RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
Company
RESIDENTIAL FUNDING CORPORATION
Master Servicer
Mortgage Pass-Through Certificates
Series 1994-MZ1
$5,448,568.76 6.47% Class A-3 Certificates
_______________
Supplement dated July 27, 1995
to
Prospectus Supplement dated March 30, 1994
and
Prospectus dated March 30, 1994
as supplemented by the
Prospectus, dated April 20, 1995
______________
The Mortgage Pass-Through Certificates Series 1994-MZ1 (the
"Certificates") were issued on March 31, 1994, and represent the
entire undivided interest in a Trust Fund consisting of eleven
classes of mortgage pass-through certificates (the "Mezzanine
Certificates") described in the
Prospectus Supplement. The Certificates consist of the Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates,
Class S-1 Certificates, Class S-2 Certificates and Class R
Certificates, respectively. After giving effect to the
distribution of principal and interest on the Certificates on
July 28, 1995 Distribution Date, the Class A-1, Class A-2 and
Class A-3 Certificates represent a 41.6%, 53.7%, and 4.7%
undivided interest in the Trust Funds, respectively.
The Master Servicer will obtain from MBIA Insurance
Corporation (the "Certificate Insurer") a certificate guaranty
insurance policy in favor of the Trustee for the benefit of the
holders of the Class A-3 Certificates (the "Certificate Insurance
Policy"). The Certificate Insurance Policy will provide for 100%
coverage of the full amount of Accrued Certificate Interest
(without reduction for any interest shortfalls other than
Prepayment Interest Shortfalls and Relief Act Shortfalls) to
which the holders of the Class A-3 Certificates are entitled and
the Insured Loss Amount (defined herein) on each Distribution
Date. The Certificate Insurance Policy is to provide
protection for credit risk and does not guarantee to the holders
of the Class A-3 Certificates any specified rate of principal
payments or prepayments. See "The Certificate Insurance Policy
and the Certificate Insurer" herein.
The Class A-3 Certificates will be offered by Residential
Funding Securities Corporation (the "Underwriter"), on a
best-efforts basis, from time to time to the public, directly or
through dealers, in negotiated transactions or otherwise at
varying prices to be determined at the time of
sale. The termination date of the offering of the Class A-3
Certificates is the earlier to occur of July 26, 1996 or
the date on which all of the Class A-3 Certificates have been
sold. Proceeds of the offering of the Class A-3 Certificates
will not be placed in any escrow, trust or similar
arrangement. The proceeds to the Company from any sale of the
Class A-3 Certificates will be equal to the purchase price paid
the purchaser thereof, net of any expenses payable by the Company
and any compensation payable to the Underwriter and any dealer.
The Class A-3 Certificates are offered subject to receipt and
acceptance by the Underwriter, to prior sale and to the
Underwriter's right to reject any order in whole or in part and
to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Class A-3 Certificates will
be made at the office of Residential Funding Securities
Corporation, 8400 Normandale Lake Boulevard, Suite 700,
Minneapolis, Minnesota 55437 on or after July 31, 1995, against
payment therefor in immediately available funds.
THIS SUPPLEMENT MUST BE DELIVERED TOGETHER WITH THE PROSPECTUS
AND PROSPECTUS SUPPLEMENT REFERRED TO ABOVE, AND SHOULD BE READ
IN CONJUNCTION THEREWITH.
Residential Funding Securities Corporation
The Pooling and Servicing Agreement will be amended as of
July 31, 1995 by Amendment No. 1 ("Amendment No. 1") to provide
for payments pursuant to the Certificate Insurance Policy (as
defined herein) to holders of the Class A-3 Certificates. The
Pooling and Servicing Agreement will require the Trustee, for the
benefit of the holders of the Class A-3 Certificates, to
establish and maintain one or more accounts (collectively, the
"Insurance Proceeds Account"). The Trustee shall cause any
amounts received in connection with the Certificate Insurance
Policy or otherwise at the direction of the Certificate Insurer
to be deposited upon receipt directly into the Insurance Proceeds
Account.
It is a condition to the sale of the Class A-3 Certificates
that they be rated not lower than "AAA" by Standard & Poor's
Ratings Group ("S&P"). See "Ratings" herein for a description of
the ratings on the Class A-3 Certificates.
Capitalized terms used but not defined in this Supplement
have the meanings set forth in the Prospectus Supplement and
Prospectus to which this Supplement is attached.
As of July 31, 1995 (the"Delivery Date"), the Mezzanine
Certificates, together with the related Senior Certificates and
Subordinate Certificates, will have the following
characteristics:
Mezzanine
Certificate Mezzanine
Principal Balance Percentage
as of the as of the
Series Delivery Date Delivery Date
1993-S31.......... $9,432,934 2.63%
1993-S34.......... 5,243,478 2.76
1993-S37.......... 6,544,072 2.71
1993-S39.......... 7,060,172 2.51
1993-S40.......... 10,622,949 2.71
1993-S43.......... 6,559,970 2.62
1993-S45.......... 12,995,491 2.66
1993-S47.......... 15,870,370 2.87
1994-S1........... 14,420,052 2.90
1994-S2........... 7,686,215 3.16
GE 1994-1......... 17,683,973 2.36
Total or Aggregate $114,119,677 2.68%
Percentage(1)....
Subordinate Senior
Percentage Percentage
as of the as of the
Series Delivery Date Delivery Date
1993-S31............. 4.53% 92.84%
1993-S34............. 4.14 93.10
1993-S37............. 4.05 93.25
1993-S39............. 4.19 93.30
1993-S40............. 4.03 93.26
1993-S43............. 3.93 93.45
1993-S45............. 3.12 94.22
1993-S47............. 3.13 94.00
1994-S1.............. 3.17 93.93
1994-S2.............. 3.15 93.70
GE 1994-1............ 3.94 93.70
Total of Aggregate 3.68% 93.66%
Percentage(1)
(1) The aggregate Mezzanine Percentage, Subordinate
Percentage or Senior Percentage is calculated
by adding the Certificate Principal Balance of all
Mezzanine Certificates, Subordinate Certificates or
Senior Certificates, as applicable, for each series of
Related Certificates and dividing by the aggregate
principal balance of all of the Mortgage Loans.
The Mortgage Loans had the following approximate aggregate
characteristics as of July 1, 1995 (the "Reference Date"),
expressed where applicable as a percentage of the aggregate
principal balance of the Mortgage Loans having such
characteristics relative to the aggregate principal
balance of all Mortgage Loans in the related Mortgage Pool or all
of the Mortgage Pools (percentages may be rounded down to zero
where appropriate, and the sum in any column may not equal
the total indicated due to rounding). Certain information with
respect to the GECMS Mortgage Loans is available as of July 1,
1995 (the "Reference Date"). See "Mortgage Pool
Characteristics" in the Prospectus Supplement for additional
information regarding the Mortgage Loans and information
regarding the GECMS Mortgage Loans as of January, 1994.
Principal Balances of the Mortgage Loans
Number Aggregate Principal
Series of Mortgage Loans Balance Outstanding
1993-S31.......... 1,212 $358,408,934
1993-S34.......... 632 190,094,274
1993-S37.......... 831 241,742,946
1993-S39.......... 998 285,689,780
1993-S40.......... 1,425 396,108,821
1993-S43.......... 895 250,307,611
1993-S45.......... 1,716 491,966,245
1993-S47.......... 1,921 552,921,018
1994-S1........... 1,711 501,992,762
1994-S2........... 920 243,281,304
GE 1994-1......... 2,643 748,113,636
Aggregate....... 14,904 4,260,627,332
Mortgage Pool(s) % of Original Mortgage
as a % of all of Pool remaining as of
Series the Mortgage Pools Cut-off Date
1993-S31....... 8.41% 83.85%
1993-S34....... 4.46 88.85
1993-S37....... 5.67 90.38
1993-S39....... 6.71 89.25
1993-S40....... 9.30 91.59
1993-S43....... 5.87 93.75
1993-S45....... 11.55 92.93
1993-S47....... 12.98 94.23
1994-S1........ 11.78 94.17
1994-S2........ 5.71 93.55
GE 1994-1...... 17.56 93.60
Aggregate 100.00% 91.88%
Mortgage Rates and Terms of the Mortgage Loans
Pass-Through Rate Weighte Average
on the Mortgage
Series Mezzanine Certificates Rate
1993-S31..... 7.000% 7.6381%
1993-S34..... 7.000 7.5406
1993-S37..... 7.000 7.5423
1993-S39..... 7.000 7.4101
1993-S40..... 6.750 7.2895
1993-S43..... 6.500 7.2774
1993-S45..... 6.500 7.2510
1993-S47..... 6.500 7.1405
1994-S1...... 6.750 7.2215
1994-S2...... 7.000 7.4975
GE 1994-1.... 6.500 N/A
Weighted
Average Term
Range of to Scheduled
Series Mortgage Rates Maturity(1)
1993-S31........ 6.875-8.375% 336
1993-S34........ 7.250-8.250 336
1993-S37........ 7.375-8.250 337
1993-S39........ 6.625-9.250 337
1993-S40........ 6.375-9.500 338
1993-S43........ 6.750-8.125 338
1993-S45........ 5.875-9.875 338
1993-S47........ 6.750-8.000 339
1994-S1......... 6.500-8.375 340
1994-S2......... 7.250-8.750 359
GE 1994-1....... N/A N/A
(1) In months.
Property Types of the Mortgage Loans
Single PUDS,Condominiums
Series Family and Townhouses
1993-S31........ 95.9% 3.9%
1993-S34........ 96.7 3.3
1993-S37........ 96.8 3.2
1993-S39........ 96.5 3.4
1993-S40........ 96.0 3.9
1993-S43........ 95.5 4.4
1993-S45........ 97.4 2.4
1993-S47........ 96.4 3.5
1994-S1......... 96.4 3.5
1994-S2......... 96.4 3.6
GE 1994-1....... N/A N/A
Vacation or
Series Second Homes Condominiums
1993-S31........ 2.2% 2.7%
1993-S34........ 2.4 2.2
1993-S37........ 1.6 2.5
1993-S39........ 1.9 2.8
1993-S40........ 2.0 2.8
1993-S43........ 1.9 3.3
1993-S45........ 2.1 1.7
1993-S47........ 1.8 2.9
1994-S1......... 1.5 2.6
1994-S2......... 2.0 2.7
GE 1994-1....... N/A N/A
All of the foregoing properties consist of fee simple
interest, except with respect to 0.9% of the Mortgage Loans
that are secured by leasehold interests in the related Mortgaged
Property.
Loan-to-Value Ratios at Origination
%of Mortgage
Loans with a Loan-to-
Weighted Average value Ratio between
Series Loan-to-Value Ratio and including 80% & 90%
1993-S31........ 72.07% 13.0%
1993-S34........ 71.57 13.6
1993-S37........ 71.74 11.5
1993-S39........ 71.64 12.4
1993-S40........ 71.74 14.3
1993-S43........ 71.64 14.3
1993-S45........ 71.41 11.5
1993-S47........ 72.06 13.1
1994-S1......... 71.92 11.8
1994-S2......... 71.98 13.3
GE 1994-1....... N/A N/A
% of Mortgage
Loans with a Loan-
to-Value Ratio in
Series Excess of 90%
1993-S31........ 0.0%
1993-S34........ 0.0
1993-S37........ 0.0
1993-S39........ 0.0
1993-S40........ 0.1
1993-S43........ 0.0
1993-S45........ 0.0
1993-S47........ 0.0
1994-S1......... 0.0
1994-S2......... 0.0
GE 1994-1....... N/A
Geographical Concentration of the Mortgage Loans
Other States With Concentrations
Over 5%
Largest
Single
Series California I II III Zip Code
1993-S31........ 59.5% 1.0%
1993-S34........ 66.0 1.3
1993-S37........ 54.8 NJ-7.0% NY-6.0% 1.6
1993-S39........ 56.4 1.2
1993-S40........ 51.3 1.2
1993-S43........ 61.2 IL-5.2 1.7
1993-S45........ 39.8 NJ-6.6 MD-5.7 NY-5.5 0.8
1993-S47........ 46.7 NY-5.9 MD-5.3 0.8
1994-S1......... 56.8 IL-7.2 1.0
1994-S2......... 35.0 NY-7.7 NJ-7.6 IL-7.1 0.8
GE 1994-1....... N/A N/A N/A N/A N/A
Purpose of the Mortgage Loans
Weighted Average
Loan-to-Value Ratio
at Origination of Rate and
Equity Equity Refinance Term
Refinance Mortgage Loans Refinance
Series Mortgage Loans Mortgage Loans
1993-S31........ 11.3% 64.23% 57.9%
1993-S34........ 11.8 63.06 51.2
1993-S37........ 10.8 60.92 56.5
1993-S39........ 11.4 62.58 54.2
1993-S40........ 9.9 64.25 58.3
1993-S43........ 11.5 63.84 55.3
1993-S45........ 9.5 65.62 57.2
1993-S47........ 11.0 65.21 57.4
1994-S1......... 12.2 63.27 55.2
1994-S2......... 13.8 66.18 52.6
GE 1994-1....... N/A N/A N/A
Weighted Average
Loan-to-Value Ratio Aggregate Equity
at Origination of and Rate and Term
Rate and Term Refinance Refinance
Series Mortgage Loans Mortgage Loans
1993-S31........ 70.05% 69.2%
1993-S34........ 69.37 62.9
1993-S37........ 70.41 67.3
1993-S39........ 70.07 65.7
1993-S40........ 69.39 68.2
1993-S43........ 68.94 66.9
1993-S45........ 69.61 66.7
1993-S47........ 69.82 68.5
1994-S1......... 70.40 67.4
1994-S2......... 69.65 66.4
GE 1994-1....... N/A N/A
Loan Programs of the Mortgage Loans
Weighted Average
Loan-to-Value Ratio
Reduced Loan at Origination
Documentation of Reduced Loans
Series Mortgage Loans Documentation
Mortgage Loans
1993-S31........ 16.8% 63.74%
1993-S34........ 15.4 61.37
1993-S37........ 16.7 64.00
1993-S39........ 14.6 62.39
1993-S40........ 17.5 63.29
1993-S43........ 19.7 62.95
1993-S45........ 17.4 62.08
1993-S47........ 15.5 63.40
1994-S1......... 13.4 64.09
1994-S2......... 20.4 64.30
GE 1994-1....... N/A N/A
Reduced Loan
Documentation California Buydown
Series Mortgage Loan(1) Mortgage Loan
1993-S31........ 68.3% 0.3%
1993-S34........ 67.9 0.4
1993-S37........ 55.3 0.3
1993-S39........ 65.5 0.0
1993-S40........ 57.4 0.2
1993-S43........ 60.0 0.2
1993-S45........ 48.6 0.2
1993-S47........ 49.3 0.4
1994-S1......... 59.1 0.1
1994-S2......... 31.6 0.2
GE 1994-1....... N/A N/A
_________________
(1) Reduced Loan Documentation Mortgage Loans originated in
California as a percentage of all Reduced Loan
Documentation Mortgage Loans.
Delinquency Experience
Delinquent Delinquent
31 to 59 days 60 to 89 days
By Dollar By % By Dollar
Amount of of Amount of By%
Series Loans Pool(1) Loans Pool(1)
1993-S31........ $1,933,968 0.54% $ 0 0.00%
1993-S34........ 453,170 0.24 0 0.00
1993-S37........ 594,466 0.25 0 0.00
1993-S39........ 925,054 0.32 276,752 0.10
1993-S40........ 3,510,352 0.89 439,844 0.11
1993-S43........ 1,067,619 0.43 586,821 0.23
1993-S45........ 2,950,980 0.60 752,027 0.15
1993-S47........ 4,489,450 0.81 503,068 0.09
1994-S1......... 2,217,549 0.44 523,147 0.10
1994-S2......... 1,635,057 0.67 600,968 0.25
GE 1994-1....... 7,215,408 0.96 1,079,298 0.14
Aggregate...... $26,993,072 0.63% $4,761,928 0.11%
Delinquent
90 or more days Foreclosures
By Dollar By Dollar BY %
Amount of By % Amount of of
Series Loans of Pool(1) Loans of Pool(1)
1993-S31........ $760,769 0.21% $1,387,363 0.39%
1993-S34........ 0 0.00 409,351 0.22
1993-S37........ 0 0.00 436,646 0.18
1993-S39........ 0 0.00 1,197,627 0.42
1993-S40........ 0 0.00 628,842 0.16
1993-S43........ 63,621 0.03 0 0.00
1993-S45........ 96,019 0.02 935,008 0.19
1993-S47........ 0 0.00 311,079 0.06
1994-S1......... 281,435 0.06 884,921 0.18
1994-S2......... 0 0.00 546,233 0.22
GE 1994-1....... 949,749 0.13 554,448 0.07
Aggregate......$2,151,592 0.05% $7,291,519 0.17%
(1) By dollar amount of loans, as a percentage of the
aggregate outstanding balance of the corresponding Mortgage Pool,
as of the Reference Date.
As of the Reference Date, no Realized Losses had been
allocated to the Certificates. As of the Reference Date,
Realized Losses in the following amounts had been allocated to
the related Subordinate Certificates:
Losses as
a % of
Original
Aggregate Pool
Series Losses Original Pool Balance Balance
1993-S31........ $519,097 $427,416,329 0.12%
1993-S34........ 0 213,956,513 0.00
1993-S37........ 33,569 267,484,931 0.01
1993-S39........ 0 320,088,062 0.00
1993-S40........ 144,480 432,489,517 0.03
1993-S43........ 0 267,002,299 0.00
1993-S45........ 327,543 529,391,834 0.06
1993-S47........ 0 586,778,060 0.00
1994-S1......... 0 533,047,439 0.00
1994-S2......... 35,282 260,061,394 0.01
GE 1994-1....... 0 799,262,582 0.00
Aggregate $1,059,972 $4,636,978,960 0.02%
As of the Reference Date, the Special Hazard Amounts, Fraud
Loss Amounts and Bankruptcy Amounts for each series of the
Related Certificates were as follows:
Special Hazard Fraud Loss Bankruptcy
Series Amount Amount Amount
1993-S31..... $3,714,787 $3,714,787 $50,000
1993-S34..... 2,573,696 1,985,897 100,000
1993-S37..... 3,062,558 2,477,600 131,228
1993-S39..... 3,535,254 2,944,643 100,000
1993-S40..... 4,637,271 4,102,126 115,508
1993-S43..... 3,868,057 2,580,704 100,000
1993-S45..... 4,640,824 757,037 135,873
1993-S47..... 5,669,206 5,055,864 138,899
1994-S1...... 5,103,942 5,103,942 167,284
1994-S2...... 2,317,527 2,497,248 100,000
GE 1994-1.... N/A N/A N/A
Except for the allocation of any Realized Losses set forth
above, any reduction of such amounts since the date of
issuance of the series of Related Certificates was pursuant
to the provisions of the related Pooling and Servicing
Agreement providing for such reductions from time to time.
As of the Reference Date, the following REO Properties
are being held by the underlying trust funds related to the
underlying Mezzanine Certificates:
Outstanding
Principal
Balance at Scheduled Mortgage
Series Acquisition Principal Balance Rate
1993-S31........ $340,777.40 $336,035.38 7.750%
1993-S40........ 218,529.93 216,434.82 7.625
Original
Zip Loan-to- Property
Series State Code Value Ratio Type
1993-S31........ CA 91311 90% Single Family
1993-S40........ CA 95132 90 Single Family
Investors should also be aware that: (i) the aggregate
percentage in the table entitled "Purpose of the Mortgage Loans"
under the column entitled "Aggregate Equity and Rate and Term
Refinance Mortgage Loans" set forth on page S-19 of the
Prospectus Supplement should be 68.62%; (ii) the
percent of Mortgage Loans that were rate and term refinance
Mortgage Loans and were underwritten under Residential Funding's
"streamlined" mortgage loan program set forth on page S-20 of the
Prospectus Supplement should be 2.38%; and (iii) the aggregate
percentage in the table entitled "Delinquency Experience" under
the column entitled "Delinquent 60 to 89 Days" set forth on page
S- 20 of the Prospectus Supplement should be 0.05%.
No representation is made by the Company, Residential Funding
Securities Corporation or any of their affiliates as to the
accuracy or completeness of the information under "The
Certificate Insurance Policy and the Certificate Insurer."
THE CERTIFICATE INSURANCE POLICY AND THE CERTIFICATE INSURER
The following information has been supplied by MBIA Insurance
Corporation (the "Certificate Insurer") for inclusion in this
Supplement.
The Certificate Insurer, in consideration of the payment of
the premium and subject to the terms of the certificate insurance
policy (the "Certificate Insurance Policy"), thereby
unconditionally and irrevocably guarantees to any Owner that an
amount equal to each full and complete Insured Payment will be
received by the Trustee, on behalf of the Owners, for
distribution by the Trustee to each Owner of each Owner's
proportionate share of the Insured Payment. The
Certificate Insurer's obligations under the Certificate Insurance
Policy with respect to a particular Insured Payment shall be
discharged to the extent funds equal to the applicable Insured
Payment are received by the Trustee, whether or not such funds
are properly applied by the Trustee. Insured Payments shall be
made only at the time set forth in the Certificate Insurance
Policy and no accelerated Insured Payments shall be made
regardless of any acceleration of the Certificates,
unless such acceleration is at the sole option of the Certificate
Insurer.
Notwithstanding the foregoing paragraph, the Certificate
Insurance Policy does not cover shortfalls, if any, attributable
to the liability of the Trust Fund, any REMIC or the Trustee for
withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Certificate Insurer will pay any amount payable under the
Certificate Insurance Policy no later than 12:00 noon, New York
City time, on the later of the Distribution Date on which the
related Deficiency Amounts are due or the Business Day following
receipt in New York, New York on a Business Day by State Street
Bank and Trust Company, N.A., as fiscal agent for the Certificate
Insurer or any successor fiscal agent appointed by the
Certificate Insurer (the "Fiscal Agent") of a Notice (as
described below); provided that if such Notice is
received after 12:00 noon, New York City time, on such Business
Day, it will be deemed to be received on the following Business
Day. If any such Notice received by the Fiscal Agent is not in
proper form or is otherwise insufficient for the purpose of
making claim under the Certificate Insurance Policy, it shall be
deemed not to have been received by the Fiscal Agent for purposes
of this paragraph, and the Certificate Insurer
or the Fiscal Agent, as the case may be, shall promptly so advise
the Trustee and the Trustee may submit an amended Notice.
Insured Payments due under the Certificate Insurance Policy
unless otherwise stated in the Certificate Insurance Policy, will
be disbursed by the Fiscal Agent to the Trustee on behalf of the
Owners by wire transfer of immediately available funds in the
amount of the Insured Payment.
The Fiscal Agent is the agent of the Certificate Insurer only,
and the Fiscal Agent shall in no event be liable to Owners for
any acts of the Fiscal Agent or any failure of the Certificate
Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under the Certificate Insurance Policy.
As used in the Certificate Insurance Policy, the following
terms shall have the following meanings:
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions in New York City or in the
city in which the corporate trust office of the Trustee
under the Pooling and Servicing Agreement is located are
authorized or obligated by law or executive order to close.
"Deficiency Amount" means, as of any Distribution Date, the
sum of (i) the amount, if any, by which Available Distribution
Amount on deposit in the Certificate Account, after giving effect
to the priority of payments set forth in the Pooling and
Servicing Agreement, is not sufficient to pay Accrued Certificate
Interest on the Class A-3 Certificates for such Distribution
Date, (ii) the difference if any between Accrued Certificate
Interest on the Class A-3 Certificates for such Distribution Date
and an amount equal to Accrued Certificate Interest thereon for
such Distribution Date without reduction thereof for any interest
shortfalls included in clauses (ii) through (iv) of the
definition of Accrued Certificate Interest in the Pooling and
Servicing Agreement other than Relief Act Shortfalls and (iii)
the Insured Loss Amount.
"Insured Loss Amount" means, with respect to any Distribution
Date, the aggregate amount of the principal portion of any
Realized Losses allocable on such Distribution Date to the Class
A-3 Certificates pursuant to the Pooling and Servicing Agreement.
"Insured Payment" means as of any Distribution Date any
Deficiency Amount for such Distribution Date.
"Notice" means the telephonic or telegraphic notice, promptly
confirmed in writing by telecopy substantially in the form of
Exhibit A attached to the Certificate Insurance Policy, the
original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment
which shall be due and owing on the applicable Distribution Date.
"Owner" means each Holder (as defined in the Pooling and
Servicing Agreement) who, on the applicable Distribution Date, is
entitled under the terms of the applicable Class A-3 Certificates
to payment thereunder.
"Pooling and Servicing Agreement" means the Pooling and
Servicing Agreement as amended by Amendment No. 1 dated as of
July 31, 1995 among the Company, the Master Servicer and the
Trustee, without regard to any other amendment or supplement
thereto unless such amendment or supplement has been approved in
writing by the Certificate Insurer.
Capitalized terms used in the Certificate Insurance Policy and
not otherwise defined in the Certificate Insurance Policy shall
have the respective meanings set forth in the Pooling and
Servicing Agreement as of the date of execution of the
Certificate Insurance Policy, without giving effect to any
subsequent amendment or modification to the Pooling
and Servicing Agreement unless such amendment or modification has
been approved in writing by the Certificate Insurer.
Any notice under the Certificate Insurance Policy or service
of process on the Fiscal Agent of the Certificate Insurer may be
made at the address listed below for the Fiscal Agent of the
Certificate Insurer or such other address as the Certificate
Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61
Broadway, New York, New York 10006
Attention: Municipal Registrar and Paying Agency, or such other
address as the Certificate Insurer shall specify to the Trustee
in writing.
The Certificate Insurance Policy is being issued under and
pursuant to, and shall be construed under, the laws of the State
of New York, without giving effect to the conflict of laws
principles thereof.
The insurance provided by the Certificate Insurance Policy is
not covered by the Property/Casualty Insurance Security Fund
specified in Article 76 of the New York Insurance Law.
The Certificate Insurance Policy is not cancelable for any
reason. The premium on the Certificate Insurance Policy is not
refundable for any reason including payment, or provision being
made for payment, prior to maturity of the Class A-3
Certificates.
The Certificate Insurer, formerly known as Municipal Bond
Investors Assurance Corporation, is the principal operating
subsidiary of MBIA Inc., a New York Stock Exchange listed
company. MBIA Inc. is not obligated to pay the debts of or
claims against the Certificate Insurer. The
Certificate Insurer is domiciled in the State of New York and
licensed to do business in all 50 states, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of
the Northern Mariana Islands, the Virgin Islands of the United
States and the Territory of Guam. The Certificate Insurer has
one European branch in the Republic of France.
All information regarding the Certificate Insurer, a wholly
owned subsidiary of MBIA Inc., including (i) the audited
financial statements
of the Certificate Insurer for the year ended December 31, 1994,
prepared in accordance with generally accepted accounting
principles included in the Annual Report on Form 10-K of MBIA
Inc. for the year ended December 31, 1994 (available from the
Certificate Insurer upon request or from the Securities and
Exchange Commission) and (ii)the unaudited financial statements
of the Certificate Insurer for the three-month period ended March
31, 1995, prepared in accordance with generally accepted
accounting principles included in the Quarterly Report on Form
10-Q of MBIA Inc. for the three-month period ended March 31,1995
( available from the Certificate Insurer upon request or from the
Securities and Exchange Commission), is hereby incorporated by
reference into this Supplement and shall be deemed to
be a part hereof. Any statement contained in a document
incorporated by reference herein shall be modified or superseded
for purposes of this Supplement to the extent that a
statement contained herein or in any other subsequently filed
document which also is incorporated by reference herein modifies
or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Supplement.
The tables below present selected financial information of the
Certificate Insurer determined in accordance with statutory
accounting practices prescribed or permitted by insurance
regulatory authorities ("SAP") and generally accepted accounting
principles ("GAAP"):
SAP
December 31, 1994 March 34, 1995
(Audited) (Unaudited)
(In millions)
Admitted Assets....... $3,401 $3,504
Liabilities........... 2,291 2,372
Capital and surplus... 1,110 1,132
GAAP
December 31, 1994 March 31, 1995
(Audited) (Unaudited)
( In millions)
Assets.................. $3,759 $3,998
Liabilities............. 1,704 1,804
Sharteholder's Equity... 2,055 2,194
Audited financial statements of the Certificate Insurer as of
December 31, 1994 and 1993 and for each of the three years in the
period ended December 31, 1994 are included herein as Exhibit
A to this Supplement. Unaudited financial statements of the
Certificate Insurer for the three-month period ended March 31,
1995 are included herein as Exhibit B to this Supplement. Such
financial statements have been prepared on the basis of generally
accepted accounting principles. Copies of the Certificate
Insurer's 1994 year-end audited financial statements prepared in
accordance with statutory accounting practices are available from
the Certificate Insurer. The address of the Certificate Insurer
is 113 King Street, Armonk, New York 10504.
A copy of the Annual Report on Form 10-K of MBIA Inc. is
available from the Certificate Insurer or the Securities and
Exchange Commission. The address of the Certificate Insurer is
113 King Street, Armonk, New York 10504.
The Certificate Insurer does not accept any responsibility for
the accuracy or completeness of this Supplement or the Prospectus
Supplement or Prospectus to which this Supplement is attached
or any information or disclosure contained herein or therein, or
omitted herefrom or therefrom, other than with respect to the
accuracy of the information regarding the Certificate Insurance
Policy and Certificate Insurer set forth herein under the heading
"The Certificate Insurance Policy and the Certificate Insurer"
and in Exhibits A and B, nor does the Certificate Insurer accept
any responsibility for the accuracy or completeness of the
Prospectuses relating to the Mezzanine Certificates or any
information or disclosure contained therein or omitted therefrom.
Moody's Investors Service, Inc. rates the claims paying
ability of the Certificate Insurer "Aaa". S&P rates the claims
paying ability of the Certificate Insurer "AAA". Fitch Investors
Service, L.P. rates the claims paying ability of the Certificate
Insurer "AAA". Each rating of the Certificate Insurer should be
evaluated independently. The ratings reflect the respective
rating agency's current assessment of the creditworthiness of the
Certificate Insurer and its ability to pay claims on its policies
of insurance. Any further explanation as to the significance of
the above ratings may be obtained only from the applicable rating
agency.
The above ratings are not recommendations to buy, sell or hold
the Class A-3 Certificates, and such ratings may be subject to
revision or withdrawal at any time by the rating agencies. Any
downward revision or withdrawal of the above ratings may have an
adverse effect on the market price of the Class A-3 Certificates.
The Certificate Insurer does not guaranty the market price of the
Class A-3 Certificates nor does it guaranty that the ratings on
the Class A-3 Certificates will not be reversed or withdrawn.
See "Ratings" herein for a description of the ratings on the
Class A-3 Certificates.
METHOD OF DISTRIBUTION
Subject to the terms and conditions set forth in an
Underwriting Agreement (the "Underwriting Agreement"), dated July
27, 1995, Residential Funding Securities Corporation (the
"Underwriter") has agreed to offer the Class A-3 Certificates on
a best efforts basis and the Company has agreed to sell to the
Underwriter such Class A-3 Certificates when and if sold by the
Underwriter. The termination date of the offering of the Class
A-3 Certificates is the earlier to occur of July 26,
1996, or the date on which all of such Class A-3 Certificates
have been sold. Proceeds of the offering of the Class A-3
Certificates will not be placed in any escrow, trust or similar
arrangement.
The Underwriter is offering the Class A-3 Certificates on a
best efforts basis and will only be obligated to pay for and
accept delivery of any of the Class A-3 Certificates at such time
as it sells such Class A-3 Certificates. The Underwriter is an
indirect wholly-owned subsidiary of the parent of the Company.
In addition, the Underwriting Agreement provides that the
obligation of the Underwriter to pay for and accept delivery of
its Certificates is subject to, among other things, the receipt
of certain legal opinions and to the conditions, among others,
that no stop order suspending the effectiveness of the Company's
Registration Statement shall be in effect, and that no
proceedings for such purpose shall be pending before or
threatened by the Securities and Exchange Commission.
The Class A-3 Certificates will be offered by the Underwriter,
on a best efforts basis, from time to time to the public,
directly or through dealers, in one or more negotiated
transactions, or otherwise, at varying prices to be determined at
the time of sale. The proceeds to the Company from any sale of
the Class A-3 Certificates will be equal to the purchase price
paid by the purchaser thereof, net of any expenses payable by the
Company and any compensation payable to the Underwriter and any
such dealer. The Underwriter may effect such transactions by
selling its Class A-3 Certificates to or through dealers, and
such dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the
Underwriter. In connection with the sale of the Class A-3
Certificates, the Underwriter may be deemed
to have received compensation from the Company in the form of
underwriting compensation. The Underwriter and any dealers that
participate with the Underwriter in the distribution of Class A-3
Certificates may be deemed to be underwriters and any profit on
the resale of the Class A-3 Certificates positioned by them may
be deemed to be underwriting discounts and commissions under the
Securities Act of 1933.
The Underwriting Agreement provides that the Company will
indemnify the Underwriter, and under limited circumstances the
Underwriter will indemnify the Company, against certain civil
liabilities under the Securities Act of 1933, or contribute to
payments required to be made in respect thereof.
There is currently no secondary market for the Class A-3
Certificates. Neither the Company, the Underwriter nor any other
person or entity intends to create a secondary market in the
Class A-3 Certificates. There can be no assurance that a
secondary market for the Class A-3 Certificates
will develop or, if it does develop, that it will continue. The
primary source of information available to investors concerning
the Class A-3 Certificates will be the monthly statements as
discussed in the Prospectus under "Description of the
Certificates Reports to Certificateholders," which will include
information as to the outstanding principal balance of the Class
A-3 Certificates and the status of the applicable form of credit
enhancement. There can be no assurance that any additional
information regarding the Class A-3 Certificates will be
available through any other source. In addition, the Company is
not aware of any source through which price information
about the Class A-3 Certificates will be generally available on
an ongoing basis. The limited nature of such information
regarding the Class A-3 Certificates may adversely affect the
liquidity of the Class A-3 Certificates, even if a secondary
market for the Class A-3 Certificates becomes available.
Experts
The consolidated financial statements of the Certificate
Insurer, MBIA Insurance Corporation (formerly Municipal Bond
Investors Assurance Corporation and Subsidiaries), included as
Exhibit A to this Supplement have been audited by Coopers &
Lybrand L.L.P., independent auditors, as set forth in their
report thereon appearing in this Supplement and are included in
reliance upon the authority of such firm as experts in accounting
and auditing.
RATINGS
It is a condition to the sale of the Class A-3 Certificates
that they be rated not lower than "AAA" by Standard & Poor's
Ratings Group ("S&P").
The ratings of S&P assigned to mortgage pass-through
certificates is based on the claims paying ability of the
Certificate Insurer. The ratings assigned to mortgage
pass-through certificates do not represent any assessment of the
likelihood or rate of principal prepayments.
The Company has not requested a rating on the Class A-3
Certificates by any rating agency other than S&P. However, there
can be no assurance as to whether any other rating agency will
rate the Class A-3 Certificates, or, if it does, what rating
would be assigned by any such other rating agency. A rating on
the Class A-3 Certificates by another rating agency, if assigned
at all, may be lower than the rating assigned to the Class A-3
Certificates by S&P.
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.
In the event that the rating initially assigned to the Class A-3
Certificates is subsequently lowered for any reason, no person
or entity is obligated to provide any additional support or
credit enhancement with respect to the Class A-3 Certificates.
UNTIL OCTOBER 25 1995, ALL DEALERS EFFECTING TRANSACTIONS IN THE
CLASS A-3 CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS (INCLUDING
THE PROSPECTUS SUPPLEMENT AND THIS SUPPLEMENT). THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
