RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
Company
RESIDENTIAL FUNDING CORPORATION
Master Servicer
Mortgage Pass-Through Certificates
Series 1996-S17
$604,550.38* 7.25% Class M-3 Certificates
Supplement dated August 23, 1996
to
Supplement dated July 26, 1996
to
Prospectus Supplement dated July 23, 1996
to
Prospectus dated June 21, 1996
*The Certificate Principal Balance of the Class M-3 Certificates after giving
effect to the distribution on August 25, 1996.
The Class M-3 Certificates will be offered by Residential Funding
Securities Corporation (the "Underwriter"), on a best-efforts basis pursuant to
an Underwriting Agreement (the "Underwriting Agreement") among the Company, the
Master Servicer and the Underwriter. The Underwriter is an indirect wholly-owned
subsidiary of the parent of the Company. The obligation of the Underwriter to
pay for and accept delivery of any of the Class M-3 Certificates is subject to,
among other things, the simultaneous sale by the Underwriter of such Class M-3
Certificates. The termination date of the offering of the Class M-3 Certificates
is the earlier to occur of August 23, 1997 or the date on which all of the Class
M-3 Certificates have been sold. Proceeds of the offering of the Class M-3
Certificates will not be placed in any escrow, trust or similar arrangement. The
Underwriter intends to offer the Class M-3 Certificates from time to time to the
public in 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 M-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 dealer. The Underwriter may effect
(continued on the following page)
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
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such transactions by selling the Class M-3 Certificates to or through dealers.
In connection with the purchase and sale of the Class M-3 Certificates, the
Underwriter and any dealers that may participate with the Underwriter in such
resale of the Class M-3 Certificates may be deemed to have received compensation
from the Company in the form of discounts or commissions or, in the case of such
dealers, compensation from the Underwriter in the form of discounts, concessions
or commissions. The Underwriter and any dealers that participate with the
Underwriter in the distribution of the Underwritten Certificates may be deemed
to be underwriters and any profit on the resale of the Underwritten 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 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 M-3 Certificates. Neither the
Company, the Underwriter nor any other person intends to make a secondary market
in the Class M-3 Certificates. There can be no assurance that any such secondary
market will develop, or if it does develop, that it will continue.
The Mortgage Pool consists of 437 Mortgage Loans with an outstanding
aggregate principal balance as of August 1, 1996 (the "Reference Date"), after
deducting payments of principal due on such date, of $120,641,213.55.
As of the Reference Date, 0.96% of the Mortgage Loans were one month
delinquent. None of the Mortgage Loans were two or more months delinquent or in
foreclosure or will have been Real Estate Owned.
UNTIL NOVEMBER 21, 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS M-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.
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