RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
Company
RESIDENTIAL FUNDING CORPORATION
Master Servicer
Mortgage Pass-Through Certificates
Series 1998-S16
$1,075,000.00 6.50% Class M-1 Certificates
$ 384,000.00 6.50% Class M-2 Certificates
$ 768,000.00 6.50% Class M-3 Certificates
Supplement dated July 27, 1998
to
Prospectus Supplement dated July 23, 1998
and
Prospectus dated July 23, 1998
The Class M-1 Certificates, Class M-2 Certificates and Class M-3 Certificates
(collectively, the "Class M Certificates") will be offered by Residential
Funding Securities Corporation (the "Class M Underwriter"), on a best-efforts
basis pursuant to an Underwriting Agreement (the "Class M Underwriting
Agreement") among the Company, the Master Servicer and the Class M Underwriter.
The Class M Underwriter is an indirect wholly-owned subsidiary of the parent of
the Company. The obligation of the Class M Underwriter to pay for and accept
delivery of any of the Class M Certificates is subject to, among other things,
the simultaneous sale by the Class M Underwriter of such Class M Certificates.
The termination date of the offering of the Class M Certificates is the earlier
to occur of July 27, 1999 or the date on which all of the Class M Certificates
have been sold. Proceeds of the offering of the Class M Certificates will not be
placed in any escrow, trust or similar arrangement. The Class M Underwriter
intends to offer the Class M 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
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
Class M Underwriter and any dealer. The Class M Underwriter may effect such
transactions by selling the Class M Certificates to or through dealers. In
connection with the purchase and sale of the Class M Certificates, the Class M
Underwriter and any dealers that may participate with the Class M Underwriter in
such resale of the Class M Certificates may
(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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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
Class M Underwriter in the form of discounts, concessions or commissions. The
Class M Underwriter and any dealers that participate with the Class M
Underwriter in the distribution of the Class M Certificates may be deemed to be
underwriters and any profit on the resale of the Class M Certificates positioned
by them may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933.
The Class M Underwriting Agreement provides that the Company will
indemnify the Class M 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 Certificates.
Neither the Company, the Class M Underwriter nor any other person intends to
make a secondary market in the Class M Certificates. There can be no assurance
that any such secondary market will develop, or if it does develop, that it will
continue.
UNTIL OCTOBER 26, 1998, ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS M
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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