets may include "due-on-sale" clauses or "due-on-encumbrance"
clauses that allow the holder of the Mortgage Loans to demand payment
in full of the remaining principal balance of the Mortgage Loans upon
sale or certain other transfers of or the creation of encumbrances upon
the related Mortgaged Property. With respect to any Whole Loans, unless
otherwise provided in the related Prospectus Supplement, the Master
Servicer, on behalf of the Trust Fund, will be required to exercise (or
waive its right to exercise) any such right that the Trustee may have
as mortgagee to accelerate payment of the Whole Loan in a manner
consistent with the Servicing Standard. See "Certain Legal Aspects of
the Mortgage Loans and the Leases--Due-on-Sale and Due-on-Encumbrance"
and "Description of the Agreements--Due-on-Sale and Due-on-Encumbrance
Provisions."

THE DEPOSITOR

Morgan Stanley Capital I Inc., the Depositor, is a direct
wholly-owned subsidiary of Morgan Stanley Group Inc. and was
incorporated in the State of Delaware on January 28, 1985. The
principal executive offices of the Depositor are located at 1585
Broadway, 37th Floor, New York, New York 10036. Its telephone number is
(212) 761-4700.

The Depositor does not have, nor is it expected in the future to
have, any significant assets.

DESCRIPTION OF THE CERTIFICATES
General

The Certificates of each series (including any class of
Certificates not offered hereby) will represent the entire beneficial
ownership interest in the Trust Fund created pursuant to the related
Agreement. Each series of Certificates will consist of one or more
classes of Certificates that may (i) provide for the accrual of
interest thereon based on fixed, variable or adjustable rates; (ii) be
senior (collectively, "Senior Certificates") or subordinate
(collectively, "Subordinate Certificates") to one or more other classes
of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions
(collectively, "Stripped Principal Certificates"); (iv) be entitled to
interest distributions, with disproportionately low, nominal or no
principal distributions (collectively, "Stripped Interest
Certificates"); (v) provide for distributions of accrued interest
thereon commencing only following the occurrence of certain events,
such as the retirement of one or more other classes of Certificates of
such series (collectively, "Accrual Certificates"); (vi) provide for
payments of principal sequentially, based on specified payment
schedules, from only a portion of the Assets in such Trust Fund or
based on specified calculations, to the extent of available funds, in
each case as described in the related Prospectus Supplement; and/or
(vii) provide for distributions based on a combination of two or more
components thereof with one or more of the characteristics described in
this paragraph including a Stripped Principal Certificate component and
a Stripped Interest Certificate component. Any such classes may include
classes of Offered Certificates.

Each class of Offered Certificates of a series will be issued in
minimum denominations corresponding to the Certificate Balances or, in
case of Stripped Interest Certificates, notional amounts or percentage
interests specified in the related Prospectus Supplement. The transfer
of any Offered Certificates may be registered and such Certificates may
be exchanged without the payment of any service charge payable in
connection with such registration of transfer or exchange, but the
Depositor or the Trustee or any agent thereof may require payment of a
sum sufficient to cover any tax or other governmental charge. One or
more classes of Certificates of a series may be issued in definitive
form ("Definitive Certificates") or in book-entry form ("Book-Entry
Certificates"), as provided in the related Prospectus Supplement. See
"Risk Factors--Book-Entry Registration" and "Description of the
Certificates--Book-Entry Registration and Definitive Certificates."
Definitive Certificates will be exchangeable for other Certificates of
the same class and series of a like aggregate Certificate Balance,
notional amount or percentage interest but of different authorized
denominations. See "Risk Factors--Limited Liquidity" and "Limited
Assets."

Distributions

Distributions on the Certificates of each series will be made by
or on behalf of the Trustee on each Distribution Date as specified in
the related Prospectus Supplement from the Available Distribution
Amount for such series and such Distribution Date. Except as otherwise
specified in the related Prospectus Supplement, distributions (other
than the final distribution) will be made to the persons in whose names
the Certificates are registered at the close of business on the last
business day of the month preceding the month in which the Distribution
Date occurs (the "Record Date"), and the amount of each distribution
will be determined as of the close of business on the date specified in
the related Prospectus Supplement (the "Determination Date"). All
distributions with respect to each class of Certificates on each
Distribution Date will be allocated pro rata among the outstanding
Certificates in such class or by random selection, as described in the
related Prospectus Supplement or otherwise established by the related
Trustee. Payments will be made either by wire transfer in immediately
available funds to the account of a Certificateholder at a bank or
other entity having appropriate facilities therefor, if such
Certificateholder has so notified the Trustee or other person required
to make such payments no later than the date specified in the related
Prospectus Supplement (and, if so provided in the related Prospectus
Supplement, holds Certificates in the requisite amount specified
therein), or by check mailed to the address of the person entitled
thereto as it appears on the Certificate Register; provided, however,
that the final distribution in retirement of the Certificates (whether
Definitive Certificates or Book-Entry Certificates) will be made only
upon presentation and surrender of the Certificates at the location
specified in the notice to Certificateholders of such final
distribution.

Available Distribution Amount

All distributions on the Certificates of each series on each
Distribution Date will be made from the Available Distribution Amount
described below, in accordance with the terms described in the related
Prospectus Supplement. Unless provided otherwise in the related
Prospectus Supplement, the "Available Distribution Amount" for each
Distribution Date equals the sum of the following amounts:

(i) the total amount of all cash on deposit in the related
Certificate Account as of the corresponding Determination Date,
exclusive of:

(a) all scheduled payments of principal and interest collected but
due on a date subsequent to the related Due Period (unless the related
Prospectus Supplement provides otherwise, a "Due Period" with respect
to any Distribution Date will commence on the second day of the month
in which the immediately preceding Distribution Date occurs, or the day
after the Cut-off Date in the case of the first Due Period, and will
end on the first day of the month of the related Distribution Date),

(b) unless the related Prospectus Supplement provides otherwise,
all prepayments, together with related payments of the interest thereon
and related Prepayment Premiums, Liquidation Proceeds, Insurance
Proceeds and other unscheduled recoveries received subsequent to the
related Due Period, and

(c) all amounts in the Certificate Account that are due or
reimbursable to the Depositor, the Trustee, an Asset Seller, a
Sub-Servicer, a Special Servicer, the Master Servicer or any other
entity as specified in the related Prospectus Supplement or that are
payable in respect of certain expenses of the related Trust Fund;

(ii) if the related Prospectus Supplement so provides, interest or
investment income on amounts on deposit in the Certificate Account,
including any net amounts paid under any Cash Flow Agreements;

(iii) all advances made by a Master Servicer or any other entity as
specified in the related Prospectus Supplement with respect to such
Distribution Date;

(v) unless the related Prospectus Supplement provides otherwise, to
the extent not on deposit in the related Certificate Account as of the
corresponding Determination Date, any amounts collected under, from or
in respect of any Credit Support with respect to such Distribution
Date.

As described below, the entire Available Distribution Amount will
be distributed among the related Certificates (including any
Certificates not offered hereby) on each Distribution Date, and
accordingly will be released from the Trust Fund and will not be
available for any future distributions.

Distributions of Interest on the Certificates

Each class of Certificates (other than classes of Stripped
Principal Certificates that have no Pass-Through Rate) may have a
different Pass-Through Rate, which will be a fixed, variable or
adjustable rate at which interest will accrue on such class or a
component thereof (the "Pass-Through Rate"). The related Prospectus
Supplement will specify the Pass-Through Rate for each class or
component or, in the case of a variable or adjustable Pass-Through
Rate, the method for determining the Pass-Through Rate. Unless
otherwise specified in the related Prospectus Supplement, interest on
the Certificates will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.

Distributions of interest in respect of the Certificates of any
class will be made on each Distribution Date (other than any class of
Accrual Certificates, which will be entitled to distributions of
accrued interest commencing only on the Distribution Date, or under the
circumstances, specified in the related Prospectus Supplement, and any
class of Stripped Principal Certificates that are not entitled to any
distributions of interest) based on the Accrued Certificate Interest
for such class and such Distribution Date, subject to the sufficiency
of the portion of the Available Distribution Amount allocable to such
class on such Distribution Date. Prior to the time interest is
distributable on any class of Accrual Certificates, the amount of
Accrued Certificate Interest otherwise distributable on such class will
be added to the Certificate Balance thereof on each Distribution Date.
With respect to each class of Certificates and each Distribution Date
(other than certain classes of Stripped Interest Certificates),
"Accrued Certificate Interest" will be equal to interest accrued for a
specified period on the outstanding Certificate Balance thereof
immediately prior to the Distribution Date, at the applicable
Pass-Through Rate, reduced as described below. Unless otherwise
provided in the Prospectus Supplement, Accrued Certificate Interest on
Stripped Interest Certificates will be equal to interest accrued for a
specified period on the outstanding notional amount thereof immediately
prior to each Distribution Date, at the applicable Pass-Through Rate,
reduced as described below. The method of determining the notional
amount for any class of Stripped Interest Certificates will be
described in the related Prospectus Supplement. Reference to notional
amount is solely for convenience in certain calculations and does not
represent the right to receive any distributions of principal. Unless
otherwise provided in the related Prospectus Supplement, the Accrued
Certificate Interest on a series of Certificates will be reduced in the
event of prepayment interest shortfalls, which are shortfalls in
collections of interest for a full accrual period resulting from
prepayments prior to the due date in such accrual period on the
Mortgage Loans comprising or underlying the Mortgage Assets in the
Trust Fund for such series. The particular manner in which such
shortfalls are to be allocated among some or all of the classes of
Certificates of that series will be specified in the related Prospectus
Supplement. The related Prospectus Supplement will also describe the
extent to which the amount of Accrued Certificate Interest that is
otherwise distributable on (or, in the case of Accrual Certificates,
that may otherwise be added to the Certificate Balance of) a class of
Offered Certificates may be reduced as a result of any other
contingencies, including delinquencies, losses and deferred interest on
or in respect of the Mortgage Loans comprising or underlying the
Mortgage Assets in the related Trust Fund. Unless otherwise provided in
the related Prospectus Supplement, any reduction in the amount of
Accrued Certificate Interest otherwise distributable on a class of
Certificates by reason of the allocation to such class of a portion of
any deferred interest on the Mortgage Loans comprising or underlying
the Mortgage Assets in the related Trust Fund will result in a
corresponding increase in the Certificate Balance of such class. See
"Risk Factors--Average Life of Certificates; Prepayments; Yields" and
"Yield Considerations."

Distributions of Principal of the Certificates

The Certificates of each series, other than certain classes of
Stripped Interest Certificates, will have a "Certificate Balance"
which, at any time, will equal the then maximum amount that the holder
will be entitled to receive in respect of principal out of the future
cash flow on the Assets and other assets included in the related Trust
Fund. The outstanding
Certificate Balance of a Certificate will be reduced to the extent of
distributions of principal thereon from time to time and, if and to the
extent so provided in the related Prospectus Supplement, by the amount
of losses incurred in respect of the related Assets, may be increased
in respect of deferred interest on the related Mortgage Loans to the
extent provided in the related Prospectus Supplement and, in the case
of Accrual Certificates prior to the Distribution Date on which
distributions of interest are required to commence, will be increased
by any related Accrued Certificate Interest. Unless otherwise provided
in the related Prospectus Supplement, the initial aggregate Certificate
Balance of all classes of Certificates of a series will not be greater
than the outstanding aggregate principal balance of the related Assets
as of the applicable Cut-off Date. The initial aggregate Certificate
Balance of a series and each class thereof will be specified in the
related Prospectus Supplement. Unless otherwise provided in the related
Prospectus Supplement, distributions of principal will be made on each
Distribution Date to the class or classes of Certificates entitled
thereto in accordance with the provisions described in such Prospectus
Supplement until the Certificate Balance of such class has been reduced
to zero. Stripped Interest Certificates with no Certificate Balance are
not entitled to any distributions of principal.

Components

To the extent specified in the related Prospectus Supplement,
distribution on a class of Certificates may be based on a combination
of two or more different components as described under "--General"
above. To such extent, the descriptions set forth under
"--Distributions of Interests on the Certificates" and "--Distributions
of Principal of the Certificates" above also relate to components of
such a class of Certificates. In such case, reference in such sections
to Certificate Balance and Pass-Through Rate refer to the principal
balance, if any, of any such component and the Pass-Through Rate, if
any, on any such component, respectively.

Distributions on the Certificates of Prepayment Premiums or in Respect
of Equity Participations

If so provided in the related Prospectus Supplement, Prepayment
Premiums or payments in respect of Equity Participations that are
collected on the Mortgage Assets in the related Trust Fund will be
distributed on each Distribution Date to the class or classes of
Certificates entitled thereto in accordance with the provisions
described in such Prospectus Supplement.

Allocation of Losses and Shortfalls

If so provided in the Prospectus Supplement for a series of
Certificates consisting of one or more classes of Subordinate
Certificates, on any Distribution Date in respect of which losses or
shortfalls in collections on the Mortgage Assets have been incurred,
the amount of such losses or shortfalls will be borne first by a class
of Subordinate Certificates in the priority and manner and subject to
the limitations specified in such Prospectus Supplement. See
"Description of Credit Support" for a description of the types of
protection that may be included in a Trust Fund against losses and
shortfalls on Mortgage Assets comprising such Trust Fund.

Advances in Respect of Delinquencies

With respect to any series of Certificates evidencing an interest
in a Trust Fund, unless otherwise provided in the related Prospectus
Supplement, the Master Servicer or another entity described therein
will be required as part of its servicing responsibilities to advance
on or before each Distribution Date its own funds or funds held in the
Certificate Account that are not included in the Available Distribution
Amount for such Distribution Date, in an amount equal to the aggregate
of payments of principal (other than any balloon payments) and interest
(net of related servicing fees and Retained Interest) that were due on
the Whole Loans in such Trust Fund during the related Due Period and
were delinquent on the related Determination Date, subject to the
Master Servicer's (or another entity's) good faith determination that
such advances will be reimbursable from Related Proceeds (as defined
below). In the case of a series of Certificates that includes one or
more classes of Subordinate Certificates and if so provided in the
related Prospectus Supplement, the Master Servicer's (or another
entity's) advance obligation may be limited only to the portion of such
delinquencies necessary to make the required distributions on one or
more classes of Senior Certificates and/or may be subject to the Master
Servicer's (or another entity's) good faith determination that such
advances will be reimbursable not only from Related Proceeds but also
from collections on other Assets otherwise distributable on one or more
classes of such Subordinate Certificates. See "Description of Credit
Support."

Advances are intended to maintain a regular flow of scheduled
interest and principal payments to holders of the class or classes of
Certificates entitled thereto, rather than to guarantee or insure
against losses. Unless otherwise provided in the
related Prospectus Supplement, advances of the Master Servicer's (or
another entity's) funds will be reimbursable only out of related
recoveries on the Mortgage Loans (including amounts received under any
form of Credit Support) respecting which such advances were made (as to
any Mortgage Loan, "Related Proceeds") and, if so provided in the
Prospectus Supplement, out of any amounts otherwise distributable on
one or more classes of Subordinate Certificates of such series;
provided, however, that any such advance will be reimbursable from any
amounts in the Certificate Account prior to any distributions being
made on the Certificates to the extent that the Master Servicer (or
such other entity) shall determine in good faith that such advance (a
"Nonrecoverable Advance") is not ultimately recoverable from Related
Proceeds or, if applicable, from collections on other Assets otherwise
distributable on such Subordinate Certificates. If advances have been
made by the Master Servicer from excess funds in the Certificate
Account, the Master Servicer is required to replace such funds in the
Certificate Account on any future Distribution Date to the extent that
funds in the Certificate Account on such Distribution Date are less
than payments required to be made to Certificateholders on such date.
If so specified in the related Prospectus Supplement, the obligations
of the Master Servicer (or another entity) to make advances may be
secured by a cash advance reserve fund, a surety bond, a letter of
credit or another form of limited guaranty. If applicable, information
regarding the characteristics of, and the identity of any obligor on,
any such surety bond, will be set forth in the related Prospectus
Supplement.

If and to the extent so provided in the related Prospectus
Supplement, the Master Servicer (or another entity) will be entitled to
receive interest at the rate specified therein on its outstanding
advances and will be entitled to pay itself such interest periodically
from general collections on the Assets prior to any payment to
Certificateholders or as otherwise provided in the related Agreement
and described in such Prospectus Supplement.

The Prospectus Supplement for any series of Certificates
evidencing an interest in a Trust Fund that includes MBS will describe
any corresponding advancing obligation of any person in connection with
such MBS.

Reports to Certificateholders

Unless otherwise provided in the Prospectus Supplement, with each
distribution to holders of any class of Certificates of a series, the
Master Servicer or the Trustee, as provided in the related Prospectus
Supplement, will forward or cause to be forwarded to each such holder,
to the Depositor and to such other parties as may be specified in the
related Agreement, a statement setting forth, in each case to the
extent applicable and available:

(i) the amount of such distribution to holders of Certificates of
such class applied to reduce the Certificate Balance thereof;

(ii) the amount of such distribution to holders of Certificates of
such class allocable to Accrued Certificate Interest;

(iii) the amount of such distribution allocable to (a) Prepayment
Premiums and (b) payments on account of Equity Participations;

(iv) the amount of related servicing compensation received by a
Master Servicer (and, if payable directly out of the related Trust
Fund, by any Special Servicer and any Sub-Servicer) and such other
customary information as any such Master Servicer or the Trustee deems
necessary or desirable, or that a Certificateholder reasonably
requests, to enable Certificateholders to prepare their tax returns;

(v) the aggregate amount of advances included in such distribution,
and the aggregate amount of unreimbursed advances at the close of
business on such Distribution Date;

(vi) the aggregate principal balance of the Assets at the close of
business on such Distribution Date;

(vii) the number and aggregate principal balance of Whole Loans in
respect of which (a) one scheduled payment is delinquent, (b) two
scheduled payments are delinquent, (c) three or more scheduled payments
are delinquent and (d) foreclosure proceedings have been commenced;

(viii) with respect to each Whole Loan that is delinquent two or more
months, (a) the loan number thereof, (b) the unpaid balance thereof,
(c) whether the delinquency is in respect of any balloon payment, (d)
the aggregate amount of unreimbursed servicing expenses and
unreimbursed advances in respect thereof, (e) if applicable, the
aggregate amount of any interest accrued and payable on related
servicing expenses and related advances assuming such Mortgage Loan is
subsequently liquidated through foreclosure, (f) whether a notice of
acceleration has been sent to the mortgagor and, if so, the date of
such
notice, (g) whether foreclosure proceedings have been commenced and, if
so, the date so commenced and (h) if such Mortgage Loan is more than
three months delinquent and foreclosure has not been commenced, the
reason therefor;

(ix) with respect to any Whole Loan liquidated during the related Due
Period (other than by payment in full), (a) the loan number thereof,
(b) the manner in which it was liquidated and (c) the aggregate amount
of liquidation proceeds received;

(x) with respect to any Whole Loan liquidated during the related Due
Period, (a) the portion of such liquidation proceeds payable or
reimbursable to the Master Servicer (or any other entity) in respect of
such Mortgage Loan and (b) the amount of any loss to
Certificateholders;

(xi) with respect to each REO Property relating to a Whole Loan and
included in the Trust Fund as of the end of the related Due Period, (a)
the loan number of the related Mortgage Loan and (b) the date of
acquisition;

(xii) with respect to each REO Property relating to a Whole Loan and
included in the Trust Fund as of the end of the related Due Period, (a)
the book value, (b) the principal balance of the related Mortgage Loan
immediately following such Distribution Date (calculated as if such
Mortgage Loan were still outstanding taking into account certain
limited modifications to the terms thereof specified in the Agreement),
(c) the aggregate amount of unreimbursed servicing expenses and
unreimbursed advances in respect thereof and (d) if applicable, the
aggregate amount of interest accrued and payable on related servicing
expenses and related advances;

(xiii) with respect to any such REO Property sold during the related
Due Period (a) the loan number of the related Mortgage Loan, (b) the
aggregate amount of sale proceeds, (c) the portion of such sales
proceeds payable or reimbursable to the Master Servicer or a Special
Servicer in respect of such REO Property or the related Mortgage Loan
and (d) the amount of any loss to Certificateholders in respect of the
related Mortgage Loan;

(xiv) the aggregate Certificate Balance or notional amount, as the
case may be, of each class of Certificates (including any class of
Certificates not offered hereby) at the close of business on such
Distribution Date, separately identifying any reduction in such
Certificate Balance due to the allocation of any loss and increase in
the Certificate Balance of a class of Accrual Certificates in the event
that Accrued Certificate Interest has been added to such balance;

(xv) the aggregate amount of principal prepayments made during the
related Due Period;

(xvi) the amount deposited in the reserve fund, if any, on such
Distribution Date;

(xvii) the amount remaining in the reserve fund, if any, as of the
close of business on such Distribution Date;

(xviii) the aggregate unpaid Accrued Certificate Interest, if any, on
each class of Certificates at the close of business on such
Distribution Date;

(xix) in the case of Certificates with a variable Pass-Through Rate,
the Pass-Through Rate applicable to such Distribution Date, and, if
available, the immediately succeeding Distribution Date, as calculated
in accordance with the method specified in the related Prospectus
Supplement;

(xx) in the case of Certificates with an adjustable Pass-Through
Rate, for statements to be distributed in any month in which an
adjustment date occurs, the adjustable Pass-Through Rate applicable to
such Distribution Date and the immediately succeeding Distribution Date
as calculated in accordance with the method specified in the related
Prospectus Supplement;

(xxi) as to any series which includes Credit Support, the amount of
coverage of each instrument of Credit Support included therein as of
the close of business on such Distribution Date; and

(xxii) the aggregate amount of payments by the mortgagors of (a)
default interest, (b) late charges and (c) assumption and modification
fees collected during the related Due Period.

In the case of information furnished pursuant to subclauses
(i)-(iv) above, the amounts shall be expressed as a dollar amount per
minimum denomination of Certificates or for such other specified
portion thereof. In addition, in the case of information furnished
pursuant to subclauses (i), (ii), (xiv), (xviii) and (xix) above, such
amounts shall also be provided with
respect to each component, if any, of a class of Certificates. The
Master Servicer or the Trustee, as specified in the related Prospectus
Supplement, will forward or cause to be forwarded to each holder, to
the Depositor and to such other parties as may be specified in the
Agreement, a copy of any statements or reports received by the Master
Servicer or the Trustee, as applicable, with respect to any MBS. The
Prospectus Supplement for each series of Offered Certificates will
describe any additional information to be included in reports to the
holders of such Certificates.

Within a reasonable period of time after the end of each calendar
year, the Master Servicer or the Trustee, as provided in the related
Prospectus Supplement, shall furnish to each person who at any time
during the calendar year was a holder of a Certificate a statement
containing the information set forth in subclauses (i)-(iv) above,
aggregated for such calendar year or the applicable portion thereof
during which such person was a Certificateholder. Such obligation of
the Master Servicer or the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall
be provided by the Master Servicer or the Trustee pursuant to any
requirements of the Code as are from time to time in force. See
"Description of the Certificates--Book-Entry Registration and
Definitive Certificates."

Termination

The obligations created by the Agreement for each series of
Certificates will terminate upon the payment to Certificateholders of
that series of all amounts held in the Certificate Account or by the
Master Servicer, if any, or the Trustee and required to be paid to them
pursuant to such Agreement following the earlier of (i) the final
payment or other liquidation of the last Asset subject thereto or the
disposition of all property acquired upon foreclosure of any Whole Loan
subject thereto and (ii) the purchase of all of the assets of the Trust
Fund by the party entitled to effect such termination, under the
circumstances and in the manner set forth in the related Prospectus
Supplement. In no event, however, will the trust created by the
Agreement continue beyond the date specified in the related Prospectus
Supplement. Written notice of termination of the Agreement will be
given to each Certificateholder, and the final distribution will be
made only upon presentation and surrender of the Certificates at the
location to be specified in the notice of termination.

If so specified in the related Prospectus Supplement, a series of
Certificates may be subject to optional early termination through the
repurchase of the assets in the related Trust Fund by the party
specified therein, under the circumstances and in the manner set forth
therein. If so provided in the related Prospectus Supplement, upon the
reduction of the Certificate Balance of a specified class or classes of
Certificates by a specified percentage or amount, the party specified
therein will solicit bids for the purchase of all assets of the Trust
Fund, or of a sufficient portion of such assets to retire such class or
classes or purchase such class or classes at a price set forth in the
related Prospectus Supplement, in each case, under the circumstances
and in the manner set forth therein.

Book-Entry Registration and Definitive Certificates

If so provided in the related Prospectus Supplement, one or more
classes of the Offered Certificates of any series will be issued as
Book-Entry Certificates, and each such class will be represented by one
or more single Certificates registered in the name of a nominee for the
depository, The Depository Trust Company ("DTC").

DTC is a limited-purpose trust company organized under the laws of
the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the Uniform Commercial
Code ("UCC") and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as
amended. DTC was created to hold securities for its participating
organizations ("Participants") and facilitate the clearance and
settlement of securities transactions between Participants through
electronic book-entry changes in their accounts, thereby eliminating
the need for physical movement of certificates. Participants include
Morgan Stanley & Co. Incorporated, securities brokers and dealers,
banks, trust companies and clearing corporations and may include
certain other organizations. Indirect access to the DTC system also is
available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants").
Unless otherwise provided in the related Prospectus Supplement,
investors that are not Participants or Indirect Participants but desire
to purchase, sell or otherwise transfer ownership of, or other
interests in, Book-Entry Certificates may do so only through
Participants and Indirect Participants. In addition, such investors
("Certificate Owners") will receive all distributions on the Book-Entry
Certificates through DTC and its Participants. Under a book-entry
format, Certificate Owners will receive payments after the related
Distribution Date because, while payments are required to be forwarded
to Cede & Co., as nominee for DTC ("Cede"), on each such date, DTC will
forward such payments to its Participants which thereafter will be
required to forward them to Indirect Participants or Certificate
Owners. Unless otherwise provided in the related Prospectus Supplement,
the only
"Certificateholder" (as such term is used in the Agreement) will be
Cede, as nominee of DTC, and the Certificate Owners will not be
recognized by the Trustee as Certificateholders under the Agreement.
Certificate Owners will be permitted to exercise the rights of
Certificateholders under the related Agreement only indirectly through
the Participants who in turn will exercise their rights through DTC.

Under the rules, regulations and procedures creating and affecting
DTC and its operations, DTC is required to make book-entry transfers
among Participants on whose behalf it acts with respect to the
Book-Entry Certificates and is required to receive and transmit
distributions of principal of and interest on the Book-Entry
Certificates. Participants and Indirect Participants with which
Certificate Owners have accounts with respect to the Book-Entry
Certificates similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective
Certificate Owners.

Because DTC can act only on behalf of Participants, who in turn
act on behalf of Indirect Participants and certain banks, the ability
of a Certificate Owner to pledge its interest in the Book-Entry
Certificates to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of its interest in the
Book-Entry Certificates, may be limited due to the lack of a physical
certificate evidencing such interest.

DTC has advised the Depositor that it will take any action
permitted to be taken by a Certificateholder under an Agreement only at
the direction of one or more Participants to whose account with DTC
interests in the Book-Entry Certificates are credited.

Unless otherwise specified in the related Prospectus Supplement,
Certificates initially issued in book-entry form will be issued in
fully registered, certificated form to Certificate Owners or their
nominees ("Definitive Certificates"), rather than to DTC or its nominee
only if (i) the Depositor advises the Trustee in writing that DTC is no
longer willing or able to properly discharge its responsibilities as
depository with respect to the Certificates and the Depositor is unable
to locate a qualified successor or (ii) the Depositor, at its option,
elects to terminate the book-entry system through DTC.

Upon the occurrence of either of the events described in the
immediately preceding paragraph, DTC is required to notify all
Participants of the availability through DTC of Definitive Certificates
for the Certificate Owners. Upon surrender by DTC of the certificate or
certificates representing the Book-Entry Certificates, together with
instructions for reregistration, the Trustee will issue (or cause to be
issued) to the Certificate Owners identified in such instructions the
Definitive Certificates to which they are entitled, and thereafter the
Trustee will recognize the holders of such Definitive Certificates as
Certificateholders under the Agreement.

DESCRIPTION OF THE AGREEMENTS

The Certificates of each series evidencing interests in a Trust
Fund including Whole Loans will be issued pursuant to a Pooling and
Servicing Agreement among the Depositor, a Master Servicer, any Special
Servicer appointed as of the date of the Pooling and Servicing
Agreement and the Trustee. The Certificates of each series evidencing
interests in a Trust Fund not including Whole Loans will be issued
pursuant to a Trust Agreement between the Depositor and a Trustee. Any
Master Servicer, any such Special Servicer and the Trustee with respect
to any series of Certificates will be named in the related Prospectus
Supplement. In lieu of appointing a Master Servicer, a servicer may be
appointed pursuant to the Pooling and Servicing Agreement for any Trust
Fund. Such servicer will service all or a significant number of Whole
Loans directly without a Sub-Servicer. Unless otherwise specified in
the related Prospectus Supplement, the obligations of any such servicer
shall be commensurate with those of the Master Servicer described
herein. References in this prospectus to Master Servicer and its rights
and obligations, unless otherwise specified in the related Prospectus
Supplement, shall be deemed to also be references to any servicer
servicing Whole Loans directly. A manager or administrator may be
appointed pursuant to the Trust Agreement for any Trust Fund to
administer such Trust Fund. The provisions of each Agreement will vary
depending upon the nature of the Certificates to be issued thereunder
and the nature of the related Trust Fund. A form of a Pooling and
Servicing Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. Any Trust Agreement will
generally conform to the form of Pooling and Servicing Agreement filed
herewith, but will not contain provisions with respect to the servicing
and maintenance of Whole Loans. The following summaries describe
certain provisions that may appear in each Agreement. The Prospectus
Supplement for a series of Certificates will describe any provision of
the Agreement relating to such series that materially differs from the
description thereof contained in this Prospectus. The summaries do not
purport to be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Agreement for
each Trust Fund and the description of such provisions in the related
Prospectus Supplement. As used herein with respect to any series, the
term "Certificate" refers to all of the Certificates of that series,
whether or not offered hereby and by the related Prospectus Supplement,
unless the context otherwise requires. The Depositor will provide
a copy of the Agreement (without exhibits) relating to any series of
Certificates without charge upon written request of a holder of a
Certificate of such series addressed to Morgan Stanley Capital I Inc.,
c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, 37th Floor, New
York, New York 10036, Attention: John E. Westerfield.

Assignment of Assets; Repurchases

At the time of issuance of any series of Certificates, the
Depositor will assign (or cause to be assigned) to the designated
Trustee the Assets to be included in the related Trust Fund, together
with all principal and interest to be received on or with respect to
such Assets after the Cut-off Date, other than principal and interest
due on or before the Cut-off Date and other than any Retained Interest.
The Trustee will, concurrently with such assignment, deliver the
Certificates to the Depositor in exchange for the Assets and the other
assets comprising the Trust Fund for such series. Each Mortgage Asset
will be identified in a schedule appearing as an exhibit to the related
Agreement. Unless otherwise provided in the related Prospectus
Supplement, such schedule will include detailed information (i) in
respect of each Whole Loan included in the related Trust Fund,
including without limitation, the address of the related Mortgaged
Property and type of such property, the Mortgage Rate and, if
applicable, the applicable index, margin, adjustment date and any rate
cap information, the original and remaining term to maturity, the
original and outstanding principal balance and balloon payment, if any,
the Value, Loan-to-Value Ratio and the Debt Service Coverage Ratio as
of the date indicated and payment and prepayment provisions, if
applicable, and (ii) in respect of each MBS included in the related
Trust Fund, including without limitation, the MBS Issuer, MBS Servicer
and MBS Trustee, the pass-through or bond rate or formula for
determining such rate, the issue date and original and remaining term
to maturity, if applicable, the original and outstanding principal
amount and payment provisions, if applicable.

With respect to each Whole Loan, the Depositor will deliver or
cause to be delivered to the Trustee (or to the custodian hereinafter
referred to) certain loan documents, which unless otherwise specified
in the related Prospectus Supplement will include the original Mortgage
Note endorsed, without recourse, in blank or to the order of the
Trustee, the original Mortgage (or a certified copy thereof) with
evidence of recording indicated thereon and an assignment of the
Mortgage to the Trustee in recordable form. Notwithstanding the
foregoing, a Trust Fund may include Mortgage Loans where the original
Mortgage Note is not delivered to the Trustee if the Depositor delivers
to the Trustee or the custodian a copy or a duplicate original of the
Mortgage Note, together with an affidavit certifying that the original
thereof has been lost or destroyed. With respect to such Mortgage
Loans, the Trustee (or its nominee) may not be able to enforce the
Mortgage Note against the related borrower. Unless otherwise specified
in the related Prospectus Supplement, the Asset Seller will be required
to agree to repurchase, or substitute for, each such Mortgage Loan that
is subsequently in default if the enforcement thereof or of the related
Mortgage is materially adversely affected by the absence of the
original Mortgage Note. Unless otherwise provided in the related
Prospectus Supplement, the related Agreement will require the Depositor
or another party specified therein to promptly cause each such
assignment of Mortgage to be recorded in the appropriate public office
for real property records, except in the State of California or in
other states where, in the opinion of counsel acceptable to the
Trustee, such recording is not required to protect the Trustee's
interest in the related Whole Loan against the claim of any subsequent
transferee or any successor to or creditor of the Depositor, the Master
Servicer, the relevant Asset Seller or any other prior holder of the
Whole Loan.

The Trustee (or a custodian) will review such Whole Loan documents
within a specified period of days after receipt thereof, and the
Trustee (or a custodian) will hold such documents in trust for the
benefit of the Certificateholders. Unless otherwise specified in the
related Prospectus Supplement, if any such document is found to be
missing or defective in any material respect, the Trustee (or such
custodian) shall immediately notify the Master Servicer and the
Depositor, and the Master Servicer shall immediately notify the
relevant Asset Seller. If the Asset Seller cannot cure the omission or
defect within a specified number of days after receipt of such notice,
then unless otherwise specified in the related Prospectus Supplement,
the Asset Seller will be obligated, within a specified number of days
of receipt of such notice, to repurchase the related Whole Loan from
the Trustee at the Purchase Price or substitute for such Mortgage Loan.
There can be no assurance that an Asset Seller will fulfill this
repurchase or substitution obligation, and neither the Master Servicer
nor the Depositor will be obligated to repurchase or substitute for
such Mortgage Loan if the Asset Seller defaults on its obligation.
Unless otherwise specified in the related Prospectus Supplement, this
repurchase or substitution obligation constitutes the sole remedy
available to the Certificateholders or the Trustee for omission of, or
a material defect in, a constituent document. To the extent specified
in the related Prospectus Supplement, in lieu of curing any omission or
defect in the Asset or repurchasing or substituting for such Asset, the
Asset Seller may agree to cover any losses suffered by the Trust Fund
as a result of such breach or defect.

If so provided in the related Prospectus Supplement, the Depositor
will, as to some or all of the Mortgage Loans, assign or cause to
be assigned to the Trustee the related Lease Assignments. In
certain cases, the Trustee, or Master Servicer, as applicable, may
collect all moneys under the related Leases and distribute
amounts, if any, required under the Lease for the payment of
maintenance, insurance and taxes, to the extent specified in the
related Lease agreement. The Trustee, or if so specified in the
Prospectus Supplement, the Master Servicer, as agent for the
Trustee, may hold the Lease in trust for the benefit of the
Certificateholders.

With respect to each Government Security or MBS in certificated
form, the Depositor will deliver or cause to be delivered to the
Trustee (or the custodian) the original certificate or other definitive
evidence of such Government Security or MBS, as applicable, together
with bond power or other instruments, certifications or documents
required to transfer fully such Government Security or MBS, as
applicable, to the Trustee for the benefit of the Certificateholders.
With respect to each Government Security or MBS in uncertificated or
book-entry form or held through a "clearing corporation" within the
meaning of the UCC, the Depositor and the Trustee will cause such
Government Security or MBS to be registered directly or on the books of
such clearing corporation or of a financial intermediary in the name of
the Trustee for the benefit of the Certificateholders. Unless otherwise
provided in the related Prospectus Supplement, the related Agreement
will require that either the Depositor or the Trustee promptly cause
any MBS and Government Securities in certificated form not registered
in the name of the Trustee to be re-registered, with the applicable
persons, in the name of the Trustee.

Representations and Warranties; Repurchases

Unless otherwise provided in the related Prospectus Supplement the
Depositor will, with respect to each Whole Loan, make or assign certain
representations and warranties, as of a specified date (the person
making such representations and warranties, the "Warrantying Party")
covering, by way of example, the following types of matters: (i) the
accuracy of the information set forth for such Whole Loan on the
schedule of Assets appearing as an exhibit to the related Agreement;
(ii) the existence of title insurance insuring the lien priority of the
Whole Loan; (iii) the authority of the Warrantying Party to sell the
Whole Loan; (iv) the payment status of the Whole Loan and the status of
payments of taxes, assessments and other charges affecting the related
Mortgaged Property; (v) the existence of customary provisions in the
related Mortgage Note and Mortgage to permit realization against the
Mortgaged Property of the benefit of the security of the Mortgage; and
(vi) the existence of hazard and extended perils insurance coverage on
the Mortgaged Property.

Any Warrantying Party, if other than the Depositor, shall be an
Asset Seller or an affiliate thereof or such other person acceptable to
the Depositor and shall be identified in the related Prospectus
Supplement.

Representations and warranties made in respect of a Whole Loan may
have been made as of a date prior to the applicable Cut-off Date. A
substantial period of time may have elapsed between such date and the
date of initial issuance of the related series of Certificates
evidencing an interest in such Whole Loan. Unless otherwise specified
in the related Prospectus Supplement, in the event of a breach of any
such representation or warranty, the Warrantying Party will be
obligated to reimburse the Trust Fund for losses caused by any such
breach or either cure such breach or repurchase or replace the affected
Whole Loan as described below. Since the representations and warranties
may not address events that may occur following the date as of which
they were made, the Warrantying Party will have a reimbursement, cure,
repurchase or substitution obligation in connection with a breach of
such a representation and warranty only if the relevant event that
causes such breach occurs prior to such date. Such party would have no
such obligations if the relevant event that causes such breach occurs
after such date.

Unless otherwise provided in the related Prospectus Supplement,
each Agreement will provide that the Master Servicer and/or Trustee
will be required to notify promptly the relevant Warrantying Party of
any breach of any representation or warranty made by it in respect of a
Whole Loan that materially and adversely affects the value of such
Whole Loan or the interests therein of the Certificateholders. If such
Warrantying Party cannot cure such breach within a specified period
following the date on which such party was notified of such breach,
then such Warrantying Party will be obligated to repurchase such Whole
Loan from the Trustee within a specified period from the date on which
the Warrantying Party was notified of such breach, at the Purchase
Price therefor. As to any Whole Loan, unless otherwise specified in the
related Prospectus Supplement, the "Purchase Price" is equal to the sum
of the unpaid principal balance thereof, plus unpaid accrued interest
thereon at the Mortgage Rate from the date as to which interest was
last paid to the due date in the Due Period in which the relevant
purchase is to occur, plus certain servicing expenses that are
reimbursable to the Master Servicer. If so provided in the Prospectus
Supplement for a series, a Warrantying Party, rather than repurchase a
Whole Loan as to which a breach has occurred, will have the option,
within a specified period after initial issuance of such series of
Certificates, to
cause the removal of such Whole Loan from the Trust Fund and substitute
in its place one or more other Whole Loans, in accordance with the
standards described in the related Prospectus Supplement. If so
provided in the Prospectus Supplement for a series, a Warrantying
Party, rather than repurchase or substitute a Whole Loan as to which a
breach has occurred, will have the option to reimburse the Trust Fund
or the Certificateholders for any losses caused by such breach. Unless
otherwise specified in the related Prospectus Supplement, this
reimbursement, repurchase or substitution obligation will constitute
the sole remedy available to holders of Certificates or the Trustee for
a breach of representation by a Warrantying Party.

Neither the Depositor (except to the extent that it is the
Warrantying Party) nor the Master Servicer will be obligated to
purchase or substitute for a Whole Loan if a Warrantying Party defaults
on its obligation to do so, and no assurance can be given that
Warrantying Parties will carry out such obligations with respect to
Whole Loans.

Unless otherwise provided in the related Prospectus Supplement the
Warrantying Party will, with respect to a Trust Fund that includes
Government Securities or MBS, make or assign certain representations or
warranties, as of a specified date, with respect to such Government
Securities or MBS, covering (i) the accuracy of the information set
forth therefor on the schedule of Assets appearing as an exhibit to the
related Agreement and (ii) the authority of the Warrantying Party to
sell such Assets. The related Prospectus Supplement will describe the
remedies for a breach thereof.

A Master Servicer will make certain representations and warranties
regarding its authority to enter into, and its ability to perform its
obligations under, the related Agreement. A breach of any such
representation of the Master Servicer which materially and adversely
affects the interests of the Certificateholders and which continues
unremedied for thirty days after the giving of written notice of such
breach to the Master Servicer by the Trustee or the Depositor, or to
the Master Servicer, the Depositor and the Trustee by the holders of
Certificates evidencing not less than 25% of the Voting Rights (unless
otherwise specified in the related Prospectus Supplement), will
constitute an Event of Default under such Pooling and Servicing
Agreement. See "Events of Default" and "Rights Upon Event of Default."

Certificate Account and Other Collection Accounts

General

The Master Servicer and/or the Trustee will, as to each Trust
Fund, establish and maintain or cause to be established and maintained
one or more separate accounts for the collection of payments on the
related Assets (collectively, the "Certificate Account"), which must be
either (i) an account or accounts the deposits in which are insured by
the Bank Insurance Fund or the Savings Association Insurance Fund of
the Federal Deposit Insurance Corporation ("FDIC") (to the limits
established by the FDIC) and the uninsured deposits in which are
otherwise secured such that the Certificateholders have a claim with
respect to the funds in the Certificate Account or a perfected first
priority security interest against any collateral securing such funds
that is superior to the claims of any other depositors or general
creditors of the institution with which the Certificate Account is
maintained or (ii) otherwise maintained with a bank or trust company,
and in a manner, satisfactory to the Rating Agency or Agencies rating
any class of Certificates of such series. The collateral eligible to
secure amounts in the Certificate Account is limited to United States
government securities and other investment grade obligations specified
in the Agreement ("Permitted Investments"). A Certificate Account may
be maintained as an interest bearing or a non-interest bearing account
and the funds held therein may be invested pending each succeeding
Distribution Date in certain short-term Permitted Investments. Unless
otherwise provided in the related Prospectus Supplement, any interest
or other income earned on funds in the Certificate Account will be paid
to a Master Servicer or its designee as additional servicing
compensation. The Certificate Account may be maintained with an
institution that is an affiliate of the Master Servicer, if applicable,
provided that such institution meets the standards imposed by the
Rating Agency or Agencies. If permitted by the Rating Agency or
Agencies and so specified in the related Prospectus Supplement, a
Certificate Account may contain funds relating to more than one series
of mortgage pass-through certificates and may contain other funds
respecting payments on mortgage loans belonging to the Master Servicer
or serviced or master serviced by it on behalf of others.

Deposits

A Master Servicer or the Trustee will deposit or cause to be
deposited in the Certificate Account for one or more Trust Funds on a
daily basis, unless otherwise provided in the related Agreement, the
following payments and collections received, or advances made, by the
Master Servicer or the Trustee or on its behalf subsequent to the
Cut-off Date (other than payments due on or before the Cut-off Date,
and exclusive of any amounts representing a Retained Interest):

(i) all payments on account of principal, including principal
prepayments, on the Assets;

(ii) all payments on account of interest on the Assets, including any
default interest collected, in each case net of any portion thereof
retained by a Master Servicer, a Sub-Servicer or a Special Servicer as
its servicing compensation and net of any Retained Interest;

(iii) all proceeds of the hazard, business interruption and general
liability insurance policies to be maintained in respect of each
Mortgaged Property securing a Whole Loan in the Trust Fund (to the
extent such proceeds are not applied to the restoration of the property
or released to the mortgagor in accordance with the normal servicing
procedures of a Master Servicer or the related Sub-Servicer, subject to
the terms and conditions of the related Mortgage and Mortgage Note) and
all proceeds of rental interruption policies, if any, insuring against
losses arising from the failure of Lessees under a Lease to make timely
rental payments because of certain casualty events (collectively,
"Insurance Proceeds") and all other amounts received and retained in
connection with the liquidation of defaulted Mortgage Loans in the
Trust Fund, by foreclosure or otherwise ("Liquidation Proceeds"),
together with the net proceeds on a monthly basis with respect to any
Mortgaged Properties acquired for the benefit of Certificateholders by
foreclosure or by deed in lieu of foreclosure or otherwise;

(iv) any amounts paid under any instrument or drawn from any fund
that constitutes Credit Support for the related series of Certificates
as described under "Description of Credit Support";

(v) any advances made as described under "Description of the
Certificates--Advances in Respect of Delinquencies";

(vi) any amounts representing Prepayment Premiums;

(vii) any amounts paid under any Cash Flow Agreement, as described
under "Description of the Trust Funds--Cash Flow Agreements";

(viii) all proceeds of any Asset or, with respect to a Whole Loan,
property acquired in respect thereof purchased by the Depositor, any
Asset Seller or any other specified person as described under
"Assignment of Assets; Repurchases" and "Representations and
Warranties; Repurchases," all proceeds of any defaulted Mortgage Loan
purchased as described under "Realization Upon Defaulted Whole Loans,"
and all proceeds of any Asset purchased as described under "Description
of the Certificates Termination" (also, "Liquidation Proceeds");

(ix) any amounts paid by a Master Servicer to cover certain interest
shortfalls arising out of the prepayment of Whole Loans in the Trust
Fund as described under "Description of the Agreements Retained
Interest; Servicing Compensation and Payment of Expenses";

(x) to the extent that any such item does not constitute additional
servicing compensation to a Master Servicer, any payments on account of
modification or assumption fees, late payment charges, Prepayment
Premiums or Equity Participations on the Mortgage Assets; (xi) all
payments required to be deposited in the Certificate Account with
respect to any deductible clause in any blanket insurance policy
described under "Hazard Insurance Policies";

(xii) any amount required to be deposited by a Master Servicer or the
Trustee in connection with losses realized on investments for the
benefit of the Master Servicer or the Trustee, as the case may be, of
funds held in the Certificate Account; and

(xiii) any other amounts required to be deposited in the Certificate
Account as provided in the related Agreement and described in the
related Prospectus Supplement.

Withdrawals

A Master Servicer or the Trustee may, from time to time, unless
otherwise provided in the related Agreement and described in the
related Prospectus Supplement, make withdrawals from the Certificate
Account for each Trust Fund for any of the following purposes:

(i) to make distributions to the Certificateholders on each
Distribution Date;

(ii) to reimburse a Master Servicer for unreimbursed amounts advanced
as described under "Description of the Certificates Advances in Respect
of Delinquencies," such reimbursement to be made out of amounts
received which were identified and applied by the Master Servicer as
late collections of interest (net of related servicing fees and
Retained Interest) on and principal of the particular Whole Loans with
respect to which the advances were made or out of amounts drawn under
any form of Credit Support with respect to such Whole Loans;

(iii) to reimburse a Master Servicer for unpaid servicing fees earned
and certain unreimbursed servicing expenses incurred with respect to
Whole Loans and properties acquired in respect thereof, such
reimbursement to be made out of amounts that represent Liquidation
Proceeds and Insurance Proceeds collected on the particular Whole Loans
and properties, and net income collected on the particular properties,
with respect to which such fees were earned or such expenses were
incurred or out of amounts drawn under any form of Credit Support with
respect to such Whole Loans and properties;

(iv) to reimburse a Master Servicer for any advances described in
clause (ii) above and any servicing expenses described in clause (iii)
above which, in the Master Servicer's good faith judgment, will not be
recoverable from the amounts described in clauses (ii) and (iii),
respectively, such reimbursement to be made from amounts collected on
other Assets or, if and to the extent so provided by the related
Agreement and described in the related Prospectus Supplement, just from
that portion of amounts collected on other Assets that is otherwise
distributable on one or more classes of Subordinate Certificates, if
any, remain outstanding, and otherwise any outstanding class of
Certificates, of the related series;

(v) if and to the extent described in the related Prospectus
Supplement, to pay a Master Servicer interest accrued on the advances
described in clause (ii) above and the servicing expenses described in
clause (iii) above while such remain outstanding and unreimbursed;

(vi) to pay for costs and expenses incurred by the Trust Fund for
environmental site assessments with respect to, and for containment,
clean-up or remediation of hazardous wastes, substances and materials
on, Mortgaged Properties securing defaulted Whole Loans as described
under "Realization Upon Defaulted Whole Loans";

(vii) to reimburse a Master Servicer, the Depositor, or any of their
respective directors, officers, employees and agents, as the case may
be, for certain expenses, costs and liabilities incurred thereby, as
and to the extent described under "Certain Matters Regarding a Master
Servicer and the Depositor";

(viii) if and to the extent described in the related Prospectus
Supplement, to pay (or to transfer to a separate account for purposes
of escrowing for the payment of) the Trustee's fees;

(ix) to reimburse the Trustee or any of its directors, officers,
employees and agents, as the case may be, for certain expenses, costs
and liabilities incurred thereby, as and to the extent described under
"Certain Matters Regarding the Trustee";

(x) unless otherwise provided in the related Prospectus Supplement,
to pay a Master Servicer, as additional servicing compensation,
interest and investment income earned in respect of amounts held in the
Certificate Account;

(xi) to pay the person entitled thereto any amounts deposited in the
Certificate Account that were identified and applied by the Master
Servicer as recoveries of Retained Interest;

(xii) to pay for costs reasonably incurred in connection with the
proper operation, management and maintenance of any Mortgaged Property
acquired for the benefit of Certificateholders by foreclosure or by
deed in lieu of foreclosure or otherwise, such payments to be made out
of income received on such property;

(xiii) if one or more elections have been made to treat the Trust
Fund or designated portions thereof as a REMIC, to pay any federal,
state or local taxes imposed on the Trust Fund or its assets or
transactions, as and to the extent described under "Certain Federal
Income Tax Consequences--REMICS--Prohibited Transactions Tax and Other
Taxes";

(xiv) to pay for the cost of an independent appraiser or other expert
in real estate matters retained to determine a fair sale price for a
defaulted Whole Loan or a property acquired in respect thereof in
connection with the liquidation of such Whole Loan or property;

(xv) to pay for the cost of various opinions of counsel obtained
pursuant to the related Agreement for the benefit of
Certificateholders;

(xvi) to pay for the costs of recording the related Agreement if such
recordation materially and beneficially affects the interests of
Certificateholders, provided that such payment shall not constitute a
waiver with respect to the obligation of the Warrantying Party to
remedy any breach of representation or warranty under the Agreement;

(xvii) to pay the person entitled thereto any amounts deposited in
the Certificate Account in error, including amounts received on any
Asset after its removal from the Trust Fund whether by reason of
purchase or substitution as contemplated by "Assignment of Assets;
Repurchase" and "Representations and Warranties; Repurchases" or
otherwise;

(xviii) to make any other withdrawals permitted by the related
Agreement and described in the related Prospectus Supplement; and

(xix) to clear and terminate the Certificate Account at the
termination of the Trust Fund.

Other Collection Accounts

Notwithstanding the foregoing, if so specified in the related
Prospectus Supplement, the Agreement for any series of Certificates may
provide for the establishment and maintenance of a separate collection
account into which the Master Servicer or any related Sub-Servicer or
Special Servicer will deposit on a daily basis the amounts described
under "--Deposits" above for one or more series of Certificates. Any
amounts on deposit in any such collection account will be withdrawn
therefrom and deposited into the appropriate Certificate Account by a
time specified in the related Prospectus Supplement. To the extent
specified in the related Prospectus Supplement, any amounts which could
be withdrawn from the Certificate Account as described under
"--Withdrawals" above, may also be withdrawn from any such collection
account. The Prospectus Supplement will set forth any restrictions with
respect to any such collection account, including investment
restrictions and any restrictions with respect to financial
institutions with which any such collection account may be maintained.

Collection and Other Servicing Procedures

The Master Servicer, directly or through Sub-Servicers, is
required to make reasonable efforts to collect all scheduled payments
under the Whole Loans and will follow or cause to be followed such
collection procedures as it would follow with respect to mortgage loans
that are comparable to the Whole Loans and held for its own account,
provided such procedures are consistent with (i) the terms of the
related Agreement and any related hazard, business interruption, rental
interruption or general liability insurance policy or instrument of
Credit Support included in the related Trust Fund described herein or
under "Description of Credit Support," (ii) applicable law and (iii)
the general servicing standard specified in the related Prospectus
Supplement or, if no such standard is so specified, its normal
servicing practices (in either case, the "Servicing Standard"). In
connection therewith, the Master Servicer will be permitted in its
discretion to waive any late payment charge or penalty interest in
respect of a late Whole Loan payment.

Each Master Servicer will also be required to perform other
customary functions of a servicer of comparable loans, including
maintaining (or causing the mortgagor or Lessee on each Mortgage or
Lease to maintain) hazard, business interruption and general liability
insurance policies (and, if applicable, rental interruption policies)
as described herein and in any related Prospectus Supplement, and
filing and settling claims thereunder; maintaining escrow or
impoundment accounts of mortgagors for payment of taxes, insurance and
other items required to be paid by any mortgagor pursuant to the Whole
Loan; processing assumptions or substitutions in those cases where the
Master Servicer has determined not to enforce any applicable
due-on-sale clause; attempting to cure delinquencies; supervising
foreclosures; inspecting and managing Mortgaged Properties under
certain circumstances; and maintaining accounting records relating to
the Whole Loans. Unless otherwise specified in the related Prospectus
Supplement, the Master Servicer will be responsible for filing and
settling claims in respect of particular Whole Loans under any
applicable instrument of Credit Support. See "Description of Credit
Support."

The Master Servicer may agree to modify, waive or amend any term
of any Whole Loan in a manner consistent with the Servicing Standard so
long as the modification, waiver or amendment will not (i) affect the
amount or timing of any scheduled payments of principal or interest on
the Whole Loan or (ii) in its judgment, materially impair the security
for the Whole Loan or reduce the likelihood of timely payment of
amounts due thereon. The Master Servicer also may agree to any
modification, waiver or amendment that would so affect or impair the
payments on, or the security for, a Whole Loan if,
unless otherwise provided in the related Prospectus Supplement, (i) in
its judgment, a material default on the Whole Loan has occurred or a
payment default is imminent and (ii) in its judgment, such
modification, waiver or amendment is reasonably likely to produce a
greater recovery with respect to the Whole Loan on a present value
basis than would liquidation. The Master Servicer is required to notify
the Trustee in the event of any modification, waiver or amendment of
any Whole Loan.

Sub-Servicers

A Master Servicer may delegate its servicing obligations in
respect of the Whole Loans to third-party servicers (each, a
"Sub-Servicer"), but such Master Servicer will remain obligated under
the related Agreement. Each sub-servicing agreement between a Master
Servicer and a Sub-Servicer (a "Sub-Servicing Agreement") must be
consistent with the terms of the related Agreement and must provide
that, if for any reason the Master Servicer for the related series of
Certificates is no longer acting in such capacity, the Trustee or any
successor Master Servicer may assume the Master Servicer's rights and
obligations under such Sub-Servicing Agreement.

Unless otherwise provided in the related Prospectus Supplement,
the Master Servicer will be solely liable for all fees owed by it to
any Sub-Servicer, irrespective of whether the Master Servicer's
compensation pursuant to the related Agreement is sufficient to pay
such fees. However, a Sub-Servicer may be entitled to a Retained
Interest in certain Whole Loans. Each Sub-Servicer will be reimbursed
by the Master Servicer for certain expenditures which it makes,
generally to the same extent the Master Servicer would be reimbursed
under an Agreement. See "Retained Interest, Servicing Compensation and
Payment of Expenses."

Special Servicers

To the extent so specified in the related Prospectus Supplement, a
special servicer (the "Special Servicer") may be appointed. The related
Prospectus Supplement will describe the rights, obligations and
compensation of a Special Servicer. The Master Servicer will only be
responsible for the duties and obligations of a Special Servicer to the
extent set forth in the Prospectus Supplement.

Realization Upon Defaulted Whole Loans

A mortgagor's failure to make required payments may reflect
inadequate income or the diversion of that income from the service of
payments due under the Mortgage Loan, and may call into question such
mortgagor's ability to make timely payment of taxes and to pay for
necessary maintenance of the related Mortgaged Property. Unless
otherwise provided in the related Prospectus Supplement, the Master
Servicer is required to monitor any Whole Loan which is in default,
contact the mortgagor concerning the default, evaluate whether the
causes of the default can be cured over a reasonable period without
significant impairment of the value of the Mortgaged Property, initiate
corrective action in cooperation with the mortgagor if cure is likely,
inspect the Mortgaged Property and take such other actions as are
consistent with the Servicing Standard. A significant period of time
may elapse before the Master Servicer is able to assess the success of
such corrective action or the need for additional initiatives.

The time within which the Master Servicer makes the initial
determination of appropriate action, evaluates the success of
corrective action, develops additional initiatives, institutes
foreclosure proceedings and actually forecloses (or takes a deed to a
Mortgaged Property in lieu of foreclosure) on behalf of the
Certificateholders, may vary considerably depending on the particular
Whole Loan, the Mortgaged Property, the mortgagor, the presence of an
acceptable party to assume the Whole Loan and the laws of the
jurisdiction in which the Mortgaged Property is located. Under federal
bankruptcy law, the Master Servicer in certain cases may not be
permitted to accelerate a Whole Loan or to foreclose on a Mortgaged
Property for a considerable period of time. See "Certain Legal Aspects
of the Mortgage--Loans and the Leases."

Any Agreement relating to a Trust Fund that includes Whole Loans
may grant to the Master Servicer and/or the holder or holders of
certain classes of Certificates a right of first refusal to purchase
from the Trust Fund at a predetermined purchase price any such Whole
Loan as to which a specified number of scheduled payments thereunder
are delinquent. Any such right granted to the holder of an Offered
Certificate will be described in the related Prospectus Supplement. The
related Prospectus Supplement will also describe any such right granted
to any person if the predetermined purchase price is less than the
Purchase Price described under "Representations and Warranties;
Repurchases."

Unless otherwise specified in the related Prospectus Supplement,
the Master Servicer may offer to sell any defaulted Whole Loan
described in the preceding paragraph and not otherwise purchased
by any person having a right of first refusal with respect
thereto, if and when the Master Servicer determines, consistent
with the Servicing Standard, that such a sale would produce a
greater recovery on a present value basis than would liquidation
through foreclosure or similar proceeding. The related Agreement
will provide that any such offering be made in a commercially
reasonable manner for a specified period and that the Master
Servicer accept the highest cash bid received from any person
(including itself, an affiliate of the Master Servicer or any
Certificateholder) that constitutes a fair price for such
defaulted Whole Loan. In the absence of any bid determined in
accordance with the related Agreement to be fair, the Master
Servicer shall proceed with respect to such defaulted Mortgage
Loan as described below. Any bid in an amount at least equal to
the Purchase Price described under "Representations and
Warranties; Repurchases" will in all cases be deemed fair.

The Master Servicer, on behalf of the Trustee, may at any time
institute foreclosure proceedings, exercise any power of sale contained
in any mortgage, obtain a deed in lieu of foreclosure, or otherwise
acquire title to a Mortgaged Property securing a Whole Loan by
operation of law or otherwise, if such action is consistent with the
Servicing Standard and a default on such Whole Loan has occurred or, in
the Master Servicer's judgment, is imminent. Unless otherwise specified
in the related Prospectus Supplement, the Master Servicer may not
acquire title to any related Mortgaged Property or take any other
action that would cause the Trustee, for the benefit of
Certificateholders, or any other specified person to be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or an "operator" of such Mortgaged Property within the meaning
of certain federal environmental laws, unless the Master Servicer has
previously determined, based on a report prepared by a person who
regularly conducts environmental audits (which report will be an
expense of the Trust Fund), that either:

(i) the Mortgaged Property is in compliance with applicable
environmental laws, and there are no circumstances present at the
Mortgaged Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation; or

(ii) if the Mortgaged Property is not so in compliance or such
circumstances are so present, then it would be in the best economic
interest of the Trust Fund to acquire title to the Mortgaged Property
and further to take such actions as would be necessary and appropriate
to effect such compliance and/or respond to such circumstances (the
cost of which actions will be an expense of the Trust Fund).

Unless otherwise provided in the related Prospectus Supplement, if
title to any Mortgaged Property is acquired by a Trust Fund as to which
a REMIC election has been made, the Master Servicer, on behalf of the
Trust Fund, will be required to sell the Mortgaged Property prior to
the close of the third calendar year following the year of acquisition
of such Mortgaged Property by the Trust Fund, unless (i) the Internal
Revenue Service grants an extension of time to sell such property or
(ii) the Trustee receives an opinion of independent counsel to the
effect that the holding of the property by the Trust Fund subsequent to
such period will not result in the imposition of a tax on the Trust
Fund or cause the Trust Fund to fail to qualify as a REMIC under the
Code at any time that any Certificate is outstanding. Subject to the
foregoing, the Master Servicer will be required to (i) solicit bids for
any Mortgaged Property so acquired in such a manner as will be
reasonably likely to realize a fair price for such property and (ii)
accept the first (and, if multiple bids are contemporaneously received,
the highest) cash bid received from any person that constitutes a fair
price.

If the Trust Fund acquires title to any Mortgaged Property, the
Master Servicer, on behalf of the Trust Fund, may retain an independent
contractor to manage and operate such property. The retention of an
independent contractor, however, will not relieve the Master Servicer
of any of its obligations with respect to the management and operation
of such Mortgaged Property. Unless otherwise specified in the related
Prospectus Supplement, any such property acquired by the Trust Fund
will be managed in a manner consistent with the management and
operation of similar property by a prudent lending institution.

The limitations imposed by the related Agreement and the REMIC
provisions of the Code (if a REMIC election has been made with respect
to the related Trust Fund) on the operations and ownership of any
Mortgaged Property acquired on behalf of the Trust Fund may result in
the recovery of an amount less than the amount that would otherwise be
recovered. See "Certain Legal Aspects of the Mortgage Loans and the
Leases--Foreclosure."

If recovery on a defaulted Whole Loan under any related instrument
of Credit Support is not available, the Master Servicer nevertheless
will be obligated to follow or cause to be followed such normal
practices and procedures as it deems
necessary or advisable to realize upon the defaulted Whole Loan. If the
proceeds of any liquidation of the property securing the defaulted
Whole Loan are less than the outstanding principal balance of the
defaulted Whole Loan plus interest accrued thereon at the Mortgage Rate
plus the aggregate amount of expenses incurred by the Master Servicer
in connection with such proceedings and which are reimbursable under
the Agreement, the Trust Fund will realize a loss in the amount of such
difference. The Master Servicer will be entitled to withdraw or cause
to be withdrawn from the Certificate Account out of the Liquidation
Proceeds recovered on any defaulted Whole Loan, prior to the
distribution of such Liquidation Proceeds to Certificateholders,
amounts representing its normal servicing compensation on the Whole
Loan, unreimbursed servicing expenses incurred with respect to the
Whole Loan and any unreimbursed advances of delinquent payments made
with respect to the Whole Loan.

If any property securing a defaulted Whole Loan is damaged and
proceeds, if any, from the related hazard insurance policy are
insufficient to restore the damaged property to a condition sufficient
to permit recovery under the related instrument of Credit Support, if
any, the Master Servicer is not required to expend its own funds to
restore the damaged property unless it determines (i) that such
restoration will increase the proceeds to Certificateholders on
liquidation of the Whole Loan after reimbursement of the Master
Servicer for its expenses and (ii) that such expenses will be
recoverable by it from related Insurance Proceeds or Liquidation
Proceeds.

As servicer of the Whole Loans, a Master Servicer, on behalf of
itself, the Trustee and the Certificateholders, will present claims to
the obligor under each instrument of Credit Support, and will take such
reasonable steps as are necessary to receive payment or to permit
recovery thereunder with respect to defaulted Whole Loans.

If a Master Servicer or its designee recovers payments under any
instrument of Credit Support with respect to any defaulted Whole Loan,
the Master Servicer will be entitled to withdraw or cause to be
withdrawn from the Certificate Account out of such proceeds, prior to
distribution thereof to Certificateholders, amounts representing its
normal servicing compensation on such Whole Loan, unreimbursed
servicing expenses incurred with respect to the Whole Loan and any
unreimbursed advances of delinquent payments made with respect to the
Whole Loan. See "Hazard Insurance Policies" and "Description of Credit
Support."

Hazard Insurance Policies

Unless otherwise specified in the related Prospectus Supplement,
each Agreement for a Trust Fund that includes Whole Loans will require
the Master Servicer to cause the mortgagor on each Whole Loan to
maintain a hazard insurance policy providing for such coverage as is
required under the related Mortgage or, if any Mortgage permits the
holder thereof to dictate to the mortgagor the insurance coverage to be
maintained on the related Mortgaged Property, then such coverage as is
consistent with the Servicing Standard. Unless otherwise specified in
the related Prospectus Supplement, such coverage will be in general in
an amount equal to the lesser of the principal balance owing on such
Whole Loan and the amount necessary to fully compensate for any damage
or loss to the improvements on the Mortgaged Property on a replacement
cost basis, but in either case not less than the amount necessary to
avoid the application of any co-insurance clause contained in the
hazard insurance policy. The ability of the Master Servicer to assure
that hazard insurance proceeds are appropriately applied may be
dependent upon its being named as an additional insured under any
hazard insurance policy and under any other insurance policy referred
to below, or upon the extent to which information in this regard is
furnished by mortgagors. All amounts collected by the Master Servicer
under any such policy (except for amounts to be applied to the
restoration or repair of the Mortgaged Property or released to the
mortgagor in accordance with the Master Servicer's normal servicing
procedures, subject to the terms and conditions of the related Mortgage
and Mortgage Note) will be deposited in the Certificate Account. The
Agreement will provide that the Master Servicer may satisfy its
obligation to cause each mortgagor to maintain such a hazard insurance
policy by the Master Servicer's maintaining a blanket policy insuring
against hazard losses on the Whole Loans. If such blanket policy
contains a deductible clause, the Master Servicer will be required to
deposit in the Certificate Account all sums that would have been
deposited therein but for such clause.

In general, the standard form of fire and extended coverage policy
covers physical damage to or destruction of the improvements of the
property by fire, lightning, explosion, smoke, windstorm and hail, and
riot, strike and civil commotion, subject to the conditions and
exclusions specified in each policy. Although the policies relating to
the Whole Loans will be underwritten by different insurers under
different state laws in accordance with different applicable state
forms, and therefore will not contain identical terms and conditions,
the basic terms thereof are dictated by respective state laws, and most
such policies typically do not cover any physical damage resulting from
war, revolution, governmental actions, floods and other water-related
causes, earth movement (including earthquakes, landslides and
mudflows), wet or dry rot, vermin, domestic animals and certain other
kinds of uninsured risks.

The hazard insurance policies covering the Mortgaged Properties
securing the Whole Loans will typically contain a co-insurance clause
that in effect requires the insured at all times to carry insurance of
a specified percentage (generally 80% to 90%) of the full replacement
value of the improvements on the property in order to recover the full
amount of any partial loss. If the insured's coverage falls below this
specified percentage, such clause generally provides that the insurer's
liability in the event of partial loss does not exceed the lesser of
(i) the replacement cost of the improvements less physical depreciation
and (ii) such proportion of the loss as the amount of insurance carried
bears to the specified percentage of the full replacement cost of such
improvements.

Each Agreement for a Trust Fund that includes Whole Loans will
require the Master Servicer to cause the mortgagor on each Whole Loan,
or, in certain cases, the related Lessee, to maintain all such other
insurance coverage with respect to the related Mortgaged Property as is
consistent with the terms of the related Mortgage and the Servicing
Standard, which insurance may typically include flood insurance (if the
related Mortgaged Property was located at the time of origination in a
federally designated flood area).

In addition, to the extent required by the related Mortgage, the
Master Servicer may require the mortgagor or related Lessee to maintain
other forms of insurance including, but not limited to, loss of rent
endorsements, business interruption insurance and comprehensive public
liability insurance, and the related Agreement may require the Master
Servicer, Sub-Servicer or Special Servicer to maintain public liability
insurance with respect to any REO Properties. Any cost incurred by the
Master Servicer in maintaining any such insurance policy will be added
to the amount owing under the Mortgage Loan where the terms of the
Mortgage Loan so permit; provided, however, that the addition of such
cost will not be taken into account for purposes of calculating the
distribution to be made to Certificateholders. Such costs may be
recovered by the Master Servicer, Sub-Servicer or Special Servicer, as
the case may be, from the Collection Account, with interest thereon, as
provided by the Agreement.

Under the terms of the Whole Loans, mortgagors will generally be
required to present claims to insurers under hazard insurance policies
maintained on the related Mortgaged Properties. The Master Servicer, on
behalf of the Trustee and Certificateholders, is obligated to present
or cause to be presented claims under any blanket insurance policy
insuring against hazard losses on Mortgaged Properties securing the
Whole Loans. However, the ability of the Master Servicer to present or
cause to be presented such claims is dependent upon the extent to which
information in this regard is furnished to the Master Servicer by
mortgagors.

Rental Interruption Insurance Policy

If so specified in the related Prospectus Supplement, the Master
Servicer or the mortgagors will maintain rental interruption insurance
policies in full force and effect with respect to some or all of the
Leases. Although the terms of such policies vary to some degree, a
rental interruption insurance policy typically provides that, to the
extent that a Lessee fails to make timely rental payments under the
related Lease due to a casualty event, such losses will be reimbursed
to the insured. If so specified in the related Prospectus Supplement,
the Master Servicer will be required to pay from its servicing
compensation the premiums on the rental interruption policy on a timely
basis. If so specified in the Prospectus Supplement, if such rental
interruption policy is canceled or terminated for any reason (other
than the exhaustion of total policy coverage), the Master Servicer will
exercise its best reasonable efforts to obtain from another insurer a
replacement policy comparable to the rental interruption policy with a
total coverage that is equal to the then existing coverage of the
terminated rental interruption policy; provided that if the cost of any
such replacement policy is greater than the cost of the terminated
rental interruption policy, the amount of coverage under the
replacement policy will, unless otherwise specified in the related
Prospectus Supplement, be reduced to a level such that the applicable
premium does not exceed, by a percentage that may be set forth in the
related Prospectus Supplement, the cost of the rental interruption
policy that was replaced. Any amounts collected by the Master Servicer
under the rental interruption policy in the nature of insurance
proceeds will be deposited in the Certificate Account.

Fidelity Bonds and Errors and Omissions Insurance

Unless otherwise specified in the related Prospectus Supplement,
each Agreement will require that the Master Servicer and any Special
Servicer obtain and maintain in effect a fidelity bond or similar form
of insurance coverage (which may provide blanket coverage) or any
combination thereof insuring against loss occasioned by fraud, theft or
other intentional misconduct of the officers, employees and agents of
the Master Servicer or the Special Servicer, as applicable. The related
Agreement will allow the Master Servicer and any Special Servicer to
self-insure against loss occasioned by the errors and
omissions of the officers, employees and agents of the Master Servicer
or the Special Servicer so long as certain criteria set forth in the
Agreement are met.

Due-on-Sale and Due-on-Encumbrance Provisions

Certain of the Whole Loans may contain clauses requiring the
consent of the mortgagee to any sale or other transfer of the related
Mortgaged Property, or due-on-sale clauses entitling the mortgagee to
accelerate payment of the Whole Loan upon any sale or other transfer of
the related Mortgaged Property. Certain of the Whole Loans may contain
clauses requiring the consent of the mortgagee to the creation of any
other lien or encumbrance on the Mortgaged Property or
due-on-encumbrance clauses entitling the mortgagee to accelerate
payment of the Whole Loan upon the creation of any other lien or
encumbrance upon the Mortgaged Property. Unless otherwise provided in
the related Prospectus Supplement, the Master Servicer, on behalf of
the Trust Fund, will exercise any right the Trustee may have as
mortgagee to accelerate payment of any such Whole Loan or to withhold
its consent to any transfer or further encumbrance in a manner
consistent with the Servicing Standard. Unless otherwise specified in
the related Prospectus Supplement, any fee collected by or on behalf of
the Master Servicer for entering into an assumption agreement will be
retained by or on behalf of the Master Servicer as additional servicing
compensation. See "Certain Legal Aspects of the Mortgage Loans and the
Leases--Due-on-Sale and Due-on-Encumbrance."

Retained Interest; Servicing Compensation and Payment of Expenses

The Prospectus Supplement for a series of Certificates will
specify whether there will be any Retained Interest in the Assets, and,
if so, the initial owner thereof. If so, the Retained Interest will be
established on a loan-by-loan basis and will be specified on an exhibit
to the related Agreement. A "Retained Interest" in an Asset represents
a specified portion of the interest payable thereon. The Retained
Interest will be deducted from mortgagor payments as received and will
not be part of the related Trust Fund.

Unless otherwise specified in the related Prospectus Supplement,
the Master Servicer's and a Sub-Servicer's primary servicing
compensation with respect to a series of Certificates will come from
the periodic payment to it of a portion of the interest payment on each
Asset. Since any Retained Interest and a Master Servicer's primary
compensation are percentages of the principal balance of each Asset,
such amounts will decrease in accordance with the amortization of the
Assets. The Prospectus Supplement with respect to a series of
Certificates evidencing interests in a Trust Fund that includes Whole
Loans may provide that, as additional compensation, the Master Servicer
or the Sub-Servicers may retain all or a portion of assumption fees,
modification fees, late payment charges or Prepayment Premiums
collected from mortgagors and any interest or other income which may be
earned on funds held in the Certificate Account or any account
established by a Sub-Servicer pursuant to the Agreement.

The Master Servicer may, to the extent provided in the related
Prospectus Supplement, pay from its servicing compensation certain
expenses incurred in connection with its servicing and managing of the
Assets, including, without limitation, payment of the fees and
disbursements of the Trustee and independent accountants, payment of
expenses incurred in connection with distributions and reports to
Certificateholders, and payment of any other expenses described in the
related Prospectus Supplement. Certain other expenses, including
certain expenses relating to defaults and liquidations on the Whole
Loans and, to the extent so provided in the related Prospectus
Supplement, interest thereon at the rate specified therein, and the
fees of any Special Servicer, may be borne by the Trust Fund.

Evidence as to Compliance

Each Agreement relating to Assets which include Whole Loans will
provide that on or before a specified date in each year, beginning with
the first such date at least six months after the related Cut-off Date,
a firm of independent public accountants will furnish a statement to
the Trustee to the effect that, on the basis of the examination by such
firm conducted substantially in compliance with either the Uniform
Single Attestation Program for Mortgage Bankers or the Audit Program
for Mortgages serviced for the Federal Home Loan Mortgage Corporation
("FHLMC"), the servicing by or on behalf of the Master Servicer of
mortgage loans under pooling and servicing agreements substantially
similar to each other (including the related Agreement) was conducted
in compliance with the terms of such agreements except for any
significant exceptions or errors in records that, in the opinion of the
firm, either the Audit Program for Mortgages serviced for FHLMC, or
paragraph 4 of the Uniform Single Attestation Program for Mortgage
Bankers, requires it to report. In rendering its statement such firm
may rely, as to matters relating to the direct servicing of mortgage
loans by Sub-Servicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the

Audit Program for Mortgages serviced for FHLMC (rendered within one
year of such statement) of firms of independent public accountants with
respect to the related Sub-Servicer.

Each such Agreement will also provide for delivery to the Trustee,
on or before a specified date in each year, of an annual statement
signed by two officers of the Master Servicer to the effect that the
Master Servicer has fulfilled its obligations under the Agreement
throughout the preceding calendar year or other specified twelve-month
period.

Unless otherwise provided in the related Prospectus Supplement,
copies of such annual accountants' statement and such statements of
officers will be obtainable by Certificateholders without charge upon
written request to the Master Servicer at the address set forth in the
related Prospectus Supplement.

Certain Matters Regarding a Master Servicer and the Depositor

The Master Servicer, if any, or a servicer for substantially all
the Whole Loans under each Agreement will be named in the related
Prospectus Supplement. The entity serving as Master Servicer (or as
such servicer) may be an affiliate of the Depositor and may have other
normal business relationships with the Depositor or the Depositor's
affiliates. Reference herein to the Master Servicer shall be deemed to
be to the servicer of substantially all of the Whole Loans, if
applicable.

Unless otherwise specified in the related Prospectus Supplement,
the related Agreement will provide that the Master Servicer may resign
from its obligations and duties thereunder only upon a determination
that its duties under the Agreement are no longer permissible under
applicable law or are in material conflict by reason of applicable law
with any other activities carried on by it, the other activities of the
Master Servicer so causing such a conflict being of a type and nature
carried on by the Master Servicer at the date of the Agreement. No such
resignation will become effective until the Trustee or a successor
servicer has assumed the Master Servicer's obligations and duties under
the Agreement.

Unless otherwise specified in the related Prospectus Supplement,
each Agreement will further provide that neither any Master Servicer,
the Depositor nor any director, officer, employee, or agent of a Master
Servicer or the Depositor will be under any liability to the related
Trust Fund or Certificateholders for any action taken, or for
refraining from the taking of any action, in good faith pursuant to the
Agreement; provided, however, that neither a Master Servicer, the
Depositor nor any such person will be protected against any breach of a
representation, warranty or covenant made in such Agreement, or against
any liability specifically imposed thereby, or against any liability
which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of obligations or duties
thereunder or by reason of reckless disregard of obligations and duties
thereunder. Unless otherwise specified in the related Prospectus
Supplement, each Agreement will further provide that any Master
Servicer, the Depositor and any director, officer, employee or agent of
a Master Servicer or the Depositor will be entitled to indemnification
by the related Trust Fund and will be held harmless against any loss,
liability or expense incurred in connection with any legal action
relating to the Agreement or the Certificates; provided, however, that
such indemnification will not extend to any loss, liability or expense
(i) specifically imposed by such Agreement or otherwise incidental to
the performance of obligations and duties thereunder, including, in the
case of a Master Servicer, the prosecution of an enforcement action in
respect of any specific Whole Loan or Whole Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to
such Agreement); (ii) incurred in connection with any breach of a
representation, warranty or covenant made in such Agreement; (iii)
incurred by reason of misfeasance, bad faith or gross negligence in the
performance of obligations or duties thereunder, or by reason of
reckless disregard of such obligations or duties; (iv) incurred in
connection with any violation of any state or federal securities law;
or (v) imposed by any taxing authority if such loss, liability or
expense is not specifically reimbursable pursuant to the terms of the
related Agreement. In addition, each Agreement will provide that
neither any Master Servicer nor the Depositor will be under any
obligation to appear in, prosecute or defend any legal action which is
not incidental to its respective responsibilities under the Agreement
and which in its opinion may involve it in any expense or liability.
Any such Master Servicer or the Depositor may, however, in its
discretion undertake any such action which it may deem necessary or
desirable with respect to the Agreement and the rights and duties of
the parties thereto and the interests of the Certificateholders
thereunder. In such event, the legal expenses and costs of such action
and any liability resulting therefrom will be expenses, costs and
liabilities of the Certificateholders, and the Master Servicer or the
Depositor, as the case may be, will be entitled to be reimbursed
therefor and to charge the Certificate Account.

Any person into which the Master Servicer or the Depositor may be
merged or consolidated, or any person resulting from any merger or
consolidation to which the Master Servicer or the Depositor is a party,
or any person succeeding to the business of the Master Servicer or the
Depositor, will be the successor of the Master Servicer or the
Depositor, as the case may be, under the related Agreement.

Events of Default

Unless otherwise provided in the related Prospectus Supplement for
a Trust Fund that includes Whole Loans, Events of Default under the
related Agreement will include (i) any failure by the Master Servicer
to distribute or cause to be distributed to Certificateholders, or to
remit to the Trustee for distribution to Certificateholders, any
required payment; (ii) any failure by the Master Servicer duly to
observe or perform in any material respect any of its other covenants
or obligations under the Agreement which continues unremedied for
thirty days after written notice of such failure has been given to the
Master Servicer by the Trustee or the Depositor, or to the Master
Servicer, the Depositor and the Trustee by the holders of Certificates
evidencing not less than 25% of the Voting Rights; (iii) any breach of
a representation or warranty made by the Master Servicer under the
Agreement which materially and adversely affects the interests of
Certificateholders and which continues unremedied for thirty days after
written notice of such breach has been given to the Master Servicer by
the Trustee or the Depositor, or to the Master Servicer, the Depositor
and the Trustee by the holders of Certificates evidencing not less than
25% of the Voting Rights; and (iv) certain events of insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings and certain actions by or on behalf of the Master Servicer
indicating its insolvency or inability to pay its obligations. Material
variations to the foregoing Events of Default (other than to shorten
cure periods or eliminate notice requirements) will be specified in the
related Prospectus Supplement. Unless otherwise specified in the
related Prospectus Supplement, the Trustee shall, not later than the
later of 60 days after the occurrence of any event which constitutes
or, with notice or lapse of time or both, would constitute an Event of
Default and five days after certain officers of the Trustee become
aware of the occurrence of such an event, transmit by mail to the
Depositor and all Certificateholders of the applicable series notice of
such occurrence, unless such default shall have been cured or waived.

Rights Upon Event of Default

So long as an Event of Default under an Agreement remains
unremedied, the Depositor or the Trustee may, and at the direction of
holders of Certificates evidencing not less than 51% of the Voting
Rights, the Trustee shall, terminate all of the rights and obligations
of the Master Servicer under the Agreement and in and to the Mortgage
Loans (other than as a Certificateholder or as the owner of any
Retained Interest), whereupon the Trustee will succeed to all of the
responsibilities, duties and liabilities of the Master Servicer under
the Agreement (except that if the Trustee is prohibited by law from
obligating itself to make advances regarding delinquent mortgage loans,
or if the related Prospectus Supplement so specifies, then the Trustee
will not be obligated to make such advances) and will be entitled to
similar compensation arrangements. Unless otherwise specified in the
related Prospectus Supplement, in the event that the Trustee is
unwilling or unable so to act, it may or, at the written request of the
holders of Certificates entitled to at least 51% of the Voting Rights,
it shall appoint, or petition a court of competent jurisdiction for the
appointment of, a loan servicing institution acceptable to the Rating
Agency with a net worth at the time of such appointment of at least
$15,000,000 to act as successor to the Master Servicer under the
Agreement. Pending such appointment, the Trustee is obligated to act in
such capacity. The Trustee and any such successor may agree upon the
servicing compensation to be paid, which in no event may be greater
than the compensation payable to the Master Servicer under the
Agreement.

Unless otherwise described in the related Prospectus Supplement,
the holders of Certificates representing at least 66 2/3% of the Voting
Rights allocated to the respective classes of Certificates affected by
any Event of Default will be entitled to waive such Event of Default;
provided, however, that an Event of Default involving a failure to
distribute a required payment to Certificateholders described in clause
(i) under "Events of Default" may be waived only by all of the
Certificateholders. Upon any such waiver of an Event of Default, such
Event of Default shall cease to exist and shall be deemed to have been
remedied for every purpose under the Agreement.

No Certificateholder will have the right under any Agreement to
institute any proceeding with respect thereto unless such holder
previously has given to the Trustee written notice of default and
unless the holders of Certificates evidencing not less than 25% of the
Voting Rights have made written request upon the Trustee to institute
such proceeding in its own name as Trustee thereunder and have offered
to the Trustee reasonable indemnity, and the Trustee for sixty days has
neglected or refused to institute any such proceeding. The Trustee,
however, is under no obligation to exercise any of the trusts or powers
vested in it by any Agreement or to make any investigation of matters
arising thereunder or to institute, conduct or defend any litigation
thereunder or in relation thereto at the request, order or direction of
any of the holders of Certificates covered by such Agreement, unless
such Certificateholders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.

Amendment

Each Agreement may be amended by the parties thereto without the
consent of any of the holders of Certificates covered by the Agreement,
(i) to cure any ambiguity, (ii) to correct, modify or supplement any
provision therein which may be inconsistent with any other provision
therein, (iii) to make any other provisions with respect to matters or
questions arising under the Agreement which are not inconsistent with
the provisions thereof, or (iv) to comply with any requirements imposed
by the Code; provided that such amendment (other than an amendment for
the purpose specified in clause (iv) above) will not (as evidenced by
an opinion of counsel to such effect) adversely affect in any material
respect the interests of any holder of Certificates covered by the
Agreement. Unless otherwise specified in the related Prospectus
Supplement, each Agreement may also be amended by the Depositor, the
Master Servicer, if any, and the Trustee, with the consent of the
holders of Certificates affected thereby evidencing not less than 51%
of the Voting Rights, for any purpose; provided, however, that unless
otherwise specified in the related Prospectus Supplement, no such
amendment may (i) reduce in any manner the amount of or delay the
timing of, payments received or advanced on Mortgage Loans which are
required to be distributed on any Certificate without the consent of
the holder of such Certificate, (ii) adversely affect in any material
respect the interests of the holders of any class of Certificates in a
manner other than as described in (i), without the consent of the
holders of all Certificates of such class or (iii) modify the
provisions of such Agreement described in this paragraph without the
consent of the holders of all Certificates covered by such Agreement
then outstanding. However, with respect to any series of Certificates
as to which a REMIC election is to be made, the Trustee will not
consent to any amendment of the Agreement unless it shall first have
received an opinion of counsel to the effect that such amendment will
not result in the imposition of a tax on the related Trust Fund or
cause the related Trust Fund to fail to qualify as a REMIC at any time
that the related Certificates are outstanding.

The Trustee

The Trustee under each Agreement will be named in the related
Prospectus Supplement. The commercial bank, national banking
association, banking corporation or trust company serving as Trustee
may have a banking relationship with the Depositor and its affiliates
and with any Master Servicer and its affiliates.

Duties of the Trustee

The Trustee will make no representations as to the validity or
sufficiency of any Agreement, the Certificates or any Asset or related
document and is not accountable for the use or application by or on
behalf of any Master Servicer of any funds paid to the Master Servicer
or its designee or any Special Servicer in respect of the Certificates
or the Assets, or deposited into or withdrawn from the Certificate
Account or any other account by or on behalf of the Master Servicer or
any Special Servicer. If no Event of Default has occurred and is
continuing, the Trustee is required to perform only those duties
specifically required under the related Agreement. However, upon
receipt of the various certificates, reports or other instruments
required to be furnished to it, the Trustee is required to examine such
documents and to determine whether they conform to the requirements of
the Agreement.

Certain Matters Regarding the Trustee

Unless otherwise specified in the related Prospectus Supplement,
the Trustee and any director, officer, employee or agent of the Trustee
shall be entitled to indemnification out of the Certificate Account for
any loss, liability or expense (including costs and expenses of
litigation, and of investigation, counsel fees, damages, judgments and
amounts paid in settlement) incurred in connection with the Trustee's
(i) enforcing its rights and remedies and protecting the interests, and
enforcing the rights and remedies, of the Certificateholders during the
continuance of an Event of Default, (ii) defending or prosecuting any
legal action in respect of the related Agreement or series of
Certificates, (iii) being the mortgagee of record with respect to the
Mortgage Loans in a Trust Fund and the owner of record with respect to
any Mortgaged Property acquired in respect thereof for the benefit of
Certificateholders, or (iv) acting or refraining from acting in good
faith at the direction of the holders of the related series of
Certificates entitled to not less than 25% (or such higher percentage
as is specified in the related Agreement with respect to any particular
matter) of the Voting Rights for such series; provided, however, that
such indemnification will not extend to any loss, liability or expense
that constitutes a specific liability of the Trustee pursuant to the
related Agreement, or to any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence on the part of
the Trustee in the performance of its obligations and duties
thereunder, or by reason of its reckless disregard of such obligations
or duties, or as may arise from a breach of any representation,
warranty or covenant of the Trustee made therein.

Resignation and Removal of the Trustee

The Trustee may at any time resign from its obligations and duties
under an Agreement by giving written notice thereof to the Depositor,
the Master Servicer, if any, and all Certificateholders. Upon receiving
such notice of resignation, the Depositor is required promptly to
appoint a successor trustee acceptable to the Master Servicer, if any.
If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.

If at any time the Trustee shall cease to be eligible to continue
as such under the related Agreement, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor may
remove the Trustee and appoint a successor trustee acceptable to the
Master Servicer, if any. Holders of the Certificates of any series
entitled to at least 51% of the Voting Rights for such series may at
any time remove the Trustee without cause and appoint a successor
trustee.

Any resignation or removal of the Trustee and appointment of a
successor trustee shall not become effective until acceptance of
appointment by the successor trustee.

DESCRIPTION OF CREDIT SUPPORT

General

For any series of Certificates, Credit Support may be provided
with respect to one or more classes thereof or the related Assets.
Credit Support may be in the form of the subordination of one or more
classes of Certificates, letters of credit, insurance policies,
guarantees, the establishment of one or more reserve funds or another
method of Credit Support described in the related Prospectus
Supplement, or any combination of the foregoing. If so provided in the
related Prospectus Supplement, any form of Credit Support may be
structured so as to be drawn upon by more than one series to the extent
described therein.

Unless otherwise provided in the related Prospectus Supplement for
a series of Certificates, the Credit Support will not provide
protection against all risks of loss and will not guarantee repayment
of the entire Certificate Balance of the Certificates and interest
thereon. If losses or shortfalls occur that exceed the amount covered
by Credit Support or that are not covered by Credit Support,
Certificateholders will bear their allocable share of deficiencies.
Moreover, if a form of Credit Support covers more than one series of
Certificates (each, a "Covered Trust"), holders of Certificates
evidencing interests in any of such Covered Trusts will be subject to
the risk that such Credit Support will be exhausted by the claims of
other Covered Trusts prior to such Covered Trust receiving any of its
intended share of such coverage.

If Credit Support is provided with respect to one or more classes
of Certificates of a series, or the related Assets, the related
Prospectus Supplement will include a description of (a) the nature and
amount of coverage under such Credit Support, (b) any conditions to
payment thereunder not otherwise described herein, (c) the conditions
(if any) under which the amount of coverage under such Credit Support
may be reduced and under which such Credit Support may be terminated or
replaced and (d) the material provisions relating to such Credit
Support. Additionally, the related Prospectus Supplement will set forth
certain information with respect to the obligor under any instrument of
Credit Support, including (i) a brief description of its principal
business activities, (ii) its principal place of business, place of
incorporation and the jurisdiction under which it is chartered or
licensed to do business, (iii) if applicable, the identity of
regulatory agencies that exercise primary jurisdiction over the conduct
of its business and (iv) its total assets, and its stockholders' or
policyholders' surplus, if applicable, as of the date specified in the
Prospectus Supplement. See "Risk Factors--Credit Support Limitations."

Subordinate Certificates

If so specified in the related Prospectus Supplement, one or more
classes of Certificates of a series may be Subordinate Certificates. To
the extent specified in the related Prospectus Supplement, the rights
of the holders of Subordinate Certificates to receive distributions of
principal and interest from the Certificate Account on any Distribution
Date will be subordinated to such rights of the holders of Senior
Certificates. If so provided in the related Prospectus Supplement, the
subordination of a class may apply only in the event of (or may be
limited to) certain types of losses or shortfalls. The related
Prospectus Supplement will set forth information concerning the amount
of subordination of a class or classes of Subordinate
Certificates in a series, the circumstances in which such subordination
will be applicable and the manner, if any, in which the amount of
subordination will be effected.

Cross-Support Provisions

If the Assets for a series are divided into separate groups, each
supporting a separate class or classes of Certificates of a series,
credit support may be provided by cross-support provisions requiring
that distributions be made on Senior Certificates evidencing interests
in one group of Mortgage Assets prior to distributions on Subordinate
Certificates evidencing interests in a different group of Mortgage
Assets within the Trust Fund. The Prospectus Supplement for a series
that includes a cross-support provision will describe the manner and
conditions for applying such provisions.

Insurance or Guarantees with Respect to the Whole Loans

If so provided in the Prospectus Supplement for a series of
Certificates, the Whole Loans in the related Trust Fund will be covered
for various default risks by insurance policies or guarantees. A copy
of any such material instrument for a series will be filed with the
Commission as an exhibit to a Current Report on Form 8-K to be filed
within 15 days of issuance of the Certificates of the related series.

Letter of Credit

If so provided in the Prospectus Supplement for a series of
Certificates, deficiencies in amounts otherwise payable on such
Certificates or certain classes thereof will be covered by one or more
letters of credit, issued by a bank or financial institution specified
in such Prospectus Supplement (the "L/C Bank"). Under a letter of
credit, the L/C Bank will be obligated to honor draws thereunder in an
aggregate fixed dollar amount, net of unreimbursed payments thereunder,
generally equal to a percentage specified in the related Prospectus
Supplement of the aggregate principal balance of the Mortgage Assets on
the related Cut-off Date or of the initial aggregate Certificate
Balance of one or more classes of Certificates. If so specified in the
related Prospectus Supplement, the letter of credit may permit draws in
the event of only certain types of losses and shortfalls. The amount
available under the letter of credit will, in all cases, be reduced to
the extent of the unreimbursed payments thereunder and may otherwise be
reduced as described in the related Prospectus Supplement. The
obligations of the L/C Bank under the letter of credit for each series
of Certificates will expire at the earlier of the date specified in the
related Prospectus Supplement or the termination of the Trust Fund. A
copy of any such letter of credit for a series will be filed with the
Commission as an exhibit to a Current Report on Form 8-K to be filed
within 15 days of issuance of the Certificates of the related series.

Insurance Policies and Surety Bonds

If so provided in the Prospectus Supplement for a series of
Certificates, deficiencies in amounts otherwise payable on such
Certificates or certain classes thereof will be covered by insurance
policies and/or surety bonds provided by one or more insurance
companies or sureties. Such instruments may cover, with respect to one
or more classes of Certificates of the related series, timely
distributions of interest and/or full distributions of principal on the
basis of a schedule of principal distributions set forth in or
determined in the manner specified in the related Prospectus
Supplement. A copy of any such instrument for a series will be filed
with the Commission as an exhibit to a Current Report on Form 8-K to be
filed with the Commission within 15 days of issuance of the
Certificates of the related series.

Reserve Funds

If so provided in the Prospectus Supplement for a series of
Certificates, deficiencies in amounts otherwise payable on such
Certificates or certain classes thereof will be covered by one or more
reserve funds in which cash, a letter of credit, Permitted Investments,
a demand note or a combination thereof will be deposited, in the
amounts so specified in such Prospectus Supplement. The reserve funds
for a series may also be funded over time by depositing therein a
specified amount of the distributions received on the related Assets as
specified in the related Prospectus Supplement.

Amounts on deposit in any reserve fund for a series, together with
the reinvestment income thereon, if any, will be applied for the
purposes, in the manner, and to the extent specified in the related
Prospectus Supplement. A reserve fund may be provided to increase the
likelihood of timely distributions of principal of and interest on the
Certificates. If so specified in the related Prospectus Supplement,
reserve funds may be established to provide limited protection against
only certain types
of losses and shortfalls. Following each Distribution Date amounts in a
reserve fund in excess of any amount required to be maintained therein
may be released from the reserve fund under the conditions and to the
extent specified in the related Prospectus Supplement and will not be
available for further application to the Certificates.

Moneys deposited in any Reserve Funds will be invested in
Permitted Investments, except as otherwise specified in the related
Prospectus Supplement. Unless otherwise specified in the related
Prospectus Supplement, any reinvestment income or other gain from such
investments will be credited to the related Reserve Fund for such
series, and any loss resulting from such investments will be charged to
such Reserve Fund. However, such income may be payable to any related
Master Servicer or another service provider as additional compensation.
The Reserve Fund, if any, for a series will not be a part of the Trust
Fund unless otherwise specified in the related Prospectus Supplement.

Additional information concerning any Reserve Fund will be set
forth in the related Prospectus Supplement, including the initial
balance of such Reserve Fund, the balance required to be maintained in
the Reserve Fund, the manner in which such required balance will
decrease over time, the manner of funding such Reserve Fund, the
purposes for which funds in the Reserve Fund may be applied to make
distributions to Certificateholders and use of investment earnings from
the Reserve Fund, if any.

Credit Support with respect to MBS

If so provided in the Prospectus Supplement for a series of
Certificates, the MBS in the related Trust Fund and/or the Mortgage
Loans underlying such MBS may be covered by one or more of the types of
Credit Support described herein. The related Prospectus Supplement will
specify as to each such form of Credit Support the information
indicated above with respect thereto, to the extent such information is
material and available.

CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS AND THE LEASES

The following discussion contains general summaries of certain
legal aspects of loans secured by commercial and multifamily
residential properties that are general in nature. Because such legal
aspects are governed by applicable state law (which laws may differ
substantially), the summaries do not purport to be complete nor to
reflect the laws of any particular state, nor to encompass the laws of
all states in which the security for the Mortgage Loans is situated.
The summaries are qualified in their entirety by reference to the
applicable federal and state laws governing the Mortgage Loans. See
"Description of the Trust Funds--Assets."

General

All of the Mortgage Loans are loans evidenced by a note or bond
and secured by instruments granting a security interest in real
property which may be mortgages, deeds of trust, security deeds or
deeds to secure debt, depending upon the prevailing practice and law in
the state in which the Mortgaged Property is located. Mortgages, deeds
of trust and deeds to secure debt are herein collectively referred to
as "mortgages." Any of the foregoing types of mortgages will create a
lien upon, or grant a title interest in, the subject property, the
priority of which will depend on the terms of the particular security
instrument, as well as separate, recorded, contractual arrangements
with others holding interests in the mortgaged property, the knowledge
of the parties to such instrument as well as the order of recordation
of the instrument in the appropriate public recording office. However,
recording does not generally establish priority over governmental
claims for real estate taxes and assessments and other charges imposed
under governmental police powers.

Types of Mortgage Instruments

A mortgage either creates a lien against or constitutes a
conveyance of real property between two parties--a mortgagor (the
borrower and usually the owner of the subject property) and a mortgagee
(the lender). In contrast, a deed of trust is a three-party instrument,
among a trustor (the equivalent of a mortgagor), a trustee to whom the
mortgaged property is conveyed, and a beneficiary (the lender) for
whose benefit the conveyance is made. As used in this Prospectus,
unless the context otherwise requires, "mortgagor" includes the trustor
under a deed of trust and a grantor under a security deed or a deed to
secure debt. Under a deed of trust, the mortgagor grants the property,
irrevocably until the debt is paid, in trust, generally with a power of
sale as security for the indebtedness evidenced by the related note. A
deed to secure debt typically has two parties. By executing a deed to
secure debt, the grantor conveys title to, as opposed to merely
creating a lien upon, the subject property to the grantee until such
time as the underlying debt is repaid, generally with a power of sale
as security for the indebtedness evidenced by the related mortgage
note. In case the mortgagor under a mortgage is a land trust, there
would be
an additional party because legal title to the property is held by a
land trustee under a land trust agreement for the benefit of the
mortgagor. At origination of a mortgage loan involving a land trust,
the mortgagor executes a separate undertaking to make payments on the
mortgage note. The mortgagee's authority under a mortgage, the
trustee's authority under a deed of trust and the grantee's authority
under a deed to secure debt are governed by the express provisions of
the mortgage, the law of the state in which the real property is
located, certain federal laws (including, without limitation, the
Soldiers' and Sailors' Civil Relief Act of 1940) and, in some cases, in
deed of trust transactions, the directions of the beneficiary.

Interest in Real Property

The real property covered by a mortgage, deed of trust, security
deed or deed to secure debt is most often the fee estate in land and
improvements. However, such an instrument may encumber other interests
in real property such as a tenant's interest in a lease of land or
improvements, or both, and the leasehold estate created by such lease.
An instrument covering an interest in real property other than the fee
estate requires special provisions in the instrument creating such
interest or in the mortgage, deed of trust, security deed or deed to
secure debt, to protect the mortgagee against termination of such
interest before the mortgage, deed of trust, security deed or deed to
secure debt is paid. Unless otherwise specified in the Prospectus
Supplement, the Depositor or the Asset Seller will make certain
representations and warranties in the Agreement with respect to the
Mortgage Loans which are secured by an interest in a leasehold estate.
Such representation and warranties will be set forth in the Prospectus
Supplement if applicable.

Leases and Rents

Mortgages that encumber income-producing property often contain an
assignment of rents and leases, pursuant to which the mortgagor assigns
its right, title and interest as landlord under each lease and the
income derived therefrom to the lender, while the mortgagor retains a
revocable license to collect the rents for so long as there is no
default. Under such assignments, the mortgagor typically assigns its
right, title and interest as lessor under each lease and the income
derived therefrom to the mortgagee, while retaining a license to
collect the rents for so long as there is no default under the mortgage
loan documentation. The manner of perfecting the mortgagee's interest
in rents may depend on whether the mortgagor's assignment was absolute
or one granted as security for the loan. Failure to properly perfect
the mortgagee's interest in rents may result in the loss of substantial
pool of funds, which could otherwise serve as a source of repayment for
such loan. If the mortgagor defaults, the license terminates and the
lender is entitled to collect the rents. Local law may require that the
lender take possession of the property and/or obtain a court-appointed
receiver before becoming entitled to collect the rents. In most states,
hotel and motel room revenues are considered accounts receivable under
the UCC; generally these revenues are either assigned by the mortgagor,
which remains entitled to collect such revenues absent a default, or
pledged by the mortgagor, as security for the loan. In general, the
lender must file financing statements in order to perfect its security
interest in the revenues and must file continuation statements,
generally every five years, to maintain perfection of such security
interest. Even if the lender's security interest in room revenues is
perfected under the UCC, the lender will generally be required to
commence a foreclosure or otherwise take possession of the property in
order to collect the room revenues after a default.

Even after a foreclosure, the potential rent payments from the
property may be less than the periodic payments that had been due under
the mortgage. For instance, the net income that would otherwise be
generated from the property may be less than the amount that would have
been needed to service the mortgage debt if the leases on the property
are at below-market rents, or as the result of excessive maintenance,
repair or other obligations which a lender succeeds to as landlord.

Lenders that actually take possession of the property, however,
may incur potentially substantial risks attendant to being a mortgagee
in possession. Such risks include liability for environmental clean-up
costs and other risks inherent in property ownership. See
"Environmental Legislation" below.

Personalty

Certain types of Mortgaged Properties, such as hotels, motels and
industrial plants, are likely to derive a significant part of their
value from personal property which does not constitute "fixtures" under
applicable state real property law and, hence, would not be subject to
the lien of a mortgage. Such property is generally pledged or assigned
as security to the lender under the UCC. In order to perfect its
security interest therein, the lender generally must file UCC financing
statements and, to maintain perfection of such security interest, file
continuation statements generally every five years.

Foreclosure

General

Foreclosure is a legal procedure that allows the mortgagee to
recover its mortgage debt by enforcing its rights and available legal
remedies under the mortgage. If the mortgagor defaults in payment or
performance of its obligations under the note or mortgage, the
mortgagee has the right to institute foreclosure proceedings to sell
the mortgaged property at public auction to satisfy the indebtedness.

Foreclosure procedures with respect to the enforcement of a
mortgage vary from state to state. Two primary methods of foreclosing a
mortgage are judicial foreclosure and non-judicial foreclosure pursuant
to a power of sale granted in the mortgage instrument. There are
several other foreclosure procedures available in some states that are
either infrequently used or available only in certain limited
circumstances, such as strict foreclosure.

Judicial Foreclosure

A judicial foreclosure proceeding is conducted in a court having
jurisdiction over the mortgaged property. Generally, the action is
initiated by the service of legal pleadings upon all parties having a
subordinate interest of record in the real property and all parties in
possession of the property, under leases or otherwise, whose interests
are subordinate to the mortgage. Delays in completion of the
foreclosure may occasionally result from difficulties in locating
defendants. When the lender's right to foreclose is contested, the
legal proceedings can be time-consuming. Upon successful completion of
a judicial foreclosure proceeding, the court generally issues a
judgment of foreclosure and appoints a referee or other officer to
conduct a public sale of the mortgaged property, the proceeds of which
are used to satisfy the judgment. Such sales are made in accordance
with procedures that vary from state to state.

Equitable Limitations on Enforceability of Certain Provisions

United States courts have traditionally imposed general equitable
principles to limit the remedies available to a mortgagee in connection
with foreclosure. These equitable principles are generally designed to
relieve the mortgagor from the legal effect of mortgage defaults, to
the extent that such effect is perceived as harsh or unfair. Relying on
such principles, a court may alter the specific terms of a loan to the
extent it considers necessary to prevent or remedy an injustice, undue
oppression or overreaching, or may require the lender to undertake
affirmative and expensive actions to determine the cause of the
mortgagor's default and the likelihood that the mortgagor will be able
to reinstate the loan. In some cases, courts have substituted their
judgment for the lender's and have required that lenders reinstate
loans or recast payment schedules in order to accommodate mortgagors
who are suffering from a temporary financial disability. In other
cases, courts have limited the right of the lender to foreclose if the
default under the mortgage is not monetary, e.g., the mortgagor failed
to maintain the mortgaged property adequately or the mortgagor executed
a junior mortgage on the mortgaged property. The exercise by the court
of its equity powers will depend on the individual circumstances of
each case presented to it. Finally, some courts have been faced with
the issue of whether federal or state constitutional provisions
reflecting due process concerns for adequate notice require that a
mortgagor receive notice in addition to statutorily-prescribed minimum
notice. For the most part, these cases have upheld the reasonableness
of the notice provisions or have found that a public sale under a
mortgage providing for a power of sale does not involve sufficient
state action to afford constitutional protections to the mortgagor.

A foreclosure action is subject to most of the delays and expenses
of other lawsuits if defenses are raised or counterclaims are
interposed, and sometimes require several years to complete. Moreover,
as discussed below, a non-collusive, regularly conducted foreclosure
sale may be challenged as a fraudulent conveyance, regardless of the
parties' intent, if a court determines that the sale was for less than
fair consideration and such sale occurred while the mortgagor was
insolvent (or the mortgagor was rendered insolvent as a result of such
sale) and within one year (or within the state statute of limitations
if the trustee in bankruptcy elects to proceed under state fraudulent
conveyance law) of the filing of bankruptcy.

Non-Judicial Foreclosure/Power of Sale

Foreclosure of a deed of trust is generally accomplished by a
non-judicial trustee's sale pursuant to the power of sale granted in
the deed of trust. A power of sale is typically granted in a deed of
trust. It may also be contained in any other type of mortgage
instrument. A power of sale allows a non-judicial public sale to be
conducted generally following a request from the beneficiary/lender to
the trustee to sell the property upon any default by the mortgagor
under the terms of the mortgage
note or the mortgage instrument and after notice of sale is given in
accordance with the terms of the mortgage instrument, as well as
applicable state law. In some states, prior to such sale, the trustee
under a deed of trust must record a notice of default and notice of
sale and send a copy to the mortgagor and to any other party who has
recorded a request for a copy of a notice of default and notice of
sale. In addition, in some states the trustee must provide notice to
any other party having an interest of record in the real property,
including junior lienholders. A notice of sale must be posted in a
public place and, in most states, published for a specified period of
time in one or more newspapers. The mortgagor or junior lienholder may
then have the right, during a reinstatement period required in some
states, to cure the default by paying the entire actual amount in
arrears (without acceleration) plus the expenses incurred in enforcing
the obligation. In other states, the mortgagor or the junior lienholder
is not provided a period to reinstate the loan, but has only the right
to pay off the entire debt to prevent the foreclosure sale. Generally,
the procedure for public sale, the parties entitled to notice, the
method of giving notice and the applicable time periods are governed by
state law and vary among the states. Foreclosure of a deed to secure
debt is also generally accomplished by a non-judicial sale similar to
that required by a deed of trust, except that the lender or its agent,
rather than a trustee, is typically empowered to perform the sale in
accordance with the terms of the deed to secure debt and applicable
law.

Public Sale

A third party may be unwilling to purchase a mortgaged property at
a public sale because of the difficulty in determining the value of
such property at the time of sale, due to, among other things,
redemption rights which may exist and the possibility of physical
deterioration of the property during the foreclosure proceedings. For
these reasons, it is common for the lender to purchase the mortgaged
property for an amount equal to or less than the underlying debt and
accrued and unpaid interest plus the expenses of foreclosure.
Generally, state law controls the amount of foreclosure costs and
expenses which may be recovered by a lender. Thereafter, subject to the
mortgagor's right in some states to remain in possession during a
redemption period, if applicable, the lender will become the owner of
the property and have both the benefits and burdens of ownership of the
mortgaged property. For example, the lender will have the obligation to
pay debt service on any senior mortgages, to pay taxes, obtain casualty
insurance and to make such repairs at its own expense as are necessary
to render the property suitable for sale. Frequently, the lender
employs a third party management company to manage and operate the
property. The costs of operating and maintaining a commercial or
multifamily residential property may be significant and may be greater
than the income derived from that property. The costs of management and
operation of those mortgaged properties which are hotels, motels,
restaurants, nursing or convalescent homes or hospitals may be
particularly significant because of the expertise, knowledge and, with
respect to nursing or convalescent homes or hospitals, regulatory
compliance, required to run such operations and the effect which
foreclosure and a change in ownership may have on the public's and the
industry's (including franchisors') perception of the quality of such
operations. The lender will commonly obtain the services of a real
estate broker and pay the broker's commission in connection with the
sale of the property. Depending upon market conditions, the ultimate
proceeds of the sale of the property may not equal the lender's
investment in the property. Moreover, a lender commonly incurs
substantial legal fees and court costs in acquiring a mortgaged
property through contested foreclosure and/or bankruptcy proceedings.
Furthermore, a few states require that any environmental contamination
at certain types of properties be cleaned up before a property may be
resold. In addition, a lender may be responsible under federal or state
law for the cost of cleaning up a mortgaged property that is
environmentally contaminated. See "Environmental Legislation."
Generally state law controls the amount of foreclosure expenses and
costs, including attorneys' fees, that may be recovered by a lender.

A junior mortgagee may not foreclose on the property securing the
junior mortgage unless it forecloses subject to senior mortgages and
any other prior liens, in which case it may be obliged to make payments
on the senior mortgages to avoid their foreclosure. In addition, in the
event that the foreclosure of a junior mortgage triggers the
enforcement of a "due-on-sale" clause contained in a senior mortgage,
the junior mortgagee may be required to pay the full amount of the
senior mortgage to avoid its foreclosure. Accordingly, with respect to
those Mortgage Loans, if any, that are junior mortgage loans, if the
lender purchases the property the lender's title will be subject to all
senior mortgages, prior liens and certain governmental liens.

The proceeds received by the referee or trustee from the sale are
applied first to the costs, fees and expenses of sale and then in
satisfaction of the indebtedness secured by the mortgage under which
the sale was conducted. Any proceeds remaining after satisfaction of
senior mortgage debt are generally payable to the holders of junior
mortgages and other liens and claims in order of their priority,
whether or not the mortgagor is in default. Any additional proceeds are
generally payable to the mortgagor. The payment of the proceeds to the
holders of junior mortgages may occur in the foreclosure action of the
senior mortgage or a subsequent ancillary proceeding or may require the
institution of separate legal proceedings by such holders.

REO Properties

If title to any Mortgaged Property is acquired by the Trustee on
behalf of the Certificateholders, the Master Servicer or any related
Sub-servicer or the Special Servicer, on behalf of such holders, will
be required to sell the Mortgaged Property prior to the close of the
third calendar year following the year of acquisition of such Mortgaged
Property by the Trust Fund, unless (i) the Internal Revenue Service
grants an extension of time to sell such property (an "REO Extension")
or (ii) it obtains an opinion of counsel generally to the effect that
the holding of the property beyond the close of the third calendar year
after its acquisition will not result in the imposition of a tax on the
Trust Fund or cause any REMIC created pursuant to the Pooling and
Servicing Agreement to fail to qualify as a REMIC under the Code.
Subject to the foregoing, the Master Servicer or any related
Sub-servicer or the Special Servicer will generally be required to
solicit bids for any Mortgaged Property so acquired in such a manner as
will be reasonably likely to realize a fair price for such property.
The Master Servicer or any related Sub-servicer or the Special Servicer
may retain an independent contractor to operate and manage any REO
Property; however, the retention of an independent contractor will not
relieve the Master Servicer or any related Sub-servicer or the Special
Servicer of its obligations with respect to such REO Property.

Rights of Redemption

The purposes of a foreclosure action are to enable the mortgagee
to realize upon its security and to bar the mortgagor, and all persons
who have an interest in the property which is subordinate to the
mortgage being foreclosed, from exercise of their "equity of
redemption." The doctrine of equity of redemption provides that, until
the property covered by a mortgage has been sold in accordance with a
properly conducted foreclosure and foreclosure sale, those having an
interest which is subordinate to that of the foreclosing mortgagee have
an equity of redemption and may redeem the property by paying the
entire debt with interest. In addition, in some states, when a
foreclosure action has been commenced, the redeeming party must pay
certain costs of such action. Those having an equity of redemption must
generally be made parties and joined in the foreclosure proceeding in
order for their equity of redemption to be cut off and terminated.

The equity of redemption is a common-law (non-statutory) right
which exists prior to completion of the foreclosure, is not waivable by
the mortgagor, must be exercised prior to foreclosure sale and should
be distinguished from the post-sale statutory rights of redemption. In
some states, after sale pursuant to a deed of trust or foreclosure of a
mortgage, the mortgagor and foreclosed junior lienors are given a
statutory period in which to redeem the property from the foreclosure
sale. In some states, statutory redemption may occur only upon payment
of the foreclosure sale price. In other states, redemption may be
authorized if the former mortgagor pays only a portion of the sums due.
The effect of a statutory right of redemption is to diminish the
ability of the lender to sell the foreclosed property. The exercise of
a right of redemption would defeat the title of any purchaser from a
foreclosure sale or sale under a deed of trust. Consequently, the
practical effect of the redemption right is to force the lender to
maintain the property and pay the expenses of ownership until the
redemption period has expired. In some states, a post-sale statutory
right of redemption may exist following a judicial foreclosure, but not
following a trustee's sale under a deed of trust.

Under the REMIC Provisions currently in effect, property acquired
by foreclosure generally must not be held beyond the close of the
third calendar year following the year of acquisition. Unless
otherwise provided in the related Prospectus Supplement, with
respect to a series of Certificates for which an election is made
to qualify the Trust Fund or a part thereof as a REMIC, the
Agreement will permit foreclosed property to be held beyond the
close of the third calendar year following the year of acquisition
if the Internal Revenue Service grants an extension of time within
which to sell such property or independent counsel renders an
opinion to the effect that holding such property for such
additional period is permissible under the REMIC Provisions.

Anti-Deficiency Legislation

Some or all of the Mortgage Loans may be nonrecourse loans, as to
which recourse may be had only against the specific property securing
the related Mortgage Loan and a personal money judgment may not be
obtained against the mortgagor. Even if a mortgage loan by its terms
provides for recourse to the mortgagor, some states impose prohibitions
or limitations on such recourse. For example, statutes in some states
limit the right of the lender to obtain a deficiency judgment against
the mortgagor following foreclosure or sale under a deed of trust. A
deficiency judgment would be a personal judgment against the former
mortgagor equal to the difference between the net amount realized upon
the public sale of the real property and the amount due to the lender.
Some states require the lender to exhaust the security afforded under a
mortgage by foreclosure in an attempt to satisfy the full debt before
bringing a personal action against the mortgagor. In certain other
states, the lender has the option of bringing a personal action against
the mortgagor on the debt without first exhausting such security;
however, in some of these states, the lender, following judgment on
such personal action, may be deemed to have elected a remedy and may be
precluded from exercising remedies with respect to the security. In
some cases, a lender will be precluded from exercising any additional
rights under the note or mortgage if it has taken any prior enforcement
action. Consequently, the practical effect of the election requirement,
in those states permitting such election, is that lenders will usually
proceed against the security first rather than bringing a personal
action against the mortgagor. Finally, other statutory provisions limit
any deficiency judgment against the former mortgagor following a
judicial sale to the excess of the outstanding debt over the fair
market value of the property at the time of the public sale. The
purpose of these statutes is generally to prevent a lender from
obtaining a large deficiency judgment against the former mortgagor as a
result of low or no bids at the judicial sale.

Leasehold Risks

Mortgage Loans may be secured by a mortgage on a ground lease.
Leasehold mortgages are subject to certain risks not associated with
mortgage loans secured by the fee estate of the mortgagor. The most
significant of these risks is that the ground lease creating the
leasehold estate could terminate, leaving the leasehold mortgagee
without its security. The ground lease may terminate if, among other
reasons, the ground lessee breaches or defaults in its obligations
under the ground lease or there is a bankruptcy of the ground lessee or
the ground lessor. This risk may be minimized if the ground lease
contains certain provisions protective of the mortgagee, but the ground
leases that secure Mortgage Loans may not contain some of these
protective provisions, and mortgages may not contain the other
protections discussed in the next paragraph. Protective ground lease
provisions include the right of the leasehold mortgagee to receive
notices from the ground lessor of any defaults by the mortgagor; the
right to cure such defaults, with adequate cure periods; if a default
is not susceptible of cure by the leasehold mortgagee, the right to
acquire the leasehold estate through foreclosure or otherwise; the
ability of the ground lease to be assigned to and by the leasehold
mortgagee or purchaser at a foreclosure sale and for the concomitant
release of the ground lessee's liabilities thereunder; and the right of
the leasehold mortgagee to enter into a new ground lease with the
ground lessor on the same terms and conditions as the old ground lease
in the event of a termination thereof.

In addition to the foregoing protections, a leasehold mortgagee
may require that the ground lease or leasehold mortgage prohibit the
ground lessee from treating the ground lease as terminated in the event
of the ground lessor's bankruptcy and rejection of the ground lease by
the trustee for the debtor-ground lessor. As further protection, a
leasehold mortgage may provide for the assignment of the debtor-ground
lessee's right to reject a lease pursuant to Section 365 of the
Bankruptcy Reform Act of 1978, as amended (Title 11 of the United
States Code) (the "Bankruptcy Code"), although the enforceability of
such clause has not been established. Without the protections described
above, a leasehold mortgagee may lose the collateral securing its
leasehold mortgage. In addition, terms and conditions of a leasehold
mortgage are subject to the terms and conditions of the ground lease.
Although certain rights given to a ground lessee can be limited by the
terms of a leasehold mortgage, the rights of a ground lessee or a
leasehold mortgagee with respect to, among other things, insurance,
casualty and condemnation will be governed by the provisions of the
ground lease.

Bankruptcy Laws

The Bankruptcy Code and related state laws may interfere with or
affect the ability of a lender to realize upon collateral and/or to
enforce a deficiency judgment. For example, under the Bankruptcy Code,
virtually all actions (including foreclosure actions and deficiency
judgment proceedings) are automatically stayed upon the filing of the
bankruptcy petition, and, usually, no interest or principal payments
are made during the course of the bankruptcy case. The delay and the
consequences thereof caused by such automatic stay can be significant.
Also, under the Bankruptcy Code, the filing of a petition in bankruptcy
by or on behalf of a junior lienor may stay the senior lender from
taking action to foreclose out such junior lien.

Under the Bankruptcy Code, provided certain substantive and
procedural safeguards for the lender are met, the amount and terms of a
mortgage secured by property of the debtor may be modified under
certain circumstances. In many jurisdictions, the outstanding amount of
the loan secured by the real property may be reduced to the
then-current value of the property (with a corresponding partial
reduction of the amount of lender's security interest) pursuant to a
confirmed plan or lien avoidance proceeding, thus leaving the lender a
general unsecured creditor for the difference between such value and
the outstanding balance of the loan. Other modifications may include
the reduction in the amount of each scheduled payment, which reduction
may result from a reduction in the rate of interest and/or the
alteration of the repayment schedule (with or without affecting the
unpaid principal balance of the loan), and/or an extension (or
reduction) of the final maturity date. Some courts with federal
bankruptcy jurisdiction have approved plans, based on the particular
facts of the reorganization case, that effected the curing of a
mortgage loan default by paying arrearages over a number of years.
Also, under federal bankruptcy law, a bankruptcy court may permit a
debtor through its rehabilitative plan to de-accelerate a secured loan
and to reinstate the loan even though the lender accelerated the
mortgage loan and final judgment of foreclosure had been entered in
state court (provided no sale of the property had yet occurred) prior
to the filing of the debtor's petition. This may be done even if the
full amount due under the original loan is never repaid.

Federal bankruptcy law provides generally that rights and
obligation under an unexpired lease of the debtor/lessee may not be
terminated or modified at any time after the commencement of a case
under the Bankruptcy Code solely on the basis of a provision in the
lease to such effect or because of certain other similar events. This
prohibition on so-called "ipso facto clauses" could limit the ability
of the Trustee for a series of Certificates to exercise certain
contractual remedies with respect to the Leases. In addition, Section
362 of the Bankruptcy Code operates as an automatic stay of, among
other things, any act to obtain possession of property from a debtor's
estate, which may delay a Trustee's exercise of such remedies for a
related series of Certificates in the event that a related Lessee or a
related mortgagor becomes the subject of a proceeding under the
Bankruptcy Code. For example, a mortgagee would be stayed from
enforcing a Lease Assignment by a mortgagor related to a Mortgaged
Property if the related mortgagor was in a bankruptcy proceeding. The
legal proceedings necessary to resolve the issues could be
time-consuming and might result in significant delays in the receipt of
the assigned rents. Similarly, the filing of a petition in bankruptcy
by or on behalf of a Lessee of a Mortgaged Property would result in a
stay against the commencement or continuation of any state court
proceeding for past due rent, for accelerated rent, for damages or for
a summary eviction order with respect to a default under the Lease that
occurred prior to the filing of the Lessee's petition. Rents and other
proceeds of a Mortgage Loan may also escape an assignment thereof if
the assignment is not fully perfected under state law prior to
commencement of the bankruptcy proceeding. See "--Leases and Rents"
above.

In addition, the Bankruptcy Code generally provides that a trustee
or debtor-in-possession may, subject to approval of the court, (a)
assume the lease and retain it or assign it to a third party or (b)
reject the lease. If the lease is assumed, the trustee in bankruptcy on
behalf of the lessee, or the lessee as debtor-in-possession, or the
assignee, if applicable, must cure any defaults under the lease,
compensate the lessor for its losses and provide the lessor with
"adequate assurance" of future performance. Such remedies may be
insufficient, however, as the lessor may be forced to continue under
the lease with a lessee that is a poor credit risk or an unfamiliar
tenant if the lease was assigned, and any assurances provided to the
lessor may, in fact, be inadequate. If the lease is rejected, such
rejection generally constitutes a breach of the executory contract or
unexpired lease immediately before the date of filing the petition. As
a consequence, the other party or parties to such lease, such as the
mortgagor, as lessor under a Lease, would have only an unsecured claim
against the debtor for damages resulting from such breach, which could
adversely affect the security for the related Mortgage Loan. In
addition, pursuant to Section 502(b)(6) of the Bankruptcy Code, a
lessor's damages for lease rejection in respect of future rent
installments are limited to the rent reserved by the lease, without
acceleration, for the greater of one year or 15%, not to exceed three
years, of the remaining term of the lease.

If a trustee in bankruptcy on behalf of a lessor, or a lessor as
debtor-in-possession, rejects an unexpired lease of real property, the
lessee may treat such lease as terminated by such rejection or, in the
alternative, the lessee may remain in
possession of the leasehold for the balance of such term and for any
renewal or extension of such term that is enforceable by the lessee
under applicable nonbankruptcy law. The Bankruptcy Code provides that
if a lessee elects to remain in possession after such a rejection of a
lease, the lessee may offset against rents reserved under the lease for
the balance of the term after the date of rejection of the lease, and
any such renewal or extension thereof, any damages occurring after such
date caused by the nonperformance of any obligation of the lessor under
the lease after such date. To the extent provided in the related
Prospectus Supplement, the Lessee will agree under certain Leases to
pay all amounts owing thereunder to the Master Servicer without offset.
To the extent that such a contractual obligation remains enforceable
against the Lessee, the Lessee would not be able to avail itself of the
rights of offset generally afforded to lessees of real property under
the Bankruptcy Code.

In a bankruptcy or similar proceeding of a mortgagor, action may
be taken seeking the recovery, as a preferential transfer or on other
grounds, of any payments made by the mortgagor, or made directly by the
related Lessee, under the related Mortgage Loan to the Trust Fund.
Payments on long-term debt may be protected from recovery as
preferences if they are payments in the ordinary course of business
made on debts incurred in the ordinary course of business. Whether any
particular payment would be protected depends upon the facts specific
to a particular transaction.

A trustee in bankruptcy, in some cases, may be entitled to collect
its costs and expenses in preserving or selling the mortgaged property
ahead of payment to the lender. In certain circumstances, a debtor in
bankruptcy may have the power to grant liens senior to the lien of a
mortgage, and analogous state statutes and general principles of equity
may also provide a mortgagor with means to halt a foreclosure
proceeding or sale and to force a restructuring of a mortgage loan on
terms a lender would not otherwise accept. Moreover, the laws of
certain states also give priority to certain tax liens over the lien of
a mortgage or deed of trust. Under the Bankruptcy Code, if the court
finds that actions of the mortgagee have been unreasonable, the lien of
the related mortgage may be subordinated to the claims of unsecured
creditors.

To the extent described in the related Prospectus Supplement,
certain of the Mortgagors may be partnerships. The laws governing
limited partnerships in certain states provide that the commencement of
a case under the Bankruptcy Code with respect to a general partner will
cause a person to cease to be a general partner of the limited
partnership, unless otherwise provided in writing in the limited
partnership agreement. This provision may be construed as an "ipso
facto" clause and, in the event of the general partner's bankruptcy,
may not be enforceable. To the extent described in the related
Prospectus Supplement, certain limited partnership agreements of the
Mortgagors may provide that the commencement of a case under the
Bankruptcy Code with respect to the related general partner constitutes
an event of withdrawal (assuming the enforceability of the clause is
not challenged in bankruptcy proceedings or, if challenged, is upheld)
that might trigger the dissolution of the limited partnership, the
winding up of its affairs and the distribution of its assets, unless
(i) at the time there was at least one other general partner and the
written provisions of the limited partnership permit the business of
the limited partnership to be carried on by the remaining general
partner and that general partner does so or (ii) the written provisions
of the limited partnership agreement permit the limited partner to
agree within a specified time frame (often 60 days) after such
withdrawal to continue the business of the limited partnership and to
the appointment of one or more general partners and the limited
partners do so. In addition, the laws governing general partnerships in
certain states provide that the commencement of a case under the
Bankruptcy Code or state bankruptcy laws with respect to a general
partner of such partnerships triggers the dissolution of such
partnership, the winding up of its affairs and the distribution of its
assets. Such state laws, however, may not be enforceable or effective
in a bankruptcy case. The dissolution of a Mortgagor, the winding up of
its affairs and the distribution of its assets could result in an
acceleration of its payment obligation under a related Mortgage Loan,
which may reduce the yield on the related series of Certificates in the
same manner as a principal prepayment.

In addition, the bankruptcy of the general partner of a Mortgagor
that is a partnership may provide the opportunity for a trustee in
bankruptcy for such general partner, such general partner as a
debtor-in-possession, or a creditor of such general partner to obtain
an order from a court consolidating the assets and liabilities of the
general partner with those of the Mortgagor pursuant to the doctrines
of substantive consolidation or piercing the corporate veil. In such a
case, the respective Mortgaged Property, for example, would become
property of the estate of such bankrupt general partner. Not only would
the Mortgaged Property be available to satisfy the claims of creditors
of such general partner, but an automatic stay would apply to any
attempt by the Trustee to exercise remedies with respect to such
Mortgaged Property. However, such an occurrence should not affect the
Trustee's status as a secured creditor with respect to the Mortgagor or
its security interest in the Mortgaged Property.

Junior Mortgages; Rights of Senior Mortgagees or Beneficiaries

To the extent specified in the related Prospectus Supplement, some
of the Mortgage Loans for a series will be secured by junior
mortgages or deeds of trust which are subordinated to senior
mortgages or deeds of trust held by other lenders or institutional
investors. The rights of the Trust Fund (and therefore the related
Certificateholders), as beneficiary under a junior deed of trust
or as mortgagee under a junior mortgage, are subordinate to those
of the mortgagee or beneficiary under the senior mortgage or deed
of trust, including the prior rights of the senior mortgagee or
beneficiary to receive rents, hazard insurance and condemnation
proceeds and to cause the Mortgaged Property securing the Mortgage
Loan to be sold upon default of the Mortgagor or trustor, thereby
extinguishing the junior mortgagee's or junior beneficiary's lien
unless the Master Servicer or Special Servicer, as applicable,
asserts its subordinate interest in a Mortgaged Property in
foreclosure litigation or satisfies the defaulted senior loan. As
discussed more fully below, in many states a junior mortgagee or
beneficiary may satisfy a defaulted senior loan in full, or may
cure such default and bring the senior loan current, in either
event adding the amounts expended to the balance due on the junior
loan. Absent a provision in the senior mortgage, no notice of
default is required to be given to the junior mortgagee unless
otherwise required by law.

The form of the mortgage or deed of trust used by many
institutional lenders confers on the mortgagee or beneficiary the right
both to receive all proceeds collected under any hazard insurance
policy and all awards made in connection with any condemnation
proceedings, and to apply such proceeds and awards to any indebtedness
secured by the mortgage or deed of trust, in such order as the
mortgagee or beneficiary may determine. Thus, in the event improvements
on the property are damaged or destroyed by fire or other casualty, or
in the event the property is taken by condemnation, the mortgagee or
beneficiary under the senior mortgage or deed of trust will have the
prior right to collect any insurance proceeds payable under the hazard
insurance policy and any award of damages in connection with the
condemnation and to apply the same to the indebtedness secured by the
senior mortgage or deed of trust. Proceeds in excess of the amount of
senior mortgage indebtedness will, in most cases, be applied to the
indebtedness of a junior mortgage or trust deed. The laws of certain
states may limit the ability of mortgagees or beneficiaries to apply
the proceeds of hazard insurance and partial condemnation awards to the
secured indebtedness. In such states, the mortgagor or trustor must be
allowed to use the proceeds of hazard insurance to repair the damage
unless the security of the mortgagee or beneficiary has been impaired.
Similarly, in certain states, the mortgagee or beneficiary is entitled
to the award for a partial condemnation of the real property security
only to the extent that its security is impaired.

The form of mortgage or deed of trust used by many institutional
lenders typically contains a "future advance" clause, which provides in
essence, that additional amounts advanced to or on behalf of the
mortgagor or trustor by the mortgagee or beneficiary are to be secured
by the mortgage or deed of trust. While such a clause is valid under
the laws of most states, the priority of any advance made under the
clause depends, in some states, on whether the advance was an
"obligatory" or "optional" advance. If the mortgagee or beneficiary is
obligated to advance the additional amounts, the advance may be
entitled to receive the same priority as amounts initially made under
the mortgage or deed of trust, notwithstanding that there may be
intervening junior mortgages or deeds of trust and other liens between
the date of recording of the mortgage or deed of trust and the date of
the future advance, and notwithstanding that the mortgagee or
beneficiary had actual knowledge of such intervening junior mortgages
or deeds of trust and other liens at the time of the advance. Where the
mortgagee or beneficiary is not obligated to advance the additional
amounts and has actual knowledge of the intervening junior mortgages or
deeds of trust and other liens, the advance may be subordinated to such
intervening junior mortgages or deeds of trust and other liens.
Priority of advances under a "future advance" clause rests, in many
other states, on state law giving priority to all advances made under
the loan agreement up to a "credit limit" amount stated in the recorded
mortgage.

Another provision typically found in the form of the mortgage or
deed of trust used by many institutional lenders obligates the
mortgagor or trustor to pay before delinquency all taxes and
assessments on the property and, when due, all encumbrances, charges
and liens on the property which appear prior to the mortgage or deed of
trust, to provide and maintain fire insurance on the property, to
maintain and repair the property and not to commit or permit any waste
thereof, and to appear in and defend any action or proceeding
purporting to affect the property or the rights of the mortgagee or
beneficiary under the mortgage or deed of trust. Upon a failure of the
mortgagor or trustor to perform any of these obligations, the mortgagee
or beneficiary is given the right under the mortgage or deed of trust
to perform the obligation itself, at its election, with the mortgagor
or trustor agreeing to reimburse the mortgagee or beneficiary on behalf
of the mortgagor or trustor. All sums so expended by the mortgagee or
beneficiary become part of the indebtedness secured by the mortgage or
deed of trust.

The form of mortgage or deed of trust used by many institutional
lenders typically requires the mortgagor or trustor to obtain the
consent of the mortgagee or beneficiary in respect of actions affecting
the mortgaged property, including, without limitation, leasing
activities (including new leases and termination or modification of
existing leases), alterations and
improvements to buildings forming a part of the mortgaged property and
management and leasing agreements for the mortgaged property. Tenants
will often refuse to execute a lease unless the mortgagee or
beneficiary executes a written agreement with the tenant not to disturb
the tenant's possession of its premises in the event of a foreclosure.
A senior mortgagee or beneficiary may refuse to consent to matters
approved by a junior mortgagee or beneficiary with the result that the
value of the security for the junior mortgage or deed of trust is
diminished. For example, a senior mortgagee or beneficiary may decide
not to approve the lease or to refuse to grant a tenant a
non-disturbance agreement. If, as a result, the lease is not executed,
the value of the mortgaged property may be diminished.

Environmental Legislation

Real property pledged as security to a lender may be subject to
unforeseen environmental liabilities. Of particular concern may be
those Mortgaged Properties which are, or have been, the site of
manufacturing, industrial or disposal activity. Such environmental
liabilities may give rise to (i) a diminution in value of property
securing any Mortgage Loan, (ii) limitation on the ability to foreclose
against such property or (iii) in certain circumstances, as more fully
described below, liability for clean-up costs or other remedial
actions, which liability could exceed the value of the principal
balance of the related Mortgage Loan or of such Mortgaged Property.

Under the laws of many states, contamination on a property may
give rise to a lien on the property for cleanup costs. In several
states, such a lien has priority over all existing liens (a
"superlien") including those of existing mortgages; in these states,
the lien of a mortgage contemplated by this transaction may lose its
priority to such a superlien.

The presence of hazardous or toxic substances, or the failure to
remediate such property properly, may adversely affect the market value
of the property, as well as the owner's ability to sell or use the real
estate or to borrow using the real estate as collateral. In addition,
certain environmental laws and common law principles govern the
responsibility for the removal, encapsulation or disturbance of
asbestos containing materials ("ACMs") when these ACMs are in poor
condition or when a property with ACMs is undergoing repair, renovation
or demolition. Such laws could also be used to impose liability upon
owners and operators of real properties for release of ACMs into the
air that cause personal injury or other damage. In addition to cleanup
and natural resource damages actions brought by federal, state, and
local agencies and private parties, the presence of hazardous
substances on a property may lead to claims of personal injury,
property damage, or other claims by private plaintiffs.

Under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), and
under the law of certain states, a secured party which takes a
deed-in-lieu of foreclosure, purchases a mortgaged property at a
foreclosure sale, or operates a Mortgaged Property may become liable in
some circumstances either to the government or to private parties for
cleanup costs, even if the lender does not cause or contribute to the
contamination. Liability under some federal or state statutes may not
be limited to the original or unamortized principal balance of a loan
or to the value of the property securing a loan. CERCLA imposes strict,
as well as joint and several, liability on several classes of
potentially responsible parties, including current owners and operators
of the property, regardless of whether they caused or contributed to
the contamination. Many states have laws similar to CERCLA.

Lenders may be held liable under CERCLA as owners or operators.
Excluded from CERCLA's definition of "owner or operator," however, is a
person "who without participating in the management of the facility,
holds indicia of ownership primarily to protect his security interest."
This exemption for holders of a security interest such as a secured
lender applies only in circumstances where the lender acts to protect
its security interest in the contaminated facility or property. Thus,
if a lender's activities encroach on the actual management of such
facility or property, the lender faces potential liability as an "owner
or operator" under CERCLA. Similarly, when a lender forecloses and
takes title to a contaminated facility or property (whether it holds
the facility or property as an investment or leases it to a third
party), the lender may incur potential CERCLA liability.

Whether actions taken by a lender would constitute such an
encroachment on the actual management of a facility or property, so as
to render the secured creditor exemption unavailable to the lender has
been a matter of judicial interpretation of the statutory language, and
court decisions have historically been inconsistent.

This scope of the secured creditor exemption has been clarified by
the enactment of the Asset Conservation, Lender Liability and Deposit
Insurance Protection Act of 1996 (the "Asset Conservation Act"), which
was signed into law by President Clinton on September 30, 1996, and
which lists permissible actions that may be undertaken by a lender
holding security in
a contaminated facility without exceeding the bounds of the secured
creditor exemption, subject to certain conditions and limitations. The
Asset Conservation Act provides that in order to be deemed to have
participated in the management of a secured property, a lender must
actually participate in the operational affairs of the property or the
borrower. The Asset Conservation Act also provides that a lender will
continue to have the benefit of the secured creditor exemption even if
it forecloses on a mortgaged property, purchases it at a foreclosure
sale or accepts a deed-in-lieu of foreclosure provided that the lender
seeks to sell the mortgaged property at the earliest practicable
commercially reasonable time on commercially reasonable terms. The
protections afforded lenders under the Asset Conversion Act are subject
to terms and conditions that have not been clarified by the courts.

The secured creditor exemption does not protect a lender from
liability under CERCLA in cases where the lender arranges for disposal
of hazardous substances or for transportation of hazardous substances.
In addition, the secured creditor exemption does not govern liability
for cleanup costs under federal laws other than CERCLA. CERCLA's
jurisdiction extends to the investigation and remediation of releases
of "hazardous substances." The definition of "hazardous substances"
under CERCLA specifically excludes petroleum products. Therefore, a
federal statute of particular significance is Subtitle I of the
Resource Conservation and Recovery Act ("RCRA"), which governs the
operation and management of underground petroleum storage tanks. Under
the Asset Conservation Act, the holders of security interests in
underground storage tanks or properties containing such tanks are
accorded protections similar to the protections accorded to lenders
under CERCLA. It should be noted, however, that liability for cleanup
of petroleum contamination may be governed by state law, which may not
provide for any specific protection for secured creditors.

In a few states, transfer of some types of properties is
conditioned upon clean up of contamination prior to transfer. In these
cases, a lender that becomes the owner of a property through
foreclosure, deed-in-lieu of foreclosure or otherwise, may be required
to cleanup the contamination before selling or otherwise transferring
the property.

Beyond statute-based environmental liability, there exist common
law causes of action (for example, actions based on nuisance or on
toxic tort resulting in death, personal injury or damage to property)
related to hazardous environmental conditions on a property. While it
may be more difficult to hold a lender liable in such cases,
unanticipated or uninsurable liabilities of the borrower may jeopardize
the borrower's ability to meet its loan obligations.

If a lender is or becomes liable, it may bring an action for
contribution against the owner or operator who created the
environmental hazard, but that person or entity may be bankrupt or
otherwise judgment proof. It is possible that cleanup costs could
become a liability of the Trust Fund and occasion a loss to
Certificateholders in certain circumstances described above if such
remedial costs were incurred.

Unless otherwise provided in the related Prospectus Supplement,
the Warrantying Party with respect to any Whole Loan included in a
Trust Fund for a particular series of Certificates will represent that
a "Phase I Assessment" as described in and meeting the requirements of
the then current version of Chapter 5 of the Federal National Mortgage
Association ("FNMA") Multifamily Guide has been received and reviewed.
In addition, unless otherwise provided in the related Prospectus
Supplement, the related Agreement will provide that the Master
Servicer, acting on behalf of the Trustee, may not acquire title to a
Mortgaged Property or take over its operation unless the Master
Servicer has previously determined, based on a report prepared by a
person who regularly conducts environmental audits, that: (i) such
Mortgaged Property is in compliance with applicable environmental laws,
and there are no circumstances present at the Mortgaged Property
relating to the use, management or disposal of any hazardous
substances, hazardous materials, wastes, or petroleum based materials
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation; or (ii) if such Mortgaged Property is not so in compliance
or such circumstances are so present, then it would be in the best
economic interest of the Trust Fund to acquire title to the Mortgaged
Property and further to take such actions as would be necessary and
appropriate to effect such compliance and/or respond to such
circumstances. This requirement effectively precludes enforcement of
the security for the related Mortgage Note until a satisfactory
environmental inquiry is undertaken or any required remedial action is
provided for, reducing the likelihood that a given Trust Fund will
become liable for any condition or circumstance that may give rise to
any environmental claim (an "Environmental Hazard Condition") affecting
a Mortgaged Property, but making it more difficult to realize on the
security for the Mortgage Loan. However, there can be no assurance that
any environmental assessment obtained by the Master Servicer or a
Special Servicer, as the case may be, will detect all possible
Environmental Hazard Conditions or that the other requirements of the
Agreement, even if fully observed by the Master Servicer or Special
Servicer, as the case may be, will in fact insulate a given Trust Fund
from liability for Environmental Hazard Conditions. See "Description of
the Agreements--Realization Upon Defaulted Whole Loans."

Unless otherwise specified in the related Prospectus Supplement,
the Depositor generally will not have determined whether environmental
assessments have been conducted with respect to the Mortgaged
Properties relating to the Mortgage Loans included in the Mortgage Pool
for a Series, and it is likely that any environmental assessments which
would have been conducted with respect to any of the Mortgaged
Properties would have been conducted at the time of the origination of
the related Mortgage Loans and not thereafter. If specified in the
related Prospectus Supplement, a Warrantying Party will represent and
warrant that, as of the date of initial issuance of the Certificates of
a Series or as of another specified date, no related Mortgaged Property
is affected by a Disqualifying Condition (as defined below). In the
event that, following a default in payment on a Mortgage Loan that
continues for 60 days, (i) the environmental inquiry conducted by the
Master Servicer or Special Servicer, as the case may be, prior to any
foreclosure indicates the presence of a Disqualifying Condition that
arose prior to the date of initial issuance of the Certificates of a
Series and (ii) the Master Servicer or the Special Servicer certify
that it has acted in compliance with the Servicing Standard and has
not, by any action, created, caused or contributed to a Disqualifying
Condition the Warrantying Party, at its option, will reimburse the
Trust Fund, cure such Disqualifying Condition or repurchase or
substitute the affected Whole Loan, as described under "Description of
the Agreements--Representations and Warranties; Repurchases." No such
person will however, be responsible for any Disqualifying Condition
which may arise on a Mortgaged Property after the date of initial
issuance of the Certificates of the related Series, whether due to
actions of the Mortgagor, the Master Servicer, the Special Servicer or
any other person. It may not always be possible to determine whether a
Disqualifying Condition arose prior or subsequent to the date of the
initial issuance of the Certificates of a Series.

A "Disqualifying Condition" is defined generally as a condition,
existing as a result of, or arising from, the presence of Hazardous
Materials (as defined below) on a Mortgaged Property, such that the
Mortgage Loan secured by the affected Mortgaged Property would be
ineligible, solely by reason of such condition, for purchase by FNMA
under the relevant provisions of FNMA's Multifamily Seller/Servicer
Guide in effect as of the date of initial issuance of the Certificates
of such series, including a condition that would constitute a material
violation of applicable federal state or local law in effect as of
their date of initial issuance of the Certificates of such series.
"Hazardous Materials" are generally defined under several federal
and state statutes, and include dangerous toxic or hazardous
pollutants, chemicals, wastes or substances, including, without
limitation, those so identified pursuant to CERCLA and RCRA, and
specifically including, asbestos and asbestos containing materials,
polychlorinated biphenyls, radon gas, petroleum and petroleum products,
urea formaldehyde and any substances classified as being "in
inventory," "usable work in process" or similar classification which
would, if classified as unusable, be included in the foregoing
definition.

Due-on-Sale and Due-on-Encumbrance

Certain of the Mortgage Loans may contain due-on-sale and
due-on-encumbrance clauses. These clauses generally provide that the
lender may accelerate the maturity of the loan if the mortgagor sells
or otherwise transfers or encumbers the related Mortgaged Property.
Certain of these clauses may provide that, upon an attempted breach
thereof by the mortgagor of an otherwise non-recourse loan, the
mortgagor becomes personally liable for the mortgage debt. The
enforceability of due-on-sale clauses has been the subject of
legislation or litigation in many states and, in some cases, the
enforceability of these clauses was limited or denied. However, with
respect to certain loans the Garn-St Germain Depository Institutions
Act of 1982 preempts state constitutional, statutory and case law that
prohibits the enforcement of due-on-sale clauses and permits lenders to
enforce these clauses in accordance with their terms subject to certain
limited exceptions. Unless otherwise provided in the related Prospectus
Supplement, a Master Servicer, on behalf of the Trust Fund, will
determine whether to exercise any right the Trustee may have as
mortgagee to accelerate payment of any such Mortgage Loan or to
withhold its consent to any transfer or further encumbrance in a manner
consistent with the Servicing Standard.

In addition, under federal bankruptcy laws, due-on-sale clauses
may not be enforceable in bankruptcy proceedings and may, under certain
circumstances, be eliminated in any modified mortgage resulting from
such bankruptcy proceeding.

Subordinate Financing

Where a mortgagor encumbers mortgaged property with one or more
junior liens, the senior lender is subjected to additional risk. First,
the mortgagor may have difficulty servicing and repaying multiple
loans. In addition, if the junior loan permits recourse to the
mortgagor (as junior loans often do) and the senior loan does not, a
mortgagor may be more likely to repay sums due on the junior loan than
those on the senior loan. Second, acts of the senior lender that
prejudice the junior lender or impair the junior lender's security may
create a superior equity in favor of the junior lender. For example, if
the mortgagor and the senior lender agree to an increase in the
principal amount of or the interest rate payable on the senior loan,
the senior lender may lose its priority to the extent any existing
junior lender is harmed or the mortgagor is additionally burdened.
Third, if the mortgagor defaults on the senior loan and/or any junior
loan or loans, the existence of junior loans and actions taken by
junior lenders can impair the security available to the senior lender
and can interfere with or delay the taking of action by the senior
lender. Moreover, the bankruptcy of a junior lender may operate to stay
foreclosure or similar proceedings by the senior lender.

Default Interest, Prepayment Charges and Prepayments

Forms of notes and mortgages used by lenders may contain
provisions obligating the mortgagor to pay a late charge or additional
interest if payments are not timely made, and in some circumstances may
provide for prepayment fees or yield maintenance penalties if the
obligation is paid prior to maturity or prohibit such prepayment for a
specified period. In certain states, there are or may be specific
limitations upon the late charges which a lender may collect from a
mortgagor for delinquent payments. Certain states also limit the
amounts that a lender may collect from a mortgagor as an additional
charge if the loan is prepaid. The enforceability, under the laws of a
number of states of provisions providing for prepayment fees or
penalties upon, or prohibition of, an involuntary prepayment is
unclear, and no assurance can be given that, at the time a Prepayment
Premium is required to be made on a Mortgage Loan in connection with an
involuntary prepayment, the obligation to make such payment, or the
provisions of any such prohibition, will be enforceable under
applicable state law. The absence of a restraint on prepayment,
particularly with respect to Mortgage Loans having higher Mortgage
Rates, may increase the likelihood of refinancing or other early
retirements of the Mortgage Loans.

Acceleration on Default

Unless otherwise specified in the related prospectus Supplement,
some of the Mortgage Loans included in the Mortgage Pool for a Series
will include a "debt-acceleration" clause, which permits the lender to
accelerate the full debt upon a monetary or nonmonetary default of the
Mortgagor. The courts of all states will enforce clauses providing for
acceleration in the event of a material payment default after giving
effect to any appropriate notices. The equity courts of the state,
however, may refuse to foreclose a mortgage or deed of trust when an
acceleration of the indebtedness would be inequitable or unjust or the
circumstances would render the acceleration unconscionable.
Furthermore, in some states, the mortgagor may avoid foreclosure and
reinstate an accelerated loan by paying only the defaulted amounts and
the costs and attorneys' fees incurred by the lender in collecting such
defaulted payments.

Applicability of Usury Laws

Title V of the Depository Institutions Deregulation and Monetary
Control Act of 1980, enacted in March 1980 ("Title V"), provides that
state usury limitations shall not apply to certain types of residential
(including multifamily but not other commercial) first mortgage loans
originated by certain lenders after March 31, 1980. A similar federal
statute was in effect with respect to mortgage loans made during the
first three months of 1980. The statute authorized any state to
reimpose interest rate limits by adopting, before April 1, 1983, a law
or constitutional provision that expressly rejects application of the
federal law. In addition, even where Title V is not so rejected, any
state is authorized by the law to adopt a provision limiting discount
points or other charges on mortgage loans covered by Title V. Certain
states have taken action to reimpose interest rate limits and/or to
limit discount points or other charges.

The Depositor has been advised by counsel that a court
interpreting Title V would hold that residential first mortgage loans
that are originated on or after January 1, 1980 are subject to federal
preemption. Therefore, in a state that has not taken the requisite
action to reject application of Title V or to adopt a provision
limiting discount points or other charges prior to origination of such
mortgage loans, any such limitation under such state's usury law would
not apply to such mortgage loans.

In any state in which application of Title V has been expressly
rejected or a provision limiting discount points or other charges is
adopted, no Mortgage Loan originated after the date of such state
action will be eligible for inclusion in a Trust Fund unless (i) such
Mortgage Loan provides for such interest rate, discount points and
charges as are permitted in such state or (ii) such Mortgage Loan
provides that the terms thereof shall be construed in accordance with
the laws of another state under which such interest rate, discount
points and charges would not be usurious and the mortgagor's counsel
has rendered an opinion that such choice of law provision would be
given effect.

Statutes differ in their provisions as to the consequences of a
usurious loan. One group of statutes requires the lender to forfeit the
interest due above the applicable limit or impose a specified penalty.
Under this statutory scheme, the mortgagor
may cancel the recorded mortgage or deed of trust upon paying its debt
with lawful interest, and the lender may foreclose, but only for the
debt plus lawful interest. A second group of statutes is more severe. A
violation of this type of usury law results in the invalidation of the
transaction, thereby permitting the mortgagor to cancel the recorded
mortgage or deed of trust without any payment or prohibiting the lender
from foreclosing.

Certain Laws and Regulations; Types of Mortgaged Properties

The Mortgaged Properties will be subject to compliance with
various federal, state and local statutes and regulations. Failure to
comply (together with an inability to remedy any such failure) could
result in material diminution in the value of a Mortgage Property which
could, together with the possibility of limited alternative uses for a
particular Mortgaged Property (e.g., a nursing or convalescent home or
hospital), result in a failure to realize the full principal amount of
the related Mortgage Loan. Mortgages on Mortgaged Properties which are
owned by the Mortgagor under a condominium form of ownership are
subject to the declaration, by-laws and other rules and regulations of
the condominium association. Mortgaged Properties which are hotels or
motels may present additional risk in that hotels and motels are
typically operated pursuant to franchise, management and operating
agreements which may be terminable by the operator, and the
transferability of the hotel's operating, liquor and other licenses to
the entity acquiring the hotel either through purchases or foreclosure
is subject to the vagaries of local law requirements. In addition,
Mortgaged Properties which are multifamily residential properties may
be subject to rent control laws, which could impact the future cash
flows of such properties.

Americans With Disabilities Act

Under Title III of the Americans with Disabilities Act of 1990 and
rules promulgated thereunder (collectively, the "ADA"), in order to
protect individuals with disabilities, public accommodations (such as
hotels, restaurants, shopping centers, hospitals, schools and social
service center establishments) must remove architectural and
communication barriers which are structural in nature from existing
places of public accommodation to the extent "readily achievable." In
addition, under the ADA, alterations to a place of public accommodation
or a commercial facility are to be made so that, to the maximum extent
feasible, such altered portions are readily accessible to and usable by
disabled individuals. The "readily achievable" standard takes into
account, among other factors, the financial resources of the affected
site, owner, landlord or other applicable person. In addition to
imposing a possible financial burden on the Mortgagor in its capacity
as owner or landlord, the ADA may also impose such requirements on a
foreclosing lender who succeeds to the interest of the Mortgagor as
owner of landlord. Furthermore, since the "readily achievable" standard
may vary depending on the financial condition of the owner or landlord,
a foreclosing lender who is financially more capable than the Mortgagor
of complying with the requirements of the ADA may be subject to more
stringent requirements than those to which the Mortgagor is subject.

Soldiers' and Sailors' Civil Relief Act of 1940

Under the terms of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended (the "Relief Act"), a mortgagor who enters military
service after the origination of such mortgagor's Mortgage Loan
(including a mortgagor who was in reserve status and is called to
active duty after origination of the Mortgage Loan), may not be charged
interest (including fees and charges) above an annual rate of 6% during
the period of such mortgagor's active duty status, unless a court
orders otherwise upon application of the lender. The Relief Act applies
to mortgagors who are members of the Army, Navy, Air Force, Marines,
National Guard, Reserves, Coast Guard and officers of the U.S. Public
Health Service assigned to duty with the military. Because the Relief
Act applies to mortgagors who enter military service (including
reservists who are called to active duty) after origination of the
related Mortgage Loan, no information can be provided as to the number
of loans that may be affected by the Relief Act. Application of the
Relief Act would adversely affect, for an indeterminate period of time,
the ability of any servicer to collect full amounts of interest on
certain of the Mortgage Loans. Any shortfalls in interest collections
resulting from the application of the Relief Act would result in a
reduction of the amounts distributable to the holders of the related
series of Certificates, and would not be covered by advances or, unless
otherwise specified in the related Prospectus Supplement, any form of
Credit Support provided in connection with such Certificates. In
addition, the Relief Act imposes limitations that would impair the
ability of the servicer to foreclose on an affected Mortgage Loan
during the mortgagor's period of active duty status, and, under certain
circumstances, during an additional three month period thereafter.
Thus, in the event that such a Mortgage Loan goes into default, there
may be delays and losses occasioned thereby.

Forfeitures in Drug and RICO Proceedings

Federal law provides that property owned by persons convicted of
drug-related crimes or of criminal violations of the Racketeer
Influenced and Corrupt Organizations ("RICO") statute can be
seized by the government if the property was used in, or purchased
with the proceeds of, such crimes. Under procedures contained in
the Comprehensive Crime Control Act of 1984 (the "Crime Control
Act"), the government may seize the property even before
conviction. The government must publish notice of the forfeiture
proceeding and may give notice to all parties "known to have an
alleged interest in the property," including the holders of
mortgage loans.

A lender may avoid forfeiture of its interest in the property if
it establishes that: (i) its mortgage was executed and recorded before
commission of the crime upon which the forfeiture is based, or (ii) the
lender was, at the time of execution of the mortgage, "reasonably
without cause to believe" that the property was used in, or purchased
with the proceeds of, illegal drug or RICO activities.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary of the anticipated material federal income
tax consequences of the purchase, ownership and disposition of Offered
Certificates is based on the advice of Sidley & Austin or Latham &
Watkins or Brown & Wood LLP or such other counsel as may be specified
in the related Prospectus Supplement, counsel to the Depositor. This
summary is based on laws, regulations, including the REMIC regulations
promulgated by the Treasury Department (the "REMIC Regulations"),
rulings and decisions now in effect or (with respect to regulations)
proposed, all of which are subject to change either prospectively or
retroactively. This summary does not address the federal income tax
consequences of an investment in Certificates applicable to all
categories of investors, some of which (for example, banks and
insurance companies) may be subject to special rules. Prospective
investors should consult their tax advisors regarding the federal,
state, local and any other tax consequences to them of the purchase,
ownership and disposition of Certificates.

General

The federal income tax consequences to Certificateholders will
vary depending on whether an election is made to treat the Trust Fund
relating to a particular Series of Certificates as a REMIC under the
Code. The Prospectus Supplement for each Series of Certificates will
specify whether a REMIC election will be made.

Grantor Trust Funds

If a REMIC election is not made, Sidley & Austin or Latham &
Watkins or Brown & Wood LLP or Cadwalader, Wickersham & Taft or such
other counsel as may be specified in the related Prospectus Supplement
will deliver its opinion that the Trust Fund will not be classified as
an association taxable as a corporation and that each such Trust Fund
will be classified as a grantor trust under subpart E, Part I of
subchapter J of Chapter 1 of Subtitle A of the Code. In this case,
owners of Certificates will be treated for federal income tax purposes
as owners of a portion of the Trust Fund's assets as described below.

a. Single Class of Grantor Trust Certificates

Characterization. The Trust Fund may be created with one class of
Grantor Trust Certificates. In this case, each Grantor Trust
Certificateholder will be treated as the owner of a pro rata undivided
interest in the interest and principal portions of the Trust Fund
represented by the Grantor Trust Certificates and will be considered
the equitable owner of a pro rata undivided interest in each of the
Mortgage Assets in the Pool. Any amounts received by a Grantor Trust
Certificateholder in lieu of amounts due with respect to any Mortgage
Asset because of a default or delinquency in payment will be treated
for federal income tax purposes as having the same character as the
payments they replace.

Each Grantor Trust Certificateholder will be required to report on
its federal income tax return in accordance with such Grantor Trust
Certificateholder's method of accounting its pro rata share of the
entire income from the Mortgage Loans in the Trust Fund represented by
Grantor Trust Certificates, including interest, original issue discount
("OID"), if any, prepayment fees, assumption fees, any gain recognized
upon an assumption and late payment charges received by the Master
Servicer. Under Code Sections 162 or 212 each Grantor Trust
Certificateholder will be entitled to deduct its pro rata share of
servicing fees, prepayment fees, assumption fees, any loss recognized
upon an assumption and late payment charges retained by the Master
Servicer, provided that such amounts are reasonable compensation for
services rendered to the Trust Fund. Grantor Trust Certificateholders
that are individuals, estates or trusts will be entitled to deduct
their share of expenses as itemized deductions only to the extent such
expenses plus all other Code Section 212 expenses exceed two percent of
its
adjusted gross income. In addition, the amount of itemized deductions
otherwise allowable for the taxable year for an individual whose
adjusted gross income exceeds the applicable amount under Code Section
68(b) (which amount will be adjusted for inflation) will be reduced by
the lesser of (i) 3% of the excess of adjusted gross income over the
applicable amount and (ii) 80% of the amount of itemized deductions
otherwise allowable for such taxable year. In general, a Grantor Trust
Certificateholder using the cash method of accounting must take into
account its pro rata share of income as and deductions as and when
collected by or paid to the Master Servicer or, with respect to
original issue discount or certain other income items for which the
Certificateholder has made an election, as such amounts are accrued by
the Trust Fund on a constant interest basis, and will be entitled to
claim its pro rata share of deductions (subject to the foregoing
limitations) when such amounts are paid or such Certificateholder would
otherwise be entitled to claim such deductions had it held the Mortgage
Assets directly. A Grantor Trust Certificateholder using an accrual
method of accounting must take into account its pro rata share of
income as payment becomes due or is made to the Master Servicer,
whichever is earlier and may deduct its pro rata share of expense items
(subject to the foregoing limitations) when such amounts are paid or
such Certificateholder otherwise would be entitled to claim such
deductions had it held the Mortgage Assets directly. If the servicing
fees paid to the Master Servicer are deemed to exceed reasonable
servicing compensation, the amount of such excess could be considered
as an ownership interest retained by the Master Servicer (or any person
to whom the Master Servicer assigned for value all or a portion of the
servicing fees) in a portion of the interest payments on the Mortgage
Assets. The Mortgage Assets would then be subject to the "coupon
stripping" rules of the Code discussed below.

Unless otherwise specified in the related Prospectus Supplement or
otherwise provided below, as to each Series of Certificates, counsel to
the Depositor will have advised the Depositor that:

(ii) a Grantor Trust Certificate owned by a real estate investment
trust representing an interest in Mortgage Assets will be considered to
represent "real estate assets" within the meaning of Code Section
856(c)(4)(A), and interest income on the Mortgage Assets will be
considered "interest on obligations secured by mortgages on real
property" within the meaning of Code Section 856(c)(3)(B), to the
extent that the Mortgage Assets represented by that Grantor Trust
Certificate are of a type described in such Code section; and

(iii) a Grantor Trust Certificate owned by a REMIC will represent
"obligation(s) . . . which (are) principally secured by an interest in
real property" within the meaning of Code Section 860G(a)(3).

The Small Business Job Protection Act of 1996, as part of the
repeal of the bad debt reserve method for thrift institutions, repealed
the application of Code Section 593(d) to any taxable year beginning
after December 31, 1995.

Stripped Bonds and Coupons. Certain Trust Funds may consist of
Government Securities that constitute "stripped bonds" or "stripped
coupons" as those terms are defined in section 1286 of the Code, and,
as a result, such assets would be subject to the stripped bond
provisions of the Code. Under these rules, such Government Securities
are treated as having original issue discount based on the purchase
price and the stated redemption price at maturity of each Security. As
such, Grantor Trust Certificateholders would be required to include in
income their pro rata share of the original issue discount on each
Government Security recognized in any given year on an economic accrual
basis even if the Grantor Trust Certificateholder is a cash method
taxpayer. Accordingly, the sum of the income includible to the Grantor
Trust Certificateholder in any taxable year may exceed amounts actually
received during such year.

Premium. The price paid for a Grantor Trust Certificate by a
holder will be allocated to such holder's undivided interest in each
Mortgage Asset based on each Mortgage Asset's relative fair market
value, so that such holder's undivided interest in each Mortgage Asset
will have its own tax basis. A Grantor Trust Certificateholder that
acquires an interest in Mortgage Assets at a premium may elect to
amortize such premium under a constant interest method, provided that
the underlying mortgage loans with respect to such Mortgage Assets were
originated after September 27, 1985. Premium allocable to mortgage
loans originated on or before September 27, 1985 should be allocated
among the principal payments on such mortgage loans and allowed as an
ordinary deduction as principal payments are made. Amortizable bond
premium will be treated as an offset to interest income on such Grantor
Trust Certificate. The basis for such Grantor Trust Certificate will be
reduced to the extent that amortizable premium is applied to offset
interest payments. It is not clear whether a reasonable prepayment
assumption should be used in computing amortization of premium
allowable under Code Section 171. A Certificateholder that makes this
election for a Mortgage Asset or any other debt instrument that is
acquired at a premium will be deemed to have made an election to
amortize bond premium with respect to all debt instruments having
amortizable bond premium that such Certificateholder acquires during
the year of the election or thereafter.

If a premium is not subject to amortization using a reasonable
prepayment assumption, the holder of a Grantor Trust Certificate
representing an interest in a Mortgage Asset or Mortgage Loan acquired
at a premium should recognize a loss if a Mortgage Loan (or an
underlying mortgage loan with respect to a Mortgage Asset) prepays in
full, equal to the difference between the portion of the prepaid
principal amount of such Mortgage Loan (or underlying mortgage loan)
that is allocable to the Certificate and the portion of the adjusted
basis of the Certificate that is allocable to such Mortgage Loan (or
underlying mortgage loan). If a reasonable prepayment assumption is
used to amortize such premium, it appears that such a loss would be
available, if at all, only if prepayments have occurred at a rate
faster than the reasonable assumed prepayment rate. It is not clear
whether any other adjustments would be required to reflect differences
between an assumed prepayment rate and the actual rate of prepayments.

On December 30, 1997, the Internal Revenue Service (the "IRS")
issued final regulations (the "Amortizable Bond Premium Regulations")
dealing with amortizable bond premium. These regulations, which
generally are effective for bonds issued or acquired on or after March
2, 1998 (or, for holders making an election for the taxable year that
includes March 2, 1998 or any subsequent taxable year, shall apply to
bonds held on or after the first day of the taxable year of the
election). The Amortizable Bond Premium Regulations specifically do
not apply to prepayable debt instruments or any pool of debt
instruments the yield on which may be affected by prepayments, such as
the Trust Fund, which are subject to Section 1272(a)(6) of the Code.
Absent further guidance from the IRS and unless otherwise specified in
the related Prospectus Supplement, the Trustee will account for
amortizable bond premium in the manner described above. Prospective
purchasers should consult their tax advisors regarding amortizable bond
premium and the Amortizable Bond Premium Regulations.

Original Issue Discount. The IRS has stated in published rulings
that, in circumstances similar to those described herein, the special
rules of the Code relating to original issue discount ("OID")
(currently Code Sections 1271 through 1273 and 1275) and Treasury
regulations issued on January 27, 1994, under such Sections (the "OID
Regulations"), will be applicable to a Grantor Trust
Certificateholder's interest in those Mortgage Assets meeting the
conditions necessary for these sections to apply. Rules regarding
periodic inclusion of OID income are applicable to mortgages of
corporations originated after May 27, 1969, mortgages of noncorporate
mortgagors (other than individuals) originated after July 1, 1982, and
mortgages of individuals originated after March 2, 1984. Such OID could
arise by the financing of points or other charges by the originator of
the mortgages in an amount greater than a statutory de minimis
exception to the extent that the points are not currently deductible
under applicable Code provisions or are not for services provided by
the lender. OID generally must be reported as ordinary gross income as
it accrues under a constant interest method. See "--Multiple Classes of
Grantor Trust Certificates--Accrual of Original Issue Discount" below.

Market Discount. A Grantor Trust Certificateholder that acquires
an undivided interest in Mortgage Assets may be subject to the market
discount rules of Code Sections 1276 through 1278 to the extent an
undivided interest in a Mortgage Asset is considered to have been
purchased at a "market discount." Generally, the amount of market
discount is equal to the excess of the portion of the principal amount
of such Mortgage Asset allocable to such holder's undivided interest
over such holder's tax basis in such interest. Market discount with
respect to a Grantor Trust Certificate will be considered to be zero if
the amount allocable to the Grantor Trust Certificate is less than
0.25% of the Grantor Trust Certificate's stated redemption price at
maturity multiplied by the weighted average maturity remaining after
the date of purchase. Treasury regulations implementing the market
discount rules have not yet been issued; therefore, investors should
consult their own tax advisors regarding the application of these rules
and the advisability of making any of the elections allowed under Code
Sections 1276 through 1278.

The Code provides that any principal payment (whether a scheduled
payment or a prepayment) or any gain on disposition of a market
discount bond acquired by the taxpayer after October 22, 1986 shall be
treated as ordinary income to the extent that it does not exceed the
accrued market discount at the time of such payment. The amount of
accrued market discount for purposes of determining the tax treatment
of subsequent principal payments or dispositions of the market discount
bond is to be reduced by the amount so treated as ordinary income.

The Code also grants the Treasury Department authority to issue
regulations providing for the computation of accrued market
discount on debt instruments, the principal of which is payable in
more than one installment. While the Treasury Department has not
yet issued regulations, rules described in the relevant
legislative history will apply. Under those rules, the holder of a
market discount bond may elect to accrue market discount either on
the basis of a constant interest rate or according to one of the
following methods. If a Grantor Trust Certificate is issued with
OID, the amount of market discount that accrues during any accrual
period would be equal to the product of (i) the total remaining
market discount and (ii) a fraction, the numerator of which is the
OID accruing during the period and the denominator of which is the
total remaining OID at the beginning of the accrual period. For
Grantor Trust Certificates issued without OID, the amount of
market discount that accrues during a period is equal to the
product of (i) the total remaining market discount and (ii) a
fraction, the numerator of which is the amount of stated interest
paid during the accrual period and the denominator of which is the
total amount of stated interest remaining to be paid at the
beginning of the accrual period. For purposes of calculating
market discount under any of the above methods in the case of
instruments (such as the Grantor Trust Certificates) that provide
for payments that may be accelerated by reason of prepayments of
other obligations securing such instruments, the same prepayment
assumption applicable to calculating the accrual of OID will
apply. Because the regulations described above have not been
issued, it is impossible to predict what effect those regulations
might have on the tax treatment of a Grantor Trust Certificate
purchased at a discount or premium in the secondary market.

A holder who acquired a Grantor Trust Certificate at a market
discount also may be required to defer a portion of its interest
deductions for the taxable year attributable to any indebtedness
incurred or continued to purchase or carry such Grantor Trust
Certificate purchased with market discount. For these purposes, the de
minimis rule referred to above applies. Any such deferred interest
expense would not exceed the market discount that accrues during such
taxable year and is, in general, allowed as a deduction not later than
the year in which such market discount is includible in income. If such
holder elects to include market discount in income currently as it
accrues on all market discount instruments acquired by such holder in
that taxable year or thereafter, the interest deferral rule described
above will not apply.

Election to Treat All Interest as OID. The OID Regulations permit
a Certificateholder to elect to accrue all interest, discount
(including de minimis market or original issue discount) and premium in
income as interest, based on a constant yield method for Certificates
acquired on or after April 4, 1994. If such an election were to be made
with respect to a Grantor Trust Certificate with market discount, the
Certificateholder would be deemed to have made an election to include
in income currently market discount with respect to all other debt
instruments having market discount that such Certificateholder acquires
during the year of the election or thereafter. Similarly, a
Certificateholder that makes this election for a Certificate that is
acquired at a premium will be deemed to have made an election to
amortize bond premium with respect to all debt instruments having
amortizable bond premium that such Certificateholder owns or acquires.
See "--Premium" herein. The election to accrue interest, discount and
premium on a constant yield method with respect to a Certificate is
irrevocable without consent of the IRS.

Anti-Abuse Rule. The IRS can apply or depart from the rules
contained in the OID Regulations as necessary or appropriate to achieve
a reasonable result where a principal purpose in structuring a Mortgage
Asset, Mortgage Loan or Grantor Trust Certificate or applying the
otherwise applicable rules is to achieve a result that is unreasonable
in light of the purposes of the applicable statutes (which generally
are intended to achieve the clear reflection of income for both issuers
and holders of debt instruments).

b. Multiple Classes of Grantor Trust Certificates

1. Stripped Bonds and Stripped Coupons

Pursuant to Code Section 1286, the separation of ownership of the
right to receive some or all of the interest payments on an obligation
from ownership of the right to receive some or all of the principal
payments results in the creation of "stripped bonds" with respect to
principal payments and "stripped coupons" with respect to interest
payments. For purposes of Code Sections 1271 through 1288, Code Section
1286 treats a stripped bond or a stripped coupon as an obligation
issued on the date that such stripped interest is created. If a Trust
Fund is created with two classes of Grantor Trust Certificates, one
class of Grantor Trust Certificates may represent the right to
principal and interest, or principal only, on all or a portion of the
Mortgage Assets (the "Stripped Bond Certificates"), while the second
class of Grantor Trust Certificates may represent the right to some or
all of the interest on such portion (the "Stripped Coupon
Certificates").

Servicing fees in excess of reasonable servicing fees ("excess
servicing") will be treated under the stripped bond rules. If the
excess servicing fee is less than 100 basis points (i.e., 1%
interest on the Mortgage Asset principal balance) or the
Certificates are initially sold with a de minimis discount
(assuming no prepayment assumption is required), any non-de
minimis discount arising from a subsequent transfer of the
Certificates should be treated as market discount. The IRS appears
to require that reasonable servicing fees be calculated on a
Mortgage Asset by Mortgage Asset basis, which could result in some
Mortgage Assets being treated as having more than 100 basis points
of interest stripped off. See "--Non-REMIC Certificates" and
"Multiple Classes of Grantor Trust Certificates--Stripped Bonds
and Stripped Coupons" herein.

Although not entirely clear, a Stripped Bond Certificate generally
should be treated as an interest in Mortgage Assets issued on the day
such Certificate is purchased for purposes of calculating any OID.
Generally, if the discount on a Mortgage Asset is larger than a de
minimis amount (as calculated for purposes of the OID rules) a
purchaser of such a Certificate will be required to accrue the discount
under the OID rules of the Code. See "--Non-REMIC Certificates" and
"--Single Class of Grantor Trust Certificates--Original Issue Discount"
herein. However, a purchaser of a Stripped Bond Certificate will be
required to account for any discount on the Mortgage Assets as market
discount rather than OID if either (i) the amount of OID with respect
to the Mortgage Assets is treated as zero under the OID de minimis rule
when the Certificate was stripped or (ii) no more than 100 basis points
(including any amount of servicing fees in excess of reasonable
servicing fees) is stripped off of the Trust Fund's Mortgage Assets.
Pursuant to Revenue Procedure 91-49, issued on August 8, 1991,
purchasers of Stripped Bond Certificates using an inconsistent method
of accounting must change their method of accounting and request the
consent of the IRS to the change in their accounting method on a
statement attached to their first timely tax return filed after August
8, 1991.

The precise tax treatment of Stripped Coupon Certificates is
substantially uncertain. The Code could be read literally to require
that OID computations be made for each payment from each Mortgage
Asset. Unless otherwise specified in the related prospectus supplement,
all payments from a Mortgage Asset underlying a Stripped Coupon
Certificate will be treated as a single installment obligation subject
to the OID rules of the Code, in which case, all payments from such
Mortgage Asset would be included in the Mortgage Asset's stated
redemption price at maturity for purposes of calculating income on such
Certificate under the OID rules of the Code.

It is unclear under what circumstances, if any, the prepayment of
Mortgage Assets will give rise to a loss to the holder of a Stripped
Bond Certificate purchased at a premium or a Stripped Coupon
Certificate. If such Certificate is treated as a single instrument
(rather than an interest in discrete mortgage loans) and the effect of
prepayments is taken into account in computing yield with respect to
such Grantor Trust Certificate, it appears that no loss will be
available as a result of any particular prepayment unless prepayments
occur at a rate sufficiently faster than the assumed prepayment rate so
that the Certificateholder will not recover its investment. However, if
such Certificate is treated as an interest in discrete Mortgage Assets,
or if no prepayment assumption is used, then when a Mortgage Asset is
prepaid, the holder of such Certificate should be able to recognize a
loss equal to the portion of the adjusted issue price of such
Certificate that is allocable to such Mortgage Asset.

Holders of Stripped Bond Certificates and Stripped Coupon
Certificates are urged to consult with their own tax advisors regarding
the proper treatment of these Certificates for federal income tax
purposes.

Treatment of Certain Owners. Several Code sections provide
beneficial treatment to certain taxpayers that invest in Mortgage
Assets of the type that make up the Trust Fund. With respect to these
Code sections, no specific legal authority exists regarding whether the
character of the Grantor Trust Certificates, for federal income tax
purposes, will be the same as that of the underlying Mortgage Assets.
While Code Section 1286 treats a stripped obligation as a separate
obligation for purposes of the Code provisions addressing OID, it is
not clear whether such characterization would apply with regard to
these other Code sections. Although the issue is not free from doubt,
each class of Grantor Trust Certificates, unless otherwise specified in
the related Prospectus Supplement, should be considered to represent
"real estate assets" within the meaning of Code Section 856(c)(4)(A)
and "loans . . . secured by, an interest in real property which is . .
. residential real property" within the meaning of Code Section
7701(a)(19)(C)(v), and interest income attributable to Grantor Trust
Certificates should be considered to represent "interest on obligations
secured by mortgages on real property" within the meaning of Code
Section 856(c)(3)(B), provided that in each case the underlying
Mortgage Assets and interest on such Mortgage Assets qualify for such
treatment. Prospective purchasers to which such characterization of an
investment in Certificates is material should consult their own tax
advisors regarding the characterization of the Grantor Trust
Certificates and the income therefrom. Grantor Trust

Certificates will be "obligation(s) . . . which (are) principally
secured by an interest in real property" within the meaning of Code
Section 860G(a)(3)(A).

2. Grantor Trust Certificates Representing Interests in Loans
Other Than ARM Loans

The original issue discount rules of Code Sections 1271 through
1275 will be applicable to a Certificateholder's interest in those
Mortgage Assets as to which the conditions for the application of those
sections are met. Rules regarding periodic inclusion of original issue
discount in income are applicable to mortgages of corporations
originated after May 27, 1969, mortgages of noncorporate mortgagors
(other than individuals) originated after July 1, 1982, and mortgages
of individuals originated after March 2, 1984. Under the OID
Regulations, such original issue discount could arise by the charging
of points by the originator of the mortgage in an amount greater than
the statutory de minimis exception, including a payment of points that
is currently deductible by the borrower under applicable Code
provisions, or under certain circumstances, by the presence of "teaser"
rates on the Mortgage Assets. OID on each Grantor Trust Certificate
must be included in the owner's ordinary income for federal income tax
purposes as it accrues, in accordance with a constant interest method
that takes into account the compounding of interest, in advance of
receipt of the cash attributable to such income. The amount of OID
required to be included in an owner's income in any taxable year with
respect to a Grantor Trust Certificate representing an interest in
Mortgage Assets other than Mortgage Assets with interest rates that
adjust periodically ("ARM Loans") likely will be computed as described
below under "--Accrual of Original Issue Discount." The following
discussion is based in part on the OID Regulations and in part on the
provisions of the Tax Reform Act of 1986 (the "1986 Act"). The OID
Regulations generally are effective for debt instruments issued on or
after April 4, 1994, but may be relied upon as authority with respect
to debt instruments, such as the Grantor Trust Certificates, issued
after December 21, 1992. Alternatively, proposed Treasury regulations
issued December 21, 1992 may be treated as authority for debt
instruments issued after December 21, 1992 and prior to April 4, 1994,
and proposed Treasury regulations issued in 1986 and 1991 may be
treated as authority for instruments issued before December 21, 1992.
In applying these dates, the issue date of the Mortgage Assets should
be used, or, in the case of Stripped Bond Certificates or Stripped
Coupon Certificates, the date such Certificates are acquired. The
holder of a Certificate should be aware, however, that neither the
proposed OID Regulations nor the OID Regulations adequately address
certain issues relevant to prepayable securities.

Under the Code, the Mortgage Assets underlying the Grantor Trust
Certificate will be treated as having been issued on the date they were
originated with an amount of OID equal to the excess of such Mortgage
Asset's stated redemption price at maturity over its issue price. The
issue price of a Mortgage Asset is generally the amount lent to the
mortgagee, which may be adjusted to take into account certain loan
origination fees. The stated redemption price at maturity of a Mortgage
Asset is the sum of all payments to be made on such Mortgage Asset
other than payments that are treated as qualified stated interest
payments. The accrual of this OID, as described below under "--Accrual
of Original Issue Discount," will, unless otherwise specified in the
related Prospectus Supplement, utilize the original yield to maturity
of the Grantor Trust Certificate calculated based on a reasonable
assumed prepayment rate for the mortgage loans underlying the Grantor
Trust Certificates (the "Prepayment Assumption") on the issue date of
such Grantor Trust Certificate, and will take into account events that
occur during the calculation period. The Prepayment Assumption will be
determined in the manner prescribed by regulations that have not yet
been issued. In the absence of such regulations, the Prepayment
Assumption used will be the prepayment assumption that is used in
determining the offering price of such Certificate. No representation
is made that any Certificate will prepay at the Prepayment Assumption
or at any other rate. The prepayment assumption contained in the Code
literally only applies to debt instruments collateralized by other debt
instruments that are subject to prepayment rather than direct ownership
interests in such debt instruments, such as the Certificates represent.
However, no other legal authority provides guidance with regard to the
proper method for accruing OID on obligations that are subject to
prepayment, and, until further guidance is issued, the Master Servicer
intends to calculate and report OID under the method described below.

Accrual of Original Issue Discount. Generally, the owner of a
Grantor Trust Certificate must include in gross income the sum of the
"daily portions," as defined below, of the OID on such Grantor Trust
Certificate for each day on which it owns such Certificate, including
the date of purchase but excluding the date of disposition. In the case
of an original owner, the daily portions of OID with respect to each
component generally will be determined as set forth under the OID
Regulations. A calculation will be made by the Master Servicer or such
other entity specified in the related Prospectus Supplement of the
portion of OID that accrues during each successive monthly accrual
period (or shorter period from the date of original issue) that ends on
the day in the calendar year corresponding to each of the Distribution
Dates on the Grantor Trust Certificates (or the day prior to each such
date). This will be done, in the case of each full month accrual
period, by (i) adding (a) the present value at the end of the accrual
period (determined by using as a discount factor the original yield to
maturity of the respective component under the Prepayment Assumption)
of all remaining payments to be received under the Prepayment
Assumption
on the respective component and (b) any payments included in the stated
redemption price at maturity received during such accrual period, and
(ii) subtracting from that total the "adjusted issue price" of the
respective component at the beginning of such accrual period. The
adjusted issue price of a Grantor Trust Certificate at the beginning of
the first accrual period is its issue price; the adjusted issue price
of a Grantor Trust Certificate at the beginning of a subsequent accrual
period is the adjusted issue price at the beginning of the immediately
preceding accrual period plus the amount of OID allocable to that
accrual period reduced by the amount of any payment other than a
payment of qualified stated interest made at the end of or during that
accrual period. The OID accruing during such accrual period will then
be divided by the number of days in the period to determine the daily
portion of OID for each day in the period. With respect to an initial
accrual period shorter than a full monthly accrual period, the daily
portions of OID must be determined according to an appropriate
allocation under any reasonable method.

Original issue discount generally must be reported as ordinary
gross income as it accrues under a constant interest method that takes
into account the compounding of interest as it accrues rather than when
received. However, the amount of original issue discount includible in
the income of a holder of an obligation is reduced when the obligation
is acquired after its initial issuance at a price greater than the sum
of the original issue price and the previously accrued original issue
discount, less prior payments of principal. Accordingly, if such
Mortgage Assets acquired by a Certificateholder are purchased at a
price equal to the then unpaid principal amount of such Mortgage Asset,
no original issue discount attributable to the difference between the
issue price and the original principal amount of such Mortgage Asset
(i.e. points) will be includible by such holder. Other original issue
discount on the Mortgage Assets (e.g., that arising from a "teaser"
rate) would still need to be accrued.

3. Grantor Trust Certificates Representing Interests in ARM Loans

The OID Regulations do not address the treatment of instruments,
such as the Grantor Trust Certificates, which represent interests in
ARM Loans. Additionally, the IRS has not issued guidance under the
Code's coupon stripping rules with respect to such instruments. In the
absence of any authority, the Master Servicer will report OID on
Grantor Trust Certificates attributable to ARM Loans ("Stripped ARM
Obligations") to holders in a manner it believes is consistent with the
rules described above under the heading "--Grantor Trust Certificates
Representing Interests in Loans Other Than ARM Loans" and with the OID
Regulations. In general, application of these rules may require
inclusion of income on a Stripped ARM Obligation in advance of the
receipt of cash attributable to such income. Further, the addition of
interest deferred by reason of negative amortization ("Deferred
Interest") to the principal balance of an ARM Loan may require the
inclusion of such amount in the income of the Grantor Trust
Certificateholder when such amount accrues. Furthermore, the addition
of Deferred Interest to the Grantor Trust Certificate's principal
balance will result in additional income (including possibly OID
income) to the Grantor Trust Certificateholder over the remaining life
of such Grantor Trust Certificates.

Because the treatment of Stripped ARM Obligations is uncertain,
investors are urged to consult their tax advisors regarding how income
will be includible with respect to such Certificates.

c. Sale or Exchange of a Grantor Trust Certificate

Sale or exchange of a Grantor Trust Certificate prior to its
maturity will result in gain or loss equal to the difference, if any,
between the amount received and the owner's adjusted basis in the
Grantor Trust Certificate. Such adjusted basis generally will equal the
seller's purchase price for the Grantor Trust Certificate, increased by
the OID included in the seller's gross income with respect to the
Grantor Trust Certificate, and reduced by principal payments on the
Grantor Trust Certificate previously received by the seller. Such gain
or loss will be capital gain or loss to an owner for which a Grantor
Trust Certificate is a "capital asset" within the meaning of Code
Section 1221, and will be long-term or short-term depending on whether
the Grantor Trust Certificate has been owned for the long-term capital
gain holding period (currently more than one year). Lower capital gains
rates generally will apply to individuals who hold Grantor Trust
Certificates for more than 18 months.

It is possible that capital gain realized by holders of one or
more classes of Grantor Trust Certificates could be considered gain
realized upon the disposition of property that was part of a
"conversion transaction." A sale of a Grantor Trust Certificate will
be part of a conversion transaction if substantially all of the
holder's expected return is attributable to the time value of the
holder's net investment, and (i) the holder entered the contract to
sell the Grantor Trust Certificate substantially contemporaneously with
acquiring the Grantor Trust Certificate, (ii) the Grantor Trust
Certificate is part of a straddle, (iii) the Grantor Trust Certificate
is marketed or sold as producing capital gain, or (iv) other
transactions to be specified in Treasury
regulations that have not yet been issued. If the sale or other
disposition of a Grantor Trust Certificate is part of a conversion
transaction, all or any portion of the gain realized upon the sale or
other disposition would be treated as ordinary income instead of
capital gain.

Grantor Trust Certificates will be "evidences of indebtedness"
within the meaning of Code Section 582(c)(1), so that gain or loss
recognized from the sale of a Grantor Trust Certificate by a bank or a
thrift institution to which such section applies will be treated as
ordinary income or loss.

d. Non-U.S. Persons

Generally, to the extent that a Grantor Trust Certificate
evidences ownership in underlying Mortgage Assets that were issued on
or before July 18, 1984, interest or OID paid by the person required to
withhold tax under Code Section 1441 or 1442 to (i) an owner that is
not a U.S. Person (as defined below) or (ii) a Grantor Trust
Certificateholder holding on behalf of an owner that is not a U.S.
Person will be subject to federal income tax, collected by withholding,
at a rate of 30% or such lower rate as may be provided for interest by
an applicable tax treaty, unless such income is effectively connected
with a U.S. trade or business of such owner or beneficial owner.
Accrued OID recognized by the owner on the sale or exchange of such a
Grantor Trust Certificate also will be subject to federal income tax at
the same rate. Generally, such payments would not be subject to
withholding to the extent that a Grantor Trust Certificate evidences
ownership in Mortgage Assets issued after July 18, 1984, by natural
persons if such Grantor Trust Certificateholder complies with certain
identification requirements (including delivery of a statement, signed
by the Grantor Trust Certificateholder under penalties of perjury,
certifying that such Grantor Trust Certificateholder is not a U.S.
Person and providing the name and address of such Grantor Trust
Certificateholder). To the extent payments to Grantor Trust
Certificateholders that are not U.S. Persons are payments of
"contingent interest" on the underlying Mortgage Assets, or such
Grantor Trust Certificateholder is ineligible for the exemption
described in the preceding sentence, the 30% withholding tax will apply
unless such withholding taxes are reduced or eliminated by an
applicable tax treaty and such holder meets the eligibility and
certification requirements necessary to obtain the benefits of such
treaty. Additional restrictions apply to Mortgage Assets where the
mortgagor is not a natural person in order to qualify for the exemption
from withholding. If capital gain derived from the sale, retirement or
other disposition of a Grantor Trust Certificate is effectively
connected with a U.S. trade or business of a Grantor Trust
Certificateholder that is not a U.S. Person, such Certificateholder
will be taxed on the net gain under the graduated U.S. federal income
tax rates applicable to U.S. Persons (and, with respect to Grantor
Trust Certificates held by or on behalf of corporations, also may be
subject to branch profits tax). In addition, if the Trust Fund acquires
a United States real property interest through foreclosure, deed in
lieu of foreclosure or otherwise on a Mortgage Asset secured by such an
interest (which for this purpose includes real property located in the
United States and the Virgin Islands), a Grantor Trust
Certificateholder that is not a U.S. Person will potentially be subject
to federal income tax on any gain attributable to such real property
interest that is allocable to such holder. Non-U.S. Persons should
consult their tax advisors regarding the application to them of the
foregoing rules.

As used herein, a "U.S. Person" means a citizen or resident of the
United States, a corporation or a partnership organized in or under the
laws of the United States or any political subdivision thereof (other
than a partnership that is not treated as a U.S. Person under any
applicable Treasury regulations), an estate the income of which from
sources outside the United States is includible in gross income for
federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States or a trust if a
court within the United States is able to exercise primary supervision
of the administration of the trust and one or more U.S. Persons have
the authority to control all substantial decisions of the trust. In
addition, certain trusts treated as U.S. Persons before August 20, 1996
may elect to continue to be so treated to the extent provided in
regulations.

e. Information Reporting and Backup Withholding

The Master Servicer will furnish or make available, within a
reasonable time after the end of each calendar year, to each person who
was a Certificateholder at any time during such year, such information
as may be deemed necessary or desirable to assist Certificateholders in
preparing their federal income tax returns, or to enable holders to
make such information available to beneficial owners or financial
intermediaries that hold such Certificates as nominees on behalf of
beneficial owners. If a holder, beneficial owner, financial
intermediary or other recipient of a payment on behalf of a beneficial
owner fails to supply a certified taxpayer identification number or if
the Secretary of the Treasury determines that such person has not
reported all interest and dividend income required to be shown on its
federal income tax return, 31% backup withholding may be required with
respect to any payments to registered owners who are not "exempt
recipients." In addition, upon the sale of a Grantor Trust Certificate
to (or through) a broker, the broker must withhold 31% of the entire
purchase
price, unless either (i) the broker determines that the seller is a
corporation or other exempt recipient, or (ii) the seller provides, in
the required manner, certain identifying information and, in the case
of a non-U.S. Person, certifies that such seller is a Non-U.S. Person,
and certain other conditions are met. Such as sale must also be
reported by the broker to the IRS, unless either (a) the broker
determines that the seller is an exempt recipient or (b) the seller
certifies its non-U.S. Person status (and certain other conditions are
met). Certification of the registered owner's non-U.S. Person status
normally would be made on IRS Form W-8 under penalties of perjury,
although in certain cases it may be possible to submit other
documentary evidence. Any amounts deducted and withheld from a
distribution to a recipient would be allowed as a credit against such
recipient's federal income tax liability.

On October 6, 1997, the Treasury Department issued new regulations
(the "New Regulations") which make certain modifications to the
withholding, backup withholding and information reporting rules
described above. The New Regulations attempt to unify certification
requirements and modify reliance standards. The New Regulations will
generally be effective for payments made after December 31, 1998,
subject to certain transition rules. Prospective investors are urged
to consult their own tax advisors regarding the New Regulations.

REMICs

The Trust Fund relating to a Series of Certificates may elect to
be treated as a REMIC. Qualification as a REMIC requires ongoing
compliance with certain conditions. Although a REMIC is not generally
subject to federal income tax (see, however "--Taxation of Owners of
REMIC Residual Certificates" and "--Prohibited Transactions" below), if
a Trust Fund with respect to which a REMIC election is made fails to
comply with one or more of the ongoing requirements of the Code for
REMIC status during any taxable year, including the implementation of
restrictions on the purchase and transfer of the residual interests in
a REMIC as described below under "Taxation of Owners of REMIC Residual
Certificates," the Code provides that a Trust Fund will not be treated
as a REMIC for such year and thereafter. In that event, such entity may
be taxable as a separate corporation, and the related Certificates (the
"REMIC Certificates") may not be accorded the status or given the tax
treatment described below. While the Code authorizes the Treasury
Department to issue regulations providing relief in the event of an
inadvertent termination of the status of a trust fund as a REMIC, no
such regulations have been issued. Any such relief, moreover, may be
accompanied by sanctions, such as the imposition of a corporate tax on
all or a portion of the REMIC's income for the period in which the
requirements for such status are not satisfied. With respect to each
Trust Fund that elects REMIC status, Sidley & Austin or Latham &
Watkins or Brown & Wood LLP or or Cadwalader, Wickersham & Taft or such
other counsel as may be specified in the related Prospectus Supplement
will deliver its opinion generally to the effect that, under then
existing law and assuming compliance with all provisions of the related
Pooling and Servicing Agreement, such Trust Fund will qualify as a
REMIC, and the related Certificates will be considered to be regular
interests ("REMIC Regular Certificates") or a sole class of residual
interests ("REMIC Residual Certificates") in the REMIC. The related
Prospectus Supplement for each Series of Certificates will indicate
whether the Trust Fund will make a REMIC election and whether a class
of Certificates will be treated as a regular or residual interest in
the REMIC.

A "qualified mortgage" for REMIC purposes is any obligation
(including certificates of participation in such an obligation and any
"regular interest" in another REMIC) that is principally secured by an
interest in real property and that is transferred to the REMIC within a
prescribed time period in exchange for regular or residual interests in
the REMIC.

In general, with respect to each Series of Certificates for which
a REMIC election is made, (i) Certificates held by a thrift institution
taxed as a "domestic building and loan association" will constitute
assets described in Code Section 7701(a)(19)(C); (ii) Certificates held
by a real estate investment trust will constitute "real estate assets"
within the meaning of Code Section 856(c)(4)(A); and (iii) interest on
Certificates held by a real estate investment trust will be considered
"interest on obligations secured by mortgages on real property" within
the meaning of Code Section 856(c)(3)(B). If less than 95% of the
REMIC's assets are assets qualifying under any of the foregoing Code
sections, the Certificates will be qualifying assets only to the extent
that the REMIC's assets are qualifying assets.

Tiered REMIC Structures. For certain Series of Certificates, two
or more separate elections may be made to treat designated portions of
the related Trust Fund as REMICs (respectively, the "Subsidiary REMIC"
and the "Master REMIC") for federal income tax purposes. Upon the
issuance of any such Series of Certificates, Sidley & Austin or Latham
& Watkins or Brown & Wood LLP or Cadwalader, Wickersham & Taft or such
other counsel as may be specified in the related Prospectus Supplement,
counsel to the Depositor, will deliver its opinion generally to the
effect that, assuming compliance with all provisions of the related
Agreement, the Master REMIC as well as any Subsidiary REMIC will each
qualify as a REMIC, and the REMIC Certificates issued by the Master
REMIC and the Subsidiary REMIC or REMICs, respectively, will be
considered to evidence ownership of regular interests ("REMIC Regular
Certificates") or residual interests ("REMIC Residual Certificates") in
the related REMIC within the meaning of the REMIC provisions.

Other than the residual interest in a Subsidiary REMIC, only REMIC
Certificates issued by the Master REMIC will be offered hereunder. The
Subsidiary REMIC or REMICs and the Master REMIC will be treated as one
REMIC solely for purposes of determining whether the REMIC Certificates
will be (i) "real estate assets" within the meaning of Section
856(c)(4)(A) of the Code; (ii) "loans secured by an interest in real
property" under Section 7701(a)(19)(C) of the Code; and (iii) whether
the income on such Certificates is interest described in Section
856(c)(3)(B) of the Code.

a. Taxation of Owners of REMIC Regular Certificates

General. Except as otherwise stated in this discussion, REMIC
Regular Certificates will be treated for federal income tax purposes as
debt instruments issued by the REMIC and not as ownership interests in
the REMIC or its assets. Moreover, holders of REMIC Regular
Certificates that otherwise report income under a cash method of
accounting will be required to report income with respect to REMIC
Regular Certificates under an accrual method.

Original Issue Discount and Premium. The REMIC Regular
Certificates may be issued with OID. Generally, such OID, if any, will
equal the difference between the "stated redemption price at maturity"
of a REMIC Regular Certificate and its "issue price." Holders of any
class of Certificates issued with OID will be required to include such
OID in gross income for federal income tax purposes as it accrues, in
accordance with a constant interest method based on the compounding of
interest as it accrues rather than in accordance with receipt of the
interest payments. The following discussion is based in part on the OID
Regulations and in part on the provisions of the Tax Reform Act of 1986
(the "1986 Act"). Holders of REMIC Regular Certificates (the "REMIC
Regular Certificateholders") should be aware, however, that the OID
Regulations do not adequately address certain issues relevant to
prepayable securities, such as the REMIC Regular Certificates.

Rules governing OID are set forth in Code Sections 1271 through
1273 and 1275. These rules require that the amount and rate of accrual
of OID be calculated based on the Prepayment Assumption and the
anticipated reinvestment rate, if any, relating to the REMIC Regular
Certificates and prescribe a method for adjusting the amount and rate
of accrual of such discount where the actual prepayment rate differs
from the Prepayment Assumption. Under the Code, the Prepayment
Assumption must be determined in the manner prescribed by regulations,
which regulations have not yet been issued. The legislative history of
the 1986 Act (the "Legislative History") provides, however, that
Congress intended the regulations to require that the Prepayment
Assumption be the prepayment assumption that is used in determining the
initial offering price of such REMIC Regular Certificates. The
Prospectus Supplement for each Series of REMIC Regular Certificates
will specify the Prepayment Assumption to be used for the purpose of
determining the amount and rate of accrual of OID. No representation is
made that the REMIC Regular Certificates will prepay at the Prepayment
Assumption or at any other rate.

In general, each REMIC Regular Certificate will be treated as a
single installment obligation issued with an amount of OID equal to the
excess of its "stated redemption price at maturity" over its "issue
price." The issue price of a REMIC Regular Certificate is the first
price at which a substantial amount of REMIC Regular Certificates of
that class are first sold to the public (excluding bond houses,
brokers, underwriters or wholesalers). If less than a substantial
amount of a particular class of REMIC Regular Certificates is sold for
cash on or prior to the date of their initial issuance (the "Closing
Date"), the issue price for such class will be treated as the fair
market value of such class on the Closing Date. The issue price of a
REMIC Regular Certificate also includes the amount paid by an initial
Certificateholder for accrued interest that relates to a period prior
to the issue date of the REMIC Regular Certificate. The stated
redemption price at maturity of a REMIC Regular Certificate includes
the original principal amount of the REMIC Regular Certificate, but
generally will not include distributions of interest if such
distributions constitute "qualified stated interest." Qualified stated
interest generally means interest payable at a single fixed rate or
qualified variable rate (as described below) provided that such
interest payments are unconditionally payable at intervals of one year
or less during the entire term of the REMIC Regular Certificate.
Interest is payable at a single fixed rate only if the rate
appropriately takes into account the length of the interval between
payments. Distributions of interest on REMIC Regular Certificates with
respect to which Deferred Interest will accrue will not constitute
qualified stated interest payments, and the stated redemption price at
maturity of such REMIC Regular Certificates includes all distributions
of interest as well as principal thereon.

at maturity of the Certificate exceeds its issue price for purposes of
the de minimis rule described below. The OID Regulations suggest that
all interest on a long first period REMIC Regular Certificate that is
issued with non-de minimis OID, as determined under the foregoing rule,
will be treated as OID. Where the interval between the issue date and
the first Distribution Date on a REMIC Regular Certificate is shorter
than the interval between subsequent Distribution Dates, interest due
on the first Distribution Date in excess of the amount that accrued
during the first period would be added to the Certificates, stated
redemption price at maturity. REMIC Regular Certificateholders should
consult their own tax advisors to determine the issue price and stated
redemption price at maturity of a REMIC Regular Certificate.

Under the de minimis rule, OID on a REMIC Regular Certificate will
be considered to be zero if such OID is less than 0.25% of the stated
redemption price at maturity of the REMIC Regular Certificate
multiplied by the weighted average maturity of the REMIC Regular
Certificate. For this purpose, the weighted average maturity of the
REMIC Regular Certificate is computed as the sum of the amounts
determined by multiplying the number of full years (i.e., rounding down
partial years) from the issue date until each distribution in reduction
of stated redemption price at maturity is scheduled to be made by a
fraction, the numerator of which is the amount of each distribution
included in the stated redemption price at maturity of the REMIC
Regular Certificate and the denominator of which is the stated
redemption price at maturity of the REMIC Regular Certificate. Although
currently unclear, it appears that the schedule of such distributions
should be determined in accordance with the Prepayment Assumption. The
Prepayment Assumption with respect to a Series of REMIC Regular
Certificates will be set forth in the related Prospectus Supplement.
Holders generally must report de minimis OID pro rata as principal
payments are received, and such income will be capital gain if the
REMIC Regular Certificate is held as a capital asset. However, accrual
method holders may elect to accrue all de minimis OID as well as market
discount under a constant interest method.

The Prospectus Supplement with respect to a Trust Fund may provide
for certain REMIC Regular Certificates to be issued at prices
significantly exceeding their principal amounts or based on notional
principal balances (the "Super-Premium Certificates"). The income tax
treatment of such REMIC Regular Certificates is not entirely certain.
For information reporting purposes, the Trust Fund intends to take the
position that the stated redemption price at maturity of such REMIC
Regular Certificates is the sum of all payments to be made on such
REMIC Regular Certificates determined under the Prepayment Assumption,
with the result that such REMIC Regular Certificates would be issued
with OID. The calculation of income in this manner could result in
negative original issue discount (which delays future accruals of OID
rather than being immediately deductible) when prepayments on the
Mortgage Assets exceed those estimated under the Prepayment Assumption.
The IRS might contend, however, that certain contingent payment rules
contained in final regulations issued on June 11, 1996, with respect to
original issue discount, should apply to such Certificates. Although
such rules are not applicable to instruments governed by Code Section
1272(a)(6), they represent the only guidance regarding the current
views of the IRS with respect to contingent payment instruments. These
proposed regulations, if applicable, generally would require holders of
Regular Interest Certificates to take the payments considered
contingent interest payments into income on a yield to maturity basis
in accordance with a schedule of projected payments provided by the
Depositor and to make annual adjustments to income to account for the
difference between actual payments received and projected payment
amounts accrued. In the alternative, the IRS could assert that the
stated redemption price at maturity of such REMIC Regular Certificates
should be limited to their principal amount (subject to the discussion
below under "--Accrued Interest Certificates"), so that such REMIC
Regular Certificates would be considered for federal income tax
purposes to be issued at a premium. If such a position were to prevail,
the rules described below under "--Taxation of Owners of REMIC Regular
Certificates--Premium" would apply. It is unclear when a loss may be
claimed for any unrecovered basis for a Super-Premium Certificate. It
is possible that a holder of a Super-Premium Certificate may only claim
a loss when its remaining basis exceeds the maximum amount of future
payments, assuming no further prepayments or when the final payment is
received with respect to such Super-Premium Certificate.

Under the REMIC Regulations, if the issue price of a REMIC Regular
Certificate (other than REMIC Regular Certificate based on a notional
amount) does not exceed 125% of its actual principal amount, the
interest rate is not considered disproportionately high. Accordingly,
such REMIC Regular Certificate generally should not be treated as a
Super-Premium Certificate and the rules described below under "--REMIC
Regular Certificates--Premium" should apply. However, it is possible
that holders of REMIC Regular Certificates issued at a premium, even if
the premium is less than 25% of such Certificate's actual principal
balance, will be required to amortize the premium under an original
issue discount method or contingent interest method even though no
election under Code Section 171 is made to amortize such premium.

Generally, a REMIC Regular Certificateholder must include in gross
income the "daily portions," as determined below, of the OID that
accrues on a REMIC Regular Certificate for each day a Certificateholder
holds the REMIC Regular Certificate, including the purchase date but
excluding the disposition date. In the case of an original holder of a
REMIC
Regular Certificate, a calculation will be made of the portion of the
OID that accrues during each successive period ("an accrual period")
that ends on the day in the calendar year corresponding to a
Distribution Date (or if Distribution Dates are on the first day or
first business day of the immediately preceding month, interest may be
treated as payable on the last day of the immediately preceding month)
and begins on the day after the end of the immediately preceding
accrual period (or on the issue date in the case of the first accrual
period). This will be done, in the case of each full accrual period, by
(i) adding (a) the present value at the end of the accrual period
(determined by using as a discount factor the original yield to
maturity of the REMIC Regular Certificates as calculated under the
Prepayment Assumption) of all remaining payments to be received on the
REMIC Regular Certificates under the Prepayment Assumption and (b) any
payments included in the stated redemption price at maturity received
during such accrual period, and (ii) subtracting from that total the
adjusted issue price of the REMIC Regular Certificates at the beginning
of such accrual period. The adjusted issue price of a REMIC Regular
Certificate at the beginning of the first accrual period is its issue
price; the adjusted issue price of a REMIC Regular Certificate at the
beginning of a subsequent accrual period is the adjusted issue price at
the beginning of the immediately preceding accrual period plus the
amount of OID allocable to that accrual period and reduced by the
amount of any payment other than a payment of qualified stated interest
made at the end of or during that accrual period. The OID accrued
during an accrual period will then be divided by the number of days in
the period to determine the daily portion of OID for each day in the
accrual period. The calculation of OID under the method described above
will cause the accrual of OID to either increase or decrease (but never
below zero) in a given accrual period to reflect the fact that
prepayments are occurring faster or slower than under the Prepayment
Assumption. With respect to an initial accrual period shorter than a
full accrual period, the daily portions of OID may be determined
according to an appropriate allocation under any reasonable method.

A subsequent purchaser of a REMIC Regular Certificate issued with
OID who purchases the REMIC Regular Certificate at a cost less than the
remaining stated redemption price at maturity will also be required to
include in gross income the sum of the daily portions of OID on that
REMIC Regular Certificate. In computing the daily portions of OID for
such a purchaser (as well as an initial purchaser that purchases at a
price higher than the adjusted issue price but less than the stated
redemption price at maturity), however, the daily portion is reduced by
the amount that would be the daily portion for such day (computed in
accordance with the rules set forth above) multiplied by a fraction,
the numerator of which is the amount, if any, by which the price paid
by such holder for that REMIC Regular Certificate exceeds the following
amount: (a) the sum of the issue price plus the aggregate amount of OID
that would have been includible in the gross income of an original
REMIC Regular Certificateholder (who purchased the REMIC Regular
Certificate at its issue price), less (b) any prior payments included
in the stated redemption price at maturity, and the denominator of
which is the sum of the daily portions for that REMIC Regular
Certificate for all days beginning on the date after the purchase date
and ending on the maturity date computed under the Prepayment
Assumption. A holder who pays an acquisition premium instead may elect
to accrue OID by treating the purchase as a purchase at original issue.

Variable Rate REMIC Regular Certificates. REMIC Regular
Certificates may provide for interest based on a variable rate.
Interest based on a variable rate will constitute qualified stated
interest and not contingent interest if, generally, (i) such interest
is unconditionally payable at least annually, (ii) the issue price of
the debt instrument does not exceed the total noncontingent principal
payments and (iii) interest is based on a "qualified floating rate," an
"objective rate," a combination of a single fixed rate and one or more
"qualified floating rates," one "qualified inverse floating rate," or a
combination of "qualified floating rates "--that do not operate in a
manner that significantly accelerates or defers interest payments on
such REMIC Regular Certificates.

The amount of OID with respect to a REMIC Regular Certificate
bearing a variable rate of interest will accrue in the manner described
above under "--Original Issue Discount and Premium" by assuming
generally that the index used for the variable rate will remain fixed
throughout the term of the Certificate. Appropriate adjustments are
made for the actual variable rate.

Although unclear at present, the Depositor intends to treat
interest on a REMIC Regular Certificate that is a weighted average of
the net interest rates on Mortgage Loans as qualified stated interest.
In such case, the weighted average rate used to compute the initial
pass-through rate on the REMIC Regular Certificates will be deemed to
be the index in effect through the life of the REMIC Regular
Certificates. It is possible, however, that the IRS may treat some or
all of the interest on REMIC Regular Certificates with a weighted
average rate as taxable under the rules relating to obligations
providing for contingent payments. Such treatment may effect the timing
of income accruals on such REMIC Regular Certificates.

Election to Treat All Interest as OID. The OID Regulations permit
a Certificateholder to elect to accrue all interest, discount
(including de minimis market discount or original issue discount) and
premium in income as interest, based on a
constant yield method. If such an election were to be made with respect
to a REMIC Regular Certificate with market discount, the
Certificateholder would be deemed to have made an election to include
in income currently market discount with respect to all other debt
instruments having market discount that such Certificateholder acquires
during the year of the election or thereafter. Similarly, a
Certificateholder that makes this election for a Certificate that is
acquired at a premium will be deemed to have made an election to
amortize bond premium with respect to all debt instruments having
amortizable bond premium that such Certificateholder owns or acquires.
See "--REMIC Regular Certificates--Premium" herein. The election to
accrue interest, discount and premium on a constant yield method with
respect to a Certificate is irrevocable without the consent of the IRS.

Market Discount. A purchaser of a REMIC Regular Certificate may
also be subject to the market discount provisions of Code Sections 1276
through 1278. Under these provisions and the OID Regulations, "market
discount" equals the excess, if any, of (i) the REMIC Regular
Certificate's stated principal amount or, in the case of a REMIC
Regular Certificate with OID, the adjusted issue price (determined for
this purpose as if the purchaser had purchased such REMIC Regular
Certificate from an original holder) over (ii) the price for such REMIC
Regular Certificate paid by the purchaser. A Certificateholder that
purchases a REMIC Regular Certificate at a market discount will
recognize income upon receipt of each distribution representing amounts
included in such certificate's stated redemption price at maturity. In
particular, under Section 1276 of the Code such a holder generally will
be required to allocate each such distribution first to accrued market
discount not previously included in income, and to recognize ordinary
income to that extent. A Certificateholder may elect to include market
discount in income currently as it accrues rather than including it on
a deferred basis in accordance with the foregoing. If made, such
election will apply to all market discount bonds acquired by such
Certificateholder on or after the first day of the first taxable year
to which such election applies.

Market discount with respect to a REMIC Regular Certificate will
be considered to be zero if the amount allocable to the REMIC Regular
Certificate is less than 0.25% of such REMIC Regular Certificate's
stated redemption price at maturity multiplied by such REMIC Regular
Certificate's weighted average maturity remaining after the date of
purchase. If market discount on a REMIC Regular Certificate is
considered to be zero under this rule, the actual amount of market
discount must be allocated to the remaining principal payments on the
REMIC Regular Certificate, and gain equal to such allocated amount will
be recognized when the corresponding principal payment is made.
Treasury regulations implementing the market discount rules have not
yet been issued; therefore, investors should consult their own tax
advisors regarding the application of these rules and the advisability
of making any of the elections allowed under Code Sections 1276 through
1278.

The Code provides that any principal payment (whether a scheduled
payment or a prepayment) or any gain on disposition of a market
discount bond acquired by the taxpayer after October 22, 1986, shall be
treated as ordinary income to the extent that it does not exceed the
accrued market discount at the time of such payment. The amount of
accrued market discount for purposes of determining the tax treatment
of subsequent principal payments or dispositions of the market discount
bond is to be reduced by the amount so treated as ordinary income.

The Code also grants authority to the Treasury Department to issue
regulations providing for the computation of accrued market discount on
debt instruments, the principal of which is payable in more than one
installment. Until such time as regulations are issued by the Treasury,
rules described in the Legislative History will apply. Under those
rules, the holder of a market discount bond may elect to accrue market
discount either on the basis of a constant interest method rate or
according to one of the following methods. For REMIC Regular
Certificates issued with OID, the amount of market discount that
accrues during a period is equal to the product of (i) the total
remaining market discount and (ii) a fraction, the numerator of which
is the OID accruing during the period and the denominator of which is
the total remaining OID at the beginning of the period. For REMIC
Regular Certificates issued without OID, the amount of market discount
that accrues during a period is equal to the product of (a) the total
remaining market discount and (b) a fraction, the numerator of which is
the amount of stated interest paid during the accrual period and the
denominator of which is the total amount of stated interest remaining
to be paid at the beginning of the period. For purposes of calculating
market discount under any of the above methods in the case of
instruments (such as the REMIC Regular Certificates) that provide for
payments that may be accelerated by reason of prepayments of other
obligations securing such instruments, the same Prepayment Assumption
applicable to calculating the accrual of OID will apply.

A holder who acquired a REMIC Regular Certificate at a market
discount also may be required to defer a portion of its interest
deductions for the taxable year attributable to any indebtedness
incurred or continued to purchase or carry such Certificate purchased
with market discount. For these purposes, the de minimis rule referred
to above applies. Any such deferred interest expense would not exceed
the market discount that accrues during such taxable year and is, in
general,
allowed as a deduction not later than the year in which such market
discount is includible in income. If such holder elects to include
market discount in income currently as it accrues on all market
discount instruments acquired by such holder in that taxable year or
thereafter, the interest deferral rule described above will not apply.

Premium. A purchaser of a REMIC Regular Certificate that purchases
the REMIC Regular Certificate at a cost (not including accrued
qualified stated interest) greater than its remaining stated redemption
price at maturity will be considered to have purchased the REMIC
Regular Certificate at a premium and may elect to amortize such premium
under a constant yield method. A Certificateholder that makes this
election for a Certificate that is acquired at a premium will be deemed
to have made an election to amortize bond premium with respect to all
debt instruments having amortizable bond premium that such
Certificateholder acquires during the year of the election or
thereafter. It is not clear whether the Prepayment Assumption would be
taken into account in determining the life of the REMIC Regular
Certificate for this purpose. However, the Legislative History states
that the same rules that apply to accrual of market discount (which
rules require use of a Prepayment Assumption in accruing market
discount with respect to REMIC Regular Certificates without regard to
whether such Certificates have OID) will also apply in amortizing bond
premium under Code Section 171. The Code provides that amortizable bond
premium will be allocated among the interest payments on such REMIC
Regular Certificates and will be applied as an offset against such
interest payment. On June 27, 1996, the IRS published in the Federal
Register proposed regulations on the amortization of bond premium. The
foregoing discussion is based in part on such proposed regulations. On
December 30, 1997, the IRS issued the Amortizable Bond Premium
Regulations, which generally are effective for bonds acquired on or
after March 2, 1998 or, for holders making an election to amortize bond
premium as described above for the taxable year that includes March 2,
1998 or any subsequent taxable year, will apply to bonds held on or
after the first day of the taxable year in which the election is made.
Neither the proposed regulations nor the final regulations, by their
express terms, apply to prepayable securities described in Section
1272(a)(6) of the Code, such as the REMIC Regular Certificates.
Certificateholders should consult their tax advisors regarding the
possibility of making an election to amortize any such bond premium.

Deferred Interest. Certain classes of REMIC Regular Certificates
may provide for the accrual of Deferred Interest with respect to one or
more ARM Loans. Any Deferred Interest that accrues with respect to a
class of REMIC Regular Certificates will constitute income to the
holders of such Certificates prior to the time distributions of cash
with respect to such Deferred Interest are made. It is unclear, under
the OID Regulations, whether any of the interest on such Certificates
will constitute qualified stated interest or whether all or a portion
of the interest payable on such Certificates must be included in the
stated redemption price at maturity of the Certificates and accounted
for as OID (which could accelerate such inclusion). Interest on REMIC
Regular Certificates must in any event be accounted for under an
accrual method by the holders of such Certificates and, therefore,
applying the latter analysis may result only in a slight difference in
the timing of the inclusion in income of interest on such REMIC Regular
Certificates.

Sale, Exchange or Redemption. If a REMIC Regular Certificate is
sold, exchanged, redeemed or retired, the seller will recognize gain or
loss equal to the difference between the amount realized on the sale,
exchange, redemption, or retirement and the seller's adjusted basis in
the REMIC Regular Certificate. Such adjusted basis generally will equal
the cost of the REMIC Regular Certificate to the seller, increased by
any OID and market discount included in the seller's gross income with
respect to the REMIC Regular Certificate, and reduced (but not below
zero) by payments included in the stated redemption price at maturity
previously received by the seller and by any amortized premium.
Similarly, a holder who receives a payment that is part of the stated
redemption price at maturity of a REMIC Regular Certificate will
recognize gain equal to the excess, if any, of the amount of the
payment over an allocable portion of the holder's adjusted basis in the
REMIC Regular Certificate. A REMIC Regular Certificateholder who
receives a final payment that is less than the holder's adjusted basis
in the REMIC Regular Certificate will generally recognize a loss.
Except as provided in the following paragraph and as provided under
"--Market Discount" above, any such gain or loss will be capital gain
or loss, provided that the REMIC Regular Certificate is held as a
"capital asset" (generally, property held for investment) within the
meaning of Code Section 1221.

Gain from the sale or other disposition of a REMIC Regular
Certificate that might otherwise be capital gain will be treated as
ordinary income to the extent that such gain does not exceed the
excess, if any, of (i) the amount that would have been includible in
such holder's income with respect to the REMIC Regular Certificate had
income accrued thereon at a rate equal to 110% of the AFR as defined in
Code Section 1274(d) determined as of the date of purchase of such
REMIC Regular Certificate, over (ii) the amount actually includible in
such holder's income. Gain from the sale or other disposition of a
REMIC Regular Certificate that might otherwise be capita gain will be
treated as ordinary income if the REMIC Regular Certificate is held as
part of a "conversion transaction" as defined in Code section 1258(c),
up to the amount of interest that
would have accrued on the REMIC Regular Certificateholder's net
investment in the conversion transaction at 120% of the appropriate
applicable federal rate under Code section 1274(d) in effect at the
time the taxpayer entered into the transaction minus any amount
previously treated as ordinary income with respect to any prior
disposition of property that was held as part of such transaction, or
if the REMIC Regular Certificate is held as part of a straddle.
Potential investors should consult their tax advisors with respect to
tax consequences of ownership and disposition of an investment in REMIC
Regular Certificates in their particular circumstances.

It is possible that capital gain realized by holders of one or
more classes of REMIC Regular Certificates could be considered gain
realized upon the disposition of property that was part of a
"conversion transaction." A sale of a REMIC Regular Certificate will be
part of a "conversion transaction" if substantially all of the holder's
expected return is attributable to the time value of the holder's net
investment, and (i) the holder entered the contract to sell the REMIC
Regular Certificate substantially contemporaneously with acquiring the
REMIC Regular Certificate, (ii) the REMIC Regular Certificate is part
of a straddle, (iii) the REMIC Regular Certificate is marketed or sold
as producing capital gains, or (iv) other transactions to be specified
in Treasury regulations that have not yet been issued. If the sale or
other disposition of a REMIC Regular Certificate is part of a
conversion transaction, all or a portion of the gain realized upon the
sale or other disposition of the REMIC Regular Certificate would be
treated as ordinary income instead of capital gain.

The Certificates will be "evidences of indebtedness" within the
meaning of Code Section 582(c)(1), so that gain or loss recognized from
the sale of a REMIC Regular Certificate by a bank or a thrift
institution to which such section applies will be ordinary income or
loss.

The REMIC Regular Certificate information reports will include a
statement of the adjusted issue price of the REMIC Regular Certificate
at the beginning of each accrual period. In addition, the reports will
include information necessary to compute the accrual of any market
discount that may arise upon secondary trading of REMIC Regular
Certificates. Because exact computation of the accrual of market
discount on a constant yield method would require information relating
to the holder's purchase price which the REMIC may not have, it appears
that the information reports will only provide information pertaining
to the appropriate proportionate method of accruing market discount.

The Taxpayer Relief Act of 1997 (the "Act") reduces the maximum
rates on long-term capital gains recognized on capital assets held by
individual taxpayers for more than eighteen months as of the date of
disposition (and would further reduce the maximum rates on such gains
in the year 2001 and thereafter for certain individual taxpayers who
meet specified conditions). The capital gains rate for capital assets
held by individual taxpayers for more than twelve months but not more
than eighteen months was not changed by the Act. The Act does not
change the capital gains rates for corporations. Prospective investors
should consult their own tax advisors concerning these tax law changes.

Accrued Interest Certificates. Certain of the REMIC Regular
Certificates ("Payment Lag Certificates") may provide for payments of
interest based on a period that corresponds to the interval between
Distribution Dates but that ends prior to each such Distribution Date.
The period between the Closing Date for Payment Lag Certificates and
their first Distribution Date may or may not exceed such interval.
Purchasers of Payment Lag Certificates for which the period between the
Closing Date and the first Distribution Date does not exceed such
interval could pay upon purchase of the REMIC Regular Certificates
accrued interest in excess of the accrued interest that would be paid
if the interest paid on the Distribution Date were interest accrued
from Distribution Date to Distribution Date. If a portion of the
initial purchase price of a REMIC Regular Certificate is allocable to
interest that has accrued prior to the issue date ("pre-issuance
accrued interest") and the REMIC Regular Certificate provides for a
payment of stated interest on the first payment date (and the first
payment date is within one year of the issue date) that equals or
exceeds the amount of the pre-issuance accrued interest, then the REMIC
Regular Certificate's issue price may be computed by subtracting from
the issue price the amount of pre-issuance accrued interest, rather
than as an amount payable on the REMIC Regular Certificate. However, it
is unclear under this method how the OID Regulations treat interest on
Payment Lag Certificates. Therefore, in the case of a Payment Lag
Certificate, the Trust Fund intends to include accrued interest in the
issue price and report interest payments made on the first Distribution
Date as interest to the extent such payments represent interest for the
number of days that the Certificateholder has held such Payment Lag
Certificate during the first accrual period.

Investors should consult their own tax advisors concerning the
treatment for federal income tax purposes of Payment Lag Certificates.

Non-Interest Expenses of the REMIC. Under temporary Treasury
regulations, if the REMIC is considered to be a "single-class
REMIC," a portion of the REMIC's servicing, administrative and
other non-interest expenses will be allocated as a separate item
to those REMIC Regular Certificateholders that are "pass-through
interest holders." Certificateholders that are pass-through
interest holders should consult their own tax advisors about the
impact of these rules on an investment in the REMIC Regular
Certificates. See "Pass-Through of Non-Interest Expenses of the
REMIC" under "Taxation of Owners of REMIC Residual Certificates"
below.

Effects of Defaults, Delinquencies and Losses. Certain Series of
Certificates may contain one or more classes of Subordinated
Certificates, and in the event there are defaults or delinquencies on
the Mortgage Assets, amounts that would otherwise be distributed on the
Subordinated Certificates may instead be distributed on the Senior
Certificates. Subordinated Certificateholders nevertheless will be
required to report income with respect to such Certificates under an
accrual method without giving effect to delays and reductions in
distributions on such Subordinated Certificates attributable to
defaults and delinquencies on the Mortgage Assets, except to the extent
that it can be established that such amounts are uncollectible. As a
result, the amount of income reported by a Subordinated
Certificateholder in any period could significantly exceed the amount
of cash distributed to such holder in that period. The holder will
eventually be allowed a loss (or will be allowed to report a lesser
amount of income) to the extent that the aggregate amount of
distributions on the Subordinated Certificate is reduced as a result of
defaults and delinquencies on the Mortgage Assets.

Although not entirely clear, it appears that holders of REMIC
Regular Certificates that are corporations should in general be allowed
to deduct as an ordinary loss any loss sustained during the taxable
year on account of any such Certificates becoming wholly or partially
worthless, and that, in general, holders of Certificates that are not
corporations should be allowed to deduct as a short-term capital loss
any loss sustained during the taxable year on account of any such
Certificates becoming wholly worthless. Potential investors and holders
of the Certificates are urged to consult their own tax advisors
regarding the appropriate timing, amount and character of any loss
sustained with respect to such Certificates, including any loss
resulting from the failure to recover previously accrued interest or
discount income. Special loss rules are applicable to banks and thrift
institutions, including rules regarding reserves for bad debts. Such
taxpayers are advised to consult their tax advisors regarding the
treatment of losses on Certificates.

Non-U.S. Persons. Generally, payments of interest (including any
payment with respect to accrued OID) on the REMIC Regular Certificates
to a REMIC Regular Certificateholder who is not a U.S. Person and is
not engaged in a trade or business within the United States will not be
subject to federal withholding tax if (i) such REMIC Regular
Certificateholder does not actually or constructively own 10 percent or
more of the combined voting power of all classes of equity in the
issuer; (ii) such REMIC Regular Certificateholder is not a controlled
foreign corporation (within the meaning of Code Section 957) related to
the issuer; and (iii) such REMIC Regular Certificateholder complies
with certain identification requirements (including delivery of a
statement, signed by the REMIC Regular Certificateholder under
penalties of perjury, certifying that such REMIC Regular
Certificateholder is a foreign person and providing the name and
address of such REMIC Regular Certificateholder). If a REMIC Regular
Certificateholder is not exempt from withholding, distributions of
interest to such holder, including distributions in respect of accrued
OID, may be subject to a 30% withholding tax, subject to reduction
under any applicable tax treaty. If the interest on a REMIC Regular
Certificate is effectively connected with the conduct by the Non-U.S.
REMIC Regular Certificateholder of a trade or business within the
United States, then the Non-U.S. REMIC Regular Certificateholder will
be subject to U.S. income tax at regular graduated rates. Such a
Non-U.S. REMIC Regular Certificateholder also may be subject to the
branch profits tax.

Further, a REMIC Regular Certificate will not be included in the
estate of a non-resident alien individual that does not actually or
constructively own 10% or more of the combined voting power of all
classes of equity in the Issuer and will not be subject to United
States estate taxes. However, Certificateholders who are non-resident
alien individuals should consult their tax advisors concerning this
question.

REMIC Regular Certificateholders who are not U.S. Persons and
persons related to such holders should not acquire any REMIC Residual
Certificates, and holders of REMIC Residual Certificates (the "REMIC
Residual Certificateholder") and persons related to REMIC Residual
Certificateholders should not acquire any REMIC Regular Certificates
without consulting their tax advisors as to the possible adverse tax
consequences of doing so. In addition, the IRS may assert that non-U.S
Persons that own directly or indirectly, a greater than 10% interest in
any Mortgagor, and foreign corporations that are "controlled foreign
corporations" as to the United States of which such a Mortgagor is a
"United States shareholder" within the meaning of Section 951(b) of the
Code, are subject to United States withholding tax on interest
distributed to them to the extent of interest concurrently paid by the
related Mortgagor.

For these purposes, a "U.S. Person" means a citizen or resident of
the United States, a corporation, partnership or other entity created
or organized in, or under the laws of, the United States or any
political subdivision thereof, an estate the income of which from
sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection
with the conduct of a trade or business or a trust as to which (i) a
court in the United States is able to exercise primary supervision over
its administration and (ii) one or more U.S. Persons have the right to
control all substantial decisions of the trust.

Information Reporting and Backup Withholding. The Master Servicer
will furnish or make available, within a reasonable time after the end
of each calendar year, to each person who was a REMIC Regular
Certificateholder at any time during such year, such information as may
be deemed necessary or desirable to assist REMIC Regular
Certificateholders in preparing their federal income tax returns, or to
enable holders to make such information available to beneficial owners
or financial intermediaries that hold such REMIC Regular Certificates
on behalf of beneficial owners. If a holder, beneficial owner,
financial intermediary or other recipient of a payment on behalf of a
beneficial owner fails to supply a certified taxpayer identification
number or if the Secretary of the Treasury determines that such person
has not reported all interest and dividend income required to be shown
on its federal income tax return, 31% backup withholding may be
required with respect to any payments with respect to any payments to
registered owners who are not "exempt recipients." In addition, upon
the sale of a REMIC Regular Certificate to (or through) a broker, the
broker must withhold 31% of the entire purchase price, unless either
(i) the broker determines that the seller is a corporation or other
exempt recipient, or (ii) the seller provides, in the required manner,
certain identifying information and, in the case of a non-U.S. Person,
certifies that such seller is a Non-U.S. Person, and certain other
conditions are met. Such as sale must also be reported by the broker
to the IRS, unless either (a) the broker determines that the seller is
an exempt recipient or (b) the seller certifies its non-U.S. Person
status (and certain other conditions are met). Certification of the
registered owner's non-U.S. Person status normally would be made on IRS
Form W-8 under penalties of perjury, although in certain cases it may
be possible to submit other documentary evidence. Any amounts deducted
and withheld from a distribution to a recipient would be allowed as a
credit against such recipient's federal income tax liability.

On October 6, 1997, the Treasury Department issued the New
Regulations, which make certain modifications to the withholding,
backup withholding and information reporting rules described above.
The New Regulations attempt to unify certification requirements and
modify reliance standards. The New Regulations will generally be
effective for payments made after December 31, 1998, subject to certain
transition rules. Prospective investors are urged to consult their own
tax advisors regarding the New Regulations.

b. Taxation of Owners of REMIC Residual Certificates

Allocation of the Income of the REMIC to the REMIC Residual
Certificates. The REMIC will not be subject to federal income tax
except with respect to income from prohibited transactions and certain
other transactions. See "--Prohibited Transactions and Other Taxes"
below. Instead, each original holder of a REMIC Residual Certificate
will report on its federal income tax return, as ordinary income, its
share of the taxable income of the REMIC for each day during the
taxable year on which such holder owns any REMIC Residual Certificates.
The taxable income of the REMIC for each day will be determined by
allocating the taxable income of the REMIC for each calendar quarter
ratably to each day in the quarter. Such a holder's share of the
taxable income of the REMIC for each day will be based on the portion
of the outstanding REMIC Residual Certificates that such holder owns on
that day. The taxable income of the REMIC will be determined under an
accrual method and will be taxable to the holders of REMIC Residual
Certificates without regard to the timing or amounts of cash
distributions by the REMIC. Ordinary income derived from REMIC Residual
Certificates will be "portfolio income" for purposes of the taxation of
taxpayers subject to the limitations on the deductibility of "passive
losses." As residual interests, the REMIC Residual Certificates will be
subject to tax rules, described below, that differ from those that
would apply if the REMIC Residual Certificates were treated for federal
income tax purposes as direct ownership interests in the Certificates
or as debt instruments issued by the REMIC.

A REMIC Residual Certificateholder may be required to include
taxable income from the REMIC Residual Certificate in excess of the
cash distributed. For example, a structure where principal
distributions are made serially on regular interests (that is, a
fast-pay, slow-pay structure) may generate such a mismatching of income
and cash distributions (that is, "phantom income"). This mismatching
may be caused by the use of certain required tax accounting methods by
the REMIC, variations in the prepayment rate of the underlying Mortgage
Assets and certain other factors. Depending upon the structure of a
particular transaction, the aforementioned factors may significantly
reduce the after-tax yield of a REMIC Residual Certificate
to a REMIC Residual Certificateholder or cause the REMIC Residual
Certificate to have negative "value." Investors should consult their
own tax advisors concerning the federal income tax treatment of a REMIC
Residual Certificate and the impact of such tax treatment on the
after-tax yield of a REMIC Residual Certificate.

A subsequent REMIC Residual Certificateholder also will report on
its federal income tax return amounts representing a daily share of the
taxable income of the REMIC for each day that such REMIC Residual
Certificateholder owns such REMIC Residual Certificate. Those daily
amounts generally would equal the amounts that would have been reported
for the same days by an original REMIC Residual Certificateholder, as
described above. The Legislative History indicates that certain
adjustments may be appropriate to reduce (or increase) the income of a
subsequent holder of a REMIC Residual Certificate that purchased such
REMIC Residual Certificate at a price greater than (or less than) the
adjusted basis such REMIC Residual Certificate would have in the hands
of an original REMIC Residual Certificateholder. See "--Sale or
Exchange of REMIC Residual Certificates" below. It is not clear,
however, whether such adjustments will in fact be permitted or required
and, if so, how they would be made. The REMIC Regulations do not
provide for any such adjustments.

Taxable Income of the REMIC Attributable to Residual
Interests. The taxable income of the REMIC will reflect a netting of
(i) the income from the Mortgage Assets and the REMIC's other assets
and (ii) the deductions allowed to the REMIC for interest and OID on
the REMIC Regular Certificates and, except as described above under
"--Taxation of Owners of REMIC Regular Certificates--Non-Interest
Expenses of the REMIC," other expenses. REMIC taxable income is
generally determined in the same manner as the taxable income of an
individual using the accrual method of accounting, except that (i) the
limitations on deductibility of investment interest expense and
expenses for the production of income do not apply, (ii) all bad loans
will be deductible as business bad debts, and (iii) the limitation on
the deductibility of interest and expenses related to tax-exempt income
will apply. The REMIC's gross income includes interest, original issue
discount income, and market discount income, if any, on the Mortgage
Loans, reduced by amortization of any premium on the Mortgage Loans,
plus income on reinvestment of cash flows and reserve assets, plus any
cancellation of indebtedness income upon allocation of realized losses
to the REMIC Regular Certificates. Note that the timing of cancellation
of indebtedness income recognized by REMIC Residual Certificateholders
resulting from defaults and delinquencies on Mortgage Assets may differ
from the time of the actual loss on the Mortgage Asset. The REMIC's
deductions include interest and original issue discount expense on the
REMIC Regular Certificates, servicing fees on the Mortgage Loans, other
administrative expenses of the REMIC and realized losses on the
Mortgage Loans. The requirement that REMIC Residual Certificateholders
report their pro rata share of taxable income or net loss of the REMIC
will continue until there are no Certificates of any class of the
related Series outstanding.

For purposes of determining its taxable income, the REMIC will
have an initial aggregate tax basis in its assets equal to the sum of
the issue prices of the REMIC Regular Certificates and the REMIC
Residual Certificates (or, if a class of Certificates is not sold
initially, its fair market value). Such aggregate basis will be
allocated among the Mortgage Assets and other assets of the REMIC in
proportion to their respective fair market value. A Mortgage Asset will
be deemed to have been acquired with discount or premium to the extent
that the REMIC's basis therein is less than or greater than its
principal balance, respectively. Any such discount (whether market
discount or OID) will be includible in the income of the REMIC as it
accrues, in advance of receipt of the cash attributable to such income,
under a method similar to the method described above for accruing OID
on the REMIC Regular Certificates. The REMIC may elect under Code
Section 171 to amortize any premium on the Mortgage Assets. Premium on
any Mortgage Asset to which such election applies would be amortized
under a constant yield method. It is not clear whether the yield of a
Mortgage Asset would be calculated for this purpose based on scheduled
payments or taking account of the Prepayment Assumption. Additionally,
such an election would not apply to the yield with respect to any
underlying mortgage loan originated on or before September 27, 1985.
Instead, premium with respect to such a mortgage loan would be
allocated among the principal payments thereon and would be deductible
by the REMIC as those payments become due.

The REMIC will be allowed a deduction for interest and OID on the
REMIC Regular Certificates. The amount and method of accrual of OID
will be calculated for this purpose in the same manner as described
above with respect to REMIC Regular Certificates except that the 0.25%
per annum de minimis rule and adjustments for subsequent holders
described therein will not apply.

A REMIC Residual Certificateholder will not be permitted to
amortize the cost of the REMIC Residual Certificate as an offset to its
share of the REMIC's taxable income. However, REMIC taxable income will
not include cash received by the REMIC that represents a recovery of
the REMIC's basis in its assets, and, as described above, the issue
price of the REMIC Residual Certificates will be added to the issue
price of the REMIC Regular Certificates in determining the REMIC's
initial basis in its assets. See "--Sale or Exchange of REMIC Residual
Certificates" below. For a discussion of possible
adjustments to income of a subsequent holder of a REMIC Residual
Certificate to reflect any difference between the actual cost of such
REMIC Residual Certificate to such holder and the adjusted basis such
REMIC Residual Certificate would have in the hands of an original REMIC
Residual Certificateholder, see "--Allocation of the Income of the
REMIC to the REMIC Residual Certificates" above.

Net Losses of the REMIC. The REMIC will have a net loss for any
calendar quarter in which its deductions exceed its gross income. Such
net loss would be allocated among the REMIC Residual Certificateholders
in the same manner as the REMIC's taxable income. The net loss
allocable to any REMIC Residual Certificate will not be deductible by
the holder to the extent that such net loss exceeds such holder's
adjusted basis in such REMIC Residual Certificate. Any net loss that is
not currently deductible by reason of this limitation may only be used
by such REMIC Residual Certificateholder to offset its share of the
REMIC's taxable income in future periods (but not otherwise). The
ability of REMIC Residual Certificateholders that are individuals or
closely held corporations to deduct net losses may be subject to
additional limitations under the Code.

Mark to Market Rules. Prospective purchasers of a REMIC Residual
Certificate should be aware that the IRS has finalized regulations (the
"Mark-to-Market Regulations") which provide that a REMIC Residual
Certificate acquired after January 3, 1995 cannot be marked to market.
The Mark-to-Market Regulations replaced the temporary regulations which
allowed a Residual Certificate to be marked to market provided that it
was not a "negative value" residual interest and did not have the same
economic effect as a "negative value" residual interest.

Pass-Through of Non-Interest Expenses of the REMIC. As a general
rule, all of the fees and expenses of a REMIC will be taken into
account by holders of the REMIC Residual Certificates. In the case of a
single class REMIC, however, the expenses and a matching amount of
additional income will be allocated, under temporary Treasury
regulations, among the REMIC Regular Certificateholders and the REMIC
Residual Certificateholders on a daily basis in proportion to the
relative amounts of income accruing to each Certificateholder on that
day. In general terms, a single class REMIC is one that either (i)
would qualify, under existing Treasury regulations, as a grantor trust
if it were not a REMIC (treating all interests as ownership interests,
even if they would be classified as debt for federal income tax
purposes) or (ii) is similar to such a trust and is structured with the
principal purpose of avoiding the single class REMIC rules. Unless
otherwise stated in the applicable Prospectus Supplement, the expenses
of the REMIC will be allocated to holders of the related REMIC Residual
Certificates in their entirety and not to holders of the related REMIC
Regular Certificates.

In the case of individuals (or trusts, estates or other persons
that compute their income in the same manner as individuals) who own an
interest in a REMIC Regular Certificate or a REMIC Residual Certificate
directly or through a pass-through interest holder that is required to
pass miscellaneous itemized deductions through to its owners or
beneficiaries (e.g. a partnership, an S corporation or a grantor
trust), such expenses will be deductible under Code Section 67 only to
the extent that such expenses, plus other "miscellaneous itemized
deductions" of the individual, exceed 2% of such individual's adjusted
gross income. In addition, Code Section 68 provides that the amount of
itemized deductions otherwise allowable for an individual whose
adjusted gross income exceeds a certain amount (the "Applicable
Amount") will be reduced by the lesser of (i) 3% of the excess of the
individual's adjusted gross income over the Applicable Amount or (ii)
80% of the amount of itemized deductions otherwise allowable for the
taxable year. The amount of additional taxable income recognized by
REMIC Residual Certificateholders who are subject to the limitations of
either Code Section 67 or Code Section 68 may be substantial. Further,
holders (other than corporations) subject to the alternative minimum
tax may not deduct miscellaneous itemized deductions in determining
such holders' alternative minimum taxable income. The REMIC is required
to report to each pass-through interest holder and to the IRS such
holder's allocable share, if any, of the REMIC's non-interest expenses.
The term "pass-through interest holder" generally refers to
individuals, entities taxed as individuals and certain pass-through
entities, but does not include real estate investment trusts.
Accordingly, investment in REMIC Residual Certificates will in general
not be suitable for individuals or for certain pass-through entities,
such as partnerships and S corporations, that have individuals as
partners or shareholders.

Excess Inclusions. A portion of the income on a REMIC Residual
Certificate (referred to in the Code as an "excess inclusion") for any
calendar quarter will be subject to federal income tax in all events.
Thus, for example, an excess inclusion (i) may not, except as described
below, be offset by any unrelated losses, deductions or loss carryovers
of a REMIC Residual Certificateholder; (ii) will be treated as
"unrelated business taxable income" within the meaning of Code Section
512 if the REMIC Residual Certificateholder is a pension fund or any
other organization that is subject to tax only on its unrelated
business taxable income (see "--Tax-Exempt Investors" below); and (iii)
is not eligible for any reduction in the rate of withholding tax in the
case of a REMIC Residual Certificateholder that is a foreign investor.
See "--Non-U.S. Persons" below.

Except as discussed in the following paragraph, with respect to
any REMIC Residual Certificateholder, the excess inclusions for
any calendar quarter is the excess, if any, of (i) the income of
such REMIC Residual Certificateholder for that calendar quarter
from its REMIC Residual Certificate over (ii) the sum of the
"daily accruals" (as defined below) for all days during the
calendar quarter on which the REMIC Residual Certificateholder
holds such REMIC Residual Certificate. For this purpose, the daily
accruals with respect to a REMIC Residual Certificate are
determined by allocating to each day in the calendar quarter its
ratable portion of the product of the "adjusted issue price" (as
defined below) of the REMIC Residual Certificate at the beginning
of the calendar quarter and 120 percent of the "Federal long-term
rate" in effect at the time the REMIC Residual Certificate is
issued. For this purpose, the "adjusted issue price" of a REMIC
Residual Certificate at the beginning of any calendar quarter
equals the issue price of the REMIC Residual Certificate,
increased by the amount of daily accruals for all prior quarters,
and decreased (but not below zero) by the aggregate amount of
payments made on the REMIC Residual Certificate before the
beginning of such quarter. The "federal long-term rate" is an
average of current yields on Treasury securities with a remaining
term of greater than nine years, computed and published monthly by
the IRS.

In the case of any REMIC Residual Certificates held by a real
estate investment trust, the aggregate excess inclusions with respect
to such REMIC Residual Certificates, reduced (but not below zero) by
the real estate investment trust taxable income (within the meaning of
Code Section 857(b)(2), excluding any net capital gain), will be
allocated among the shareholders of such trust in proportion to the
dividends received by such shareholders from such trust, and any amount
so allocated will be treated as an excess inclusion with respect to a
REMIC Residual Certificate as if held directly by such shareholder.
Regulated investment companies, common trust funds and certain
cooperatives are subject to similar rules.

The Small Business Job Protection Act of 1996 has eliminated the
special rule permitting Section 593 institutions ("thrift
institutions") to use net operating losses and other allowable
deductions to offset their excess inclusion income from REMIC residual
certificates that have "significant value" within the meaning of the
REMIC Regulations, effective for taxable years beginning after December
31, 1995, except with respect to residual certificates continuously
held by a thrift institution since November 1, 1995.

In addition, the Small Business Job Protection Act of 1996
provides three rules for determining the effect on excess inclusions on
the alternative minimum taxable income of a residual holder. First,
alternative minimum taxable income for such residual holder is
determined without regard to the special rule that taxable income
cannot be less than excess inclusions. Second, the amount of any
alternative minimum tax net operating loss deductions must be computed
without regard to any excess inclusions. Third, a residual holder's
alternative minimum taxable income for a tax year cannot be less than
excess inclusions for the year. The effect of this last statutory
amendment is to prevent the use of nonrefundable tax credits to reduce
a taxpayer's income tax below its tentative minimum tax computed only
on excess inclusions. These rules are effective for tax years beginning
after December 31, 1986, unless a residual holder elects to have such
rules apply only to tax years beginning after August 20, 1996.

Payments. Any distribution made on a REMIC Residual Certificate to
a REMIC Residual Certificateholder will be treated as a non-taxable
return of capital to the extent it does not exceed the REMIC Residual
Certificateholder's adjusted basis in such REMIC Residual Certificate.
To the extent a distribution exceeds such adjusted basis, it will be
treated as gain from the sale of the REMIC Residual Certificate.

Sale or Exchange of REMIC Residual Certificates. If a REMIC
Residual Certificate is sold or exchanged, the seller will generally
recognize gain or loss equal to the difference between the amount
realized on the sale or exchange and its adjusted basis in the REMIC
Residual Certificate (except that the recognition of loss may be
limited under the "wash sale" rules described below). A holder's
adjusted basis in a REMIC Residual Certificate generally equals the
cost of such REMIC Residual Certificate to such REMIC Residual
Certificateholder, increased by the taxable income of the REMIC that
was included in the income of such REMIC Residual Certificateholder
with respect to such REMIC Residual Certificate, and decreased (but not
below zero) by the net losses that have been allowed as deductions to
such REMIC Residual Certificateholder with respect to such REMIC
Residual Certificate and by the distributions received thereon by such
REMIC Residual Certificateholder. In general, any such gain or loss
will be capital gain or loss provided the REMIC Residual Certificate is
held as a capital asset. However, REMIC Residual Certificates will be
"evidences of indebtedness" within the meaning of Code Section
582(c)(1), so that gain or loss recognized from sale of a REMIC
Residual Certificate by a bank or thrift institution to which such
section applies would be ordinary income or loss. In addition, a
transfer of a REMIC Residual Certificate that is a "noneconomic
residual interest" may be subject to different rules. See "--Tax
Related Restrictions on Transfers of REMIC Residual
Certificates--Noneconomic REMIC Residual Certificates" below.

Except as provided in Treasury regulations yet to be issued, if
the seller of a REMIC Residual Certificate reacquires such REMIC
Residual Certificate, or acquires any other REMIC Residual Certificate,
any residual interest in another REMIC or similar interest in a
"taxable mortgage pool" (as defined in Code Section 7701(i)) during the
period beginning six months before, and ending six months after, the
date of such sale, such sale will be subject to the "wash sale" rules
of Code Section 1091. In that event, any loss realized by the REMIC
Residual Certificateholder on the sale will not be deductible, but,
instead, will increase such REMIC Residual Certificateholder's adjusted
basis in the newly acquired asset.

The Act reduces the maximum rates on long-term capital gains
recognized on capital assets held by individual taxpayers for more than
eighteen months as of the date of disposition (and would further reduce
the maximum rates on such gains in the year 2001 and thereafter for
certain individual taxpayers who meet specified conditions). The
capital gains rate for capital assets held by individual taxpayers for
more than twelve months but not more than eighteen months was not
changed by the Act. The Act does not change the capital gains rates
for corporations. Prospective investors should consult their own tax
advisors concerning these tax law changes.

Prohibited Transactions and Other Taxes

The Code imposes a tax on REMICs equal to 100% of the net income
derived from "prohibited transactions" (the "Prohibited Transactions
Tax"). In general, subject to certain specified exceptions, a
prohibited transaction means the disposition of a Mortgage Asset, the
receipt of income from a source other than a Mortgage Asset or certain
other permitted investments, the receipt of compensation for services,
or gain from the disposition of an asset purchased with the payments on
the Mortgage Assets for temporary investment pending distribution on
the Certificates. It is not anticipated that the Trust Fund for any
Series of Certificates will engage in any prohibited transactions in
which it would recognize a material amount of net income.

In addition, certain contributions to a Trust Fund as to which an
election has been made to treat such Trust Fund as a REMIC made after
the day on which such Trust Fund issues all of its interests could
result in the imposition of a tax on the Trust Fund equal to 100% of
the value of the contributed property (the "Contributions Tax"). No
Trust Fund for any Series of Certificates will accept contributions
that would subject it to such tax.

In addition, a Trust Fund as to which an election has been made to
treat such Trust Fund as a REMIC may also be subject to federal income
tax at the highest corporate rate on "net income from foreclosure
property," determined by reference to the rules applicable to real
estate investment trusts. "Net income from foreclosure property"
generally means income from foreclosure property other than qualifying
income for a real estate investment trust.

Where any Prohibited Transactions Tax, Contributions Tax, tax on
net income from foreclosure property or state or local income or
franchise tax that may be imposed on a REMIC relating to any Series of
Certificates arises out of or results from (i) a breach of the related
Servicer's, Trustee's or Depositor's obligations, as the case may be,
under the related Agreement for such Series, such tax will be borne by
such Servicer, Trustee or Depositor, as the case may be, out of its own
funds or (ii) the Depositor's obligation to repurchase a Mortgage Loan,
such tax will be borne by the Depositor. In the event that such
Servicer, Trustee or Depositor, as the case may be, fails to pay or is
not required to pay any such tax as provided above, such tax will be
payable out of the Trust Fund for such Series and will result in a
reduction in amounts available to be distributed to the
Certificateholders of such Series.

Liquidation and Termination

If the REMIC adopts a plan of complete liquidation, within the
meaning of Code Section 860F(a)(4)(A)(i), which may be accomplished by
designating in the REMIC's final tax return a date on which such
adoption is deemed to occur, and sells all of its assets (other than
cash) within a 90-day period beginning on such date, the REMIC will not
be subject to any Prohibited Transaction Tax, provided that the REMIC
credits or distributes in liquidation all of the sale proceeds plus its
cash (other than the amounts retained to meet claims) to holders of
Regular and REMIC Residual Certificates within the 90-day period.

The REMIC will terminate shortly following the retirement of the
REMIC Regular Certificates. If a REMIC Residual Certificateholder's
adjusted basis in the REMIC Residual Certificate exceeds the amount of
cash distributed to such REMIC Residual Certificateholder in final
liquidation of its interest, then it would appear that the REMIC
Residual Certificateholder
would be entitled to a loss equal to the amount of such excess. It is
unclear whether such a loss, if allowed, will be a capital loss or an
ordinary loss.

Administrative Matters

Solely for the purpose of the administrative provisions of the
Code, the REMIC generally will be treated as a partnership and the
REMIC Residual Certificateholders will be treated as the partners.
Certain information will be furnished quarterly to each REMIC Residual
Certificateholder who held a REMIC Residual Certificate on any day in
the previous calendar quarter.

Each REMIC Residual Certificateholder is required to treat items
on its return consistently with their treatment on the REMIC's return,
unless the REMIC Residual Certificateholder either files a statement
identifying the inconsistency or establishes that the inconsistency
resulted from incorrect information received from the REMIC. The IRS
may assert a deficiency resulting from a failure to comply with the
consistency requirement without instituting an administrative
proceeding at the REMIC level. The REMIC does not intend to register as
a tax shelter pursuant to Code Section 6111 because it is not
anticipated that the REMIC will have a net loss for any of the first
five taxable years of its existence. Any person that holds a REMIC
Residual Certificate as a nominee for another person may be required to
furnish the REMIC, in a manner to be provided in Treasury regulations,
with the name and address of such person and other information.

Tax-Exempt Investors

Any REMIC Residual Certificateholder that is a pension fund or
other entity that is subject to federal income taxation only on its
"unrelated business taxable income" within the meaning of Code Section
512 will be subject to such tax on that portion of the distributions
received on a REMIC Residual Certificate that is considered an excess
inclusion. See "--Taxation of Owners of REMIC Residual
Certificates--Excess Inclusions" above.

Residual Certificate Payments--Non-U.S. Persons

Amounts paid to REMIC Residual Certificateholders who are not U.S.
Persons (see "--Taxation of Owners of REMIC Regular
Certificates--Non-U.S. Persons" above) are treated as interest for
purposes of the 30% (or lower treaty rate) United States withholding
tax. Amounts distributed to holders of REMIC Residual Certificates
should qualify as "portfolio interest," subject to the conditions
described in "--Taxation of Owners of REMIC Regular Certificates"
above, but only to the extent that the underlying mortgage loans were
originated after July 18, 1984. Furthermore, the rate of withholding on
any income on a REMIC Residual Certificate that is excess inclusion
income will not be subject to reduction under any applicable tax
treaties. See "--Taxation of Owners of REMIC Residual
Certificates--Excess Inclusions" above. If the portfolio interest
exemption is unavailable, such amount will be subject to United States
withholding tax when paid or otherwise distributed (or when the REMIC
Residual Certificate is disposed of) under rules similar to those for
withholding upon disposition of debt instruments that have OID. The
Code, however, grants the Treasury Department authority to issue
regulations requiring that those amounts be taken into account earlier
than otherwise provided where necessary to prevent avoidance of tax
(for example, where the REMIC Residual Certificates do not have
significant value). See "--Taxation of Owners of REMIC Residual
Certificates--Excess Inclusions" above. If the amounts paid to REMIC
Residual Certificateholders that are not U.S. Persons are effectively
connected with their conduct of a trade or business within the United
States, the 30% (or lower treaty rate) withholding will not apply.
Instead, the amounts paid to such non-U.S. Person will be subject to
U.S. federal income taxation at regular graduated rates. For special
restrictions on the transfer of REMIC Residual Certificates, see
"--Tax-Related Restrictions on Transfers of REMIC Residual
Certificates" below.

REMIC Regular Certificateholders and persons related to such
holders should not acquire any REMIC Residual Certificates, and REMIC
Residual Certificateholders and persons related to REMIC Residual
Certificateholders should not acquire any REMIC Regular Certificates,
without consulting their tax advisors as to the possible adverse tax
consequences of such acquisition.

Tax-Related Restrictions on Transfers of REMIC Residual Certificates

Disqualified Organizations. An entity may not qualify as a REMIC
unless there are reasonable arrangements designed to ensure that
residual interests in such entity are not held by "disqualified
organizations" (as defined below). Further, a tax is imposed on the
transfer of a residual interest in a REMIC to a "disqualified
organization." The amount of the tax equals
the product of (A) an amount (as determined under the REMIC
Regulations) equal to the present value of the total anticipated
"excess inclusions" with respect to such interest for periods after the
transfer and (ii) the highest marginal federal income tax rate
applicable to corporations. The tax is imposed on the transferor unless
the transfer is through an agent (including a broker or other
middleman) for a disqualified organization, in which event the tax is
imposed on the agent. The person otherwise liable for the tax shall be
relieved of liability for the tax if the transferee furnished to such
person an affidavit that the transferee is not a disqualified
organization and, at the time of the transfer, such person does not
have actual knowledge that the affidavit is false. A "disqualified
organization" means (A) the United States, any State, possession or
political subdivision thereof, any foreign government, any
international organization or any agency or instrumentality of any of
the foregoing (provided that such term does not include an
instrumentality if all its activities are subject to tax and, except
for FHLMC, a majority of its board of directors is not selected by any
such governmental agency), (B) any organization (other than certain
farmers' cooperatives) generally exempt from federal income taxes
unless such organization is subject to the tax on "unrelated business
taxable income" and (C) a rural electric or telephone cooperative.

A tax is imposed on a "pass-through entity" (as defined below)
holding a residual interest in a REMIC if at any time during the
taxable year of the pass-through entity a disqualified organization is
the record holder of an interest in such entity. The amount of the tax
is equal to the product of (A) the amount of excess inclusions for the
taxable year allocable to the interest held by the disqualified
organization and (B) the highest marginal federal income tax rate
applicable to corporations. The pass-through entity otherwise liable
for the tax, for any period during which the disqualified organization
is the record holder of an interest in such entity, will be relieved of
liability for the tax if such record holder furnishes to such entity an
affidavit that such record holder is not a disqualified organization
and, for such period, the pass-through entity does not have actual
knowledge that the affidavit is false. For this purpose, a
"pass-through entity" means (i) a regulated investment company, real
estate investment trust or common trust fund, (ii) a partnership, trust
or estate and (iii) certain cooperatives. Except as may be provided in
Treasury regulations not yet issued, any person holding an interest in
a pass-through entity as a nominee for another will, with respect to
such interest, be treated as a pass-through entity. Electing large
partnerships (generally, non-service partnerships with 100 or more
members electing to be subject to simplified IRS reporting provisions
under Code sections 771 through 777) will be taxable on excess
inclusion income as if all partners were disqualified organizations.

In order to comply with these rules, the Agreement will provide
that no record or beneficial ownership interest in a REMIC Residual
Certificate may be purchased, transferred or sold, directly or
indirectly, without the express written consent of the Master Servicer.
The Master Servicer will grant such consent to a proposed transfer only
if it receives the following: (i) an affidavit from the proposed
transferee to the effect that it is not a disqualified organization and
is not acquiring the REMIC Residual Certificate as a nominee or agent
for a disqualified organization and (ii) a covenant by the proposed
transferee to the effect that the proposed transferee agrees to be
bound by and to abide by the transfer restrictions applicable to the
REMIC Residual Certificate.

Noneconomic REMIC Residual Certificates. The REMIC Regulations
disregard, for federal income tax purposes, any transfer of a
Noneconomic REMIC Residual Certificate to a "U.S. Person," as defined
above, unless no significant purpose of the transfer is to enable the
transferor to impede the assessment or collection of tax. A Noneconomic
REMIC Residual Certificate is any REMIC Residual Certificate (including
a REMIC Residual Certificate with a positive value at issuance) unless,
at the time of transfer, taking into account the Prepayment Assumption
and any required or permitted clean up calls or required liquidation
provided for in the REMIC's organizational documents, (i) the present
value of the expected future distributions on the REMIC Residual
Certificate at least equals the product of the present value of the
anticipated excess inclusions and the highest corporate income tax rate
in effect for the year in which the transfer occurs and (ii) the
transferor reasonably expects that the transferee will receive
distributions from the REMIC at or after the time at which taxes accrue
on the anticipated excess inclusions in an amount sufficient to satisfy
the accrued taxes. A significant purpose to impede the assessment or
collection of tax exists if the transferor, at the time of the
transfer, either knew or should have known that the transferee would be
unwilling or unable to pay taxes due on its share of the taxable income
of the REMIC. A transferor is presumed not to have such knowledge if
(i) the transferor conducted a reasonable investigation of the
transferee and (ii) the transferee acknowledges to the transferor that
the residual interest may generate tax liabilities in excess of the
cash flow and the transferee represents that it intends to pay such
taxes associated with the residual interest as they become due. If a
transfer of a Noneconomic REMIC Residual Certificate is disregarded,
the transferor would continue to be treated as the owner of the REMIC
Residual Certificate and would continue to be subject to tax on its
allocable portion of the net income of the REMIC.

Foreign Investors. The REMIC Regulations provide that the transfer
of a REMIC Residual Certificate that has a "tax avoidance potential" to
a "foreign person" will be disregarded for federal income tax purposes.
This rule appears to apply to
a transferee who is not a U.S. Person unless such transferee's income
in respect of the REMIC Residual Certificate is effectively connected
with the conduct of a United Sates trade or business. A REMIC Residual
Certificate is deemed to have a tax avoidance potential unless, at the
time of transfer, the transferor reasonably expect that the REMIC will
distribute to the transferee amounts that will equal at least 30
percent of each excess inclusion, and that such amounts will be
distributed at or after the time the excess inclusion accrues and not
later than the end of the calendar year following the year of accrual.
If the non-U.S. Person transfers the REMIC Residual Certificate to a
U.S. Person, the transfer will be disregarded, and the foreign
transferor will continue to be treated as the owner, if the transfer
has the effect of allowing the transferor to avoid tax on accrued
excess inclusions. The provisions in the REMIC Regulations regarding
transfers of REMIC Residual Certificates that have tax avoidance
potential to foreign persons are effective for all transfers after June
30, 1992. The Pooling and Servicing Agreement will provide that no
record or beneficial ownership interest in a REMIC Residual Certificate
may be transferred, directly or indirectly, to a non-U.S. Person unless
such person provides the Trustee with a duly completed IRS Form 4224
and the Trustee consents to such transfer in writing.

Any attempted transfer or pledge in violation of the transfer
restrictions shall be absolutely null and void and shall vest no rights
in any purported transferee. Investors in REMIC Residual Certificates
are advised to consult their own tax advisors with respect to transfers
of the REMIC Residual Certificates and, in addition, pass-through
entities are advised to consult their own tax advisors with respect to
any tax which may be imposed on a pass-through entity.

STATE TAX CONSIDERATIONS

In addition to the federal income tax consequences described in
"Certain Federal Income Tax Consequences," potential investors should
consider the state income tax consequences of the acquisition,
ownership, and disposition of the Offered Certificates. State income
tax law may differ substantially from the corresponding federal law,
and this discussion does not purport to describe any aspect of the
income tax laws of any state. Therefore, potential investors should
consult their own tax advisors with respect to the various tax
consequences of investments in the Offered Certificates.

ERISA CONSIDERATIONS

General

Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), imposes certain restrictions on employee benefit
plans subject thereto ("ERISA Plans") and on persons who are parties in
interest or disqualified persons ("parties in interest") with respect
to such ERISA Plans. Certain employee benefit plans, such as
governmental plans and church plans (if no election has been made under
Section 410(d) of the Code), are not subject to the restrictions of
ERISA, and assets of such plans may be invested in the Certificates
without regard to the ERISA considerations described below, subject to
other applicable federal, state or local law. However, any such
governmental or church plan which is qualified under Section 401(a) of
the Code and exempt from taxation under Section 501(a) of the Code is
subject to the prohibited transaction rules set forth in Section 503 of
the Code.

Investments by ERISA Plans are subject to ERISA's general
fiduciary requirements, including the requirement of investment
prudence and diversification and the requirement that an ERISA Plan's
investments be made in accordance with the documents governing the
ERISA Plan.

Prohibited Transactions

General

Section 406 of ERISA prohibits parties in interest with respect to
an ERISA Plan from engaging in certain transactions involving such Plan
and its assets unless a statutory or administrative exemption applies
to the transaction. In some cases, a civil penalty may be assessed on
non-exempt prohibited transactions pursuant to Section 502(i) of ERISA.
Section 4975 of the Code imposes certain excise taxes on similar
transactions between employee benefit plans and certain other
retirement plans and arrangements, including individual retirement
accounts or annuities and Keogh plans, subject thereto and disqualified
persons with respect to such plans and arrangements (together with
ERISA Plans, "Plans").

The United States Department of Labor ("Labor") has issued a final
regulation (29 C.F.R. Section 2510.3-101) containing rules for
determining what constitutes the assets of a Plan. This regulation
provides that, as a general rule, the
underlying assets and properties of corporations, partnerships, trusts
and certain other entities in which a Plan makes an "equity investment"
will be deemed for purposes of ERISA and Section 4975 of the Code to be
assets of the Plan unless certain exceptions apply.

Under the terms of the regulation, the Trust may be deemed to hold
plan assets by reason of a Plan's investment in a Certificate; such
plan assets would include an undivided interest in the Mortgage Loans
and any other assets held by the Trust. In such an event, the
Depositor, the Master Servicer, any Sub-Servicer, the Trustee, any
insurer of the Mortgage Assets and other persons, in providing services
with respect to the assets of the Trust, may be fiduciaries subject to
the fiduciary responsibility provisions of Title I of ERISA, or may
otherwise be parties in interest or disqualified persons, with respect
to such Plan. In addition, transactions involving such assets could
constitute or result in prohibited transactions under Section 406 of
ERISA or Section 4975 of the Code unless such transactions are subject
to a statutory or administrative exemption.

The regulations contain a de minimis safe-harbor rule that exempts
any entity from plan assets status as long as the aggregate equity
investment in such entity by plans is not significant. For this
purpose, equity participation in the entity will be significant if
immediately after any acquisition of any equity interest in the entity,
"benefit plan investors" in the aggregate, own at least 25% of the
value of any class of equity interest (excluding equity interests held
by persons who have discretionary authority or control with respect to
the assets of the entity (or by affiliates of such persons)). "Benefit
plan investors" are defined as Plans as well as employee benefit plans
not subject to Title I of ERISA (e.g., governmental plans and foreign
plans) and entities whose underlying assets include plan assets by
reason of plan investment in such entities. The 25% limitation must be
met with respect to each class of equity interests, regardless of the
portion of total equity value represented by such class, on an ongoing
basis.

Availability of Underwriter's Exemption for Certificates

Labor has granted to Morgan Stanley & Co. Incorporated Prohibited
Transaction Exemption 90-24, Exemption Application No. D-8019, 55 Fed.
Reg. 20548 (1990) (the "Exemption") which exempts from the application
of the prohibited transaction rules transactions relating to: (1) the
acquisition, sale and holding by Plans of certain certificates
representing an undivided interest in certain asset-backed pass-through
trusts, with respect to which Morgan Stanley & Co. Incorporated or any
of its affiliates is the sole underwriter or the manager or co-manager
of the underwriting syndicate; and (2) the servicing, operation and
management of such asset-backed pass-through trusts, provided that the
general conditions and certain other conditions set forth in the
Exemption are satisfied.

General Conditions of the Exemption. Section II of the Exemption
sets forth the following general conditions which must be satisfied
before a transaction involving the acquisition, sale and holding of the
Certificates or a transaction in connection with the servicing,
operation and management of the Trust may be eligible for exemptive
relief thereunder:

(2) The rights and interests evidenced by the Certificates
acquired by the Plan are not subordinated to the rights and interests
evidenced by other certificates of the Trust with respect to the right
to receive payment in the event of default or delinquencies in the
underlying assets of the Trust;

(3) The Certificates acquired by the Plan have received a rating
at the time of such acquisition that is in one of the three highest
generic rating categories from any of Duff & Phelps Credit Rating Co.,
Fitch Investors Service, L.P., Moody's Investors Service, Inc. and
Standard & Poor's Ratings Services;

(4) The Trustee is not an affiliate of the Depositor, any
Underwriter, the Master Servicer, any insurer of the Mortgage Assets,
any borrower whose obligations under one or more Mortgage Loans
constitute more than 5% of the aggregate unamortized principal balance
of the assets in the Trust, or any of their respective affiliates (the
"Restricted Group");

(5) The sum of all payments made to and retained by the
Underwriter in connection with the distribution of the Certificates
represents not more than reasonable compensation for underwriting such
Certificates; the sum of all payments made to and retained by the Asset
Seller pursuant to the sale of the Mortgage Loans to the Trust
represents not more than the fair market value of such Mortgage Loans;
the sum of all payments made to and retained by the Master Servicer
represent not
more than reasonable compensation for the Master Servicer's services
under the Pooling Agreement and reimbursement of the Master Servicer's
reasonable expenses in connection therewith; and

(6) The Plan investing in the Certificates is an "accredited
investor" as defined in Rule 501(a)(1) of Regulation D of the
Securities and Exchange Commission under the Securities Act of 1933 as
amended.

Before purchasing a Certificate in reliance on the Exemption, a
fiduciary of a Plan should itself confirm (a) that the Certificates
constitute "certificates" for purposes of the Exemption and (b) that
the general conditions and other requirements set forth in the
Exemption would be satisfied.

Review by Plan Fiduciaries

Any Plan fiduciary considering whether to purchase any
Certificates on behalf of a Plan should consult with its counsel
regarding the applicability of the fiduciary responsibility and
prohibited transaction provisions of ERISA and the Code to such
investment. Among other things, before purchasing any Certificates, a
fiduciary of a Plan should make its own determination as to the
availability of the exemptive relief provided in the Exemption, and
also consider the availability of any other prohibited transaction
exemptions. In this regard, purchasers that are insurance companies
should determine the extent to which Prohibited Transaction Class
Exemption 95-60 (for certain transactions involving insurance company
general accounts) may be available. The Prospectus Supplement with
respect to a series of Certificates may contain additional information
regarding the application of the Exemption, Prohibited Transaction
Class Exemption 83-1 (for certain transactions involving mortgage pool
investment trusts), or any other exemption, with respect to the
Certificates offered thereby.

LEGAL INVESTMENT

The Prospectus Supplement for each series of Offered Certificates
will identify those classes of Offered Certificates, if any, which
constitute "mortgage related securities" for purposes of the Secondary
Mortgage Market Enhancement Act of 1984, as amended ("SMMEA"). Those
classes of Offered Certificates that (i) are rated in one of the two
highest rating categories by one or more Rating Agencies and (ii) are
part of a series representing interests in, or secured by, a Trust Fund
consisting of Mortgage Loans or MBS, provided that such Mortgage Loans
(or the Mortgage Loans underlying the MBS) are secured by first liens
on Mortgaged Property and were originated by certain types of
originators as specified in SMMEA, will be "mortgage related
securities" for purposes of SMMEA (the "SMMEA Certificates"). As
"mortgage related securities," the SMMEA Certificates will constitute
legal investments for persons, trusts, corporations, partnerships,
associations, business trusts and business entities (including, but not
limited to, state-chartered savings banks, commercial banks, savings
and loan associations and insurance companies, as well as trustees and
state government employee retirement systems) created pursuant to or
existing under the laws of the United States or of any state (including
the District of Columbia and Puerto Rico) whose authorized investments
are subject to state regulation to the same extent that, under
applicable law, obligations issued by or guaranteed as to principal and
interest by the United States or any agency or instrumentality thereof
constitute legal investments for such entities. Pursuant to SMMEA, a
number of states enacted legislation, before the October 4, 1991 cutoff
established by SMMEA for such enactments, limiting to varying extents
the ability of certain entities (in particular, insurance companies) to
invest in mortgage related securities, in most cases by requiring the
affected investors to rely solely upon existing state law, and not
SMMEA. Pursuant to Section 347 of the Riegle Community Development and
Regulatory Improvement Act of 1994, which amended the definition of
"mortgage related security" (effective December 31, 1996) to include,
in relevant part, Offered Certificates satisfying the rating, first
lien and qualified originator requirements for "mortgage related
securities," but representing interests in, or secured by, a Trust Fund
consisting, in whole or in part, of first liens on one or more parcels
of real estate upon which are located one or more commercial
structures, states were authorized to enact legislation, on or before
September 23, 2001, specifically referring to Section 347 and
prohibiting or restricting the purchase, holding or investment by
state-regulated entities in such types of Offered Certificates.
Investors affected by such legislation will be authorized to invest in
SMMEA Certificates only to the extent provided in such legislation.

SMMEA also amended the legal investment authority of
federally-chartered depository institutions as follows: federal savings
and loan associations and federal savings banks may invest in, sell or
otherwise deal in "mortgage related securities" without limitation as
to the percentage of their assets represented thereby, federal credit
unions may invest in such securities, and national banks may purchase
such securities for their own account without regard to the limitations
generally applicable to investment securities set forth in 12 U.S.C.
Section 24 (Seventh), subject in each case to such regulations as the
applicable federal regulatory authority may prescribe. In this
connection, the Office of the Comptroller of the Currency (the "OCC")
has amended 12 C.F.R. Part 1 to authorize national banks to purchase
and sell for their own account, without limitation as to a
percentage of the bank's capital and surplus (but subject to compliance
with certain general standards concerning "safety and soundness" and
retention of credit information in 12 C.F.R. Section 1.5), certain
"Type IV securities," defined in 12 C.F.R. Section 1.2(1) to include
certain "commercial mortgage-related securities" and "residential
mortgage-related securities." As so defined, "commercial
mortgage-related security" and "residential mortgage-related security"
mean, in relevant part, "mortgage-related security" within the meaning
of SMMEA, provided that, in the case of a "commercial mortgage-related
security," it "represents ownership of a promissory note or certificate
of interest or participation that is directly secured by a first lien
on one or more parcels of real estate upon which one or more commercial
structures are located and that is fully secured by interests in a pool
of loans to numerous obligors." In the absence of any rule or
administrative interpretation by the OCC defining the term "numerous
obligors," no representation is made as to whether any class of Offered
Certificates will qualify as "commercial mortgage-related securities,"
and thus as "Type IV securities," for investment by national banks.
Federal credit unions should review the National Credit Union
Administration ("NCUA") Letter to Credit Unions No. 96, as modified by
Letter to Credit Unions No. 108, which includes guidelines to assist
federal credit unions in making investment decisions for mortgage
related securities. The NCUA has adopted rules, codified as 12 C.F.R.
Section 703.5(f)-(k), which prohibit federal credit unions from
investing in certain mortgage related securities (including securities
such as certain series or classes of Offered Certificates), except
under limited circumstances. Effective January 1, 1998, the NCUA has
amended its rules governing investments by federal credit unions at 12
C.F.R. Part 703; the revised rules will permit investments in "mortgage
related securities" under certain limited circumstances, but will
prohibit investments in stripped mortgage related securities, residual
interests in mortgage related securities, and commercial mortgage
related securities, unless the credit union has obtained written
approval from the NCUA to participate in the "investment pilot program"
described in 12 C.F.R. Section 703.140.

All depository institutions considering an investment in the
Offered Certificates should review the "Supervisory Policy Statement on
Securities Activities" dated January 28, 1992, as revised April 15,
1994 (the "Policy Statement") of the Federal Financial Institutions
Examination Council. The Policy Statement, which has been adopted by
the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the OCC and the Office of Thrift
Supervision, and by the NCUA (with certain modifications), prohibits
depository institutions from investing in certain "high-risk mortgage
securities" (including securities such as certain series or classes of
the Offered Certificates), except under limited circumstances, and sets
forth certain investment practices deemed to be unsuitable for
regulated institutions.

Institutions whose investment activities are subject to regulation
by federal or state authorities should review rules, policies and
guidelines adopted from time to time by such authorities before
purchasing any Offered Certificates, as certain series or classes may
be deemed unsuitable investments, or may otherwise be restricted, under
such rules, policies or guidelines (in certain instances irrespective
of SMMEA).

The foregoing does not take into consideration the applicability
of statutes, rules, regulations, orders, guidelines or agreements
generally governing investments made by a particular investor,
including, but not limited to, "prudent investor" provisions,
percentage-of-assets limits, provisions which may restrict or prohibit
investment in securities which are not "interest bearing" or "income
paying," and, with regard to any Offered Certificates issued in
book-entry form, provisions which may restrict or prohibit investments
in securities which are issued in book-entry form.

If specified in the related Prospectus Supplement, other classes
of Offered Certificates offered pursuant to this Prospectus will not
constitute "mortgage related securities" under SMMEA. The appropriate
characterization of such Offered Certificates under various legal
investment restrictions, and thus the ability of investors subject to
these restrictions to purchase such Offered Certificates, may be
subject to significant interpretive uncertainties.

Except as to the status of SMMEA Certificates identified in the
Prospectus Supplement for a series as "mortgage related securities"
under SMMEA, no representations are made as to the proper
characterization of the Offered Certificates for legal investment or
financial institution regulatory purposes, or as to the ability of
particular investors to purchase any Offered Certificates under
applicable legal investment restrictions. The uncertainties described
above (and any unfavorable future determinations concerning legal
investment or financial institution regulatory characteristics of the
Offered Certificates) may adversely affect the liquidity of the Offered
Certificates.

Investors should consult with their own legal advisors in
determining whether and to what extent the Offered Certificates of any
class constitute legal investments or are subject to investment,
capital or other restrictions, and, if applicable, whether SMMEA has
been overridden in any jurisdiction relevant to such investor.

PLAN OF DISTRIBUTION

The Offered Certificates offered hereby and by the Supplements to
this Prospectus will be offered in series. The distribution of the
Certificates may be effected from time to time in one or more
transactions, including negotiated transactions, at a fixed public
offering price or at varying prices to be determined at the time of
sale or at the time of commitment therefor. If so specified in the
related Prospectus Supplement, the Offered Certificates will be
distributed in a firm commitment underwriting, subject to the terms and
conditions of the underwriting agreement, by Morgan Stanley & Co.
Incorporated ("Morgan Stanley") acting as underwriter with other
underwriters, if any, named therein. In such event, the Prospectus
Supplement may also specify that the underwriters will not be obligated
to pay for any Offered Certificates agreed to be purchased by
purchasers pursuant to purchase agreements acceptable to the Depositor.
In connection with the sale of Offered Certificates, underwriters may
receive compensation from the Depositor or from purchasers of Offered
Certificates in the form of discounts, concessions or commissions. The
Prospectus Supplement will describe any such compensation paid by the
Depositor.

Alternatively, the Prospectus Supplement may specify that Offered
Certificates will be distributed by Morgan Stanley acting as agent or
in some cases as principal with respect to Offered Certificates that it
has previously purchased or agreed to purchase. If Morgan Stanley acts
as agent in the sale of Offered Certificates, Morgan Stanley will
receive a selling commission with respect to such Offered Certificates,
depending on market conditions, expressed as a percentage of the
aggregate Certificate Balance or notional amount of such Offered
Certificates as of the Cut-off Date. The exact percentage for each
series of Certificates will be disclosed in the related Prospectus
Supplement. To the extent that Morgan Stanley elects to purchase
Offered Certificates as principal, Morgan Stanley may realize losses or
profits based upon the difference between its purchase price and the
sales price. The Prospectus Supplement with respect to any series
offered other than through underwriters will contain information
regarding the nature of such offering and any agreements to be entered
into between the Depositor and purchasers of Offered Certificates of
such series.

The Depositor will indemnify Morgan Stanley and any underwriters
against certain civil liabilities, including liabilities under the
Securities Act of 1933, or will contribute to payments Morgan Stanley
and any underwriters may be required to make in respect thereof.

In the ordinary course of business, Morgan Stanley and the
Depositor may engage in various securities and financing transactions,
including repurchase agreements to provide interim financing of the
Depositor's mortgage loans pending the sale of such mortgage loans or
interests therein, including the Certificates.

Offered Certificates will be sold primarily to institutional
investors. Purchasers of Offered Certificates, including dealers, may,
depending on the facts and circumstances of such purchases, be deemed
to be "underwriters" within the meaning of the Securities Act of 1933
in connection with reoffers and sales by them of Offered Certificates.
Certificateholders should consult with their legal advisors in this
regard prior to any such reoffer or sale.

As to each series of Certificates, only those classes rated in an
investment grade rating category by any Rating Agency will be offered
hereby. Any non-investment-grade class may be initially retained by the
Depositor, and may be sold by the Depositor at any time in private
transactions.

LEGAL MATTERS

Certain legal matters in connection with the Certificates,
including certain federal income tax consequences, will be passed upon
for the Depositor by Sidley & Austin, New York, New York or Latham &
Watkins, New York, New York or Cadwalader, Wickersham & Taft, New York,
New York or Brown & Wood LLP, New York, New York or such other counsel
as may be specified in the related Prospectus Supplement.

FINANCIAL INFORMATION

A new Trust Fund will be formed with respect to each series of
Certificates and no Trust Fund will engage in any business activities
or have any assets or obligations prior to the issuance of the related
series of Certificates. Accordingly, no financial statements with
respect to any Trust Fund will be included in this Prospectus or in the
related Prospectus Supplement.

RATING

It is a condition to the issuance of any class of Offered
Certificates that they shall have been rated not lower than investment
grade, that is, in one of the four highest rating categories, by a
Rating Agency.

Ratings on mortgage pass-through certificates address the
likelihood of receipt by certificateholders of all distributions on the
underlying mortgage loans. These ratings address the structural, legal
and issuer-related aspects associated with such certificates, the
nature of the underlying mortgage loans and the credit quality of the
guarantor, if any. Ratings on mortgage pass-through certificates do not
represent any assessment of the likelihood of principal prepayments by
mortgagors or of the degree by which such prepayments might differ from
those originally anticipated. As a result, certificateholders might
suffer a lower than anticipated yield, and, in addition, holders of
stripped interest certificates in extreme cases might fail to recoup
their initial investments.

A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time by
the assigning rating organization. Each security rating should be
evaluated independently of any other security rating.

INDEX OF PRINCIPAL DEFINITIONS

Term
Page(s) on which
term is defined
in the Prospectus

<S> <C>
Accrual Certificates 30
ADA 72
Applicable Amount 93
ARM Loans 24, 79
Asset Conservation Act 68
Asset Seller 20
Assets 1, 20
Balloon Mortgage Loans 16
Bankruptcy Code 63
Book-Entry Certificates 31
Cash Flow Agreement 26
Cash Flow Agreements 1
Cede 3, 37
CERCLA 18, 68
Certificate Account 41
Certificate Owners 37
Certificateholders 3
Closing Date 83
Commercial Loans 20
Commercial Properties 20
Commission 3
Contributions Tax 95
Cooperatives 21
Covered Trust 17, 55
CPR 29
Credit Support 1, 26
Crime Control Act 73
Deferred Interest 80
Definitive Certificates 31, 38
Depositor 20
Determination Date 31
DTC 3, 37
Due Period 31
Environmental Hazard Condition 69
Equity Participations 24
ERISA 99
ERISA Plans 99
Exchange Act 3
Exemption 100
FDIC 41
FHLMC 50
FNMA 69
Government Securities 1, 20
Indirect Participants 37
Insurance Proceeds 42
IRS 76
Labor 99
L/C Bank 56
Lease 3
Lease Assignment 1
Legislative History 83
Lessee 3
Liquidation Proceeds 42
Lock-out Date 24
Lock-out Period 24
Mark-to-Market Regulations 93
Master REMIC 83
MBS 1, 20
MBS Agreement 24
MBS Issuer 24
MBS Servicer 24
MBS Trustee 24
Morgan Stanley 103
Mortgage Loans 1, 20
Mortgage Notes 21
Mortgage Rate 24
Mortgages 21
Multifamily Loans 20
Multifamily Properties 20
NCUA 102
Nonrecoverable Advance 34
Offered Certificates 1
OID 74, 76
OID Regulations 76
Originator 21
Participants 37
Pass-Through Rate 32
Payment Lag Certificates 89
Permitted Investments 41
Plans 99
Prepayment Assumption 79
Prepayment Premium 24
Prohibited Transactions Tax 95
RCRA 68
Record Date 31
Related Proceeds 34
Relief Act 72
REMIC Certificates 82
REMIC Regular Certificateholders 83
REMIC Regular Certificates 82
REMIC Regulations 74
REMIC Residual Certificateholder 90
REMIC Residual Certificates 82
REO Extension 61
REO Tax 61
Restricted Group 100
RICO 73
Senior Certificates 30
Servicing Standard 45
SMMEA 101
SMMEA Certificates 101
Special Servicer 45
Stripped ARM Obligations 80
Stripped Bond Certificates 77
Stripped Coupon Certificates 77
Stripped Interest Certificates 30
Stripped Principal Certificates 30
Subordinate Certificates 30
Sub-Servicer 45
Sub-Servicing Agreement 45
Subsidiary REMIC 83
Super-Premium Certificates 84
Title V 71
Trust Assets 2
Trust Fund 1
UCC 37
Voting Rights 19
Warrantying Party 40
</TABLE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*

The following table sets forth the estimated expenses in connection with
the issuance and distribution of the Certificates, other than underwriting
discounts and commissions:

SEC Registration Fee $2,655,000
Blue Sky Fees 3,000
NASD Fees N/A
Printing and Engraving Fees 50,000
Legal Fees and Expenses 200,000
Accounting Fees and Expenses 40,000
Trustee Fees and Expenses 25,000
Rating Agency Fees 60,000
Miscellaneous 35,000
-------

Total $3,068,000

-------------
* All amounts except the SEC Registration Fee are estimates of
expenses incurred or to be incurred in connection with the issuance
and distribution of a single Series of Certificates in an aggregate
principal amount assumed for these purposes to be equal to
$100,000,000 of Certificates registered hereby.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under Section VII of the proposed form of Underwriting Agreement, the
Underwriter is obligated under certain circumstances to indemnify officers
and directors of Morgan Stanley Capital I Inc. (the "Company") who sign the
Registration Statement, and certain controlling persons of the Company,
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended (the "Act").

The Company's By-laws provide for indemnification of directors and
officers of the Company to the full extent permitted by Delaware law.

Section 145 of the Delaware General Corporation Law provides, in
substance, that Delaware corporations shall have the power, under specified
circumstances, to indemnify their directors, officers, employees and agents
in connection with actions, suits or proceedings brought against them by a
third party or in the right of the corporation, by reason of the fact that
they are or were such directors, officers, employees or agents, against
expenses incurred in any such action, suit or proceeding.

The Pooling and Servicing Agreement will provide that no director,
officer, employee or agent of the Company will be liable to the Trust Fund or
the Certificateholders for any action taken or for refraining from the taking
of any action pursuant to the Pooling and Servicing Agreement, except for
such person's own misfeasance, bad faith or gross negligence in the
performance of duties. The Pooling and Servicing Agreements will provide
further that, with the exceptions stated above, any director, officer,
employee or agent of the Company will be indemnified and held harmless by the
Trust Fund against any loss, liability or expense incurred in connection with
any legal action relating to the Pooling and Servicing Agreement or the
Certificates, other than any loss, liability or expense (i) related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to the Pooling and
Servicing Agreement), (ii) incurred in connection with any violation by him
or her of any state or federal securities law or (iii) imposed by any taxing
authority if such loss, liability or expense is not specifically reimbursable
pursuant to the terms of the Pooling and Servicing Agreement.

ITEM 16. EXHIBITS.

1.1 Form of Underwriting Agreement*
3.1 Certificate of Incorporation of the Company*
3.2 By-laws of the Company*
4.1 Form of Pooling and Servicing Agreement*
5.1 Opinion of Brown & Wood LLP as to legality of the
Certificates

5.2 Opinion of Sidley & Austin as to legality of the
Certificates**
5.3 Opinion of Latham & Watkins as to legality of the
Certificates**
5.4 Opinion of Cadwalader, Wickersham & Taft as to legality of the
Certificates**

8.1 Opinion of Brown & Wood LLP as to certain tax matters (included in
Exhibit 5.1)

8.2 Opinion of Sidley & Austin as to certain tax matters**
8.3 Opinion of Latham & Watkins as to certain tax matters**
8.4 Opinion of Cadwalader, Wickersham & Taft as to certain tax
matters (included in Exhibit 5.4)**
23.1 Consent of Brown & Wood LLP (included in Exhibits 5.1 and 8.1
hereto)**
23.2 Consent of Sidley & Austin (included in Exhibit 5.2)**
23.3 Consent of Latham & Watkins (included in Exhibit 5.3)**
23.4 Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5.4)**
25.1 Powers of Attorney (included on Page II-4)**

- ------------------
* Incorporated by reference to Registration Statement No. 33-45042 as
previously filed by the Registrant on Form S-11, Registration Statement
No. 33-46723 as previously filed by the Registrant on Form S-3 to Form
S-11 and Registration Statement No. 333-26667 as previously filed by the
Registrant on Form S-3 to Form S-11.

** Previously filed.

ITEM 17. UNDERTAKINGS.

A. Undertaking in respect of indemnification.

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.

B. Undertaking pursuant to Rule 415 Offering.

The Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) to include any prospectus required by Section 10(a)(3) of
the Act;

(ii) to reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the Registration Statement;

(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change of such information in the
Registration Statement;

(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.

C. Undertaking in respect of incorporation by reference.

The Registrant hereby undertakes that, for purposes of determining any
liability under the Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities and Exchange Act
of 1934 that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

D. Undertaking in respect of equity offerings of nonreporting Registrants.

The Registrant hereby undertakes to provide to the underwriter at the
closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit delivery to each purchaser.

E. Undertaking pursuant to Rule 430A

The registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on February 11, 1998.

MORGAN STANLEY CAPITAL I INC.

By: /s/ David R. Warren
-----------------------
Name: David R. Warren
Title: President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>

/s/ David R. Warren President (Principal Executive February 11, 1998
- ---------------------- Officer) and Director
David R. Warren

* Direct February 11, 1998
- ----------------------
Craig S. Phillips

* Director February 11, 1998
- -----------------------
John G. Westerfield

* Treasurer (Principal February 11, 1998
- ----------------------- Financial Officer) and Controller
Eileen K. Murray

*/s/ David R. Warren February 11, 1998
______________________
David R. Warren
as Attorney-in-Fact

</TABLE>

EXHIBIT INDEX

Exhibit No. Description of Exhibit
<S> <C>
1.1 Form of Underwriting Agreement*
3.1 Certificate of Incorporation of the Company*
3.2 By-laws of the Company*
4.1 Form of Pooling and Servicing Agreement*
5.1 Opinion of Brown & Wood LLP as to legality of the Certificates

5.2 Opinion of Sidley & Austin as to legality of the Certificates**
5.3 Opinion of Latham & Watkins as to legality of the Certificates**
5.4 Opinion of Cadwalader, Wickersham & Taft as to legality of the
Certificates**

8.1 Opinion of Brown & Wood LLP as to certain tax matters (included in Exhibit 5.1)

8.2 Opinion of Sidley & Austin as to certain tax matters**
8.3 Opinion of Latham & Watkins as to certain tax matters
8.4 Opinion of Cadwalader, Wickersham & Taft as to certain tax
matters (included in Exhibit 5.4)**

23.1 Consent of Brown & Wood LLP (included in Exhibits 5.1 and
8.1 hereto)**

23.2 Consent of Sidley & Austin (included in Exhibit 5.2)**
23.3 Consent of Latham & Watkins (included in Exhibit 5.3)**
23.4 Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5.4)**
25.1 Powers of Attorney (included on Page II-5)**

-------------------

* Incorporated by reference to Registration Statement No. 33-45042 as previously filed by the Registrant on Form S-11, No.
33-46723 as previously filed by the Registrant on Form S-3 to Form S-11 and No. 333-26667 as previously filed by the
Registrant on Form S-3 to Form S-11.

** Previously filed.

</TABLE>

EXHIBIT 5.1

BROWN & WOOD LLP
One World Trade Center
New York, N.Y. 10048-0557
Telephone: 212-839-5300
Facsimile: 212-839-5599

February 11, 1998

Morgan Stanley Capital I Inc.
1585 Broadway
New York, New York 10036

Re: Morgan Stanley Capital I Inc.
Registration Statement on Form S-3
----------------------------------

Ladies and Gentlemen:

We have acted as counsel for Morgan Stanley Capital I Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-3 (the "Registration Statement") relating to
the Mortgage Pass-Through Certificates specified therein (the
"Certificates"), issuable in series (each, a "Series"). Pursuant to Rule
429 of the Secuities and Exchange Commission Rules and Regulations under the
Securities Act of 1933, as amended (the "1933 Act"), the Prospectuses and
Prospectus Supplements contained in the Registration Statement also relate to
the Company's registration statement No. 33-46723 as previously filed on Form
S-3, registration statement No. 33-45042 as previously filed on Form S-11 and
registration statement No. 333-26667 as previously filed on Form S-3. The
Registration Statement is being filed with the Securities and Exchange
Commission under the 1933 Act. As set forth in the Registration Statement,
each Series of Certificates will be issued under and pursuant to the
conditions of a separate pooling and servicing agreement (each, a "Pooling
and Servicing Agreement") among the Company, a trustee and a master
servicer to be identified in the prospectus supplement for such Series of
Certificates (the "Trustee" and the "Master Servicer" for such Series,
respectively).

We have examined copies of the Company's Certificate of Incorporation
and By-laws, a form of Pooling and Servicing Agreement, the forms of
Certificates included in the Pooling and Servicing Agreement, the forms of
prospectus supplements and prospectuses contained in the Registration
Statement (the "Prospectus Supplements" and "Base Prospectuses",
respectively) and such other records, documents and statutes as we have
deemed necessary for purposes of this opinion.

Based upon the foregoing, we are of the opinion that:

1. When a Pooling and Servicing Agreement for a Series of Certificates
has been duly and validly authorized by all necessary action on the part of
the Company and has been duly executed and delivered by the Company, the
Master Servicer, the Trustee and any other party thereto for such Series,
such Pooling and Servicing Agreement will constitute a valid and binding
agreement of the Company, enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
relating to or affecting creditors' rights generally or by general equity
principles.

2. When a Series of Certificates has been duly authorized by all
necessary action on the part of the Company (subject to the terms thereof
otherwise being in compliance with applicable law at such time), duly
executed and authenticated by the Trustee for such Series in accordance with
the terms of the related Pooling and Servicing Agreement, and issued and
delivered against payment therefor as contemplated in the Registration
Statement, the Certificates in such Series will be legally and validly
issued, fully paid and nonassessable, and the holders thereof will be
entitled to the benefits of such Pooling and Servicing Agreement.

3. The information set forth in the Prospectus Supplements and Base
Prospectuses under the caption "Certain Federal Income Tax Consequences," to
the extent that it constitutes matters of law or legal conclusions, is
correct in all material respects.

We hereby consent to the use of our name in the Base Prospectuses under
the caption "Certain Federal Income Tax Consequences" and in the Prospectus
Supplements and Base Prospectuses under the caption "Legal Matters" and to
the filing of this opinion as an exhibit to the Registration Statement.

Very truly yours,

/s/ Brown & Wood LLP