RESIDENTIAL FUNDING MORTGAGE SECURITIES I INC
424B5, 2000-10-26
ASSET-BACKED SECURITIES
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<PAGE>
                                              Filed Pursuant to Rule 424(b)(5)
                                              Registration File No.: 333-72493


PROSPECTUS SUPPLEMENT DATED OCTOBER 24, 2000 (TO PROSPECTUS DATED SEPTEMBER 22,
                                     2000)


                                  $258,508,565

                          RFMSI SERIES 2000-S13 TRUST
                                    ISSUER

                RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
                                   DEPOSITOR

                        RESIDENTIAL FUNDING CORPORATION
                                MASTER SERVICER

              MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-S13


The trust will hold a pool of one- to four-family residential first mortgage
            loans.

The trust will issue these classes of certificates that are offered under this
prospectus supplement:

             o  10 classes of senior certificates

             o  3 classes of subordinated certificates


Credit enhancement for all of these certificates will be provided by additional
subordination.

  YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-12
     IN THIS PROSPECTUS SUPPLEMENT.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE OFFERED CERTIFICATES OR
DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR
COMPLETE. 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.

Bear, Stearns & Co. Inc. will offer eight classes of the senior certificates to
the public at varying prices to be determined at the time of sale. The proceeds
to the depositor from the sale of these underwritten certificates will be
approximately 99.19% of the principal balance of these underwritten
certificates plus accrued interest, before deducting expenses. There is no
underwriting arrangement for the remaining two classes of senior certificates.

Residential Funding Securities Corporation will offer three classes of the
subordinated certificates to the public on a best efforts basis, from time to
time, directly or through dealers. The termination of the offering of this
portion of underwritten certificates is the earlier to occur of October 24,
2001 and the date on which all of these underwritten certificates have been
sold. Proceeds of this offering will not be placed in escrow, trust or similar
arrangement. The proceeds to the depositor from any sale of these underwritten
certificates will be equal to the purchase price paid by the purchaser of these
underwritten certificates, net of any expenses payable by the depositor and any
compensation payable to Residential Funding Securities Corporation and any
dealer.



     BEAR, STEARNS & CO. INC.        RESIDENTIAL FUNDING SECURITIES CORPORATION

                                 UNDERWRITERS
<PAGE>

             IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
                    PROSPECTUS SUPPLEMENT AND THE PROSPECTUS

We provide information to you about the offered certificates in two separate
documents that provide progressively more detail:

o the prospectus, which provides general information, some of which may not
  apply to your series of certificates; and

o this prospectus supplement, which describes the specific terms of your series
  of certificates.

IF THE DESCRIPTION OF YOUR CERTIFICATES IN THIS PROSPECTUS SUPPLEMENT DIFFERS
FROM THE RELATED DESCRIPTION IN THE PROSPECTUS, YOU SHOULD RELY ON THE
INFORMATION IN THIS PROSPECTUS SUPPLEMENT.

The depositor's principal offices are located at 8400 Normandale Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437 and its telephone number is
(952) 832-7000.


                               TABLE OF CONTENTS




<TABLE>
<CAPTION>
                                              PAGE
                                             -----
<S>                                          <C>
Summary ..................................   S-4
Risk Factors .............................   S-12
       Risk of Loss ......................   S-12
       Limited Obligations ...............   S-13
       Liquidity Risks ...................   S-13
       Special Yield and Prepayment
         Considerations ..................   S-14
Introduction .............................   S-20
Description of the Mortgage Pool .........   S-20
       General ...........................   S-20
       Mortgage Pool Characteristics .....   S-21
       Primary Mortgage Insurance
         and Primary Hazard Insurance ....   S-25
       Additional Information ............   S-26
Description of the Certificates ..........   S-27
       General ...........................   S-27
       Book-Entry Registration of
         Certain of the Offered
         Certificates ....................   S-28
       Glossary of Terms .................   S-29
       Interest Distributions ............   S-35
       Determination of LIBOR ............   S-37
       Principal Distributions on the
         Senior Certificates .............   S-38
       Principal Distributions on the
         Insured Certificates ............   S-39
       The Policy ........................   S-43
       Principal Distributions on the
         Class M Certificates ............   S-44
       Allocation of Losses;
         Subordination ...................   S-45
       Advances ..........................   S-49
The Insurer ..............................   S-50
Certain Yield and Prepayment
   Considerations ........................   S-52
       General ...........................   S-52
       Adjustable Rate Certificate
         Yield Considerations ............   S-60
       Principal Only Certificate and
         Interest Only Certificate
         Yield Considerations ............   S-62
       Class M-2 and Class M-3
         Certificate Yield
         Considerations ..................   S-63
       Additional Yield Considerations
         Applicable Solely to the Residual
         Certificates ....................   S-66
Pooling and Servicing Agreement ..........   S-67
       General ...........................   S-67
       The Master Servicer ...............   S-67
       Servicing and Other
  Compensation and Payment of Expenses ...   S-72
       Voting Rights .....................   S-72
       Termination .......................   S-72
</TABLE>

                                      S-2
<PAGE>




<TABLE>
<CAPTION>
                                     PAGE
                                    -----
<S>                                 <C>
Material Federal Income Tax
   Consequences .................   S-73
       Special Tax Considerations
         Applicable to Residual
         Certificates ...........   S-74
Method of Distribution ..........   S-76
Legal Opinions ..................   S-77
Experts .........................   S-77
Ratings .........................   S-78
Legal Investment ................   S-78
ERISA Considerations ............   S-79
Annex I .........................   A-1
</TABLE>

                                      S-3
<PAGE>

                                    SUMMARY

     The following summary is a very general overview of the offered
certificates and does not contain all of the information that you should
consider in making your investment decision. To understand all of the terms of
the offered certificates, you should read carefully this entire document and
the prospectus.


Issuer......................   RFMSI Series 2000-S13 Trust.


Title of securities.........   Mortgage Pass-Through Certificates, Series
                               2000-S13.


Depositor...................   Residential Funding Mortgage Securities I,
                               Inc., an affiliate of Residential Funding
                               Corporation.


Master servicer.............   Residential Funding Corporation.


Trustee.....................   Bank One, National Association.


Mortgage pool...............   729 fixed rate mortgage loans with an aggregate
                               principal balance of approximately $260,199,949
                               as of the cut-off date, secured by first liens on
                               one- to four-family residential properties.


Cut-off date................   October 1, 2000.


Closing date................   On or about October 27, 2000.


Distribution dates..........   Beginning on November 27, 2000 and thereafter
                               on the 25th of each month or, if the 25th is not
                               a business day, on the next business day.


Assumed final
distribution date...........   October 25, 2030. The actual final distribution
                               date could be substantially earlier.


Form of certificates........   Book-entry: Class A-1 through Class A-6 and
                               Class M Certificates.

                               Physical: Class A-P, Class A-V and Class R
                               Certificates.

                               See "Description of the Certificates--Book-Entry
                               Registration of Certain of the Offered
                               Certificates" in this prospectus supplement.


Minimum denominations.......   Class A-1, Class A-2, Class A-4, Class A-6,
                               Class A-P and Class M-1 Certificates: $25,000.
                               Class A-3


                                      S-4
<PAGE>

                               Certificates: $1,000. Class M-2 and Class M-3
                               Certificates: $250,000. Class A-5 Certificates:
                               100% percentage interest. Class A-V Certificates
                               and Class R Certificates: 20% percentage
                               interests.


Legal investment............   When issued, the Class A, Class R and Class M-1
                               Certificates will, and the Class M-2 and Class
                               M-3 Certificates will not, be "mortgage related
                               securities" for purposes of the Secondary
                               Mortgage Market Enhancement Act of 1984.


                               See "Legal Investment" in this prospectus
                               supplement and "Legal Investment Matters" in the
                               prospectus.


                                      S-5
<PAGE>


<TABLE>
<CAPTION>
                                           OFFERED CERTIFICATES
                                                 INITIAL
                                  PASS-        CERTIFICATE        INITIAL
                                 THROUGH        PRINCIPAL          RATING
CLASS                             RATE           BALANCE        (FITCH/S&P)            DESIGNATIONS
<S>                           <C>            <C>               <C>             <C>
CLASS A CERTIFICATES:
                                                                                     Senior/Accretion
  A-1                         7.75%          $ 183,197,544        AAA/AAA          Directed/Fixed Rate
                                                                                   Senior/Accrual/Fixed
  A-2                         7.75%          $   5,000,000        AAA/AAA                  Rate
                                                                                  Senior/Insured/Retail/
  A-3                         7.20%          $  25,718,000        AAA/AAA               Fixed Rate
                              Adjustable                                             Senior/Floater/
  A-4                            Rate        $  10,081,456        AAA/AAA            Adjustable Rate
                                                                                      Senior/Inverse
                              Adjustable                                             Floater/Interest
  A-5                            Rate        $           0        AAA/AAA          Only/Adjustable Rate
  A-6                         7.75%          $  26,020,000        AAA/AAA       Senior/Lockout/Fixed Rate
  A-P                         0.00%          $     425,165        AAA/AAA         Senior/Principal Only
                               Variable                                              Senior/Interest
  A-V                            Rate        $           0        AAA/AAA           Only/Variable Rate
Total Class A Certificates:                  $ 250,442,165
CLASS R CERTIFICATES:
  R-I                         7.75%          $         100        AAA/AAA       Senior/Residual/Fixed Rate
  R-II                        7.75%          $         100        AAA/AAA       Senior/Residual/Fixed Rate
Total senior certificates:                   $ 250,442,365
CLASS M CERTIFICATES:
  M-1                         7.75%          $   4,943,800         AA/NA           Mezzanine/Fixed Rate
  M-2                         7.75%          $   1,951,500          A/NA           Mezzanine/Fixed Rate
  M-3                         7.75%          $   1,170,900         BBB/NA          Mezzanine/Fixed Rate
Total Class M Certificates:                  $   8,066,200
Total offered certificates:                  $ 258,508,565
                                             NON-OFFERED CERTIFICATES
CLASS B CERTIFICATES:
  B-1                         7.75%          $     650,500         BB/NA          Subordinate/Fixed Rate
  B-2                         7.75%          $     520,400          B/NA          Subordinate/Fixed Rate
  B-3                         7.75%          $     520,484         NA/NA          Subordinate/Fixed Rate
Total Class B Certificates:                  $   1,691,384

Total offered and
non-offered certificates:                    $ 260,199,949
</TABLE>

OTHER INFORMATION:

CLASS A-4 AND CLASS A-5:

<TABLE>
<CAPTION>
ADJUSTABLE RATES:     INITIAL     FORMULA            MAXIMUM     MINIMUM
<S>                   <C>         <C>               <C>         <C>
  Class A-4:           7.520%     LIBOR + 0.90%     9.00%       0.90%
  Class A-5:           1.480%     8.10% - LIBOR     8.10%       0.00%
</TABLE>

For the purpose of calculating interest payments, the Class A-5 Certificates
will have an initial notional amount of approximately $10,081,456.

CLASS A-V:
Variable Rate: Varies according to the weighted average of the excess of the
net mortgage rate on each mortgage loan over 7.75%.

The Class A-V Certificates do not have a principal balance. For the purpose of
calculating interest payments, interest will accrue on a notional amount
initially equal to $260,199,949.


                                      S-6
<PAGE>

THE TRUST
The depositor will establish a trust with respect to the Series 2000-S13
Certificates under a pooling and servicing agreement dated as of October 1,
2000, among the depositor, the master servicer and the trustee. On the closing
date, the depositor will deposit the pool of mortgage loans described in this
prospectus supplement into the trust. Each certificate will represent a partial
ownership interest in the trust.


THE MORTGAGE POOL

The mortgage loans to be deposited into the trust have the following
characteristics as of the cut-off date:



<TABLE>
<CAPTION>
                                           WEIGHTED
                         RANGE              AVERAGE
                  -------------------   --------------
<S>               <C>                   <C>
Principal         $    35,000 to
  balance           $1,000,000          $ 356,927*
Mortgage
  rate            6.125% to 9.750%         8.4207%
Remaining
  maturity
   (months)          164 to 360               358
</TABLE>

* Indicates average principal balance

For additional information regarding the mortgage pool see "Description of the
Mortgage Pool" in this prospectus supplement.


DISTRIBUTIONS ON THE OFFERED
CERTIFICATES

Amount available for monthly distribution. On each monthly distribution date,
the trustee will make distributions to investors. The amount available for
distribution will include:

 o     collections of monthly payments on the mortgage loans, including
       prepayments and other unscheduled collections plus

 o     advances for delinquent payments minus

 o     the fees and expenses of the subservicers and the master servicer,
       including reimbursement for advances, and the premium on the certificate
       guaranty insurance policy.

See "Description of the Certificates-- Glossary of Terms--Available
Distribution Amount" in this prospectus supplement.

Priority of distributions. Distributions on the offered certificates will be
made from available amounts as described in this prospectus supplement as
follows:

 o     Distribution of interest to the interest-bearing senior certificates

 o     Distribution of principal to the Class A-P Certificates

 o     Distribution of principal to the remaining senior certificates entitled
       to principal

 o     Payment to master servicer for certain unreimbursed advances

 o     Distribution to the Class M Certificates in the following order:

        o     Interest to the Class M-1 Certificates

        o    Principal to the Class M-1 Certificates

        o    Interest to the Class M-2 Certificates

        o    Principal to the Class M-2 Certificates

        o    Interest to the Class M-3 Certificates

        o    Principal to the Class M-3 Certificates


                                      S-7
<PAGE>

Interest distributions. The amount of interest owed to each class of
interest-bearing certificates on each distribution date will equal:

 o     the pass-through rate for that class of certificates multiplied by

 o     the principal balance or notional amount of that class of certificates
       as of the day immediately prior to the related distribution date
       multiplied by

 o     1/12th minus

 o     the share of some types of interest shortfalls allocated to that class.

See "Description of the Certificates-- Interest Distributions" in this
prospectus supplement.

Allocations of principal. Principal distributions on the certificates will be
allocated among the various classes of offered certificates as described in
this prospectus supplement. Until the distribution date in November 2005, all
principal prepayments on the mortgage loans will be distributed among the
senior certificates, other than the Class A-5 Certificates, Class A-6
Certificates and Class A-V Certificates, unless the remaining interest-bearing
senior certificates entitled to principal distributions are no longer
outstanding. Not all outstanding senior certificates will receive principal on
each distribution date. The Class A-P Certificates receive only a portion of
the principal received from each mortgage loan that has a net mortgage rate of
less than 7.75%. The Class A-5 Certificates and Class A-V Certificates are not
entitled to receive any principal distributions.

See "Description of the Certificates-- Principal Distributions on the Senior
Certificates," "--Principal Distributions on the Insured Certificates" and
"--Principal Distributions on the Class M Certificates" in this prospectus
supplement.


CREDIT ENHANCEMENT

Allocation of losses. Most losses on the mortgage loans will be allocated in
full to the first class listed below with a principal balance greater than
zero:

         o    Class B-3

         o    Class B-2

         o    Class B-1

         o    Class M-3

         o    Class M-2

         o    Class M-1

When this occurs, the principal balance of the class to which the loss is
allocated is reduced, without a corresponding payment of principal.

If none of the Class M Certificates or Class B Certificates are outstanding,
losses on the mortgage loans will be allocated proportionately among the senior
certificates, subject to the special rules mentioned below. All of these losses
allocated to the Class A-3 Certificates will be covered by a certificate
guaranty insurance policy to be issued by Ambac Assurance Corporation. See
"Description of the Certificates--The Policy" in this prospectus supplement.

Not all losses will be allocated in the priority described in the third
preceding paragraph. Losses due to natural disasters such as floods and
earthquakes, fraud by a mortgagor, or


                                      S-8
<PAGE>

bankruptcy of a mortgagor will be allocated as described in the third preceding
paragraph only up to specified amounts. Losses of these types in excess of the
specified amounts and losses due to other extraordinary events will be
allocated proportionately among all outstanding classes of certificates except
as stated in the following paragraph. Therefore, the Class M Certificates and
Class B Certificates do not act as credit enhancement for the senior
certificates for these losses. Any such losses allocated to the Class A-3
Certificates will be covered by the certificate guaranty insurance policy. See
"Description of the Certificates--The Policy" in this prospectus supplement.

Special loss allocation for Class A-P Certificates. Whenever losses are
allocated to the senior certificates, the Class A-P Certificates will share in
the loss only if the mortgage loan had a net mortgage rate less than 7.75%. In
that case, the Class A-P Certificates will bear a share of the loss equal to
their percentage interest in the principal of that mortgage loan.

See "Description of the Certificates-- Allocation of Losses; Subordination" in
this prospectus supplement.

Priority of distributions. All or a disproportionately large portion of
principal prepayments and other unscheduled payments of principal will be
allocated to the senior certificates as described in this prospectus supplement
during the first nine years after the closing date. This provides additional
credit enhancement for the senior certificates by reserving a greater portion
of the principal balances of the Class M Certificates and Class B Certificates
for absorption of losses.

ADVANCES

For any month, if the master servicer does not receive the full scheduled
payment on a mortgage loan, the master servicer will advance funds to cover the
amount of the scheduled payment that was not made. However, the master servicer
will advance funds only if it determines that the advance will be recoverable
from future payments or collections on that mortgage loan.

See "Description of the Certificates-- Advances" in this prospectus supplement.


OPTIONAL TERMINATION

On any distribution date on which the aggregate principal balance of the
mortgage loans is less than 10% of their aggregate principal balance as of the
cut-off date, the master servicer or the depositor will have the option to:

 o     purchase from the trust all remaining mortgage loans, causing an early
       retirement of the certificates; or

 o     purchase all the certificates.

Under either type of optional purchase, holders of the outstanding certificates
will receive the outstanding principal balance of the certificates in full with
accrued interest. However, any optional purchase of the remaining mortgage
loans may result in a shortfall to the holders of the most subordinate classes
of certificates outstanding, if the trust then holds properties acquired from
foreclosing upon defaulted loans. In either case, there will be no
reimbursement of principal reductions or related interest that resulted from
losses allocated to the certificates.


                                      S-9
<PAGE>

See "Pooling and Servicing Agreement--Termination" in this prospectus
supplement and "The Pooling and Servicing Agreement--Termination; Retirement of
Certificates" in the prospectus.


RATINGS

When issued, the offered certificates will receive ratings which are not lower
than those listed in the table on page S-6 of this prospectus supplement. The
ratings on the offered certificates address the likelihood that holders of the
offered certificates will receive all distributions on the underlying mortgage
loans to which they are entitled. A security rating is not a recommendation to
buy, sell or hold a security and may be changed or withdrawn at any time by the
assigning rating agency. The ratings also do not address the rate of principal
prepayments on the mortgage loans. For example, the rate of prepayments, if
different than originally anticipated, could adversely affect the yield
realized by holders of the offered certificates or cause holders of the Class
A-5 Certificates or Class A-V Certificates to fail to fully recover their
initial investments.

See "Ratings" in this prospectus supplement.


LEGAL INVESTMENT

When issued, the Class A, Class R and Class M-1 Certificates will, and the
Class M-2 and Class M-3 Certificates will not, be "mortgage related securities"
for purposes of SMMEA. You should consult your legal advisors in determining
whether and to what extent the offered certificates constitute legal
investments for you.

See "Legal Investment" in this prospectus supplement for important information
concerning possible restrictions on ownership of the offered certificates by
regulated institutions.


ERISA CONSIDERATIONS

The Class A Certificates may be considered eligible for purchase by persons
investing assets of employee benefit plans or individual retirement accounts.
Sales of the Class M Certificates and the Class R Certificates to such plans or
retirement accounts are prohibited, except as permitted under "ERISA
Considerations" in this prospectus supplement. If you invest in a Class M
Certificate, you will be deemed to represent that you comply with the
restrictions described in this prospectus supplement.

See "ERISA Considerations" in this prospectus supplement and in the prospectus.



TAX STATUS

For federal income tax purposes, the depositor will elect to treat the trust as
two real estate mortgage investment conduits. The certificates, other than the
Class R Certificates, will represent ownership of regular interests in the
trust and will be treated as representing ownership of debt for federal income
tax purposes. You will be required to include in income all interest and
original issue discount, if any, on such certificates in accordance with the
accrual method of accounting regardless of your usual methods of accounting.
For federal income tax purposes, each of the Class R Certificates will be the
sole residual interest in one of the two real estate mortgage investment
conduits.


                                      S-10
<PAGE>

For further information regarding the federal income tax consequences of
investing in the offered certificates, including important information
regarding the tax treatment of the Class R Certificates, see "Material Federal
Income Tax Consequences" in this prospectus supplement and in the prospectus.















                                      S-11
<PAGE>

                                  RISK FACTORS

     The offered certificates are not suitable investments for all investors.
In particular, you should not purchase any class of offered certificates unless
you understand the prepayment, credit, liquidity and market risks associated
with that class.


     The offered certificates are complex securities. You should possess,
either alone or together with an investment advisor, the expertise necessary to
evaluate the information contained in this prospectus supplement and the
prospectus in the context of your financial situation and tolerance for risk.


     You should carefully consider, among other things, the following factors
in connection with the purchase of the offered certificates:


RISK OF LOSS


<TABLE>
<S>                      <C>
The return on your       Losses on the mortgage loans may occur due to a wide variety
certificates may be      of causes, including a decline in real estate values, and adverse
affected by losses on    changes in the borrower's financial condition. A decline in real
the mortgage loans,      estate values or economic conditions nationally or in the
which could occur        regions where the mortgaged properties are concentrated may
due to a variety of      increase the risk of losses on the mortgage loans.
causes.

The return on your       One risk of investing in mortgage-backed securities is created
certificates may be      by any concentration of the related properties in one or more
particularly sensitive   geographic regions. Approximately 44.8% of the cut-off date
to changes in real       principal balance of the mortgage loans are located in
estate markets in        California. If the regional economy or housing market
specific regions.        weakens in California, or in any other region having a
                         significant concentration of properties underlying the mortgage
                         loans, the mortgage loans in that region may experience high
                         rates of loss and delinquency, resulting in losses to
                         certificateholders. A region's economic condition and housing
                         market may be adversely affected by a variety of events,
                         including natural disasters such as earthquakes, hurricanes,
                         floods and eruptions, and civil disturbances such as riots.
</TABLE>

                                      S-12
<PAGE>


<TABLE>
<S>                     <C>
The return on your      The only credit enhancement for the senior certificates (other
certificates will be    than the Class A-3 Certificates) will be the subordination
reduced if losses       provided by the Class M Certificates and Class B Certificates.
exceed the credit       Additional credit enhancement will be provided for the Class
enhancement             A-3 Certificates by a certificate guaranty insurance policy. The
available to your       only credit enhancement for the Class M Certificates will be
certificates.           the subordination provided by the Class B Certificates and by
                        any class of Class M Certificates with a lower payment priority.
                        You should also be aware that the credit enhancement
                        provided for some types of losses is limited, except in the case
                        of the Class A-3 Certificates.

The value of your       If the performance of the mortgage loans is substantially worse
certificates may be     than assumed by the rating agencies, the ratings of any class of
reduced if losses are   the certificates may be lowered in the future. This would
higher than expected.   probably reduce the value of those certificates. Neither the
                        depositor, the master servicer nor any other entity will have
                        any obligation to supplement any credit enhancement, or to
                        take any other action to maintain any rating of the certificates.

LIMITED OBLIGATIONS

Payments on the         The certificates represent interests only in the RFMSI Series
mortgage loans are      2000-S13 Trust. The certificates do not represent an ownership
the primary source of   interest in or obligation of the depositor, the master servicer
payments on your        or any of their affiliates. If proceeds from the assets of the
certificates.           RFMSI Series 2000-S13 Trust are not sufficient to make all
                        payments provided for under the pooling and servicing
                        agreement, investors will have no recourse to the depositor,
                        the master servicer or any other entity, and will incur losses.
                        Losses allocated to the Class A-3 Certificates will be covered
                        by a certificate guaranty insurance policy.

LIQUIDITY RISKS

You may have to hold    A secondary market for your certificates may not develop.
your certificates to    Even if a secondary market does develop, it may not continue
maturity if their       or it may be illiquid. Neither the underwriters nor any other
marketability is        person will have any obligation to make a secondary market in
limited.                your certificates Illiquidity means you may not be able to find
                        a buyer to buy your securities readily or at prices that will
                        enable you to realize a desired yield. Illiquidity can have a
                        severe adverse effect on the market value of your certificates.
</TABLE>

                                      S-13
<PAGE>


<TABLE>
<S>                      <C>
                         Any class of offered certificates may experience illiquidity,
                         although generally illiquidity is more likely for classes that are
                         especially sensitive to prepayment, credit or interest rate risk,
                         or that have been structured to meet the investment
                         requirements of limited categories of investors.

SPECIAL YIELD AND
PREPAYMENT
CONSIDERATIONS

The yield on your        The yield to maturity on each class of offered certificates will
certificates will vary   depend on a variety of factors, including:
depending on the rate
of prepayments.
                          o  the rate and timing of principal payments on the mortgage
                             loans, including prepayments, defaults and liquidations,
                             and repurchases due to breaches of representations or
                             warranties;
                          o  the pass-through rate for that class;
                          o  interest shortfalls due to mortgagor prepayments; and
                          o  the purchase price of that class.

                         The rate of prepayments is one of the most important and
                         least predictable of these factors.

                         In general, if you purchase a certificate at a price higher than
                         its outstanding principal balance and principal distributions on
                         your certificate occur faster than you assumed at the time of
                         purchase, your yield will be lower than you anticipated.
                         Conversely, if you purchase a certificate at a price lower than
                         its outstanding principal balance and principal distributions on
                         that class occur more slowly than you assumed at the time of
                         purchase, your yield will be lower than you anticipated.
</TABLE>

                                      S-14
<PAGE>


<TABLE>
<S>                     <C>
The rate of             Since mortgagors, in most cases, can prepay their mortgage
prepayments on the      loans at any time, the rate and timing of principal distributions
mortgage loans will     on the offered certificates are highly uncertain. Generally,
vary depending on       when market interest rates increase, borrowers are less likely
future market           to prepay their mortgage loans. This could result in a slower
conditions, and other   return of principal to you at a time when you might have been
factors.                able to reinvest your funds at a higher rate of interest than the
                        pass-through rate on your class of certificates. On the other
                        hand, when market interest rates decrease, borrowers are
                        generally more likely to prepay their mortgage loans. This
                        could result in a faster return of principal to you at a time
                        when you might not be able to reinvest your funds at an
                        interest rate as high as the pass-through rate on your class of
                        certificates.

                        Refinancing programs, which may involve soliciting all or some
                        of the mortgagors to refinance their mortgage loans, may
                        increase the rate of prepayments on the mortgage loans. These
                        refinancing programs may be offered by the master servicer,
                        any subservicer or their affiliates, and may include streamlined
                        documentation programs as well as programs under which a
                        mortgage loan is modified to reduce the interest rate.

The yield on your       The offered certificates of each class have different yield
certificates will be    considerations and different sensitivities to the rate and timing
affected by the         of principal distributions. The following is a general discussion
specific terms that     of yield considerations and prepayment sensitivities of each
apply to that class,    class.
discussed below.

Class A                 The Class A Certificates are subject to various priorities for
 Certificates           payment of principal. Distributions of principal on the Class A
                        Certificates with an earlier priority of payment will be affected
                        by the rates of prepayment of the mortgage loans early in the
                        life of the mortgage pool. Those classes of Class A Certificates
                        with a later priority of payment will be affected by the rates of
                        prepayment of the mortgage loans experienced both before
                        and after the commencement of principal distributions on
                        those classes, and will be more likely to be affected by losses
                        on the mortgage loans not covered by the credit enhancement.

                        See "Description of the Certificates--Principal Distributions on
                        the Senior Certificates" in this prospectus supplement.
</TABLE>

                                      S-15
<PAGE>


<TABLE>
<S>             <C>
Class A-2       Because the Class A-2 Certificates are not entitled to receive
 Certificates   any distributions of interest for some period of time, these
                certificates will likely experience significant price and yield
                volatility. Investors should consider whether this volatility is
                suitable to their investment needs.

Class A-3       The Class A-3 Certificates will receive a portion of principal
                Certificates payments after some of the other classes of Class A
                Certificates have received principal payments. Therefore, an
                investor's yield on the Class A-3 Certificates will be sensitive
                to the rate and timing of those distributions and therefore
                those certificates would not be an appropriate investment for
                any investor requiring a distribution of a particular amount of
                principal or interest on a specific date or dates. IN ADDITION
                TO THE CONSIDERATIONS DESCRIBED ABOVE, INVESTORS IN THE CLASS
                A-3 CERTIFICATES SHOULD BE AWARE THAT THOSE CERTIFICATES MAY NOT
                BE AN APPROPRIATE INVESTMENT FOR ALL PROSPECTIVE INVESTORS.

                Investors in the Class A-3 Certificates should be aware that
                payments of principal on those certificates will be allocated
                according to a random lot procedure. Therefore it is highly
                uncertain that payments will be made to any investor in those
                certificates on the date desired by that investor.

                See "Description of the Certificates--Principal Distributions on
                the Insured Certificates" in this prospectus supplement.

                Losses on mortgage loans that are allocated to the Class A-3
                Certificates will be covered by the certificate guaranty
                insurance policy provided by Ambac Assurance Corporation, as
                described in this prospectus supplement. Additionally, some
                interest shortfalls allocated to the Class A-3 Certificates will
                be offset to the extent that funds are available in the reserve
                fund described in this prospectus supplement and, to the extent
                that funds are not so available, by the certificate guaranty
                insurance policy.

                See "Description of the Certificates--Interest Distributions"
                and "--The Policy" in this prospectus supplement.
</TABLE>

                                      S-16
<PAGE>


<TABLE>
<S>                <C>
Class A-4          The interest rate on the Class A-4 Certificates will vary with
Certificates and   LIBOR. The interest rate on the Class A-5 Certificates will
Class A-5          vary inversely with LIBOR. Therefore, the yield to investors
Certificates       on the Class A-4 Certificates and Class A-5 Certificates will be
                   sensitive to fluctuations of LIBOR.

Class A-5          Investors in the Class A-5 Certificates should be aware that
 Certificates      the yield on the Class A-5 Certificates will be extremely
                   sensitive to the rate and timing of principal payments on the
                   mortgage loans, and that rate may fluctuate significantly over
                   time. A faster than expected rate of principal payments on the
                   mortgage loans will have an adverse effect on the yield to
                   investors in the Class A-5 Certificates and could result in their
                   failure to fully recover their initial investments.

Class A-6          It is not expected that the Class A-6 Certificates will receive
 Certificates      any distributions of principal until the distribution date in
                   November 2005. Until the distribution date in November 2009,
                   the Class A-6 Certificates may receive a portion of principal
                   payments that is smaller than its pro rata share of principal
                   payments.

Class A-P          The Class A-P Certificates will receive a portion of the
 Certificates      principal payments only on the mortgage loans that have net
                   mortgage rates lower than 7.75%. Therefore, the yield on the
                   Class A-P Certificates is extremely sensitive to the rate and
                   timing of principal prepayments and defaults on the mortgage
                   loans that have net mortgage rates lower than 7.75%.

                   Mortgage loans with lower mortgage rates are less likely to be
                   prepaid than mortgage loans with higher mortgage rates. If
                   prepayments of principal on the mortgage loans that have net
                   mortgage rates lower than 7.75% occur at a rate slower than
                   an investor assumed at the time of purchase, the investor's
                   yield will be adversely affected.

Class A-V          The Class A-V Certificates will receive a portion of the
 Certificates      interest payments only from mortgage loans that have net
                   mortgage rates higher than 7.75%. Therefore, the yield on the
                   Class A-V Certificates will be extremely sensitive to the rate
                   and timing of principal prepayments and defaults on the
                   mortgage loans that have net mortgage rates higher than
                   7.75%.
</TABLE>

                                      S-17
<PAGE>


<TABLE>
<S>                       <C>
                          Mortgage loans with higher mortgage rates are more likely to
                          be prepaid than mortgage loans with lower mortgage rates. If
                          the mortgage loans that have net mortgage rates higher than
                          7.75% are prepaid at a rate faster than an investor assumed at
                          the time of purchase, the yield to investors in the Class A-V
                          Certificates will be adversely affected. Investors in the Class
                          A-V Certificates should fully consider the risk that a rapid rate
                          of prepayments on the mortgage loans that have net mortgage
                          rates higher than 7.75% could result in the failure of such
                          investors to fully recover their investments.

Class M                   The yield to investors in each class of the Class M Certificates
 Certificates             will be sensitive to the rate and timing of losses on the
                          mortgage loans, if those losses are not covered by a more
                          subordinate class of Class M Certificates or the Class B
                          Certificates.

                          It is not expected that the Class M Certificates will receive any
                          distributions of principal prepayments until the distribution
                          date in November 2005. After that date, all or a
                          disproportionately large portion of principal prepayments on
                          the mortgage loans may be allocated to the senior certificates,
                          and none or a disproportionately small portion of principal
                          prepayments may be paid to the holders of the Class M
                          Certificates and Class B Certificates. As a result, the weighted
                          average lives of the Class M Certificates may be longer than
                          would otherwise be the case.

The recording of          The mortgages or assignments of mortgage for some of the
mortgages in the          mortgage loans have been or may be recorded in the name of
name of MERS may          Mortgage Electronic Registration Systems, Inc., or MERS,
affect the yield on the   solely as nominee for the originator and its successors and
certificates.             assigns. Subsequent assignments of those mortgages are
                          registered electronically through the MERS (Registered Trademark)  System.
                          However, if MERS discontinues the MERS (Registered Trademark)  System and it
                          becomes necessary to record an assignment of the mortgage to
                          the trustee, then any related expenses shall be paid by the
                          trust and will reduce the amount available to pay principal of
                          and interest on the outstanding class or classes of certificates
                          with the lowest payment priorities.
</TABLE>

                                      S-18
<PAGE>


The recording of mortgages in the name of MERS is a new
practice in the mortgage lending industry. Public recording
officers and others may have limited, if any, experience with
lenders seeking to foreclose mortgages, assignments of which
are registered with MERS. Accordingly, delays and additional
costs in commencing, prosecuting and completing foreclosure
proceedings and conducting foreclosure sales of the mortgaged
properties could result. Those delays and additional costs
could in turn delay the distribution of liquidation proceeds to
certificateholders and increase the amount of losses on the
mortgage loans.

For additional information regarding MERS and the MERS (Registered Trademark)
System, see "Description of the Mortgage Pool--Mortgage Pool
Characteristics" and "Certain Yield and Prepayment
Considerations" in this prospectus supplement and "Description
of the Certificates--Assignment of Trust Assets" in the
prospectus.


                                      S-19

<PAGE>

                                 INTRODUCTION

     The depositor will establish a trust with respect to Series 2000-S13 on
the closing date, under a series supplement, dated as of October 1, 2000, to
the standard terms of pooling and servicing agreement, dated as of September 1,
2000, among the depositor, the master servicer and the trustee. On the closing
date, the depositor will deposit into the trust a pool of mortgage loans, that
in the aggregate will constitute a mortgage pool, secured by one- to
four-family residential properties with terms to maturity of not more than 30
years.

     Some capitalized terms used in this prospectus supplement have the
meanings given below under "Description of the Certificates--Glossary of Terms"
or in the prospectus under "Glossary."


                       DESCRIPTION OF THE MORTGAGE POOL


GENERAL

     The mortgage pool will consist of 729 mortgage loans with an aggregate
principal balance outstanding as of the cut-off date, after deducting payments
of principal due on the cut-off date, of approximately $260,199,949. The
mortgage loans are secured by first liens on fee simple interests in one- to
four-family residential real properties. The property securing the mortgage
loan is referred to as the mortgaged property. The mortgage pool will consist
of conventional, fixed-rate, fully-amortizing, level monthly payment first
mortgage loans with terms to maturity of not more than 30 years from the date
of origination or modification. With respect to mortgage loans which have been
modified, references in this prospectus supplement to the date of origination
shall be deemed to be the date of the most recent modification. All percentages
of the mortgage loans described in this prospectus supplement are approximate
percentages by aggregate principal balance as of the cut-off date unless
otherwise indicated.

     All of the mortgage loans were purchased by the depositor through its
affiliate, Residential Funding, from unaffiliated sellers as described in this
prospectus supplement and in the prospectus, except in the case of 7.5% of the
mortgage loans, which were purchased by the depositor through its affiliate,
Residential Funding, from HomeComings Financial Network, Inc., a wholly-owned
subsidiary of the master servicer. 2.4% of the mortgage loans were purchased
from and are being or will be subserviced by GMAC Mortgage Corporation, an
affiliate of the master servicer. 14.9% and 11.6% of the mortgage loans were
purchased from and are being subserviced by National City Mortgage Company and
First Nationwide Mortgage, respectively, each an unaffiliated seller. Except as
described in the preceding sentence, no unaffiliated seller sold more than 9.1%
of the mortgage loans to Residential Funding. 46.2% of the mortgage loans are
being or will be subserviced by HomeComings Financial Network, Inc.

     The depositor and Residential Funding will make certain limited
representations and warranties regarding the mortgage loans as of the date of
issuance of the certificates. The depositor and Residential Funding will be
required to repurchase or substitute for any mortgage loan as to which a breach
of its representations and warranties with respect to that mortgage loan
occurs, if such breach materially and adversely affects the interests of the
certificateholders in any of those mortgage loans. However, neither the
depositor nor Residential Funding will be required to repurchase or substitute
for any mortgage loan in the event of a breach of its representations and
warranties with respect to that mortgage loan if the substance of that breach
also constitutes fraud in the origination of such affected mortgage loan.
Residential Funding will not assign to the depositor, and consequently the
depositor will not assign to the trustee for the benefit of the
certificateholders, any of the representations and warranties made by the
sellers or the right to require the related seller to repurchase any such
mortgage loan in the event of a breach of any of its representations and
warranties, except to the extent that (i) the substance of any of its
representations and warranties regarding a mortgage loan also constitutes fraud
in the origination of the mortgage loan or (ii) the seller has made a
representation and warranty that it had no actual knowledge of the presence of,
nor reasonable grounds to suspect the presence of, any toxic materials or other
environmental hazards that could affect the mortgaged property. Accordingly,
the only representations and warranties regarding the mortgage loans that will
be made for the benefit of the certificateholders will be the limited
representations and warranties made by Residential Funding and the


                                      S-20
<PAGE>

depositor and the representations and warranties made by the sellers to the
limited extent described above. Neither Residential Funding nor the depositor
makes any representations or warranties with respect to any toxic materials or
other environmental hazards that could affect the related mortgaged properties.
See "Mortgage Loan Program--Representations with Respect to the Mortgage Loans"
in the prospectus.

     A limited amount of losses on mortgage loans as to which there was fraud
in the origination of those mortgage loans will be covered by the subordination
provided by the Class M Certificates and Class B Certificates as described in
this prospectus supplement under "Description of the Certificates--Allocation
of Losses; Subordination" and all such losses allocated to the Class A-3
Certificates will be covered by the certificate guaranty insurance policy. See
"Description of the Certificates--The Policy" in this prospectus supplement.


MORTGAGE POOL CHARACTERISTICS

     None of the mortgage loans will have been originated prior to March 1,
1999 or will have a maturity date later than October 1, 2030. No mortgage loan
will have a remaining term to maturity as of the cut-off date of less than 164
months. The weighted average remaining term to maturity of the mortgage loans
as of the cut-off date will be approximately 358 months. The weighted average
original term to maturity of the mortgage loans as of the cut-off date will be
approximately 360 months. As used in this prospectus supplement the remaining
term to maturity means, as of any date of determination and with respect to any
mortgage loan, the number of months equaling the number of scheduled monthly
payments necessary to reduce the then-current Stated Principal Balance of that
mortgage loan to zero, assuming the related mortgagor will make all scheduled
monthly payments but no prepayments, on the mortgage loan thereafter.

     The original mortgages for some of the mortgage loans have been, or in the
future may be, at the sole discretion of the master servicer, recorded in the
name of Mortgage Electronic Registration Systems, Inc., or MERS, solely as
nominee for the originator and its successors and assigns, and subsequent
assignments of those mortgages have been, or in the future may be, at the sole
discretion of the master servicer, registered electronically through the MERS
(Registered Trademark)  System. In some other cases, the original mortgage was
recorded in the name of the originator of the mortgage loan, record ownership
was later assigned to MERS, solely as nominee for the owner of the mortgage
loan, and subsequent assignments of the mortgage were, or in the future may be,
at the sole discretion of the master servicer, registered electronically
through the MERS (Registered Trademark)  System. For each of these mortgage
loans, MERS serves as mortgagee of record on the mortgage solely as a nominee
in an administrative capacity on behalf of the trustee, and does not have any
interest in the mortgage loan. For additional information regarding the
recording of mortgages in the name of MERS see "Certain Yield and Prepayment
Considerations--General" in this prospectus supplement and "Description of the
Certificates--Assignment of Trust Assets" in the prospectus.

     As of the cut-off date, none of the mortgage loans will be one month or
more delinquent in payment of principal and interest. For a description of the
methodology used to categorize mortgage loans as delinquent, see "Pooling and
Servicing Agreement--The Master Servicer" in this prospectus supplement.

     Approximately 0.1% of the mortgage loans will be Buy-Down Mortgage Loans.

     No mortgage loan provides for deferred interest or negative amortization.

     15 mortgage loans, representing approximately 2.4% of the aggregate
principal balance of the mortgage loans, are Pledged Asset Mortgage Loans. See
"The Trusts--The Mortgage Loans" in the prospectus.

     For purposes of the table below entitled "Original Loan-To-Value Ratios,"
the LTV ratio of each Pledged Asset Mortgage Loan was calculated by reducing
the principal balance of the Pledged Asset Mortgage Loan by the amount of
Pledged Assets with respect to that mortgage loan.

     Included below is a table showing the Credit Scores for some mortgagors.
Credit Scores are obtained by many mortgage lenders in connection with mortgage
loan applications to help assess a borrower's


                                      S-21
<PAGE>

credit-worthiness. In addition, Credit Scores may be obtained by Residential
Funding after the origination of a mortgage loan if the seller does not provide
to Residential Funding a Credit Score. Credit Scores are obtained from credit
reports provided by various credit reporting organizations, each of which may
employ differing computer models and methodologies. The Credit Score is
designed to assess a borrower's credit history at a single point in time, using
objective information currently on file for the borrower at a particular credit
reporting organization. Information utilized to create a Credit Score may
include, among other things, payment history, delinquencies on accounts, levels
of outstanding indebtedness, length of credit history, types of credit, and
bankruptcy experience. Credit Scores range from approximately 350 to
approximately 840, with higher scores indicating an individual with a more
favorable credit history compared to an individual with a lower score. However,
a Credit Score purports only to be a measurement of the relative degree of risk
a borrower represents to a lender, i.e., a borrower with a higher score is
statistically expected to be less likely to default in payment than a borrower
with a lower score. In addition, it should be noted that Credit Scores were
developed to indicate a level of default probability over a two-year period,
which does not correspond to the life of a mortgage loan. Furthermore, Credit
Scores were not developed specifically for use in connection with mortgage
loans, but for consumer loans in general, and assess only the borrower's past
credit history. Therefore, a Credit Score does not take into consideration the
differences between mortgage loans and consumer loans generally, or the
specific characteristics of the related mortgage loan, for example, the LTV
ratio, the collateral for the mortgage loan, or the debt to income ratio. There
can be no assurance that the Credit Scores of the mortgagors will be an
accurate predictor of the likelihood of repayment of the related mortgage loans
or that any mortgagor's Credit Score would not be lower if obtained as of the
date of this prospectus supplement.


                           CREDIT SCORE DISTRIBUTION




<TABLE>
<CAPTION>
                               NUMBER OF         PRINCIPAL         PERCENT OF
CREDIT SCORE RANGE          MORTGAGE LOANS        BALANCE        MORTGAGE LOANS
------------------------   ----------------   ---------------   ---------------
<S>                        <C>                <C>               <C>
620 - 639 ..............           15          $  5,041,970            1.94%
640 - 659 ..............           23             7,983,459            3.07
660 - 679 ..............           33            11,444,460            4.40
680 - 699 ..............           67            23,904,991            9.19
700 - 719 ..............          104            37,066,097           14.25
720 - 739 ..............           96            32,603,937           12.53
740 - 759 ..............          160            58,804,768           22.60
760 - 779 ..............          131            48,244,294           18.54
780 - 799 ..............           81            29,184,393           11.22
800 or Greater .........           19             5,921,580            2.28
                                  ---          ------------           -----
Total ..................          729          $260,199,949          100.00%
                                  ===          ============          ======
</TABLE>


                                      S-22
<PAGE>

     Set forth below is a description of some additional characteristics of the
mortgage loans as of the cut-off date unless otherwise indicated. All
percentages of the mortgage loans are approximate percentages by aggregate
principal balance as of the cut-off date unless otherwise indicated. Unless
otherwise specified, all principal balances of the mortgage loans are as of the
cut-off date and are rounded to the nearest dollar.


                                MORTGAGE RATES




<TABLE>
<CAPTION>
                              NUMBER OF         PRINCIPAL         PERCENT OF
MORTGAGE RATES (%)         MORTGAGE LOANS        BALANCE        MORTGAGE LOANS
-----------------------   ----------------   ---------------   ---------------
<S>                       <C>                <C>               <C>
6.125 - 6.249 .........            1          $    448,681            0.17%
7.000 - 7.124 .........            1               196,898            0.08
7.500 - 7.624 .........            1               344,744            0.13
7.750 - 7.874 .........            1               379,462            0.15
7.875 - 7.999 .........           14             4,623,850            1.78
8.000 - 8.124 .........           17             6,384,464            2.45
8.125 - 8.249 .........           60            23,345,735            8.97
8.250 - 8.374 .........          136            52,123,388           20.03
8.375 - 8.499 .........          133            48,096,460           18.48
8.500 - 8.624 .........          194            66,803,694           25.67
8.625 - 8.749 .........           88            31,041,288           11.93
8.750 - 8.874 .........           37            11,259,542            4.33
8.875 - 8.999 .........           19             5,473,200            2.10
9.000 - 9.124 .........           15             5,536,732            2.13
9.125 - 9.249 .........            3             1,064,240            0.41
9.250 - 9.374 .........            1               282,254            0.11
9.375 - 9.499 .........            2               437,279            0.17
9.500 - 9.624 .........            4             1,854,287            0.71
9.625 - 9.749 .........            1               199,808            0.08
9.750 - 9.874 .........            1               303,944            0.12
                                 ---          ------------           -----
Total .................          729          $260,199,949          100.00%
                                 ===          ============          ======
</TABLE>

   As of the cut-off date, the weighted average mortgage rate will be
             approximately 8.4207% per annum.


        ORIGINAL MORTGAGE LOAN PRINCIPAL BALANCES OF THE MORTGAGE LOANS




<TABLE>
<CAPTION>
ORIGINAL MORTGAGE                    NUMBER OF         PRINCIPAL         PERCENT OF
LOAN BALANCE                      MORTGAGE LOANS        BALANCE        MORTGAGE LOANS
------------------------------   ----------------   ---------------   ---------------
<S>                              <C>                <C>               <C>
$      0 -   100,000 .........           17          $  1,277,013            0.49%
 100,001 -   200,000 .........           23             3,637,222            1.40
 200,001 -   300,000 .........          186            52,314,295           20.11
 300,001 -   400,000 .........          333           114,621,139           44.05
 400,001 -   500,000 .........           98            43,890,554           16.87
 500,001 -   600,000 .........           38            20,899,602            8.03
 600,001 -   700,000 .........           26            16,554,724            6.36
 700,001 -   800,000 .........            3             2,234,546            0.86
 800,001 -   900,000 .........            2             1,791,430            0.69
 900,001 - 1,000,000 .........            3             2,979,421            1.15
                                        ---          ------------           -----
Total ........................          729          $260,199,949          100.00%
                                        ===          ============          ======
</TABLE>

     As of the cut-off date, the average unpaid principal balance will be
approximately $356,927.

                                      S-23
<PAGE>

                               ORIGINAL LTV RATIO




<TABLE>
<CAPTION>
                               NUMBER OF         PRINCIPAL        PERCENT OF
ORIGINAL LTV RATIO (%)      MORTGAGE LOANS        BALANCE       MORTGAGE LOANS
------------------------   ----------------   --------------   ---------------
<S>                        <C>                <C>              <C>
 0.01 - 50.00 ..........           31         $ 10,586,870            4.07%
50.01 - 55.00 ..........           21            9,367,299            3.60
55.01 - 60.00 ..........           31           10,900,013            4.19
60.01 - 65.00 ..........           41           15,583,982            5.99
65.01 - 70.00 ..........           50           19,473,695            7.48
70.01 - 75.00 ..........           76           25,832,608            9.93
75.01 - 80.00 ..........          417          149,516,751           57.46
80.01 - 85.00 ..........            9            2,754,642            1.06
85.01 - 90.00 ..........           40           12,615,105            4.85
90.01 - 95.00 ..........           13            3,568,984            1.37
                                  ---         ------------           -----
Total ..................          729         $260,199,949          100.00%
                                  ===         ============          ======
</TABLE>

   The weighted average LTV ratio at origination of the mortgage loans will be
         74.67%.


     GEOGRAPHIC DISTRIBUTION OF MORTGAGED PROPERTIES OF THE MORTGAGE LOANS




<TABLE>
<CAPTION>
                           NUMBER OF         PRINCIPAL         PERCENT OF
STATE                   MORTGAGE LOANS        BALANCE        MORTGAGE LOANS
--------------------   ----------------   ---------------   ---------------
<S>                    <C>                <C>               <C>
California .........          324          $116,636,162           44.83%
Virginia ...........           36            12,510,490            4.81
New Jersey .........           32            11,096,801            4.26
Texas ..............           28            10,991,871            4.22
Illinois ...........           30            10,626,474            4.08
Florida ............           31            10,306,873            3.96
Maryland ...........           30             9,588,156            3.68
New York ...........           23             8,055,325            3.10
Georgia ............           20             7,853,645            3.02
Other (1) ..........          175            62,534,151           24.03
                              ---          ------------           -----
Total ..............          729          $260,199,949          100.00%
                              ===          ============          ======
</TABLE>

----------
(1)   Other includes states and the District of Columbia with under 3%
      concentrations individually.


     No more than 0.8% will be secured by mortgaged properties located in any
one zip code area in California and no more than 0.6% will be secured by
mortgaged properties located in any one zip code area outside California.


                  MORTGAGE LOAN PURPOSE OF THE MORTGAGE LOANS




<TABLE>
<CAPTION>
                                    NUMBER OF         PRINCIPAL         PERCENT OF
LOAN PURPOSE                     MORTGAGE LOANS        BALANCE        MORTGAGE LOANS
-----------------------------   ----------------   ---------------   ---------------
<S>                             <C>                <C>               <C>
Purchase ....................          589          $209,269,205           80.43%
Rate/Term Refinance .........           91            35,095,917           13.49
Equity Refinance ............           49            15,834,826            6.09
                                       ---          ------------           -----
Total .......................          729          $260,199,949          100.00%
                                       ===          ============          ======
</TABLE>

     The weighted average LTV ratio at origination of rate and term refinance
mortgage loans will be 70.37%. The weighted average LTV ratio at origination of
equity refinance mortgage loans will be 66.39%.


                                      S-24
<PAGE>

            MORTGAGE LOAN DOCUMENTATION TYPES OF THE MORTGAGE LOANS




<TABLE>
<CAPTION>
                                      NUMBER OF         PRINCIPAL         PERCENT OF
DOCUMENTATION TYPE                 MORTGAGE LOANS        BALANCE        MORTGAGE LOANS
-------------------------------   ----------------   ---------------   ---------------
<S>                               <C>                <C>               <C>
Full Documentation ............          632          $231,371,366           88.92%
Reduced Documentation .........           97            28,828,583           11.08
                                         ---          ------------           -----
Total .........................          729          $260,199,949          100.00%
                                         ===          ============          ======
</TABLE>

     The weighted average LTV ratio at origination which were underwritten
under a reduced loan documentation program will be 64.57%. No more than 39.0%
of such reduced loan documentation will be secured by mortgaged properties
located in California.


                     OCCUPANCY TYPES OF THE MORTGAGE LOANS




<TABLE>
<CAPTION>
                                  NUMBER OF         PRINCIPAL         PERCENT OF
OCCUPANCY TYPE                 MORTGAGE LOANS        BALANCE        MORTGAGE LOANS
---------------------------   ----------------   ---------------   ---------------
<S>                           <C>                <C>               <C>
Primary Residence .........          711          $253,126,486           97.28%
Second/Vacation ...........           18             7,073,463            2.72
                                     ---          ------------           -----
Total .....................          729          $260,199,949          100.00%
                                     ===          ============          ======
</TABLE>

                           MORTGAGED PROPERTY TYPES




<TABLE>
<CAPTION>
                                                 NUMBER OF         PRINCIPAL         PERCENT OF
PROPERTY TYPE                                 MORTGAGE LOANS        BALANCE        MORTGAGE LOANS
------------------------------------------   ----------------   ---------------   ---------------
<S>                                          <C>                <C>               <C>
Single-family detached ...................          523          $188,568,142           72.47%
Planned Unit Developments (detached)                167            58,897,965           22.64
Two- to four-family units ................            2               540,379            0.21
Condo Low-Rise (less than 5 stories) .....           24             8,215,259            3.16
Condo Mid-Rise (5 to 8 stories) ..........            1               363,883            0.14
Condo High-Rise (9 stories or more) ......            4             1,183,566            0.45
Townhouse ................................            2               549,827            0.21
Planned Unit Developments (attached) .....            6             1,880,925            0.72
                                                    ---          ------------           -----
Total ....................................          729          $260,199,949          100.00%
                                                    ===          ============          ======
</TABLE>

                 NET MORTGAGE RATES OF DISCOUNT MORTGAGE LOANS




<TABLE>
<CAPTION>
                             NUMBER OF         PRINCIPAL        PERCENT OF
NET MORTGAGE RATE(%)      MORTGAGE LOANS        BALANCE       MORTGAGE LOANS
----------------------   ----------------   --------------   ---------------
<S>                      <C>                <C>              <C>
5.845.................           1           $   448,681     0.17%
6.595.................           1               196,898     0.08
7.220.................           1               344,744     0.13
7.345.................           2               708,000     0.27
7.470.................           4             1,830,912     0.70
7.595.................          17             6,509,200     2.50
7.720.................          21             7,394,514     2.84
                                --           -----------     ----
Total ................          47           $17,432,949     6.70%
                                ==           ===========     ====
</TABLE>





     As of the cut-off date, the weighted average of the Discount Fractions of
the Discount Mortgage Loans was approximately 2.43885663%.


PRIMARY MORTGAGE INSURANCE AND PRIMARY HAZARD INSURANCE

     Each mortgage loan is required to be covered by a standard hazard
insurance policy, which is referred to as a primary hazard insurance policy. In
addition, to the best of the depositor's knowledge, each


                                      S-25
<PAGE>

mortgage loan with an LTV ratio at origination in excess of 80% will be insured
by a primary mortgage insurance policy, which is referred to as a primary
insurance policy, covering at least 30% of the principal balance of the
mortgage loan at origination if the LTV ratio is between 95.00% and 90.01%, at
least 25% of the balance if the LTV ratio is between 90.00% and 85.01%, and at
least 12% of the balance if the LTV ratio is between 85.00% and 80.01%. 15
Pledged Asset Mortgage Loans representing approximately 2.4% of the aggregate
principal balance of the mortgage loans will be secured by Pledged Assets in
addition to the related mortgaged property and in lieu of any primary mortgage
insurance.


     Substantially all of the primary insurance policies were issued by General
Electric Mortgage Insurance Corporation, Mortgage Guaranty Insurance
Corporation, United Guaranty Residential Insurance Company, PMI Mortgage
Insurance Company, Commonwealth Mortgage Assurance Company or Republic Mortgage
Insurance Company, which collectively are the primary insurers. Each primary
insurer has a claims paying ability currently acceptable to the rating agencies
that have been requested to rate the certificates; however, there is no
assurance as to the actual ability of any primary insurer to pay claims. See
"Insurance Policies on Mortgage Loans" in the prospectus.


ADDITIONAL INFORMATION


     The description in this prospectus supplement of the mortgage pool and the
mortgaged properties is based upon the mortgage pool as constituted at the
close of business on the cut-off date, as adjusted for the scheduled principal
payments due on or before the cut-off date. Prior to the issuance of the
offered certificates, mortgage loans may be removed from the mortgage pool as a
result of incomplete documentation or otherwise, if the depositor deems that
removal necessary or appropriate. A limited number of other mortgage loans may
be added to the mortgage pool prior to the issuance of the offered
certificates. The depositor believes that the information in this prospectus
supplement will be substantially representative of the characteristics of the
mortgage pool as it will be constituted at the time the offered certificates
are issued although the range of mortgage rates and maturities and some other
characteristics of the mortgage loans in the mortgage pool may vary.


     A current report on Form 8-K will be available to purchasers of the
offered 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 offered certificates. In the event mortgage
loans are removed from or added to the mortgage pool as described in the
preceding paragraph, that removal or addition will be noted in the current
report.


                                      S-26
<PAGE>

                        DESCRIPTION OF THE CERTIFICATES


GENERAL

     The Series 2000-S13 Mortgage Pass-Through Certificates will include the
following ten classes of Senior Certificates:

    o Class A-1 Certificates, or the Accretion Directed Certificates;

    o Class A-2 Certificates, or the Accrual Certificates;

    o Class A-3 Certificates, or the Insured Certificates;

    o Class A-4 Certificates, or the Floater Certificates;

    o Class A-5 Certificates, or the Inverse Floater Certificates; and
      together with the Floater Certificates, the Adjustable Rate Certificates;

    o Class A-6 Certificates, or the Lockout Certificates;

    o Class A-P Certificates, or the Principal Only Certificates;

    o Class A-V Certificates, or the Variable Strip Certificates, and together
      with the Inverse Floater Certificates, the Interest Only Certificates; and

    o Class R-I Certificates and Class R-II Certificates, together the
      Residual Certificates.

     In addition to the Senior Certificates, the Series 2000-S13 Mortgage
Pass-Through Certificates will also include six classes of subordinate
certificates which are designated as the Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2
Certificates and Class B-3 Certificates. Only the Senior Certificates and Class
M Certificates are offered hereby. See "Index of Principal Definitions" in the
prospectus for the meanings of capitalized terms and acronyms not otherwise
defined in this prospectus supplement.

     The Insured Certificates will be entitled to the benefits of a certificate
guaranty insurance policy, or the policy, to be issued by Ambac Assurance
Corporation, referred to in this prospectus supplement as the insurer. The
insurer shall be subrogated to the rights of each holder of an Insured
Certificate to receive distributions, as applicable, on those Insured
Certificates to the extent of any payment by the insurer under the policy.

     The certificates will evidence the entire beneficial ownership interest in
the trust. The trust will consist of:

    o the mortgage loans;

    o the assets as from time to time that are identified as deposited in
      respect of the mortgage loans in the Custodial Account and in the
      Certificate Account and belonging to the trust;

    o property acquired by foreclosure of the mortgage loans or deed in lieu
      of foreclosure;

    o any applicable primary insurance policies and primary hazard insurance
      policies; and

    o all proceeds of any of the foregoing.

     The Senior Certificates will evidence in the aggregate an initial
beneficial ownership interest of approximately 96.25% in the trust. The Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates will
each evidence in the aggregate an initial beneficial ownership interest of
approximately 1.90%, 0.75%, 0.45%, 0.25%, 0.20% and 0.20%, respectively, in the
trust.

     The Senior Certificates, other than the Class A-P, Class A-V and Class R
Certificates, and the Class M Certificates will be available only in book-entry
form through facilities of The Depository Trust Company, and are collectively
referred to as the DTC registered certificates. The DTC registered certificates
will be issued, maintained and transferred on the book-entry records of DTC and
its participants. The DTC registered certificates, other than the Insured
Certificates and Class A-5 Certificates, will be issued in minimum
denominations of $25,000, or $250,000 in the case of the Class M-2


                                      S-27
<PAGE>

Certificates and Class M-3 Certificates, and integral multiples of $1 in excess
thereof. The Insured Certificates will be issued in minimum denominations of
$1,000 and integral multiples of $1,000 in excess thereof. The Class A-5
Certificates will be issued in a 100% percentage interest denomination. The
Class A-P Certificates will be issued in registered, certificated form in
minimum denominations of $25,000 and integral multiples of $1,000 in excess
thereof, except for one Class A-P Certificate evidencing the sum of an
authorized denomination thereof and the remainder of the aggregate initial
Certificate Principal Balance of such class of certificates. The Variable Strip
Certificates and Residual Certificates will be issued in registered,
certificated form in minimum denominations of a 20% percentage interest,
except, in the case of one Class R-I Certificate and one Class R-II
Certificate, as otherwise described in this prospectus supplement under
"Material Federal Income Tax Consequences."

     The DTC registered certificates will be represented by one or more
certificates registered in the name of the nominee of DTC. The depositor has
been informed by DTC that DTC's nominee will be Cede & Co. No beneficial owner
will be entitled to receive a certificate of any class in fully registered
form, or a definitive certificate, except as described in this prospectus
supplement under "--Book-Entry Registration of Certain of the Offered
Certificates--Definitive Certificates." Unless and until definitive
certificates are issued for the DTC registered certificates under the limited
circumstances described in this prospectus supplement:

    o all references to actions by certificateholders with respect to the DTC
      registered certificates shall refer to actions taken by DTC upon
      instructions from its participants, and

    o all references in this prospectus supplement to distributions, notices,
      reports and statements to certificateholders with respect to the DTC
      registered certificates shall refer to distributions, notices, reports and
      statements to DTC or Cede, as the registered holder of the DTC registered
      certificates, for distribution to beneficial owners by DTC in accordance
      with DTC procedures.


BOOK-ENTRY REGISTRATION OF CERTAIN OF THE OFFERED CERTIFICATES

     General. Beneficial owners that are not participants or indirect
participants but desire to purchase, sell or otherwise transfer ownership of,
or other interests in, the related DTC registered certificates may do so only
through participants and indirect participants. In addition, beneficial owners
will receive all distributions of principal of and interest on the related DTC
registered certificates from the paying agent through DTC and participants.
Accordingly, beneficial owners may experience delays in their receipt of
payments. Unless and until definitive certificates are issued for the related
DTC registered certificates, it is anticipated that the only registered
certificateholder of the DTC registered certificates will be Cede, as nominee
of DTC. Beneficial owners will not be recognized by the trustee or the master
servicer as certificateholders, as the term is used in the pooling and
servicing agreement, and beneficial owners will be permitted to receive
information furnished to certificateholders and to exercise the rights of
certificateholders only indirectly through DTC, its participants and indirect
participants.

     Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers of DTC registered
certificates among participants and to receive and transmit distributions of
principal of, and interest on, the DTC registered certificates. Participants
and indirect participants with which beneficial owners have accounts with
respect to the DTC registered certificates similarly are required to make
book-entry transfers and receive and transmit distributions on behalf of their
respective beneficial owners. Accordingly, although beneficial owners will not
possess physical certificates evidencing their interests in the DTC registered
certificates, DTC's rules provide a mechanism by which beneficial owners,
through their participants and indirect participants, will receive
distributions and will be able to transfer their interests in the DTC
registered certificates.

     None of the depositor, the master servicer or the trustee will have any
liability for any actions taken by DTC or its nominee, including, without
limitation, actions for any aspect of the records relating to or payments made
on account of beneficial ownership interests in the DTC registered certificates
held by Cede, as nominee for DTC, or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.


                                      S-28
<PAGE>

     Definitive Certificates. Definitive certificates will be issued to
beneficial owners or their nominees, respectively, rather than to DTC or its
nominee, only under the limited conditions described in the prospectus under
"Description of the Certificates--Form of Certificates."

     Upon the occurrence of an event described in the prospectus in the third
paragraph under "Description of the Certificates--Form of Certificates," the
trustee is required to notify, through DTC, participants who have ownership of
DTC registered certificates as indicated on the records of DTC of the
availability of definitive certificates for their DTC registered certificates.
Upon surrender by DTC of the definitive certificates representing the DTC
registered certificates and upon receipt of instructions from DTC for
re-registration, the trustee will reissue the DTC registered certificates as
definitive certificates issued in the respective principal amounts owned by
individual beneficial owners, and thereafter the trustee and the master
servicer will recognize the holders of the definitive certificates as
certificateholders under the pooling and servicing agreement.

     For additional information regarding DTC and the DTC registered
certificates, see "Description of the Certificates--Form of Certificates" in
the prospectus.


GLOSSARY OF TERMS

     The following terms are given the meanings shown below to help describe
the cash flows on the certificates:

     ACCRETION TERMINATION DATE--The earlier to occur of (i) the distribution
date on which the Certificate Principal Balance of the Class A-1 Certificates
has been reduced to zero and (ii) the Credit Support Depletion Date.

     ACCRUAL DISTRIBUTION AMOUNT--On each distribution date preceding the
Accretion Termination Date, an amount equal to the amount of Accrued
Certificate Interest on the Class A-2 Certificates for such date which will be
added to the Certificate Principal Balance of the Class A-2 Certificates and
distributed to the holders of the Class A-1 Certificates, in the manner and
priority set forth in this prospectus supplement, as principal in reduction of
the Certificate Principal Balance of the Class A-1 Certificates. The amount
that is added to the Certificate Principal Balance of the Class A-2
Certificates will accrue interest at a rate of 7.75% per annum. On each
distribution date on or after the Accretion Termination Date, the entire
Accrued Certificate Interest on the Class A-2 Certificates for that date will
be payable to the holders of the Class A-2 Certificates, as interest, to the
extent not required to fully reduce the Certificate Principal Balance of the
Class A-1 Certificates to zero on the Accretion Termination Date; provided,
however, that if the Accretion Termination Date is the Credit Support Depletion
Date, the entire Accrual Distribution Amount for that date will be payable as
interest to the holders of the Class A-2 Certificates.

     ACCRUED CERTIFICATE INTEREST--With respect to any distribution date, an
amount equal to (a) in the case of each class of offered certificates, other
than the Interest Only Certificates and Principal Only Certificates, interest
accrued during the related Interest Accrual Period on the Certificate Principal
Balance of the certificates of that class immediately prior to that
distribution date at the related pass-through rate and (b) in the case of the
Interest Only Certificates, interest accrued during the related Interest
Accrual Period on the related Notional Amount immediately prior to that
distribution date at the then-applicable pass-through rate on that class for
that distribution date; in each case less interest shortfalls, if any,
allocated thereto for that distribution date to the extent not covered with
respect to the Senior Certificates by the subordination provided by the Class B
Certificates and Class M Certificates and, only with respect to the Insured
Certificates, by the additional credit enhancement provided by the Reserve Fund
and the policy, as applicable, after depletion of any applicable subordination
and, with respect to the Class M Certificates to the extent not covered by the
subordination provided by the Class B Certificates and any class or classes of
Class M Certificates having a lower payment priority, including in each case:

     (i) any Prepayment Interest Shortfall to the extent not covered by the
   master servicer as described in this prospectus supplement under
   "Description of the Certificates--Interest Distributions";


                                      S-29
<PAGE>

     (ii) the interest portions of Realized Losses, including Excess Special
   Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses and
   Extraordinary Losses not allocated through subordination;

     (iii) the interest portion of any Advances that were made with respect to
   delinquencies that were ultimately determined to be Excess Special Hazard
   Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
   Losses; and

     (iv) any other interest shortfalls not covered by subordination,
   including interest shortfalls relating to the Soldiers' and Sailors' Civil
   Relief Act of 1940, or Relief Act, or similar legislation or regulations,
   all allocated as described below.

Any reductions will be allocated among the holders of all classes of
certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been payable on that distribution date absent these
reductions. In the case of each class of Class M Certificates, Accrued
Certificate Interest on that class will be further reduced by the allocation of
the interest portion of certain losses thereto, if any, as described below
under "--Allocation of Losses; Subordination." Accrued Certificate Interest on
each class of Senior Certificates will be distributed on a pro rata basis.
Accrued Certificate Interest on each class of certificates is calculated on the
basis of a 360-day year consisting of twelve 30-day months.

     AVAILABLE DISTRIBUTION AMOUNT--For any distribution date, an amount equal
to the aggregate of:

    o the aggregate amount of scheduled payments on the mortgage loans due on
      the related due date and received on or prior to the related determination
      date, after deduction of the related master servicing fees and any
      subservicing fees, which are collectively referred to as the servicing
      fees and the premium on the certificate guaranty insurance policy;

    o all unscheduled payments, including mortgagor prepayments on the
      mortgage loans, Insurance Proceeds, Liquidation Proceeds and proceeds from
      repurchases of and substitutions for the mortgage loans occurring during
      the preceding calendar month; and

    o all Advances made for that distribution date, in each case net of
      amounts reimbursable therefrom to the master servicer and any subservicer.


     In addition to the foregoing amounts, with respect to unscheduled
collections, not including mortgagor prepayments, the master servicer may elect
to treat such amounts as included in the Available Distribution Amount for the
distribution date in the month of receipt, but is not obligated to do so. As
described in this prospectus supplement under "--Principal Distributions on the
Senior Certificates," any amount with respect to which such election is so made
shall be treated as having been received on the last day of the preceding
calendar month for the purposes of calculating the amount of principal and
interest distributions to any class of certificates. With respect to any
distribution date, the due date is the first day of the month in which that
distribution date occurs and the determination date is the 20th day of the
month in which that distribution date occurs or, if that day is not a business
day, the immediately succeeding business day.

     CERTIFICATE PRINCIPAL BALANCE--For any offered certificate as of any date
of determination, an amount equal to the initial Certificate Principal Balance
of that certificate, plus, in the case of the Accrual Certificates, an amount
equal to the Accrued Certificate Interest added to the Certificate Principal
Balance of the Accrual Certificates on each distribution date on or prior to
the Accretion Termination Date, reduced by the aggregate of (a) all amounts
allocable to principal previously distributed with respect to that certificate
and (b) any reductions in the Certificate Principal Balance of that certificate
deemed to have occurred in connection with allocations of Realized Losses in
the manner described in this prospectus supplement, provided that, after the
Certificate Principal Balances of the Class B Certificates have been reduced to
zero, the Certificate Principal Balance of any certificate of the class of
Class M Certificates outstanding with the lowest payment priority shall equal
the percentage interest evidenced thereby multiplied by the excess, if any, of
(i) the then-aggregate Stated Principal Balance of all of the mortgage loans
over (ii) the then-aggregate Certificate Principal Balance of all other classes
of certificates then outstanding, not taking into consideration any reduction
in the Certificate Principal Balances of the Insured Certificates due to
withdrawals of funds from the Rounding Account.


                                      S-30
<PAGE>

     CLASS A-P COLLECTION SHORTFALL--With respect to each Final Disposition of
a Discount Mortgage Loan in connection with each distribution date or any prior
distribution date, the extent that the amount included under clause (iii) of
the definition of Class A-P Distribution Amount for that distribution date was
less than the amount described in (a) under clause (iii) of the definition of
Class A-P Distribution Amount. Notwithstanding any other provision of this
prospectus supplement, any distribution relating to any Class A-P Collection
Shortfall, to the extent not covered by any amounts otherwise distributable to
the Class B-3 Certificates, shall result in a reduction of the amount of
principal distributions on that distribution date on (i) first, the Class B-1
Certificates and Class B-2 Certificates and (ii) second, the Class M
Certificates, in each case in reverse order of their payment priority.

     CLASS A-P DISTRIBUTION AMOUNT--On each distribution date, a distribution
allocable to principal made to holders of the Class A-P Certificates from the
Available Distribution Amount remaining after the Senior Interest Distribution
Amount, other than the Accrual Distribution Amount, is distributed, equal to
the aggregate of:

     (i) the related Discount Fraction of the principal portion of the
   scheduled monthly payment on each Discount Mortgage Loan due on the related
   due date, whether or not received on or prior to the related determination
   date, less the Discount Fraction of the principal portion of any related
   Debt Service Reductions which together with other Bankruptcy Losses are in
   excess of the Bankruptcy Amount;

     (ii) the related Discount Fraction of the principal portion of all
   unscheduled collections on each Discount Mortgage Loan received during the
   preceding calendar month, other than amounts received in connection with a
   Final Disposition of a Discount Mortgage Loan described in clause (iii)
   below, including full and partial mortgagor prepayments, repurchases of
   Discount Mortgage Loans or, in the case of a substitution, amounts
   representing a principal adjustment, as required by the pooling and
   servicing agreement, Liquidation Proceeds and Insurance Proceeds, to the
   extent applied as recoveries of principal;

     (iii) in connection with the Final Disposition of a Discount Mortgage
   Loan that did not result in any Excess Special Hazard Losses, Excess Fraud
   Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal
   to the lesser of (a) the applicable Discount Fraction of the Stated
   Principal Balance of that Discount Mortgage Loan immediately prior to that
   distribution date and (b) the aggregate amount of collections on that
   Discount Mortgage Loan to the extent applied as recoveries of principal;

     (iv) any amounts allocable to principal for any previous distribution
   date calculated pursuant to clauses (i) through (iii) above that remain
   undistributed; and

     (v) an amount equal to the aggregate of the Class A-P Collection
   Shortfalls, less any amounts paid under this clause on a prior distribution
   date, until paid in full; provided, that distributions under this clause
   (v) shall only be made to the extent of Eligible Funds (as described in the
   definition of Eligible Funds) on any distribution date.

     CLASS M PERCENTAGE--With respect to the Class M-1, Class M-2 and Class M-3
Certificates and any distribution date, a percentage that will initially equal
approximately 1.90%, 0.75% and 0.45%, respectively, and each will in no event
exceed 100%. The Class M-1, Class M-2 and Class M-3 Percentages will each be
adjusted for each distribution date to be the percentage equal to the
Certificate Principal Balance of the related class of Class M Certificates
immediately prior to that distribution date divided by the aggregate Stated
Principal Balance of all of the mortgage loans, other than the related Discount
Fraction of each Discount Mortgage Loan, immediately prior to that distribution
date. The initial Class M-1, Class M-2 and Class M-3 Percentages are greater
than the initial percentage interests in the trust evidenced by the Class M-1,
Class M-2 and Class M-3 Certificates, respectively, because the Class M-1,
Class M-2 and Class M-3 Percentages are calculated without regard to the
Discount Fraction of the Stated Principal Balance of each Discount Mortgage
Loan.

     CREDIT SUPPORT DEPLETION DATE--The first distribution date on which the
Senior Percentage equals 100%.


                                      S-31
<PAGE>

     DECEASED HOLDER--A beneficial owner of an Insured Certificate who was a
natural person living at the time that holder's interest was acquired and whose
executor or other authorized representative causes to be furnished to the
participant, evidence of death satisfactory to the participant and any tax
waivers requested by the participant.

     DISCOUNT FRACTION--With respect to each Discount Mortgage Loan, a
fraction, expressed as a percentage, the numerator of which is 7.75% minus the
Net Mortgage Rate for such Discount Mortgage Loan and the denominator of which
is 7.75%. The Class A-P Certificates will be entitled to payments based on the
Discount Fraction of the Discount Mortgage Loans.

     DISCOUNT MORTGAGE LOAN--Any mortgage loan with a Net Mortgage Rate less
than 7.75% per annum.

     ELIGIBLE FUNDS--On any distribution date, the portion, if any, of the
Available Distribution Amount remaining after reduction by the sum of the
Senior Interest Distribution Amount, the Senior Principal Distribution Amount,
determined without regard to clause (iv) of its definition, the Class A-P
Distribution Amount, determined without regard to clause (v) of its definition,
and the aggregate amount of Accrued Certificate Interest on the Class M, Class
B-1 and Class B-2 Certificates.

     EXCESS BANKRUPTCY LOSSES--Bankruptcy Losses in excess of the Bankruptcy
Amount.

     EXCESS FRAUD LOSSES--Fraud Losses in excess of the Fraud Loss Amount.

     EXCESS SPECIAL HAZARD LOSSES--Special Hazard Losses in excess of the
Special Hazard Amount.

     EXCESS SUBORDINATE PRINCIPAL AMOUNT--With respect to any distribution date
on which the Certificate Principal Balance of the most subordinate class or
classes of certificates then outstanding is to be reduced to zero and on which
Realized Losses are to be allocated to that class or those classes, the amount,
if any, by which (i) the amount of principal that would otherwise be
distributable on that class or those classes of certificates on that
distribution date is greater than (ii) the excess, if any, of the aggregate
Certificate Principal Balance of that class or those classes of certificates
immediately prior to that distribution date over the aggregate amount of
Realized Losses to be allocated to that class or those classes of certificates
on that distribution date, as reduced by any amount calculated pursuant to
clause (v) of the definition of "Class A-P Distribution Amount."

     FINAL DISPOSITION--With respect to a defaulted mortgage loan, a Final
Disposition is deemed to have occurred upon a determination by the master
servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the master servicer reasonably and in
good faith expects to be finally recoverable with respect to the mortgage loan.


     GUARANTEED DISTRIBUTION--With respect to the Insured Certificates
together, (i) one full month's interest on the Certificate Principal Balance of
the Insured Certificates at the respective pass-through rate indicated in the
table on page S-6 in this prospectus supplement, net of (a) any Prepayment
Interest Shortfalls covered by the Reserve Fund or any Compensating Interest
allocated to the Insured Certificates, and (b) any interest shortfalls relating
to the Relief Act allocated to the Insured Certificates, (ii) the principal
portion of any Realized Loss allocated to the Insured Certificates and (iii)
the Certificate Principal Balance of the Insured Certificates to the extent
unpaid on the final distribution date or earlier termination of the trust
pursuant to the terms of the pooling and servicing agreement.

     INTEREST ACCRUAL PERIOD--For all classes of certificates, other than the
Adjustable Rate Certificates, the calendar month preceding the month in which
the distribution date occurs. The Interest Accrual Period for the Adjustable
Rate Certificates is the one-month period commencing on the 25th day of the
month preceding the month in which the distribution date occurs and ending on
the 24th day of the month in which the distribution date occurs. In spite of
the foregoing, the distributions of interest on any distribution date for all
classes of certificates, including the Adjustable Rate Certificates, will
reflect interest accrued, and receipts for that interest accrued, on the
mortgage loans for the preceding calendar month, as may be reduced by any
Prepayment Interest Shortfall and other shortfalls in collections of interest
to the extent described in this prospectus supplement.

     LOCKOUT PERCENTAGE--For any distribution date occurring prior to the
distribution date in November 2005, 0%. For any distribution date occurring
after the first five years following the closing date, a percentage determined
as follows:


                                      S-32
<PAGE>

    o for any distribution date during the sixth year after the closing date,
      30%;

    o for any distribution date during the seventh year after the closing
      date, 40%;

    o for any distribution date during the eighth year after the closing date,
      60%;

    o for any distribution date during the ninth year after the closing date,
      80%; and

    o for any distribution date thereafter, 100%.

     NON-DISCOUNT MORTGAGE LOAN--The mortgage loans other than the Discount
Mortgage Loans.

     NOTIONAL AMOUNT--As of any date of determination, the Notional Amount of
the Class A-5 Certificates is equal to the Certificate Principal Balance of the
Floater Certificates immediately prior to that date. The initial Notional
Amount of the Class A-5 Certificates is approximately $10,081,456. As of any
date of determination, the Notional Amount of the Variable Strip Certificates
is equal to the aggregate Stated Principal Balance of the mortgage loans
immediately prior to that date. Reference to a Notional Amount with respect to
any Variable Strip Certificate or Class A-5 Certificate is solely for
convenience in specific calculations and does not represent the right to
receive any distributions allocable to principal.

     PREFERENCE AMOUNT--With respect to the Insured Certificates, any payment
of a Guaranteed Distribution on an Insured Certificate which has become due for
payment under the pooling and servicing agreement and which is made to a holder
of an Insured Certificate by or on behalf of the trustee which has been deemed
a preferential transfer and theretofore recovered from the holder of an Insured
Certificate pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court of competent jurisdiction.

     RESERVE FUND--A fund established at the time of the issuance of the
certificates solely for the benefit of the Insured Certificates by an initial
deposit into the Reserve Fund of approximately $22,000 by the senior
underwriter. The Reserve Fund will be maintained by the trustee in a separate
account. The Reserve Fund will be beneficially owned by the senior underwriter
and will not be an asset of the trust. A withdrawal will be made on each
distribution date from amounts on deposit in the Reserve Fund, to the extent
funds are available therein, to cover any Prepayment Interest Shortfalls
allocated to the Insured Certificates that were not offset by the master
servicer. Once the Reserve Fund has been reduced to zero, the policy will cover
any Prepayment Interest Shortfalls allocated to the Insured Certificates that
were not offset by the master servicer. The balance of any amount remaining in
the Reserve Fund on the distribution date on which the Certificate Principal
Balance of the Insured Certificates has been reduced to zero will be
distributed to the senior underwriter.

     ROUNDING ACCOUNT--A non-interest bearing account to be established on the
closing date for the Insured Certificates with a $999.99 deposit by the senior
underwriter.

     SENIOR ACCELERATED DISTRIBUTION PERCENTAGE--For any distribution date
occurring prior to the distribution date in November 2005, 100%. The Senior
Accelerated Distribution Percentage for any distribution date occurring after
the first five years following the closing date will be as follows:

    o for any distribution date during the sixth year after the closing date,
      the Senior Percentage for that distribution date plus 70% of the
      Subordinate Percentage for that distribution date;

    o for any distribution date during the seventh year after the closing
      date, the Senior Percentage for that distribution date plus 60% of the
      Subordinate Percentage for that distribution date;

    o for any distribution date during the eighth year after the closing date,
      the Senior Percentage for that distribution date plus 40% of the
      Subordinate Percentage for that distribution date;

    o for any distribution date during the ninth year after the closing date,
      the Senior Percentage for that distribution date plus 20% of the
      Subordinate Percentage for that distribution date; and

    o for any distribution date thereafter, the Senior Percentage for that
      distribution date.

If on any distribution date the Senior Percentage exceeds the initial Senior
Percentage, the Senior Accelerated Distribution Percentage for that
distribution date will once again equal 100%.


                                      S-33
<PAGE>

     Any scheduled reduction to the Senior Accelerated Distribution Percentage
shall not be made as of any distribution date unless either:

     (a)(i)(X) the outstanding principal balance of mortgage loans delinquent
   60 days or more averaged over the last six months, as a percentage of the
   aggregate outstanding Certificate Principal Balance of the Class M
   Certificates and Class B Certificates, is less than 50% or (Y) the
   outstanding principal balance of mortgage loans delinquent 60 days or more
   averaged over the last six months, as a percentage of the aggregate
   outstanding principal balance of all mortgage loans averaged over the last
   six months, does not exceed 2%, and

     (ii) Realized Losses on the mortgage loans to date for that distribution
   date, if occurring during the sixth, seventh, eighth, ninth or tenth year,
   or any year thereafter, after the closing date, are less than 30%, 35%,
   40%, 45% or 50%, respectively, of the sum of the initial Certificate
   Principal Balances of the Class M Certificates and Class B Certificates; or


     (b)(i) the outstanding principal balance of mortgage loans delinquent 60
   days or more averaged over the last six months, as a percentage of the
   aggregate outstanding principal balance of all mortgage loans averaged over
   the last six months, does not exceed 4%, and

     (ii) Realized Losses on the mortgage loans to date for that distribution
   date, if occurring during the sixth, seventh, eighth, ninth or tenth year,
   or any year thereafter, after the Closing Date, are less than 10%, 15%,
   20%, 25% or 30%, respectively, of the sum of the initial Certificate
   Principal Balances of the Class M Certificates and Class B Certificates.

Notwithstanding the foregoing, upon reduction of the Certificate Principal
Balances of the Senior Certificates, other than the Class A-P Certificates, to
zero, the Senior Accelerated Distribution Percentage will equal 0%.

     SENIOR INTEREST DISTRIBUTION AMOUNT--The aggregate amount of Accrued
Certificate Interest to be distributed to the holders of the Senior
Certificates for that distribution date, including the Accrual Distribution
Amount.

     SENIOR PERCENTAGE--As of each distribution date, the percentage equal to
the aggregate Certificate Principal Balance of the Senior Certificates, other
than the Class A-P Certificates, immediately prior to that distribution date
divided by the aggregate Stated Principal Balance of all of the mortgage loans,
other than the Discount Fraction of the Discount Mortgage Loans, immediately
prior to that distribution date. The Senior Percentage will initially equal
approximately 96.24% and will in no event exceed 100%. The initial Senior
Percentage is less than the initial percentage interest in the trust evidenced
by the Senior Certificates in the aggregate because that percentage is
calculated without regard to either the Certificate Principal Balance of the
Class A-P Certificates or the Discount Fraction of the Stated Principal Balance
of each Discount Mortgage Loan.

     SENIOR PRINCIPAL DISTRIBUTION AMOUNT--With respect to any distribution
date, the lesser of (a) the balance of the Available Distribution Amount
remaining after the Senior Interest Distribution Amount and Class A-P
Distribution Amount have been distributed and (b) the sum of:

     (i) the product of (A) the then-applicable Senior Percentage and (B) the
   aggregate of the following amounts:

         (1) the principal portion of all scheduled monthly payments on the
       mortgage loans, other than the related Discount Fraction of the
       principal portion of those payments with respect to each Discount
       Mortgage Loan, due on the related due date, whether or not received on
       or prior to the related determination date, less the principal portion
       of Debt Service Reductions, other than the related Discount Fraction of
       the principal portion of the Debt Service Reductions with respect to
       each Discount Mortgage Loan, which together with other Bankruptcy Losses
       are in excess of the Bankruptcy Amount;

         (2) the principal portion of all proceeds of the repurchase of a
       mortgage loan or, in the case of a substitution, amounts representing a
       principal adjustment, other than the related Discount Fraction of the
       principal portion of those proceeds with respect to each Discount
       Mortgage Loan, as required by the pooling and servicing agreement during
       the preceding calendar month; and


                                      S-34
<PAGE>

         (3) the principal portion of all other unscheduled collections
       received during the preceding calendar month, other than full and
       partial mortgagor prepayments and any amounts received in connection
       with a Final Disposition of a mortgage loan described in clause (ii)
       below, to the extent applied as recoveries of principal, other than the
       related Discount Fraction of the principal portion of those unscheduled
       collections, with respect to each Discount Mortgage Loan;

     (ii) in connection with the Final Disposition of a mortgage loan (x) that
   occurred in the preceding calendar month and (y) that did not result in any
   Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses
   or Extraordinary Losses, an amount equal to the lesser of:

         (1) the then-applicable Senior Percentage of the Stated Principal
       Balance of the mortgage loan, other than the related Discount Fraction
       of the Stated Principal Balance, with respect to a Discount Mortgage
       Loan; and

         (2) the then-applicable Senior Accelerated Distribution Percentage of
       the related unscheduled collections, including Insurance Proceeds and
       Liquidation Proceeds, to the extent applied as recoveries of principal,
       in each case other than the portion of the collections, with respect to
       a Discount Mortgage Loan, included in clause (iii) of the definition of
       Class A-P Distribution Amount;

     (iii) the then-applicable Senior Accelerated Distribution Percentage of
   the aggregate of all full and partial mortgagor prepayments made by the
   respective mortgagors of the mortgage loans during the preceding calendar
   month, other than the related Discount Fraction of mortgagor prepayments,
   with respect to each Discount Mortgage Loan;

     (iv) any Excess Subordinate Principal Amount for that distribution date;
and

     (v) any amounts allocable to principal for any previous distribution date
   calculated pursuant to clauses (i) through (iii) above that remain
   undistributed to the extent that any of those amounts are not attributable
   to Realized Losses which were allocated to the Class M Certificates or
   Class B Certificates.

     SUBORDINATE PERCENTAGE--As of any date of determination a percentage equal
to 100% minus the Senior Percentage as of that date.

INTEREST DISTRIBUTIONS

     Holders of each class of Senior Certificates other than the Principal Only
Certificates will be entitled to receive interest distributions in an amount
equal to the Accrued Certificate Interest on that class on each distribution
date, to the extent of the Available Distribution Amount for that distribution
date, commencing on the first distribution date in the case of all classes of
Senior Certificates entitled to interest distributions, other than the Accrual
Certificates, and commencing on the Accretion Termination Date in the case of
the Accrual Certificates.

     Holders of each class of Class M Certificates will be entitled to receive
interest distributions in an amount equal to the Accrued Certificate Interest
on that class on each distribution date, to the extent of the Available
Distribution Amount for that distribution date after distributions of interest
and principal to the Senior Certificates, reimbursements for some Advances to
the master servicer and distributions of interest and principal to any class of
Class M Certificates having a higher payment priority.

     As described in the definition of "Accrued Certificate Interest", Accrued
Certificate Interest on each class of certificates is subject to reduction in
the event of specified interest shortfalls allocable thereto. However, in the
event that any such interest shortfall is allocated to the Insured
Certificates, the amount of such allocated interest shortfall will be drawn
under the policy and distributed to the holders of the Insured Certificates;
provided that:

    o no such draw will be made against, and therefore the Insured
      Certificates will not be protected against, any such shortfall caused by
      the Relief Act; and

    o no such draw will be made in respect of any interest shortfall otherwise
      covered by the master servicer in the form of Compensating Interest or by
      the Reserve Fund.


                                      S-35
<PAGE>

Notwithstanding the foregoing, if payments were not made as required under the
policy, any interest shortfalls may be allocated to the Insured Certificates as
set forth in the definition of "Accrued Certificate Interest."

     The Principal Only Certificates are not entitled to distributions of
interest.

     Prepayment Interest Shortfalls will result because interest on prepayments
in full is distributed only to the date of prepayment, and because no interest
is distributed on prepayments in part, as these prepayments in part are applied
to reduce the outstanding principal balance of the related mortgage loans as of
the due date in the month of prepayment.

     However, with respect to any distribution date, any Prepayment Interest
Shortfalls resulting from prepayments in full during the preceding calendar
month will be offset by the master servicer, but only to the extent those
Prepayment Interest Shortfalls do not exceed an amount equal to the lesser of
(a) one-twelfth of 0.125% of the Stated Principal Balance of the mortgage loans
immediately preceding that distribution date and (b) the sum of the master
servicing fee payable to the master servicer for its master servicing
activities and reinvestment income received by the master servicer on amounts
payable with respect to that distribution date. Prepayment Interest Shortfalls
resulting from partial prepayments will not be offset by the master servicer
from master servicing compensation or otherwise. No assurance can be given that
the master servicing compensation available to cover Prepayment Interest
Shortfalls will be sufficient therefor See "Pooling and Servicing
Agreement--Servicing and Other Compensation and Payment of Expenses" in this
prospectus supplement.

     If on any distribution date the Available Distribution Amount is less than
Accrued Certificate Interest on the Senior Certificates for that distribution
date, the shortfall will be allocated among the holders of all classes of
Senior Certificates in proportion to the respective amounts of Accrued
Certificate Interest for that distribution date. In addition, the amount of any
such interest shortfalls that are covered by subordination, specifically,
interest shortfalls not described in clauses (i) through (iv) in the definition
of Accrued Certificate Interest, will be unpaid Accrued Certificate Interest
and will be distributable to holders of the certificates of those classes
entitled to those amounts on subsequent distribution dates, in each case to the
extent of available funds after interest distributions as required in this
prospectus supplement.

     These interest shortfalls could occur, for example, if delinquencies on
the mortgage loans were exceptionally high and were concentrated in a
particular month and Advances by the master servicer did not cover the
shortfall. Any amounts so carried forward will not bear interest. Any interest
shortfalls will not be offset by a reduction in the servicing compensation of
the master servicer or otherwise, except to the limited extent described in the
second preceding paragraph with respect to Prepayment Interest Shortfalls
resulting from prepayments in full.

     Notwithstanding the foregoing, in the case of the Insured Certificates, to
the extent that Prepayment Interest Shortfalls are not offset by the master
servicer as described in the third preceding paragraph and are not otherwise
covered by the Reserve Fund, such interest shortfalls shall be covered by the
policy. See "--The Policy" in this prospectus supplement.

     On or prior to the distribution date on which the Accretion Termination
Date occurs, interest shortfalls allocated to the Accrual Certificates will
reduce the amount that is added to the Certificate Principal Balance of those
certificates in respect of Accrued Certificate Interest on that distribution
date, and will result in a corresponding reduction of the amount available for
distributions relating to principal on the Accretion Directed Certificates and
will cause the Certificate Principal Balance of those certificates to be
reduced to zero later than would otherwise be the case. See "Certain Yield and
Prepayment Considerations" in this prospectus supplement. Any interest
shortfalls allocated to the Accrual Certificates will cause the Certificate
Principal Balance of those certificates to be less than would otherwise be the
case and will reduce the amount of Accrued Certificate Interest that will
accrue on those certificates after that distribution date.

     The pass-through rates on all classes of offered certificates, other than
the Adjustable Rate, Variable Strip and Principal Only Certificates, are fixed
and are listed on page S-6 of this prospectus supplement.


                                      S-36
<PAGE>

   The pass-through rates on the Adjustable Rate Certificates are calculated
   as follows:

     (1) The pass-through rate on the Class A-4 Certificates with respect to
   the initial Interest Accrual Period is 7.520% per annum, and as to any
   Interest Accrual Period thereafter, will be a per annum rate equal to 0.90%
   plus LIBOR, with a maximum rate of 9.00% per annum and a minimum rate of
   0.90% per annum.

     (2) The pass-through rate on the Class A-5 Certificates with respect to
   the initial Interest Accrual Period is 1.480% per annum, and as to any
   Interest Accrual Period thereafter, will be a per annum rate equal to 8.10%
   minus LIBOR, with a maximum rate of 8.10% per annum and a minimum rate of
   0.00% per annum.

     The pass-through rates on the Adjustable Rate Certificates for the current
and immediately preceding Interest Accrual Period may be obtained by
telephoning the trustee at (800) 524-9472.

     The pass-through rate on the Variable Strip Certificates on each
distribution date will equal the weighted average, as of the due date in the
month preceding the month in which that distribution date occurs, of the pool
strip rates on each of the mortgage loans in the mortgage pool. The pool strip
rate on any mortgage loan is equal to its Net Mortgage Rate minus 7.75%, but
not less than 0.00%. As of the cut-off date, the pool strip rates on the
mortgage loans range between 0.00% and 1.67% per annum. The initial
pass-through rate on the Variable Strip Certificates is 0.3487% per annum.

     As described in this prospectus supplement, the Accrued Certificate
Interest allocable to each class of certificates, other than the Principal Only
Certificates, which are not entitled to distributions of interest, is based on
the Certificate Principal Balance of that class or, in the case of any class of
Interest Only Certificates, on the Notional Amount of that class.

     At the option of the initial holder of the Variable Strip Certificates,
any Variable Strip Certificate can be exchanged by that holder for one or more
Variable Strip Certificates that represent, in the aggregate, the same Notional
Amount, and the pass-through rate and Notional Amount of each Variable Strip
Certificate so exchanged will be based on the pool strip rates and Stated
Principal Balances of the mortgage loans corresponding to that Variable Strip
Certificate


DETERMINATION OF LIBOR

     LIBOR for any Interest Accrual Period after the initial Interest Accrual
Period will be determined as described in the three succeeding paragraphs.

     On each distribution date, LIBOR shall be established by the trustee and
as to any Interest Accrual Period, LIBOR will equal the rate for United States
dollar deposits for one month which appears on the Dow Jones Telerate Screen
Page 3750 as of 11:00 A.M., London time, on the second LIBOR Business Day prior
to the first day of that Interest Accrual Period -- the LIBOR rate adjustment
date. Telerate Screen Page 3750 means the display designated as page 3750 on
the Telerate Service or any other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks. If
the rate does not appear on that page or any other page as may replace that
page on that service, or if the service is no longer offered, any other service
for displaying LIBOR or comparable rates as may be selected by the trustee
after consultation with the master servicer, the rate will be the reference
bank rate.

     The reference bank rate will be determined on the basis of the rates at
which deposits in U.S. Dollars are offered by the reference banks, which shall
be three major banks that are engaged in transactions in the London interbank
market, selected by the trustee after consultation with the master servicer.
The reference bank rate will be determined as of 11:00 A.M., London time, on
the day that is one LIBOR business day prior to the immediately preceding
distribution date to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the aggregate Certificate Principal
Balance of the Adjustable Rate Certificates then outstanding. The trustee will
request the principal London office of each of the reference banks to provide a
quotation of its rate. If at least two quotations are provided, the rate will
be the arithmetic mean of the quotations. If on that date fewer than two
quotations are provided as requested, the rate will be the arithmetic mean of
the rates quoted by one or


                                      S-37
<PAGE>

more major banks in New York City, selected by the trustee after consultation
with the master servicer, as of 11:00 A.M., New York City time, on that date
for loans in U.S. Dollars to leading European banks for a period of one month
in amounts approximately equal to the aggregate Certificate Principal Balance
of the Adjustable Rate Certificates then outstanding. If no quotations can be
obtained, the rate will be LIBOR for the prior distribution date, or in the
case of the first LIBOR rate adjustment date, 6.620% with respect to the
Adjustable Rate Certificates; provided however, if, under the priorities listed
previously in this paragraph, LIBOR for a distribution date would be based on
LIBOR for the previous distribution date for the third consecutive distribution
date, the trustee shall select an alternative comparable index over which the
trustee has no control, used for determining one-month Eurodollar lending rates
that is calculated and published or otherwise made available by an independent
party. LIBOR business day means any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.

     The establishment of LIBOR by the trustee and the trustee's subsequent
calculation of the pass-through rates applicable to the Adjustable Rate
Certificates for the relevant Interest Accrual Period, in the absence of
manifest error, will be final and binding.


PRINCIPAL DISTRIBUTIONS ON THE SENIOR CERTIFICATES

     The holders of the Senior Certificates, other than the Interest Only
Certificates which are not entitled to distributions of principal, will be
entitled to receive on each distribution date, in the priority described in
this prospectus supplement and to the extent of the portion of the Available
Distribution Amount remaining after the distribution of the Senior Interest
Distribution Amount, other than the Accrual Distribution Amount, a distribution
allocable to principal equal to the Senior Principal Distribution Amount, the
Class A-P Distribution Amount and the Accrual Distribution Amount.

     Distributions of principal on the Senior Certificates on each distribution
date will be made, after distribution of the Senior Interest Distribution
Amount, other than the Accrual Distribution Amount, as follows:

       (a) Prior to the occurrence of the Credit Support Depletion Date:

         (i) the Class A-P Distribution Amount shall be distributed to the
       Class A-P Certificates, in reduction of the Certificate Principal
       Balance thereof, until the Certificate Principal Balance thereof has
       been reduced to zero;

         (ii) an amount equal to the Accrual Distribution Amount shall be
       distributed to the Class A-1 Certificates, until the Certificate
       Principal Balance thereof has been reduced to zero;

         (iii) the Senior Principal Distribution Amount shall be distributed to
       the Lockout Certificates, in reduction of the Certificate Principal
       Balance thereof, in an amount equal to the Lockout Percentage of the
       Lockout Certificates' pro rata share (based on the Certificate Principal
       Balance thereof relative to the aggregate Certificate Principal Balance
       of all of the Certificates (other than the Principal Only Certificates))
       of the aggregate of the collections described in clauses (i), (ii),
       (iii) and (v) of the definition of Senior Principal Distribution Amount
       without any application of the Senior Percentage or Senior Accelerated
       Distribution Percentage;

       provided that, if the aggregate of the amounts set forth in clauses (i),
       (ii), (iii) and (v) of the definition of Senior Principal Distribution
       Amount is more than the balance of the Available Distribution Amount
       remaining after the Senior Interest Distribution Amount and the Class
       A-P Distribution Amount have been distributed, the amount paid to the
       Lockout Certificates pursuant to this clause (iii) shall be reduced by
       an amount equal to the Lockout Certificates' pro rata share (based on
       the Certificate Principal Balance thereof relative to the aggregate
       Certificate Principal Balance of all classes of Senior Certificates
       (other than the Principal Only Certificates)) of such difference;


                                      S-38
<PAGE>

         (iv) the balance of the Senior Principal Distribution Amount remaining
       after the distributions, if any, described in clause (iii) above shall
       be distributed concurrently, to the Class R-I Certificates and Class
       R-II Certificates, on a pro rata basis, until the Certificate Principal
       Balances thereof have been reduced to zero;

         (v) an amount equal to $35,800.00 of the balance of the Senior
       Principal Distribution Amount remaining after the distributions, if any,
       described in clauses (iii) and (iv) above shall be distributed for each
       distribution date commencing on the distribution date in November 2003,
       concurrently, to the Class A-3 Certificates and Class A-4 Certificates,
       on a pro rata basis in accordance with their respective outstanding
       Certificate Principal Balances (plus any amount described in this clause
       (v) remaining unpaid from any previous distribution date), until the
       Certificate Principal Balances thereof have been reduced to zero;

         (vi) the balance of the Senior Principal Distribution Amount remaining
       after the distributions, if any, described in clauses (iii) through (v)
       above shall be distributed, in the following order of priority:

            (A) first, to the Class A-1 Certificates, until the Certificate
          Principal Balance thereof has been reduced to zero; and

            (B) second, to the Class A-2 Certificates, until the Certificate
          Principal Balance thereof has been reduced to zero;

         (vii) the balance of the Senior Principal Distribution Amount
       remaining after the distributions, if any, described in clauses (iii)
       through (vi) above shall be distributed concurrently, to the Class A-3
       Certificates and Class A-4 Certificates, on a pro rata basis in
       accordance with their respective outstanding Certificate Principal
       Balances, until the Certificate Principal Balances thereof have been
       reduced to zero; and

         (viii) the balance of the Senior Principal Distribution Amount
       remaining after the distributions, if any, described in clauses (iii)
       through (vii) above shall be distributed to the Lockout Certificates,
       until the Certificate Principal Balance thereof has been reduced to
       zero.

     (b) On or after the occurrence of the Credit Support Depletion Date, all
   priorities relating to distributions as described in clause (a) above
   relating to principal among the Senior Certificates, other than the Class
   A-P Certificates, will be disregarded. Instead, an amount equal to the
   Discount Fraction of the principal portion of scheduled and unscheduled
   payments received or advanced relating to Discount Mortgage Loans will be
   distributed to the Class A-P Certificates, and the Senior Principal
   Distribution Amount will be distributed to the Senior Certificates
   remaining, other than the Class A-P Certificates, pro rata in accordance
   with their respective outstanding Certificate Principal Balances and the
   Senior Interest Distribution Amount will be distributed as described under
   "Interest Distributions."

     (c) After reduction of the Certificate Principal Balances of the Senior
   Certificates, other than the Class A-P Certificates, to zero but prior to
   the Credit Support Depletion Date, the Senior Certificates, other than the
   Class A-P Certificates, will be entitled to no further distributions of
   principal and the Available Distribution Amount will be paid solely to the
   holders of the Class A-P, Class A-V, Class M and Class B Certificates, in
   each case as described in this prospectus supplement.


PRINCIPAL DISTRIBUTIONS ON THE INSURED CERTIFICATES

     General. Beneficial owners of the Insured Certificates have the right to
request that distributions of principal be made with respect to their
certificates on any distribution date on which that class of certificates is
entitled to receive distributions of principal. As to distributions of
principal among holders of the Insured Certificates, Deceased Holders who
request distributions will be entitled to first priority, and beneficial owners
of the Insured Certificates other than Deceased Holders, referred to as Living
Holders, who request distributions will be entitled to a second priority.


                                      S-39
<PAGE>

     Prospective certificateholders in the Insured Certificates should be aware
that distributions of principal on those certificates may be significantly
earlier or later than the date that may be desired by that certificateholder.
All such requested distributions are subject to the priorities described below
under "--Priority of Requested Distributions" and are further subject to the
limitation that they be made (i) only in lots equal to integral multiples of
$1,000 of the related initial Certificate Principal Balance, each such
certificate referred to as an Individual Insured Certificate and (ii) only to
the extent that the portion of the Senior Principal Distribution Amount
allocated to the Insured Certificates on the applicable distribution date (plus
any amounts available from the Rounding Account) provides sufficient funds for
such requested distributions. To the extent that amounts available for
distributions in respect of principal on the Insured Certificates on any
distribution date exceed the aggregate amount of the requests made by Deceased
Holders and Living Holders for principal distributions applicable to that
distribution date, such excess amounts will be distributed to the beneficial
owners of the Insured Certificates by random lot, as described below under
"--Mandatory Distributions of Principal on the Insured Certificates."

     On each distribution date on which amounts are available for distributions
in reduction of the Certificate Principal Balance of the Insured Certificates,
the aggregate amount allocable to such distributions for that class will be
rounded, as necessary, to an amount equal to an integral multiple of $1,000,
except as provided below, in accordance with the limitations set forth in this
prospectus supplement. Such rounding will be accomplished on the first
distribution date on which distributions of principal on the Insured
Certificates are made by withdrawing from the Rounding Account the amount of
funds, if any, needed to round the amount otherwise available for that
distribution with respect to the Insured Certificates upward to the next higher
integral multiple of $1,000. On each succeeding distribution date on which
distributions of principal on the Insured Certificates are to be made, the
aggregate amount allocable to the Insured Certificates will be applied first to
repay any funds withdrawn from the Rounding Account on the prior distribution
date, and then the remainder of such allocable amount, if any, will be
similarly rounded upward through another withdrawal from the Rounding Account
and distributed in reduction of the Certificate Principal Balance of the
Insured Certificates. This process will continue on succeeding distribution
dates until the Certificate Principal Balance of the Insured Certificates has
been reduced to zero. Thus, the aggregate distribution made in reduction of the
Certificate Principal Balance of the Insured Certificates on each distribution
date may be slightly more or less than would be the case in the absence of such
rounding procedures, but such difference will be no more than $999.99 on any
distribution date. Under no circumstances will the sum of all distributions
made in reduction of the Certificate Principal Balance of the Insured
Certificates, through any distribution date, be less than the sum of such
distributions that would have resulted in the absence of such rounding
procedures. The Class R Certificates will be entitled to any amount remaining
in the Rounding Account after the Certificate Principal Balance of the Insured
Certificates has been reduced to zero.

     Notwithstanding any provisions in this prospectus supplement to the
contrary, on each distribution date following the first distribution date on
which any Realized Losses are allocated to the Insured Certificates, including
any Realized Losses allocated to the Insured Certificates for which payment is
not made under the policy, distribution in reduction of the Certificate
Principal Balance of the Insured Certificates will be made pro rata among the
holders of the Insured Certificates in accordance with the outstanding
Certificate Principal Balance and will not be made in integral multiples of
$1,000 or pursuant to requested distributions or mandatory distributions by
random lot.

     There is no assurance that a beneficial owner of an Insured Certificate
who has submitted a request for a distribution will receive the distribution at
any particular time after the distribution is requested, since there can be no
assurance that funds will be available for making those distributions on any
particular distribution date, or, even if funds are available for making
principal distributions on the Insured Certificates, that such distributions
will be made to any particular beneficial owner whether that beneficial owner
is a Deceased Holder or a Living Holder. Also, due to the procedure for
mandatory distributions described below under "--Mandatory Distributions of
Principal on the Insured Certificates," there can be no assurance that on any
distribution date on which the funds available for distribution in respect of
principal of the Insured Certificates exceed the aggregate amount of
distributions requested by beneficial owners of certificates of that class, any
particular beneficial owner will receive a principal distribution from those
excess funds. THUS, THE TIMING OF DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE



                                      S-40
<PAGE>

PRINCIPAL BALANCE FOR ANY PARTICULAR INSURED CERTIFICATE, WHETHER OR NOT THE
SUBJECT OF A REQUEST FOR DISTRIBUTION BY A DECEASED HOLDER OR A LIVING HOLDER,
IS HIGHLY UNCERTAIN AND MAY BE MADE EARLIER OR LATER THAN THE DATE THAT MAY BE
DESIRED BY A BENEFICIAL OWNER OF THAT CERTIFICATE.

     Priority of Requested Distributions. Subject to the limitations described
in this prospectus supplement, including the timing and the order of the
receipt of the request for distributions as described below under "--Procedure
for Requested Distributions," beneficial owners of the Insured Certificates
have the right to request that distributions be made in reduction of the
Certificate Principal Balance of those certificates. On each distribution date
on which distributions in reduction of the Certificate Principal Balance of the
Insured Certificates are made, those distributions will be made in the
following order of priority among the beneficial owners of that class: (i) any
request by a Deceased Holder, in an amount up to but not exceeding $100,000 per
request; and (ii) any request by a Living Holder, in an amount up to but not
exceeding $10,000 per request. Thereafter, distributions will be made as
provided in clauses (i) and (ii) above up to a second $100,000 and $10,000,
respectively. This sequence of priorities will be repeated for each request for
principal distributions made by the beneficial owners of the Insured
Certificates until all such requests have been honored.

     Procedure for Requested Distributions. Under the current procedures of
DTC, a beneficial owner may request that distributions in reduction of the
Certificate Principal Balance of its Insured Certificates be made on a
distribution date by delivering a written request for those distributions to
the participant or indirect participant that maintains the beneficial owner's
account with respect to the Insured Certificates so that such request is
received by the trustee from DTC on DTC's "participant terminal system" on or
before the close of business on the last business day of the month next
preceding the month in which the related distribution date occurs, or the
record date for such distribution date. In the case of a request on behalf of a
Deceased Holder, appropriate evidence of death and any tax waivers are required
to be forwarded to the participant under separate cover. Furthermore, those
requests of Deceased Holders that are incomplete may not be honored by the
participant. The participant shall forward a certification satisfactory to the
trustee certifying the death of the beneficial owner and the receipt of the
appropriate death and tax waivers. The participant should in turn make the
request of DTC (or, in the case of an indirect participant, such firm must
notify the related participant of such request, which participant should make
the request of DTC) on DTC's participant terminal system. The trustee will not
accept a request from a person other than DTC. DTC may establish such
procedures as it deems fair and equitable to establish the order of receipt of
requests for those requests for distributions received by it on the same day.
None of the master servicer, the depositor or the trustee shall be liable for
any delay by DTC, any participant or any indirect participant in the delivery
of requests for distributions or withdrawals of those distributions to the
trustee or for any changes made to the procedures described herein by DTC, any
participant or any indirect participant. Requests for distributions are to be
honored in the order of their receipt (subject to the priorities described in
the previous paragraph). The exact procedures to be followed by the trustee for
purposes of determining the order of receipt of such requests will be those
established from time to time by DTC. Requests for distributions of principal
received by DTC and forwarded to the trustee on DTC's participant terminal
system after the record date for such distribution date and requests for
principal distributions received in a timely manner but not accepted with
respect to a given distribution date, will be treated as requests for
distributions on the next succeeding distribution date and each succeeding
distribution date thereafter until each request is accepted or is withdrawn as
described below. Each request for distributions in reduction of the Certificate
Principal Balance of an Insured Certificate submitted by a beneficial owner of
that certificate will be held on DTC's participant terminal system until such
request has been accepted by the trustee or has been withdrawn by the
participant in writing. Each Individual Insured Certificate covered by that
request will continue to bear interest at the related pass-through rate through
the Interest Accrual Period related to such distribution date.

     In the case of a request on behalf of a Deceased Holder, the related
participant shall forward certification satisfactory to the trustee certifying
the death of the beneficial owner and the receipt of the appropriate death and
tax waivers. Insured Certificates beneficially owned by tenants by the
entirety, joint tenants or tenants in common will be considered to be
beneficially owned by a single owner. The death of a tenant by the entirety,
joint tenant or tenant in common will be deemed to be the death of the


                                      S-41
<PAGE>

beneficial owner, and the Insured Certificates so beneficially owned will be
eligible to request priority with respect to distributions in reduction of the
Certificate Principal Balance of those certificates, subject to the limitations
stated in this prospectus supplement. The Insured Certificates beneficially
owned by a trust will be considered to be beneficially owned by each
beneficiary of the trust to the extent of such beneficiary's beneficial
interest in that trust, but in no event will a trust's beneficiaries
collectively be deemed to be beneficial owners of a number of Individual
Insured Certificates greater than the number of Individual Insured Certificates
of which such trust is the owner. The death of a beneficiary of a trust will be
deemed to be the death of a beneficial owner of the Insured Certificates
beneficially owned by the trust but only to the extent of such beneficiary's
beneficial interest in that trust. The death of an individual who was a tenant
by the entirety, joint tenant or tenant in common in a tenancy which is the
beneficiary of a trust will be deemed to be the death of the beneficiary of the
trust. The death of a person who, during his or her lifetime, was entitled to
substantially all of the beneficial ownership interests in Insured Certificates
will be deemed to be the death of the beneficial owner of those certificates
regardless of the registration of ownership, if that beneficial interest can be
established to the satisfaction of the participant. Such beneficial interest
will be deemed to exist in typical cases of street name or nominee ownership,
ownership by a trustee, ownership under the Uniform Gift to Minors Act and
community property or other joint ownership arrangements between a husband and
wife. Beneficial interest shall include the power to sell, transfer or
otherwise dispose of an Insured Certificate and the right to receive the
proceeds therefrom, as well as interest and distributions of principal with
respect thereto. As used in this prospectus supplement, a request for a
distribution in reduction of the Certificate Principal Balance of an Insured
Certificate by a Deceased Holder shall mean a request by the personal
representative, surviving tenant by the entirety, surviving joint tenant or a
surviving tenant in common of the Deceased Holder.

     With respect to Insured Certificates as to which beneficial owners have
requested distributions to be made on a particular distribution date and on
which distributions of principal are being made, the trustee will notify DTC
prior to that distribution date whether, and the extent to which, those
certificates have been accepted for distributions. Participants and indirect
participants holding Insured Certificates are required to forward such notices
to the beneficial owners of those certificates. Individual Insured Certificates
that have been accepted for a distribution will be due and payable on the
applicable distribution date and will cease to bear interest after the Interest
Accrual Period related to such distribution date.

     Any beneficial owner of an Insured Certificate who has requested a
distribution may withdraw its request by so notifying in writing the
participant or indirect participant that maintains that beneficial owner's
account. In the event that such account is maintained by an indirect
participant, the indirect participant must notify the related participant which
in turn must forward the withdrawal of such request, on DTC's participant
terminal system. If that notice of withdrawal of a request for distribution has
not been received on DTC's participant terminal system on or before the record
date for such distribution date, the previously made request for distribution
will be irrevocable with respect to the making of distributions in reduction of
the Certificate Principal Balance of that Insured Certificate on the applicable
distribution date.

     Mandatory Distributions of Principal on the Insured Certificates. To the
extent, if any, that distributions in reduction of the Certificate Principal
Balance of the Insured Certificates on a distribution date exceed the
outstanding Certificate Principal Balance of the Insured Certificates with
respect to which distribution requests have been received by the applicable
record date, additional Insured Certificates in lots equal to Individual
Insured Certificates will be selected to receive principal distributions in
accordance with the then-applicable established random lot procedures of DTC,
and the then-applicable established procedures of the participants and indirect
participants, which may or may not be by random lot. No prior notice will be
provided by the depositor, the master servicer or the trustee to the beneficial
owners of the Insured Certificates for those distributions made by random lot.
Investors may ask those participants or indirect participants what allocation
procedures they use. Participants and indirect participants holding Insured
Certificates selected for mandatory distributions of principal are required to
provide notice of those mandatory distributions to the affected beneficial
owners.


                                      S-42
<PAGE>

THE POLICY

     The following summary of the provisions of the certificate guaranty
insurance policy, referred to in this prospectus supplement as the policy, to
be issued by the insurer does not purport to be complete and is qualified in
its entirety by reference to the policy.

     Simultaneously with the issuance of the certificates, the insurer will
deliver the policy to the trustee for the benefit of each holder of the Class
A-3 Certificates. Under the policy, the insurer unconditionally and irrevocably
guarantees to the trustee for the benefit of each holder of Class A-3
Certificates the full and complete payment of (i) the Guaranteed Distribution
on each distribution date and (ii) the amount of any distribution of principal
or interest to any holder of a certificate of that class which distribution
subsequently is avoided in whole or in part as a preference payment under
applicable law.

     As provided by the policy, the insurer will pay any amount payable
thereunder, other than Preference Amounts, no later than 12:00 noon, New York
City time, on the later of the distribution date on which the related
Guaranteed Distribution is due or the business day following receipt in New
York, New York on a business day by the insurer of a notice; provided that, if
the notice is received after 12:00 noon, New York City time, on that business
day, it will be deemed to be received on the following business day. If any
such notice is not in proper form or is otherwise insufficient for the purpose
of making a claim under the policy, it shall be deemed not to have been
received for purposes of this paragraph, and the insurer shall promptly so
advise the trustee and the trustee may submit an amended notice.

     The insurer will pay any Preference Amount when due to be paid pursuant to
the order referred to below, but in any event on the distribution date next
following receipt on a business day by the insurer of (i) a certified copy of a
final, non-appealable order, referred to as an order, of a court or other body
exercising jurisdiction in such insolvency proceeding to the effect that the
trustee or the holder of a Class A-3 Certificate is required to return such
Preference Amount paid during the term of the policy because such payments were
avoided as a preferential transfer or otherwise rescinded or required to be
restored by the trustee or the holder of a Class A-3 Certificate, (ii) a
certificate by or on behalf of the trustee that the order has been entered and
is not subject to any stay, (iii) an assignment, in form and substance
satisfactory to the insurer, duly executed and delivered by the trustee,
irrevocably assigning to the insurer all rights and claims of the trustee or
the holder of a Class A-3 Certificate relating to or arising under the pooling
and servicing agreement against the estate of the trustee or otherwise with
respect to such Preference Amount and (iv) a notice of nonpayment appropriately
completed and executed by the trustee. Such payment shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the order, and not to the trustee or the holder of a Class A-3 Certificate, as
applicable, directly, unless the trustee or the holder of a Class A-3
Certificate, as applicable, has made a payment of the Preference Amount to the
court or such receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the order, in which case the insurer will pay the trustee
on behalf of the holder of a Class A-3 Certificate, subject to the delivery of
(a) the items referred to in clauses (i), (ii), (iii) and (iv) above to the
insurer and (b) evidence satisfactory to the insurer that payment has been made
to such court or receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the order.

     Under the policy, "business day" means any day other than (i) a Saturday
or Sunday or (ii) a day on which banking institutions in the City of New York,
New York or Chicago, Illinois are authorized or obligated by law or executive
order to be closed.

     "Notice" as used in this sections means the telephonic or telegraphic
notice, promptly confirmed in writing by telecopy substantially in the form
required pursuant to the policy, the original of which is subsequently
delivered by registered or certified mail, from the trustee specifying the
Guaranteed Distribution which will be due and owing on the applicable
distribution date.

     The "term of the policy" means the period from and including the date of
issuance of the policy to and including the date on which (i) the Certificate
Principal Balance of the Class A-3 Certificates is reduced to zero, (ii) any
period during which any payment on the Class A-3 Certificates could have been
avoided in whole or in part as a preference payment under applicable
bankruptcy, insolvency, receivership or similar law has expired, and (iii) if
any proceedings requisite to avoidance as a preference payment have been
commenced prior to the occurrence of (i) and (ii), a final and nonappealable
order in resolution of each such proceeding has been entered.


                                      S-43
<PAGE>

     The insurer's obligations under the policy in respect of Guaranteed
Distributions will be discharged to the extent funds are transferred to the
trustee as provided in the policy whether or not such funds are properly
applied by the trustee.

     The insurer will be subrogated to the rights of each holder of a Class A-3
Certificate to receive distributions on Class A-3 Certificates to the extent of
any payment by the insurer under the policy.

     The terms of the policy cannot be modified or altered by any other
agreement or instrument, or by the merger, consolidation or dissolution of the
depositor. The policy may not be cancelled or revoked prior to payment in full
of the Class A-3 Certificates. The policy is governed by the laws of the State
of New York.


PRINCIPAL DISTRIBUTIONS ON THE CLASS M CERTIFICATES

     Holders of each class of the Class M Certificates will be entitled to
receive on each distribution date, to the extent of the portion of the
Available Distribution Amount remaining after:

    o the sum of the Senior Interest Distribution Amount, Class A-P
      Distribution Amount and Senior Principal Distribution Amount is
      distributed;

    o reimbursement is made to the master servicer for some Advances remaining
      unreimbursed following the final liquidation of the related mortgage loan
      to the extent described below under "Advances";

    o the aggregate amount of Accrued Certificate Interest and principal
      required to be distributed to any class of Class M Certificates having a
      higher payment priority on that distribution date is distributed to
      holders of that class of Class M Certificates; and

    o the aggregate amount of Accrued Certificate Interest required to be
      distributed to that class of Class M Certificates on that distribution
      date is distributed to those Class M Certificates,

     a distribution allocable to principal in the sum of the following:

         (i) the product of (A) the then-applicable related Class M Percentage
       and (B) the aggregate of the following amounts:

            (1) the principal portion of all scheduled monthly payments on the
          mortgage loans, other than the related Discount Fraction of the
          principal portion of those payments with respect to a Discount
          Mortgage Loan, due on the related due date, whether or not received
          on or prior to the related determination date, less the principal
          portion of Debt Service Reductions, other than the related Discount
          Fraction of the principal portion of the Debt Service Reductions with
          respect to a Discount Mortgage Loan, which together with other
          Bankruptcy Losses are in excess of the Bankruptcy Amount;

            (2) the principal portion of all proceeds of the repurchase of a
          mortgage loan or, in the case of a substitution, amounts representing
          a principal adjustment, other than the related Discount Fraction of
          the principal portion of the proceeds with respect to a Discount
          Mortgage Loan, as required by the pooling and servicing agreement
          during the preceding calendar month; and

            (3) the principal portion of all other unscheduled collections
          received during the preceding calendar month, other than full and
          partial mortgagor prepayments and any amounts received in connection
          with a Final Disposition of a mortgage loan described in clause (ii)
          below, to the extent applied as recoveries of principal, other than
          the related Discount Fraction of the principal amount of those
          unscheduled collections, with respect to a Discount Mortgage Loan;

         (ii) that class' pro rata share, based on the Certificate Principal
       Balance of each class of Class M Certificates and Class B Certificates
       then outstanding, of all amounts received in connection with the Final
       Disposition of a mortgage loan, other than the related Discount Fraction
       of those amounts with respect to a Discount Mortgage Loan, (x) that
       occurred during


                                      S-44
<PAGE>

       the preceding calendar month and (y) that did not result in any Excess
       Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
       Extraordinary Losses, to the extent applied as recoveries of principal
       and to the extent not otherwise payable to the Senior Certificates;

         (iii) the portion of full and partial mortgagor prepayments, other
       than the Discount Fraction of those mortgagor prepayments with respect
       to a Discount Mortgage Loan, made by the respective mortgagors during
       the preceding calendar month allocable to that class of Class M
       Certificates as described in the third succeeding paragraph;

         (iv) if that class is the most senior class of certificates then
       outstanding, an amount equal to the Excess Subordinate Principal Amount,
       if any; and

         (v) any amounts allocable to principal for any previous distribution
       date calculated pursuant to clauses (i) through (iii) above that remain
       undistributed to the extent that any of those amounts are not
       attributable to Realized Losses which were allocated to any class of
       Class M Certificates with a lower payment priority or the Class B
       Certificates.

     References in this prospectus supplement to "payment priority" of the
Class M Certificates refer to a payment priority among those classes of
certificates as follows: first, to the Class M-1 Certificates; second, to the
Class M-2 Certificates; and third, to the Class M-3 Certificates.

     As to each class of Class M Certificates, on any distribution date, any
Accrued Certificate Interest thereon remaining unpaid from any previous
distribution date will be distributable to the extent of available funds.
Notwithstanding the foregoing, if the Certificate Principal Balances of the
Class B Certificates have been reduced to zero, on any distribution date, with
respect to the class of Class M Certificates outstanding on that distribution
date with the lowest payment priority, Accrued Certificate Interest thereon
remaining unpaid from any previous distribution date, except in the limited
circumstances provided in the pooling and servicing agreement, will not be
distributable.

     All mortgagor prepayments not otherwise distributable to the Senior
Certificates will be allocated on a pro rata basis among the class of Class M
Certificates with the highest payment priority then outstanding and each other
class of Class M Certificates and Class B Certificates for which certain loss
levels established for that class in the pooling and servicing agreement have
not been exceeded. The related loss level on any distribution date would be
satisfied as to any Class M-2, Class M-3 or Class B Certificates, respectively,
only if the sum of the current percentage interests in the mortgage pool
evidenced by that class and each class, if any, subordinate thereto were at
least equal to the sum of the initial percentage interests in the mortgage pool
evidenced by that class and each class, if any, subordinate thereto.

     As stated above under "--Principal Distributions on the Senior
Certificates," the Senior Accelerated Distribution Percentage will be 100%
during the first five years after the closing date, unless the Certificate
Principal Balances of the Senior Certificates, other than the Class A-P
Certificates, are reduced to zero before the end of that five-year period, and
will thereafter equal 100% whenever the Senior Percentage exceeds the initial
Senior Percentage. Furthermore, as described in this prospectus supplement, the
Senior Accelerated Distribution Percentage will exceed the Senior Percentage
during the sixth through ninth years following the closing date, and scheduled
reductions to the Senior Accelerated Distribution Percentage may be postponed
due to the loss and delinquency experience of the mortgage loans. Accordingly,
each class of the Class M Certificates will not be entitled to any mortgagor
prepayments for at least the first five years after the closing date, unless
the Certificate Principal Balances of the Senior Certificates (other than the
Class A-P Certificates) have been reduced to zero before the end of such
period, and may receive no mortgagor prepayments or a disproportionately small
portion of mortgagor prepayments relative to the related Class M Percentage
during certain periods after this five year period. See "--Principal
Distributions on the Senior Certificates" in this prospectus supplement.


ALLOCATION OF LOSSES; SUBORDINATION

     The subordination provided to the Senior Certificates by the Class B
Certificates and Class M Certificates and the subordination provided to each
class of Class M Certificates by the Class B Certificates and by any class of
Class M Certificates subordinate thereto will cover Realized Losses on the


                                      S-45
<PAGE>

mortgage loans that are Defaulted Mortgage Losses, Fraud Losses, Bankruptcy
Losses and Special Hazard Losses. Any Realized Losses which are not Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses will be allocated as follows:

    o first, to the Class B Certificates;

    o second, to the Class M-3 Certificates;

    o third, to the Class M-2 Certificates; and

    o fourth, to the Class M-1 Certificates

in each case until the Certificate Principal Balance of that class of
certificates has been reduced to zero; and thereafter, if any Realized Loss is
on a Discount Mortgage Loan, to the Class A-P Certificates in an amount equal
to the related Discount Fraction of the principal portion of the Realized Loss
until the Certificate Principal Balance of the Class A-P Certificates has been
reduced to zero, and the remainder of the Realized Losses and the entire amount
of Realized Losses on Non-Discount Mortgage Loans will be allocated among all
the remaining classes of Senior Certificates on a pro rata basis.

     Any allocation of a Realized Loss, other than a Debt Service Reduction, to
a certificate will be made by reducing:

    o its Certificate Principal Balance, in the case of the principal portion
      of the Realized Loss, in each case until the Certificate Principal Balance
      of that class has been reduced to zero, and

    o the Accrued Certificate Interest thereon, in the case of the interest
      portion of the Realized Loss, by the amount so allocated as of the
      distribution date occurring in the month following the calendar month in
      which the Realized Loss was incurred.

In addition, any allocation of a Realized Loss to a Class M Certificate may
also be made by operation of the payment priority to the Senior Certificates
described under "--Principal Distributions on the Senior Certificates" and any
class of Class M Certificates with a higher payment priority.

     As used in this prospectus supplement, subordination refers to the
provisions discussed above for the sequential allocation of Realized Losses
among the various classes, as well as all provisions effecting those
allocations including the priorities for distribution of cash flows in the
amounts described in this prospectus supplement.

     As described in the prospectus, in some circumstances the master servicer
may permit a servicing modification--the modification of a defaulted mortgage
loan to reduce the applicable mortgage rate or to reduce its outstanding
principal amount. Any principal reduction of this type shall constitute a
Realized Loss at the time of the reduction, and the amount by which each
monthly payment is reduced by any mortgage rate reduction shall constitute a
Realized Loss in the month in which each such reduced monthly payment is due.

     Servicing modification reductions shall be allocated when incurred (as
provided above) in the same manner as other Realized Losses as described in
this prospectus supplement. Any Advances made on any mortgage loan will be
reduced to reflect any related servicing modifications previously made. No
servicing modification will have the effect of reducing the mortgage rate below
the sum of the servicing fee rate and the pool strip rate as in effect at the
cut-off date. The mortgage rate and Net Mortgage Rate as to any mortgage loan
will be deemed not reduced by any servicing modification, so that the
calculation of Accrued Certificate Interest payable on the offered certificates
will not be affected by the servicing modification.

     Allocations of the principal portion of Debt Service Reductions to each
class of Class M Certificates and Class B Certificates will result from the
priority of distributions of the Available Distribution Amount as described in
this prospectus supplement, which distributions shall be made first to the
Senior Certificates, second to the Class M Certificates in the order of their
payment priority and third to the Class B Certificates. An allocation of the
interest portion of a Realized Loss as well as the principal portion of Debt
Service Reductions will not reduce the level of subordination, as that term is
defined in this prospectus supplement, until an amount in respect thereof has
been actually disbursed to the Senior Certificateholders or the Class M
Certificateholders, as applicable.


                                      S-46
<PAGE>

     The holders of the offered certificates will not be entitled to any
additional payments with respect to Realized Losses from amounts otherwise
distributable on any classes of certificates subordinate thereto, except in
limited circumstances in respect of any Excess Subordinate Principal Amount, or
in the case of Class A-P Collection Shortfalls, to the extent of Eligible
Funds. Accordingly, the subordination provided to the Senior Certificates,
other than the Class A-P Certificates, and to each class of Class M
Certificates by the respective classes of certificates subordinate thereto with
respect to Realized Losses allocated on any distribution date will be effected
primarily by increasing the Senior Percentage, or the respective Class M
Percentage, of future distributions of principal of the remaining mortgage
loans. Because the Discount Fraction of each Discount Mortgage Loan will not
change over time, the protection from losses provided to the Class A-P
Certificates by the Class M Certificates and Class B Certificates is limited to
the prior right of the Class A-P Certificates to receive distributions in
respect of principal as described in this prospectus supplement. Furthermore,
principal losses on the mortgage loans that are not covered by subordination
will be allocated to the Class A-P Certificates only to the extent they occur
on a Discount Mortgage Loan and only to the extent of the related Discount
Fraction of those losses. The allocation of principal losses on the Discount
Mortgage Loans may result in those losses being allocated in an amount that is
greater or less than would have been the case had those losses been allocated
in proportion to the Certificate Principal Balance of the Class A-P
Certificates. Thus, the Senior Certificates, other than the Class A-P
Certificates, will bear the entire amount of losses that are not allocated to
the Class M Certificates and Class B Certificates, other than the amount
allocable to the Class A-P Certificates, which losses will be allocated among
all classes of Senior Certificates, other than the Class A-P Certificates, as
described in this prospectus supplement.

     Because the Class A-P Certificates are entitled to receive in connection
with the Final Disposition of a Discount Mortgage Loan, on any distribution
date, an amount equal to all unpaid Class A-P Collection Shortfalls to the
extent of Eligible Funds on that distribution date, shortfalls in distributions
of principal on any class of Class M Certificates could occur under some
circumstances, even if that class is not the most subordinate class of
certificates then outstanding.

     Any Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses, Extraordinary Losses or other losses of a type not covered by
subordination on Non-Discount Mortgage Loans will be allocated on a pro rata
basis among the Senior Certificates, other than the Class A-P Certificates,
Class M Certificates and Class B Certificates. Any Realized Losses so allocated
to the Senior Certificates or Class M Certificates will be allocated without
priority among the various classes of Senior Certificates, other than the Class
A-P Certificates, or Class M Certificates. The principal portion of these
losses on Discount Mortgage Loans will be allocated to the Class A-P
Certificates in an amount equal to their related Discount Fraction, and the
remainder of the losses on Discount Mortgage Loans will be allocated among the
remaining certificates on a pro rata basis.

     An allocation of a Realized Loss on a "pro rata basis" among two or more
classes of certificates means an allocation to each of those classes of
certificates on the basis of its then outstanding Certificate Principal Balance
prior to giving effect to distributions to be made on that distribution date in
the case of an allocation of the principal portion of a Realized Loss, or based
on the Accrued Certificate Interest thereon in respect of that distribution
date in the case of an allocation of the interest portion of a Realized Loss;
provided that in determining the Certificate Principal Balance of the Accrual
Certificates for the purpose of allocating any portion of a Realized Loss to
that certificate, the Certificate Principal Balance of that certificate shall
be deemed to be the lesser of:

    o the original Certificate Principal Balance of that certificate and

    o the Certificate Principal Balance of that certificate prior to giving
      effect to distributions to be made on that distribution date.

     In order to maximize the likelihood of distribution in full of the Senior
Interest Distribution Amount, Class A-P Distribution Amount and Senior
Principal Distribution Amount, on each distribution date, holders of Senior
Certificates have a right to distributions of the Available Distribution Amount
that is prior to the rights of the holders of the Class M Certificates and
Class B Certificates, to the extent necessary to satisfy the Senior Interest
Distribution Amount, Class A-P Distribution Amount and Senior


                                      S-47
<PAGE>

Principal Distribution Amount. Similarly, holders of the Class M Certificates
have a right to distributions of the Available Distribution Amount prior to the
rights of holders of the Class B Certificates, and holders of any class of
Class M Certificates with a higher payment priority have a right to
distributions of the Available Distribution Amount prior to the rights of
holders of any class of Class M Certificates with a lower payment priority.

     The application of the Senior Accelerated Distribution Percentage, when it
exceeds the Senior Percentage, to determine the Senior Principal Distribution
Amount will accelerate the amortization of the Senior Certificates in the
aggregate, other than the Class A-P Certificates, relative to the actual
amortization of the mortgage loans. The Class A-P Certificates will not receive
more than the Discount Fraction of any unscheduled payment relating to a
Discount Mortgage Loan. To the extent that the Senior Certificates in the
aggregate, other than the Class A-P Certificates, are amortized faster than the
mortgage loans, in the absence of offsetting Realized Losses allocated to the
Class M Certificates and Class B Certificates, the percentage interest
evidenced by the Senior Certificates in the trust will be decreased, with a
corresponding increase in the interest in the trust evidenced by the Class M
Certificates and Class B Certificates, thereby increasing, relative to their
respective Certificate Principal Balances, the subordination afforded the
Senior Certificates by the Class M Certificates and Class B Certificates
collectively. In addition, if losses on the mortgage loans exceed the amounts
described in this prospectus supplement under "--Principal Distributions on the
Senior Certificates," a greater percentage of full and partial mortgagor
prepayments will be allocated to the Senior Certificates in the aggregate,
other than the Class A-P Certificates, than would otherwise be the case,
thereby accelerating the amortization of the Senior Certificates relative to
the Class M Certificates and Class B Certificates.

     The priority of payments, including principal prepayments, among the Class
M Certificates, as described in this prospectus supplement, also has the effect
during some periods, in the absence of losses, of decreasing the percentage
interest evidenced by any class of Class M Certificates with a higher payment
priority, thereby increasing, relative to its Certificate Principal Balance,
the subordination afforded to that class of the Class M Certificates by the
Class B Certificates and any class of Class M Certificates with a lower payment
priority.

     The Special Hazard Amount shall initially be equal to $2,601,999. As of
any date of determination following the cut-off date, the Special Hazard Amount
shall equal $2,601,999 less the sum of (A) any amounts allocated through
subordination relating to Special Hazard Losses and (B) the Adjustment Amount.
The Adjustment Amount will be equal to an amount calculated under the terms of
the pooling and servicing agreement.

     The Fraud Loss Amount shall initially be equal to $2,601,999. As of any
date of determination after the cut-off date, the Fraud Loss Amount shall equal
(X) prior to the third anniversary of the cut-off date an amount equal to 1.00%
of the aggregate principal balance of all of the mortgage loans as of the
cut-off date minus the aggregate amounts allocated through subordination with
respect to Fraud Losses up to that date of determination and (Y) from the third
to the fifth anniversary of the cut-off date, an amount equal to (1) the lesser
of (a) the Fraud Loss Amount as of the most recent anniversary of the cut-off
date and (b) 0.50% of the aggregate principal balance of all of the mortgage
loans as of the most recent anniversary of the cut-off date minus (2) the
aggregate amounts allocated through subordination with respect to Fraud Losses
since the most recent anniversary of the cut-off date up to that date of
determination. On and after the fifth anniversary of the cut-off date, the
Fraud Loss Amount shall be zero and Fraud Losses shall not be allocated through
subordination.

     The Bankruptcy Amount will initially be equal to $101,073. As of any date
of determination on or after the first anniversary of the cut-off date, the
Bankruptcy Amount will equal the excess, if any, of (1) the lesser of (a) the
Bankruptcy Amount as of the business day next preceding the most recent
anniversary of the cut-off date and (b) an amount calculated under the terms of
the pooling and servicing agreement, which amount as calculated will provide
for a reduction in the Bankruptcy Amount, over (2) the aggregate amount of
Bankruptcy Losses allocated solely to the Class M Certificates or Class B
Certificates through subordination since that anniversary.


                                      S-48
<PAGE>

     Notwithstanding the foregoing, the provisions relating to subordination
will not be applicable in connection with a Bankruptcy Loss so long as the
master servicer has notified the trustee in writing that:

    o the master servicer is diligently pursuing any remedies that may exist
      in connection with the representations and warranties made regarding the
      related mortgage loan; and

    o either:

      o  the related mortgage loan is not in default with regard to payments
         due thereunder; or

      o  delinquent payments of principal and interest under the related
         mortgage loan and any premiums on any applicable primary hazard
         insurance policy and any related escrow payments relating to that
         mortgage loan are being advanced on a current basis by the master
         servicer or a subservicer.

     The Special Hazard Amount, Fraud Loss Amount and Bankruptcy Amount may be
further reduced as described in the prospectus under "Subordination."

     Notwithstanding the foregoing, with respect to the Insured Certificates,
the policy will cover the interest and principal portions of all Realized
Losses allocated thereto. See "The Policy" in this prospectus supplement. If
payments are not made as required under the policy, Realized Losses allocated
to the Insured Certificates will be borne by the holders of such certificates.

ADVANCES

     Prior to each distribution date, the master servicer is required to make
Advances which were due on the mortgage loans on the immediately preceding due
date and delinquent on the business day next preceding the related
determination date.

     These Advances are required to be made only to the extent they are deemed
by the master servicer to be recoverable from related late collections,
Insurance Proceeds, Liquidation Proceeds or amounts otherwise payable to the
holders of the Class B Certificates or Class M Certificates. The purpose of
making these Advances is to maintain a regular cash flow to the
certificateholders, rather than to guarantee or insure against losses. The
master servicer will not be required to make any Advances with respect to
reductions in the amount of the monthly payments on the mortgage loans due to
Debt Service Reductions or the application of the Relief Act or similar
legislation or regulations. 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, as successor master
servicer, will be obligated to make any Advance, in accordance with the terms
of the pooling and servicing agreement.

     All Advances will be reimbursable to the master servicer on a first
priority basis from either (a) late collections, Insurance Proceeds and
Liquidation Proceeds from the mortgage loan as to which such unreimbursed
Advance was made or (b) as to any Advance that remains unreimbursed in whole or
in part following the final liquidation of the related mortgage loan, from any
amounts otherwise distributable on any of the Class B Certificates or Class M
Certificates; provided, however, that any Advances that were made with respect
to delinquencies which ultimately were determined to be Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses
are reimbursable to the master servicer out of any funds in the Custodial
Account prior to distributions on any of the certificates and the amount of
those losses will be allocated as described in this prospectus supplement. The
effect of these provisions on any class of the Class M Certificates is that,
with respect to any Advance which remains unreimbursed following the final
liquidation of the related mortgage loan, the entire amount of the
reimbursement for that Advance will be borne first by the holders of the Class
B Certificates or any class of Class M Certificates having a lower payment
priority to the extent that the reimbursement is covered by amounts otherwise
distributable to those classes, and then by the holders of that class of Class
M Certificates, except as provided above, to the extent of the amounts
otherwise distributable to them.

     In addition, if the Certificate Principal Balances of the Class M
Certificates and Class B Certificates have been reduced to zero, any Advances
previously made which are deemed by the master servicer to be nonrecoverable
from related late collections, Insurance Proceeds and Liquidation Proceeds may
be reimbursed to the master servicer out of any funds in the Custodial Account
prior to distributions on the Senior Certificates.


                                      S-49
<PAGE>

                                  THE INSURER

     The following information has been supplied by Ambac Assurance
Corporation, the insurer, for inclusion in this prospectus supplement. No
representation is made by the depositor, the master servicer, the underwriter
or any of their affiliates as to the accuracy or completeness of the
information.

     The insurer is a Wisconsin-domiciled stock insurance corporation regulated
by the Office of the Commissioner of Insurance of the State of Wisconsin and
licensed to do business in 50 states, the District of Columbia, the
Commonwealth of Puerto Rico and the Territory of Guam. The insurer primarily
insures newly-issued municipal and structured finance obligations. The insurer
is a wholly owned subsidiary of Ambac Financial Group, Inc. (formerly, AMBAC
Inc.), a 100% publicly-held company. Moody's Investors Service, Inc., Standard
& Poor's and Fitch have each assigned a triple-A financial strength rating to
the insurer.

     The consolidated financial statements of the insurer and subsidiaries as
of December 31, 1999 and December 31, 1998 and for each of the years in the
three-year period ended December 31, 1999 prepared in accordance with generally
accepted accounting principles, included in the Annual Report on Form 10-K of
Ambac Financial Group, Inc. (which was filed with the Commission on March 30,
2000; Commission File Number 1-10777), and the unaudited consolidated financial
statements of the insurer and subsidiaries as of June 30, 2000 and for the
periods ending June 30, 2000 and June 30, 1999, included in the Quarterly
Report on Form 10-Q of Ambac Financial Group, Inc., for the period ended June
30, 2000 (which was filed with the Commission on August 11, 2000), are hereby
incorporated by reference into this prospectus supplement and shall be deemed
to be a part of this prospectus supplement. Any statement contained in a
document incorporated in this prospectus supplement by reference shall be
modified or superseded for the purposes of this prospectus supplement to the
extent that a statement contained in this prospectus supplement by reference in
this prospectus supplement also modifies or supersedes the statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus supplement.

     All financial statements of the insurer and subsidiaries included in
documents filed by Ambac Financial Group, Inc. with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, subsequent to the date
of this prospectus supplement and prior to the termination of the offering of
the certificates shall be deemed to be incorporated by reference into this
prospectus supplement and to be a part hereof from the respective dates of
filing the documents.

     The following table sets forth the capitalization of the insurer as of
December 31, 1998, December 31, 1999 and June 30, 2000, in conformity with
generally accepted accounting principles.


                          AMBAC ASSURANCE CORPORATION
                             CAPITALIZATION TABLE
                             (DOLLARS IN MILLIONS)



<TABLE>
<CAPTION>
                                                         DECEMBER 31, 1998     DECEMBER 31, 1999     JUNE 30, 2000
                                                        -------------------   -------------------   --------------
                                                                                                      (UNAUDITED)
<S>                                                     <C>                   <C>                   <C>
Unearned premiums ...................................          $1,303               $1,442              $1,452
Other liabilities ...................................             548                  524                 504
                                                               ------               ------              ------
 Total liabilities ..................................           1,851                1,966               1,956
                                                               ------               ------              ------
Stockholder's equity:
 Common Stock .......................................              82                   82                  82
 Additional paid-in capital .........................             541                  752                 753
 Accumulated other comprehensive income
   (loss) ...........................................             138                  (92)                (46)
 Retained earnings ..................................           1,405                1,674               1,834
                                                               ------               ------              ------
 Total stockholder's equity .........................           2,166                2,416               2,623
                                                               ------               ------              ------
 Total liabilities and stockholder's equity .........          $4,017               $4,382              $4,579
                                                               ======               ======              ======
</TABLE>

                                      S-50
<PAGE>

     For additional financial information concerning the insurer, see the
audited financial statements of the insurer incorporated by reference in this
prospectus supplement. Copies of the financial statements of the insurer
incorporated by reference and copies of the insurer's annual statement for the
year ended December 31, 1999 prepared in accordance with statutory accounting
standards are available, without charge, from the insurer. The address of the
insurer's administrative offices and its telephone number are One State Street
Plaza, 19th Floor, New York, New York 10004 and (212) 668-0340.


     The insurer makes no representation regarding the certificates or the
advisability of investing in the certificates and makes no representation
regarding, nor has it participated in the preparation of, this prospectus
supplement other than the information supplied by the insurer and presented
under the headings "The Insurer" and "Description of the Certificates--The
Policy" in this prospectus supplement and in the financial statements
incorporated in this prospectus supplement by reference.


                                      S-51
<PAGE>

                  CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS


GENERAL

     The yields to maturity and the aggregate amount of distributions on the
offered certificates will be affected by the rate and timing of principal
payments on the mortgage loans and the amount and timing of mortgagor defaults
resulting in Realized Losses. The yields may be adversely affected by a higher
or lower than anticipated rate of principal payments on the mortgage loans in
the trust. The rate of principal payments on the mortgage loans will in turn be
affected by the amortization schedules of the mortgage loans, the rate and
timing of mortgagor prepayments on the mortgage loans by the mortgagors,
liquidations of defaulted mortgage loans and purchases of mortgage loans due to
breaches of some representations and warranties.

     The timing of changes in the rate of prepayments, liquidations and
purchases of the mortgage loans may, and the timing of Realized Losses will,
significantly affect the yield to an investor, even if the average rate of
principal payments experienced over time is consistent with an investor's
expectation. In addition, the rate of prepayments of the mortgage loans and the
yield to investors on the certificates may be affected by refinancing programs,
which may include general or targeted solicitations, as described under
"Maturity and Prepayment Considerations" in the prospectus. Since the rate and
timing of principal payments on the mortgage loans will depend on future events
and on a variety of factors, as described in this prospectus supplement and in
the prospectus under "Yield Considerations" and "Maturity and Prepayment
Considerations", no assurance can be given as to the rate or the timing of
principal payments on the offered certificates.

     The mortgage loans in most cases may be prepaid by the mortgagors at any
time without payment of any prepayment fee or penalty, although a small portion
of the mortgage loans provide for payment of a prepayment charge, which may
have a substantial effect on the rate of prepayment of those mortgage loans.
See "Description of the Mortgage Pool--Mortgage Pool Characteristics."

     Some state laws restrict the imposition of prepayment charges even when
the mortgage loans expressly provide for the collection of those charges.
Although the Alternative Mortgage Transactions Parity Act permits the
collection of prepayment charges in connection with some types of eligible
mortgage loans, preempting any contrary state law prohibitions, some states do
not recognize the preemptive authority of the Parity Act. As a result, it is
possible that prepayment charges may not be collected even on mortgage loans
that provide for the payment of these charges.

     Most of the mortgage loans contain due-on-sale clauses. As described under
"Description of the Certificates--Principal Distributions on the Senior
Certificates" and "--Principal Distributions on the Class M Certificates" in
this prospectus supplement, during specified periods all or a
disproportionately large percentage of principal prepayments on the mortgage
loans will be allocated among the Senior Certificates, other than the Lockout
Certificates and the Class A-P Certificates, and during specified periods no
principal prepayments or, relative to the related Class M Percentage, a
disproportionately small portion of principal prepayments on the mortgage loans
will be distributed to the Lockout Certificates and to each class of Class M
Certificates. In addition to the foregoing, if on any distribution date, the
loss level established for the Class M-2 Certificates or Class M-3 Certificates
is exceeded and a class of Class M Certificates having a higher payment
priority is then outstanding, the Class M-2 Certificates or Class M-3
Certificates, as the case may be, will not receive distributions relating to
principal prepayments on that distribution date. Furthermore, if the
Certificate Principal Balances of the Senior Certificates, other than the
Lockout Certificates and the Class A-P Certificates, have been reduced to zero,
the Lockout Certificates may, under some circumstances, receive all mortgagor
prepayments made during the preceding calendar month to the extent not paid to
the Class A-P Certificates.

     Prepayments, liquidations and purchases of the mortgage loans will result
in distributions to holders of the offered certificates of principal amounts
which would otherwise be distributed over the remaining terms of the mortgage
loans. Factors affecting prepayment, including defaults and liquidations, of
mortgage loans include changes in mortgagors' housing needs, job transfers,
unemployment, mortgagors' net equity in the mortgaged properties, changes in
the value of the mortgaged properties, mortgage


                                      S-52
<PAGE>

market interest rates, solicitations and servicing decisions. In addition, if
prevailing mortgage rates fell significantly below the mortgage rates on the
mortgage loans, the rate of prepayments, including refinancings, would be
expected to increase. Conversely, if prevailing mortgage rates rose
significantly above the mortgage rates on the mortgage loans, the rate of
prepayments on the mortgage loans would be expected to decrease.

     The rate of defaults on the mortgage loans will also affect the rate and
timing of principal payments on the mortgage loans. 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 LTV 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 mortgaged 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. See "Maturity and
Prepayment Considerations" in the prospectus.

     The recording of mortgages in the name of MERS is a new practice in the
mortgage lending industry. While the depositor expects that the master servicer
or applicable subservicer will be able to commence foreclosure proceedings on
the mortgaged properties, when necessary and appropriate, public recording
officers and others, however, may have limited, if any, experience with lenders
seeking to foreclose mortgages, assignments of which are registered with MERS.
Accordingly, delays and additional costs in commencing, prosecuting and
completing foreclosure proceedings, defending litigation commenced by third
parties and conducting foreclosure sales of the mortgaged properties could
result. Those delays and additional costs could in turn delay the distribution
of liquidation proceeds to the certificateholders and increase the amount of
Realized Losses on the mortgage loans. In addition, if, as a result of MERS
discontinuing or becoming unable to continue operations in connection with the
MERS (Registered Trademark)  System, it becomes necessary to remove any
mortgage loan from registration on the MERS (Registered Trademark)  System and
to arrange for the assignment of the related mortgages to the trustee, then any
related expenses shall be reimbursable by the trust to the master servicer,
which will reduce the amount available to pay principal of and interest on the
outstanding class or classes of certificates with the lowest payment
priorities. For additional information regarding the recording of mortgages in
the name of MERS see "Description of the Mortgage Pool--Mortgage Pool
Characteristics" in this prospectus supplement and "Description of the
Certificates--Assignment of Trust Assets" in the prospectus.

     Because the mortgage rates on the mortgage loans and the pass-through
rates on the offered certificates, other than the Adjustable Rate Certificates
and Variable Strip Certificates, are fixed, these rates will not change in
response to changes in market interest rates. Accordingly, if market interest
rates or market yields for securities similar to such offered certificates were
to rise, the market value of such offered certificates may decline.

     As described under "Description of the Certificates--Allocation of Losses;
Subordination" and "--Advances," amounts otherwise distributable to holders of
one or more classes of the Class M Certificates may be made available to
protect the holders of the Senior Certificates and holders of any Class M
Certificates with a higher payment priority against interruptions in
distributions due to some mortgagor delinquencies, to the extent not covered by
Advances. These delinquencies may affect the yields to investors on those
classes of the Class M Certificates, and, even if subsequently cured, may
affect the timing of the receipt of distributions by the holders of those
classes of Class M Certificates. Furthermore, the Class A-P Certificates will
share in the principal portion of Realized Losses on the mortgage loans only to
the extent that they are incurred with respect to Discount Mortgage Loans and
only to the extent of the related Discount Fraction. Thus, after the Class B
Certificates and the Class M Certificates are retired or in the case of Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses and
Extraordinary Losses, the Senior Certificates other than the Insured
Certificates, to the extent such losses are covered by the policy, and the
Class A-P Certificates, may be affected to a greater extent by losses on
Non-Discount Mortgage Loans than losses on Discount Mortgage Loans. In


                                      S-53
<PAGE>

addition, a higher than expected rate of delinquencies or losses will also
affect the rate of principal payments on one or more classes of the Class M
Certificates if it delays the scheduled reduction of the Senior Accelerated
Distribution Percentage or affects the allocation of prepayments among the
Class M Certificates and Class B Certificates.

     The periodic increase in interest paid by the mortgagor of a Buy-Down
Mortgage Loan may increase the risk of default with respect to the related
mortgage loan. See "Mortgage Loan Program--Underwriting Standards" and "Yield
Considerations" in the prospectus.

     The amount of interest otherwise payable to holders of the offered
certificates will be reduced by any interest shortfalls to the extent not
covered by subordination or the master servicer or, solely with respect to the
Insured Certificates, by the policy and the Reserve Fund, as described in this
prospectus supplement, including Prepayment Interest Shortfalls and, in the
case of each class of the Class M Certificates, the interest portions of
Realized Losses allocated solely to that class of certificates. These
shortfalls will not be offset by a reduction in the servicing fees payable to
the master servicer or otherwise, except as described in this prospectus
supplement with respect to some Prepayment Interest Shortfalls. See "Yield
Considerations" in the prospectus and "Description of the
Certificates--Interest Distributions" in this prospectus supplement for a
discussion of the effect of principal prepayments on the mortgage loans on the
yield to maturity of the offered certificates and possible shortfalls in the
collection of interest.

     The yield to investors in the offered certificates will be affected by
Prepayment Interest Shortfalls allocable thereto in the month preceding any
distribution date to the extent that those shortfalls exceed the amount offset
by the master servicer or, solely with respect to the Insured Certificates, by
the policy and the Reserve Fund. See "Description of the Certificates--Interest
Distributions" in this prospectus supplement.

     In addition, the yield to maturity on each class of the offered
certificates will depend on, among other things, the price paid by the holders
of the offered certificates and the related pass-through rate. The extent to
which the yield to maturity of an offered certificate is sensitive to
prepayments will depend, in part, upon the degree to which it is purchased at a
discount or premium. In general, if a class of offered certificates is
purchased at a premium and principal distributions thereon occur at a rate
faster than assumed at the time of purchase, the investor's actual yield to
maturity will be lower than anticipated at the time of purchase. Conversely, if
a class of offered certificates is purchased at a discount and principal
distributions thereon occur at a rate slower than assumed at the time of
purchase, the investor's actual yield to maturity will be lower than
anticipated at the time of purchase. For additional considerations relating to
the yield on the offered certificates, see "Yield Considerations" and "Maturity
and Prepayment Considerations" in the prospectus.

     Sequentially Paying Certificates: The Senior Certificates, other than the
Class A-P Certificates and Interest Only Certificates, are entitled to receive
distributions in accordance with various priorities for payment of principal as
described in this prospectus supplement. Distributions of principal on classes
having an earlier priority of payment will be affected by the rates of
prepayment of the mortgage loans early in the life of the mortgage pool. The
timing of commencement of principal distributions and the weighted average
lives of certificates with a later priority of payment will be affected by the
rates of prepayment of the mortgage loans both before and after the
commencement of principal distributions on those classes.

     Accretion Directed Certificates and Accrual Certificates: On or prior to
the Accretion Termination Date, the Accretion Directed Certificates, as and to
the extent described in this prospectus supplement, will receive as monthly
principal distributions the Accrual Distribution Amount. On or prior to the
Accretion Termination Date, interest shortfalls allocated to the Accrual
Certificates will reduce the amount added to the Certificate Principal Balance
of those certificates relating to interest accrued thereon and will result in a
corresponding reduction of the amount available for distributions relating to
principal on the Accretion Directed Certificates. Furthermore, because these
interest shortfalls will result in the Certificate Principal Balance of the
Accrual Certificates being less than it would otherwise be, the amount


                                      S-54
<PAGE>

of interest that will accrue in the future on the Accrual Certificates and be
available for distributions relating to principal on the Accretion Directed
Certificates will be reduced. Accordingly, the weighted average lives of the
Accretion Directed Certificates would be extended.

     In addition, investors in the Accrual Certificates should be aware that
the Accretion Termination Date may be later, or earlier, than otherwise assumed
if prepayments occur slower, or faster, than anticipated. Investors in the
Accrual Certificates should also be aware that the Accretion Termination Date
could be different from that assumed at the time of purchase.

     Because the Accrual Certificates are not entitled to receive any
distributions of interest, other than as described in this prospectus
supplement, until the occurrence of the Accretion Termination Date, those
certificates will likely experience greater price and yield volatility than
would mortgage pass-through certificates that are otherwise similar but which
are entitled to current distributions of interest. Investors should consider
whether this volatility is suitable to their investment needs.

     Insured Certificates: IN ADDITION TO THE CONSIDERATIONS DESCRIBED ABOVE,
INVESTORS IN THE INSURED CERTIFICATES SHOULD BE AWARE THAT THOSE CERTIFICATES
MAY NOT BE AN APPROPRIATE INVESTMENT FOR ALL PROSPECTIVE INVESTORS. The Insured
Certificates would not be an appropriate investment for any investor requiring
a distribution of a particular amount of principal or interest on a specific
date or dates or an otherwise predictable stream of cash payments. The timing
of those distributions may have a significant effect on an investor's yield on
those certificates if the certificate is purchased at a discount or a premium.

     Investors in the Insured Certificates also should be aware that
distributions of principal to the Insured Certificates will be allocated by DTC
according to a random lot procedure, except as provided in this prospectus
supplement under "Description of the Certificates--Principal Distributions on
the Insured Certificates." Due to this random lot procedure, there can be no
assurance that on any distribution date, any holder of an Insured Certificate
will receive a principal distribution. Thus, the timing of distributions in
reduction of the Certificate Principal Balance with respect to any particular
Insured Certificate, even if a request for distribution has been made as
provided under "Description of the Certificates--Principal Distributions on the
Insured Certificates," is highly uncertain and may be earlier or later than the
date that may be desired by that certificateholder.

     Furthermore, investors in the Insured Certificates should be aware that
because these certificates have a later priority of payment as to principal in
relation to the other classes of Senior Certificates, the effect on the market
value of the Insured Certificates of changes in market interest rates or market
yields for similar securities will be greater than would be the effect of those
changes on other classes of Senior Certificates entitled to earlier priorities
of principal distributions. Furthermore, this later payment priority also makes
the Insured Certificates particularly sensitive to the rate and timing of
principal prepayments on the mortgage loans. If prepayments on the mortgage
loans occur at a higher rate than anticipated, the weighted average lives of
the Insured Certificates may be shortened. Conversely, if prepayments on the
mortgage loans occur at a lower rate than anticipated, the weighted average
lives of the Insured Certificates may be extended.

     Class A-5 Certificates: The yield to investors on the Class A-5
Certificates will be extremely sensitive to the rate and timing of principal
payments on the mortgage loans, including prepayments, defaults and
liquidations, which rate may fluctuate significantly over time. A faster than
expected rate of principal payments on the mortgage loans will have an adverse
effect on the yield to such investors and could result in the failure of
investors in the Class A-5 Certificates to fully recover their initial
investments. See "--Principal Only Certificate and Interest Only Certificate
Yield Considerations" in this prospectus supplement.

     Lockout Certificates: Investors in the Lockout Certificates should be
aware that because the Lockout Certificates do not receive any distributions of
principal payments prior to the distribution date occurring in November 2005
and until the distribution date occurring in November 2009 will receive a
disproportionately small portion of principal payments, unless the Certificate
Principal Balances of the Senior Certificates, other than the Lockout
Certificates and Class A-P Certificates, have been reduced to


                                      S-55
<PAGE>

zero, the weighted average life of the Lockout Certificates will be longer than
would otherwise be the case. The effect on the market value of the Lockout
Certificates of changes in market interest rates or market yields for similar
securities will be greater than for other classes of Senior Certificates
entitled to principal distributions.

     Certificates with Subordination Features: After the Certificate Principal
Balances of the Class B Certificates have been reduced to zero, the yield to
maturity on the class of Class M Certificates then outstanding with the lowest
payment priority will be extremely sensitive to losses on the mortgage loans
and the timing of those losses because the entire amount of losses that are
covered by subordination will be allocated to that class of Class M
Certificates. See "--Class M-2 and Class M-3 Certificate Yield Considerations"
below. Furthermore, because principal distributions are paid to some classes of
Senior Certificates and Class M Certificates before other classes, holders of
classes having a later priority of payment bear a greater risk of losses than
holders of classes having earlier priority for distribution of principal. With
respect to the Insured Certificates only, Realized Losses allocated thereto
will be covered by the policy to the extent set forth in the policy.

     Assumed Final Distribution Date: The assumed final distribution date with
respect to each class of the offered certificates is October 25, 2030, which is
the distribution date immediately following the latest scheduled maturity date
for any mortgage loan. No event of default, change in the priorities for
distribution among the various classes or other provisions under the pooling
and servicing agreement will arise or become applicable solely by reason of the
failure to retire the entire Certificate Principal Balance of any class of
certificates on or before its assumed final distribution date.

     Weighted Average Life: Weighted average life refers to the average amount
of time that will elapse from the date of issuance of a security to the date of
distribution to the investor of each dollar distributed in reduction of
principal of the security assuming no losses. The weighted average life of the
offered certificates will be influenced by, among other things, the rate at
which principal of the mortgage loans is paid, which may be in the form of
scheduled amortization, prepayments or liquidations.

     Prepayments on mortgage loans are commonly measured relative to a
prepayment standard or model. The model used in this prospectus supplement, the
prepayment speed assumption, represents an assumed rate of prepayment each
month relative to the then outstanding principal balance of a pool of new
mortgage loans. A prepayment assumption of 100% PSA assumes constant prepayment
rates of 0.20% per annum of the then outstanding principal balance of the
mortgage loans in the first month of the life of the mortgage loans and an
additional 0.20% per annum in each month thereafter until the 30th month.
Beginning in the 30th month and in each month thereafter during the life of the
mortgage loans, 100% PSA assumes a constant prepayment rate of 6% per annum
each month. As used in the table below, "0% PSA" assumes prepayment rates equal
to 0% of PSA--no prepayments. Correspondingly, "100% PSA" and "275% PSA"
assumes prepayment rates equal to 100% of PSA and 275% of PSA, respectively,
and so forth. PSA does not purport 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.

     The table captioned "Percent of Initial Certificate Principal Balance
Outstanding at the Following Percentages of PSA" has been prepared on the basis
of assumptions as listed in this paragraph regarding the weighted average
characteristics of the mortgage loans that are expected to be included in the
trust as described under "Description of the Mortgage Pool" in this prospectus
supplement and their performance. The table assumes, among other things, that:
(i) as of the date of issuance of the offered certificates, the mortgage loans
have the following characteristics:




<TABLE>
<CAPTION>
                                                                          DISCOUNT            NON-DISCOUNT
                                                                       MORTGAGE LOANS        MORTGAGE LOANS
                                                                    -------------------   --------------------
<S>                                                                 <C>                   <C>
   Aggregate principal balance ..................................     $ 17,432,948.68       $ 242,766,999.87
   Weighted average mortgage rate ...............................        7.9458582629%                8.4548%
   Weighted average servicing fee rate ..........................        0.3848696518%                0.3310%
   Weighted average original term to maturity (months) ..........                 360                    360
   Weighted average remaining term to maturity (months) .........                 359                    358
</TABLE>

                                      S-56
<PAGE>

     (ii) the scheduled monthly payment for each mortgage loan has been based
on its outstanding balance, mortgage rate and remaining term to maturity, so
that the mortgage loan will amortize in amounts sufficient for its repayment
over its remaining term to maturity; (iii) none of the unaffiliated sellers,
Residential Funding or the depositor will repurchase any mortgage loan, as
described under "Mortgage Loan Program--Representations with Respect to
Mortgage Loans" and "Description of the Certificates--Assignment of the Trust
Assets" in the prospectus, and neither the master servicer nor the depositor
exercises any option to purchase the mortgage loans and thereby cause a
termination of the trust; (iv) there are no delinquencies or Realized Losses on
the mortgage loans, and principal payments on the mortgage loans will be timely
received together with prepayments, if any, at the respective constant
percentages of PSA set forth in the table; (v) there is no Prepayment Interest
Shortfall or any other interest shortfall in any month; (vi) payments on the
certificates will be received on the 25th day of each month, commencing in
November 2000; (vii) payments on the mortgage loans earn no reinvestment
return; (viii) there are no additional ongoing trust expenses payable out of
the trust; (ix) on each distribution date, distributions of principal on the
Insured Certificates are not restricted to increments of $1,000 and no deposits
or withdrawals are made to or from the Rounding Account; (x) the certificates
will be purchased on October 27, 2000; and (xi) LIBOR remains constant at 6.62%
per annum. Clauses (i) through (xi) above are collectively referred to as the
structuring assumptions.


     The actual characteristics and performance of the mortgage loans will
differ from the assumptions used in constructing the table below, which is
hypothetical in nature and is provided only to give a general sense of how the
principal cash flows might behave under varying prepayment scenarios. For
example, it is very unlikely that the mortgage loans will prepay at a constant
level of PSA until maturity or that all of the mortgage loans will prepay at
the same level of PSA. Moreover, the diverse remaining terms to maturity and
mortgage rates of the mortgage loans could produce slower or faster principal
distributions than indicated in the table at the various constant percentages
of PSA specified, even if the weighted average remaining term to maturity and
weighted average mortgage rate of the mortgage loans are as assumed. Any
difference between the assumptions and the actual characteristics and
performance of the mortgage loans, or actual prepayment or loss experience,
will affect the percentages of initial Certificate Principal Balances
outstanding over time and the weighted average lives of the classes of offered
certificates.


     In accordance with the foregoing discussion and assumptions, the following
table indicates the weighted average life of each class of offered
certificates, other than the Interest Only Certificates and Residual
Certificates, and sets forth the percentages of the initial Certificate
Principal Balance of each class of offered certificates that would be
outstanding after each of the distribution dates at the various percentages of
PSA shown.


                                      S-57
<PAGE>

PERCENT OF INITIAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING AT THE FOLLOWING
                        CONSTANT PERCENTAGES OF THE PSA




<TABLE>
<CAPTION>
                                                        CLASS A-1                               CLASS A-2
                                         --------------------------------------- ----------------------------------------
DISTRIBUTION DATE                            0%      100%    275%   400%   500%      0%       100%    275%   400%   500%
---------------------------------------- --------- -------- ------ ------ ------ --------- --------- ------ ------ ------
<S>                                      <C>       <C>      <C>    <C>    <C>    <C>       <C>       <C>    <C>    <C>
Initial Percentage .....................     100%     100%    100%   100%   100%     100%      100%    100%   100%   100%
October 25, 2001 .......................      99       96      92     89     87      108       108     108    108    108
October 25, 2002 .......................      97       89      76     67     59      117       117     117    117    117
October 25, 2003 .......................      96       80      56     40     28      126       126     126    126    126
October 25, 2004 .......................      94       72      39     20      7      136       136     136    136    136
October 25, 2005 .......................      93       64      24      4      0      147       147     147    147      0
October 25, 2006 .......................      91       56      14      0      0      159       159     159      0      0
October 25, 2007 .......................      89       50       5      0      0      172       172     172      0      0
October 25, 2008 .......................      87       44       0      0      0      186       186     149      0      0
October 25, 2009 .......................      85       38       0      0      0      200       200       0      0      0
October 25, 2010 .......................      83       33       0      0      0      217       217       0      0      0
October 25, 2011 .......................      81       28       0      0      0      234       234       0      0      0
October 25, 2012 .......................      78       24       0      0      0      253       253       0      0      0
October 25, 2013 .......................      75       20       0      0      0      273       273       0      0      0
October 25, 2014 .......................      72       15       0      0      0      295       295       0      0      0
October 25, 2015 .......................      69       11       0      0      0      319       319       0      0      0
October 25, 2016 .......................      65        7       0      0      0      344       344       0      0      0
October 25, 2017 .......................      61        4       0      0      0      372       372       0      0      0
October 25, 2018 .......................      56         *      0      0      0      402       402       0      0      0
October 25, 2019 .......................      51        0       0      0      0      434       303       0      0      0
October 25, 2020 .......................      46        0       0      0      0      469       210       0      0      0
October 25, 2021 .......................      40        0       0      0      0      506       122       0      0      0
October 25, 2022 .......................      34        0       0      0      0      547        38       0      0      0
October 25, 2023 .......................      27        0       0      0      0      591         0       0      0      0
October 25, 2024 .......................      19        0       0      0      0      639         0       0      0      0
October 25, 2025 .......................      11        0       0      0      0      690         0       0      0      0
October 25, 2026 .......................       2        0       0      0      0      745         0       0      0      0
October 25, 2027 .......................       0        0       0      0      0      515         0       0      0      0
October 25, 2028 .......................       0        0       0      0      0      190         0       0      0      0
October 25, 2029 .......................       0        0       0      0      0        0         0       0      0      0
October 25, 2030 .......................       0        0       0      0      0        0         0       0      0      0
Weighted Average Life** (in years) .....    17.5      7.9     3.6    2.7    2.3     27.5      20.2     8.4    5.6    4.6



<CAPTION>
                                                     CLASSES A-3 AND A-4
                                         --------------------------------------------
DISTRIBUTION DATE                            0%       100%      275%     400%    500%
---------------------------------------- --------- --------- --------- -------- -----
<S>                                      <C>       <C>       <C>       <C>      <C>
Initial Percentage .....................     100%      100%      100%     100%  100%
October 25, 2001 .......................     100       100       100      100   100
October 25, 2002 .......................     100       100       100      100   100
October 25, 2003 .......................     100       100       100      100   100
October 25, 2004 .......................      99        99        99       99    99
October 25, 2005 .......................      98        98        98       98    75
October 25, 2006 .......................      96        96        96       88    32
October 25, 2007 .......................      95        95        95       53     7
October 25, 2008 .......................      94        94        94       33     0
October 25, 2009 .......................      93        93        92       21     0
October 25, 2010 .......................      92        92        75       16     0
October 25, 2011 .......................      90        90        62       12     0
October 25, 2012 .......................      89        89        50        9     0
October 25, 2013 .......................      88        88        41        7     0
October 25, 2014 .......................      87        87        33        5     0
October 25, 2015 .......................      86        86        27        4     0
October 25, 2016 .......................      84        84        22        3     0
October 25, 2017 .......................      83        83        17        2     0
October 25, 2018 .......................      82        82        14        1     0
October 25, 2019 .......................      81        81        11        1     0
October 25, 2020 .......................      80        80         9        1     0
October 25, 2021 .......................      78        78         7        1     0
October 25, 2022 .......................      77        77         5         *    0
October 25, 2023 .......................      76        70         4         *    0
October 25, 2024 .......................      75        59         3         *    0
October 25, 2025 .......................      74        47         2         *    0
October 25, 2026 .......................      72        37         1         *    0
October 25, 2027 .......................      71        27         1         *    0
October 25, 2028 .......................      70        17         1         *    0
October 25, 2029 .......................      46         8          *        *    0
October 25, 2030 .......................       0         0         0        0     0
Weighted Average Life** (in years) .....    25.1      22.9      13.1      8.1   5.7
</TABLE>

-------
*     Indicates a number that is greater than zero but less than 0.5%.

**    The weighted average life of a certificate of any class is determined by
      (i) multiplying the amount of each net distribution of Certificate
      Principal Balance by the number of years from the date of issuance of the
      certificate to the related distribution date, (ii) adding the results,
      and (iii) dividing the sum by the aggregate of the net distributions
      described in (i) above.


THIS TABLE HAS BEEN PREPARED BASED ON THE STRUCTURING ASSUMPTIONS (INCLUDING
THE ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF THE MORTGAGE
LOANS, WHICH DIFFER FROM THE ACTUAL CHARACTERISTICS AND PERFORMANCE THEREOF)
AND SHOULD BE READ IN CONJUNCTION THEREWITH.
(Table continued on next page.)

                                      S-58
<PAGE>

PERCENT OF INITIAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING AT THE FOLLOWING
                        CONSTANT PERCENTAGES OF THE PSA




<TABLE>
<CAPTION>
                                                            CLASS A--6
                                         ------------------------------------------------
DISTRIBUTION DATE                            0%       100%      275%      400%     500%
---------------------------------------- --------- --------- --------- --------- --------
<S>                                      <C>       <C>       <C>       <C>       <C>
Initial Percentage .....................     100%      100%      100%      100%     100%
October 25, 2001 .......................     100       100       100       100      100
October 25, 2002 .......................     100       100       100       100      100
October 25, 2003 .......................     100       100       100       100      100
October 25, 2004 .......................     100       100       100       100      100
October 25, 2005 .......................     100       100       100       100      100
October 25, 2006 .......................     100        98        94        92       90
October 25, 2007 .......................      99        95        87        82       77
October 25, 2008 .......................      98        91        78        69       57
October 25, 2009 .......................      97        85        66        55       38
October 25, 2010 .......................      95        79        54        41       26
October 25, 2011 .......................      93        72        45        30       18
October 25, 2012 .......................      91        66        36        23       12
October 25, 2013 .......................      89        61        30        17        8
October 25, 2014 .......................      86        56        24        12        6
October 25, 2015 .......................      84        51        19         9        4
October 25, 2016 .......................      81        46        16         7        3
October 25, 2017 .......................      77        41        13         5        2
October 25, 2018 .......................      74        37        10         4        1
October 25, 2019 .......................      70        33         8         3        1
October 25, 2020 .......................      66        29         6         2        1
October 25, 2021 .......................      61        26         5         1         *
October 25, 2022 .......................      57        22         4         1         *
October 25, 2023 .......................      51        19         3         1         *
October 25, 2024 .......................      45        16         2          *        *
October 25, 2025 .......................      39        13         1          *        *
October 25, 2026 .......................      32        10         1          *        *
October 25, 2027 .......................      25         7         1          *        *
October 25, 2028 .......................      17         5          *         *        *
October 25, 2029 .......................       8         2          *         *        *
October 25, 2030 .......................       0         0         0         0        0
Weighted Average Life** (in years) .....    21.9      16.1      11.6      10.0      9.0



<CAPTION>
                                                           CLASS A-P                           CLASSES M-1, M-2 AND M-3
                                         ---------------------------------------------- --------------------------------------
DISTRIBUTION DATE                            0%       100%     275%     400%     500%       0%       100%      275%     400%
---------------------------------------- --------- --------- -------- -------- -------- --------- --------- --------- --------
<S>                                      <C>       <C>       <C>      <C>      <C>      <C>       <C>       <C>       <C>
Initial Percentage .....................     100%      100%     100%     100%     100%      100%      100%      100%     100%
October 25, 2001 .......................      99        98       95       93       92        99        99        99       99
October 25, 2002 .......................      98        93       84       78       73        98        98        98       98
October 25, 2003 .......................      97        87       70       59       51        97        97        97       97
October 25, 2004 .......................      96        81       58       44       35        96        96        96       96
October 25, 2005 .......................      95        75       48       33       25        95        95        95       95
October 25, 2006 .......................      94        69       39       25       17        94        92        89       87
October 25, 2007 .......................      92        64       32       19       12        93        89        82       77
October 25, 2008 .......................      91        59       26       14        8        91        84        72       64
October 25, 2009 .......................      89        55       22       10        6        90        79        62       51
October 25, 2010 .......................      88        51       18        8        4        88        73        51       38
October 25, 2011 .......................      86        47       15        6        3        86        67        41       28
October 25, 2012 .......................      84        43       12        4        2        85        62        34       21
October 25, 2013 .......................      81        39       10        3        1        82        56        27       15
October 25, 2014 .......................      79        36        8        2        1        80        52        22       11
October 25, 2015 .......................      76        32        6        2        1        78        47        18        8
October 25, 2016 .......................      74        29        5        1         *       75        43        15        6
October 25, 2017 .......................      71        26        4        1         *       72        38        12        5
October 25, 2018 .......................      67        24        3        1         *       69        35         9        3
October 25, 2019 .......................      64        21        3         *        *       65        31         7        2
October 25, 2020 .......................      60        19        2         *        *       61        27         6        2
October 25, 2021 .......................      56        16        2         *        *       57        24         4        1
October 25, 2022 .......................      51        14        1         *        *       52        21         3        1
October 25, 2023 .......................      47        12        1         *        *       48        18         3        1
October 25, 2024 .......................      41        10        1         *        *       42        15         2         *
October 25, 2025 .......................      36         8         *        *        *       36        12         1         *
October 25, 2026 .......................      29         6         *        *        *       30         9         1         *
October 25, 2027 .......................      23         5         *        *        *       23         7         1         *
October 25, 2028 .......................      16         3         *        *        *       16         4          *        *
October 25, 2029 .......................       8         1         *        *        *        7         2          *        *
October 25, 2030 .......................       0         0        0        0        0         0         0         0        0
Weighted Average Life** (in years) .....    20.4      11.8      6.2      4.6      3.8      20.6      15.3      11.0      9.6



<CAPTION>
                                         CLASSES
                                          M-1, M-2
DISTRIBUTION DATE                          500%
---------------------------------------- --------
<S>                                      <C>
Initial Percentage .....................    100%
October 25, 2001 .......................     99
October 25, 2002 .......................     98
October 25, 2003 .......................     97
October 25, 2004 .......................     96
October 25, 2005 .......................     95
October 25, 2006 .......................     85
October 25, 2007 .......................     73
October 25, 2008 .......................     58
October 25, 2009 .......................     43
October 25, 2010 .......................     29
October 25, 2011 .......................     20
October 25, 2012 .......................     14
October 25, 2013 .......................      9
October 25, 2014 .......................      6
October 25, 2015 .......................      4
October 25, 2016 .......................      3
October 25, 2017 .......................      2
October 25, 2018 .......................      1
October 25, 2019 .......................      1
October 25, 2020 .......................      1
October 25, 2021 .......................       *
October 25, 2022 .......................       *
October 25, 2023 .......................       *
October 25, 2024 .......................       *
October 25, 2025 .......................       *
October 25, 2026 .......................       *
October 25, 2027 .......................       *
October 25, 2028 .......................       *
October 25, 2029 .......................       *
October 25, 2030 .......................      0
Weighted Average Life** (in years) .....    8.9
</TABLE>

-------
*     Indicates a number that is greater than zero but less than 0.5%.

**    The weighted average life of a certificate of any class is determined by
      (i) multiplying the amount of each net distribution of Certificate
      Principal Balance by the number of years from the date of issuance of the
      certificate to the related distribution date, (ii) adding the results,
      and (iii) dividing the sum by the aggregate of the net distributions
      described in (i) above.


THIS TABLE HAS BEEN PREPARED BASED ON THE STRUCTURING ASSUMPTIONS (INCLUDING
THE ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF THE MORTGAGE
LOANS, WHICH DIFFER FROM THE ACTUAL CHARACTERISTICS AND PERFORMANCE THEREOF)
AND SHOULD BE READ IN CONJUNCTION THEREWITH.
(Table continued from previous page.)

                                      S-59
<PAGE>

ADJUSTABLE RATE CERTIFICATE YIELD CONSIDERATIONS

     The yield to investors on the Adjustable Rate Certificates will be
sensitive to fluctuations in the level of LIBOR. The pass-through rate on the
Floater Certificates will vary with LIBOR and the pass-through rate on the
Inverse Floater Certificates will vary inversely with LIBOR. The pass-through
rates on the Adjustable Rate Certificates are subject to maximum and minimum
pass-through rates, and are therefore limited despite changes in LIBOR in some
circumstances. Changes in the level of LIBOR may not correlate with changes in
prevailing mortgage interest rates or changes in other indices. It is possible
that lower prevailing mortgage interest rates, which might be expected to
result in faster prepayments, could occur concurrently with an increased level
of LIBOR. Investors in the Adjustable Rate Certificates should also fully
consider the effect on the yields on those certificates of changes in the level
of LIBOR.

     To illustrate the significance of changes in the level of LIBOR and
prepayments on the yield to maturity on the Adjustable Rate Certificates, the
following tables indicate the approximate pre-tax yields to maturity on a
corporate bond equivalent basis under the different constant percentages of PSA
and varying levels of LIBOR indicated. Because the rate of distribution of
principal on the certificates will be related to the actual amortization,
including prepayments, of the mortgage loans, which will include mortgage loans
that have remaining terms to maturity shorter or longer than assumed and
mortgage rates higher or lower than assumed, the pre-tax yields to maturity on
the Adjustable Rate Certificates are likely to differ from those shown in the
following tables, even if all the mortgage loans prepay at constant percentages
of PSA and the level of LIBOR, the weighted average remaining term to maturity
and the weighted average mortgage rate of the mortgage loans are as assumed.
Any differences between the assumptions and the actual characteristics and
performance of the mortgage loans and of the certificates may result in yields
being different from those shown in the tables. Discrepancies between assumed
and actual characteristics and performance underscore the hypothetical nature
of the tables, which are provided only to give a general sense of the
sensitivity of yields in varying prepayment scenarios and different levels of
LIBOR.

     In addition, it is highly unlikely that the mortgage loans will prepay at
a constant level of PSA until maturity, that all of the mortgage loans will
prepay at the same rate, or that the level of LIBOR will remain constant. The
timing of changes in the rate of prepayments may significantly affect the
actual yield to maturity to an investor, even if the average rate of principal
prepayments is consistent with an investor's expectation. In general, the
earlier the payment of principal of the mortgage loans, the greater the effect
on an investor's yield to maturity. As a result, the effect on an investor's
yield of principal prepayments occurring at a rate higher or lower than the
rate anticipated by the investor during the period immediately following the
issuance of the certificates will not be equally offset by a subsequent like
reduction or increase in the rate of principal prepayments.

     The tables below are based on the structuring assumptions, including the
assumptions regarding the characteristics and performance of the mortgage loans
and the certificates, which may differ from their actual characteristics and
performance, and assuming further that:

    o on each LIBOR rate adjustment date, LIBOR will be at the level shown

    o the aggregate purchase prices of the Class A-4 Certificates and Class
      A-5 Certificates are $10,136,075 and $555,309, respectively, in each case,
      including accrued interest, and

    o the initial pass-through rates on the Class A-4 Certificates and Class
      A-5 Certificates are described on page S-6 of this prospectus supplement.

     There can be no assurance that the mortgage loans will have the assumed
characteristics, will prepay at any of the rates shown in the tables or at any
other particular rate, that the pre-tax yield to maturity on the Adjustable
Rate Certificates will correspond to any of the pre-tax yields to maturity
shown in this prospectus supplement, that the level of LIBOR will correspond to
the levels shown in the table or that the aggregate purchase price of the
Adjustable Rate Certificates will be as assumed. In addition to any other
factors an investor may deem material, each investor must make its own decision
as to the appropriate prepayment assumption to be used and the appropriate
levels of LIBOR to be assumed in deciding whether or not to purchase an
Adjustable Rate Certificate.


                                      S-60
<PAGE>

                SENSITIVITY OF PRE-TAX YIELD TO MATURITY OF THE
                CLASS A-4 CERTIFICATES TO PREPAYMENTS AND LIBOR


                               PERCENTAGE OF PSA




<TABLE>
<CAPTION>
LIBOR                   0%       100%      275%      400%     500%
------------------   -------   -------   -------   -------   ------
<S>                  <C>       <C>       <C>       <C>       <C>
4.620%               5.56%     5.56%     5.54%     5.53%     5.51%
5.620%               6.57%     6.57%     6.56%     6.54%     6.52%
6.620%               7.59%     7.59%     7.57%     7.55%     7.53%
7.620%               8.61%     8.61%     8.59%     8.57%     8.54%
8.100% and above     9.10%     9.10%     9.08%     9.06%     9.03%
</TABLE>

                SENSITIVITY OF PRE-TAX YIELD TO MATURITY OF THE
                CLASS A-5 CERTIFICATES TO PREPAYMENTS AND LIBOR


                               PERCENTAGE OF PSA




<TABLE>
<CAPTION>
LIBOR                    0%          100%         275%           400%            500%
------------------   ----------   ----------   ----------   -------------   -------------
<S>                  <C>          <C>          <C>          <C>             <C>
4.620%                  69.82%       69.82%       69.74%         68.79%       66.81%
5.620%                  48.42%       48.42%       48.12%         46.10%       42.72%
6.620%                  27.83%       27.81%       26.62%         22.41%       16.39%
7.620%                   7.15%        6.80%        2.10%         (6.62)%     (19.86)%
8.100% and above            *            *            *              *            *
</TABLE>

----------
*     These yields represent a loss of substantially all of the assumed
      purchase price of the Class A-5 Certificates.


     Each pre-tax yield to maturity listed in the preceding tables was
calculated by determining the monthly discount rate which, when applied to the
assumed stream of cash flows to be paid on the Adjustable Rate Certificates,
would cause the discounted present value of the assumed stream of cash flows to
equal the assumed purchase price for those certificates. Accrued interest is
included in the assumed purchase price and is used in computing the corporate
bond equivalent yields shown. These yields do not take into account the
different interest rates at which investors may be able to reinvest funds
received by them as distributions on the Adjustable Rate Certificates, and thus
do not reflect the return on any investment in the Adjustable Rate Certificates
when any reinvestment rates other than the discount rates are considered.

     Notwithstanding the assumed prepayment rates reflected in the preceding
tables, it is highly unlikely that the mortgage loans will be prepaid according
to one particular pattern. For this reason, and because the timing of cash
flows is critical to determining yields, the pre-tax yield to maturity on the
Adjustable Rate Certificates is likely to differ from those shown in the
tables, even if all of the mortgage loans prepay at the indicated constant
percentages of PSA over any given time period or over the entire life of the
certificates.

     There can be no assurance that the mortgage loans will prepay at any
particular rate or that the yield on any class of Adjustable Rate Certificates
will conform to the yields described in this prospectus supplement. Moreover,
the various remaining terms to maturity and mortgage rates of the mortgage
loans could produce slower or faster principal distributions than indicated in
the preceding tables at the various constant percentages of PSA specified, even
if the weighted average remaining term to maturity and weighted average
mortgage rate of the mortgage loans are as assumed. Investors are urged to make
their investment decisions based on their determinations as to anticipated
rates of prepayment under a variety of scenarios. Investors in the Adjustable
Rate Certificates should fully consider the risk that a rapid rate of
prepayments on the mortgage loans could result in the failure of those
investors to fully recover their investments.


                                      S-61
<PAGE>

     For additional considerations relating to the yield on the certificates,
see "Yield Considerations" and "Maturity and Prepayment Considerations" in the
prospectus.


PRINCIPAL ONLY CERTIFICATE AND INTEREST ONLY CERTIFICATE YIELD CONSIDERATIONS

     Because the Principal Only Certificates will be purchased at a discount,
the pre-tax yield on the Principal Only Certificates will be adversely affected
by slower than expected payments of principal, including prepayments, defaults,
liquidations and purchases of mortgage loans due to a breach of a
representation and warranty on the Discount Mortgage Loans.

     The pre-tax yield to maturity on the Interest Only Certificates will be
extremely sensitive to both the timing of receipt of prepayments and the
overall rate of principal prepayments and defaults on the mortgage loans, which
rate may fluctuate significantly over time. Investors in the Interest Only
Certificates should fully consider the risk that a rapid rate of prepayments on
the mortgage loans could result in the failure of those investors to fully
recover their investments. Solely with respect to the Variable Strip
Certificates, because the pool strip rates on the Discount Mortgage Loans equal
0.00%, the pre-tax yield to investors on the Variable Strip Certificates will
not be affected by prepayments on the Discount Mortgage Loans.

     The following tables indicate the sensitivity of the pre-tax yields to
maturity on the Principal Only Certificates and Variable Strip Certificates to
various constant rates of prepayment on the mortgage loans by projecting the
monthly aggregate payments on the Principal Only Certificates and Variable
Strip Certificates and computing the corresponding pre-tax yields to maturity
on a corporate bond equivalent basis, based on the structuring assumptions,
including the assumptions regarding the characteristics and performance of the
mortgage loans, which differ from their actual characteristics and performance
and assuming the aggregate purchase prices, including accrued interest, if any,
set forth below. Any differences between the assumptions and the actual
characteristics and performance of the mortgage loans and of the Principal Only
Certificates and Variable Strip Certificates may result in pre-tax yields being
different from those shown in the tables. Discrepancies between assumed and
actual characteristics and performance underscore the hypothetical nature of
the tables, which are provided only to give a general sense of the sensitivity
of pre-tax yields in varying prepayment scenarios.


                   PRE-TAX YIELD TO MATURITY OF THE CLASS A-P
               CERTIFICATES AT THE FOLLOWING PERCENTAGES OF PSA




<TABLE>
<CAPTION>
ASSUMED PURCHASE PRICE       0%      100%     275%      400%     500%
------------------------   ------   ------   ------   -------   ------
<S>                        <C>      <C>      <C>      <C>       <C>
     $263,602...........   2.4%     4.6%     9.2%     12.3%     14.6%
</TABLE>

                PRE-TAX YIELD TO MATURITY OF THE VARIABLE STRIP
                CERTIFICATES AT THE FOLLOWING PERCENTAGES OF PSA




<TABLE>
<CAPTION>
ASSUMED PURCHASE PRICE         0%       100%      275%     400%     500%
-------------------------   -------   -------   -------   ------   -----
<S>                         <C>       <C>       <C>       <C>      <C>
     $3,163,178..........   29.3%     24.2%     15.0%     8.3%     2.8%
</TABLE>

     Each pre-tax yield to maturity set forth in the preceding tables was
calculated by determining the monthly discount rate which, when applied to the
assumed stream of cash flows to be paid on the Principal Only Certificates and
Variable Strip Certificates, would cause the discounted present value of the
assumed stream of cash flows to equal the assumed purchase price listed in the
applicable table. Accrued interest, if any, is included in the assumed purchase
price and is used in computing the corporate bond equivalent yields shown.
These pre-tax yields do not take into account the different interest rates at
which investors may be able to reinvest funds received by them as distributions
on the Principal Only Certificates or Variable Strip Certificates, and thus do
not reflect the return on any investment in the Principal Only Certificates or
Variable Strip Certificates when any reinvestment rates other than the discount
rates are considered.

     Notwithstanding the assumed prepayment rates reflected in the preceding
tables, it is highly unlikely that the mortgage loans will be prepaid according
to one particular pattern. For this reason, and because


                                      S-62
<PAGE>

the timing of cash flows is critical to determining yields, the pre-tax yields
to maturity on the Principal Only Certificates and Variable Strip Certificates
are likely to differ from those shown in the tables, even if all of the
mortgage loans prepay at the constant percentages of PSA indicated in the
tables above over any given time period or over the entire life of the
certificates.

     A lower than anticipated rate of principal prepayments on the Discount
Mortgage Loans will have a material adverse effect on the yield to maturity of
the Class A-P Certificates. The rate and timing of principal prepayments on the
Discount Mortgage Loans may differ from the rate and timing of principal
prepayments on the mortgage pool. In addition, because the Discount Mortgage
Loans have Net Mortgage Rates that are lower than the Net Mortgage Rates of the
Non-Discount Mortgage Loans, and because mortgage loans with lower Net Mortgage
Rates are likely to have lower mortgage rates, the Discount Mortgage Loans are
likely to prepay under most circumstances at a lower rate than the Non-Discount
Mortgage Loans. In addition, holders of the Variable Strip Certificates in most
cases have rights to relatively larger portions of interest payments on
mortgage loans with higher mortgage rates; thus, the yield on the Variable
Strip Certificates will be materially adversely affected to a greater extent
than on the other offered certificates if the mortgage loans with higher
mortgage rates prepay faster than the mortgage loans with lower mortgage rates.
Because mortgage loans having higher pool strip rates usually have higher
mortgage rates, these mortgage loans are more likely to be prepaid under most
circumstances than are mortgage loans having lower pool strip rates.

     There can be no assurance that the mortgage loans will prepay at any
particular rate or that the yield on the Principal Only Certificates and
Variable Strip Certificates will conform to the yields described in this
prospectus supplement. Moreover, the various remaining terms to maturity and
mortgage rates of the mortgage loans could produce slower or faster principal
distributions than indicated in the preceding table at the various constant
percentages of PSA specified, even if the weighted average remaining term to
maturity and weighted average mortgage rate of the mortgage loans are as
assumed. Investors are urged to make their investment decisions based on their
determinations as to anticipated rates of prepayment under a variety of
scenarios. Investors in the Interest Only Certificates should fully consider
the risk that a rapid rate of prepayments on the mortgage loans could result in
the failure of those investors to fully recover their investments.

     For additional considerations relating to the yield on the certificates,
see "Yield Considerations" and "Maturity and Prepayment Considerations" in the
prospectus.


CLASS M-2 AND CLASS M-3 CERTIFICATE YIELD CONSIDERATIONS

     If the aggregate Certificate Principal Balance of the Class B Certificates
is reduced to zero, the yield to maturity on the Class M-3 Certificates will
become extremely sensitive to losses on the mortgage loans and the timing of
those losses that are covered by subordination, because the entire amount of
those losses will be allocated to the Class M-3 Certificates.

     The aggregate initial Certificate Principal Balance of the Class B
Certificates is equal to approximately 0.65% of the aggregate principal balance
of the mortgage loans as of the cut-off date. If the Certificate Principal
Balances of the Class B Certificates and Class M-3 Certificates have been
reduced to zero, the yield to maturity on the Class M-2 Certificates will
become extremely sensitive to losses on the mortgage loans and the timing of
those losses that are covered by subordination, because the entire amount of
those losses will be allocated to the Class M-2 Certificates. The aggregate
initial Certificate Principal Balance of the Class M-3 Certificates and Class B
Certificates is equal to approximately 1.10% of the aggregate principal balance
of the mortgage loans as of the cut-off date.

     Defaults on mortgage loans may be measured relative to a default standard
or model. The model used in this prospectus supplement, the standard default
assumption, represents an assumed rate of default each month relative to the
then outstanding performing principal balance of a pool of new mortgage loans.
A default assumption of 100% SDA assumes constant default rates of 0.02% per
annum of the then outstanding principal balance of the mortgage loans in the
first month of the life of the mortgage loans and an additional 0.02% per annum
in each month thereafter until the 30th month. Beginning in the 30th month and
in each month thereafter through the 60th month of the life of the


                                      S-63
<PAGE>

mortgage loans, 100% SDA assumes a constant default rate of 0.60% per annum
each month. Beginning in the 61st month and in each month thereafter through
the 120th month of the life of the mortgage loans, 100% SDA assumes that the
constant default rate declines each month by 0.0095% per annum, and that the
constant default rate remains at 0.03% per annum in each month after the 120th
month. For the purposes of the tables below, it is assumed that there is no
delay between the default and liquidation of the mortgage loans. As used in the
table below, "0% SDA" assumes default rates equal to 0% of SDA--no defaults.
Correspondingly, "200% SDA" assumes default rates equal to 200% of SDA, and so
forth. SDA does not purport to be a historical description of default
experience or a prediction of the anticipated rate of default of any pool of
mortgage loans, including the mortgage loans in this mortgage pool.


     The following tables indicate the sensitivity of the yield to maturity on
the Class M-2 Certificates and Class M-3 Certificates to various rates of
prepayment and varying levels of aggregate Realized Losses by projecting the
monthly aggregate cash flows on the Class M-2 Certificates and Class M-3
Certificates and computing the corresponding pre-tax yield to maturity on a
corporate bond equivalent basis. The tables are based on the structuring
assumptions, except assumption (iv), including the assumptions regarding the
characteristics and performance of the mortgage loans, which differ from their
actual characteristics and performance, and assuming further that:


   o defaults and final liquidations on the mortgage loans occur on the last day
     of each month at the respective SDA percentages set forth in the tables;


   o each liquidation results in a Realized Loss allocable to principal equal to
     the percentage indicated, the loss severity percentage, multiplied by the
     principal balances of the mortgage loans assumed to be liquidated;


   o there are no delinquencies on the mortgage loans, and principal payments on
     the mortgage loans, other than those on mortgage loans assumed to be
     liquidated, will be timely received together with prepayments, if any, at
     the respective constant percentages of PSA set forth in the table;


   o there are no Excess Special Hazard Losses, Excess Fraud Losses, Excess
     Bankruptcy Losses or Extraordinary Losses;


   o clauses (a)(i), (b)(i) and (b)(ii) in the definition of the Senior
     Accelerated Distribution Percentage are not applicable; and


   o the purchase prices of the Class M-2 Certificates and Class M-3
     Certificates will be approximately $1,940,469 and $1,110,127, respectively,
     including accrued interest.


     Investors should also consider the possibility that aggregate losses
incurred may not in fact be materially reduced by higher prepayment speeds
because mortgage loans that would otherwise ultimately default and be
liquidated may be less likely to be prepaid. In addition, investors should be
aware that the following table is based upon the assumption that the Class M-2
Certificates and Class M-3 Certificates are priced at a discount. Since
prepayments will occur at par, the yield on the Class M-2 Certificates and
Class M-3 Certificates may increase due to those prepayments, even if losses
occur. Any differences between the assumptions and the actual characteristics
and performance of the mortgage loans and of the certificates may result in
yields different from those shown in the tables. Discrepancies between assumed
and actual characteristics and performance underscore the hypothetical nature
of the tables, which are provided only to give a general sense of the
sensitivity of yields in varying Realized Loss and prepayment scenarios.


                                      S-64
<PAGE>

                SENSITIVITY OF PRE-TAX YIELD TO MATURITY OF THE
               CLASS M-2 CERTIFICATES AND CLASS M-3 CERTIFICATES
                       TO PREPAYMENTS AND REALIZED LOSSES


                            CLASS M-2 CERTIFICATES




<TABLE>
<CAPTION>
                                                               PERCENTAGE OF PSA
PERCENTAGE        LOSS SEVERITY   ---------------------------------------------------------------------------
  OF SDA           PERCENTAGE           0%             100%            275%           400%           500%
--------------   --------------   -------------   -------------   -------------   ------------   ------------
<S>              <C>              <C>             <C>             <C>             <C>            <C>
  0% .........        N/A               7.94%           7.95%           7.97%          7.97%          7.98%
100% .........          30%             7.34%           7.95%           7.97%          7.97%          7.98%
200% .........          30%           (23.76)%        (15.15)%          5.21%          7.97%          7.98%
300% .........          30%           (42.43)%        (37.80)%        (25.75)%        (0.72)%         4.29%
400% .........          30%           (57.16)%        (53.49)%        (45.15)%       (36.36)%        (9.58)%
</TABLE>

                             CLASS M-3 CERTIFICATES




<TABLE>
<CAPTION>
                                                               PERCENTAGE OF PSA
PERCENTAGE        LOSS SEVERITY   ----------------------------------------------------------------------------
  OF SDA           PERCENTAGE           0%             100%            275%           400%            500%
--------------   --------------   -------------   -------------   -------------   ------------   -------------
<S>              <C>              <C>             <C>             <C>             <C>            <C>
  0% .........        N/A               8.46%           8.55%           8.68%          8.74%           8.78%
100% .........          30%           (14.95)%          2.44%           8.28%          8.74%           8.78%
200% .........          30%           (47.13)%        (42.96)%        (33.22)%        (7.91)%          0.49%
300% .........          30%           (68.46)%        (65.61)%        (59.39)%       (53.48)%        (47.14)%
400% .........          30%           (83.86)%        (81.80)%        (77.51)%       (73.71)%        (69.99)%
</TABLE>

     Each pre-tax yield to maturity listed in the preceding tables was
calculated by determining the monthly discount rate which, when applied to the
assumed stream of cash flows to be paid on the Class M-2 Certificates or Class
M-3 Certificates, as applicable, would cause the discounted present value of
the assumed stream of cash flows to equal the assumed purchase price referred
to above, and converting that rate to a corporate bond equivalent yield.
Accrued interest is included in the assumed purchase price and is used in
computing the corporate bond equivalent yields shown. These yields do not take
into account the different interest rates at which investors may be able to
reinvest funds received by them as distributions on the Class M-2 Certificates
or Class M-3 Certificates, and thus do not reflect the return on any investment
in the Class M-2 Certificates or Class M-3 Certificates when any reinvestment
rates other than the discount rates set forth in the preceding tables are
considered.

     The following table sets forth the amount of Realized Losses that would be
incurred with respect to the certificates in the aggregate under each of the
scenarios in the preceding tables, expressed as a percentage of the aggregate
outstanding principal balance of the mortgage loans as of the cut-off date:


                           AGGREGATE REALIZED LOSSES




<TABLE>
<CAPTION>
                                                PERCENTAGE OF PSA
PERCENTAGE        LOSS SEVERITY   ----------------------------------------------
  OF SDA           PERCENTAGE        0%       100%      275%      400%     500%
--------------   --------------   -------   -------   -------   -------   ------
<S>              <C>              <C>       <C>       <C>       <C>       <C>
100% .........   30%              1.18%     0.93%     0.66%     0.52%     0.44%
200% .........   30%              2.31%     1.83%     1.29%     1.04%     0.88%
300% .........   30%              3.41%     2.70%     1.92%     1.54%     1.31%
400% .........   30%              4.46%     3.54%     2.52%     2.03%     1.73%
</TABLE>

     Notwithstanding the assumed percentages of SDA, loss severity and
prepayment reflected in the preceding table, it is highly unlikely that the
mortgage loans will be prepaid or that Realized Losses will be incurred
according to one particular pattern. For this reason, and because the timing of
cash flows is critical to determining yields, the actual pre-tax yields to
maturity on the Class M-2 Certificates and Class M-3 Certificates are likely to
differ from those shown in the tables. There can be no assurance that the
mortgage loans will prepay at any particular rate or that Realized Losses will
be incurred at any particular


                                      S-65
<PAGE>

level or that the yield on the Class M-2 Certificates or Class M-3 Certificates
will conform to the yields described in this prospectus supplement. Moreover,
the various remaining terms to maturity and mortgage rates of the mortgage
loans could produce slower or faster principal distributions than indicated in
the preceding tables at the various constant percentages of PSA specified, even
if the weighted average remaining term to maturity and weighted average
mortgage rate of the mortgage loans are as assumed.


     Investors are urged to make their investment decisions based on their
determinations as to anticipated rates of prepayment and Realized Losses under
a variety of scenarios. Investors in the Class M-2 Certificates and
particularly in the Class M-3 Certificates should fully consider the risk that
Realized Losses on the mortgage loans could result in the failure of those
investors to fully recover their investments. For additional considerations
relating to the yield on the certificates, see "Yield Considerations" and
"Maturity and Prepayment Considerations" in the prospectus.


ADDITIONAL YIELD CONSIDERATIONS APPLICABLE SOLELY TO THE RESIDUAL CERTIFICATES


     The Residual Certificateholders' after-tax rate of return on their
Residual Certificates will reflect their pre-tax rate of return, reduced by the
taxes required to be paid with respect to the Residual Certificates. Holders of
Residual Certificates may have tax liabilities with respect to their Residual
Certificates during the early years of the trust's term that substantially
exceed any distributions payable thereon during any such period. In addition,
holders of Residual Certificates may have tax liabilities with respect to their
Residual Certificates the present value of which substantially exceeds the
present value of distributions payable thereon and of any tax benefits that may
arise with respect thereto. Accordingly, the after-tax rate of return on the
Residual Certificates may be negative or may otherwise be significantly
adversely affected. The timing and amount of taxable income attributable to the
Residual Certificates will depend on, among other things, the timing and
amounts of prepayments and losses experienced with respect to the mortgage
pool.


     The Residual Certificateholders should consult their tax advisors as to
the effect of taxes and the receipt of any payments made to those holders in
connection with the purchase of the Residual Certificates on after-tax rates of
return on the Residual Certificates. See "Material Federal Income Tax
Consequences" in this prospectus supplement and "Material Federal Income Tax
Consequences" in the prospectus.


                                      S-66
<PAGE>

                        POOLING AND SERVICING AGREEMENT


GENERAL


     The certificates will be issued under a series supplement, dated as of
October 1, 2000, to the standard terms of pooling and servicing agreement,
dated as of September 1, 2000, together referred to as the pooling and
servicing agreement, among the depositor, the master servicer, and Bank One,
National Association, as trustee. Reference is made to the prospectus for
important information in addition to that described herein regarding the terms
and conditions of the pooling and servicing agreement and the offered
certificates. The trustee will appoint Wells Fargo Bank Minnesota, National
Association to serve as custodian in connection with the certificates. The
offered certificates will be transferable and exchangeable at the corporate
trust office of the trustee, which will serve as certificate registrar and
paying agent. The depositor will provide a prospective or actual
certificateholder without charge, on written request, a copy, without exhibits,
of the pooling and servicing agreement. Requests should be addressed to the
President, Residential Funding Mortgage Securities I, Inc., 8400 Normandale
Lake Boulevard, Suite 600, Minneapolis, Minnesota 55437.


     Under the pooling and servicing agreement, transfers of Residual
Certificates are prohibited to any non-United States person. Transfers of the
Residual Certificates are additionally restricted as described in the pooling
and servicing agreement. See "Material Federal Income Tax Consequences" in this
prospectus supplement and "Material Federal Income Tax Consequences
--REMICs--Taxation of Owners of REMIC Residual Certificates--Tax and
Restrictions on Transfers of REMIC Residual Certificates to Certain
Organizations" and "--Noneconomic REMIC Residual Certificates" in the
prospectus. In addition to the circumstances described in the prospectus, the
depositor may terminate the trustee for cause under specified circumstances.
See "The Pooling and Servicing Agreement--The Trustee" in the prospectus.


THE MASTER SERVICER


     Residential Funding, an indirect wholly-owned subsidiary of GMAC Mortgage
and an affiliate of the depositor, will act as master servicer for the
certificates under the pooling and servicing agreement. For a general
description of Residential Funding and its activities, see "Residential Funding
Corporation" in the prospectus.


     The following tables set forth information concerning the delinquency
experience, including pending foreclosures, on one- to four-family residential
mortgage loans that generally complied with Residential Funding's published
loan purchase criteria at the time of purchase by Residential Funding and were
being master serviced by Residential Funding at the dates indicated. The tables
set forth information for the total mortgage loan portfolio and for mortgage
loans underwritten under a reduced loan documentation program described under
"Mortgage Loan Program--Underwriting Standards" in the prospectus.


     As used in this prospectus supplement, a loan is considered to be "30 to
59 days" or "30 or more days" delinquent when a payment due on any due date
remains unpaid as of the close of business on the last business day immediately
prior to the next following monthly due date. The determination as to whether a
loan falls into this category is made as of the close of business on the last
business day of each month. Delinquency information presented in this
prospectus supplement as of the cut-off date is determined and prepared as of
the close of business on the last business day immediately prior to the cut-off
date.


                                      S-67
<PAGE>

                  TOTAL LOAN PORTFOLIO DELINQUENCY EXPERIENCE




<TABLE>
<CAPTION>
                                AT DECEMBER 31, 1995         AT DECEMBER 31, 1996         AT DECEMBER 31, 1997
                            ---------------------------- ---------------------------- ----------------------------
                               BY NO.       BY DOLLAR       BY NO.       BY DOLLAR       BY NO.       BY DOLLAR
                                 OF         AMOUNT OF         OF         AMOUNT OF         OF         AMOUNT OF
                               LOANS          LOANS         LOANS          LOANS         LOANS          LOANS
                            ----------- ---------------- ----------- ---------------- ----------- ----------------
                                  (DOLLAR AMOUNTS              (DOLLAR AMOUNTS              (DOLLAR AMOUNTS
                                   IN THOUSANDS)                IN THOUSANDS)                IN THOUSANDS)
<S>                         <C>         <C>              <C>         <C>              <C>         <C>
Total Loan Portfolio ......   102,531     $ 25,892,632     116,118     $ 29,568,270     147,742     $ 35,987,149
Period of Delinquency
 30 to 59 days ............     1,932          453,020       2,249          547,873       2,734          582,199
 60 to 89 days ............       437          100,919         411          100,176         495          101,150
 90 days or more ..........       347           73,287         329           77,614         271           52,824
Foreclosures Pending ......       899          247,985         925          245,637         904          231,994
Total Delinquent Loans.....     3,615     $    875,211       3,914     $    971,301       4,404     $    968,167
Percent of Loan
 Portfolio ................     3.526%           3.380%      3.371%           3.285%      2.981%           2.690%



<CAPTION>
                                AT DECEMBER 31, 1998         AT DECEMBER 31, 1999           AT JUNE 30, 2000
                            ---------------------------- ---------------------------- ----------------------------
                               BY NO.       BY DOLLAR       BY NO.       BY DOLLAR       BY NO.       BY DOLLAR
                                 OF         AMOUNT OF         OF         AMOUNT OF         OF         AMOUNT OF
                               LOANS          LOANS         LOANS          LOANS         LOANS          LOANS
                            ----------- ---------------- ----------- ---------------- ----------- ----------------
                                  (DOLLAR AMOUNTS              (DOLLAR AMOUNTS              (DOLLAR AMOUNTS
                                   IN THOUSANDS)                IN THOUSANDS)                IN THOUSANDS)
<S>                         <C>         <C>              <C>         <C>              <C>         <C>
Total Loan Portfolio ......   164,378     $ 41,048,258     159,458     $ 41,799,848     156,617     $ 41,427,184
Period of Delinquency
 30 to 59 days ............     2,454          574,997       2,081          485,414       1,720          405,246
 60 to 89 days ............       369           85,292         297           66,720         292           63,570
 90 days or more ..........       368           84,426         301           69,148         281           64,194
Foreclosures Pending ......       544          132,205         419          100,940         353           85,646
Total Delinquent Loans.....     3,735     $    876,920       3,098     $    722,221       2,646     $    618,656
Percent of Loan
 Portfolio ................     2.272%           2.136%      1.943%           1.728%      1.689%           1.493%
</TABLE>

       TOTAL REDUCED DOCUMENTATION LOAN PORTFOLIO DELINQUENCY EXPERIENCE




<TABLE>
<CAPTION>
                               AT DECEMBER 31, 1995        AT DECEMBER 31, 1996        AT DECEMBER 31, 1997
                            --------------------------- --------------------------- ---------------------------
                               BY NO.      BY DOLLAR       BY NO.      BY DOLLAR       BY NO.      BY DOLLAR
                                 OF        AMOUNT OF         OF        AMOUNT OF         OF        AMOUNT OF
                               LOANS         LOANS         LOANS         LOANS         LOANS         LOANS
                            ----------- --------------- ----------- --------------- ----------- ---------------
                                  (DOLLAR AMOUNTS             (DOLLAR AMOUNTS             (DOLLAR AMOUNTS
                                   IN THOUSANDS)               IN THOUSANDS)               IN THOUSANDS)
<S>                         <C>         <C>             <C>         <C>             <C>         <C>
Total Loan Portfolio ......    25,645     $ 5,230,083      27,603     $ 5,491,996      33,212     $ 6,116,561
Period of Delinquency
 30 to 59 days ............       524         121,992         528         112,386         640         126,977
 60 to 89 days ............       133          30,622         108          22,995         123          28,564
 90 days or more ..........        90          19,845          85          22,438          69          12,872
Foreclosures Pending ......       316          92,592         320          95,862         272          67,379
Total Delinquent Loans.....     1,063     $   265,050       1,041     $   253,681       1,104     $   235,791
Percent of Loan
 Portfolio ................     4.145%          5.068%      3.771%          4.619%      3.324%          3.855%



<CAPTION>
                               AT DECEMBER 31, 1998        AT DECEMBER 31, 1999          AT JUNE 30, 2000
                            --------------------------- --------------------------- ---------------------------
                               BY NO.      BY DOLLAR       BY NO.      BY DOLLAR       BY NO.      BY DOLLAR
                                 OF        AMOUNT OF         OF        AMOUNT OF         OF        AMOUNT OF
                               LOANS         LOANS         LOANS         LOANS         LOANS         LOANS
                            ----------- --------------- ----------- --------------- ----------- ---------------
                                  (DOLLAR AMOUNTS             (DOLLAR AMOUNTS             (DOLLAR AMOUNTS
                                   IN THOUSANDS)               IN THOUSANDS)               IN THOUSANDS)
<S>                         <C>         <C>             <C>         <C>             <C>         <C>
Total Loan Portfolio ......    34,791     $ 6,239,996      31,572     $ 5,733,023      29,856     $ 5,434,738
Period of Delinquency
 30 to 59 days ............       576         106,876         476          87,173         352          66,736
 60 to 89 days ............        93          18,844          72          13,317          68          12,840
 90 days or more ..........        84          18,619          68          14,146          55          11,777
Foreclosures Pending ......       158          37,471         113          23,846         103          23,561
Total Delinquent Loans.....       911     $   181,809         729     $   138,482         578     $   114,914
Percent of Loan
 Portfolio ................     2.618%          2.914%      2.309%          2.416%      1.936%          2.114%
</TABLE>

-----------

o  The tables relate to the mortgage loans referred to above. Some of the
   information reported above may differ from information for the same periods
   reported by the depositor in previous years, because the depositor's
   methodology for determining the total portfolio differed in previous years,
   but these differences in the data are not material.

o  Does not include foreclosures pending.


                                      S-68
<PAGE>

     The following tables set forth information concerning foreclosed mortgage
loans and loan loss experience of Residential Funding as of the dates
indicated, with respect to the mortgage loans referred to above. For purposes
of the following tables, Average Portfolio Balance for the period indicated is
based on end of month balances divided by the number of months in the period
indicated, the Foreclosed Loans Ratio is equal to the aggregate principal
balance of Foreclosed Loans divided by the Total Loan Portfolio at the end of
the indicated period, and the Gross Loss Ratios and Net Loss Ratios are
computed by dividing the Gross Loss or Net Loss respectively during the period
indicated by the Average Portfolio Balance during that period.


























                                      S-69
<PAGE>

                  TOTAL LOAN PORTFOLIO FORECLOSURE EXPERIENCE




<TABLE>
<CAPTION>
                                       AT OR FOR           AT OR FOR           AT OR FOR
                                        THE YEAR            THE YEAR            THE YEAR
                                         ENDED               ENDED               ENDED
                                   DECEMBER 31, 1995   DECEMBER 31, 1996   DECEMBER 31, 1997
                                  ------------------- ------------------- -------------------
                                    (DOLLAR AMOUNTS     (DOLLAR AMOUNTS     (DOLLAR AMOUNTS
                                     IN THOUSANDS)       IN THOUSANDS)       IN THOUSANDS)
<S>                               <C>                 <C>                 <C>
Total Loan Portfolio ............    $ 25,892,632        $ 29,568,270        $ 35,987,149
Average Portfolio Balance .......    $ 24,182,873        $ 28,285,392        $ 32,155,215
Foreclosed Loans ................    $    116,189        $     91,995        $     90,297
Liquidated Foreclosed Loans .....    $    243,509        $    280,704        $    177,621
Foreclosed Loans Ratio ..........           0.449%              0.311%              0.251%
Gross Loss ......................    $     82,690        $     89,912        $     42,988
Gross Loss Ratio ................           0.342%              0.318%              0.134%
Covered Loss ....................    $     53,357        $     58,800        $     29,455
Net Loss ........................    $     29,333        $     31,111        $     13,533
Net Loss Ratio ..................           0.121%              0.110%              0.042%
Excess Recovery .................    $        345        $        438        $        238



<CAPTION>
                                       AT OR FOR           AT OR FOR            AT OR FOR
                                        THE YEAR            THE YEAR          THE SIX MONTH
                                         ENDED               ENDED            PERIOD ENDED
                                   DECEMBER 31, 1998   DECEMBER 31, 1999      JUNE 30, 2000
                                  ------------------- ------------------- --------------------
                                    (DOLLAR AMOUNTS     (DOLLAR AMOUNTS      (DOLLAR AMOUNTS
                                     IN THOUSANDS)       IN THOUSANDS)        IN THOUSANDS)
<S>                               <C>                 <C>                 <C>
Total Loan Portfolio ............    $ 41,048,258        $ 41,799,848       $ 41,427,183,976
Average Portfolio Balance .......    $ 31,941,101        $ 41,744,291       $ 41,702,462,437
Foreclosed Loans ................    $     43,584        $     36,732       $     22,122,132
Liquidated Foreclosed Loans .....    $    154,768        $     40,097       $     34,586,536
Foreclosed Loans Ratio ..........           0.106%              0.088%                 0.053%
Gross Loss ......................    $     40,012        $      6,022       $      8,798,842
Gross Loss Ratio ................           0.125%              0.014%                 0.021%
Covered Loss ....................    $     17,214        $      3,549       $      4,197,589
Net Loss ........................    $     22,798        $      2,473       $      4,601,252
Net Loss Ratio ..................           0.071%              0.006%                 0.011%
Excess Recovery .................    $        640        $        333       $         81,422
</TABLE>

       TOTAL REDUCED DOCUMENTATION LOAN PORTFOLIO FORECLOSURE EXPERIENCE





<TABLE>
<CAPTION>
                                       AT OR FOR           AT OR FOR
                                        THE YEAR            THE YEAR
                                         ENDED               ENDED
                                   DECEMBER 31, 1995   DECEMBER 31, 1996
                                  ------------------- -------------------
                                    (DOLLAR AMOUNTS     (DOLLAR AMOUNTS
                                     IN THOUSANDS)       IN THOUSANDS)
<S>                               <C>                 <C>
Total Loan Portfolio ............     $ 5,230,083         $ 5,491,996
Average Portfolio Balance .......     $ 5,129,445         $ 5,419,953
Foreclosed Loans ................     $    37,554         $    26,961
Liquidated Foreclosed Loans .....     $    96,103         $    82,103
Foreclosed Loans Ratio ..........           0.718%              0.491%
Gross Loss ......................     $    36,507         $    31,840
Gross Loss Ratio ................           0.712%              0.587%
Covered Loss ....................     $    22,155         $    20,838
Net Loss ........................     $    14,351         $    11,001
Net Loss Ratio ..................           0.280%              0.203%
Excess Recovery .................     $       140         $       216



<CAPTION>
                                       AT OR FOR           AT OR FOR           AT OR FOR           AT OR FOR
                                        THE YEAR            THE YEAR            THE YEAR         THE SIX MONTH
                                         ENDED               ENDED               ENDED            PERIOD ENDED
                                   DECEMBER 31, 1997   DECEMBER 31, 1998   DECEMBER 31, 1999     JUNE 30, 2000
                                  ------------------- ------------------- ------------------- -------------------
                                    (DOLLAR AMOUNTS     (DOLLAR AMOUNTS     (DOLLAR AMOUNTS     (DOLLAR AMOUNTS
                                     IN THOUSANDS)       IN THOUSANDS)       IN THOUSANDS)       IN THOUSANDS)
<S>                               <C>                 <C>                 <C>                 <C>
Total Loan Portfolio ............     $ 6,116,561         $ 6,239,996         $ 5,733,023       $ 5,434,737,594
Average Portfolio Balance .......     $ 5,757,996         $ 5,001,079         $ 6,483,857       $ 5,556,812,725
Foreclosed Loans ................     $    25,067         $    11,195         $     7,705       $     3,709,614
Liquidated Foreclosed Loans .....     $    50,629         $    34,189         $     7,487       $     6,142,954
Foreclosed Loans Ratio ..........           0.410%              0.179%              0.134%                0.068%
Gross Loss ......................     $    14,009         $     9,220         $     1,142       $     2,184,271
Gross Loss Ratio ................           0.243%              0.184%              0.018%                0.039%
Covered Loss ....................     $     9,443         $     3,714         $       561       $       717,273
Net Loss ........................     $     4,566         $     5,506         $       581       $     1,466,999
Net Loss Ratio ..................           0.079%              0.110%              0.009%                0.026%
Excess Recovery .................     $        77         $       150         $       148       $        65,010
</TABLE>

                                      S-70
<PAGE>

----------

o    The table relates to the mortgage loans referred to above. Some of the
     information reported above may differ from information for the same periods
     reported by the depositor in previous years, because the depositor's
     methodology for determining the total portfolio differed in previous years,
     but these differences in the data are not material.

o    For purposes of these tables, Foreclosed Loans includes the principal
     balance of mortgage loans secured by mortgaged properties the title to
     which has been acquired by Residential Funding, by investors or by an
     insurer following foreclosure or delivery of a deed in lieu of foreclosure
     and which had not been liquidated by the end of the period indicated.

o    Liquidated Foreclosed Loans is the sum of the principal balances of the
     foreclosed loans liquidated during the period indicated.

o    Gross Loss is the sum of the gross losses less net gains (Excess
     Recoveries) on all mortgage loans liquidated during the period indicated.
     Gross Loss for any mortgage loan is equal to the difference between (a) the
     principal balance plus accrued interest plus all liquidation expenses
     related to that mortgage loan and (b) all amounts received in connection
     with the liquidation of the related mortgaged property, excluding amounts
     received from mortgage pool or special hazard insurance or other forms of
     credit enhancement, as described below. Net gains from the liquidation of
     mortgage loans are identified below.

o    Covered Loss, for the period indicated, is equal to the aggregate of all
     proceeds received in connection with liquidated mortgage loans from
     mortgage pool insurance, special hazard insurance (but not including
     primary mortgage insurance, special hazard insurance or other insurance
     available for specific mortgaged properties) or other insurance as well as
     all proceeds received from or losses borne by other credit enhancement,
     including subordinate certificates.

o    Net Loss is determined by subtracting Covered Loss from Gross Loss. Net
     Loss indicated here may reflect Excess Recovery. Net Loss includes losses
     on mortgage loan pools which do not have the benefit of credit enhancement.

o    Excess Recovery is calculated only with respect to defaulted mortgage loans
     as to which the liquidation of the related mortgaged property resulted in
     recoveries in excess of the principal balance plus accrued interest thereon
     plus all liquidation expenses related to that mortgage loan. Excess
     Recoveries are not applied to reinstate any credit enhancement, and usually
     are not allocated to holders of certificates.


     The loss and delinquency experience of the master servicer, as shown in
the tables above, reflects a stable, consistently managed servicing operation.
Loss and delinquency levels during these periods were consistently within the
ranges anticipated by management. The loss and delinquency levels have declined
over the years shown in the above tables. This decline is attributable
primarily to generally favorable and improving economic conditions over this
time period. These can be no assurance that the experience shown in the above
tables will be indicative of future loss and delinquency experience of the
total portfolio, or of the mortgage loans in the trust.


     There can be no assurance that factors beyond Residential Funding's
control, such as weakening national or local economic conditions, higher
interest rates, higher unemployment rates, a decline in the availability of
refinancing, or downturns in real estate markets, will not result in increased
rates of delinquencies and foreclosure losses in the future. A general
deterioration of the real estate market in regions where the mortgaged
properties are located may result in higher delinquencies, delays in
foreclosure and lower sales prices with higher losses upon liquidation. A
general weakening of the economy may result in decreases in the financial
strength of borrowers and decreases in the value of collateral serving as
security for loans, causing an increase in delinquencies and higher net losses
on liquidated loans.


                                      S-71
<PAGE>

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

     The servicing fees for each mortgage loan are payable out of the interest
payments on that mortgage loan. The servicing fees relating to each mortgage
loan will be at least 0.28% per annum and not more than 0.58% per annum of the
outstanding principal balance of that mortgage loan, with a weighted average
servicing fee of approximately 0.3346% per annum. The servicing fees consist of
(a) servicing compensation payable to the master servicer in respect of its
master servicing activities and (b) subservicing and other related compensation
payable to the subservicer, including any payment due to prepayment charges on
the related mortgage loans and such compensation paid to the master servicer as
the direct servicer of a mortgage loan for which there is no subservicer.

     The primary compensation to be paid to the master servicer for its master
servicing activities will be at least 0.03% per annum and not more than 0.08%
per annum of the outstanding principal balance of each mortgage loan, with a
weighted average of approximately 0.0767%. As described in the prospectus, a
subservicer is entitled to servicing compensation in a minimum amount equal to
0.25% per annum of the outstanding principal balance of each mortgage loan
serviced by it. The master servicer is obligated to pay some ongoing expenses
associated with the trust and incurred by the master servicer in connection
with its responsibilities under the pooling and servicing agreement. See "The
Pooling and Servicing Agreement--Servicing and Other Compensation and Payment
of Expenses" in the prospectus for information regarding other possible
compensation to the master servicer and subservicers and for information
regarding expenses payable by the master servicer.


VOTING RIGHTS

     There are actions specified in the prospectus that may be taken by holders
of certificates evidencing a specified percentage of all undivided interests in
the trust and may be taken by holders of certificates entitled in the aggregate
to that percentage of the voting rights. 97% of all voting rights will be
allocated among all holders of the certificates, other than the Interest Only
Certificates and Residual Certificates, in proportion to their then outstanding
Certificate Principal Balances, 1.0% of all voting rights will be allocated
among the holders of the Class A-5 Certificates, 1.0% of all voting rights will
be allocated among the holders of the Variable Strip Certificates and 0.5% and
0.5% of all voting rights will be allocated among the holders of the Class R-I
Certificates and Class R-II Certificates, respectively, in proportion to the
percentage interests evidenced by their respective certificates. The pooling
and servicing agreement may be amended without the consent of the holders of
the Residual Certificates in specified circumstances.

     Notwithstanding the foregoing, so long as there does not exist a failure
by the insurer to make a required payment under the policy, the insurer shall
have the right to exercise all rights of the holders of the Insured
Certificates under the pooling and servicing agreement without any consent of
such holders, and such holders may exercise such rights only with the prior
written consent of the insurer except as provided in the pooling and servicing
agreement.


TERMINATION

     The circumstances under which the obligations created by the pooling and
servicing agreement will terminate relating to the offered certificates are
described under "The Pooling and Servicing Agreement--Termination; Retirement
of Certificates" in the prospectus. The master servicer or the depositor will
have the option, on any distribution date on which the aggregate Stated
Principal Balance of the mortgage loans is less than 10% of the aggregate
principal balance of the mortgage loans as of the cut-off date, either to
purchase all remaining mortgage loans and other assets in the trust, thereby
effecting early retirement of the offered certificates or to purchase, in whole
but not in part, the certificates. Any such purchase of mortgage loans and
other assets of the trust shall be made at a price equal to the sum of (a) 100%
of the unpaid principal balance of each mortgage loan or the fair market value
of the related underlying mortgaged properties with respect to defaulted
mortgage loans as to which title to such mortgaged properties has been acquired
if such fair market value is less than such unpaid principal balance, net of
any unreimbursed Advance attributable to principal, as of the date of
repurchase plus (b) accrued interest thereon at the Net Mortgage Rate to, but
not including, the first day of the month in which the repurchase price is
distributed.


                                      S-72
<PAGE>

     Distributions on the certificates relating to any optional termination
will be paid, first, to the Senior Certificates, second, to the Class M
Certificates in the order of their payment priority and, third, to the Class B
Certificates. The proceeds of any such distribution may not be sufficient to
distribute the full amount to each class of certificates if the purchase price
is based in part on the fair market value of the underlying mortgaged property
and the fair market value is less than 100% of the unpaid principal balance of
the related mortgage loan. Any such purchase of the certificates will be made
at a price equal to 100% of their Certificate Principal Balances plus, except
with respect to the Principal Only Certificates, the sum of interest thereon,
or with respect to the Interest Only Certificates, on their Notional Amounts,
for the immediately preceding Interest Accrual Period at the then-applicable
pass-through rate and any previously unpaid Accrued Certificate Interest. Upon
the purchase of such certificates or at any time thereafter, at the option of
the master servicer or the depositor, the mortgage loans may be sold, thereby
effecting a retirement of the certificates and the termination of the trust, or
the certificates so purchased may be held or resold by the master servicer or
the depositor.

     Upon presentation and surrender of the offered certificates in connection
with the termination of the trust or a purchase of certificates under the
circumstances described in the two preceding paragraphs, the holders of the
offered certificates will receive an amount equal to the Certificate Principal
Balance of that class plus, except in the case of the Principal Only
Certificates, interest thereon for the immediately preceding Interest Accrual
Period at the then-applicable pass-through rate, or, with respect to the
Interest Only Certificates, interest for the immediately preceding Interest
Accrual Period on their Notional Amounts, plus any previously unpaid Accrued
Certificate Interest. However, distributions to the holders of the most
subordinate class of certificates outstanding will be reduced, as described in
the preceding paragraph, in the case of the termination of the trust resulting
from a purchase of all the assets of the trust.


                   MATERIAL FEDERAL INCOME TAX CONSEQUENCES

     Thacher Proffitt & Wood, counsel to the depositor, has filed with the
depositor's registration statement an opinion to the effect that, assuming
compliance with all provisions of the pooling and servicing agreement, for
federal income tax purposes, the trust (exclusive of the Reserve Fund) will
qualify as two REMICs under the Internal Revenue Code.

     For federal income tax purposes:

    o the Class R-I Certificates will constitute the sole class of "residual
      interests" in REMIC I;

    o each class of Senior Certificates, other than the Residual Certificates,
      the Class M Certificates and the Class B Certificates will represent
      ownership of "regular interests" in REMIC II and will generally be
      treated as debt instruments of REMIC II; and

    o the Class R-II Certificates will constitute the sole class of "residual
      interests" in REMIC II.

     See "Material Federal Income Tax Consequences--REMICs" in the prospectus.

     For federal income tax purposes, the Class A-2, Class A-5, Class A-P,
Class A-V and Class M-3 Certificates will, and all other classes of offered
certificates will not, be treated as having been issued with original issue
discount. 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
275% PSA. No representation is made that the mortgage loans will prepay at that
rate or at any other rate. See "Material Federal Income Tax
Consequences--General" and "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount" in the prospectus.

     The Internal Revenue Service has issued original issue discount
regulations under sections 1271 to 1275 of the Internal Revenue Code that
address the treatment of debt instruments issued with original issue discount.
The OID regulations suggest that original issue discount with respect to
securities similar to the Variable Strip Certificates that represent multiple
uncertificated REMIC regular interests, in which ownership interests will be
issued simultaneously to the same buyer, should be computed on an aggregate
method. In the absence of further guidance from the IRS, original issue
discount with respect to the uncertificated regular interests represented by
the Variable Strip Certificates will be reported to the IRS


                                      S-73
<PAGE>

and the certificateholders on an aggregate method based on a single overall
constant yield and the prepayment assumption stated above, treating all
uncertificated regular interests as a single debt instrument as described in
the OID regulations.

     A reasonable application of the principles of the OID regulations to the
Adjustable Rate Certificates generally would be to report income with respect
to those certificates as original issue discount for each period by computing
the original issue discount (i) by assuming that the value of the applicable
index will remain constant for purposes of determining the original yield to
maturity of each such class of certificates and projecting future distributions
on those certificates, thereby treating those certificates as fixed rate
instruments to which the original issue discount computation rules described in
the prospectus can be applied, and (ii) by accounting for any positive or
negative variation in the actual value of the applicable index in any period
from its assumed value as a current adjustment to original issue discount with
respect to that period.

     If the method for computing original issue discount described in the
prospectus results in a negative amount for any period with respect to a
certificateholder, the amount of original issue discount allocable to that
period would be zero and the certificateholder will be permitted to offset that
negative amount only against future original issue discount, if any,
attributable to those certificates.

     In some circumstances the OID regulations permit the holder of a debt
instrument to recognize original issue discount under a method that differs
from that used by the issuer. Accordingly, it is possible that the holder of a
certificate may be able to select a method for recognizing original issue
discount that differs from that used by the master servicer in preparing
reports to the certificateholders and the IRS.

     Some of the classes of offered certificates may be treated for federal
income tax purposes as having been issued at a premium. Whether any holder of
one of those classes of certificates will be treated as holding a certificate
with amortizable bond premium will depend on the certificateholder's purchase
price and the distributions remaining to be made on the certificate at the time
of its acquisition by the certificateholder. Holders of those classes of
certificates should consult their tax advisors regarding the possibility of
making an election to amortize such premium. See "Material Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Regular Certificates" and
"--Premium" in the prospectus.

     The offered certificates will be treated as assets described in Section
7701(a)(19)(C) of the Internal Revenue Code and "real estate assets" under
Section 856(c)(4)(A) of the Internal Revenue Code generally in the same
proportion that the assets of the trust would be so treated. In addition,
interest on the offered certificates will be treated as "interest on
obligations secured by mortgages on real property" under Section 856(c)(3)(B)
of the Internal Revenue Code generally to the extent that the offered
certificates are treated as "real estate assets" under Section 856(c)(4)(A) of
the Internal Revenue Code. Moreover, the offered certificates, other than the
Residual Certificates, will be "qualified mortgages" within the meaning of
Section 860G(a)(3) of the Internal Revenue Code if transferred to another REMIC
on its startup day in exchange for a regular or residual interest therein.
However, prospective investors in offered certificates that will be generally
treated as assets described in Section 860G(a)(3) of the Internal Revenue Code
should note that, notwithstanding that treatment, any repurchase of a
certificate pursuant to the right of the master servicer or the depositor to
repurchase the offered certificates may adversely affect any REMIC that holds
the offered certificates if the repurchase is made under circumstances giving
rise to a Prohibited Transaction Tax. See "The Pooling and Servicing
Agreement--Termination" in this prospectus supplement and "Material Federal
Income Tax Consequences--REMICs-- Characterization of Investments in REMIC
Certificates" in the prospectus.

     For further information regarding federal income tax consequences of
investing in the offered certificates, see "Material Federal Income Tax
Consequences--REMICs" in the prospectus.

SPECIAL TAX CONSIDERATIONS APPLICABLE TO RESIDUAL CERTIFICATES

     The IRS has issued REMIC regulations under the provisions of the Internal
Revenue Code that significantly affect holders of Residual Certificates. The
REMIC regulations impose restrictions on the transfer or acquisition of some
residual interests, including the Residual Certificates. The pooling and
servicing agreement includes other provisions regarding the transfer of
Residual Certificates, including:


                                      S-74
<PAGE>

    o the requirement that any transferee of a Residual Certificate provide an
      affidavit representing that the transferee:

      o is not a disqualified organization;

      o is not acquiring the Residual Certificate on behalf of a disqualified
        organization; and

      o will maintain that status and will obtain a similar affidavit from any
        person to whom the transferee shall subsequently transfer a Residual
        Certificate;

    o a provision that any transfer of a Residual Certificate to a
      disqualified organization shall be null and void; and

    o a grant to the master servicer of the right, without notice to the
      holder or any prior holder, to sell to a purchaser of its choice any
      Residual Certificate that shall become owned by a disqualified
      organization despite the first two provisions above.

In addition, under the pooling and servicing agreement, the Residual
Certificates may not be transferred to non-United States persons.

     The REMIC regulations also provide that a transfer to a United States
person of "noneconomic" residual interests will be disregarded for all federal
income tax purposes, and that the purported transferor of "noneconomic"
residual interests will continue to remain liable for any taxes due with
respect to the income on the residual interests, unless "no significant purpose
of the transfer was to impede the assessment or collection of tax." Based on
the REMIC regulations, the Residual Certificates may constitute noneconomic
residual interests during some or all of their terms for purposes of the REMIC
regulations and, accordingly, unless no significant purpose of a transfer is to
impede the assessment or collection of tax, transfers of the Residual
Certificates may be disregarded and purported transferors may remain liable for
any taxes due relating to the income on the Residual Certificates. All
transfers of the Residual Certificates will be restricted in accordance with
the terms of the pooling and servicing agreement that are intended to reduce
the possibility of any transfer of a Residual Certificate being disregarded to
the extent that the Residual Certificates constitute noneconomic residual
interests. The IRS has issued proposed changes to the REMIC regulations that
would add to the conditions necessary to assure that a transfer of a
noneconomic residual interest would be respected. The proposed additional
condition would require that the amount received by the transferee be no less
on a present value basis than the present value of the net tax detriment
attributable to holding a residual interest reduced by the present value of the
projected payments to be received on the residual interest. The change is
proposed to be effective for transfers of residual interests occurring after
February 4, 2000. See "Material Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Residual Certificates--
Noneconomic REMIC Residual Certificates" in the prospectus.

     The Residual Certificateholders may be required to report an amount of
taxable income with respect to the earlier accrual periods of the term of the
REMIC that significantly exceeds the amount of cash distributions received by
the Residual Certificateholders from the REMIC with respect to those periods.
Furthermore, the tax on that income may exceed the cash distributions with
respect to those periods. Consequently, Residual Certificateholders should have
other sources of funds sufficient to pay any federal income taxes due in the
earlier years of the REMIC's term as a result of their ownership of the
Residual Certificates. In addition, the required inclusion of this amount of
taxable income during the REMIC's earlier accrual periods and the deferral of
corresponding tax losses or deductions until later accrual periods or until the
ultimate sale or disposition of a Residual Certificate, or possibly later under
the "wash sale" rules of Section 1091 of the Internal Revenue Code may cause
the Residual Certificateholders' after-tax rate of return to be zero or
negative even if the Residual Certificateholders' pre-tax rate of return is
positive. That is, on a present value basis, the Residual Certificateholders'
resulting tax liabilities could substantially exceed the sum of any tax
benefits and the amount of any cash distributions on the Residual Certificates
over their life.

     An individual, trust or estate that holds, whether directly or indirectly
through pass-through entities, a Residual Certificate, may have significant
additional gross income with respect to, but may be limited


                                      S-75
<PAGE>

on the deductibility of, servicing and trustee's fees and other administrative
expenses properly allocable to the REMIC in computing the certificateholder's
regular tax liability and will not be able to deduct those fees or expenses to
any extent in computing the certificateholder's alternative minimum tax
liability. See "Material Federal Income Tax Consequences--REMICs--Taxation of
Owners of REMIC Residual Certificates--Possible Pass-Through of Miscellaneous
Itemized Deductions" in the prospectus.

     Residential Funding will be designated as the "tax matters person" with
respect to the REMIC as defined in the REMIC Provisions, as defined in the
prospectus, and in connection therewith will be required to hold not less than
0.01% of the Class R Certificates.

     Purchasers of the Residual Certificates are strongly advised to consult
their tax advisors as to the economic and tax consequences of investment in the
Residual Certificates.

     For further information regarding the federal income tax consequences of
investing in the Residual Certificates, see "Certain Yield and Prepayment
Considerations--Additional Yield Considerations Applicable Solely to the
Residual Certificates" in this prospectus supplement and "Material Federal
Income Tax Consequences--REMICs--Taxation of Owners of REMIC Residual
Certificates" in the prospectus.


                            METHOD OF DISTRIBUTION

     In accordance with the terms and conditions of a senior underwriting
agreement, dated October 24, 2000, Bear, Stearns & Co. Inc. will serve as the
senior underwriter and has agreed to purchase and the depositor has agreed to
sell the Senior Certificates other than the Class A-P Certificates and Class
A-V Certificates, except that a de minimis portion of the Residual Certificates
will be retained by Residential Funding, and that portion is not offered
hereby. The certificates being sold to Bear, Stearns & Co. Inc. are referred to
as the senior underwritten certificates. It is expected that delivery of the
senior underwritten certificates, other than the Residual Certificates, will be
made only in book-entry form through the Same Day Funds Settlement System of
DTC, and that the delivery of the Residual Certificates will be made at the
offices of Bear, Stearns & Co. Inc., New York, New York, on or about October
27, 2000 against payment therefor in immediately available funds.

     In accordance with the terms and conditions of a Class M underwriting
agreement, dated October 24, 2000, Residential Funding Securities Corporation
will serve as Class M underwriter and has agreed to purchase on a best efforts
basis and the depositor has agreed to sell the Class M Certificates. The
certificates being sold to the Class M underwriter are referred to as the Class
M underwritten certificates. It is expected that delivery of the Class M
underwritten certificates will be made only in book-entry form through the Same
Day Funds Settlement System of DTC against payment therefor in immediately
available funds. The termination date of the offering of the Class M
underwritten certificates is the earlier to occur of October 24, 2001 or the
date on which all of the Class M certificates have been sold. Proceeds of the
Class M underwritten certificates will not be placed in escrow, trust or
similar arrangement.

     The senior underwriting agreement and the Class M underwriting agreement
are collectively referred to in this prospectus supplement as the underwriting
agreements and the senior underwriter and the Class M underwriter are referred
to in this prospectus supplement together as the underwriters. The senior
underwritten certificates and the Class M underwritten certificates are
collectively referred to in this prospectus supplement as the underwritten
certificates.

     In connection with the senior underwritten certificates, the senior
underwriter has agreed, in accordance with the terms and conditions of the
senior underwriting agreement, to purchase all of the senior underwritten
certificates if any of those underwritten certificates are purchased thereby.

     The underwriting agreements provide that the obligations of the
underwriters to pay for and accept delivery of their respective underwritten
certificates are subject to, among other things, the receipt of legal opinions
and to the conditions, among others, that no stop order suspending the
effectiveness of the depositor's registration statement shall be in effect, and
that no proceedings for that purpose shall be pending before or threatened by
the Securities and Exchange Commission.


                                      S-76
<PAGE>

     The distribution of the underwritten certificates by the respective
underwriters may be effected from time to time in one or more negotiated
transactions, or otherwise, at varying prices to be determined at the time of
sale. Proceeds to the depositor from the sale of the senior underwritten
certificates, before deducting expenses payable by the depositor, will be
approximately 99.19% of the aggregate Certificate Principal Balance of the
senior underwritten certificates plus accrued interest thereon from the cut-off
date. The proceeds to the depositor from any sale of the Class M underwritten
certificates will be equal to the purchase price paid by the purchaser of these
underwritten certificates, net of any expenses payable by the depositor and any
compensation payable to Residential Funding Securities Corporation and any
dealer.

     The underwriters may effect these transactions by selling the underwritten
certificates to or through dealers, and those dealers may receive compensation
in the form of underwriting discounts, concessions or commissions from the
underwriter for whom they act as agent. In connection with the sale of the
underwritten certificates, the underwriters may be deemed to have received
compensation from the depositor in the form of underwriting compensation. The
underwriters and any dealers that participate with the underwriters in the
distribution of the related 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.

     The underwriting agreements provide that the depositor will indemnify the
related underwriter, and that under limited circumstances the related
underwriter will indemnify the depositor, against some liabilities under the
Securities Act, or contribute to payments required to be made in respect
thereof.

     The Class A-P Certificates and Class A-V Certificates may be offered by
the depositor from time to time directly or through an underwriter or agent in
one or more negotiated transactions, or otherwise, at varying prices to be
determined at the time of sale. However, there is currently no underwriting
arrangement in effect for these certificates. Proceeds to the depositor from
any sale of the Class A-P Certificates and Class A-V Certificates will equal
the purchase price paid by their purchaser, net of any expenses payable by the
depositor and any compensation payable to any underwriter or agent.

     There is currently no secondary market for the offered certificates. Each
underwriter intends to make a secondary market in the underwritten certificates
it is underwriting but is not obligated to do so. There can be no assurance
that a secondary market for the offered certificates will develop or, if it
does develop, that it will continue. The offered certificates will not be
listed on any securities exchange.

     The primary source of information available to investors concerning the
offered certificates will be the monthly statements discussed in the prospectus
under "Description of the Certificates--Reports to Certificateholders," which
will include information as to the outstanding principal balance or notional
amount of the offered certificates. There can be no assurance that any
additional information regarding the offered certificates will be available
through any other source. In addition, the depositor is not aware of any source
through which price information about the offered certificates will be
available on an ongoing basis. The limited nature of this information regarding
the offered certificates may adversely affect the liquidity of the offered
certificates, even if a secondary market for the offered certificates becomes
available.

                                 LEGAL OPINIONS

     Certain legal matters relating to the certificates will be passed upon for
the depositor and for Residential Funding Securities Corporation by Thacher
Proffitt & Wood, New York, New York and for the senior underwriter by Brown &
Wood LLP, New York, New York.

                                    EXPERTS

     The consolidated financial statements of Ambac Assurance Corporation and
subsidiaries, as of December 31, 1999 and December 31, 1998 and for each of the
years in the three-year period ended December 31, 1999 are incorporated by
reference in this prospectus supplement and in the registration statement in
reliance upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference in this prospectus supplement, and upon the authority
of said firm as experts in accounting and auditing.


                                      S-77
<PAGE>

                                    RATINGS

     It is a condition of the issuance of the Senior Certificates that they be
rated "AAA" by Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., or Standard & Poor's, and Fitch, Inc., or Fitch. It is a condition of the
issuance of the Class M-1, Class M-2 and Class M-3 Certificates that they be
rated not lower than "AA," "A" and "BBB," respectively, by Fitch.

     Standard & Poor's ratings on mortgage pass-through certificates address
the likelihood of the receipt by certificateholders of payments required under
the pooling and servicing agreement. Standard & Poor'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. Standard & Poor's rating on the certificates does not, however,
constitute a statement regarding frequency of prepayments on the mortgages. See
"Certain Yield and Prepayment Considerations" in this prospectus supplement.

     The ratings assigned by Fitch to mortgage pass-through certificates
address the likelihood of the receipt by certificateholders of all
distributions to which they are entitled under the transaction structure.
Fitch's ratings reflect its analysis of the riskiness of the underlying
mortgage loans and the structure of the transaction as described in the
operative documents. Fitch's ratings do not address the effect on the
certificates' yield attributable to prepayments or recoveries on the underlying
mortgage loans. Further, the rating on the Interest Only Certificates does not
address whether investors therein will recoup their initial investments. The
rating on the Principal Only Certificates only addresses the return of its
Certificate Principal Balance. The rating on the Residual Certificates only
addresses the return of its Certificate Principal Balance and interest on the
Residual Certificates at the related pass-through rate.

     The depositor has not requested a rating on the Senior Certificates by any
rating agency other than Standard & Poor's and Fitch or on the Class M
Certificates by any rating agency other than Fitch. However, there can be no
assurance as to whether any other rating agency will rate the Senior
Certificates or Class M Certificates, or, if it does, what rating would be
assigned by any other rating agency. A rating on the certificates by another
rating agency, if assigned at all, may be lower than the ratings assigned to
the Senior Certificates by Standard & Poor's and Fitch, and the Class M
Certificates by Fitch.

     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. The ratings of the Interest Only Certificates do not
address the possibility that the holders of those certificates may fail to
fully recover their initial investments. In the event that the ratings
initially assigned to the offered certificates are subsequently lowered for any
reason, no person or entity is obligated to provide any additional support or
credit enhancement with respect to the offered certificates.


                               LEGAL INVESTMENT

     The Senior Certificates and Class M-1 Certificates will constitute
"mortgage related securities" for purposes of SMMEA so long as they are rated
in at least the second highest rating category by one of the rating agencies,
and, as such, are legal investments for some entities to the extent provided in
SMMEA. SMMEA provides, however, 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. Some
states have enacted legislation which overrides the preemption provisions of
SMMEA. The Class M-2 Certificates and Class M-3 Certificates will not
constitute "mortgage related securities" for purposes of SMMEA.

     One or more classes of the offered certificates may be viewed as "complex
securities" under TB13a, which applies to thrift institutions regulated by the
OTS.

     The depositor makes no representations as to the proper characterization
of any class of the offered certificates for legal investment or other
purposes, or as to the ability of particular investors to purchase any class of
the offered certificates under applicable legal investment restrictions. These
uncertainties may adversely affect the liquidity of any class of offered
certificates. Accordingly, all institutions whose


                                      S-78
<PAGE>

investment activities are subject to legal investment laws and regulations,
regulatory capital requirements or review by regulatory authorities should
consult with their legal advisors in determining whether and to what extent any
class of the offered certificates constitutes a legal investment or is subject
to investment, capital or other restrictions.

     See "Legal Investment Matters" in the prospectus.


                             ERISA CONSIDERATIONS

     A fiduciary of any ERISA plan, any insurance company, whether through its
general or separate accounts, or any other person investing ERISA plan assets
of any ERISA plan, as defined under "ERISA Considerations--ERISA Plan Asset
Regulations" in the prospectus, should carefully review with its legal advisors
whether the purchase or holding of offered certificates could give rise to a
transaction prohibited or not otherwise permissible under ERISA or Section 4975
of the Internal Revenue Code. The purchase or holding of the offered
certificates, other than the Class M Certificates or Residual Certificates, by
or on behalf of, or with ERISA plan assets of, an ERISA plan may qualify for
exemptive relief under the exemption, as described under "ERISA
Considerations--Prohibited Transaction Exemption" in the prospectus and as
currently in effect. However, the exemption contains a number of conditions
which must be met for the exemption to apply, including the requirement that
any ERISA 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.

     Insurance companies contemplating the investment of general account assets
in the offered certificates should consult with their legal advisors with
respect to the applicability of Section 401(c) of ERISA, as described under
"ERISA Considerations--Insurance Company General Accounts" in the prospectus.
The DOL published final regulations under Section 401(c) on January 5, 2000,
but these final regulations are generally not applicable until July 5, 2001.

     Because the exemptive relief afforded by the exemption as currently in
effect or any similar exemption that may be available will not likely apply to
the purchase, sale or holding of the Class M Certificates, no Class M
Certificate or any interest therein may be acquired or held by any ERISA plan,
any trustee or other person acting on behalf of any ERISA plan, or any other
person using ERISA plan assets to effect such acquisition or holding--a plan
investor--unless:

    o the acquirer or holder is an insurance company;

    o the source of funds used to acquire or hold the certificate or interest
      therein is an "insurance company general account", as defined in U.S.
      Department of Labor Prohibited Transaction Class Exemption 95-60; and

    o the conditions in Sections I and III of PTCE 95-60 have been satisfied.

     Each beneficial owner of a Class M Certificate or any interest therein
shall be deemed to have represented, by virtue of its acquisition or holding of
that certificate or interest therein, that either (i) it is not a plan investor
or (ii) (1) it is an insurance company, (2) the source of funds used to acquire
or hold the certificate or interest therein is an "insurance company general
account", as such term is defined in PTCE 95-60, and (3) the conditions in
Sections I and III of PTCE 95-60 have been satisfied.

     The DOL has proposed certain amendments to the exemption which, if
published in final form as proposed, would permit the Class M Certificates to
be purchased and held by or on behalf of, or with plan assets of, a plan if the
Class M Certificates are rated "BBB-" or better at the time of purchase. See
DOL Exemption Application No. D-10809, 65 Fed. Reg. 51454 (August 23, 2000).
The exemption amendments will not apply until they are finalized by the DOL and
published in final form in the Federal Register, but the proposed effective
date is August 23, 2000. Accordingly, the Class M Certificates may be purchased
and held by or on behalf of, or with plan assets of, any plan without regard to
the restrictions set forth in the preceding paragraph, if:

    o the exemption amendments are published in final form with substantially
      the same conditions as proposed and an effective date which is no later
      that the closing date;


                                      S-79
<PAGE>

    o the Class M Certificates are rated "BBB-" or better at the time of
      purchase; and


    o the purchase date occurs after the date on which the exemption
      amendments are published in final form.


There can be no assurance that the exemption amendments will be published in
final form on any future date or that the final conditions will not be more
restrictive that those proposed. The depositor, the trustee and the master
servicer will have no obligation to notify any person if or when the exemption
amendments are published in final form.


     If any Class M Certificate or any interest therein is acquired or held in
violation of the provisions of the two preceding paragraphs, the next preceding
permitted beneficial owner will be treated as the beneficial owner of that
Class M Certificate, retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding
of any such certificate or interest therein was effected in violation of the
provisions of the two preceding paragraphs shall indemnify and hold harmless
the depositor, the trustee, the master servicer, any subservicer, and the trust
from and against any and all liabilities, claims, costs or expenses incurred by
those parties as a result of that acquisition or holding.


     Investors in the Class M Certificates are urged to obtain from a
transferee of those certificates, unless the exemption amendments are published
in final form with substantially the same conditions as proposed and an
effective date which is no later than the closing date, a certification of the
transferee's eligibility to purchase the certificates in the form of the
representation letter attached as Annex I to this prospectus supplement.


     Because the exemptive relief afforded by the exemption or any similar
exemption that might be available also will not likely apply to the purchase,
sale or holding of the Residual Certificates, transfers of those certificates
to any plan investor will not be registered by the trustee unless the
transferee provides the depositor, the trustee and the master servicer with an
opinion of counsel satisfactory to those entities, which opinion will not be at
the expense of those entities, that the purchase of those certificates by or on
behalf of the plan investor:


    o is permissible under applicable law


    o will not constitute or result in a non-exempt prohibited transaction
      under ERISA or Section 4975 of the Internal Revenue Code and


    o will not subject the depositor, the trustee or the master servicer to
      any obligation in addition to those undertaken in the pooling and
      servicing agreement.


     Any fiduciary or other investor of ERISA plan assets that proposes to
acquire or hold the offered certificates on behalf of or with ERISA plan assets
of any ERISA plan should consult with its counsel with respect to: (i) whether
the specific and general conditions and the other requirements in the exemption
would be satisfied, or whether any other prohibited transaction exemption would
apply, and (ii) the potential applicability of the general fiduciary
responsibility provisions of ERISA and the prohibited transaction provisions of
ERISA and Section 4975 of the Internal Revenue Code to the proposed investment.
See "ERISA Considerations" in the prospectus.


     The sale of any of the offered certificates to an ERISA plan is in no
respect a representation by the depositor or the underwriter that such an
investment meets all relevant legal requirements relating to investments by
ERISA plans generally or any particular ERISA plan, or that such an investment
is appropriate for ERISA plans generally or any particular ERISA plan.


                                      S-80
<PAGE>

                                                                         ANNEX I


                          ERISA REPRESENTATION LETTER


                                    [date]

Residential Funding Corporation
8400 Normandale Lake Boulevard, Suite 600
Minneapolis, Minnesota 55437


Residential Funding Mortgage Securities I, Inc.
8400 Normandale Lake Boulevard, Suite 600
Minneapolis, Minnesota 55437


Bank One, National Association
1 Bank One Plaza
Attn: Global Corporate Trust Services
Suite IL1-0126
Chicago, Illinois 60670-0126


Re: Residential Funding Mortgage Securities I, Inc.
    Mortgage Pass-Through Certificates, Series 2000-S13, Class M-

Ladies and Gentlemen:

     [          ] (the "Purchaser") intends to purchase from [          ] (the
"Seller") $[   ] initial Certificate Principal Balance of the above-referenced
certificates, issued under the series supplement, dated as of October 1, 2000,
to the standard terms of pooling and servicing agreement, dated as of September
1, 2000, among Residential Funding Mortgage Securities I, Inc., as seller,
Residential Funding Corporation, as master servicer and Bank One, National
Association, as trustee. All terms used in this ERISA Representation Letter and
not otherwise defined shall have the meanings set forth in the pooling and
servicing agreement.

     The Purchaser hereby certifies, represents and warrants to, and covenants
with the Seller, the trustee and the master servicer that, either:

     (a) The Purchaser is not an ERISA plan, or any other person, including an
   investment manager, a named fiduciary or a trustee of any Plan, acting,
   directly or indirectly, on behalf of or purchasing any certificate with
   "plan assets" of any ERISA plan within the meaning of the DOL regulation at
   29 C.F.R.  Section 2510.3-101; or

     (b) The Purchaser is an insurance company, the source of funds to be used
   by which to purchase the certificates is an "insurance company general
   account", as the term is defined in DOL Prohibited Transaction Class
   Exemption 95-60, and the conditions in Sections I and III of PTCE 95-60
   have been satisfied.

     In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Seller, the trustee and the master servicer that the
Purchaser will not transfer the certificates to any ERISA plan or person unless
that ERISA plan or person meets the requirements in either (a) or (b) above.

                                        Very truly yours,


                                      By: ------------------------------------

                                      Name: ----------------------------------

                                      Title: -----------------------------------









                                      A-1

<PAGE>

PROSPECTUS

MORTGAGE PASS-THROUGH CERTIFICATES


RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
Depositor




The depositor may periodically form separate trusts to issue certificates in
series, backed by mortgage collateral.




OFFERED CERTIFICATES   The certificates in a series will represent interests in
                       a trust and will be paid only from the assets of that
                       trust. Each series may include multiple classes of
                       certificates with differing payment terms and priorities.
                       Credit enhancement will be provided for all offered
                       certificates.





MORTGAGE COLLATERAL    Each trust will consist primarily of:

     o   mortgage loans secured by first liens on one- to four-family
         residential properties;

     o   mortgage securities and whole or partial participations in mortgage
         loans; and

     o   mortgage loans secured by additional collateral







NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE CERTIFICATES OR DETERMINED THAT
THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.






                               September 22, 2000
<PAGE>

             IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
             PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT


     We provide information to you about the certificates in two separate
documents that provide progressively more detail:


     o   this prospectus, which provides general information, some of which may
         not apply to your series of certificates; and


     o   the accompanying prospectus supplement, which describes the specific
         terms of your series of certificates.


IF THE DESCRIPTION OF YOUR CERTIFICATES IN THE ACCOMPANYING PROSPECTUS
SUPPLEMENT DIFFERS FROM THE RELATED DESCRIPTION IN THIS PROSPECTUS, YOU SHOULD
RELY ON THE INFORMATION IN THAT PROSPECTUS SUPPLEMENT.


You should rely only on the information provided in this prospectus and the
accompanying prospectus supplement, including the information incorporated by
reference. See "Additional Information", "Reports to certificateholders" and
"Incorporation of Certain Information by Reference" in this Prospectus. You can
request information incorporated by reference from Residential Funding Mortgage
Securities I, Inc. by calling us at (612) 832-7000 or writing to us at 8400
Normandale Lake Boulevard, Suite 600, Minneapolis, Minnesota 55437. We have not
authorized anyone to provide you with different information. We are not
offering the certificates in any state where the offer is not permitted.


Some capitalized terms used in this prospectus are defined in the Glossary
attached hereto.


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

                                       2
<PAGE>

                               TABLE OF CONTENTS




<TABLE>
<CAPTION>
                                                     PAGE
                                                -------------
<S>                                             <C>
Introduction ................................          4
The Trusts ..................................          4
   General ..................................          4
   The Mortgage Loans .......................          6
Mortgage Loan Program .......................         10
   Underwriting Standards ...................         10
   Qualifications of Sellers ................         14
   Representations with Respect to the
      Mortgage Loans ........................         14
   Subservicing .............................         17
Description of the Certificates .............         19
   General ..................................         19
   Form of Certificates .....................         19
   Assignment of Trust Assets ...............         21
   Review of Mortgage Loans .................         22
   Spread ...................................         23
   Payments on Mortgage Loans;
      Deposits to Certificate Account .......         24
   Withdrawals from the Custodial
      Account ...............................         26
   Distributions ............................         27
   Example of Distributions .................         28
   Advances .................................         29
   Prepayment Interest Shortfalls ...........         30
   Reports to Certificateholders ............         30
   Collection and Other Servicing
      Procedures ............................         31
   Special Servicing and Special
      Servicing Agreements ..................         32
   Realization Upon Defaulted
      Mortgage Loans ........................         33
Subordination ...............................         34
   General ..................................         34
   Overcollateralization ....................         35
Description of Credit Enhancement ...........         36
   General ..................................         36
   Letters of Credit ........................         37
   Mortgage Pool Insurance Policies .........         37
   Special Hazard Insurance Policies ........         39
   Bankruptcy Policies ......................         39
   Reserve Funds ............................         40
   Certificate Insurance Policies; Surety
      Bonds .................................         40
   Maintenance of Credit Enhancement.........         40
   Reduction or Substitution of Credit
      Enhancement ...........................         41
Other Financial Obligations Related to
   the Certificates .........................         42
   Swaps and Yield Supplement
      Agreements ............................         42
   Purchase Obligations .....................         42
Insurance Policies on Mortgage Loans ........         43
   Primary Insurance Policies ...............         43


</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                     PAGE
                                                -------------
<S>                                             <C>
   Standard Hazard Insurance on
      Mortgaged Properties ..................         44
The Depositor ...............................         45
Residential Funding Corporation .............         45
The Pooling and Servicing Agreement .........         46
   Servicing and Other Compensation
      and Payment of Expenses ...............         46
   Evidence as to Compliance ................         47
   Certain Matters Regarding the Master
      Servicer and the Depositor ............         47
   Events of Default ........................         48
   Rights Upon Event of Default .............         48
   Amendment ................................         49
   Termination; Retirement of
      Certificates ..........................         50
   The Trustee ..............................         51
Yield Considerations ........................         51
Maturity and Prepayment
   Considerations ...........................         54
Certain Legal Aspects of Mortgage
   Loans ....................................         56
   The Mortgage Loans .......................         56
   Environmental Legislation ................         63
   Soldiers' and Sailors' Civil Relief Act
      of 1940 ...............................         64
   Default Interest and Limitations on
      Prepayments ...........................         64
   Forfeitures in Drug and RICO
      Proceedings ...........................         64
   Negative Amortization Loans ..............         65
Material Federal Income Tax
   Consequences .............................         66
   General ..................................         66
   REMICs ...................................         66
State and Other Tax Consequences ............         81
ERISA Considerations ........................         81
   ERISA Plan Asset Regulations .............         81
   Prohibited Transaction Exemption .........         82
   Insurance Company General
      Accounts ..............................         84
   Representations from Investing Plans......         85
   Tax-Exempt Investors .....................         85
   Consultation with Counsel ................         85
Legal Investment Matters ....................         86
Use of Proceeds .............................         87
Methods of Distribution .....................         87
Legal Matters ...............................         88
Financial Information .......................         88
Additional Information ......................         88
Reports to Certificateholders ...............         88
Incorporation of Certain Information by
   Reference ................................         89
Glossary ....................................         90
</TABLE>

                                       3
<PAGE>

                                  INTRODUCTION

     The mortgage pass-through certificates offered may be sold from time to
time in series. Each series of certificates will represent in the aggregate the
entire beneficial ownership interest, excluding any interest retained by
Residential Funding Mortgage Securities I, Inc., the depositor, or any other
entity specified in the related prospectus supplement, in a trust consisting
primarily of a segregated pool of one- to four-family, residential first
mortgage loans, acquired by the depositor from one or more affiliated or
unaffiliated institutions. Each series of certificates will be issued under a
pooling and servicing agreement among the depositor, the trustee and the master
servicer specified in the related prospectus supplement.


                                   THE TRUSTS


GENERAL

     The mortgage loans and other assets described in this prospectus under
"The Trusts--The Mortgage Loans" and in the related prospectus supplement will
be held in a trust for the benefit of the holders of the related series of
certificates and the Excess Spread, if any, under a pooling and servicing
agreement as described in this section and in the related prospectus
supplement. As specified in the related prospectus supplement, each series of
certificates will represent in the aggregate the entire beneficial ownership
interest in the mortgage pool consisting primarily of conventional mortgage
loans, excluding any interest retained by the depositor or any other entity
specified in the related prospectus supplement, evidenced by promissory notes,
the mortgage notes secured by first mortgages or first deeds of trust or other
similar security instruments creating a first lien on one- to four-family
residential properties, or interests in the mortgage loans which may include
mortgage securities evidencing interests in mortgage loans.

     As specified in the related prospectus supplement, the mortgaged
properties will consist primarily of owner-occupied attached or detached
one-family dwelling units, two- to four-family dwelling units, condominiums,
townhouses, row houses, individual units in planned-unit developments and
modular pre-cut/panelized housing, and the fee, leasehold or other interests in
the underlying real property. The mortgaged properties may include vacation,
second and non-owner-occupied homes. If specified in the related prospectus
supplement relating to a series of certificates, a mortgage pool may contain
Cooperative Loans evidenced by Cooperative Notes. In addition, if specified in
the related prospectus supplement relating to a series of certificates, a
mortgage pool may contain Additional Collateral Loans or Pledged Asset Mortgage
Loans that are secured, in addition to the related mortgaged property, by
Additional Collateral or Pledged Assets.

     As used herein, unless the context indicates otherwise, mortgage loans
includes Cooperative Loans, Additional Collateral Loans and Pledged Asset
Mortgage Loans, mortgaged properties includes shares in the related Cooperative
and the related proprietary leases or occupancy agreements securing Cooperative
Notes, mortgage notes includes Cooperative Notes and mortgages includes a
security agreement with respect to a Cooperative Note.

     The prospectus supplement with respect to a series will describe the
specific manner in which certificates of that series issued under a particular
pooling and servicing agreement will evidence specified beneficial ownership
interests in a separate trust created under that pooling and servicing
agreement. A trust will consist of, to the extent provided in the related
pooling and servicing agreement:

     o   mortgage loans and the related mortgage documents or interests therein,
         including any mortgage securities, underlying a particular series of
         certificates as from time to time are subject to the pooling and
         servicing agreement, exclusive of, if specified in the related
         prospectus supplement, any Excluded Spread or other interest retained
         by the depositor or any of its affiliates with respect to each Mortgage
         Loan

     o   assets including, without limitation, all payments and collections
         derived from the mortgage loans or mortgage securities due after the
         related cut-off date, as from time to time are identified as deposited
         in the Custodial Account and in the related Certificate Account

     o   property acquired by foreclosure of the mortgage loans or deed in lieu
         of foreclosure and portions of the related proceeds from the
         disposition of any related Additional Collateral or Pledged Assets

     o   hazard insurance policies and primary insurance policies, if any, and
         portions of the related proceeds; and


                                       4
<PAGE>

     o   any combination, as and to the extent specified in the related
         prospectus supplement, of a letter of credit, purchase obligation,
         mortgage pool insurance policy, special hazard insurance policy,
         bankruptcy policy, certificate insurance policy, surety bond or other
         type of credit enhancement as described under "Description of Credit
         Enhancement."

     The related prospectus supplement will describe the material terms and
conditions of certificates of interest or participations in mortgage loans to
the extent they are included in the related trust.

     Each mortgage loan will be selected by the depositor for inclusion in a
mortgage pool from among those purchased by the depositor, either directly or
through its affiliates, including Residential Funding Corporation, from sellers
who are affiliates of the depositor including HomeComings Financial Network,
Inc. and GMAC Mortgage Corporation, or from banks, savings and loan
associations, mortgage bankers, investment banking firms, the Federal Deposit
Insurance Corporation, or FDIC, and other mortgage loan originators or sellers
not affiliated with the depositor, all as described in this prospectus under
"Mortgage Loan Program." If a mortgage pool is composed of mortgage loans
acquired by the depositor directly from sellers other than Residential Funding
Corporation, the related prospectus supplement will specify the extent of
mortgage loans so acquired. The characteristics of the mortgage loans are as
described in the related prospectus supplement. No more than five percent (5%)
of the mortgage loans (as they are constituted as of the cut-off date) by
aggregate principal balance as of the cut-off date will have characteristics
that deviate from those characteristics described in the related prospectus
supplement. Other mortgage loans available for purchase by the depositor may
have characteristics which would make them eligible for inclusion in a mortgage
pool but were not selected for inclusion in a mortgage pool at that time.

     The mortgage loans may also be delivered to the depositor in a Designated
Seller Transaction. Those certificates may be sold in whole or in part to any
seller identified in the related prospectus supplement in exchange for the
related mortgage loans, or may be offered under any of the other methods
described in this prospectus under "Methods of Distribution." The related
prospectus supplement for a Designated Seller Transaction will include
information, provided by the related seller, about the seller, the mortgage
loans and the underwriting standards applicable to the mortgage loans. None of
the depositor, Residential Funding Corporation, GMAC Mortgage Group, Inc. or
any of their affiliates will make any representation or warranty with respect
to the mortgage loans, or any representation as to the accuracy or completeness
of the information provided by the seller.

     If specified in the related prospectus supplement, the trust underlying a
series of certificates may include mortgage securities. The mortgage securities
may have been issued previously by the depositor or an affiliate thereof, a
financial institution or other entity engaged in the business of mortgage
lending or a limited purpose corporation organized for the purpose of, among
other things, acquiring and depositing mortgage loans into trusts, and selling
beneficial interests in such trusts. As specified in the related prospectus
supplement, the mortgage securities will primarily be similar to certificates
offered hereunder. As to any series of certificates, the related prospectus
supplement will include a description of the mortgage securities and any
related credit enhancement, and the mortgage loans underlying those mortgage
securities will be described together with any other mortgage loans included in
the mortgage pool relating to that series. As to any series of certificates, as
used in this prospectus a mortgage pool includes the related mortgage loans
underlying any mortgage securities.

     Any mortgage securities underlying any certificates will (i) either (a)
have been previously registered under the Securities Act, or (b) will be
eligible for sale under Rule 144(k) under the Securities Act, and (ii) will be
acquired in secondary market transactions from persons other than the issuer or
its affiliates. Alternatively, if the mortgage securities were acquired from
their issuer or its affiliates, or were issued by the depositor or any of its
affiliates, then the mortgage securities will be registered under the
Securities Act at the same time as the certificates.

     For any series of certificates backed by mortgage securities, the entity
that administers the mortgage securities may be referred to as the manager, if
so specified in the related prospectus supplement. References in this
prospectus to Advances to be made and other actions to be taken by the master
servicer in connection with the mortgage loans may include Advances made and
other actions taken under the terms of the mortgage securities.

     As specified in the applicable prospectus supplement, each series of
certificates will evidence interests in one mortgage pool including mortgage
loans having an aggregate principal balance of not less than approximately
$5,000,000 as of the cut-off date. Each certificate will evidence an interest
in only the related mortgage pool and corresponding trust, and not in any other
mortgage pool or trust.


                                       5
<PAGE>

THE MORTGAGE LOANS

     As specified in the related prospectus supplement, all of the mortgage
loans in a mortgage pool will:

     o   have monthly payments due or deemed to be due on the first of each
         month

     o   be secured by mortgaged properties located in any of the 50 states or
         the District of Columbia, or be Puerto Rico mortgage loans and

     o   be of one or more types of the following types of mortgage loans
         described or referred to in paragraphs numbered (1) through (8):

     (1) Fixed-rate, fully-amortizing mortgage loans, which may include
   mortgage loans converted from adjustable-rate mortgage loans or otherwise
   modified, providing for level monthly payments of principal and interest
   and terms at origination or modification of not more than 15 years;

     (2) Fixed-rate, fully-amortizing mortgage loans, which may include
   mortgage loans converted from adjustable-rate mortgage loans or otherwise
   modified, providing for level monthly payments of principal and interest
   and terms at origination or modification of more than 15 years, but not
   more than 30 years;

     (3) Fully-amortizing adjustable-rate mortgage loans, or ARM loans, having
   an original or modified term to maturity of not more than 30 years with a
   related interest rate which usually adjusts initially either one, three or
   six months, one, three, five or seven years subsequent to the initial
   payment date, and thereafter at either one, three or six-month, one-year or
   other intervals, with corresponding adjustments in the amount of monthly
   payments, over the term of the mortgage loan to equal the Note Margin and
   an index. The related prospectus supplement will describe the relevant
   index and the highest, lowest and weighted average Note Margin with respect
   to the ARM loans in the related mortgage pool. The related prospectus
   supplement will also indicate any periodic or lifetime limitations on
   changes in any per annum mortgage rate at the time of any adjustment. If
   specified in the related prospectus supplement, an ARM Loan may include a
   provision that allows the mortgagor to convert the adjustable mortgage rate
   to a fixed rate at some point during the term of the ARM Loan, which in
   most cases will occur not later than ten years subsequent to the initial
   payment date;

     (4) Negatively-amortizing adjustable-rate mortgage loans having original
   or modified terms to maturity of not more than 30 years with mortgage rates
   which in most cases adjust initially on the interest adjustment date
   referred to in the related prospectus supplement, and thereafter on each
   interest adjustment date to equal the sum of the Note Margin and the index.
   The scheduled monthly payment will be adjusted as and when described in the
   related prospectus supplement to an amount that would fully amortize the
   mortgage loan over its remaining term on a level debt service basis;
   provided that increases in the scheduled monthly payment may be limited as
   specified in the related prospectus supplement. If an adjustment to the
   mortgage rate on a mortgage loan causes the amount of interest accrued
   thereon in any month to exceed the scheduled monthly payment on the
   mortgage loan, the resulting amount of deferred interest will be added to
   the principal balance of that mortgage loan;

     (5) Fixed-rate, graduated payment mortgage loans having original or
   modified terms to maturity of not more than 15 years with monthly payments
   during the first year calculated on the basis of an assumed interest rate
   which is a specified percentage below the mortgage rate on that mortgage
   loan. The monthly payments increase at the beginning of the second year by
   a specified percentage of the monthly payment during the preceding year and
   each year thereafter to the extent necessary to amortize the mortgage loan
   over the remainder of its 15-year term. Deferred interest, if any, will be
   added to the principal balance of these mortgage loans;

     (6) Fixed-rate, graduated payment mortgage loans having original or
   modified terms to maturity of not more than 30 years with monthly payments
   during the first year calculated on the basis of an assumed interest rate
   which is a specified percentage below the mortgage rate. The monthly
   payments increase at the beginning of the second year by a specified
   percentage of the monthly payment during the preceding year and each year
   thereafter to the extent necessary to fully amortize the mortgage loan
   within its 30-year term. Deferred interest, if any, will be added to the
   principal balance of the mortgage loan;

     (7) Balloon Loans. The amount of the monthly payment will remain constant
   until the maturity date, upon which date the Balloon Amount will be due and
   payable; or


                                       6
<PAGE>

     (8) Additional Collateral Loans, Buy-Down Mortgage Loans, Convertible
   Mortgage Loans, Cooperative Loans, modified loans or Pledged Asset Mortgage
   Loans.

     If so specified in the related prospectus supplement, a mortgage pool may
contain mortgage loans that provide for payment of a prepayment charge.

     If so specified in the related prospectus supplement, a mortgage pool will
contain Additional Collateral Loans. The Additional Collateral Requirement will
generally terminate when the loan-to-value ratio, or LTV ratio, of the mortgage
loan is reduced to a predetermined level, which generally shall not be more
than 75%, as a result of a reduction in the loan amount caused by principal
payments by the mortgagor under the mortgage loan or an increase in the
appraised value of the related mortgaged property.

     The seller of the Additional Collateral Loan or the related subservicer,
as applicable, will be required, in accordance with the master servicer's
servicing guidelines or its normal servicing procedures, to attempt to realize
on any Additional Collateral if the related Additional Collateral Loan is
liquidated upon default. The right to receive proceeds from the realization of
Additional Collateral upon any liquidation will be assigned to the related
trustee. No assurance can be given as to the amount of proceeds, if any, that
might be realized from such Additional Collateral and thereafter remitted to
the trustee.

     Unless otherwise specified in the related prospectus supplement, an
insurance company whose claims-paying ability is rated in the highest long-term
rating category by each rating agency rating the applicable series of
certificates will have issued a limited purpose surety bond insuring any
deficiency in the amounts realized by the Additional Collateral Loan seller
from the liquidation of Additional Collateral, up to the amount of the
Additional Collateral Requirement. For additional considerations concerning the
Additional Collateral Loans, see "Certain Legal Aspects of Mortgage Loans--The
Mortgage Loans--Anti-Deficiency Legislation and Other Limitations on Lenders"
in this prospectus.

     If so specified in the related prospectus supplement, a mortgage pool may
include Pledged Asset Mortgage Loans. Each Pledged Asset will be held by a
custodian for the benefit of the trustee for the trust in which the related
Pledged Asset Mortgage Loan is held, and will be invested in investment
obligations permitted by the Rating agencies rating the related series of
certificates. The amount of the Pledged Assets will be determined by the seller
in accordance with its underwriting standards, but generally will not be more
than an amount that, if applied to reduce the original principal balance of the
mortgage loan, would reduce that principal balance to less than 70% of the
appraised value of the mortgaged property.

     If, following a default by the mortgagor and the liquidation of the
related mortgaged property, there remains a loss on the related mortgage loan,
the limited liability company will be required to pay to the master servicer or
the subservicer on behalf of the trustee the amount of that loss, up to the
pledged amount for such mortgage loan. If the mortgagor becomes a debtor in a
bankruptcy proceeding, there is a significant risk that the Pledged Assets will
not be available to be paid to the certificateholders. At the mortgagor's
request, and in accordance with some conditions, the Pledged Assets may be
applied as a partial prepayment of the mortgage loan. The Pledged Assets will
be released to the limited liability company if the outstanding principal
balance of the mortgage loan has been reduced by the amount of the Pledged
Assets.

     If so specified in the related prospectus supplement, a mortgage pool may
include mortgage loans that have been modified. The modifications may include
conversions from an adjustable to a fixed mortgage rate (discussed below) or
other changes in the related mortgage note. If a mortgage loan is a modified
mortgage loan, references to origination generally shall be deemed to be
references to the date of modification.

     The mortgaged properties may consist of detached individual dwellings,
cooperative dwellings, individual condominiums, townhouses, duplexes, row
houses, modular pre-cut/panelized housing, individual units or two- to four-
unit dwellings in planned unit developments, two- to four-family dwellings and
other attached dwelling units. Each mortgaged property, other than a
Cooperative dwelling, will be located on land owned in fee simple by the
mortgagor or, if specified in the related prospectus supplement, land leased by
the mortgagor. Attached dwellings may include structures where each mortgagor
owns the land upon which the unit is built with the remaining adjacent land
owned in common, or dwelling units subject to a proprietary lease or occupancy
agreement in an apartment building owned by a Cooperative. The proprietary
lease or occupancy agreement securing a Cooperative Loan is subordinate, in
most cases, to any blanket mortgage on the related cooperative apartment
building or on the underlying land. Additionally, in the case of a Cooperative
Loan, the proprietary lease or occupancy agreement may be terminated and the
cooperative shares may be canceled by the Cooperative if the tenant-stockholder
fails to pay maintenance or other obligations or charges owed by the
tenant-stockholder. See "Certain Legal Aspects of Mortgage Loans."


                                       7
<PAGE>

     The mortgaged properties may be owner occupied or non-owner occupied and
may include vacation homes, second homes and investment properties. The
percentage of mortgage loans that are owner-occupied will be disclosed in the
related prospectus supplement. The basis for any statement that a given
percentage of the mortgage loans are secured by mortgaged properties that are
owner-occupied will be one or more of the following:

     o   the making of a representation by the mortgagor at origination of a
         mortgage loan that the mortgagor intends to use the mortgaged property
         as a primary residence,

     o   a representation by the originator of the mortgage loan (which
         representation may be based solely on the above clause, or

     o   the fact that the mailing address for the mortgagor is the same as the
         address of the mortgaged property; and any representation and warranty
         in the related pooling and servicing agreement regarding
         owner-occupancy may be based solely on that information.

Mortgage loans secured by investment properties, including two- to four-unit
dwellings, may also be secured by an assignment of leases and rents and
operating or other cash flow guarantees relating to the mortgage loans.

     In the case of purchase mortgage loans, the LTV ratio is the ratio,
expressed as a percentage, of the principal amount of the mortgage loan at
origination to the lesser of (1) the appraised value determined in an appraisal
obtained at origination of the mortgage loan and (2) the sales price for the
related mortgaged property, except that in the case of some employee or
preferred customer loans, the denominator of the ratio may be the sales price.

     In the case of some non-purchase mortgage loans including refinance,
modified or converted mortgage loans, the LTV ratio at origination is defined
in most cases as the ratio, expressed as a percentage, of the principal amount
of the mortgage loan to either the appraised value determined in an appraisal
obtained at the time of refinancing, modification or conversion or, if no
appraisal has been obtained, the value of the related mortgaged property which
value generally will be supported by either:

     o   a representation by the related seller as to the value

     o   a broker's price opinion, automated appraisal, drive by appraisal or
         other certification of value

     o   an appraisal obtained within twelve months prior to the refinancing,
         modification or conversion or, under the streamlined refinancing
         program described herein, an appraisal obtained within approximately 24
         months prior to the refinancing or

     o   the sales price, if the mortgaged property was purchased within the
         previous twelve months.

     In the case of some mortgage loans seasoned for over twelve months, the
LTV ratio may be determined at the time of purchase from the related seller
based on the ratio of the current loan amount to the current value of the
related mortgaged property which value may be supported by either:

     o   a statistical analysis

     o   a broker's price opinion or

     o   an appraisal obtained within 120 days of the purchase date, in which
         case the LTV ratio may be significantly lower than the ratio determined
         at origination.

     The denominator of the applicable ratio described in the preceding three
paragraphs is the appraised value. In connection with a representation by the
related seller as to the value of the mortgaged property, the seller in most
cases will represent and warrant that either (i) the current value of the
related mortgaged property at the time of refinancing, modification or
conversion was not less than the appraised value of the related property at the
time of the origination of the original mortgage loan or (ii) the current LTV
ratio of the mortgage loan generally meets the depositor's underwriting
guidelines. There can be no assurance that the substance of that representation
and warranty will be true.

     Some of the mortgage loans which are subject to negative amortization will
have LTV ratios that will increase after origination as a result of their
negative amortization. In the case of some seasoned mortgage loans, the values
used in calculating LTV ratios may no longer be accurate valuations of the
mortgaged properties, particularly where the LTV ratio was not determined at
the time of purchase as described in the four


                                       8
<PAGE>

preceding paragraphs. Certain mortgaged properties may be located in regions
where property values have declined significantly since the time of
origination. In addition, the LTV ratio does not take into account any
secondary financing. Under the depositor's underwriting standards, a seller is
usually permitted to provide secondary financing to a mortgagor
contemporaneously with the origination of a mortgage loan, provided that the
combined LTV ratio is not greater than 100%. Secondary financing is readily
available and may be obtained by a mortgagor from a lender including the seller
at any time, including at origination.

     The mortgage loans may be "equity refinance" mortgage loans, as to which a
portion of the proceeds are used to refinance an existing mortgage loan, and
the remaining proceeds may be retained by the mortgagor or used for purposes
unrelated to the mortgaged property. Alternatively, the mortgage loans may be
"rate and term refinance" mortgage loans, as to which substantially all of the
proceeds, net of related costs incurred by the mortgagor, are used to refinance
an existing mortgage loan or loans, which may include a junior lien, primarily
in order to change the interest rate or other terms of the existing mortgage
loan.

     The mortgage loans may be loans that have been consolidated and/or have
had various terms changed, loans that have been converted from adjustable rate
mortgage loans to fixed rate mortgage loans, or construction loans which have
been converted to permanent mortgage loans. In addition, a mortgaged property
may be subject to secondary financing at the time of origination of the
mortgage loan or at any time thereafter.

     If so specified in the related prospectus supplement, a portion of the
proceeds of a mortgage loan may be held by the originator and used to reimburse
the mortgagor for some costs of construction of or improvements to the related
mortgaged property. The appraised value of this type of mortgaged property will
be based on the assumption that the construction has been completed; no
inspections of the mortgaged property will be made. If the construction is not
completed, the actual value of the related mortgaged property could be
adversely affected and, even if the escrowed proceeds are applied to reduce the
principal balance of the mortgage loan, the actual LTV ratio of the mortgage
loan could be higher than that assumed at the time of origination of the
mortgage loan. In addition, the application of any unused proceeds could cause
the rate of payment of principal on the mortgage loan to be faster than that
assumed.

     A mortgage pool may contain Convertible Mortgage Loans. If specified in
the related prospectus supplement, upon any conversion, the depositor will
repurchase or Residential Funding Corporation, the applicable subservicer or a
third party will purchase the converted mortgage loan as and to the extent
described in the related prospectus supplement. Alternatively, if specified in
the related prospectus supplement, the depositor, Residential Funding
Corporation or another party specified in the related prospectus supplement may
agree to act as remarketing agent with respect to the converted mortgage loans
and, in such capacity, to use its best efforts to arrange for the sale of
converted mortgage loans under specified conditions. Upon the failure of any
party so obligated to purchase any converted mortgage loan, the inability of
any remarketing agent to arrange for the sale of the converted mortgage loan
and the unwillingness of the remarketing agent to exercise any election to
purchase the converted mortgage loan for its own account, the related mortgage
pool will thereafter include both fixed rate and adjustable rate mortgage
loans.

     If specified in the related prospectus supplement, some of the mortgage
loans may be Buy-Down Mortgage Loans under which the monthly payments made by
the mortgagor during the Buy-Down Period will be less than the scheduled
monthly payments on the mortgage loan, the resulting difference to be made up
from:

     o   Buy-Down Funds contributed by the seller of the mortgaged property or
         another source and placed in the Buy-Down Account;

     o   if the Buy-Down Funds are contributed on a present value basis,
         investment earnings on the Buy-Down Funds; or

     o   additional buydown funds to be contributed over time by the mortgagor's
         employer or another source.

     See "Description of the Certificates--Payments on Mortgage Loans; Deposits
to Certificate Account." Under Residential Funding Corporation's underwriting
standards, the mortgagor under each Buy-Down Mortgage Loan will be qualified
based on the initial reduced monthly payment amount. See "Mortgage Loan
Program--Underwriting Standards" for a discussion of loss and delinquency
considerations relating to Buy-Down Mortgage Loans.

     The related prospectus supplement will provide material information
concerning the types and characteristics of the mortgage loans included in the
related mortgage pool. A Current Report on Form 8-K will be available upon
request to holders of the related series of certificates and will be filed,
together with the related


                                       9
<PAGE>

pooling and servicing agreement with the Securities and Exchange Commission
within fifteen days after the initial issuance of the certificates. In the
event that mortgage loans are added to or deleted from the trust after the date
of the related prospectus supplement, that addition or deletion will be noted
in the Form 8-K. Additions or deletions of this type, if any, will be made
prior to the closing date.

     The depositor will cause the mortgage loans constituting each mortgage
pool, or mortgage securities evidencing interests therein, to be assigned to
the trustee named in the related prospectus supplement, for the benefit of the
holders of all of the certificates of a series. The master servicer named in
the related prospectus supplement will service the mortgage loans, usually
through subservicers which are other mortgage servicing institutions, under a
pooling and servicing agreement and will receive a fee for such services. See
"Mortgage Loan Program" and "Description of the Certificates."

     With respect to those mortgage loans serviced by the master servicer
through a subservicer, the master servicer will remain liable for its servicing
obligations under the related pooling and servicing agreement as if the master
servicer alone were servicing those mortgage loans. In addition to or in lieu
of the master servicer for a series of certificates, the related prospectus
supplement may identify a Certificate Administrator for the trust. All
references in this prospectus to master servicer and any discussions of the
servicing and administration functions of the master servicer will also apply
to the Certificate Administrator to the extent applicable.

     The depositor will make a series of limited representations and warranties
regarding the mortgage loans except as otherwise specified in this prospectus,
but its assignment of the mortgage loans to the trustee will be without
recourse. See "Description of the Certificates--Assignment of Mortgage Loans."

     The master servicer's obligations with respect to the mortgage loans will
consist principally of its contractual servicing obligations under the related
pooling and servicing agreement, including its obligation to enforce some
purchase and other obligations of subservicers, sellers and Residential Funding
Corporation, as described in this prospectus under "Mortgage Loan
Program--Representations with Respect to the Mortgage Loans," "--Subservicing"
and "Description of the Certificates--Assignment of Trust Assets," and its
obligation to make cash advances in the event of delinquencies in payments on
or with respect to the mortgage loans in amounts described in this prospectus
under "Description of the Certificates--Advances," or under the terms of any
mortgage securities. The obligation of the master servicer to make Advances
will be limited to amounts which the master servicer believes ultimately would
be reimbursable out of the proceeds of liquidation of the mortgage loans or any
applicable form of credit support. See "Description of the
Certificates--Advances."


                             MORTGAGE LOAN PROGRAM

     The mortgage loans will have been purchased by the depositor, either
directly or indirectly through Residential Funding Corporation, from sellers.
The mortgage loans will have been originated in accordance with the depositor's
underwriting standards or alternative underwriting criteria as described in
this section under "Underwriting Standards" or as described in the related
prospectus supplement.


UNDERWRITING STANDARDS

 General Standards

     The depositor's underwriting standards with respect to the mortgage loans
will conform to those published in Residential Funding Corporation's Client
Guide, as application to the "Jumbo A" program. The underwriting standards
contained in the Client Guide are continuously revised based on opportunities
and prevailing conditions in the residential mortgage market and the market for
the depositor's mortgage pass-through certificates. The mortgage loans may be
underwritten by Residential Funding Corporation or by a designated third party.
In some circumstances, however, the mortgage loans may be underwritten only by
the seller. See "--Client Guide Standards" and "--Qualifications of Sellers."
Residential Funding Corporation may perform only sample quality assurance
reviews to determine whether the mortgage loans in any mortgage pool were
underwritten in accordance with applicable standards.

     With respect to the depositor's underwriting standards, as well as any
other underwriting standards that may be applicable to any mortgage loans, the
underwriting standards include a set of specific criteria under which the
underwriting evaluation is made. However, the application of underwriting
standards does not imply that each specific criterion was satisfied
individually. Rather, a mortgage loan will be considered to be originated in
accordance with a given set of underwriting standards if, based on an overall
qualitative evaluation, the loan is in substantial compliance with the
underwriting standards. For example, a mortgage loan may be considered


                                       10
<PAGE>

to comply with a set of underwriting standards, even if one or more specific
criteria included in such underwriting standards were not satisfied, if other
factors compensated for the criteria that were not satisfied or if the mortgage
loan is considered to be in substantial compliance with the underwriting
standards.

     In addition, the depositor purchases mortgage loans which do not conform
to the underwriting standards contained in the Client Guide. A portion of the
mortgage loans will be purchased in negotiated transactions, which may be
governed by master commitment agreements relating to ongoing purchases of
mortgage loans by Residential Funding Corporation, from sellers who will
represent that the mortgage loans have been originated in accordance with
underwriting standards agreed to by Residential Funding Corporation.
Residential Funding Corporation, on behalf of the depositor, will review only a
limited portion of the mortgage loans in any delivery from the related seller
for conformity with the applicable underwriting standards. A portion of the
mortgage loans will be purchased from sellers who will represent that the
mortgage loans were originated pursuant to underwriting standards determined by
a mortgage insurance company or third party origination system acceptable to
Residential Funding Corporation. The depositor, or Residential Funding
Corporation on behalf of the depositor, may accept a certification from an
insurance company or a confirmation by a third party as to a mortgage loan's
insurability in a mortgage pool as of the date of certification or confirmation
as evidence of a mortgage loan conforming to applicable underwriting standards.
Such certifications or confirmations will likely have been issued before the
purchase of the mortgage loan by Residential Funding Corporation or the
depositor.

     The level of review by Residential Funding Corporation or the depositor,
if any, of any mortgage loan for conformity with the applicable underwriting
standards will vary depending on any one of a number of factors, including:

     o   factors relating to the experience and status of the seller

     o   characteristics of the specific mortgage loan, including the principal
         balance, the LTV ratio, the loan type or loan program and

     o   the applicable credit score of the related mortgagor used in connection
         with the origination of the mortgage loan, as determined based on a
         credit scoring model acceptable to the depositor.

Credit scoring models provide a means for evaluating the information about a
prospective borrower that is available from a credit reporting agency. The
underwriting criteria applicable to any program under which the mortgage loans
may be originated and reviewed may provide that qualification for the loan, or
the availability of various loan features, including maximum loan amount,
maximum LTV ratio, property type and use, and documentation level, may depend
on the borrower's credit score.

     The underwriting standards utilized in negotiated transactions and master
commitments, the underwriting standards of insurance companies issuing
certificates and the underwriting standards applicable to mortgage loans
underlying mortgage securities may vary substantially from the underwriting
standards contained in the Client Guide. Those underwriting standards are
generally intended to provide an underwriter with information to evaluate the
borrower's repayment ability and the adequacy of the mortgaged property as
collateral. Due to the variety of underwriting standards and review procedures
that may be applicable to the mortgage loans included in any mortgage pool, the
related prospectus supplement generally will not distinguish among the various
underwriting standards applicable to the mortgage loans nor describe any review
for compliance with applicable underwriting standards performed by the
depositor or Residential Funding Corporation. Moreover, there can be no
assurance that every mortgage loan was originated in conformity with the
applicable underwriting standards in all material respects, or that the quality
or performance of mortgage loans underwritten pursuant to varying underwriting
standards will be equivalent under all circumstances. In the case of a
Designated Seller Transaction, the applicable underwriting standards will be
those of the seller or of the originator of the mortgage loans, and will be
described in the related prospectus supplement.

     The depositor, either directly or indirectly through Residential Funding
Corporation, will also purchase mortgage loans from its affiliates, including
GMAC Mortgage Corporation and HomeComings Financial Network, Inc., with
underwriting standards in accordance with the Client Guide or as otherwise
agreed to by the depositor. However, in some limited circumstances, the
mortgage loans may be employee or preferred customer loans with respect to
which, in accordance with the related affiliate's mortgage loan programs,
income, asset and employment verifications and appraisals may not have been
required. With respect to mortgage loans made under any employee loan program
maintained by Residential Funding Corporation, or its affiliates, in limited
circumstances preferential interest rates may be allowed, and primary insurance
policies may not be


                                       11
<PAGE>

required in connection with an LTV ratio over 80%. As to any series of
certificates representing interests in such mortgage loans, credit enhancement
may be provided covering losses on the mortgage loans to the extent that these
losses would be covered by primary insurance policies if obtained, in the form
of a corporate guaranty or in other forms described in this prospectus under
"Description of Credit Enhancement." Neither the depositor nor Residential
Funding Corporation will review any affiliate's mortgage loans for conformity
with the underwriting standards contained in the Client Guide.


 Client Guide Standards

     The following is a brief description of the underwriting standards set
forth in the Client Guide for full documentation loan programs. Initially, a
prospective borrower, other than a trust if the trust is the borrower, is
required to fill out a detailed application providing pertinent credit
information. As part of the application, the borrower is required to provide a
current balance sheet describing assets and liabilities and a statement of
income and expenses, as well as an authorization to apply for a credit report
which summarizes the borrower's credit history with merchants and lenders and
any record of bankruptcy. In addition, an employment verification is obtained
which reports the borrower's current salary and may contain the length of
employment and an indication as to whether it is expected that the borrower
will continue that employment in the future. If a prospective borrower is
self-employed, the borrower may be required to submit copies of signed tax
returns. The borrower may also be required to authorize verification of
deposits at financial institutions where the borrower has accounts. In the case
of a mortgage loan secured by a property owned by a trust, the foregoing
procedures may be waived where the mortgage note is executed on behalf of the
trust.

     In determining the adequacy of the mortgaged property as collateral, an
appraisal is made of each property considered for financing. The appraiser is
required to verify that the property is in good condition and that
construction, if new, has been completed. The appraisal is based on various
factors, including the market value of comparable homes and the cost of
replacing the improvements. Alternatively, property valuations may be made
under various other methods, as described in this prospectus under "The
Trusts--The Mortgage Loans."

     Credit Scores are obtained by many mortgage lenders in connection with
mortgage loan applications to help assess a borrower's credit-worthiness. In
addition, Credit Scores may be obtained by Residential Funding Corporation
after the origination of a mortgage loan if the seller does not provide to
Residential Funding Corporation a Credit Score. Credit Scores are obtained from
credit reports provided by various credit reporting organizations, each of
which may employ differing computer models and methodologies.

     The Credit Score is designed to assess a borrower's credit history at a
single point in time, using objective information currently on file for the
borrower at a particular credit reporting organization Credit Scores range from
approximately 350 to approximately 840, with higher scores indicating an
individual with a more favorable credit history compared to an individual with
a lower score. However, a Credit Score purports only to be a measurement of the
relative degree of risk a borrower represents to a lender, i.e., a borrower
with a higher score is statistically expected to be less likely to default in
payment than a borrower with a lower score. In addition, it should be noted
that Credit Scores were developed to indicate a level of default probability
over a two-year period, which does not correspond to the life of a mortgage
loan. Furthermore, Credit Scores were not developed specifically for use in
connection with mortgage loans, but for consumer loans in general, and assess
only the borrower's past credit history. Therefore, in most cases, a Credit
Score does not take into consideration the differences between mortgage loans
and consumer loans, or the specific characteristics of the related mortgage
loan, including the LTV ratio, the collateral for the mortgage loan, or the
debt to income ratio. There can be no assurance that the Credit Scores of the
mortgagors will be an accurate predictor of the likelihood of repayment of the
related mortgage loans or that any mortgagor's Credit Score would not be lower
if obtained as of the date of the related prospectus supplement.

     Once all applicable employment, credit and property information is
received, a determination is made as to whether the prospective borrower has
sufficient monthly income available to meet the borrower's monthly obligations
on the proposed mortgage loan and other expenses related to the home, including
property taxes and hazard insurance, and other financial obligations and
monthly living expenses. The depositor will underwrite ARM loans, Buy-Down
Mortgage Loans, graduated payment mortgage loans and any other mortgage loans
on the basis of the borrower's ability to make monthly payments as determined
by reference to the mortgage rates in effect at origination or the reduced
initial monthly payments, as the case may be, and on the basis of an assumption
that the borrowers will likely be able to pay the higher monthly payments that
may result from later increases in the mortgage rates or from later increases
in the monthly payments, as the case may be, at the time of the increase even
though the borrowers may not be able to make the higher


                                       12
<PAGE>

payments at the time of origination. The mortgage rate in effect from the
origination date of an ARM loan or other types of loans to the first adjustment
date are likely to be lower, and may be significantly lower, than the sum of
the then applicable index and Note Margin. Similarly, the amount of the monthly
payment on Buy-Down Mortgage Loans and graduated payment mortgage loans will
increase periodically. If the borrowers' incomes do not increase in an amount
commensurate with the increases in monthly payments, the likelihood of default
will increase. In addition, in the case of either ARM loans or graduated
payment mortgage loans that are subject to negative amortization, due to the
addition of deferred interest the principal balances of those mortgage loans
are more likely to equal or exceed the value of the underlying mortgaged
properties, thereby increasing the likelihood of defaults and losses. With
respect to Balloon Loans, payment of the Balloon Amount will depend on the
borrower's ability to obtain refinancing or to sell the mortgaged property
prior to the maturity of the Balloon Loan, and there can be no assurance that
refinancing will be available to the borrower or that a sale will be possible.


     If so specified in the related prospectus supplement, a mortgage pool may
include mortgage loans that have been underwritten pursuant to a streamlined
documentation refinancing program, contained in the Client Guide. This program
permits mortgage loans to be refinanced with only limited verification or
updating of the underwriting information that was obtained at the time that the
original mortgage loan was originated. For example, a new appraisal of the
mortgaged property may not be required if the refinanced mortgage loan was
originated up to approximately 24 months prior to the refinancing. In addition,
the mortgagor's income may not be verified, although continued employment is
required to be verified. In some cases, the mortgagor may be permitted to
borrow up to 105% of the outstanding principal amount of the original mortgage
loan. Each mortgage loan underwritten pursuant to this program will be treated
as having been underwritten pursuant to the same underwriting documentation
program as the mortgage loan that it refinanced, including for purposes of the
disclosure in the related prospectus supplement.


     The underwriting standards set forth in the Client Guide will be varied in
appropriate cases, including "limited" or "reduced loan documentation" mortgage
loan programs. Some reduced loan documentation programs, for example, do not
require income, employment or asset verifications. In most cases, in order to
be eligible for a reduced loan documentation program, the LTV ratio must meet
applicable guidelines, the borrower must have a good credit history and the
borrower's eligibility for this type of program may be determined by use of a
credit scoring model.


     To the extent the seller fails or is unable to repurchase any mortgage
loan due to a breach of a representation and warranty, neither the depositor,
Residential Funding Corporation, nor any other entity will be so obligated.
Furthermore, to the extent that the appraised value of the related mortgaged
property has declined, the actual LTV ratio with respect to such mortgage loan
will be higher than the LTV ratio set forth with respect thereto in the related
prospectus supplement.


     In its evaluation of mortgage loans that have more than twelve months of
payment experience, Residential Funding Corporation tends to place greater
weight on payment history and may take into account market and other economic
trends while placing less weight on underwriting factors traditionally applied
to newly originated mortgage loans. Some mortgage loans seasoned for over
twelve months may be underwritten for purchase by Residential Funding
Corporation based on the borrower's credit score and payment history, with no
current income verification, and under alternative property valuation methods
described in this prospectus under "The Trusts--The Mortgage Loans."


     The mortgaged properties may be located in states where, in general, a
lender providing credit on a single-family property may not seek a deficiency
judgment against the mortgagor but rather must look solely to the property for
repayment in the event of foreclosure. See "Certain Legal Aspects of Mortgage
Loans--The Mortgage Loans--Anti-Deficiency Legislation and Other Limitations on
Lenders." The depositor's underwriting standards applicable to all states,
including anti-deficiency states, require that the value of the property being
financed, as indicated by the appraisal, currently supports and is anticipated
to support in the future the outstanding loan balance, although there can be no
assurance that the value will support the loan balance in the future.


                                       13
<PAGE>

QUALIFICATIONS OF SELLERS

     Except with respect to Designated Seller Transactions, each seller, other
than the FDIC and investment banking firms, will have been approved by
Residential Funding Corporation for participation in Residential Funding
Corporation's loan purchase program. In determining whether to approve a seller
for participation in the loan purchase program, Residential Funding Corporation
will consider, among other things, the financial status, including the net
worth, of the seller, the previous experience of the seller in originating
mortgage loans, the prior delinquency and loss experience of the seller, the
underwriting standards employed by the seller and the quality control and, if
applicable, the servicing operations established by the seller. There can be no
assurance that any seller presently meets any qualifications or will continue
to meet any qualifications at the time of inclusion of mortgage loans sold by
it in the trust for a series of certificates, or thereafter. If a seller
becomes subject to the direct or indirect control of the FDIC or if a seller's
net worth, financial performance or delinquency and foreclosure rates
deteriorate, that institution may continue to be treated as a seller. Any event
of this type may adversely affect the ability of the seller to repurchase the
mortgage loan in the event of a breach of a representation or warranty which
has not been cured.

     The depositor and Residential Funding Corporation generally monitor
sellers that it knows to be under control of the FDIC or are insolvent,
otherwise in receivership or conservatorship or financially distressed. Any
seller that is under control of the FDIC or insolvent may make no
representations and warranties with respect to mortgage loans sold by it. The
FDIC, either in its corporate capacity or as receiver for a depository
institution, may also be a seller of the mortgage loans, in which event neither
the FDIC nor the related depository institution may make representations and
warranties with respect to the mortgage loans sold, or only limited
representations and warranties may be made, for example, that the related legal
documents are enforceable. The FDIC may have no obligation to repurchase any
mortgage loan for a breach of representation or warranty.

     As specified in the related prospectus supplement, the qualifications
required of sellers for approval by Residential Funding Corporation as
participants in its loan purchase programs may not apply to sellers in
Designated Seller Transactions. To the extent the seller in a Designated Seller
Transaction fails to or is unable to repurchase any mortgage loan due to a
breach of representation and warranty, neither the depositor, Residential
Funding Corporation nor any other entity will have assumed the representations
and warranties and any related losses will be borne by the certificateholders
or by the credit enhancement, if any.


REPRESENTATIONS WITH RESPECT TO THE MORTGAGE LOANS

     The sellers, generally, will make representations and warranties with
respect to the mortgage loans sold by it directly or indirectly to Residential
Funding Corporation or the depositor. However mortgage loans purchased from
some unaffiliated sellers may be purchased with very limited or no
representations and warranties. Residential Funding Corporation and the
depositor will not assign to the trustee for the benefit of the related
certificateholders any of the representations and warranties made by a seller
regarding mortgage loans sold by it or any remedies provided for any breach of
those representations and warranties except to the extent that the substance of
the breach also constitutes fraud in the origination of the mortgage loan or
the breach relates to the absence of toxic waste or other environmental
hazards. Accordingly, unless the related prospectus supplement discloses that
additional representations and warranties are made by the seller or other
person for the benefit of the certificateholders, the only representations and
warranties that will be made for the benefit of the certificateholders will be
the limited representations and warranties of Residential Funding Corporation
described below and any representations made by a seller to the limited extent
described in this paragraph.

     In the case of a mortgage pool consisting of mortgage loans purchased by
the depositor from sellers through Residential Funding Corporation, Residential
Funding Corporation, except in the case of a Designated Seller Transaction or
as to mortgage loans underlying any mortgage securities, will also have made
limited representations and warranties regarding the mortgage loans to the
depositor at the time, just prior to the initial issuance of the related series
of certificates, that they are sold to the depositor. These representations and
warranties will include, among other things, that:

     o   as of the cut-off date, the information set forth in a listing of the
         related mortgage loans is true and correct in all material respects;


                                       14
<PAGE>

     o   except in the case of Cooperative Loans, either a policy of title
         insurance in the form and amount required by the Client Guide or an
         equivalent protection was effective at the origination of each mortgage
         loan, and each policy remained in full force and effect on the date of
         sale of the mortgage loan to the depositor;

     o   to the best of Residential Funding Corporation's knowledge, if
         required, the mortgage loans are the subject of a primary insurance
         policy;

     o   Residential Funding Corporation had good title to each mortgage loan
         and each mortgage loan is subject to no offsets, defenses or
         counterclaims except as may be provided under the Relief Act and except
         with respect to any buydown agreement for a Buy-Down Mortgage Loan;

     o   each mortgaged property is free of damage and is in good repair;

     o   each mortgage loan complied in all material respects with all
         applicable local, state and federal laws at the time of origination;

     o   except as otherwise indicated in the related prospectus supplement, no
         mortgage loan is 30 or more days delinquent in payment of principal and
         interest as of the related cut-off date and was not so delinquent more
         than once during the twelve-month period prior to the cut-off date; and

     o   there is no delinquent tax or assessment lien against any mortgaged
         property.

     In the event of a breach of a representation or warranty made by
Residential Funding Corporation that materially adversely affects the interests
of the certificateholders in a mortgage loan, Residential Funding Corporation
will be obligated to repurchase or substitute for that mortgage loan as
described below. In addition, Residential Funding Corporation will be obligated
to repurchase or substitute for as described below any mortgage loan as to
which it is discovered that the related mortgage is not a valid first lien on
the related mortgaged property subject only to (a) liens of real property taxes
and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record as of
the date of recording of the mortgage and other permissible title exceptions
and (c) other matters to which like properties are commonly subject which do
not materially adversely affect the value, use, enjoyment or marketability of
the mortgaged property.

     In addition, with respect to any mortgage loan as to which the depositor
delivers to the trustee or the custodian an affidavit certifying that the
original mortgage note has been lost or destroyed, if the mortgage loan
subsequently is in default and the enforcement of the mortgage loan or of the
related mortgage is materially adversely affected by the absence of the
original mortgage note, Residential Funding Corporation will be obligated to
repurchase or substitute for that mortgage loan in the manner described in this
prospectus under "Mortgage Loan Program--Representations with Respect to the
Mortgage Loans". However, Residential Funding Corporation will not be required
to repurchase or substitute for any mortgage loan if the circumstances giving
rise to that requirement also constitute fraud in the origination of the
related mortgage loan. Furthermore, because the listing of the related mortgage
loans generally contains information with respect to the mortgage loans as of
the cut-off date, prepayments and, in limited circumstances, modifications to
the interest rate and principal and interest payments may have been made with
respect to one or more of the related mortgage loans between the cut-off date
and the closing date. Residential Funding Corporation will not be required to
purchase or substitute for any mortgage loan as a result of this type of
prepayment or modification.

     The depositor will assign to the trustee for the benefit of the holders of
the related series of certificates all of its right, title and interest in each
agreement by which it purchased a mortgage loan from Residential Funding
Corporation insofar as the agreement relates to the representations and
warranties made by Residential Funding Corporation relating to the mortgage
loan and any remedies provided for with respect to any breach of the
representations and warranties. If a seller or Residential Funding Corporation,
as the case may be, cannot cure a breach of any representation or warranty made
by it in respect of a mortgage loan which materially and adversely affects the
interests of the certificateholders in that mortgage loan within 90 days after
notice from the master servicer, the seller or Residential Funding Corporation,
as the case may be, will be obligated to purchase the mortgage loan at the
purchase price set forth in the related pooling and servicing agreement which
purchase price will in most cases be equal to the principal balance thereof as
of the date of purchase plus accrued and unpaid interest to the first day of
the month following the month of repurchase at the mortgage rate, less the
amount, expressed as a percentage per annum, payable as master servicing
compensation or subservicing compensation, as applicable, and, if applicable,
the Excluded Spread.


                                       15
<PAGE>

     As to any mortgage loan required to be purchased by Residential Funding
Corporation, as provided above, rather than repurchase the mortgage loan,
Residential Funding Corporation may, at its sole option, remove the deleted
mortgage loan from the trust and cause the depositor to substitute in its place
a qualified substitute mortgage loan; however, this substitution must be
effected within 120 days of the date of the initial issuance of the
certificates with respect to a trust for which no REMIC election is to be made.
With respect to a trust for which a REMIC election is to be made, except as
otherwise provided in the prospectus supplement relating to a series of
certificates, any substitution of a defective mortgage loan must be effected
within two years of the date of the initial issuance of the certificates, and
may not be made if the substitution would cause the trust to not qualify as a
REMIC or result in a prohibited transaction tax under the Internal Revenue
Code.

     Any qualified substitute mortgage loan generally will, on the date of
substitution:

     o   have an outstanding principal balance, after deduction of the principal
         portion of the monthly payment due in the month of substitution, not in
         excess of the outstanding principal balance of the deleted mortgage
         loan, with the amount of any shortfall to be deposited in a Custodial
         Account in the month of substitution for distribution to the
         certificateholders;

     o   have a mortgage rate and a Net Mortgage Rate not less than, and not
         more than one percentage point greater than, the mortgage rate and Net
         Mortgage Rate, respectively, of the deleted mortgage loan as of the
         date of substitution;

     o   have an LTV ratio at the time of substitution no higher than that of
         the deleted mortgage loan at the time of substitution;

     o   have a remaining term to maturity not greater than, and not more than
         one year less than, that of the deleted mortgage loan; and

     o   comply with all of the representations and warranties set forth in the
         related pooling and servicing agreement as of the date of substitution.

     The related pooling and servicing agreement may include additional
requirements relating to ARM loans or other specific types of mortgage loans,
or additional provisions relating to meeting the foregoing requirements on an
aggregate basis where a number of substitutions occur contemporaneously.

     Unless otherwise specified in the related prospectus supplement, a seller,
including a seller in a Designated Seller Transaction, will have no option to
substitute for a mortgage loan that it is obligated to repurchase in connection
with a breach of a representation and warranty.

     The master servicer will be required under the applicable pooling and
servicing agreement to use its best reasonable efforts to enforce this purchase
or substitution obligation for the benefit of the trustee and the
certificateholders, using practices it would employ in its good faith business
judgment and which are normal and usual in its general mortgage servicing
activities; provided, however, that this purchase or substitution obligation
will not become an obligation of the master servicer in the event that the
seller or Residential Funding Corporation, as the case may be, fails to honor
that obligation. The master servicer will be entitled to reimbursement for any
costs and expenses incurred in pursuing a purchase or substitution obligation
with respect to a breach by a seller of a representation and warranty that has
been assigned to the trustee for the benefit of the certificateholders,
including but not limited to any costs or expenses associated with litigation.
If the seller fails to honor its repurchase or substitution obligation, that
obligation will not become an obligation of Residential Funding Corporation,
the depositor or the master servicer. In instances where a seller is unable or
disputes its obligation to repurchase affected mortgage loans, the master
servicer, using practices it would employ in its good faith business judgment
and which are normal and usual in its general mortgage servicing activities,
may negotiate and enter into settlement agreements with that seller that could
provide for, among other things, the repurchase of only a portion of the
affected mortgage loans. Any settlement could lead to losses on the mortgage
loans which would be borne by the related certificateholders.

     Furthermore, the master servicer may pursue foreclosure or similar
remedies concurrently with pursuing any remedy for a breach of a representation
and warranty. However, the master servicer is not required to continue to
pursue both remedies if it determines that one remedy is more likely to result
in a greater recovery. In accordance with the above described practices, the
master servicer will not be required to enforce any purchase obligation of
Residential Funding Corporation or the seller arising from any
misrepresentation by Residential Funding Corporation or the seller, if the
master servicer determines in the reasonable exercise of its business judgment
that the matters related to the misrepresentation did not directly cause or are
not likely


                                       16
<PAGE>

to directly cause a loss on the related mortgage loan. The foregoing
obligations will constitute the sole remedies available to certificateholders
or the trustee for a breach of any representation or warranty by Residential
Funding Corporation or the seller, or for any other event giving rise to the
obligations.



SUBSERVICING

     The seller of a mortgage loan will usually act as the subservicer for that
mortgage loan under a subservicing agreement between Residential Funding
Corporation and the subservicer unless servicing is released to the master
servicer or has been transferred to a servicer approved by Residential Funding
Corporation. The master servicer may, but is not obligated to, assign the
related subservicing to designated subservicers which will be qualified sellers
and which may include GMAC Mortgage Corporation or its affiliates. A
representative form of subservicing agreement is included as an exhibit to the
forms of pooling and servicing agreements filed as exhibits to the registration
statement of which this prospectus is a part. The subservicing agreement
executed in connection with a Designated Seller Transaction or with respect to
some mortgage loans sold in negotiated transactions will usually vary from the
form filed herewith to accommodate the different features of the mortgage loans
included in a Designated Seller Transaction and to vary the parameters
constituting an event of default. The following description describes all
material terms and provisions relating to the subservicing agreements. The
description does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the form of subservicing agreement and by the
discretion of the master servicer to modify the subservicing agreement and to
enter into different subservicing agreements. While any subservicing agreement
will be a contract solely between the master servicer and the subservicer, the
pooling and servicing agreement under which a series of certificates is issued
will provide that, if for any reason the master servicer for that series of
certificates is no longer the master servicer of the related mortgage loans,
the trustee or any successor master servicer must recognize the subservicer's
rights and obligations under that subservicing agreement.

     With the approval of the master servicer, a subservicer may delegate its
servicing obligations to third-party servicers, but that subservicer will
remain obligated under the related subservicing agreement. Each subservicer
will be required to perform the customary functions of a servicer, including:

     o   collection of payments from mortgagors and remittance of those
         collections to the master servicer;

     o   maintenance of hazard insurance and filing and settlement of claims
         thereunder, subject in some cases to the right of the master servicer
         to approve in advance any such settlement;

     o   maintenance of escrow or impoundment accounts of mortgagors for payment
         of taxes, insurance and other items required to be paid by the
         mortgagor under the mortgage loan;

     o   processing of assumptions or substitutions, although, unless otherwise
         specified in the related prospectus supplement, the master servicer is
         generally required to exercise due-on-sale clauses to the extent such
         exercise is permitted by law and would not adversely affect insurance
         coverage;

     o   attempting to cure delinquencies; and

     o   maintaining accounting records relating to the mortgage loans.

     A subservicer may also be required to supervise foreclosures and inspect
and manage mortgaged properties. A subservicer will also be obligated to make
Advances to the master servicer for delinquent installments of principal and
interest, net of any subservicing or other compensation, on mortgage loans, as
described more fully under "Description of the Certificates--Advances," and in
respect of some taxes and insurance premiums not paid on a timely basis by
mortgagors. In addition, a subservicer is obligated to pay to the master
servicer interest on the amount of any partial prepayment of principal received
and applied to reduce the outstanding principal balance of a mortgage loan from
the date of application of that payment to the first day of the following
month. Any amounts paid by a subservicer pursuant to the preceding sentence
will be for the benefit of the master servicer as additional servicing
compensation. No assurance can be given that the subservicers will carry out
their Advance or payment obligations with respect to the mortgage loans. A
subservicer may, as limited by the terms of the related prospectus supplement,
transfer its servicing obligations to another entity that has been approved for
participation in Residential Funding Corporation's loan purchase programs, but
only with the approval of the master servicer.

     As compensation for its servicing duties, the subservicer will be entitled
to a monthly servicing fee, to the extent the related mortgage loan payment has
been collected, in a minimum amount set forth in the related prospectus
supplement. The subservicer or master servicer may also be entitled to collect
and retain, as part of


                                       17
<PAGE>

its servicing compensation, any late charges or prepayment penalties, as
provided in the mortgage note or related instruments. The subservicer will be
reimbursed by the master servicer for some expenditures which it makes, in most
cases to the same extent that the master servicer would be reimbursed under the
applicable pooling and servicing agreement. In some instances, the subservicer
will receive additional compensation in the form of all or a portion of the
interest due and payable on the applicable mortgage loan which is over and
above the interest rate that the depositor or Residential Funding Corporation,
as the case may be, required at the time it committed to purchase the mortgage
loan. See "The Pooling and Servicing Agreement--Servicing and Other
Compensation and Payment of Expenses."


     Each subservicer will be required to agree to indemnify the master
servicer for any liability or obligation sustained by the master servicer in
connection with any act or failure to act by the subservicer in its servicing
capacity. Each subservicer is required to maintain a fidelity bond and an
errors and omissions policy with respect to its officers, employees and other
persons acting on its behalf or on behalf of the master servicer.


     Each subservicer will be required to service each mortgage loan under the
terms of the subservicing agreement for the entire term of that mortgage loan,
unless the subservicing agreement is earlier terminated by the master servicer
or unless servicing is released to the master servicer. In accordance with
applicable law, the master servicer may terminate a subservicing agreement
immediately upon the giving of notice upon stated events, including the
violation of the subservicing agreement by the subservicer, or upon sixty days'
notice to the subservicer without cause upon payment of an amount equal to
approximately 2% of the aggregate outstanding principal balance of all mortgage
loans, including the mortgage loans, serviced by such subservicer under a
subservicing agreement.


     The master servicer may agree with a subservicer to amend a subservicing
agreement. Upon termination of a subservicing agreement, the master servicer
may act as servicer of the related mortgage loans or enter into one or more new
subservicing agreements. If the master servicer acts as servicer, it will not
assume liability for the representations and warranties of the subservicer
which it replaces. If the master servicer enters into a new subservicing
agreement, each new subservicer must either be a seller, meet the standards for
becoming a seller or have servicing experience that is otherwise satisfactory
to the master servicer.


     The master servicer may make reasonable efforts to have the new
subservicer assume liability for the representations and warranties of the
terminated subservicer, but no assurance can be given that such an assumption
will occur and, in any event, if the new subservicer is an affiliate of
Residential Funding Corporation the liability for such representations and
warranties will not be assumed by the new subservicer. In the event of this
type of assumption, the master servicer may in the exercise of its business
judgment release the terminated subservicer from liability in respect of the
representations and warranties. Any amendments to a subservicing agreement or
to a new subservicing agreement may contain provisions different from those
described in this prospectus which are in effect in the original subservicing
agreements. However, the pooling and servicing agreement for each trust will
provide that any amendment or new agreement may not be inconsistent with or
violate the related pooling and servicing agreement in a manner which would
materially and adversely affect the interests of the certificateholders.


                                       18
<PAGE>

                        DESCRIPTION OF THE CERTIFICATES


GENERAL

     The certificates will be issued in series. Each series of certificates or,
in some instances, two or more series of certificates, will be issued under a
pooling and servicing agreement, similar to one of the forms filed as an
exhibit to the registration statement under the Securities Act of 1933, as
amended, or Securities Act, with respect to the certificates of which this
prospectus is a part. Each pooling and servicing agreement will be filed with
the Securities and Exchange Commission as an exhibit to a Form 8-K. The
following summaries, together with additional summaries under "The Pooling and
Servicing Agreement" below, describe all material terms and provisions relating
to the certificates common to each pooling and servicing agreement. 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 pooling and
servicing agreement for each trust and the related prospectus supplement.

     Each series of certificates may consist of any one or a combination of the
following:

     o   a single class of certificates;

     o   two or more classes of senior certificates, of which one or more
         classes of certificates may be senior in right of payment to any other
         class or classes of certificates subordinated thereto, and as to which
         some classes of senior or subordinate certificates may be senior to
         other classes of senior or subordinate certificates, as described in
         the respective prospectus supplement;

     o   one or more classes of mezzanine certificates which are subordinate
         certificates but which are senior to other classes of subordinate
         certificates in respect of such distributions or losses;

     o   one or more classes of strip certificates which will be entitled to (a)
         principal distributions, with disproportionate, nominal or no interest
         distributions or (b) interest distributions, with disproportionate,
         nominal or no principal distributions;

     o   two or more classes of certificates which differ as to the timing,
         sequential order, rate, pass-through rate or amount of distributions of
         principal or interest or both, or as to which distributions of
         principal or interest or both on any class may be made upon the
         occurrence of specified events, in accordance with a schedule or
         formula, including "planned amortization classes" and "targeted
         amortization classes" and "very accurately defined maturity classes,"
         or on the basis of collections from designated portions of the mortgage
         pool, which series may include one or more classes of accrual
         certificates with respect to which some accrued interest will not be
         distributed but rather will be added to their principal balance on the
         distribution date, which is the 25th day, or, if the 25th day is not a
         business day, the next business day, of each month, commencing in the
         month following the month in which the related cut-off date occurs; or

     o   other types of classes of certificates, as described in the related
         prospectus supplement.

     Credit support for each series of certificates will be provided by a
mortgage pool insurance policy, special hazard insurance policy, bankruptcy
policy, letter of credit, purchase obligation, reserve fund, certificate
insurance policy, surety bond or other credit enhancement as described under
"Description of Credit Enhancement," or by the subordination of one or more
classes of certificates as described under "Subordination" or by any
combination of the foregoing


FORM OF CERTIFICATES

     As specified in the related prospectus supplement, the certificates of
each series will be issued either as physical certificates or in book-entry
form. If issued as physical certificates, the certificates will be in fully
registered form only in the denominations specified in the related prospectus
supplement, and will be transferable and exchangeable at the corporate trust
office of the certificate registrar appointed under the related pooling and
servicing agreement to register the certificates. No service charge will be
made for any registration of exchange or transfer of certificates, but the
trustee may require payment of a sum sufficient to cover any tax or other
governmental charge. The term certificateholder or holder refers to the entity
whose name appears on the records of the certificate registrar or, if
applicable, a transfer agent, as the registered holder of the certificate,
except as otherwise indicated in the related prospectus supplement.

     If issued in book-entry form, the classes of a series of certificates will
be initially issued through the book-entry facilities of The Depository Trust
Company, or DTC, or CEDEL Bank, SA or the Euroclear System


                                       19
<PAGE>

(in Europe) if they are participants of those systems, or indirectly through
organizations which are participants in those systems, or through any other
depositary or facility as may be specified in the related prospectus
supplement. As to any class of book-entry certificates so issued, the record
holder of those certificates will be DTC's nominee. CEDEL Bank, SA and
Euroclear System will hold omnibus positions on behalf of their participants
through customers' securities accounts in CEDEL Bank, SA's and Euroclear
System's names on the books of their respective depositaries, which in turn
will hold those positions in customers' securities accounts in the
depositaries' names on the books of DTC. DTC is a limited-purpose trust company
organized under the laws of the State of New York, which holds securities for
its DTC participants, which include securities brokers and dealers, banks,
trust companies and clearing corporations. DTC together with the CEDEL Bank, SA
and Euroclear System participating organizations facilitates the clearance and
settlement of securities transactions between participants through electronic
book-entry changes in the accounts of participants. Other institutions that are
not participants but indirect participants which clear through or maintain a
custodial relationship with participants have indirect access to DTC's
clearance system.

     Unless otherwise specified in the related prospectus supplement, no
beneficial owner in an interest in any book-entry certificate will be entitled
to receive a certificate representing that interest in registered, certificated
form, unless either (i) DTC ceases to act as depository for that certificate
and a successor depository is not obtained, or (ii) the depositor elects in its
sole discretion to discontinue the registration of the certificates through
DTC. Prior to any such event, beneficial owners will not be recognized by the
trustee or the master servicer as holders of the related certificates for
purposes of the pooling and servicing agreement, and beneficial owners will be
able to exercise their rights as owners of their certificates only indirectly
through DTC, participants and indirect participants. Any beneficial owner that
desires to purchase, sell or otherwise transfer any interest in book-entry
certificates may do so only through DTC, either directly if the beneficial
owner is a participant or indirectly through participants and, if applicable,
indirect participants. Pursuant to the procedures of DTC, transfers of the
beneficial ownership of any book-entry certificates will be required to be made
in minimum denominations specified in the related prospectus supplement. The
ability of a beneficial owner to pledge book-entry certificates to persons or
entities that are not participants in the DTC system, or to otherwise act with
respect to the certificates, may be limited because of the lack of physical
certificates evidencing the certificates and because DTC may act only on behalf
of participants.

     Because of time zone differences, the securities account of a CEDEL Bank,
SA or Euroclear System participant as a result of a transaction with a DTC
participant, other than a depositary holding on behalf of CEDEL Bank, SA or
Euroclear System, will be credited during a subsequent securities settlement
processing day, which must be a business day for CEDEL Bank, SA or Euroclear
System, as the case may be, immediately following the DTC settlement date.
Credits or any transactions in those securities settled during this processing
will be reported to the relevant Euroclear System participant or CEDEL Bank, SA
participants on that business day. Cash received in CEDEL Bank, SA or Euroclear
System as a result of sales of securities by or through a CEDEL Bank, SA
participant or Euroclear System participant to a DTC participant, other than
the depositary for CEDEL Bank, SA or Euroclear System, will be received with
value on the DTC settlement date, but will be available in the relevant CEDEL
Bank, SA or Euroclear System cash account only as of the business day following
settlement in DTC.

     Transfers between participants will occur in accordance with DTC rules.
Transfers between CEDEL Bank, SA participants and Euroclear System participants
will occur in accordance with their respective rules and operating procedures.

     Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through CEDEL Bank, SA
participants or Euroclear System participants, on the other, will be effected
in DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by the relevant depositaries; however, the cross
market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in that system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to its
depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same day funds settlement applicable to
DTC. CEDEL Bank, SA participants and Euroclear System participants may not
deliver instructions directly to the depositaries.

     CEDEL Bank, SA, as a professional depository, holds securities for its
participating organizations and facilitates the clearance and settlement of
securities transactions between CEDEL Bank, SA participants


                                       20
<PAGE>

through electronic book-entry changes in accounts of CEDEL Bank, SA
participants, thereby eliminating the need for physical movement of
certificates. As a professional depository, CEDEL Bank, SA is subject to
regulation by the Luxembourg Monetary Institute.

     Euroclear System was created to hold securities for participants of
Euroclear System and to clear and settle transactions between Euroclear System
participants through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and cash. The
Euroclear System operator is the Brussels, Belgium office of Morgan Guaranty
Trust Company of New York, under contract with the clearance cooperative,
Euroclear System Clearance Systems S.C., a Belgian co-operative corporation.
All operations are conducted by the Euroclear System operator, and all
Euroclear System securities clearance accounts and Euroclear System cash
accounts are accounts with the Euroclear System operator, not the clearance
cooperative.

     The clearance cooperative establishes policy for Euroclear System on
behalf of Euroclear System participants. The Euroclear System operator is the
Belgian branch of a New York banking corporation which is a member bank of the
Federal Reserve System. As a result, it is regulated and examined by the Board
of Governors of the Federal Reserve System and the New York State Banking
Department, as well as the Belgian Banking Commission. Securities clearance
accounts and cash accounts with the Euroclear System operator are governed by
the terms and conditions Governing Use of Euroclear System and the related
operating procedures of the Euroclear System and applicable Belgian law. The
terms and conditions govern transfers of securities and cash within Euroclear
System, withdrawals of securities and cash from Euroclear System, and receipts
of payments with respect to securities in Euroclear System. All securities in
Euroclear System are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts.

     Distributions on the book-entry certificates will be forwarded by the
trustee to DTC, and DTC will be responsible for forwarding those payments to
participants, each of which will be responsible for disbursing the payments to
the beneficial owners it represents or, if applicable, to indirect
participants. Accordingly, beneficial owners may experience delays in the
receipt of payments in respect of their certificates. Under DTC's procedures,
DTC will take actions permitted to be taken by holders of any class of
book-entry certificates under the pooling and servicing agreement only at the
direction of one or more participants to whose account the book-entry
certificates are credited and whose aggregate holdings represent no less than
any minimum amount of percentage interests or voting rights required therefor.
DTC may take conflicting actions with respect to any action of
certificateholders of any class to the extent that participants authorize those
actions. None of the master servicer, the depositor, the trustee or any of
their respective affiliates will have any liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the book-entry certificates, or for maintaining, supervising or
reviewing any records relating to those beneficial ownership interests.



ASSIGNMENT OF TRUST ASSETS

     At the time of issuance of a series of certificates, the depositor will
cause the mortgage loans or mortgage securities and any other assets being
included in the related trust to be assigned to the trustee or its nominee,
which may be the custodian, together with, if specified in the related
prospectus supplement, all principal and interest received on or with respect
to the mortgage loans or mortgage securities after the cut-off date, other than
principal and interest due on or before the cut-off date and any Excluded
Spread. The trustee will, concurrently with that assignment, deliver a series
of certificates to the depositor in exchange for the mortgage loans or mortgage
securities. Each mortgage loan will be identified in a schedule appearing as an
exhibit to the related pooling and servicing agreement. The schedule will
include, among other things, information as to the principal balance of each
mortgage loan as of the cut-off date, as well as information respecting the
mortgage rate, the currently scheduled monthly payment of principal and
interest, the maturity of the mortgage note and the LTV ratio at origination or
modification, without regard to any secondary financing.

     If so specified in the related prospectus supplement, and in accordance
with the rules of membership of Merscorp, Inc. and/or Mortgage Electronic
Registration Systems, Inc. or, MERS, assignments of the mortgages for the
mortgage loans in the related trust will be registered electronically through
Mortgage Electronic Registration Systems, Inc., or MERS (Registered Trademark)
System. With respect to mortgage loans registered through the MERS (Registered
Trademark)  System, MERS shall serve as mortgagee of record solely as a nominee
in an administrative capacity on behalf of the trustee and shall not have any
interest in any of those mortgage loans.


                                       21
<PAGE>

     In addition, the depositor will, as to each mortgage loan other than
mortgage loans underlying any mortgage securities, deliver to the trustee, or
to the custodian, a set of legal documents relating to each mortgage loan that
are in possession of the depositor, including:

     o   the mortgage note and any modification or amendment thereto endorsed
         without recourse either in blank or to the order of the trustee or its
         nominee;

     o   the mortgage, except for any mortgage not returned from the public
         recording office, with evidence of recording indicated thereon or, in
         the case of a Cooperative Loan, on the related financing statement;

     o   an assignment in recordable form of the mortgage, or evidence that the
         mortgage is held for the trustee through the MERS (Registered
         Trademark) System or, with respect to a Cooperative Loan, an assignment
         of the related proprietary lease or occupancy agreement; and

     o   if applicable, any riders or modifications to the mortgage note and
         mortgage, together with any other documents at such times as described
         in the related pooling and servicing agreement.

     The assignments may be blanket assignments covering mortgages secured by
mortgaged properties located in the same county, if permitted by law.
Notwithstanding the foregoing, a trust 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 mortgage
note has been lost or destroyed. With respect to those mortgage loans, the
trustee or its nominee may not be able to enforce the mortgage note against the
related borrower. Residential Funding Corporation will agree to repurchase or
substitute for that type of mortgage loan in some circumstances. See "Mortgage
Loan Program--Representations with Respect to the Mortgage Loans".

     In the event that, with respect to any mortgage loan, the depositor cannot
deliver the mortgage or any assignment with evidence of recording thereon
concurrently with the execution and delivery of the related pooling and
servicing agreement because of a delay caused by the public recording office,
the depositor will deliver or cause to be delivered to the trustee or the
custodian a true and correct photocopy of the mortgage or assignment. The
depositor will deliver or cause to be delivered to the trustee or the custodian
such mortgage or assignment with evidence of recording indicated thereon after
receipt thereof from the public recording office or from the related
subservicer. Assignments of the mortgage loans to the trustee or its nominee
will be recorded in the appropriate public recording office, except in states
where, in the opinion of counsel acceptable to the trustee, recording is not
required to protect the trustee's or nominee's interests in the mortgage loan
against the claim of any subsequent transferee or any successor to or creditor
of the depositor or the originator of the mortgage loan, or except as otherwise
specified in the related prospectus supplement.

     With respect to any Puerto Rico mortgage loans, the mortgages with respect
to those mortgage loans either a Direct Puerto Rico Mortgage or an Endorsable
Puerto Rico Mortgage. Endorsable Puerto Rico Mortgages do not require an
assignment to transfer the related lien. Rather, transfer of those mortgages
follows an effective endorsement of the related mortgage note and, therefore,
delivery of the assignment referred to in the third clause listed in the third
preceding paragraph would be inapplicable. Direct Puerto Rico Mortgages,
however, require an assignment to be recorded with respect to any transfer of
the related lien and the assignment would be delivered to the trustee, or the
custodian.

     Assignments of the mortgage loans to the trustee will be recorded in the
appropriate public recording office, except for mortgages held under the MERS
(Registered Trademark)  System or in states where, in the opinion of counsel
acceptable to the trustee, the recording is not required to protect the
trustee's interests in the mortgage loan against the claim of any subsequent
transferee or any successor to or creditor of the depositor or the originator
of the mortgage loan, or except as otherwise specified in the related
prospectus supplement.


REVIEW OF MORTGAGE LOANS

     The trustee or the custodian will hold the documents referred to above in
trust for the benefit of the certificateholders, and within 45 days after
receipt thereof, will review such documents. If any such document is found to
be defective in any material respect, the trustee or the custodian shall
promptly notify the master servicer and the depositor, the former of which
shall notify the related subservicer or seller, as the case may be. If the
subservicer or seller does not cure the omission or defect within 60 days after
notice is given to the master servicer, the subservicer or seller, as the case
may be, will be required to purchase within 90 days of such notice the related
mortgage loan from the trustee at its purchase price or, except in the case of
a Designated Seller Transaction, substitute for such mortgage loan under the
conditions specified in the related prospectus


                                       22
<PAGE>

supplement. The master servicer will be obligated to enforce this obligation of
the subservicer or seller, as the case may be, to the extent described in this
prospectus under "Mortgage Loan Program--Representations with Respect to the
Mortgage Loans" but in accordance with the provisions described in this
prospectus under "--Realization Upon Defaulted Mortgage Loans." There can be no
assurance that the applicable subservicer, seller or Residential Funding
Corporation will fulfill its obligation to purchase any mortgage loan. Neither
the master servicer nor the depositor will be obligated to purchase or
substitute for a mortgage loan if the subservicer, seller or Residential
Funding Corporation, as the case may be, defaults on its obligation to do so.
This purchase obligation constitutes the sole remedy available to the
certificateholders or the trustee for omission of, or a material defect in, a
constituent document. Any mortgage loan not so purchased or substituted for
shall remain in the related trust.

     The trustee will be authorized at any time to appoint one or more
custodians under a custodial agreement to maintain possession of and review
documents relating to the mortgage loans as the agent of the trustee. The
identity of any custodian will be set forth in the related prospectus
supplement.

     With respect to the mortgage loans in a mortgage pool, except in the case
of a Designated Seller Transaction or as to mortgage loans underlying any
mortgage securities or unless otherwise specified in the related prospectus
supplement, the depositor will make limited representations and warranties as
to the types and geographical concentrations of the mortgage loans and as to
the accuracy, in all material respects, of some identifying information in
respect of each such mortgage loan, for example, original LTV ratio, principal
balance as of the cut-off date, mortgage rate and maturity. Upon a breach of
any of this type of representation which materially adversely affects the
interests of the certificateholders in a mortgage loan, the depositor will be
obligated to cure the breach in all material respects, to purchase the mortgage
loan at its purchase price or to substitute for the mortgage loan a qualified
substitute mortgage loan in accordance with the provisions for substitution by
Residential Funding Corporation as described in this prospectus under "Mortgage
Loan Program--Representations with Respect to the Mortgage Loans." However, the
depositor will not be required to repurchase or substitute for any mortgage
loan in connection with a breach of a representation and warranty if the
substance of that breach also constitutes fraud in the origination of the
related mortgage loan. This purchase or substitution obligation constitutes the
sole remedy available to certificateholders or the trustee for a breach of this
type of representation by the depositor. Any mortgage loan not so purchased or
substituted for shall remain in the related trust.

     The master servicer will make representations and warranties regarding its
authority to enter into, and its ability to perform its obligations under, the
pooling and servicing agreement. Upon a breach of any of this type of
representation of the master servicer which materially adversely affects the
interests of the certificateholders in a mortgage loan, the master servicer
will be obligated either to cure the breach in all material respects or to
purchase the mortgage loan at its purchase price, less unreimbursed Advances
made by the master servicer with respect to the mortgage loan, or to substitute
for the mortgage loan a qualified substitute mortgage loan in accordance with
the provisions for substitution described in this prospectus under "Mortgage
Loan Program--Representations with Respect to the Mortgage Loans." This
purchase or substitution obligation will constitute the sole remedy available
to certificateholders or the trustee for a breach of this type of
representation by the master servicer. Any mortgage loan not so purchased or
substituted for shall remain in the related trust.

     In accordance with the terms of each pooling and servicing agreement, the
master servicer, either directly or through subservicers, will service and
administer the mortgage loans assigned to the trustee.



SPREAD

     The depositor, the master servicer or any of their affiliates, or any
other entity specified in the related prospectus supplement may retain or be
paid a portion of interest due with respect to the related mortgage loans or
mortgage securities. The payment of any portion of interest in this manner will
be disclosed in the related prospectus supplement. This payment may be in
addition to any other payment, including a servicing fee, that the specified
entity is otherwise entitled to receive with respect to the mortgage loans or
mortgage securities. Any payment of this sort in respect of the mortgage loans
or mortgage securities will represent a specified portion of the interest
payable thereon and as specified in the related prospectus supplement, will
either be Excess Spread or Excluded Spread. The interest portion of a Realized
Loss or Extraordinary Loss and any partial recovery of interest in respect of
the mortgage loans or mortgage securities will be allocated between the owners
of any Excess Spread or Excluded Spread and the certificateholders entitled to
payments of interest as provided in the applicable pooling and servicing
agreement.


                                       23
<PAGE>

PAYMENTS ON MORTGAGE LOANS; DEPOSITS TO CERTIFICATE ACCOUNT

     Each subservicer servicing a mortgage loan under a subservicing agreement
will establish and maintain an Subservicing Account. Except as otherwise
permitted by the applicable nationally recognized statistical rating agency or
agencies maintaining a rating on the certificates of that series, a
Subservicing Account must be segregated and may not be established as a general
ledger account, and only principal and interest payments and escrow payments
from mortgage loans serviced for Residential Funding Corporation may be held
therein.

     A subservicer is required to deposit into its Subservicing Account on a
daily basis all amounts described in this prospectus under "Mortgage Loan
Program--Subservicing by Sellers" that are received by it in respect of the
mortgage loans, less its servicing or other compensation. On or before the date
specified in the subservicing agreement, which date may be no later than the
business day prior to the determination date referred to below and is currently
the 18th day of each month or, if that day is not a business day, the preceding
business day, the subservicer must remit or cause to be remitted to the master
servicer all funds held in the Subservicing Account with respect to mortgage
loans that are required to be so remitted, with the exception of prepayments in
full, some partial prepayments and Liquidation Proceeds which must be remitted
to the master servicer within five business days of receipt. The subservicer is
also required to advance on the scheduled date of remittance any monthly
installment of principal and interest, less its servicing or other
compensation, on any mortgage loan for which payment was not received from the
mortgagor. Unless otherwise specified in the related prospectus supplement,
this obligation of the subservicer to advance continues through the first of
the month following the date on which the related mortgaged property is sold at
a foreclosure sale or is acquired by the trust by deed in lieu of foreclosure.
The certificateholders are not entitled to any of these Advances made by a
subservicer. Each subservicer may also be required to pay to the master
servicer, for the master servicer's account, interest, net of its servicing or
other compensation, on any partial prepayment of principal received during a
month and applied by the subservicer prior to the first day of the following
month, from the date of application of the payment to the first day of the
following month.

     The master servicer will deposit or will cause to be deposited into the
Custodial Account payments and collections received by it subsequent to the
cut-off date, other than payments due on or before the cut-off date, as
specifically described in the related pooling and servicing agreement, which,
except as otherwise provided therein, generally will include the following:

     o   all payments on account of principal of the mortgage loans comprising a
         trust;

     o   all payments on account of interest on the mortgage loans comprising
         that trust, net of the portion of each payment thereof retained by the
         subservicer, if any, as its servicing or other compensation;

     o   liquidation proceeds;

     o   all amounts, net of unreimbursed liquidation expenses and insured
         expenses incurred, and unreimbursed Servicing Advances made, by the
         related subservicer, received and retained, including Insurance
         Proceeds or proceeds from any alternative arrangements established in
         lieu of any such insurance and described in the applicable prospectus
         supplement, other than proceeds to be applied to the restoration of the
         related property or released to the mortgagor in accordance with the
         master servicer's normal servicing procedures;

     o   any Buy-Down Funds and, if applicable, investment earnings thereon,
         required to be paid to certificateholders, as described in this
         prospectus under "Description of the Certificates--Payments on Mortgage
         Loans; Deposits to Certificate Account";

     o   all proceeds of any mortgage loan in the trust purchased or, in the
         case of a substitution, amounts representing a principal adjustment, by
         the master servicer, the depositor, Residential Funding Corporation,
         any subservicer or seller or any other person under the terms of the
         pooling and servicing agreement;

     o   any amount required to be deposited by the master servicer in
         connection with losses realized on investments of funds held in the
         Custodial Account, as described in this prospectus under "Description
         of the Certificates--Payments on Mortgage Loans; Deposits to
         Certificate Account"; and

     o   any amounts required to be transferred from the Certificate Account to
         the Custodial Account.

     See "Mortgage Loan Program--Representations with Respect to the Mortgage
Loans," "--Assignment of Mortgage Loans" above and "Purchase Obligations."


                                       24
<PAGE>

     In addition to the Custodial Account, the master servicer will establish
and maintain the Certificate Account. Both the Custodial Account and the
Certificate Account must be either:

     o   maintained with a depository institution whose debt obligations at the
         time of any deposit therein are rated by any rating agency that rated
         any certificates of the related series not less than a specified level
         comparable to the rating category of the certificates;

     o   an account or accounts the deposits in which are fully insured to the
         limits established by the FDIC, provided that any deposits not so
         insured shall be otherwise maintained so that, as evidenced by an
         opinion of counsel, the certificateholders have a claim with respect to
         the funds in such accounts or a perfected first priority security
         interest in any collateral securing those funds that is superior to the
         claims of any other depositors or creditors of the depository
         institution with which the accounts are maintained;

     o   in the case of the Custodial Account, a trust account or accounts
         maintained in either the corporate trust department or the corporate
         asset services department of a financial institution which has debt
         obligations that meet specified rating criteria;

     o   in the case of the Certificate Account, a trust account or accounts
         maintained with the trustee; or

     o   an Eligible Account.

     The collateral that is eligible to secure amounts in an Eligible Account
is limited to some Permitted Investments. A Certificate Account may be
maintained as an interest-bearing or a non-interest-bearing account, or funds
therein may be invested in Permitted Investments as described in this
prospectus under "Description of the Certificates--Payments on Mortgage Loans;
Deposits to Certificate Account". The Custodial Account may contain funds
relating to more than one series of certificates as well as payments received
on other mortgage loans and assets serviced or master serviced by the master
servicer that have been deposited into the Custodial Account.

     Unless otherwise described in the related prospectus supplement, not later
than the business day preceding each distribution date, the master servicer
will withdraw from the Custodial Account and deposit into the applicable
Certificate Account, in immediately available funds, the amount to be
distributed therefrom to certificateholders on that distribution date. The
master servicer or the trustee will also deposit or cause to be deposited into
the Certificate Account:

     o   the amount of any Advances made by the master servicer as described
         herein under "--Advances;"

     o   any payments under any letter of credit, and any amounts required to be
         transferred to the Certificate Account from a reserve fund, as
         described under "Description of Credit Enhancement" below;

     o   any amounts required to be paid by the master servicer out of its own
         funds due to the operation of a deductible clause in any blanket policy
         maintained by the master servicer to cover hazard losses on the
         mortgage loans as described under "Insurance Policies on Mortgage
         Loans" below;

     o   any distributions received on any mortgage securities included in the
         trust; and

     o   any other amounts as described in the related pooling and servicing
         agreement.

     The portion of any payment received by the master servicer in respect of a
mortgage loan that is allocable to Excess Spread or Excluded Spread, as
applicable, will typically be deposited into the Custodial Account, but any
Excluded Spread will not be deposited in the Certificate Account for the
related series of certificates and will be distributed as provided in the
related pooling and servicing agreement.

     Funds on deposit in the Custodial Account may be invested in Permitted
Investments maturing in general not later than the business day preceding the
next distribution date and funds on deposit in the related Certificate Account
may be invested in Permitted Investments maturing, in general, no later than
the distribution date. Except as otherwise specified in the related prospectus
supplement, all income and gain realized from any investment will be for the
account of the master servicer as additional servicing compensation. The amount
of any loss incurred in connection with any such investment must be deposited
in the Custodial Account or in the Certificate Account, as the case may be, by
the master servicer out of its own funds upon realization of the loss.

     With respect to each Buy-Down Mortgage Loan, the subservicer will deposit
the related Buy-Down Funds provided to it in a Buy-Down Account which will
comply with the requirements described in this prospectus


                                       25
<PAGE>

with respect to a Subservicing Account. Unless otherwise specified in the
related prospectus supplement, the terms of all Buy-Down Mortgage Loans provide
for the contribution of Buy-Down Funds in an amount equal to or exceeding
either (i) the total payments to be made from those funds under the related
buydown plan or (ii) if the Buy-Down Funds are to be deposited on a discounted
basis, that amount of Buy-Down Funds which, together with investment earnings
thereon at a rate as set forth in the Client Guide from time to time will
support the scheduled level of payments due under the Buy-Down Mortgage Loan.

     Neither the master servicer nor the depositor will be obligated to add to
any discounted Buy-Down Funds any of its own funds should investment earnings
prove insufficient to maintain the scheduled level of payments. To the extent
that any insufficiency is not recoverable from the mortgagor or, in an
appropriate case, from the subservicer, distributions to certificateholders may
be affected. With respect to each Buy-Down Mortgage Loan, the subservicer will
withdraw from the Buy-Down Account and remit to the master servicer on or
before the date specified in the subservicing agreement described in this
prospectus under "Description of the Certificates--Payments on Mortgage Loans;
Deposits to Certificate Account" the amount, if any, of the Buy-Down Funds,
and, if applicable, investment earnings thereon, for each Buy-Down Mortgage
Loan that, when added to the amount due from the mortgagor on the Buy-Down
Mortgage Loan, equals the full monthly payment which would be due on the
Buy-Down Mortgage Loan if it were not subject to the buydown plan. The Buy-Down
Funds will in no event be a part of the related trust.

     If the mortgagor on a Buy-Down Mortgage Loan prepays the mortgage loan in
its entirety during the Buy-Down Period, the subservicer will withdraw from the
Buy-Down Account and remit to the mortgagor or any other designated party in
accordance with the related buydown plan any Buy-Down Funds remaining in the
Buy-Down Account. If a prepayment by a mortgagor during the Buy-Down Period
together with Buy-Down Funds will result in full prepayment of a Buy-Down
Mortgage Loan, the subservicer will, in most cases, be required to withdraw
from the Buy-Down Account and remit to the master servicer the Buy-Down Funds
and investment earnings thereon, if any, which together with such prepayment
will result in a prepayment in full; provided that Buy-Down Funds may not be
available to cover a prepayment under some mortgage loan programs. Any Buy-Down
Funds so remitted to the master servicer in connection with a prepayment
described in the preceding sentence will be deemed to reduce the amount that
would be required to be paid by the mortgagor to repay fully the related
mortgage loan if the mortgage loan were not subject to the buydown plan.

     Any investment earnings remaining in the Buy-Down Account after prepayment
or after termination of the Buy-Down Period will be remitted to the related
mortgagor or any other designated party under the buydown agreement. If the
mortgagor defaults during the Buy-Down Period with respect to a Buy-Down
Mortgage Loan and the property securing that Buy-Down mortgage loan is sold in
liquidation either by the master servicer, the primary insurer, the pool
insurer under the mortgage pool insurance policy or any other insurer, the
subservicer will be required to withdraw from the Buy-Down Account the Buy-Down
Funds and all investment earnings thereon, if any, and remit the same to the
master servicer or, if instructed by the master servicer, pay the same to the
primary insurer or the pool insurer, as the case may be, if the mortgaged
property is transferred to that insurer and the insurer pays all of the loss
incurred in respect of such default.



WITHDRAWALS FROM THE CUSTODIAL ACCOUNT

     The master servicer may, from time to time, make withdrawals from the
Custodial Account for certain purposes, as specifically described in the
related pooling and servicing agreement, which, except as otherwise provided
therein, will include the following:

     o   to make deposits to the Certificate Account in the amounts and in the
         manner provided in the pooling and servicing agreement and described in
         this prospectus under "Payments on Mortgage Loans; Deposits to
         Certificate Account;"

     o   to reimburse itself or any subservicer for Advances, or for Servicing
         Advances, out of late payments or collections on the mortgage loan with
         respect to which those Advances or Servicing Advances were made;

     o   to pay to itself or any subservicer unpaid Servicing Fees and
         Subservicing Fees, out of payments or collections of interest on each
         mortgage loan;

     o   to pay to itself as additional servicing compensation any investment
         income on funds deposited in the Custodial Account, any amounts
         remitted by subservicers as interest on partial prepayments on the


                                       26
<PAGE>

         mortgage loans, and, if so provided in the pooling and servicing
         agreement, any profits realized upon disposition of a mortgaged
         property acquired by deed in lieu of foreclosure or repossession or
         otherwise allowed under the pooling and servicing agreement;

     o   to pay to itself, a subservicer, a seller, Residential Funding
         Corporation, the depositor or the seller all amounts received with
         respect to each mortgage loan purchased, repurchased or removed under
         the terms of the pooling and servicing agreement and not required to be
         distributed as of the date on which the related purchase price is
         determined;

     o   to pay the depositor or its assignee, or any other party named in the
         related prospectus supplement, all amounts allocable to the Excluded
         Spread, if any, out of collections or payments which represent interest
         on each mortgage loan, including any mortgage loan as to which title to
         the underlying mortgaged property was acquired;

     o   to reimburse itself or any subservicer for any Nonrecoverable Advance,
         limited by the terms of the pooling and servicing agreement as
         described in the related prospectus supplement;

     o   to reimburse itself or the depositor for other expenses incurred for
         which it or the depositor is entitled to reimbursement, including, in
         some circumstances, reimbursement in connection with enforcing any
         repurchase, substitution or indemnification obligation of any seller
         that is assigned to the trustee for the benefit of the
         certificateholders, or against which it or the depositor is indemnified
         under the pooling and servicing agreement;

     o   to withdraw any amount deposited in the Custodial Account that was not
         required to be deposited therein; and

     o   to clear the Custodial Account of amounts relating to the corresponding
         mortgage loans in connection with the termination of the trust under
         the pooling and servicing agreement, as described in "The Pooling and
         Servicing Agreement--Termination; Retirement of Certificates."



DISTRIBUTIONS

     Beginning on the distribution date in the month next succeeding the month
in which the cut-off date occurs, or any other date as may be set forth in the
related prospectus supplement, for a series of certificates, distribution of
principal and interest, or, where applicable, of principal only or interest
only, on each class of certificates entitled thereto will be made either by the
trustee, the master servicer acting on behalf of the trustee or a paying agent
appointed by the trustee. The distributions will be made to the persons who are
registered as the holders of the certificates at the close of business on the
last business day of the preceding month.

     Distributions will be made in immediately available funds, by wire
transfer or otherwise, to the account of a certificateholder at a bank or other
entity having appropriate facilities therefor, if the certificateholder has so
notified the trustee, the master servicer or the paying agent, as the case may
be, and the applicable pooling and servicing agreement provides for that form
of payment, or by check mailed to the address of the person entitled thereto as
it appears on the certificate register. Except as otherwise provided in the
related pooling and servicing agreement, the final distribution in retirement
of the certificates will be made only upon presentation and surrender of the
certificates at the office or agency of the trustee specified in the notice to
the certificateholders. Distributions will be made to each certificateholder in
accordance with that holder's percentage interest in a particular class.

 Principal and Interest on the Certificates

     The method of determining, and the amount of, distributions of principal
and interest, or, where applicable, of principal only or interest only, on a
particular series of certificates will be described in the related prospectus
supplement. Distributions of interest on each class of certificates will be
made prior to distributions of principal thereon. Each class of certificates,
other than classes of strip certificates, may have a different specified
interest rate, or pass-through rate, which may be a fixed, variable or
adjustable pass-through rate, or any combination of two or more pass-through
rates. The related prospectus supplement will specify the pass-through rate or
rates for each class, or the initial pass-through rate or rates and the method
for determining the pass-through rate or rates. Unless otherwise specified in
the related prospectus supplement, interest on the certificates will accrue
during each calendar month and will be payable on the distribution date in the
following


                                       27
<PAGE>

calendar month. If so specified in the related prospectus supplement, interest
on any class of certificates for any distribution date may be limited to the
extent of available funds for that distribution date. 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.

     On each distribution date for a series of certificates, the trustee or the
master servicer on behalf of the trustee will distribute or cause the paying
agent to distribute, as the case may be, to each holder of record on the last
day of the preceding month of a class of certificates, an amount equal to the
percentage interest represented by the certificate held by that holder
multiplied by that class's Distribution Amount.

     In the case of a series of certificates which includes two or more classes
of certificates, the timing, sequential order, priority of payment or amount of
distributions of principal, and any schedule or formula or other provisions
applicable to that determination, including distributions among multiple
classes of senior certificates or subordinate certificates, shall be described
in the related prospectus supplement. Distributions of principal on any class
of certificates will be made on a pro rata basis among all of the certificates
of that class unless otherwise set forth in the related prospectus supplement.

     Except as otherwise provided in the related pooling and servicing
agreement, on or prior to the 20th day, or, if the 20th day is not a business
day, the next business day, of the month of distribution, the master servicer
will determine the amounts of principal and interest which will be passed
through to certificateholders on the immediately succeeding distribution date.
Prior to the close of business on the business day next succeeding each
determination date, the master servicer will furnish a statement to the trustee
with information to be made available to certificateholders by the master
servicer on request, setting forth, among other things, the amount to be
distributed on the next succeeding distribution date.


EXAMPLE OF DISTRIBUTIONS

     The following chart sets forth an example of the flow of funds as it would
relate to a hypothetical series of certificates issued, and with a cut-off date
occurring, in September 2000:




<TABLE>
<CAPTION>
DATE                                   NOTE                        DESCRIPTION
----------------------------------- --------- ----------------------------------------------------
<S>                                 <C>       <C>
   September 1 ....................  (A)      Cut-off date.
   September 2-30 .................  (B)      Subservicers receive any Principal Prepayments and
                                              applicable interest thereon.
   September 30 ...................  (C)      record date.
   September 2-October 1 ..........  (D)      The due dates for payments on a mortgage loan.
   October 18 .....................  (E)      Subservicers remit to the Master Servicer scheduled
                                              payments of principal and interest due during the
                                              related Due Period and received or advanced by
                                              them.
   October 20 .....................  (F)      Determination date.
   October 25 .....................  (G)      Distribution date.
</TABLE>

Succeeding months follow the pattern of (B) through (G), except that for
succeeding months, (B) will also include the first day of that month. A series
of certificates may have different prepayment periods, cut-off dates, record
dates, remittance dates, determination dates and/or distribution dates than
those set forth above.
----------

(A)        The initial principal balance of the mortgage pool will be the
           aggregate principal balance of the mortgage loans at the close of
           business on September 1 after deducting principal payments due on or
           before that date. Those principal payments due on or before
           September 1 and the accompanying interest payments, and any
           Principal Prepayments received as of the close of business on
           September 1 are not part of the mortgage pool and will not be passed
           through to certificateholders.

(B)        Any Principal Prepayments may be received at any time during this
           period and will be remitted to the master servicer as described in
           (E) below for distribution to certificateholders as described in (F)
           below. When a mortgage loan is prepaid in full, interest on the
           amount prepaid is collected from the mortgagor only to the date of
           payment. Partial Principal Prepayments are applied so as to reduce
           the principal balances of the related mortgage loans as of the first
           day of the month in which the payments are made; no interest will be
           paid to certificateholders from such prepaid amounts for the month
           in which the partial Principal Prepayments were received.
                                              (Footnotes continued on next page)

                                       28
<PAGE>

(C)        Distributions on October 25 will be made to certificateholders of
           record at the close of business on September 30.

(D)        Scheduled principal and interest payments are due from mortgagors.

(E)        Payments due from mortgagors during the related Due Period will be
           deposited by the subservicers in Subservicing Accounts, or will be
           otherwise managed in a manner acceptable to the rating agencies, as
           received and will include the scheduled principal payments plus
           interest on the principal balances immediately prior to those
           payments. Funds required to be remitted from the Subservicing
           Accounts to the master servicer will be remitted on October 18
           together with any required Advances by the subservicers, except that
           Principal Prepayments in full and Principal Prepayments in part
           received by subservicers during the month of September will have
           been remitted to the master servicer within five business days of
           receipt.

(F)        On October 20, the master servicer will determine the amounts of
           principal and interest which will be passed through on October 25 to
           the holders of each class of certificates. The master servicer will
           be obligated to distribute those payments due during the related due
           period which have been received from subservicers prior to and
           including October 18, as well as all Principal Prepayments received
           on mortgage loans in September, with interest adjusted to the
           pass-through rates applicable to the respective classes of
           certificates and reduced on account of Principal Prepayments as
           described in clause (B) above. Distributions to the holders of
           senior certificates, if any, on October 25 may include amounts
           otherwise distributable to the holders of the related subordinate
           certificates, amounts withdrawn from any reserve fund and amounts
           Advanced by the master servicer under the circumstances described in
           "Subordination" and "--Advances."

(G)        On October 25, the amounts determined on October 20 will be
           distributed to certificateholders.

     If provided in the related prospectus supplement, the distribution date
with respect to any series of certificates as to which the trust includes
mortgage securities may be a specified date or dates other than the 25th day of
each month in order to allow for the receipt of distributions on the mortgage
securities.



ADVANCES

     As to each series of certificates, the master servicer will make Advances
on or before each distribution date, but only to the extent that the Advances
would, in the judgment of the master servicer, be recoverable out of late
payments by the mortgagors, Liquidation Proceeds, Insurance Proceeds or
otherwise.

     The amount of any Advance will be determined based on the amount payable
under the mortgage loan as adjusted from time to time and as may be modified as
described in this prospectus under "--Collection and Other Servicing
Practices," and no Advance will be required in connection with any reduction in
amounts payable under the Relief Act, or as a result of certain actions taken
by a bankruptcy court. As specified in the related prospectus supplement with
respect to any series of certificates as to which the trust includes mortgage
securities, the master servicer's advancing obligations will be pursuant to the
terms of the mortgage securities, as may be supplemented by the terms of the
applicable pooling and servicing agreement, and may differ from the provisions
relating to Advances described in this prospectus.

     Advances are intended to maintain a regular flow of scheduled interest and
principal payments to related certificateholders. Advances do not represent an
obligation of the master servicer to guarantee or insure against losses. If
Advances have been made by the master servicer from cash being held for future
distribution to certificateholders, those funds will be required to be replaced
on or before any future distribution date to the extent that funds in the
Certificate Account on that distribution date would be less than payments
required to be made to certificateholders. Any Advances will be reimbursable to
the master servicer out of recoveries on the related mortgage loans for which
those amounts were advanced, including late payments made by the related
mortgagor, any related Liquidation Proceeds and Insurance Proceeds, proceeds of
any applicable form of credit enhancement, or proceeds of any mortgage loan
purchased by the depositor, Residential Funding Corporation, a subservicer or a
seller.

     Advances may also be reimbursable from cash otherwise distributable to
certificateholders to the extent that the master servicer shall determine that
any Advances previously made are not ultimately recoverable as described in the
third preceding paragraph. With respect to any senior/subordinate series, so
long as the related subordinate certificates remain outstanding and limited
with respect to Special Hazard Losses, Fraud Losses,


                                       29
<PAGE>

Bankruptcy Losses and Extraordinary Losses, the Advances may also be
reimbursable out of amounts otherwise distributable to holders of the
subordinate certificates, if any. The master servicer may also be obligated to
make Servicing Advances, to the extent recoverable out of Liquidation Proceeds
or otherwise, in respect of some taxes and insurance premiums not paid by
mortgagors on a timely basis. Funds so advanced may be reimbursable to the
master servicer to the extent permitted by the pooling and servicing agreement.
Notwithstanding the foregoing, if the master servicer exercises its option, if
any, to purchase the assets of a trust as described under "The Pooling and
Servicing Agreement--Termination; Retirement of Certificates" below, the master
servicer will be deemed to have been reimbursed for all related Advances
previously made by it and not theretofore reimbursed to it.

     The master servicer's obligation to make Advances may be supported by
another entity, a letter of credit or other method as may be described in the
related pooling and servicing agreement. In the event that the short-term or
long-term obligations of the provider of the support are downgraded by a rating
agency rating the related certificates or if any collateral supporting such
obligation is not performing or is removed under the terms of any agreement
described in the related prospectus supplement, the certificates may also be
downgraded.



PREPAYMENT INTEREST SHORTFALLS

     When a mortgagor prepays a mortgage loan in full between scheduled due
dates for the mortgage loan, the mortgagor pays interest on the amount prepaid
only to but not including the date on which the Principal Prepayment is made.
Similarly, Liquidation Proceeds from a mortgaged property will not include
interest for any period after the date on which the liquidation took place.

     If so specified in the related prospectus supplement, to the extent funds
are available from the Servicing Fee, the master servicer may make an
additional payment to certificateholders with respect to any mortgage loan that
prepaid in full during the related prepayment period equal to the Compensating
Interest for that mortgage loan from the date of the prepayment to the related
due date. Compensating Interest will be limited to the aggregate amount
specified in the related prospectus supplement and may not be sufficient to
cover the Prepayment Interest Shortfall. If so disclosed in the related
prospectus supplement, Prepayment Interest Shortfalls may be applied to reduce
interest otherwise payable with respect to one or more classes of certificates
of a series. See "Yield Considerations."



REPORTS TO CERTIFICATEHOLDERS

     On each distribution date, the master servicer will forward or cause to be
forwarded to each certificateholder of record a statement or statements with
respect to the related trust setting forth the information described in the
related pooling and servicing agreement. Except as otherwise provided in the
related pooling and servicing agreement, the information will include the
following (as applicable):

     o   the amount, if any, of the distribution allocable to principal;

     o   the amount, if any, of the distribution allocable to interest and the
         amount, if any, of any shortfall in the amount of interest and
         principal;

     o   the aggregate unpaid principal balance of the mortgage loans after
         giving effect to the distribution of principal on that distribution
         date;

     o   the outstanding principal balance or notional amount of each class of
         certificates after giving effect to the distribution of principal on
         that distribution date;

     o   based on the most recent reports furnished by subservicers, the number
         and aggregate principal balances of mortgage loans in the related
         mortgage pool that are delinquent (a) one month, (b) two months and (c)
         three months, and that are in foreclosure;

     o   the book value of any property acquired by the trust through
         foreclosure or grant of a deed in lieu of foreclosure;

     o   the balance of the reserve fund, if any, at the close of business on
         that distribution date;

     o   the percentage of the outstanding principal balances of the senior
         certificates, if applicable, after giving effect to the distributions
         on that distribution date;


                                       30
<PAGE>

     o   the amount of coverage under any letter of credit, mortgage pool
         insurance policy or other form of credit enhancement covering default
         risk as of the close of business on the applicable determination date
         and a description of any credit enhancement substituted therefor;

     o   if applicable, the Special Hazard Amount, Fraud Loss Amount and
         Bankruptcy Amount as of the close of business on the applicable
         distribution date and a description of any change in the calculation of
         those amounts;

     o   in the case of certificates benefitting from alternative credit
         enhancement arrangements described in a prospectus supplement, the
         amount of coverage under the alternative arrangements as of the close
         of business on the applicable determination date;

     o   the servicing fee payable to the master servicer and the subservicer;
         and

     o   with respect to any series of certificates as to which the trust
         includes mortgage securities, any additional information as required
         under the related pooling and servicing agreement.

     In addition to the information described above, reports to
certificateholders will contain any other information as is described in the
applicable pooling and servicing agreement, which may include, without
limitation, information as to Advances, reimbursements to subservicers and the
master servicer and losses borne by the related trust.

     In addition, to the extent described in the related pooling and servicing
agreement, within a reasonable period of time after the end of each calendar
year, the master servicer will furnish a report to each person that was a
holder of record of any class of certificates at any time during that calendar
year. The report will include information as to the aggregate of amounts
reported pursuant to the first two items in the list above for that calendar
year or, in the event the person was a holder of record of a class of
certificates during a portion of that calendar year, for the applicable portion
of that year.


COLLECTION AND OTHER SERVICING PROCEDURES

     The master servicer, directly or through subservicers, as the case may be,
will make reasonable efforts to collect all payments called for under the
mortgage loans and will, consistent with the related pooling and servicing
agreement and any applicable insurance policy or other credit enhancement,
follow the collection procedures as it follows with respect to mortgage loans
serviced by it that are comparable to the mortgage loans. The master servicer
may, in its discretion, waive any prepayment charge in connection with the
prepayment of a mortgage loan or extend the due dates for payments due on a
mortgage note, provided that the insurance coverage for the mortgage loan or
any coverage provided by any alternative credit enhancement will not be
adversely affected thereby. The master servicer may also waive or modify any
term of a mortgage loan so long as the master servicer has determined that the
waiver or modification is not materially adverse to any certificateholders,
taking into account any estimated loss that may result absent that action. With
respect to any series of certificates as to which the trust includes mortgage
securities, the master servicer's servicing and administration obligations will
be pursuant to the terms of those mortgage securities.

     Under its subservicing agreement, a subservicer is granted discretion to
extend relief to mortgagors whose payments become delinquent. A subservicer may
grant a period of temporary indulgence, in most cases up to three months, to a
mortgagor or may enter into a liquidating plan providing for repayment by the
mortgagor of delinquent amounts within six months from the date of execution of
the plan, in each case without the prior approval of the master servicer. Most
other types of forbearance require master servicer approval. Neither indulgence
nor forbearance with respect to a mortgage loan will affect the pass-through
rate or rates used in calculating distributions to certificateholders. See
"--Distributions."

     In instances in which a mortgage loan is in default or if default is
reasonably foreseeable, and if determined by the master servicer to be in the
best interests of the related certificateholders, the master servicer may
permit modifications of the mortgage loan rather than proceeding with
foreclosure. In making this determination, the estimated Realized Loss that
might result if the mortgage loan were liquidated would be taken into account.
These modifications may have the effect of reducing the mortgage rate or
extending the final maturity date of the mortgage loan. Any modified mortgage
loan may remain in the related trust, and the reduction in collections
resulting from the modification may result in reduced distributions of
interest, or other amounts, on, or may extend the final maturity of, one or
more classes of the related certificates.

     In connection with any significant partial prepayment of a mortgage loan,
the master servicer, to the extent not inconsistent with the terms of the
mortgage note and local law and practice, may permit the mortgage loan


                                       31
<PAGE>

to be re-amortized so that the monthly payment is recalculated as an amount
that will fully amortize its remaining principal amount by the original
maturity date based on the original mortgage rate, provided that the
re-amortization shall not be permitted if it would constitute a modification of
the mortgage loan for federal income tax purposes.

     In any case in which property subject to a mortgage loan, other than an
ARM loan described below, is being conveyed by the mortgagor, the master
servicer, directly or through a subservicer, shall in general be obligated, to
the extent it has knowledge of the conveyance, to exercise its rights to
accelerate the maturity of the mortgage loan under any due-on-sale clause
applicable thereto, but only if the exercise of those rights is permitted by
applicable law and only to the extent it would not adversely affect or
jeopardize coverage under any primary insurance policy or applicable credit
enhancement arrangements. If the master servicer or subservicer is prevented
from enforcing the due-on-sale clause under applicable law or if the master
servicer or subservicer determines that it is reasonably likely that a legal
action would be instituted by the related mortgagor to avoid enforcement of the
due-on-sale clause, the master servicer or subservicer will enter into an
assumption and modification agreement with the person to whom the related
property has been or is about to be conveyed, under which that person becomes
liable under the mortgage note subject to specified conditions. The original
mortgagor may be released from liability on a mortgage loan if the master
servicer or subservicer shall have determined in good faith that the release
will not adversely affect the collectability of the mortgage loan.

     An ARM loan may be assumed if the ARM loan is by its terms assumable and
if, in the reasonable judgment of the master servicer or the subservicer, the
proposed transferee of the related mortgaged property establishes its ability
to repay the loan and the security for that ARM loan would not be impaired by
the assumption. If a mortgagor transfers the mortgaged property subject to an
ARM loan without consent, the ARM loan may be declared due and payable. Any fee
collected by the master servicer or subservicer for entering into an assumption
or substitution of liability agreement will be retained by the master servicer
or subservicer as additional servicing compensation unless otherwise set forth
in the related prospectus supplement. See "Certain Legal Aspects of Mortgage
Loans--The Mortgage Loans--Enforceability of Certain Provisions" in this
prospectus. In connection with any such assumption, the mortgage rate borne by
the related mortgage note may not be altered.

     Mortgagors may, from time to time, request partial releases of the
mortgaged properties, easements, consents to alteration or demolition and other
similar matters. The master servicer or the related subservicer may approve
this type of request if it has determined, exercising its good faith business
judgment in the same manner as it would if it were the owner of the related
mortgage loan, that approval will not adversely affect the security for, and
the timely and full collectability of, the related mortgage loan. Any fee
collected by the master servicer or the subservicer for processing this type of
request will be retained by the master servicer or subservicer as additional
servicing compensation.

     The master servicer will be required to maintain a fidelity bond and
errors and omissions policy with respect to its officers and employees and
other persons acting on behalf of the master servicer in connection with its
activities under the pooling and servicing agreement.


SPECIAL SERVICING AND SPECIAL SERVICING AGREEMENTS

     The pooling and servicing agreement for a series of certificates may name
a Special Servicer. The Special Servicer may have discretion to extend relief
to certain mortgagors whose payments become delinquent. The Special Servicer
may be permitted to grant a period of temporary indulgence to a mortgagor or
may enter into a repayment plan providing for repayment of arrearages by the
mortgagor, in each case without the prior approval of the master servicer or
the subservicer. Other types of forbearance may require the approval of the
master servicer or subservicer, as applicable.

     In addition, the master servicer may enter into various agreements with
holders of one or more classes of subordinate certificates or of a class of
securities representing interests in one or more classes of subordinate
certificates. Under the terms of those agreements, the holder may, with respect
to some delinquent mortgage loans:

     o   instruct the master servicer to commence or delay foreclosure
         proceedings, provided that the holder deposits a specified amount of
         cash with the master servicer which will be available for distribution
         to certificateholders in the event that Liquidation Proceeds are less
         than they otherwise may have been had the master servicer acted under
         its normal servicing procedures;


                                       32
<PAGE>

     o   instruct the master servicer to purchase the mortgage loans from the
         trust prior to the commencement of foreclosure proceedings at the
         purchase price and to resell the mortgage loans to the holder, in which
         case any subsequent loss with respect to the mortgage loans will not be
         allocated to the certificate-holders;

     o   become, or designate a third party to become, a subservicer with
         respect to the mortgage loans so long as (i) the master servicer has
         the right to transfer the subservicing rights and obligations of the
         mortgage loans to another subservicer at any time or (ii) the holder or
         its servicing designee is required to service the mortgage loans
         according to the master servicer's servicing guidelines; or

     o   the related prospectus supplement may provide for the other types of
         special servicing arrangements.


REALIZATION UPON DEFAULTED MORTGAGE LOANS

     In the event that title to any acquisition of title and cancellation of
any REO Mortgage Loan will be considered for most purposes to be an outstanding
mortgage loan held in the trust until it is converted into a Liquidated
Mortgage Loan.

     For purposes of calculations of amounts distributable to
certificateholders in respect of an REO Mortgage Loan, the amortization
schedule in effect at the time of any acquisition of title, before any
adjustment thereto by reason of any bankruptcy or any similar proceeding or any
moratorium or similar waiver or grace period, will be deemed to have continued
in effect and, in the case of an ARM Loan, the amortization schedule will be
deemed to have adjusted in accordance with any interest rate changes occurring
on any adjustment date therefor, so long as the REO Mortgage Loan is considered
to remain in the trust. If a REMIC election has been made, any mortgaged
property so acquired by the trust must be disposed of in accordance with
applicable federal income tax regulations and consistent with the status of the
trust as a REMIC. To the extent provided in the related pooling and servicing
agreement, any income, net of expenses and other than gains described in the
second succeeding paragraph, received by the subservicer or the master servicer
on the mortgaged property prior to its disposition will be deposited in the
Custodial Account upon receipt and will be available at that time to the extent
provided in the related pooling and servicing agreement, for making payments to
certificate-holders.

     With respect to a mortgage loan in default, the master servicer may pursue
foreclosure or similar remedies concurrently with pursuing any remedy for a
breach of a representation and warranty. However, the master servicer is not
required to continue to pursue both remedies if it determines that one remedy
is more likely to result in a greater recovery. If the mortgage loan is an
Additional Collateral Loan, the master servicer or the related subservicer, if
the lien on the Additional Collateral for such Additional Collateral Loan is
not assigned to the trustee on behalf of the certificateholders, may proceed
against the related mortgaged property or the related Additional Collateral
first or may proceed against both concurrently, as permitted by applicable law
and the terms under which the Additional Collateral is held, including any
third-party guarantee.

     Upon the first to occur of final liquidation and a repurchase or
substitution pursuant to a breach of a representation and warranty, the
mortgage loan will be removed from the related trust. The master servicer may
elect to treat a defaulted mortgage loan as having been finally liquidated if
substantially all amounts expected to be received in connection therewith have
been received. Any additional liquidation expenses relating to the mortgage
loan thereafter incurred will be reimbursable to the master servicer or any
subservicer from any amounts otherwise distributable to the related
certificateholders, or may be offset by any subsequent recovery related to the
mortgage loan. Alternatively, for purposes of determining the amount of related
Liquidation Proceeds to be distributed to certificateholders, the amount of any
Realized Loss or the amount required to be drawn under any applicable form of
credit enhancement, the master servicer may take into account minimal amounts
of additional receipts expected to be received, as well as estimated additional
liquidation expenses expected to be incurred in connection with the defaulted
mortgage loan.

     With respect to some series of certificates, the applicable form of credit
enhancement may provide, to the extent of coverage, that a defaulted mortgage
loan or REO Mortgage Loan will be removed from the trust prior to its final
liquidation. If a final liquidation of a mortgage loan resulted in a Realized
Loss and within two years thereafter the master servicer receives a subsequent
recovery specifically related to that mortgage loan, in connection with a
related breach of a representation or warranty or otherwise, such subsequent
recovery shall be distributed to the then-current certificateholders of any
outstanding class to which the Realized Loss was allocated, with the amounts to
be distributed allocated among such classes in the same proportions as such
Realized Loss was allocated, provided that no such distributions of subsequent
recoveries, together with any


                                       33
<PAGE>

other reimbursement amounts, exceed the total amount of the Realized Loss that
was allocated to that class. In the event that any class of certificates to
which such Realized Loss was allocated is no longer outstanding, any subsequent
recovery shall be distributed to the persons who were the holders of that class
of certificates when it was retired. In the case of a series of certificates
other than a senior/subordinate series, if so provided in the related
prospectus supplement, the applicable form of credit enhancement may provide
for reinstatement in accordance with specified conditions in the event that,
following the final liquidation of a mortgage loan and a draw under the related
credit enhancement, subsequent recoveries are received. If a defaulted mortgage
loan or REO Mortgage Loan is not so removed from the trust, then, upon its
final liquidation, if a loss is realized which is not covered by any applicable
form of credit enhancement or other insurance, the certificateholders will bear
the loss. However, if a gain results from the final liquidation of an REO
Mortgage Loan which is not required by law to be remitted to the related
mortgagor, the master servicer will be entitled to retain that gain as
additional servicing compensation unless the related prospectus supplement
provides otherwise. For a description of the master servicer's obligations to
maintain and make claims under applicable forms of credit enhancement and
insurance relating to the mortgage loans, see "Description of Credit
Enhancement" and "Insurance Policies on Mortgage Loans."

     For a discussion of legal rights and limitations associated with the
foreclosure of a mortgage loan, see "Certain Legal Aspects of Mortgage Loans."


                                 SUBORDINATION


GENERAL

     A senior/subordinate series of certificates will consist of one or more
classes of senior certificates and one or more classes of subordinate
certificates, as specified in the related prospectus supplement. Subordination
of the subordinate certificates of any senior/subordinate series will be
effected by the following method, unless an alternative method is specified in
the related prospectus supplement. In addition, some classes of senior or
subordinate certificates may be senior to other classes of senior or
subordinate certificates, as specified in the related prospectus supplement.

     With respect to any senior/subordinate series, the total amount available
for distribution on each distribution date, as well as the method for
allocating that amount among the various classes of certificates included in
the series, will be described in the related prospectus supplement. Generally,
with respect to any series, the amount available for distribution will be
allocated first to interest on the senior certificates of that series, and then
to principal of the senior certificates up to the amounts described in the
related prospectus supplement, prior to allocation of any amounts to the
subordinate certificates.

     If so provided in the pooling and servicing agreement, the master servicer
may be permitted, under certain circumstances, to purchase any mortgage loan
that is three or more months delinquent in payments of principal and interest,
at the purchase price. Any Realized Loss subsequently incurred in connection
with any such mortgage loan may be borne by the then-current certificateholders
of the class or classes that would have borne that Realized Loss if the
mortgage loan had not been so purchased, unless that purchase was made upon the
request of the holder of the most junior class of certificates of the related
series.

     In the event of any Realized Losses not in excess of the limitations
described below, other than Extraordinary Losses, the rights of the subordinate
certificateholders to receive distributions will be subordinate to the rights
of the senior certificateholders and the owner of the Excess Spread and as to
certain classes of subordinate certificates, may be subordinate to the rights
of other subordinate certificateholders.

     Except as noted below, Realized Losses will be allocated to the
subordinate certificates of the related series until their outstanding
principal balances have been reduced to zero. Additional Realized Losses, if
any, will be allocated to the senior certificates. If the series includes more
than one class of senior certificates, the additional Realized Losses will be
allocated either on a pro rata basis among all of the senior certificates in
proportion to their respective outstanding principal balances or as otherwise
provided in the related prospectus supplement.

     Special Hazard Losses in excess of the Special Hazard Amount will be
allocated among all outstanding classes of certificates of the related series,
either on a pro rata basis in proportion to their outstanding principal
balances, or as otherwise provided in the related prospectus supplement. The
respective amounts of other specified types of losses, including Fraud Losses
and Bankruptcy Losses, that may be borne solely by the subordinate certificates
may be similarly limited to the Fraud Loss Amount and the Bankruptcy Amount,
and the subordinate certificates may provide no coverage with respect to
Extraordinary Losses or other specified


                                       34
<PAGE>

types of losses, as described in the related prospectus supplement, in which
case those losses would be allocated on a pro rata basis among all outstanding
classes of certificates or as otherwise specified in the related prospectus
supplement. Each of the Special Hazard Amount, Fraud Loss Amount and Bankruptcy
Amount may be subject to periodic reductions and may be subject to further
reduction or termination, without the consent of the certificateholders, upon
the written confirmation from each applicable rating agency, as described in
the related prospectus supplement, that the then-current rating of the related
series of certificates will not be adversely affected.

     In most cases, any allocation of a Realized Loss, including a Special
Hazard Loss, Fraud Loss or Bankruptcy Loss, to a certificate in a
senior/subordinate series will be made by reducing its outstanding principal
balance as of the distribution date following the calendar month in which the
Realized Loss was incurred.

     The rights of holders of the various classes of certificates of any series
to receive distributions of principal and interest is determined by the
aggregate outstanding principal balance of each class or, if applicable, the
related notional amount. The outstanding principal balance of any certificate
will be reduced by all amounts previously distributed on that certificate
representing principal, and by any Realized Losses allocated thereto. If there
are no Realized Losses or Principal Prepayments on any of the mortgage loans,
the respective rights of the holders of certificates of any series to future
distributions generally would not change. However, to the extent described in
the related prospectus supplement, holders of senior certificates may be
entitled to receive a disproportionately larger amount of prepayments received
during specified periods, which will have the effect, absent offsetting losses,
of accelerating the amortization of the senior certificates and increasing the
respective percentage ownership interest evidenced by the subordinate
certificates in the related trust, with a corresponding decrease in the
percentage of the outstanding principal balances of the senior certificates,
thereby preserving the availability of the subordination provided by the
subordinate certificates. In addition, some Realized Losses will be allocated
first to subordinate certificates by reduction of their outstanding principal
balance, which will have the effect of increasing the respective ownership
interest evidenced by the senior certificates in the related trust.

     If so provided in the related prospectus supplement, some amounts
otherwise payable on any distribution date to holders of certificates may be
deposited into a reserve fund. Amounts held in any reserve fund may be applied
as described under "Description of Credit Enhancement--Reserve Funds" and in
the related prospectus supplement.

     In lieu of the foregoing provisions, subordination may be effected in the
following manner, or in any other manner as may be described in the related
prospectus supplement. The rights of the holders of subordinate certificates to
receive the Subordinate Amount will be limited to the extent described in the
related prospectus supplement. As specified in the related prospectus
supplement, the Subordinate Amount may be reduced based upon the amount of
losses borne by the holders of the subordinate certificates as a result of the
subordination, a specified schedule or other method of reduction as the
prospectus supplement may specify.

     With respect to any senior/subordinate series, the terms and provisions of
the subordination may vary from those described in this prospectus. Any
variation and any additional credit enhancement will be described in the
related prospectus supplement.


OVERCOLLATERALIZATION

     If so specified in the related prospectus supplement, interest collections
on the mortgage loans may exceed interest payments on the certificates for the
related distribution date. To the extent such excess interest is applied as
principal payments on the certificates, the effect will be to reduce the
principal balance of the certificates relative to the outstanding balance of
the mortgage loans, thereby creating overcollateralization and additional
protection to the certificateholders, as specified in the related prospectus
supplement.


                                       35
<PAGE>

                       DESCRIPTION OF CREDIT ENHANCEMENT


GENERAL

     Credit support with respect to each series of certificates may be
comprised of one or more of the following components. Each component will have
a dollar limit and will provide coverage with respect to Realized Losses that
are:

     o   Defaulted Mortgage Losses;

     o   Special Hazard Losses;

     o   Bankruptcy Losses; and

     o   Fraud Losses.

     Most forms of credit support will not provide protection against all risks
of loss and will not guarantee repayment of the entire outstanding principal
balance of the certificates and interest thereon. If losses occur that exceed
the amount covered by credit support or are of a type that is not covered by
the credit support, certificateholders will bear their allocable share of
deficiencies. In particular, Defaulted Mortgage Losses, Special Hazard Losses,
Bankruptcy Losses and Fraud Losses in excess of the amount of coverage provided
therefor and Extraordinary Losses will not be covered. To the extent that the
credit enhancement for any series of certificates is exhausted, the
certificateholders will bear all further risks of loss not otherwise insured
against.

     As described in this prospectus and in the related prospectus supplement,

     o   coverage with respect to Defaulted Mortgage Losses may be provided by a
         mortgage pool insurance policy,

     o   coverage with respect to Special Hazard Losses may be provided by a
         special hazard insurance policy,

     o   coverage with respect to Bankruptcy Losses may be provided by a
         bankruptcy policy and

     o   coverage with respect to Fraud Losses may be provided by a mortgage
         pool insurance policy or mortgage repurchase bond.

In addition, if so specified in the applicable prospectus supplement, in lieu
of or in addition to any or all of the foregoing arrangements, credit
enhancement may be in the form of a reserve fund to cover those losses, in the
form of subordination of one or more classes of certificates as described under
"Subordination," or in the form of a certificate insurance policy, a letter of
credit, mortgage pool insurance policies, surety bonds or other types of
insurance policies, other secured or unsecured corporate guarantees or in any
other form as may be described in the related prospectus supplement, or in the
form of a combination of two or more of the foregoing.

     In addition, the credit support may be provided by an assignment of the
right to receive cash amounts, a deposit of cash into a reserve fund or other
pledged assets, or by banks, insurance companies, guarantees or any combination
thereof identified in the related prospectus supplement. Coverage may also be
provided by representations made by Residential Funding Corporation or the
depositor. If so specified in the related prospectus supplement, limited credit
enhancement may be provided to cover Defaulted Mortgage Losses with respect to
mortgage loans with LTV ratios at origination of over 80% which are not insured
by a primary insurance policy, to the extent that those losses would be covered
under a primary insurance policy if obtained, or may be provided in lieu of
title insurance coverage, in the form of a corporate guaranty or in other forms
described in this section. Credit support may also be provided in the form of
an insurance policy covering the risk of collection and adequacy of any
Additional Collateral provided in connection with any Additional Collateral
Loan, as limited by such insurance policy. As described in the pooling and
servicing agreement, credit support may apply to all of the mortgage loans or
to some mortgage loans contained in a mortgage pool.

     Each prospectus supplement will include a description of:

     o   the amount payable under the credit enhancement arrangement, if any,
         provided with respect to a series;

     o   any conditions to payment thereunder not otherwise described in this
         prospectus;

     o   the conditions under which the amount payable under the credit support
         may be reduced and under which the credit support may be terminated or
         replaced; and


                                       36
<PAGE>

     o   the material provisions of any agreement relating to the credit
         support.


     Additionally, each prospectus supplement will contain information with
respect to the issuer of any third-party credit enhancement, if applicable. The
pooling and servicing agreement or other documents may be modified in
connection with the provisions of any credit enhancement arrangement to provide
for reimbursement rights, control rights or other provisions that may be
required by the credit enhancer. To the extent provided in the applicable
pooling and servicing agreement, the credit enhancement arrangements may be
periodically modified, reduced and substituted for based on the performance of
or on the aggregate outstanding principal balance of the mortgage loans covered
thereby. See "Description of Credit Enhancement--Reduction or Substitution of
Credit Enhancement." If specified in the applicable prospectus supplement,
credit support for a series of certificates may cover one or more other series
of certificates.

     The descriptions of any insurance policies, bonds or other instruments
described in this prospectus or any prospectus supplement and the coverage
thereunder do not purport to be complete and are qualified in their entirety by
reference to the actual forms of the policies, copies of which generally will
be exhibits to the Form 8-K to be filed with the Securities and Exchange
Commission in connection with the issuance of the related series of
certificates.


LETTERS OF CREDIT

     If any component of credit enhancement as to any series of certificates is
to be provided by a letter of credit, a bank will deliver to the trustee an
irrevocable letter of credit. The letter of credit may provide direct coverage
with respect to the mortgage loans. The letter of credit bank, the amount
available under the letter of credit with respect to each component of credit
enhancement, the expiration date of the letter of credit, and a more detailed
description of the letter of credit will be specified in the related prospectus
supplement. On or before each distribution date, the letter of credit bank will
be required to make payments after notification from the trustee, to be
deposited in the related Certificate Account with respect to the coverage
provided thereby. The letter of credit may also provide for the payment of
Advances.


MORTGAGE POOL INSURANCE POLICIES

     Any insurance policy covering losses on a pool of mortgage loans obtained
by the depositor for a trust will be issued by the pool insurer. Each mortgage
pool insurance policy, in accordance with the limitations described in this
prospectus and in the prospectus supplement, if any, will cover Defaulted
Mortgage Losses in an amount equal to a percentage specified in the applicable
prospectus supplement of the aggregate principal balance of the mortgage loans
on the cut-off date. As described under "--Maintenance of Credit Enhancement,"
the master servicer will use its best reasonable efforts to maintain the
mortgage pool insurance policy and to present claims thereunder to the pool
insurer on behalf of itself, the trustee and the certificateholders. The
mortgage pool insurance policies, however, are not blanket policies against
loss, since claims thereunder may only be made respecting particular defaulted
mortgage loans and only upon satisfaction of specified conditions precedent
described in the succeeding paragraph. Unless specified in the related
prospectus supplement, the mortgage pool insurance policies may not cover
losses due to a failure to pay or denial of a claim under a primary insurance
policy, irrespective of the reason therefor.

     Each mortgage pool insurance policy will provide that no claims may be
validly presented thereunder unless, among other things:

     o   any required primary insurance policy is in effect for the defaulted
         mortgage loan and a claim thereunder has been submitted and settled;

     o   hazard insurance on the property securing the mortgage loan has been
         kept in force and real estate taxes and other protection and
         preservation expenses have been paid by the master servicer;

     o   if there has been physical loss or damage to the mortgaged property, it
         has been restored to its condition, reasonable wear and tear excepted,
         at the cut-off date; and

     o   the insured has acquired good and merchantable title to the mortgaged
         property free and clear of liens except permitted encumbrances.

     Upon satisfaction of these conditions, the pool insurer will have the
option either (a) to purchase the property securing the defaulted mortgage loan
at a price equal to its outstanding principal balance plus accrued and unpaid
interest at the applicable mortgage rate to the date of purchase and some
expenses incurred by the


                                       37
<PAGE>

master servicer or subservicer on behalf of the trustee and certificateholders,
or (b) to pay the amount by which the sum of the outstanding principal balance
of the defaulted mortgage loan plus accrued and unpaid interest at the mortgage
rate to the date of payment of the claim and the aforementioned expenses
exceeds the proceeds received from an approved sale of the mortgaged property,
in either case net of some amounts paid or assumed to have been paid under any
related primary insurance policy.

     Certificateholders will experience a shortfall in the amount of interest
payable on the related certificates in connection with the payment of claims
under a mortgage pool insurance policy because the pool insurer is only
required to remit unpaid interest through the date a claim is paid rather than
through the end of the month in which the claim is paid. In addition, the
certificateholders will also experience losses with respect to the related
certificates in connection with payments made under a mortgage pool insurance
policy to the extent that the master servicer expends funds to cover unpaid
real estate taxes or to repair the related mortgaged property in order to make
a claim under a mortgage pool insurance policy, as those amounts will not be
covered by payments under the policy and will be reimbursable to the master
servicer from funds otherwise payable to the certificateholders. If any
mortgaged property securing a defaulted mortgage loan is damaged and proceeds,
if any (see "--Special Hazard Insurance Policies" below for risks which are not
covered by those policies), from the related hazard insurance policy or
applicable special hazard insurance policy are insufficient to restore the
damaged property to a condition sufficient to permit recovery under the
mortgage pool insurance policy, the master servicer is not required to expend
its own funds to restore the damaged property unless it determines that (a)
restoration will increase the proceeds to one or more classes of
certificateholders on liquidation of the mortgage loan after reimbursement of
the master servicer for its expenses and (b) the expenses will be recoverable
by it through Liquidation Proceeds or Insurance Proceeds.

     A mortgage pool insurance policy and some primary insurance policies will
likely not insure against loss sustained by reason of a default arising from,
among other things, fraud or negligence in the origination or servicing of a
mortgage loan, including misrepresentation by the mortgagor, the seller or
other persons involved in the origination thereof, failure to construct a
mortgaged property in accordance with plans and specifications or bankruptcy,
except if specified in the related prospectus supplement an endorsement to the
mortgage pool insurance policy provides for insurance against that type of
loss. Depending upon the nature of the event, a breach of representation made
by a seller may also have occurred. If that breach materially and adversely
affects the interests of certificateholders, has been assigned to the trustee
for the benefit of the certificateholders and cannot be cured, it would give
rise to a repurchase obligation on the part of the seller, as described under
"Mortgage Loan Program -- Representations with Respect to the Mortgage Loans."
However, an event of this type would not give rise to a breach of a
representation or warranty or a repurchase obligation on the part of the
depositor or Residential Funding Corporation.

     The original amount of coverage under each mortgage pool insurance policy
will be reduced over the life of the related series of certificates by the
aggregate amount of claims paid less the aggregate of the net amounts realized
by the pool insurer upon disposition of all foreclosed properties. The amount
of claims paid includes some expenses incurred by the master servicer or
subservicer as well as accrued interest on delinquent mortgage loans to the
date of payment of the claim. See "Certain Legal Aspects of Mortgage Loans--The
Mortgage Loans--Foreclosure on Mortgage Loans." Accordingly, if aggregate net
claims paid under any mortgage pool insurance policy reach the original policy
limit, coverage under that mortgage pool insurance policy will be exhausted and
any further losses will be borne by the related certificateholders. In
addition, unless the master servicer determines that an Advance relating to a
delinquent mortgage loan would be recoverable to it from the proceeds of the
liquidation of the mortgage loan or otherwise, the master servicer would not be
obligated to make an Advance respecting any delinquency since the Advance would
not be ultimately recoverable to it from either the mortgage pool insurance
policy or from any other related source. See "Description of the
Certificates--Advances."

     Since each mortgage pool insurance policy will require that the property
subject to a defaulted mortgage loan be restored to its original condition
prior to claiming against the pool insurer, the policy will not provide
coverage against hazard losses. As described under "Insurance Policies on
Mortgage Loans--Standard Hazard Insurance on Mortgaged Properties," the hazard
policies covering the mortgage loans typically exclude from coverage physical
damage resulting from a number of causes and, even when the damage is covered,
may afford recoveries which are significantly less than full replacement cost
of those losses. Additionally, no coverage for Special Hazard Losses, Fraud
Losses or Bankruptcy Losses will cover all risks, and the amount of any such
coverage will be limited. See "--Special Hazard Insurance Policies" below. As a
result, certain hazard risks will not be insured against and may be borne by
certificateholders.


                                       38
<PAGE>

SPECIAL HAZARD INSURANCE POLICIES

     Any insurance policy covering Special Hazard Losses obtained for a trust
will be issued by the insurer named in the related prospectus supplement. Each
special hazard insurance policy subject to limitations described in this
paragraph and in the related prospectus supplement, if any, will protect the
related certificateholders from Special Hazard Losses. Aggregate claims under a
special hazard insurance policy will be limited to the amount set forth in the
related pooling and servicing agreement and will be subject to reduction as
described in the related pooling and servicing agreement. A special hazard
insurance policy will provide that no claim may be paid unless hazard and, if
applicable, flood insurance on the property securing the mortgage loan has been
kept in force and other protection and preservation expenses have been paid by
the master servicer.

     In accordance with the foregoing limitations, a special hazard insurance
policy will provide that, where there has been damage to property securing a
foreclosed mortgage loan, title to which has been acquired by the insured, and
to the extent the damage is not covered by the hazard insurance policy or flood
insurance policy, if any, maintained by the mortgagor or the master servicer or
the subservicer, the insurer will pay the lesser of (i) the cost of repair or
replacement of the related property or (ii) upon transfer of the property to
the insurer, the unpaid principal balance of the mortgage loan at the time of
acquisition of the related property by foreclosure or deed in lieu of
foreclosure, plus accrued interest at the mortgage rate to the date of claim
settlement and certain expenses incurred by the master servicer or the
subservicer with respect to the related property.

     If the property is transferred to a third party in a sale approved by the
special hazard insurer, the amount that the special hazard insurer will pay
will be the amount under (ii) above reduced by the net proceeds of the sale of
the property. If the unpaid principal balance plus accrued interest and some
expenses is paid by the special hazard insurer, the amount of further coverage
under the related special hazard insurance policy will be reduced by that
amount less any net proceeds from the sale of the property. Any amount paid as
the cost of repair of the property will further reduce coverage by that amount.
Restoration of the property with the proceeds described under (i) above will
satisfy the condition under each mortgage pool insurance policy that the
property be restored before a claim under the policy may be validly presented
with respect to the defaulted mortgage loan secured by the related property.
The payment described under (ii) above will render presentation of a claim
relating to a mortgage loan under the related mortgage pool insurance policy
unnecessary. Therefore, so long as a mortgage pool insurance policy remains in
effect, the payment by the insurer under a special hazard insurance policy of
the cost of repair or of the unpaid principal balance of the related mortgage
loan plus accrued interest and some expenses will not affect the total
Insurance Proceeds paid to certificateholders, but will affect the relative
amounts of coverage remaining under the related special hazard insurance policy
and mortgage pool insurance policy.

     To the extent described in the related prospectus supplement, coverage for
Special Hazard Losses for a series of certificates may be provided, in whole or
in part, by a type of special hazard coverage other than a special hazard
insurance policy or by means of a representation of the depositor or
Residential Funding Corporation.



BANKRUPTCY POLICIES

     In the event of a personal bankruptcy of a mortgagor, a bankruptcy court
may establish the value of the mortgaged property of the mortgagor, and, if
specified in the related prospectus supplement, any related Additional
Collateral, at a Deficient Valuation. The amount of the secured debt could then
be reduced to that value, and, thus, the holder of the mortgage loan would
become an unsecured creditor to the extent the outstanding principal balance of
the mortgage loan exceeds the value assigned to the mortgaged property, and any
related Additional Collateral, by the bankruptcy court.

     In addition, other modifications of the terms of a mortgage loan can
result from a bankruptcy proceeding, including a Debt Service Reduction. See
"Certain Legal Aspects of Mortgage Loans--The Mortgage Loans--Anti-Deficiency
Legislation and Other Limitations on Lenders." Any bankruptcy policy to provide
coverage for Bankruptcy Losses resulting from proceedings under the federal
Bankruptcy Code obtained for a trust will be issued by an insurer named in the
related prospectus supplement. The level of coverage under each bankruptcy
policy will be set forth in the related prospectus supplement.


                                       39
<PAGE>

RESERVE FUNDS

     If so specified in the related prospectus supplement, the depositor will
deposit or cause to be deposited in a reserve fund, any combination of cash or
Permitted Investments in specified amounts, or any other instrument
satisfactory to the rating agency or Agencies, which will be applied and
maintained in the manner and under the conditions specified in the related
pooling and servicing agreement. In the alternative or in addition to that
deposit, to the extent described in the related prospectus supplement, a
reserve fund may be funded through application of all or a portion of amounts
otherwise payable on any related certificates, from the Excess Spread, Excluded
Spread or otherwise. To the extent that the funding of the reserve fund is
dependent on amounts otherwise payable on related certificates, Excess Spread,
Excluded Spread or other cash flows attributable to the related mortgage loans
or on reinvestment income, the reserve fund may provide less coverage than
initially expected if the cash flows or reinvestment income on which the
funding is dependent are lower than anticipated.

     With respect to any series of certificates as to which credit enhancement
includes a letter of credit, if so specified in the related prospectus
supplement, under specified circumstances the remaining amount of the letter of
credit may be drawn by the trustee and deposited in a reserve fund. Amounts in
a reserve fund may be distributed to certificateholders, or applied to
reimburse the master servicer for outstanding Advances, or may be used for
other purposes, in the manner and to the extent specified in the related
prospectus supplement. If so specified in the related prospectus supplement,
amounts in a reserve fund may be available only to cover specific types of
losses, or losses on specific mortgage loans. Unless otherwise specified in the
related prospectus supplement, any reserve fund will not be deemed to be part
of the related trust. A reserve fund may provide coverage to more than one
series of certificates, if set forth in the related prospectus supplement.

     The trustee will have a perfected security interest for the benefit of the
certificateholders in the assets in the reserve fund, unless the assets are
owned by the related trust. However, to the extent that the depositor, any
affiliate of the depositor or any other entity has an interest in any reserve
fund, in the event of the bankruptcy, receivership or insolvency of that
entity, there could be delays in withdrawals from the reserve fund and the
corresponding payments to the certificateholders. These delays could adversely
affect the yield to investors on the related certificates.

     Amounts deposited in any reserve fund for a series will be invested in
Permitted Investments by, or at the direction of, and for the benefit of the
master servicer or any other person named in the related prospectus supplement.



CERTIFICATE INSURANCE POLICIES; SURETY BONDS

     If so specified in the related prospectus supplement, the depositor may
obtain one or more certificate insurance policies or guaranties or one or more
surety bonds, or one or more guarantees issued by insurers or other parties
acceptable to the rating agency or Agencies rating the certificates offered, as
specified in the related prospectus supplement, insuring the holders of one or
more classes of certificates the payment of amounts due in accordance with the
terms of that class or those classes of certificates. Any certificate insurance
policy, surety bond or guaranty will have the characteristics described in, and
will be in accordance with any limitations and exceptions described in, the
related prospectus supplement.


MAINTENANCE OF CREDIT ENHANCEMENT

     If credit enhancement has been obtained for a series of certificates, the
master servicer will be obligated to exercise its best reasonable efforts to
keep or cause to be kept the credit enhancement in full force and effect
throughout the term of the applicable pooling and servicing agreement, unless
coverage thereunder has been exhausted through payment of claims or otherwise,
or substitution therefor is made as described below under "--Reduction or
Substitution of Credit Enhancement." The master servicer, on behalf of itself,
the trustee and certificateholders, will be required to provide information
required for the trustee to draw under any applicable credit enhancement.

     The master servicer, the servicer or the Certificate Administrator will
agree to pay the premiums for each mortgage pool insurance policy, special
hazard insurance policy, bankruptcy policy, certificate insurance policy or
surety bond, as applicable, on a timely basis, unless the premiums are paid
directly by the trust. As to mortgage pool insurance policies generally, in the
event the related insurer ceases to be a Qualified Insurer, the master servicer
will use its best reasonable efforts to obtain from another Qualified Insurer a
comparable


                                       40
<PAGE>

replacement insurance policy with a total coverage equal to the then
outstanding coverage of the policy. If the cost of the replacement policy is
greater than the cost of the existing policy, the coverage of the replacement
policy will, unless otherwise agreed to by the depositor, be reduced to a level
so that its premium rate does not exceed the premium rate on the original
insurance policy. In the event that a pool insurer ceases to be a Qualified
Insurer because it ceases to be approved as an insurer by the Federal Home Loan
Mortgage Corporation, or Freddie Mac, the Federal National Mortgage Association
or Fannie Mae or any successor entity, the master servicer will review, not
less often than monthly, the financial condition of the pool insurer with a
view toward determining whether recoveries under the mortgage pool insurance
policy are jeopardized for reasons related to the financial condition of the
pool insurer. If the master servicer determines that recoveries are so
jeopardized, it will exercise its best reasonable efforts to obtain from
another Qualified Insurer a replacement insurance policy as described above, at
the same cost limit. Any losses in market value of the certificates associated
with any reduction or withdrawal in rating by an applicable rating agency shall
be borne by the certificateholders.


     If any property securing a defaulted mortgage loan is damaged and
proceeds, if any, from the related hazard insurance policy or any applicable
special hazard insurance policy are insufficient to restore the damaged
property to a condition sufficient to permit recovery under any letter of
credit, mortgage pool insurance policy or any related primary insurance policy,
the master servicer is not required to expend its own funds to restore the
damaged property unless it determines (i) that restoration will increase the
proceeds to one or more classes of certificateholders on liquidation of the
mortgage loan after reimbursement of the master servicer for its expenses and
(ii) that the expenses will be recoverable by it through Liquidation Proceeds
or Insurance Proceeds. If recovery under any letter of credit, mortgage pool
insurance policy, other credit enhancement or any related primary insurance
policy is not available because the master servicer has been unable to make the
above determinations, has made the determinations incorrectly or recovery is
not available for any other reason, the master servicer is nevertheless
obligated to follow whatever normal practices and procedures, in accordance
with the preceding sentence, that it deems necessary or advisable to realize
upon the defaulted mortgage loan and in the event this determination has been
incorrectly made, is entitled to reimbursement of its expenses in connection
with the restoration.



REDUCTION OR SUBSTITUTION OF CREDIT ENHANCEMENT


     The amount of credit support provided with respect to any series of
certificates and relating to various types of losses incurred may be reduced
under specified circumstances. In most cases, the amount available as credit
support will be subject to periodic reduction on a non-discretionary basis in
accordance with a schedule or formula set forth in the related pooling and
servicing agreement. Additionally, in most cases, the credit support may be
replaced, reduced or terminated, and the formula used in calculating the amount
of coverage with respect to Bankruptcy Losses, Special Hazard Losses or Fraud
Losses may be changed, without the consent of the certificateholders, upon the
written assurance from each applicable rating agency that the then-current
rating of the related series of certificates will not be adversely affected
thereby.


     Furthermore, in the event that the credit rating of any obligor under any
applicable credit enhancement is downgraded, the credit rating of each class of
the related certificates may be downgraded to a corresponding level, and,
unless otherwise specified in the related prospectus supplement, neither the
master servicer nor the depositor will be obligated to obtain replacement
credit support in order to restore the rating of the certificates. The master
servicer will also be permitted to replace any credit support with other credit
enhancement instruments issued by obligors whose credit ratings are equivalent
to the downgraded level and in lower amounts which would satisfy the downgraded
level, provided that the then-current rating of each class of the related
series of certificates is maintained. Where the credit support is in the form
of a reserve fund, a permitted reduction in the amount of credit enhancement
will result in a release of all or a portion of the assets in the reserve fund
to the depositor, the master servicer or any other person that is entitled
thereto. Any assets so released and any amount by which the credit enhancement
is reduced will not be available for distributions in future periods.

                                       41
<PAGE>

            OTHER FINANCIAL OBLIGATIONS RELATED TO THE CERTIFICATES


SWAPS AND YIELD SUPPLEMENT AGREEMENTS


     The trustee on behalf of the trust may enter into interest rate swaps and
related caps, floors and collars to minimize the risk of certificateholders
from adverse changes in interest rates, and other yield supplement agreements
or similar yield maintenance arrangements that do not involve swap agreements
or other notional principal contracts.


     An interest rate swap is an agreement between two parties to exchange a
stream of interest payments on an agreed hypothetical or "notional" principal
amount. No principal amount is exchanged between the counterparties to an
interest rate swap. In the typical swap, one party agrees to pay a fixed rate
on a notional principal amount, while the counterparty pays a floating rate
based on one or more reference interest rates including the London Interbank
Offered Rate or, LIBOR, a specified bank's prime rate or U.S. Treasury Bill
rates. Interest rate swaps also permit counterparties to exchange a floating
rate obligation based upon one reference interest rate, such as LIBOR, for a
floating rate obligation based upon another referenced interest rate, such as
U.S. Treasury Bill rates).


     The swap market has grown substantially in recent years with a significant
number of banks and financial service firms acting both as principals and as
agents utilizing standardized swap documentation. Caps, floors and collars are
more recent innovations, and they are less liquid than other swaps.


     Yield supplement agreements may be entered into to supplement the interest
rate or other rates on one or more classes of the certificates of any series.


     There can be no assurance that the trust will be able to enter into or
offset swaps or enter into yield supplement agreements at any specific time or
at prices or on other terms that are advantageous. In addition, although the
terms of the swaps and yield supplement agreements may provide for termination
under some circumstances, there can be no assurance that the trust will be able
to terminate a swap or yield supplement agreement when it would be economically
advantageous to the trust to do so.



PURCHASE OBLIGATIONS


     Some types of mortgage loans and classes of certificates of any series, as
specified in the related prospectus supplement, may be subject to a purchase
obligation. The terms and conditions of each purchase obligation, including the
purchase price, timing and payment procedure, will be described in the related
prospectus supplement. A purchase obligation with respect to mortgage loans may
apply to those mortgage loans or to the related certificates. Each purchase
obligation may be a secured or unsecured obligation of its provider, which may
include a bank or other financial institution or an insurance company. Each
purchase obligation will be evidenced by an instrument delivered to the trustee
for the benefit of the applicable certificateholders of the related series.
Unless otherwise specified in the related prospectus supplement, each purchase
obligation with respect to mortgage loans will be payable solely to the trustee
for the benefit of the certificateholders of the related series. Other purchase
obligations may be payable to the trustee or directly to the holders of the
certificates to which the obligation relate.


                                       42
<PAGE>

                      INSURANCE POLICIES ON MORTGAGE LOANS

     Each mortgage loan will be required to be covered by a hazard insurance
policy, as described below, and, at times, a primary insurance policy or an
alternative form of coverage, as described below. The descriptions of any
insurance policies contained in this prospectus or any prospectus supplement
and the coverage thereunder do not purport to be complete and are qualified in
their entirety by reference to the forms of policies.



PRIMARY INSURANCE POLICIES

     Unless otherwise specified in the related prospectus supplement, (i) each
mortgage loan having an LTV ratio at origination of over 80% will be covered by
a primary mortgage guaranty insurance policy insuring against default on the
mortgage loan up to an amount set forth in the related prospectus supplement,
unless and until the principal balance of the mortgage loan is reduced to a
level that would produce an LTV ratio equal to or less than 80%, and (ii) the
depositor or Residential Funding Corporation will represent and warrant that,
to the best of the depositor's knowledge, the mortgage loans are so covered.
Alternatively, coverage of the type that would be provided by a primary
insurance policy if obtained may be provided by another form of credit
enhancement as described in this prospectus under "Description of Credit
Enhancement." However, the foregoing standard may vary significantly depending
on the characteristics of the mortgage loans and the applicable underwriting
standards. A mortgage loan will not be considered to be an exception to the
foregoing standard if no primary insurance policy was obtained at origination
but the mortgage loan has amortized to an 80% or less LTV ratio level as of the
applicable cut-off date. In most cases, the depositor will have the ability to
cancel any primary insurance policy if the LTV ratio of the mortgage loan is
reduced to 80% or less, or a lesser specified percentage, based on an appraisal
of the mortgaged property after the related closing date or as a result of
principal payments that reduce the principal balance of the mortgage loan after
the closing date.

     Pursuant to recently enacted federal legislation, mortgagors with respect
to many residential mortgage loans originated on or after July 29, 1999, will
have a right to request the cancellation of any private mortgage insurance
policy insuring loans when the outstanding principal amount of the mortgage
loan has been reduced or is scheduled to have been reduced to 80% or less of
the value of the mortgaged property at the time the mortgage loan was
originated. The mortgagor's right to request the cancellation of the policy is
subject to certain conditions, including (i) the condition that no monthly
payment has been thirty days or more past due during the twelve months prior to
the cancellation date, and no monthly payment has been sixty days or more past
due during the twelve months prior to that period, (ii) there has been no
decline in the value of the mortgaged property since the time the mortgage loan
was originated and (iii) the mortgaged property is not encumbered by
subordinate liens. In addition, any requirement for private mortgage insurance
will automatically terminate when the scheduled principal balance of the
mortgage loan, based on the original amortization schedule for the mortgage
loan, is reduced to 78% or less of the value of the mortgaged property at the
time of origination, provided the mortgage loan is current. The legislation
requires that mortgagors be provided written notice of these cancellation
rights at the origination of the mortgage loans.

     If the requirement for private mortgage insurance is not otherwise
canceled or terminated in the circumstances described above, it must be
terminated no later than the first day of the month immediately following the
date that is the midpoint of the loan's amortization period, if, on that date,
the borrower is current on the payments required by the terms of the loan. The
mortgagee's or servicer's failure to comply with the law could subject such
parties to civil money penalties but would not affect the validity or
enforceability of the mortgage loan. The law does not preempt any state law
regulating private mortgage insurance except to the extent that such law is
inconsistent with the federal law and then only to the extent of the
inconsistency.

     Mortgage loans which are subject to negative amortization will only be
covered by a primary insurance policy if that coverage was required upon their
origination, notwithstanding that subsequent negative amortization may cause
that mortgage loan's LTV ratio, based on the then-current balance, to
subsequently exceed the limits which would have required coverage upon their
origination. Primary insurance policies may be required to be obtained and paid
for by the mortgagor, or may be paid for by the servicer.

     While the terms and conditions of the Primary Insurance Policies issued by
one primary mortgage guaranty insurer will usually differ from those in Primary
Insurance Policies issued by other primary insurers, each primary insurance
policy generally will pay either:

     o   the insured percentage of the loss on the related mortgaged property;


                                       43
<PAGE>

     o   the entire amount of the loss, after receipt by the primary insurer of
         good and merchantable title to, and possession of, the mortgaged
         property; or

     o   at the option of the primary insurer under certain Primary Insurance
         Policies, the sum of the delinquent monthly payments plus any Advances
         made by the insured, both to the date of the claim payment and,
         thereafter, monthly payments in the amount that would have become due
         under the mortgage loan if it had not been discharged plus any Advances
         made by the insured until the earlier of (a) the date the mortgage loan
         would have been discharged in full if the default had not occurred or
         (b) an approved sale.

     The amount of the loss as calculated under a primary insurance policy
covering a mortgage loan will in most cases consist of the unpaid principal
amount of such mortgage loan and accrued and unpaid interest thereon and
reimbursement of some expenses, less:

     o   rents or other payments received by the insured, other than the
         proceeds of hazard insurance, that are derived from the related
         mortgaged property;


     o   hazard insurance proceeds received by the insured in excess of the
         amount required to restore the mortgaged property and which have not
         been applied to the payment of the mortgage loan;

     o   amounts expended but not approved by the primary insurer;

     o   claim payments previously made on the mortgage loan; and

     o   unpaid premiums and other amounts.

     As conditions precedent to the filing or payment of a claim under a
primary insurance policy, in the event of default by the mortgagor, the insured
will typically be required, among other things, to:

     o   advance or discharge (a) hazard insurance premiums and (b) as necessary
         and approved in advance by the primary insurer, real estate taxes,
         protection and preservation expenses and foreclosure and related costs;

     o   in the event of any physical loss or damage to the mortgaged property,
         have the mortgaged property restored to at least its condition at the
         effective date of the primary insurance policy, ordinary wear and tear
         excepted; and

     o   tender to the primary insurer good and merchantable title to, and
         possession of, the mortgaged property.

     For any certificates offered under this prospectus, the master servicer
will maintain or cause each subservicer to maintain, as the case may be, in
full force and effect and to the extent coverage is available a primary
insurance policy with regard to each mortgage loan for which coverage is
required under the standard described above unless an exception to such
standard applies or alternate credit enhancement is provided as described in
the related prospectus supplement; provided that the primary insurance policy
was in place as of the cut-off date and the depositor had knowledge of such
primary insurance policy. If the depositor gains knowledge that as of the
closing date, a mortgage loan had an LTV ratio at origination in excess of 80%
and was not the subject of a primary insurance policy, and was not included in
any exception to the standard or covered by alternate credit enhancement as
described in the related prospectus supplement, and that the mortgage loan has
a then current LTV ratio in excess of 80%, then the master servicer is required
to use its reasonable efforts to obtain and maintain a primary insurance policy
to the extent that a policy is obtainable at a reasonable price.

STANDARD HAZARD INSURANCE ON MORTGAGED PROPERTIES

     The terms of the mortgage loans, other than Cooperative Loans, require
each mortgagor to maintain a hazard insurance policy covering the related
mortgaged property and providing for coverage at least equal to that of the
standard form of fire insurance policy with extended coverage customary in the
state in which the property is located. Most coverage will be in an amount
equal to the lesser of the principal balance of the mortgage loan or 100% of
the insurable value of the improvements securing the mortgage loan. The pooling
and servicing agreement will provide that the master servicer or servicer shall
cause the hazard policies to be maintained or shall obtain a blanket policy
insuring against losses on the mortgage loans. The ability of the master
servicer to ensure that hazard insurance proceeds are appropriately applied may
be dependent on its being named as an additional insured under any hazard
insurance policy and under any flood insurance policy referred to below, or
upon the extent to which information in this regard is furnished to the master
servicer by mortgagors or subservicers.


                                       44
<PAGE>

     The standard form of fire and extended coverage policy covers physical
damage to or destruction of the improvements on the property by fire,
lightning, explosion, smoke, windstorm, hail, riot, strike and civil commotion,
in accordance with the conditions and exclusions specified in each policy. The
policies relating to the mortgage 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. These policies
typically do not cover any physical damage resulting from the following: war,
revolution, governmental actions, floods and other water-related causes, earth
movement, including earthquakes, landslides and mudflows, nuclear reactions,
wet or dry rot, vermin, rodents, insects or domestic animals, theft and, in
some cases, vandalism. The foregoing list is merely indicative of some kinds of
uninsured risks and is not intended to be all-inclusive. Where the improvements
securing a mortgage loan are located in a federally designated flood area at
the time of origination of that mortgage loan, the pooling and servicing
agreement generally requires the master servicer to cause to be maintained for
each such mortgage loan serviced, flood insurance, to the extent available, in
an amount equal to the lesser of the amount required to compensate for any loss
or damage on a replacement cost basis or the maximum insurance available under
the federal flood insurance program.

     The hazard insurance policies covering the mortgaged properties typically
contain a co-insurance clause that in effect requires the related mortgagor at
all times to carry insurance of a specified percentage, typically 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 related mortgagor's
coverage falls below this specified percentage, this clause usually provides
that the insurer's liability in the event of partial loss does not exceed the
greater of (i) the replacement cost of the improvements damaged or destroyed
less physical depreciation or (ii) the proportion of the loss as the amount of
insurance carried bears to the specified percentage of the full replacement
cost of the improvements.

     Since the amount of hazard insurance that mortgagors are required to
maintain on the improvements securing the mortgage loans may decline as the
principal balances owing thereon decrease, and since residential properties
have historically appreciated in value over time, hazard insurance proceeds
could be insufficient to restore fully the damaged property in the event of a
partial loss. See "Subordination" above for a description of when subordination
is provided, the protection, limited to the Special Hazard Amount as described
in the related prospectus supplement, afforded by subordination, and
"Description of Credit Enhancement--Special Hazard Insurance Policies" for a
description of the limited protection afforded by any special hazard insurance
policy against losses occasioned by hazards which are otherwise uninsured
against.


                                 THE DEPOSITOR

     The depositor is an indirect wholly-owned subsidiary of GMAC Mortgage
Group, Inc., which is a wholly-owned subsidiary of General Motors Acceptance
Corporation. The depositor was incorporated in the State of Delaware on January
25, 1985. The depositor was organized for the purpose of serving as a private
secondary mortgage market conduit. The depositor anticipates that it will in
many cases have acquired mortgage loans indirectly through Residential Funding
Corporation, which is also an indirect wholly-owned subsidiary of GMAC Mortgage
Group, Inc. The depositor does not have, nor is it expected in the future to
have, any significant assets.

     The certificates do not represent an interest in or an obligation of the
depositor. The depositor's only obligations with respect to a series of
certificates will be pursuant to limited representations and warranties made by
the depositor or as otherwise provided in the related prospectus supplement.

     The depositor maintains its principal office at 8400 Normandale Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437. Its telephone number is
(612) 832-7000.


                        RESIDENTIAL FUNDING CORPORATION

     Unless otherwise specified in the related prospectus supplement,
Residential Funding Corporation, an affiliate of the depositor, will act as the
master servicer or manager for a series of certificates.

     Residential Funding Corporation buys conventional mortgage loans under
several loan purchase programs from mortgage loan originators or sellers
nationwide, including affiliates, that meet its seller/servicer eligibility
requirements and services mortgage loans for its own account and for others.
Residential Funding Corporation's principal executive offices are located at
8400 Normandale Lake Boulevard, Suite 600, Minneapolis, Minnesota 55437. Its
telephone number is (612) 832-7000. Residential Funding Corporation conducts


                                       45
<PAGE>

operations from its headquarters in Minneapolis and from offices located in
California, New York, Florida, Georgia and Maryland. At December 31, 1998,
Residential Funding Corporation was master servicing a first lien loan
portfolio of approximately $55.0 billion and a second lien loan portfolio of
approximately $2.9 billion.

     Residential Funding Corporation's delinquency, foreclosure and loan loss
experience as of the end of the most recent calendar quarter for which that
information is available on the portfolio of loans for which it acts as master
servicer and that were originated under its modified loan purchase criteria
will be summarized in each prospectus supplement relating to a mortgage pool
for which Residential Funding Corporation will act as master servicer. There
can be no assurance that this experience will be representative of the results
that may be experienced with respect to any particular series of certificates.



                      THE POOLING AND SERVICING AGREEMENT

     As described in this prospectus under "Description of the
Certificates--General," each series of certificates will be issued under a
pooling and servicing agreement as described in that section. The following
summaries describe additional provisions common to each pooling and servicing
agreement.



SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

     The principal servicing compensation to be paid to the master servicer for
its master servicing activities for each series of certificates will be equal
to the percentage per annum described in the related prospectus supplement,
which may vary under some circumstances, of the outstanding principal balance
of each mortgage loan, and that compensation will be retained by it from
collections of interest on the mortgage loan in the related trust, after
provision has been made for the payment of interest at the applicable
pass-through rate or Net Mortgage Rate, as the case may be, to
certificateholders and for the payment of any Excess Spread or Excluded Spread,
at the time the collections are deposited into the applicable Custodial
Account. Notwithstanding the foregoing, with respect to a series of
certificates as to which the trust includes mortgage securities, the
compensation payable to the master servicer or manager for servicing and
administering the mortgage securities on behalf of the holders of the
certificates may be based on a percentage per annum described in the related
prospectus supplement of the outstanding balance of those mortgage securities
and may be retained from distributions of interest thereon, if so specified in
the related prospectus supplement.

     As compensation for its servicing duties, a subservicer or, if there is no
subservicer, the master servicer will be entitled to a monthly servicing fee as
described in the related prospectus supplement, which may vary under certain
circumstances from the amounts described in the prospectus supplement. Some
subservicers may also receive additional compensation in the amount of all or a
portion of the interest due and payable on the applicable mortgage loan which
is over and above the interest rate specified at the time the depositor or
Residential Funding Corporation, as the case may be, committed to purchase the
mortgage loan. See "Mortgage Loan Program--Subservicing." subservicers will be
required to pay to the master servicer an amount equal to one month's interest,
net of its servicing or other compensation, on the amount of any partial
Principal Prepayment. The master servicer will retain these amounts to the
extent collected from subservicers. In addition, the master servicer or a
subservicer will retain all prepayment charges, assumption fees and late
payment charges, to the extent collected from mortgagors, and any benefit which
may accrue from the investment of funds in the Custodial Account or the
applicable Certificate Account, to the extent not applied as Compensating
Interest, or in a Subservicing Account, as the case may be. In addition, some
reasonable duties of the master servicer may be performed by an affiliate of
the master servicer who will be entitled to compensation therefor.

     The master servicer will pay or cause to be paid some of the ongoing
expenses associated with each trust and incurred by it in connection with its
responsibilities under the pooling and servicing agreement, including, without
limitation, payment of any fee or other amount payable for any alternative
credit enhancement arrangements, payment of the fees and disbursements of the
trustee, any custodian appointed by the trustee, the certificate registrar and
any paying agent, and payment of expenses incurred in enforcing the obligations
of subservicers and sellers. The master servicer will be entitled to
reimbursement of expenses incurred in enforcing the obligations of subservicers
and sellers under limited circumstances. In addition, as indicated in the
preceding section, the master servicer will be entitled to reimbursements for
some of the expenses incurred by it in connection with Liquidated Mortgage
Loans and in connection with the restoration of mortgaged properties, such
right of reimbursement being prior to the rights of certificateholders to
receive any related Liquidation Proceeds, including Insurance Proceeds.


                                       46
<PAGE>

EVIDENCE AS TO COMPLIANCE

     Each pooling and servicing agreement will provide that the master servicer
will, with respect to each series of certificates, deliver to the trustee, on
or before the date in each year specified in the related pooling and servicing
agreement, an officer's certificate stating that:

     o   a review of the activities of the master servicer during the preceding
         calendar year relating to its servicing of mortgage loans and its
         performance under pooling and servicing agreements, including that
         pooling and servicing agreement has been made under the supervision of
         that officer;

     o   to the best of the officer's knowledge, based on the review, the master
         servicer has complied in all material respects with the minimum
         servicing standards set forth in the Uniform Single Attestation Program
         for Mortgage Bankers and has fulfilled all its obligations under the
         pooling and servicing agreement throughout that year, or, if there has
         been material noncompliance with the servicing standards or a material
         default in the fulfillment of any such obligation, the statement shall
         include a description of the noncompliance or specify each default
         known to the officer and the nature and status thereof; and

     o   to the best of the officers' knowledge, each subservicer has complied
         in all material respects with the minimum servicing standards set forth
         in the Uniform Single Attestation Program for Mortgage Bankers and has
         fulfilled all of its material obligations under its subservicing
         agreement in all material respects throughout that year, or, if there
         has been material noncompliance with the servicing standards or a
         material default in the fulfillment of such obligations, the statement
         shall include a description of the noncompliance or specify each
         default, as the case may be, known to the officer and the nature and
         status thereof.

     In addition, each pooling and servicing agreement will provide that the
master servicer will cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to furnish a
report stating its opinion that, on the basis of an examination conducted by
that firm substantially in accordance with standards established by the
American Institute of Certified Public Accountants, the assertions made
regarding compliance with the minimum servicing standards set forth in the
Uniform Single Attestation Program for Mortgage Bankers during the preceding
calendar year are fairly stated in all material respects, subject to any
exceptions and other qualifications that, in the opinion of the firm, the
accounting standards require it to report. In rendering its statement, the firm
may rely, as to matters relating to the direct servicing of mortgage loans by
subservicers, on comparable statements prepared in connection with examinations
conducted in similar manners



CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR

     The pooling and servicing agreement for each series of certificates will
provide that the master servicer may not resign from its obligations and duties
thereunder except upon a determination that performance of its duties is no
longer permissible under applicable law or except in connection with a
permitted transfer of servicing. No resignation will become effective until the
trustee or a successor servicer has assumed the master servicer's obligations
and duties under the pooling and servicing agreement.

     Each pooling and servicing agreement will also provide that, except as
described below, neither the master servicer, the depositor, nor any director,
officer, employee or agent of the master servicer or the depositor will be
under any liability to the trust or the certificateholders for any action taken
or for refraining from the taking of any action in good faith under the pooling
and servicing agreement, or for errors in judgment; provided, however, that
neither the master servicer, the depositor, nor any such person will be
protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties thereunder. Each
pooling and servicing agreement will further provide that the master servicer,
the depositor, and any director, officer, employee or agent of the master
servicer or the depositor is entitled to indemnification by the trust and will
be held harmless against any loss, liability or expense incurred in connection
with any legal action relating to the pooling and servicing agreement or the
related series of certificates, other than any loss, liability or expense
related to any specific mortgage loan or mortgage loans, except any such loss,
liability or expense otherwise reimbursable under the pooling and servicing
agreement, and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
thereunder or by reason of reckless disregard of obligations and duties
thereunder.


                                       47
<PAGE>

     In addition, each pooling and servicing agreement will provide that
neither the master servicer nor the depositor will be under any obligation to
appear in, prosecute or defend any legal or administrative action that is not
incidental to its respective duties under the pooling and servicing agreement
and which in its opinion may involve it in any expense or liability. The master
servicer or the depositor may, however, in its discretion undertake any action
which it may deem necessary or desirable with respect to the pooling and
servicing agreement and the rights and duties of the parties thereto and the
interests of the certificateholders thereunder. In that event, the legal
expenses and costs of that action and any liability resulting therefrom will be
expenses, costs and liabilities of the trust and the master servicer or the
depositor, as the case may be, will be entitled to be reimbursed for the legal
expenses and costs out of funds otherwise distributable to certificateholders.

     Any person into which the master servicer may be merged or consolidated,
any person resulting from any merger or consolidation to which the master
servicer is a party or any person succeeding to the business of the master
servicer will be the successor of the master servicer under the pooling and
servicing agreement, provided that (i) that person is qualified to service
mortgage loans on behalf of Fannie Mae or Freddie Mac and (ii) the merger,
consolidation or succession does not adversely affect the then-current rating
of the classes of certificates of the related series that have been rated. In
addition, notwithstanding the prohibition on its resignation, the master
servicer may assign its rights under a pooling and servicing agreement to any
person to whom the master servicer is transferring a substantial portion of its
mortgage servicing portfolio, provided clauses (i) and (ii) above are satisfied
and that person is reasonably satisfactory to the depositor and the trustee. In
the case of any assignment of this type, the master servicer will be released
from its obligations under the pooling and servicing agreement, exclusive of
liabilities and obligations incurred by it prior to the time of assignment.


EVENTS OF DEFAULT

     Events of default under the pooling and servicing agreement for a series
of certificates will include:

     o   any failure by the master servicer to make a required deposit to the
         Certificate Account or, if the master servicer is the paying agent, to
         distribute to the holders of any class of certificates of that series
         any required payment which continues unremedied for five days after the
         giving of written notice of the failure 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 of such class evidencing not
         less than 25% of the aggregate percentage interests constituting that
         class;

     o   any failure by the master servicer duly to observe or perform in any
         material respect any other of its covenants or agreements in the
         pooling and servicing agreement with respect to that series of
         certificates which continues unremedied for 30 days, or 15 days in the
         case of a failure to pay the premium for any insurance policy which is
         required to be maintained under the pooling and servicing agreement,
         after the giving of written notice of the failure to the master
         servicer by the trustee or the depositor, or to the master servicer,
         the depositor and the trustee by the holders of any class of
         certificates of that series evidencing not less than 25% of the
         aggregate percentage interests constituting that class; and

     o   some events of insolvency, readjustment of debt, marshalling of assets
         and liabilities or similar proceedings regarding the master servicer
         and certain actions by the master servicer indicating its insolvency or
         inability to pay its obligations.

     A default under the terms of any mortgage securities included in any trust
will not constitute an event of default under the related pooling and servicing
agreement.


RIGHTS UPON EVENT OF DEFAULT

     So long as an event of default remains unremedied, either the depositor or
the trustee may, and, at the direction of the holders of certificates
evidencing not less than 51% of the aggregate voting rights in the related
trust, except as otherwise provided for in the related pooling and servicing
agreement with respect to the credit enhancer, the trustee shall, by written
notification to the master servicer and to the depositor or the trustee, as
applicable, terminate all of the rights and obligations of the master servicer
under the pooling and servicing agreement, other than any rights of the master
servicer as certificateholder, covering the trust and in and to the mortgage
loans and the proceeds thereof, whereupon the trustee or, upon notice to the
depositor and with the depositor's consent, its designee will succeed to all
responsibilities, duties and liabilities of the master servicer under the
pooling and servicing agreement, other than the obligation to purchase mortgage
loans under some circumstances, and will be entitled to similar compensation
arrangements. In the event that the trustee would be obligated to succeed the
master servicer but is unwilling so to act, it may appoint or if it is unable
so to act,


                                       48
<PAGE>

it shall appoint or petition a court of competent jurisdiction for the
appointment of, a Fannie Mae- or Freddie Mac-approved mortgage servicing
institution with a net worth of at least $10,000,000 to act as successor to the
master servicer under the pooling and servicing agreement, unless otherwise set
forth in the pooling and servicing agreement. Pending appointment, the trustee
is obligated to act in that capacity. The trustee and such successor may agree
upon the servicing compensation to be paid, which in no event may be greater
than the compensation to the initial master servicer under the pooling and
servicing agreement.

     No certificateholder will have any right under a pooling and servicing
agreement to institute any proceeding with respect to the pooling and servicing
agreement, except as otherwise provided for in the related pooling and
servicing agreement with respect to the credit enhancer, unless the holder
previously has given to the trustee written notice of default and the
continuance thereof and unless the holders of certificates of any class
evidencing not less than 25% of the aggregate percentage interests constituting
that class have made written request upon the trustee to institute the
proceeding in its own name as trustee thereunder and have offered to the
trustee reasonable indemnity and the trustee for 60 days after receipt of the
request and indemnity has neglected or refused to institute any proceeding.
However, the trustee will be under no obligation to exercise any of the trusts
or powers vested in it by the pooling and servicing agreement 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
the pooling and servicing agreement, unless the 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 pooling and servicing agreement may be amended by the depositor, the
master servicer and the trustee, without the consent of the related
certificateholders:

     o   to cure any ambiguity;

     o   to correct or supplement any provision therein which may be
         inconsistent with any other provision therein or to correct any error;

     o   to change the timing and/or nature of deposits in the Custodial Account
         or the Certificate Account or to change the name in which the Custodial
         Account is maintained, except that (a) the Certificate Account deposit
         date may not occur later than the related distribution date, (b) the
         change may not adversely affect in any material respect the interests
         of any certificateholder, as evidenced by an opinion of counsel, and
         (c) the change may not adversely affect the then-current rating of any
         rated classes of certificates, as evidenced by a letter from each
         applicable rating agency as specified in the related prospectus
         supplement;

     o   if an election to treat the related trust as a "real estate mortgage
         investment conduit", or REMIC, has been made, to modify, eliminate or
         add to any of its provisions (a) to the extent necessary to maintain
         the qualification of the trust as a REMIC or to avoid or minimize the
         risk of imposition of any tax on the related trust, provided that the
         trustee has received an opinion of counsel to the effect that (1) that
         action is necessary or desirable to maintain qualification or to avoid
         or minimize that risk, and (2) the action will not adversely affect in
         any material respect the interests of any related certificateholder, or
         (b) to modify the provisions regarding the transferability of the REMIC
         residual certificates, provided that the depositor has determined that
         the change would not adversely affect the applicable ratings of any
         classes of the certificates, as evidenced by a letter from each
         applicable rating agency as specified in the related prospectus
         supplement, and that any such amendment will not give rise to any tax
         with respect to the transfer of the REMIC residual certificates to a
         non-permitted transferee;

     o   to make any other provisions with respect to matters or questions
         arising under the pooling and servicing agreement which are not
         materially inconsistent with its provisions, so long as the action will
         not adversely affect in any material respect the interests of any
         certificateholder; or

     o   to amend any provision that is not material to holders of any class of
         related certificates.

     The pooling and servicing agreement may also be amended by the depositor,
the master servicer and the trustee, except as otherwise provided for in the
related pooling and servicing agreement with respect to the credit enhancer,
with the consent of the holders of certificates of each class affected thereby
evidencing, in each case, not less than 66% of the aggregate percentage
interests constituting that class for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the pooling
and servicing


                                       49
<PAGE>

agreement or of modifying in any manner the rights of the related
certificateholders, except that no such amendment may (i) reduce in any manner
the amount of, or delay the timing of, payments received on mortgage loans
which are required to be distributed on a certificate of any class without the
consent of the holder of the certificate or (ii) reduce the percentage of
certificates of any class the holders of which are required to consent to any
such amendment unless the holders of all certificates of that class have
consented to the change in the percentage.

     Notwithstanding the foregoing, if a REMIC election has been made with
respect to the related trust, the trustee will not be entitled to consent to
any amendment to a pooling and servicing agreement without having first
received an opinion of counsel to the effect that the amendment or the exercise
of any power granted to the master servicer, the depositor or the trustee in
accordance with the amendment will not result in the imposition of a tax on the
related trust or cause the trust to fail to qualify as a REMIC


TERMINATION; RETIREMENT OF CERTIFICATES

     The primary obligations created by the pooling and servicing agreement for
each series of certificates will terminate upon the payment to the related
certificateholders of all amounts held in the Certificate Account or by the
master servicer and required to be paid to the certificateholders following the
earlier of

     o   the final payment or other liquidation or disposition, or any Advance
         with respect thereto, of the last mortgage loan subject thereto and all
         property acquired upon foreclosure or deed in lieu of foreclosure of
         any mortgage loan and

     o   the purchase by the master servicer or the depositor or, if specified
         in the related prospectus supplement, by the holder of the REMIC
         residual certificates (see "Material Federal Income Tax Consequences"
         below) from the trust for such series of all remaining mortgage loans
         and all property acquired in respect of the mortgage loans.

     Any option to purchase described in the second item above will be limited
to cases in which the aggregate Stated Principal Balance of the remaining
mortgage loans is less than or equal to ten percent (10%) of the initial
aggregate Stated Principal Balance of the mortgage loans. In addition to the
foregoing, the master servicer or the depositor may have the option to
purchase, in whole but not in part, the certificates specified in the related
prospectus supplement in the manner described in the related prospectus
supplement. Upon the purchase of such certificates or at any time thereafter,
at the option of the master servicer or the depositor, the mortgage loans may
be sold, thereby effecting a retirement of the certificates and the termination
of the trust, or the certificates so purchased may be held or resold by the
master servicer or the depositor. 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 an office or agency appointed by the trustee which will be
specified in the notice of termination. If the certificateholders are permitted
to terminate the trust under the applicable pooling and servicing agreement, a
penalty may be imposed upon the certificateholders based upon the fee that
would be foregone by the master servicer because of the related termination.

     Any purchase described in the preceding paragraph of mortgage loans and
property acquired relating to the mortgage loans evidenced by a series of
certificates shall be made at the option of the master servicer, the depositor
or, if applicable, the holder of the REMIC residual certificates at the price
specified in the related prospectus supplement. The exercise of that right will
effect early retirement of the certificates of that series, but the right of
any entity to purchase the mortgage loans and related property will be in
accordance with the criteria, and will be at the price, set forth in the
related prospectus supplement. Early termination in this manner may adversely
affect the yield to holders of some classes of the certificates. If a REMIC
election has been made, the termination of the related trust will be effected
in a manner consistent with applicable federal income tax regulations and its
status as a REMIC.

     In addition to the optional repurchase of the property in the related
trust, if so specified in the related prospectus supplement, a holder of the
Call Class will have the right, solely at its discretion, to terminate the
related trust and thereby effect early retirement of the certificates of the
series, on any distribution date after the 12th distribution date following the
date of initial issuance of the related series of certificates and until the
date when the optional termination rights of the master servicer and the
depositor become exercisable. The Call Class will not be offered under the
prospectus supplement. Any such call will be of the entire trust at one time;
multiple calls with respect to any series of certificates will not be
permitted. In the case of a call, the holders of the certificates will be paid
a price equal to the Call Price. To exercise the call, the Call
Certificateholder must


                                       50
<PAGE>

remit to the related trustee for distribution to the certificateholders, funds
equal to the Call Price. If those funds are not deposited with the related
trustee, the certificates of that series will remain outstanding. In addition,
in the case of a trust for which a REMIC election or elections have been made,
this termination will be effected in a manner consistent with applicable
Federal income tax regulations and its status as a REMIC. In connection with a
call by the Call certificateholder, the final payment to the certificateholders
will be made upon surrender of the related certificates to the trustee. Once
the certificates have been surrendered and paid in full, there will not be any
further liability to certificateholders.


THE TRUSTEE

     The trustee under each pooling and servicing agreement will be named in
the related prospectus supplement. The commercial bank or trust company serving
as trustee may have normal banking relationships with the depositor and/or its
affiliates, including Residential Funding Corporation.

     The trustee may resign at any time, in which event the depositor will be
obligated to appoint a successor trustee. The depositor may also remove the
trustee if the trustee ceases to be eligible to continue as trustee under the
pooling and servicing agreement or if the trustee becomes insolvent. Upon
becoming aware of those circumstances, the depositor will be obligated to
appoint a successor trustee. The trustee may also be removed at any time by the
holders of certificates evidencing not less than 51% of the aggregate voting
rights in the related trust. Any resignation or removal of the trustee and
appointment of a successor trustee will not become effective until acceptance
of the appointment by the successor trustee.


                              YIELD CONSIDERATIONS

     The yield to maturity of a certificate will depend on the price paid by
the holder for the certificate, the pass-through rate on any certificate
entitled to payments of interest, which pass-through rate may vary if so
specified in the related prospectus supplement, and the rate and timing of
principal payments, including prepayments, defaults, liquidations and
repurchases, on the mortgage loans and the allocation thereof to reduce the
principal balance of the certificate or its notional amount, if applicable.

     Each monthly interest payment on a mortgage loan will be calculated as
one-twelfth of the applicable mortgage rate multiplied by the principal balance
of the mortgage loan outstanding as of the first day of the related due date
for the mortgage loan, subject to any deferred interest. The amount of payments
with respect to each mortgage loan distributed, or accrued in the case of
deferred interest or accrual certificates, monthly to holders of a class of
certificates entitled to payments of interest will be similarly calculated,
unless otherwise specified in the prospectus supplement, on the basis of that
class's specified percentage of each payment of interest, or accrual in the
case of accrual certificates, and will be expressed as a fixed, adjustable or
variable pass-through rate payable on the outstanding principal balance or
notional amount of the certificate, or any combination of pass-through rates,
calculated as described in this prospectus and in the related prospectus
supplement. Holders of strip certificates or a class of certificates having a
pass-through rate that varies based on the weighted average mortgage rate of
the underlying mortgage loans will be affected by disproportionate prepayments
and repurchases of mortgage loans having higher Net Mortgage Rates or rates
applicable to the strip certificates, as applicable.

     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 the certificate because, while interest
will accrue on each mortgage loan from the first day of each month, the
distribution of interest will be made on the 25th day or, if the 25th day is
not a business day, the next succeeding business day, of the month following
the month of accrual.

     A class of certificates may be entitled to payments of interest at a fixed
pass-through rate, a variable pass-through rate or adjustable pass-through
rate, or any combination of pass-through rates, each as specified in the
related prospectus supplement. A variable pass-through rate may be calculated
based on the weighted average of the Net Mortgage Rates, net of servicing fees
and any Excess Spread or Excluded Spread, of the related mortgage loans for the
month preceding the distribution date. An adjustable pass-through rate may be
calculated by reference to an index or otherwise.

     The aggregate payments of interest on a class of certificates, and the
yield to maturity thereon, will be affected by the rate of payment of principal
on the certificates, or the rate of reduction in the notional amount of
certificates entitled to payments of interest only, and, in the case of
certificates evidencing interests in ARM loans, by changes in the Net Mortgage
Rates on the ARM loans. See "Maturity and Prepayment Consider-


                                       51
<PAGE>

ations" below. The yield on the certificates will also be affected by
liquidations of mortgage loans following mortgagor defaults and by purchases of
mortgage loans in the event of breaches of representations made for the
mortgage loans by the depositor, Residential Funding Corporation and other
persons as may be specified in the related prospectus supplement, or
conversions of ARM loans to a fixed interest rate. See "Mortgage Loan
Program--Representations with Respect to the Mortgage Loans" and "Description
of the Certificates--Assignment of Trust Assets" above. In addition, if the
index used to determine the pass-through rate for the certificates is different
than the index applicable to the mortgage rates, the yield on the certificates
will be sensitive to changes in the index related to the pass-through rate and
the yield on the certificates may be reduced by application of a cap on the
pass-through rate based on the weighted average of the Net Mortgage Rates.

     In general, if a certificate is purchased at a premium over its face
amount and payments of principal on the related mortgage loans occur at a rate
faster than assumed at the time of purchase, the purchaser's actual yield to
maturity will be lower than that anticipated at the time of purchase.
Conversely, if a class of certificates is purchased at a discount from its face
amount and payments of principal on the related mortgage loans occur at a rate
slower than that assumed at the time of purchase, the purchaser's actual yield
to maturity will be lower than that originally anticipated. The effect of
Principal Prepayments, liquidations and purchases on yield will be particularly
significant in the case of a series of certificates having a class entitled to
payments of interest only or disproportionate payments of interest. This type
of class will likely be sold at a substantial premium to its principal balance
and any faster than anticipated rate of prepayments will adversely affect the
yield to its holders. In some circumstances, rapid prepayments may result in
the failure of the holders to recoup their original investment. In addition,
the yield to maturity on other types of classes of certificates, including
accrual certificates, certificates with a pass-through rate that fluctuates
inversely with or at a multiple of an index or other classes in a series
including more than one class of certificates, may be relatively more sensitive
to the rate of prepayment on the related mortgage loans than other classes of
certificates.

     The timing of changes in the rate of principal payments on or repurchases
of the mortgage loans may significantly affect an investor's actual yield to
maturity, even if the average rate of principal payments experienced over time
is consistent with an investor's expectation. In general, the earlier a
prepayment of principal on the underlying mortgage loans or a repurchase of the
mortgage loans, the greater will be the effect on an investor's yield to
maturity. As a result, the effect on an investor's yield of principal payments
and repurchases occurring at a rate higher or lower than the rate anticipated
by the investor during the period immediately following the issuance of a
series of certificates would not be fully offset by a subsequent like reduction
or increase in the rate of principal payments.

     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, at a daily rate determined by dividing the mortgage rate by 365.
Prepayments in full generally will reduce the amount of interest distributed in
the following month to holders of certificates entitled to distributions of
interest if the resulting Prepayment Interest Shortfall is not covered by
Compensating Interest. See "Description of the Certificates--Prepayment
Interest Shortfalls." A partial prepayment of principal is applied so as to
reduce the outstanding principal balance of the related mortgage loan as of the
first day of the month in which the partial prepayment is received. As a
result, the effect of a partial prepayment on a mortgage loan will be to reduce
the amount of interest distributed to holders of certificates in the month
following the receipt of the partial prepayment by an amount equal to one
month's interest at the applicable pass-through rate or Net Mortgage Rate, as
the case may be, on the prepaid amount. See "Description of the
Certificates--Prepayment Interest Shortfalls." Neither full or partial
Principal Prepayments nor Liquidation Proceeds will be distributed until the
distribution date in the month following receipt. See "Maturity and Prepayment
Considerations."

     The rate of defaults on the mortgage loans will also affect the rate and
timing of principal payments on the mortgage loans 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 LTV 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 mortgaged
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. The risk of loss may also be greater on mortgage loans



                                       52
<PAGE>

with LTV ratios greater than 80% and with no primary insurance policies. The
yield on any class of certificates and the timing of principal payments on that
class may also be affected by modifications or actions that may be approved by
the master servicer as described in this prospectus under "Description of the
Certificates--Collection and Other Servicing Procedures," in connection with a
mortgage loan that is in default, or if a default is reasonably foreseeable.


     The risk of loss on mortgage loans made on Puerto Rico mortgage loans may
be greater than on mortgage loans that are made to mortgagors who are United
States residents and citizens or that are secured by properties located in the
United States. See "Certain Legal Aspects of Mortgage Loans."


     With respect to some 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 usually 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 monthly payments following the adjustment of the
mortgage rate. In addition, the periodic increase in the amount paid by the
mortgagor of a Buy-Down Mortgage Loan during or at the end of the applicable
Buy-Down Period may create a greater financial burden for the mortgagor, who
might not have otherwise qualified for a mortgage under Residential Funding
Corporation's underwriting guidelines, and may accordingly increase the risk of
default with respect to the related mortgage loan.


     The mortgage rates on ARM loans that are subject to negative amortization
typically 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 typically lower than the sum of
the Indices applicable at origination and the related Note Margins--the amount
of interest accruing on the principal balance of those mortgage loans may
exceed the amount of the scheduled monthly payment thereon. As a result, a
portion of the accrued interest on negatively amortizing mortgage loans may
become deferred interest which will be added to their principal balance and
will bear interest at the applicable mortgage rate.


     The addition of any deferred interest to the principal balance of any
related class of certificates will lengthen the weighted average life of that
class of certificates and may adversely affect yield to holders of those
certificates. In addition, with respect to ARM loans that are subject to
negative amortization, during a period of declining interest rates, it might be
expected that each scheduled monthly payment on such a mortgage loan would
exceed the amount of scheduled principal and accrued interest on its principal
balance, and since the excess will be applied to reduce the principal balance
of the related class or classes of certificates, the weighted average life of
those certificates will be reduced and may adversely affect yield to holders
thereof.


     For each mortgage pool, if all necessary Advances are made and if there is
no unrecoverable loss on any mortgage loan, the net effect of each distribution
respecting interest will be to pass-through to each holder of a class of
certificates entitled to payments of interest an amount which is equal to one
month's interest at the applicable pass-through rate on that class's principal
balance or notional balance, as adjusted downward to reflect any decrease in
interest caused by any Principal Prepayments and the addition of any deferred
interest to the principal balance of any mortgage loan. See "Description of the
Certificates--Distributions--Principal and Interest on the Certificates."

                                       53
<PAGE>

                     MATURITY AND PREPAYMENT CONSIDERATIONS

     As indicated above under "The Trusts--The Mortgage Loans," the original
terms to maturity of the mortgage loans in a given mortgage pool will vary
depending upon the type of mortgage loans included in the mortgage pool. The
prospectus supplement for a series of certificates will contain information
with respect to the types and maturities of the mortgage loans in the related
mortgage pool. Unless otherwise specified in the related prospectus supplement,
all of the mortgage loans may be prepaid without penalty in full or in part at
any time. The prepayment experience, the timing and rate of repurchases and the
timing and amount of liquidations with respect to the related mortgage loans in
a mortgage pool will affect the life and yield of the related series of
certificates.

     With respect to Balloon Loans, payment of the Balloon Amount, which, based
on the amortization schedule of those mortgage loans, is expected to be a
substantial amount, will typically depend on the mortgagor's ability to obtain
refinancing of the mortgage loans or to sell the mortgaged property prior to
the maturity of the Balloon Loan. The ability to obtain refinancing will depend
on a number of factors prevailing at the time refinancing or sale is required,
including, without limitation, real estate values, the mortgagor's financial
situation, prevailing mortgage loan interest rates, the mortgagor's equity in
the related mortgaged property, tax laws and prevailing general economic
conditions. Neither the depositor, the master servicer nor any of their
affiliates will be obligated to refinance or repurchase any mortgage loan or to
sell the mortgaged property.

     Prepayments on mortgage loans are commonly measured relative to a
prepayment standard or model. The prospectus supplement for each series of
certificates may describe one or more prepayment standard or model and may
contain tables setting forth the projected yields to maturity on each class of
certificates and/or the weighted average life of each class of certificates and
the percentage of the original principal amount of each class of certificates
of that series that would be outstanding on specified payment dates for the
series based on the assumptions stated in the related prospectus supplement,
including assumptions that prepayments on the mortgage loans are made at rates
corresponding to various percentages of the prepayment standard or model. There
is no assurance that prepayment of the mortgage loans underlying a series of
certificates will conform to any level of the prepayment standard or model
specified in the related prospectus supplement.

     The following is a list of factors that may affect prepayment experience:

     o   homeowner mobility;

     o   economic conditions;

     o   changes in mortgagors' housing needs;

     o   job transfers;

     o   unemployment;

     o   mortgagors' equity in the properties securing the mortgages;

     o   servicing decisions;

     o   enforceability of due-on-sale clauses;

     o   mortgage market interest rates;

     o   mortgage recording taxes;

     o   solicitations and the availability of mortgage funds; and

     o   the obtaining of secondary financing by the mortgagor.

     Unless otherwise specified in the related prospectus supplement, all
mortgage loans, other than ARM loans, will contain due-on-sale provisions
permitting the mortgagee to accelerate the maturity of the mortgage loan upon
sale or some transfers by the mortgagor of the underlying mortgaged property.
Unless the related prospectus supplement indicates otherwise, the master
servicer will 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.


                                       54
<PAGE>

     An ARM loan is assumable, in some circumstances, if the proposed
transferee of the related mortgaged property establishes its ability to repay
the mortgage loan and, in the reasonable judgment of the master servicer or the
related subservicer, the security for the ARM loan would not be impaired by the
assumption. The extent to which ARM loans are assumed by purchasers of the
mortgaged properties rather than prepaid by the related mortgagors in
connection with the sales of the mortgaged properties will affect the weighted
average life of the related series of certificates. See "Description of the
Certificates--Collection and Other Servicing Procedures" and "Certain Legal
Aspects of Mortgage Loans--The Mortgage Loans--Enforceability of Certain
Provisions" for a description of provisions of the pooling and servicing
agreement and legal developments that may affect the prepayment experience on
the mortgage loans.

     In addition, some mortgage securities included in a mortgage pool may be
backed by underlying mortgage loans having differing interest rates.
Accordingly, the rate at which principal payments are received on the related
certificates will, to some extent, depend on the interest rates on the
underlying mortgage loans.

     A subservicer may allow the refinancing of a mortgage loan in any trust by
accepting prepayments thereon and permitting a new loan to the same borrower
secured by a mortgage on the same property, which may be originated by the
subservicer or the master servicer or any of their respective affiliates or by
an unrelated entity. In the event of a refinancing, the new loan would not be
included in the related trust and, therefore, the refinancing would have the
same effect as a prepayment in full of the related mortgage loan. A subservicer
or the master servicer may, from time to time, implement programs designed to
encourage refinancing. These 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. Targeted solicitations may be based on a
variety of factors, including the credit of the borrower or the location of the
mortgaged property. In addition, subservicers or the master servicer may
encourage assumptions of mortgage loans, including defaulted mortgage loans,
under which creditworthy borrowers assume the outstanding indebtedness of the
mortgage loans which may be removed from the related mortgage pool. As a result
of these programs, with respect to the mortgage pool underlying any trust, the
rate of Principal Prepayments of the mortgage loans in the mortgage pool may be
higher than would otherwise be the case, and in some cases, the average credit
or collateral quality of the mortgage loans remaining in the mortgage pool may
decline.

     All statistics known to the depositor that have been compiled with respect
to prepayment experience on mortgage loans indicate that while some mortgage
loans may remain outstanding until their stated maturities, a substantial
number will be paid prior to their respective stated maturities.

     The rate of prepayment with respect to conventional fixed-rate mortgage
loans has fluctuated significantly in recent years. For example, published
principal balance information for Freddie Mac and Fannie Mae securities backed
by conventional fixed-rate mortgage loans indicates that the prepayment rates
for those mortgage securities were substantially lower during the high interest
rate climate prevailing during 1980, 1981 and early 1982 than the prepayment
rates during 1985 and 1986 when prevailing interest rates declined. 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 depositor is not
aware of any historical prepayment experience with respect to mortgage loans
secured by properties located in Puerto Rico and, accordingly, prepayments on
those loans may not occur at the same rate or be affected by the same factors
as other mortgage loans.

     Although the mortgage rates on ARM loans will be subject to periodic
adjustments, the adjustments generally will:

     o   not increase or decrease the mortgage rates by more than a fixed
         percentage amount on each adjustment date;

     o   not increase the mortgage rates over a fixed percentage amount during
         the life of any ARM loan; and

     o   be based on an index, which may not rise and fall consistently with
         mortgage interest rates, plus the related Note Margin, which may be
         different from margins being used at the time for newly originated
         adjustable rate mortgage loans.

     As a result, the mortgage rates on the ARM loans in a mortgage pool at any
time may not equal the prevailing rates for similar, newly originated
adjustable rate mortgage loans. In some rate environments, the prevailing rates
on fixed-rate mortgage loans may be sufficiently low in relation to the
then-current mortgage rates on ARM loans that the rate of prepayment may
increase as a result of refinancings. There can be no certainty as to the rate
of prepayments on the mortgage loans during any period or over the life of any
series of certificates.


                                       55
<PAGE>

     Under some circumstances, the master servicer, the depositor or, if
specified in the related prospectus supplement, the holders of the REMIC
residual certificates may have the option to purchase the mortgage loans in a
trust. See "The Pooling and Servicing Agreement--Termination; Retirement of
Certificates."


                    CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS

     The following discussion contains summaries of some legal aspects of
mortgage loans that are general in nature. Because these legal aspects are
governed in part by state law, which laws may differ substantially from state
to state, the summaries do not purport to be complete, to reflect the laws of
any particular state or to encompass the laws of all states in which the
mortgaged properties may be situated. The summaries are qualified in their
entirety by reference to the applicable federal and state laws governing the
mortgage loans.



THE MORTGAGE LOANS

 General

     The mortgage loans, other than Cooperative Loans, will be secured by deeds
of trust, mortgages or deeds to secure debt depending upon the prevailing
practice in the state in which the related mortgaged property is located. In
some states, a mortgage, deed of trust or deed to secure debt creates a lien
upon the related real property. In other states, the mortgage, deed of trust or
deed to secure debt conveys legal title to the property to the mortgagee
subject to a condition subsequent, for example, the payment of the indebtedness
secured thereby. These instruments are not prior to the lien for real estate
taxes and assessments and other charges imposed under governmental police
powers. Priority with respect to these instruments depends on their terms and
in some cases on the terms of separate subordination or inter-creditor
agreements, and generally on the order of recordation of the mortgage deed of
trust or deed to secure debt in the appropriate recording office.

     There are two parties to a mortgage, the mortgagor, who is the borrower
and homeowner, and the mortgagee, who is the lender. Under the mortgage
instrument, the mortgagor delivers to the mortgagee a note or bond and the
mortgage. In some states, three parties may be involved in a mortgage financing
when title to the property is held by a land trustee under a land trust
agreement of which the borrower is the beneficiary; at origination of a
mortgage loan, the land trustee, as fee owner of the property, executes the
mortgage and the borrower executes (1) a separate undertaking to make payments
on the mortgage note and (2) an assignment of leases and rents. Although a deed
of trust is similar to a mortgage, a deed of trust has three parties: the
trustor, who is the borrower/homeowner; the beneficiary, who is the lender; and
a third-party grantee called the trustee. Under a deed of trust, the borrower
grants the property, irrevocably until the debt is paid, in trust, the
grantee's authority under a deed to secure debt generally with a power of sale,
to the trustee to secure payment of the obligation. A deed to secure debt
typically has two parties, under which the borrower, or grantor, conveys title
to the real property to the grantee, or lender, typically with a power of sale,
until the time when the debt is repaid. The trustee's authority under a deed of
trust and the mortgagee's authority under a mortgage are governed by the law of
the state in which the real property is located, the express provisions of the
deed of trust, mortgage or deed to secure debt and, in some deed of trust,
transactions, the directions of the beneficiary.

 Cooperative Loans

     If specified in the prospectus supplement relating to a series of
certificates, the mortgage loans may include Cooperative Loans. Each
Cooperative Note evidencing a Cooperative Loan will be secured by a security
interest in shares issued by the Cooperative that owns the related apartment
building, which is a corporation entitled to be treated as a housing
cooperative under federal tax law, and in the related proprietary lease or
occupancy agreement granting exclusive rights to occupy a specific dwelling
unit in the Cooperative's building. The security agreement will create a lien
upon, or grant a security interest in, the Cooperative shares and proprietary
leases or occupancy agreements, the priority of which will depend on, among
other things, the terms of the particular security agreement as well as the
order of recordation of the agreement, or the filing of the financing
statements related thereto, in the appropriate recording office or the taking
of possession of the Cooperative shares, depending on the law of the state in
which the Cooperative is located. This type of lien or security interest is
not, in general, prior to liens in favor of the cooperative corporation for
unpaid assessments or common charges.

     Generally, 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


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hazard and liability insurance. If there is an underlying mortgage or mortgages
on the Cooperative's building or underlying land, as is typically the case, or
an underlying lease of the land, as is the case in some instances, the
Cooperative, as mortgagor or lessee, as the case may be, is also responsible
for fulfilling the mortgage or rental obligations.

     An underlying mortgage loan is ordinarily obtained by the Cooperative in
connection with either the construction or purchase of the Cooperative's
building or the 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 is generally subordinate to the interest of the
holder of an underlying 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 an underlying mortgage, the mortgagee holding an underlying 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. In addition, an
underlying 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 the 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
Cooperative's interest in the property and termination of all proprietary
leases and occupancy agreements. In either event, a foreclosure by the holder
of an underlying mortgage or the termination of the underlying lease could
eliminate or significantly diminish the value of any collateral held by the
lender who financed the purchase by an individual tenant-stockholder of shares
of the Cooperative, or in the case of the mortgage loans, the collateral
securing the Cooperative Loans.

     Each Cooperative is owned by shareholders, referred to as
tenant-stockholders, who, through ownership of stock or shares in the
Cooperative, receive proprietary leases or occupancy agreements which confer
exclusive rights to occupy specific dwellings. Generally, a tenant-stockholder
of a Cooperative must make a monthly rental payment to the Cooperative under
the proprietary lease, which rental payment represents the tenant-stockholder's
pro rata share of the Cooperative's payments for its underlying mortgage, real
property taxes, maintenance expenses and other capital or ordinary expenses. An
ownership interest in a Cooperative and accompanying occupancy rights may be
financed through a Cooperative Loan evidenced by a Cooperative 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 shares of the related
Cooperative. 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. In accordance with the
limitations discussed below, upon default of the tenant-stockholder, the lender
may sue for judgment on the Cooperative 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 on Shares of Cooperatives"
below.


 Tax Aspects of Cooperative Ownership

     In general, a "tenant-stockholder", as defined in Section 216(b)(2) of the
Internal Revenue Code of 1986, or Internal Revenue Code, of a corporation that
qualifies as a "cooperative housing corporation" within the meaning of Section
216(b)(1) of the Internal Revenue Code is allowed a deduction for amounts paid
or accrued within his or her taxable year to the corporation representing his
or her proportionate share of certain interest expenses and real estate taxes
allowable as a deduction under Section 216(a) of the Internal Revenue Code to
the corporation under Sections 163 and 164 of the Internal Revenue Code. In
order for a corporation to qualify under Section 216(b)(1) of the Internal
Revenue Code for its taxable year in which those items are allowable as a
deduction to the corporation, the section requires, among other things, that at
least 80% of the gross income of the corporation be derived from its
tenant-stockholders. By virtue of this requirement, the status of a corporation
for purposes of Section 216(b)(1) of the Internal Revenue Code must be
determined on a year-to-year basis. Consequently, there can be no assurance
that Cooperatives relating to the Cooperative Loans will qualify under this
section for any particular year. In the event that a Cooperative fails to
qualify for one or more years, the value of the collateral securing any related
Cooperative Loans could be significantly impaired because no deduction would be
allowable to tenant-stockholders under Section 216(a) of the Internal


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<PAGE>

Revenue Code with respect to those years. In view of the significance of the
tax benefits accorded tenant-stockholders of a corporation that qualifies under
Section 216(b)(1) of the Internal Revenue Code, the likelihood that this type
of failure would be permitted to continue over a period of years appears
remote.

 Foreclosure on Mortgage Loans

     Although a deed of trust or a deed to secure debt may also be foreclosed
by judicial action, foreclosure of a deed of trust or a deed to secure debt is
typically accomplished by a non-judicial trustee's or grantee's, as applicable,
sale under a specific provision in the deed of trust or deed to secure debt
which authorizes the trustee or grantee, as applicable, to sell the property
upon any default by the borrower under the terms of the note or deed of trust
or deed to secure debt. In addition to any notice requirements contained in a
deed of trust or deed to secure debt, in some states, the trustee or grantee,
as applicable, must record a notice of default and send a copy to the
borrower/trustor and to any person who has recorded a request for a copy of
notice of default and notice of sale. In addition, in some states, the trustee
or grantee, as applicable, must provide notice to any other individual having
an interest of record in the real property, including any junior lienholders.
If the deed of trust or deed to secure debt is not reinstated within a
specified period, a notice of sale must be posted in a public place and, in
most states, published for a specific period of time in one or more newspapers.
In addition, some states' laws require that a copy of the notice of sale be
posted on the property and sent to all parties having an interest of record in
the real property.

     Foreclosure of a mortgage generally is accomplished by judicial action. In
most cases, 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 result from difficulties in locating and serving
necessary parties, including borrowers located outside the jurisdiction in
which the mortgaged property is located. If the mortgagee's right to foreclose
is contested, the legal proceedings necessary to resolve the issue can be
time-consuming.

     In some states, the borrower-trustor has the right to reinstate the loan
at any time following default until shortly before the trustee's sale. In
general, in those states, the borrower, or any other person having a junior
encumbrance on the real estate, may, during a reinstatement period, cure the
default by paying the entire amount in arrears plus the costs and expenses
incurred in enforcing the obligation.

     In the case of foreclosure under a mortgage, a deed of trust or deed to
secure debt, the sale by the referee or other designated officer or by the
trustee or grantee, as applicable, is a public sale. However, because of the
difficulty a potential buyer at the sale may have in determining the exact
status of title and because the physical condition of the property may have
deteriorated during the foreclosure proceedings, it is uncommon for a third
party to purchase the property at a foreclosure sale. Rather, it is common for
the lender to purchase the property from the trustee or grantee, as applicable,
or referee for a credit bid less than or equal to the unpaid principal amount
of the mortgage or deed of trust or deed to secure debt, accrued and unpaid
interest and the expense of foreclosure, in which case the mortgagor's debt
will be extinguished unless the lender purchases the property for a lesser
amount in order to preserve its right against a borrower to seek a deficiency
judgment and the remedy is available under state law and the related loan
documents. In the same states, there is a statutory minimum purchase price
which the lender may offer for the property and generally, state law controls
the amount of foreclosure costs and expenses, including attorneys' fees, which
may be recovered by a lender. Thereafter, subject to the right of the borrower
in some states to remain in possession during the redemption period, the lender
will assume the burdens of ownership, including obtaining hazard insurance,
paying taxes and making repairs at its own expense that are necessary to render
the property suitable for sale. Generally, the lender will 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 and, in some states, the lender may be entitled to a deficiency
judgment. In some cases, a deficiency judgment may be pursued in lieu of
foreclosure. Any loss may be reduced by the receipt of any mortgage insurance
proceeds or other forms of credit enhancement for a series of certificates. See
"Description of Credit Enhancement."

 Foreclosure on Mortgaged Properties Located in the Commonwealth of Puerto Rico

     Under the laws of the Commonwealth of Puerto Rico the foreclosure of a
real estate mortgage usually follows an ordinary "civil action" filed in the
Superior Court for the district where the mortgage property is located. If the
defendant does not contest the action filed, a default judgment is rendered for
the plaintiff and the mortgaged property is sold at public auction, after
publication of the sale for two weeks, by posting written notice in three
public places in the municipality where the auction will be held, in the tax
collection office and in the public school of the municipality where the
mortgagor resides, if known. If the residence of the mortgagor


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<PAGE>

is not known, publication in one of the newspapers of general circulation in
the Commonwealth of Puerto Rico must be made at least once a week for two
weeks. There may be as many as three public sales of the mortgaged property. If
the defendant contests the foreclosure, the case may be tried and judgment
rendered based on the merits of the case.

     There are no redemption rights after the public sale of a foreclosed
property under the laws of the Commonwealth of Puerto Rico. Commonwealth of
Puerto Rico law provides for a summary proceeding for the foreclosure of a
mortgage, but it is very seldom used because of concerns regarding the validity
of those actions. The process may be expedited if the mortgagee can obtain the
consent of the defendant to the execution of a deed in lieu of foreclosure.

     Under Commonwealth of Puerto Rico law, in the case of the public sale upon
foreclosure of a mortgaged property that (a) is subject to a mortgage loan that
was obtained for a purpose other than the financing or refinancing of the
acquisition, construction or improvement of the property and (b) is occupied by
the mortgagor as his principal residence, the mortgagor of the property has a
right to be paid the first $1,500 from the proceeds obtained on the public sale
of the property. The mortgagor can claim this sum of money from the mortgagee
at any time prior to the public sale or up to one year after the sale. This
payment would reduce the amount of sales proceeds available to satisfy the
mortgage loan and may increase the amount of the loss.


 Foreclosure on Shares of Cooperatives

     The Cooperative shares owned by the tenant-stockholder, together with the
rights of the tenant-stockholder under the proprietary lease or occupancy
agreement, are pledged to the lender and are, in almost all cases, in
accordance with restrictions on transfer as set forth in the Cooperative's
certificate of incorporation and by-laws, as well as in the proprietary lease
or occupancy agreement. The proprietary lease or occupancy agreement, even
while pledged, may be canceled by the Cooperative for failure by the
tenant-stockholder to pay rent or other obligations or charges owed by the
tenant-stockholder, including mechanics' liens against the Cooperative's
building incurred by the tenant-stockholder.

     Generally, rent and other obligations and charges arising under a
proprietary lease or occupancy agreement which are owed to the Cooperative are
made liens upon the shares to which the proprietary lease or occupancy
agreement relates. In addition, the proprietary lease or occupancy agreement
generally permits the Cooperative to terminate the lease or agreement in the
event the borrower defaults in the performance of covenants thereunder.
Typically, the lender and the Cooperative enter into a recognition agreement
which, together with any lender protection provisions contained in the
proprietary lease or occupancy agreement, establishes the rights and
obligations of both parties in the event of a default by the tenant-stockholder
on its obligations under the proprietary lease or occupancy agreement. 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 the lease or
agreement until the lender has been provided with notice of and 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 a sale of the shares and the
proprietary lease or occupancy agreement allocated to the dwelling, subject,
however, to the Cooperative's right to sums due under the proprietary lease or
occupancy agreement or which have become liens on the shares relating to the
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 amount realized upon a sale of
the collateral below the outstanding principal balance of the Cooperative Loan
and accrued and unpaid interest thereon.

     Recognition agreements also generally provide that in the event the lender
succeeds to the tenant-shareholder's shares and proprietary lease or occupancy
agreement as the result of realizing upon its collateral for a Cooperative
Loan, the lender must obtain the approval or consent of the board of directors
of the Cooperative as required by the proprietary lease before transferring the
Cooperative shares and assigning the proprietary lease. This approval or
consent is usually based on the prospective purchaser's income and net worth,
among other factors, and may significantly reduce the number of potential
purchasers, which could limit the ability of the lender to sell and realize
upon the value of the collateral. Generally, the lender is not limited in any
rights it may have to dispossess the tenant-stockholder.


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<PAGE>

     Because of the nature of Cooperative Loans, lenders do not require the
tenant-stockholder, i.e., the borrower, to obtain title insurance of any type.
Consequently, the existence of any prior liens or other imperfections of title
affecting the Cooperative's building or real estate also may adversely affect
the marketability of the shares allocated to the dwelling unit in the event of
foreclosure.

     A foreclosure on the Cooperative shares is accomplished by public sale in
accordance with the provisions of Article 9 of the Uniform Commercial Code, or
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 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 sale and the sale price. Generally, a sale conducted
according to the usual practice of creditors selling similar collateral in the
same area 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 Cooperative corporation 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. See
"--Anti-Deficiency Legislation and Other Limitations on Lenders" below.


 Rights of Redemption

     In some states, after sale pursuant to a deed of trust, or a deed to
secure debt or foreclosure of a mortgage, the borrower and foreclosed junior
lienors or other parties are given a statutory period, typically ranging from
six months to two years, in which to redeem the property from the foreclosure
sale. In some states, redemption may occur only upon payment of the entire
principal balance of the loan, accrued interest and expenses of foreclosure. In
other states, redemption may be authorized if the former borrower pays only a
portion of the sums due. In some states, the right to redeem is an equitable
right. The equity of redemption, which is a non-statutory right that must be
exercised prior to a foreclosure sale, should be distinguished from statutory
rights of redemption. The effect of a statutory right of redemption is to
diminish the ability of the lender to sell the foreclosed property. The rights
of redemption would defeat the title of any purchaser subsequent to foreclosure
or sale under a deed of trust or a deed to secure debt. 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.

 Anti-Deficiency Legislation and Other Limitations on Lenders

     Some states have imposed statutory prohibitions which limit the remedies
of a beneficiary under a deed of trust, a mortgagee under a mortgage or a
grantee under a deed to secure debt. In some states, including California,
statutes limit the right of the beneficiary, mortgagee or grantee to obtain a
deficiency judgment against the borrower following foreclosure. A deficiency
judgment is a personal judgment against the former borrower equal in most cases
to the difference between the net amount realized upon the public sale of the
real property and the amount due to the lender. In the case of a mortgage loan
secured by a property owned by a trust where the mortgage note is executed on
behalf of the trust, a deficiency judgment against the trust following
foreclosure or sale under a deed of trust or deed to secure debt, even if
obtainable under applicable law, may be of little value to the beneficiary,
grantee or mortgagee if there are no trust assets against which the deficiency
judgment may be executed. Some state statutes require the beneficiary, grantee
or mortgagee to exhaust the security afforded under a deed of trust, deed to
secure debt or mortgage by foreclosure in an attempt to satisfy the full debt
before bringing a personal action against the borrower.

     In other states, the lender has the option of bringing a personal action
against the borrower on the debt without first exhausting the security;
however, in some of these states, the lender, following judgment on the
personal action, may be deemed to have elected a remedy and may be precluded
from exercising remedies with respect to the security. Consequently, the
practical effect of the election requirement, in those states permitting this
election, is that lenders will usually proceed against the security first
rather than bringing a personal action against the borrower. Finally, in other
states, statutory provisions limit any deficiency judgment against the borrower
following a foreclosure to the excess of the outstanding debt over the fair
value of the property at the time of the public sale. The purpose of these
statutes is generally to prevent a beneficiary, grantee or mortgagee from
obtaining a large deficiency judgment against the borrower as a result of low
or no bids at the judicial sale.


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<PAGE>

     Generally, Article 9 of the UCC governs foreclosure on Cooperative shares
and the related proprietary lease or occupancy agreement. Some courts have
interpreted Article 9 to prohibit or limit a deficiency award in some
circumstances, including circumstances where the disposition 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 not
conducted in a commercially reasonable manner.

     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 its collateral
and/or enforce a deficiency judgment. For example, under the federal bankruptcy
law, all actions against the debtor, the debtor's property and any co-debtor
are automatically stayed upon the filing of a bankruptcy petition. Moreover, a
court having federal bankruptcy jurisdiction may permit a debtor through its
Chapter 11 or Chapter 13 rehabilitative plan to cure a monetary default
relating to a mortgage loan on the 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 which is not the principal
residence 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 under a plan confirmed under Chapter 13 except with respect
to mortgage payment arrearages, which may be cured within a reasonable time
period. Courts with federal bankruptcy jurisdiction similarly may be able to
modify the terms of a Cooperative Loan.

     Certain tax liens arising under the Internal Revenue Code may, in some
circumstances, have priority over the lien of a mortgage, deed to secure debt
or deed of trust. This may have the effect of delaying or interfering with the
enforcement of rights with respect to a defaulted mortgage loan.

     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.

     Some of the mortgage loans may be High Cost Loans. Purchasers or assignees
of any High Cost Loan, including any trust, could be liable under federal law
for all claims and subject to all defenses that the borrower could assert
against the originator of the High Cost Loan. Remedies available to the
borrower include monetary penalties, as well as recission rights if the
appropriate disclosures were not given as required. The maximum damages that
may be recovered under these provisions from an assignee, including the trust,
is the remaining amount of indebtedness plus the total amount paid by the
borrower in connection with the mortgage loan. In addition to federal law, some
states have enacted, or may enact, laws or regulations that prohibit inclusion
of some provisions in mortgage loans that have interest rates or origination
costs in excess of prescribed levels, and require that borrowers be given
certain disclosures prior to the consummation of the mortgage loans. An
originators' failure to comply with these laws could subject the trust (and
other assignees of the mortgage loans) to monetary penalties and could result
in the borrowers rescinding the mortgage loans against either the trust or
subsequent holders of the mortgage loans.

 Enforceability of Certain Provisions

     Unless the prospectus supplement indicates otherwise, the mortgage loans
contain due-on-sale clauses. These clauses permit the lender to accelerate the
maturity of the loan if the borrower sells, transfers or conveys the property.
The enforceability of these clauses has been the subject of legislation or
litigation in many states, and in some cases the enforceability of these
clauses has been limited or denied. However, the Garn-St Germain Depository
Institutions Act of 1982, or Garn-St Germain Act, preempts state
constitutional, statutory and case


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<PAGE>

law that prohibit the enforcement of due-on-sale clauses and permits lenders to
enforce these clauses in accordance with their terms, subject to limited
exceptions. The Garn-St Germain Act does "encourage" lenders to permit
assumption of loans at the original rate of interest or at some other rate less
than the average of the original rate and the market rate.

     The Garn-St Germain Act also sets forth nine specific instances in which a
mortgage lender covered by the Garn-St Germain Act 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
under a due-on-sale clause.

     The inability to enforce a due-on-sale clause may result in a mortgage
loan bearing an interest rate below the current market rate being assumed by a
new home buyer rather than being paid off, which may have an impact upon the
average life of the mortgage loans and the number of mortgage loans which may
be outstanding until maturity.

     Upon foreclosure, courts have imposed general equitable principles. These
equitable principles are designed to relieve the borrower from the legal effect
of its defaults under the loan documents. Examples of judicial remedies that
have been fashioned include judicial requirements that the lender undertake
affirmative and expensive actions to determine the causes for the borrower's
default and the likelihood that the borrower will be able to reinstate the
loan. In some cases, courts have required that lenders reinstate loans or
recast payment schedules in order to accommodate borrowers who are suffering
from temporary financial disability. In other cases, courts have limited the
right of the lender to foreclose if the default under the mortgage instrument
is not monetary, including the borrower failing to adequately maintain the
property. Finally, some courts have been faced with the issue of whether or not
federal or state constitutional provisions reflecting due process concerns for
adequate notice require that borrowers under deeds of trust, deeds to secure
debt or mortgages receive notices in addition to the statutorily prescribed
minimum. For the most part, these cases have upheld the notice provisions as
being reasonable or have found that the sale by a trustee under a deed of
trust, or under a deed to secure a debt or a mortgagee having a power of sale,
does not involve sufficient state action to afford constitutional protections
to the borrower.

 Applicability of Usury Laws

     Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980, or Title V, provides that state usury limitations shall not apply
to some types of residential first mortgage loans, including Cooperative Loans,
originated by some 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, or OTS, is authorized to issue rules
and regulations and to publish interpretations governing implementation of
Title V. The statute authorized any state to impose interest rate limits by
adopting, before April 1, 1983, a law or constitutional provision which
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 or to limit
discount points or other charges.

     Unless otherwise described in the related prospectus supplement,
Residential Funding Corporation or another specified party, will have
represented that each mortgage loan was originated in compliance with then
applicable state laws, including usury laws, in all material respects. However,
the mortgage rates on the mortgage loans will be subject to applicable usury
laws as in effect from time to time.

 Alternative Mortgage Instruments

     Alternative mortgage instruments, including adjustable rate mortgage
loans, adjustable rate Cooperative Loans, and early ownership mortgage loans,
originated by non-federally chartered lenders, have historically been subjected
to a variety of restrictions. These 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, or Title
VIII. Title VIII provides that, notwithstanding any state law to the contrary;

     o   state-chartered banks may originate alternative mortgage instruments in
         accordance with regulations promulgated by the Comptroller of the
         Currency with respect to the origination of alternative mortgage
         instruments by national banks,


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     o   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

     o   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 OTS, with respect to origination of alternative
         mortgage instruments by federal savings and loan associations.

Title VIII also 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 these
provisions. Some states have taken this action


ENVIRONMENTAL LEGISLATION

     Under the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or CERCLA,and under state law in some
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 for the costs of cleaning up hazardous
substances regardless of whether they have contaminated the property. 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 who did not cause or contribute to the contamination. Furthermore,
liability under CERCLA is not limited to the original or unamortized principal
balance of a loan or to the value of the property securing a loan. Lenders may
be held liable under CERCLA as owners or operators unless they qualify for the
secured creditor exemption to CERCLA. This exemption exempts from the
definition of owners and operators those who, without participating in the
management of a facility, hold indicia of ownership primarily to protect a
security interest in the facility.

     The Asset Conservation, Lender Liability and Deposit Insurance Act of
1996, or Conservation Act, amended, among other things, the provisions of
CERCLA with respect to lender liability and the secured creditor exemption. The
Conservation Act offers substantial protection to lenders by defining the
activities in which a lender can engage and still have the benefit of the
secured creditor exemption. In order for a lender to be deemed to have
participated in the management of a mortgaged property, the lender must
actually participate in the operational affairs of the property of the
borrower. The Conservation Act provides that "merely having the capacity to
influence, or unexercised right to control" operations does not constitute
participation in management. A lender will lose the protection of the secured
creditor exemption only if it exercises decision-making control over the
borrower's environmental compliance and hazardous substance handling and
disposal practices, or assumes day-to-day management of all operational
functions of the mortgaged property. The 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.

     Other federal and state laws in some circumstances may impose liability on
a secured party which takes a deed-in-lieu of foreclosure, purchases a
mortgaged property at a foreclosure sale, or operates a mortgaged property on
which contaminants other than CERCLA hazardous substances are present,
including petroleum, agricultural chemicals, hazardous wastes, asbestos, radon,
and lead-based paint. These cleanup costs may be substantial. It is possible
that the cleanup costs could become a liability of a trust and reduce the
amounts otherwise distributable to the holders of the related series of
certificates. Moreover, some federal statutes and some states by statute impose
an Environmental Lien. All subsequent liens on that property are usually
subordinated to an Environmental Lien and, in some states, even prior recorded
liens are subordinated to Environmental Liens. In the latter states, the
security interest of the trustee in a related parcel of real property that is
subject to an Environmental Lien could be adversely affected.

     Traditionally, many residential mortgage lenders have not taken steps to
evaluate whether contaminants are present with respect to any mortgaged
property prior to the origination of the mortgage loan or prior to foreclosure
or accepting a deed-in-lieu of foreclosure. Neither the depositor nor any
master servicer will be required by any Agreement to undertake any of these
evaluations prior to foreclosure or accepting a deed-in-lieu of foreclosure.
Neither the depositor nor Residential Funding Corporation makes any represen-


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tations or warranties or assumes any liability with respect to the absence or
effect of contaminants on any mortgaged property or any casualty resulting from
the presence or effect of contaminants. However, the master servicer will not
be obligated to foreclose on any mortgaged property or accept a deed-in-lieu of
foreclosure if it knows or reasonably believes that there are material
contaminated conditions on the property. A failure so to foreclose may reduce
the amounts otherwise available to certificateholders of the related series.

     Except as otherwise specified in the applicable prospectus supplement, at
the time the mortgage loans were originated, no environmental assessment or a
very limited environment assessment of the mortgaged properties will have been
conducted.


SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940

     Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, or Relief Act, a borrower who enters military service after the
origination of the borrower's mortgage loan, including a borrower 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 the borrower's active duty status, unless a
court orders otherwise upon application of the lender. The Relief Act applies
to borrowers who are members of the Air Force, Army, Marines, Navy, National
Guard, Reserves or Coast Guard, and officers of the U.S. Public Health Service
assigned to duty with the military.

     Because the Relief Act applies to borrowers 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
mortgage loans that may be affected by the Relief Act. With respect to mortgage
loans included in a trust, application of the Relief Act would adversely
affect, for an indeterminate period of time, the ability of the master servicer
to collect full amounts of interest on those mortgage loans. Any shortfall in
interest collections resulting from the application of the Relief Act or
similar legislation or regulations, which would not be recoverable from the
related mortgage loans, would result in a reduction of the amounts
distributable to the holders of the related certificates, and would not be
covered by Advances or any form of credit enhancement provided in connection
with the related series of certificates. In addition, the Relief Act imposes
limitations that would impair the ability of the master servicer to foreclose
on an affected mortgage loan during the mortgagor's period of active duty
status, and, under some circumstances, during an additional three month period
thereafter. Thus, in the event that the Relief Act or similar legislation or
regulations applies to any mortgage loan which goes into default, there may be
delays in payment and losses on the related certificates in connection
therewith. Any other interest shortfalls, deferrals or forgiveness of payments
on the mortgage loans resulting from similar legislation or regulations may
result in delays in payments or losses to certificateholders of the related
series.


DEFAULT INTEREST AND LIMITATIONS ON PREPAYMENTS

     Notes and mortgages may contain provisions that obligate the borrower to
pay a late charge or additional interest if payments are not timely made, and
in some circumstances, may prohibit prepayments for a specified period and/or
condition prepayments upon the borrower's payment of prepayment fees or yield
maintenance penalties. In some states, there are or may be specific limitations
upon the late charges which a lender may collect from a borrower for delinquent
payments. Some states also limit the amounts that a lender may collect from a
borrower as an additional charge if the loan is prepaid. In addition, the
enforceability of provisions that provide for prepayment fees or penalties upon
an involuntary prepayment is unclear under the laws of many states. Most
conventional single-family mortgage loans may be prepaid in full or in part
without penalty. The regulations of the Federal Home Loan Bank Board, as
succeeded by the OTS, prohibit the imposition of a prepayment penalty or
equivalent fee for or in connection with the acceleration of a loan by exercise
of a due-on-sale clause. A mortgagee to whom a prepayment in full has been
tendered may be compelled to give either a release of the mortgage or an
instrument assigning the existing mortgage. 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.


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, or RICO, statute can be seized by the government if the
property was used in, or purchased with the proceeds of, those crimes. Under
procedures contained in the Comprehensive Crime Control Act of 1984, 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.


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<PAGE>

     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.



NEGATIVE AMORTIZATION LOANS


     A recent case held that state restrictions on the compounding of interest
are not preempted by the provisions of the Depository Institutions Deregulation
and Monetary Control Act of 1980, or DIDMC, and as a result, a mortgage loan
that provided for negative amortization violated New Hampshire's requirement
that first mortgage loans provide for computation of interest on a simple
interest basis. The court did not address the applicability of the Alternative
Mortgage Transaction Parity Act of 1982, which authorizes a lender to make
residential mortgage loans that provide for negative amortization. As a result,
the enforceability of compound interest on mortgage loans that provide for
negative amortization is unclear. The case, which was decided by the First
Circuit Court of Appeals, is binding authority only on Federal District Courts
in Maine, New Hampshire, Massachusetts, Rhode Island and Puerto Rico.


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<PAGE>

                    MATERIAL FEDERAL INCOME TAX CONSEQUENCES


GENERAL

     The following is a discussion of the material federal income tax
consequences of the purchase, ownership and disposition of the certificates.
This discussion is directed solely to certificateholders that hold the
certificates as capital assets within the meaning of Section 1221 of the
Internal Revenue Code and does not purport to discuss all federal income tax
consequences that may be applicable to particular categories of investors, some
of which, including banks, insurance companies and foreign investors, may be
subject to special rules. In addition, the authorities on which this
discussion, and the opinion referred to below, are based are subject to change
or differing interpretations, which could apply retroactively. Taxpayers and
preparers of tax returns, including those filed by any REMIC or other issuer,
should be aware that under applicable Treasury regulations a provider of advice
on specific issues of law is not considered an income tax return preparer
unless the advice:

    o is given with respect to events that have occurred at the time the
      advice is rendered and is not given with respect to the consequences of
      contemplated actions, and

    o is directly relevant to the determination of an entry on a tax return.

     Accordingly, taxpayers should consult their tax advisors and tax return
preparers regarding the preparation of any item on a tax return, even where the
anticipated tax treatment has been discussed in this prospectus or in a
prospectus supplement. In addition to the federal income tax consequences
described in this prospectus, potential investors should consider the state and
local tax consequences, if any, of the purchase, ownership and disposition of
the certificates. See "State and Other Tax Consequences." Certificateholders
are advised to consult their tax advisors concerning the federal, state, local
or other tax consequences to them of the purchase, ownership and disposition of
the certificates offered by this prospectus.

     The following discussion addresses REMIC certificates representing
interests in a trust, or a portion thereof, which the master servicer will
covenant to elect to have treated as a REMIC under Sections 860A through 860G,
or REMIC Provisions, of the Internal Revenue Code. The prospectus supplement
for each series of certificates will indicate whether a REMIC election or
elections will be made for the related trust and, if that election is to be
made, will identify all "regular interests" and "residual interests" in the
REMIC. If a REMIC election will not be made for a trust, the federal income
consequences of the purchase, ownership and disposition of the related
certificates will be described in the related prospectus supplement. For
purposes of this tax discussion, references to a "certificateholder" or a
"holder" are to the beneficial owner of a certificate.

     In the event that a REMIC election is not made upon the issuance of a
particular series because, for example, a grantor trust structure is being
used, an opinion of counsel relating to the tax consequences of that structure
will be filed prior to the initial sale of the related certificates.
Furthermore, the tax discussion relating to that structure will be provided in
the prospectus supplement for that series.

     The following discussion is based in part upon the OID regulations and in
part upon the REMIC regulations. The OID regulations, which are effective with
respect to debt instruments issued on or after April 4, 1994, do not adequately
address some issues relevant to, and in some instances provide that they are
not applicable to, securities like the certificates


REMICS

 Classification of REMICs

     Upon the issuance of each series of REMIC certificates, Thacher Proffitt &
Wood, Orrick, Herrington & Sutcliffe LLP or Stroock & Stroock & Lavan LLP,
counsel to the depositor, will deliver their opinion to the effect that,
assuming compliance with all provisions of the related pooling and servicing
agreement, the related trust, or each applicable portion of the trust, will
qualify as a REMIC and the REMIC certificates offered with respect thereto will
be considered to evidence ownership of "regular interests,"or REMIC regular
certificates or "residual interests," or REMIC residual certificates in that
REMIC within the meaning of the REMIC Provisions.

     If an entity electing to be treated as a REMIC fails to comply with one or
more of the ongoing requirements of the Internal Revenue Code for that status
during any taxable year, the Internal Revenue Code provides that the entity
will not be treated as a REMIC for that year and thereafter. In that event, the
entity may be taxable as a separate corporation under Treasury regulations, and
the related REMIC certificates may


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<PAGE>

not be accorded the status or given the tax treatment described in this
prospectus under "Material Federal Income Tax Consequences". Although the
Internal Revenue Code authorizes the Treasury Department to issue regulations
providing relief in the event of an inadvertent termination of REMIC status, no
regulations have been issued. Any relief, moreover, may be accompanied by
sanctions, including the imposition of a corporate tax on all or a portion of
the trust's income for the period in which the requirements for that status are
not satisfied. The pooling and servicing agreement with respect to each REMIC
will include provisions designed to maintain the trust's status as a REMIC
under the REMIC Provisions. It is not anticipated that the status of any trust
as a REMIC will be terminated.


 Characterization of Investments in REMIC Certificates

     In general, the REMIC certificates will be "real estate assets" within the
meaning of Section 856(c)(4)(A) of the Internal Revenue Code and assets
described in Section 7701(a)(19)(C) of the Internal Revenue Code in the same
proportion that the assets of the REMIC underlying the certificates would be so
treated. Moreover, if 95% or more of the assets of the REMIC qualify for any of
the foregoing treatments at all times during a calendar year, the REMIC
certificates will qualify for the corresponding status in their entirety for
that calendar year. Interest, including original issue discount, on the REMIC
regular certificates and income allocated to the class of REMIC residual
certificates will be interest described in Section 856(c)(3)(B) of the Internal
Revenue Code to the extent that those certificates are treated as "real estate
assets" within the meaning of Section 856(c)(4)(A) of the Internal Revenue
Code. In addition, the REMIC regular certificates will be "qualified mortgages"
within the meaning of Section 860G(a)(3)(C) of the Internal Revenue Code if
transferred to another REMIC on its startup day in exchange for regular or
residual interests in that REMIC. The determination as to the percentage of the
REMIC's assets that constitute assets described in the foregoing sections of
the Internal Revenue Code will be made with respect to each calendar quarter
based on the average adjusted basis of each category of the assets held by the
REMIC during that calendar quarter. The master servicer will report those
determinations to certificateholders in the manner and at the times required by
applicable Treasury regulations.

     The assets of the REMIC will include, in addition to mortgage loans,
payments on mortgage loans held pending distribution on the REMIC certificates
and property acquired by foreclosure held pending sale, and may include amounts
in reserve accounts. It is unclear whether property acquired by foreclosure
held pending sale and amounts in reserve accounts would be considered to be
part of the mortgage loans, or whether those assets, to the extent not invested
in assets described in the foregoing sections, otherwise would receive the same
treatment as the mortgage loans for purposes of all of the foregoing sections.
In addition, in some instances mortgage loans, including Additional Collateral
Loans or Pledged Asset Mortgage Loans, may not be treated entirely as assets
described in the foregoing sections. If the assets of a REMIC include
Additional Collateral Loans or Pledged Asset Mortgage Loans, the non-real
property collateral, while itself not an asset of the REMIC, could cause the
mortgage loans not to qualify for one or more of those characterizations. If
so, the related prospectus supplement will describe the mortgage loans,
including Additional Collateral Loans or Pledged Asset Mortgage Loans, that may
not be so treated. The REMIC regulations do provide, however, that payments on
mortgage loans held pending distribution are considered part of the mortgage
loans for purposes of Section 856(c)(4)(A) of the Internal Revenue Code.
Furthermore, foreclosure property will qualify as "real estate assets" under
Section 856(c)(4)(A) of the Internal Revenue Code.

 Tiered REMIC Structures

     For some series of REMIC certificates, two or more separate elections may
be made to treat designated portions of the related trust as REMICs, or tiered
REMICs, for federal income tax purposes. Upon the issuance of this type of
series of REMIC certificates, Thacher Proffitt & Wood, Orrick, Herrington &
Sutcliffe LLP or Stroock & Stroock & Lavan LLP, counsel to the depositor, will
deliver their opinion to the effect that, assuming compliance with all
provisions of the related pooling and servicing agreement, the tiered REMICs
will each qualify as a REMIC and the REMIC certificates issued by the tiered
REMICs, respectively, will be considered to evidence ownership of REMIC regular
certificates or REMIC residual certificates in the related REMIC within the
meaning of the REMIC Provisions.

     Solely for purposes of determining whether the REMIC certificates will be
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Internal
Revenue Code, and "loans secured by an interest in real property" under Section
7701(a)(19)(C) of the Internal Revenue Code, and whether the income on the
certificates is interest described in Section 856(c)(3)(B) of the Internal
Revenue Code, the tiered REMICs will be treated as one REMIC.


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<PAGE>

 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

     Some REMIC regular certificates may be issued with "original issue
discount" within the meaning of Section 1273(a) of the Internal Revenue Code.
Any holders of REMIC regular certificates issued with original issue discount
typically will be required to include original issue discount in income as it
accrues, in accordance with the method described below, in advance of the
receipt of the cash attributable to that income. In addition, Section
1272(a)(6) of the Internal Revenue Code provides special rules applicable to
REMIC regular certificates and certain other debt instruments issued with
original issue discount. Regulations have not been issued under that section.

     The Internal Revenue Code requires that a prepayment assumption be used
with respect to mortgage loans held by a REMIC in computing the accrual of
original issue discount on REMIC regular certificates issued by that REMIC, and
that adjustments be made in the amount and rate of accrual of the discount to
reflect differences between the actual prepayment rate and the prepayment
assumption. The prepayment assumption is to be determined in a manner
prescribed in Treasury regulations; as noted above, those regulations have not
been issued. The conference committee report accompanying the Tax Reform Act of
1986 indicates that the regulations will provide that the prepayment assumption
used with respect to a REMIC regular certificate must be the same as that used
in pricing the initial offering of the REMIC regular certificate. The
prepayment assumption used by the master servicer in reporting original issue
discount for each series of REMIC regular certificates will be consistent with
this standard and will be disclosed in the related prospectus supplement.
However, neither the depositor nor the master servicer will make any
representation that the mortgage loans will in fact prepay at a rate conforming
to the prepayment assumption or at any other rate.

     The original issue discount, if any, on a REMIC regular certificate will
be the excess of its stated redemption price at maturity over its issue price.
The issue price of a particular class of REMIC regular certificates will be the
first cash price at which a substantial amount of REMIC regular certificates of
that class is sold, excluding sales to bond houses, brokers and underwriters.
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, or the closing date, the issue price for that class will be treated
as the fair market value of the class on the closing date. Under the OID
regulations, the stated redemption price of a REMIC regular certificate is
equal to the total of all payments to be made on that certificate other than
"qualified stated interest." Qualified stated interest includes interest that
is unconditionally payable at least annually at a single fixed rate, or in the
case of a variable rate debt instrument, at a "qualified floating rate," an
"objective rate," a combination of a single fixed rate and one or more
"qualified floating rates" or one "qualified inverse floating rate," or a
combination of "qualified floating rates" that generally does not operate in a
manner that accelerates or defers interest payments on a REMIC regular
certificate.

     In the case of REMIC regular certificates bearing adjustable interest
rates, the determination of the total amount of original issue discount and the
timing of the inclusion of the original issue discount will vary according to
the characteristics of the REMIC regular certificates. If the original issue
discount rules apply to the certificates, the related prospectus supplement
will describe the manner in which the rules will be applied by the master
servicer with respect to those certificates in preparing information returns to
the certificateholders and the Internal Revenue Service, or IRS.

     Some classes of the REMIC regular certificates may provide for the first
interest payment with respect to their certificates to be made more than one
month after the date of issuance, a period which is longer than the subsequent
monthly intervals between interest payments. Assuming the "accrual period" for
original issue discount is each monthly period that ends on a distribution
date, in some cases, as a consequence of this "long first accrual period," some
or all interest payments may be required to be included in the stated
redemption price of the REMIC regular certificate and accounted for as original
issue discount. Because interest on REMIC regular certificates must in any
event be accounted for under an accrual method, applying this analysis would
result in only a slight difference in the timing of the inclusion in income of
the yield on the REMIC regular certificates.


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<PAGE>

     In addition, if the accrued interest to be paid on the first distribution
date is computed with respect to a period that begins prior to the closing
date, a portion of the purchase price paid for a REMIC regular certificate will
reflect the accrued interest. In these cases, information returns to the
certificateholders and the IRS will be based on the position that the portion
of the purchase price paid for the interest accrued with respect to periods
prior to the closing date is treated as part of the overall cost of the REMIC
regular certificate, and not as a separate asset the cost of which is recovered
entirely out of interest received on the next distribution date, and that
portion of the interest paid on the first distribution date in excess of
interest accrued for a number of days corresponding to the number of days from
the closing date to the first distribution date should be included in the
stated redemption price of the REMIC regular certificate. However, the OID
regulations state that all or some portion of the accrued interest may be
treated as a separate asset the cost of which is recovered entirely out of
interest paid on the first distribution date. It is unclear how an election to
do so would be made under the OID regulations and whether that election could
be made unilaterally by a certificateholder.

     Notwithstanding the general definition of original issue discount,
original issue discount on a REMIC regular certificate will be considered to be
de minimis if it is less than 0.25% of the stated redemption price of the REMIC
regular certificate multiplied by its weighted average maturity. For this
purpose, the weighted average maturity of the REMIC regular certificate is
computed as the sum of the amounts determined, as to each payment included in
the stated redemption price of the REMIC regular certificate, by multiplying
(i) the number of complete years, rounding down for partial years, from the
issue date until the payment is expected to be made, presumably taking into
account the prepayment assumption, by (ii) a fraction, the numerator of which
is the amount of the payment, and the denominator of which is the stated
redemption price at maturity of the REMIC regular certificate. Under the OID
regulations, original issue discount of only a de minimis amount, other than de
minimis original issue discount attributable to a so-called "teaser" interest
rate or an initial interest holiday, will be included in income as each payment
of stated principal is made, based on the product of the remaining total amount
of the de minimis original issue discount and a fraction, the numerator of
which is the amount of the principal payment and the denominator of which is
the outstanding stated principal amount of the REMIC regular certificate. The
OID regulations also would permit a certificateholder to elect to accrue de
minimis original issue discount into income currently based on a constant yield
method. See "--Market Discount" for a description of that election under the
OID regulations.

     If original issue discount on a REMIC regular certificate is in excess of
a de minimis amount, the holder of the certificate must include in ordinary
gross income the sum of the "daily portions" of original issue discount for
each day during its taxable year on which it held 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, the daily
portions of original issue discount will be determined as follows.

     As to each "accrual period," that is, unless otherwise stated in the
related prospectus supplement, each period that ends on a date that corresponds
to a distribution date and begins on the first day following the immediately
preceding accrual period, or in the case of the first accrual period, begins on
the closing date, a calculation will be made of the portion of the original
issue discount that accrued during that accrual period. The portion of original
issue discount that accrues in any accrual period will equal the excess, if
any, of (i) the sum of (A) the present value, as of the end of the accrual
period, of all of the distributions remaining to be made on the REMIC regular
certificate, if any, in future periods and (B) the distributions made on the
REMIC regular certificate during the accrual period of amounts included in the
stated redemption price, over (ii) the adjusted issue price of the REMIC
regular certificate at the beginning of the accrual period. The present value
of the remaining distributions referred to in the preceding sentence will be
calculated (1) assuming that distributions on the REMIC regular certificate
will be received in future periods based on the mortgage loans being prepaid at
a rate equal to the prepayment assumption and (2) using a discount rate equal
to the original yield to maturity of the certificate. For these purposes, the
original yield to maturity of the certificate will be calculated based on its
issue price and assuming that distributions on the certificate will be made in
all accrual periods based on the mortgage loans being prepaid at a rate equal
to the prepayment assumption. The adjusted issue price of a REMIC regular
certificate at the beginning of any accrual period will equal the issue price
of the certificate, increased by the aggregate amount of original issue
discount that accrued with respect to that certificate in prior accrual
periods, and reduced by the amount of any distributions made on that REMIC
regular certificate in prior accrual periods of amounts included in its stated
redemption price. The original issue discount accruing during any accrual
period, computed as described above, will be allocated ratably to each day
during the accrual period to determine the daily portion of original issue
discount for that day.


                                       69
<PAGE>

     The OID regulations suggest that original issue discount with respect to
securities that represent multiple uncertificated REMIC regular interests, in
which ownership interests will be issued simultaneously to the same buyer and
which may be required under the related pooling and servicing agreement to be
transferred together, should be computed on an aggregate method. In the absence
of further guidance from the IRS, original issue discount with respect to
securities that represent the ownership of multiple uncertificated REMIC
regular interests will be reported to the IRS and the certificateholders on an
aggregate method based on a single overall constant yield and the prepayment
assumption stated in the related prospectus supplement, treating all
uncertificated regular interests as a single debt instrument as set forth in
the OID regulations, so long as the pooling and servicing agreement requires
that the uncertificated regular interests be transferred together.

     A subsequent purchaser of a REMIC regular certificate that purchases the
certificate at a cost, excluding any portion of that cost attributable to
accrued qualified stated interest, less than its remaining stated redemption
price will also be required to include in gross income the daily portions of
any original issue discount with respect to that certificate. However, each
daily portion will be reduced, if the cost is in excess of its "adjusted issue
price," in proportion to the ratio that excess bears to the aggregate original
issue discount remaining to be accrued on the REMIC regular certificate. The
adjusted issue price of a REMIC regular certificate on any given day equals (i)
the adjusted issue price or, in the case of the first accrual period, the issue
price, of the certificate at the beginning of the accrual period which includes
that day, plus (ii) the daily portions of original issue discount for all days
during the accrual period prior to that day minus (iii) any principal payments
made during the accrual period prior to that day with respect to the
certificate.

     Market Discount

     A certificateholder that purchases a REMIC regular certificate at a market
discount, that is, in the case of a REMIC regular certificate issued without
original issue discount, at a purchase price less than its remaining stated
principal amount, or in the case of a REMIC regular certificate issued with
original issue discount, at a purchase price less than its adjusted issue price
will recognize income upon receipt of each distribution representing stated
redemption price. In particular, under Section 1276 of the Internal Revenue
Code such a certificateholder generally will be required to allocate the
portion of each distribution representing stated redemption price 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, the election will apply to all market
discount bonds acquired by the certificateholder on or after the first day of
the first taxable year to which the election applies. In addition, 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. If the election were
made with respect to a REMIC regular certificate with market discount, the
certificateholder would be deemed to have made an election to include currently
market discount in income with respect to all other debt instruments having
market discount that the certificateholder acquires during the taxable year of
the election or thereafter. Similarly, a certificateholder that made this
election for a certificate that is acquired at a premium would be deemed to
have made an election to amortize bond premium with respect to all debt
instruments having amortizable bond premium that the certificateholder owns or
acquires. See "--Premium." Each of these elections to accrue interest, discount
and premium with respect to a certificate on a constant yield method or as
interest may not be revoked without the consent of the IRS.

     However, market discount with respect to a REMIC regular certificate will
be considered to be de minimis for purposes of Section 1276 of the Internal
Revenue Code if the market discount is less than 0.25% of the remaining stated
redemption price of the REMIC regular certificate multiplied by the number of
complete years to maturity remaining after the date of its purchase. In
interpreting a similar rule with respect to original issue discount on
obligations payable in installments, the OID regulations refer to the weighted
average maturity of obligations, and it is likely that the same rule will be
applied with respect to market discount, presumably taking into account the
prepayment assumption. If market discount is treated as de minimis under this
rule, it appears that the actual discount would be treated in a manner similar
to original issue discount of a de minimis amount. See "--Original Issue
Discount." This treatment may result in discount being included in income at a
slower rate than discount would be required to be included in income using the
method described above.

     Section 1276(b)(3) of the Internal Revenue Code specifically authorizes
the Treasury Department to issue regulations providing for the method for
accruing market discount on debt instruments, the principal of which


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is payable in more than one installment. Until regulations are issued by the
Treasury Department, certain rules described in the Committee Report apply. The
Committee Report indicates that in each accrual period market discount on REMIC
regular certificates should accrue, at the certificateholder's option:

     o   on the basis of a constant yield method,

     o   in the case of a REMIC regular certificate issued without original
         issue discount, in an amount that bears the same ratio to the total
         remaining market discount as the stated interest paid in the accrual
         period bears to the total amount of stated interest remaining to be
         paid on the REMIC regular certificate as of the beginning of the
         accrual period, or

     o   in the case of a REMIC regular certificate issued with original issue
         discount, in an amount that bears the same ratio to the total remaining
         market discount as the original issue discount accrued in the accrual
         period bears to the total original issue discount remaining on the
         REMIC regular certificate at the beginning of the accrual period.


Moreover, the prepayment assumption used in calculating the accrual of original
issue discount is to be used in calculating the accrual of market discount.
Because the regulations referred to in this paragraph have not been issued, it
is not possible to predict what effect those regulations might have on the tax
treatment of a REMIC regular certificate purchased at a discount in the
secondary market.

     To the extent that REMIC regular certificates provide for monthly or other
periodic distributions throughout their term, the effect of these rules may be
to require market discount to be includible in income at a rate that is not
significantly slower than the rate at which the discount would accrue if it
were original issue discount. Moreover, in any event a holder of a REMIC
regular certificate generally will be required to treat a portion of any gain
on the sale or exchange of that Certificate as ordinary income to the extent of
the market discount accrued to the date of disposition under one of the
foregoing methods, less any accrued market discount previously reported as
ordinary income.

     In addition, under Section 1277 of the Internal Revenue Code, a holder of
a REMIC regular certificate 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 a REMIC regular certificate purchased with
market discount. For these purposes, the de minimis rule referred to above
applies. Any deferred interest expense would not exceed the market discount
that accrues during that taxable year and is, in general, allowed as a
deduction not later than the year in which the market discount is includible in
income. If the holder elects to include market discount in income currently as
it accrues on all market discount instruments acquired by that holder in that
taxable year or thereafter, the interest deferral rule described above will not
apply.


     Premium

     A REMIC regular certificate purchased at a cost, excluding any portion of
that cost attributable to accrued qualified stated interest, greater than its
remaining stated redemption price will be considered to be purchased at a
premium. The holder of a REMIC regular certificate may elect under Section 171
of the Internal Revenue Code to amortize that premium under the constant yield
method over the life of the certificate. If made, this election will apply to
all debt instruments having amortizable bond premium that the holder owns or
subsequently acquires. Amortizable premium will be treated as an offset to
interest income on the related REMIC regular certificate, rather than as a
separate interest deduction. The OID regulations also permit certificateholders
to elect to include all interest, discount and premium in income based on a
constant yield method, further treating the certificateholder as having made
the election to amortize premium generally. See "--Market Discount." The
conference committee report states that the same rules that apply to accrual of
market discount, which rules will require use of a prepayment assumption in
accruing market discount with respect to REMIC regular certificates without
regard to whether those certificates have original issue discount, will also
apply in amortizing bond premium under Section 171 of the Internal Revenue
Code.

     Realized Losses

     Under Section 166 of the Internal Revenue Code, both corporate holders of
the REMIC regular certificates and noncorporate holders of the REMIC regular
certificates that acquire those certificates in connection with a trade or
business should be allowed to deduct, as ordinary losses, any losses sustained
during a taxable year in which their certificates become wholly or partially
worthless as the result of one or more Realized Losses on the mortgage loans.
However, it appears that a noncorporate holder that does not acquire


                                       71
<PAGE>

a REMIC regular certificate in connection with a trade or business will not be
entitled to deduct a loss under Section 166 of the Internal Revenue Code until
the holder's certificate becomes wholly worthless--until its outstanding
principal balance has been reduced to zero--and that the loss will be
characterized as a short-term capital loss.

     Each holder of a REMIC regular certificate will be required to accrue
interest and original issue discount with respect to that certificate, without
giving effect to any reductions in distributions attributable to defaults or
delinquencies on the mortgage loans or the underlying certificates until it can
be established that any reduction ultimately will not be recoverable. As a
result, the amount of taxable income reported in any period by the holder of a
REMIC regular certificate could exceed the amount of economic income actually
realized by the holder in that period. Although the holder of a REMIC regular
certificate eventually will recognize a loss or reduction in income
attributable to previously accrued and included income that, as the result of a
Realized Loss, ultimately will not be realized, the law is unclear with respect
to the timing and character of the loss or reduction in income.


 Taxation of Owners of REMIC Residual Certificates

     General

     As residual interests, the REMIC residual certificates will be subject to
tax rules that differ significantly from those that would apply if the REMIC
residual certificates were treated for federal income tax purposes as direct
ownership interests in the mortgage loans or as debt instruments issued by the
REMIC.

     A holder of a REMIC residual certificate generally will be required to
report its daily portion of the taxable income or, in accordance with the
limitations noted in this discussion, the net loss of the REMIC for each day
during a calendar quarter that the holder owned the REMIC residual certificate.
For this purpose, the taxable income or net loss of the REMIC will be allocated
to each day in the calendar quarter ratably using a "30 days per month/90 days
per quarter/360 days per year" convention unless otherwise disclosed in the
related prospectus supplement. The daily amounts will then be allocated among
the REMIC residual certificateholders in proportion to their respective
ownership interests on that day. Any amount included in the gross income or
allowed as a loss of any REMIC residual certificateholder by virtue of this
allocation will be treated as ordinary income or loss. The taxable income of
the REMIC will be determined under the rules described in this prospectus in
"--Taxable Income of the REMIC" and will be taxable to the REMIC residual
certificateholders without regard to the timing or amount of cash distributions
by the REMIC. Ordinary income derived from REMIC residual certificates will be
"portfolio income" for purposes of the taxation of taxpayers in accordance with
limitations under Section 469 of the Internal Revenue Code on the deductibility
of "passive losses."

     A holder of a REMIC residual certificate that purchased the certificate
from a prior holder of that certificate also will be required to report on its
federal income tax return amounts representing its daily portion of the taxable
income or net loss of the REMIC for each day that it holds the REMIC residual
certificate. These daily portions generally will equal the amounts of taxable
income or net loss determined as described above. The committee report
indicates that modifications of the general rules may be made, by regulations,
legislation or otherwise, to reduce, or increase, the income or loss of a REMIC
residual certificateholder that purchased the REMIC residual certificate from a
prior holder of such certificate at a price greater than, or less than, the
adjusted basis, as defined below, that REMIC residual certificate would have
had in the hands of an original holder of that Certificate. The REMIC
regulations, however, do not provide for any such modifications.

     Any payments received by a REMIC residual certificateholder in connection
with the acquisition of that REMIC residual certificate will be taken into
account in determining the income of the holder for federal income tax
purposes. Although it appears likely that any payment would be includible in
income immediately upon its receipt, the IRS might assert that the payment
should be included in income over time according to an amortization schedule or
according to some other method. Because of the uncertainty concerning the
treatment of these payments, holders of REMIC residual certificates should
consult their tax advisors concerning the treatment of these payments for
income tax purposes.

     The amount of income REMIC residual certificateholders will be required to
report, or the tax liability associated with that income, may exceed the amount
of cash distributions received from the REMIC for the corresponding period.
Consequently, REMIC residual certificateholders should have other sources of
funds sufficient to pay any federal income taxes due as a result of their
ownership of REMIC residual certificates or unrelated deductions against which
income may be offset, subject to the rules relating to "excess inclusions"


                                       72
<PAGE>

and "noneconomic" residual interests discussed below. The fact that the tax
liability associated with the income allocated to REMIC residual
certificateholders may exceed the cash distributions received by the REMIC
residual certificateholders for the corresponding period may significantly
adversely affect the REMIC residual certificateholders after-tax rate of
return.


 Taxable Income of the REMIC

     The taxable income of the REMIC will equal the income from the mortgage
loans and other assets of the REMIC plus any cancellation of indebtedness
income due to the allocation of Realized Losses to REMIC regular certificates,
less the deductions allowed to the REMIC for interest, including original issue
discount and reduced by the amortization of any premium received on issuance,
on the REMIC regular certificates, and any other class of REMIC certificates
constituting "regular interests" in the REMIC not offered hereby, amortization
of any premium on the mortgage loans, bad debt deductions with respect to the
mortgage loans and, except as described below, for servicing, administrative
and other expenses.

     For purposes of determining its taxable income, the REMIC will have an
initial aggregate basis in its assets equal to their fair market value
immediately after their transfer to the REMIC. For this purpose, the master
servicer intends to treat the fair market value of the mortgage loans as being
equal to the aggregate issue prices of the REMIC regular certificates and REMIC
residual certificates. The aggregate basis will be allocated among the mortgage
loans collectively and the other assets of the REMIC in proportion to their
respective fair market values. The issue price of any REMIC certificates
offered by this prospectus will be determined in the manner described above
under "--Taxation of Owners of REMIC Regular Certificates--Original Issue
Discount." Accordingly, if one or more classes of REMIC certificates are
retained initially rather than sold, the master servicer may be required to
estimate the fair market value of those interests in order to determine the
basis of the REMIC in the mortgage loans and other property held by the REMIC.

     Subject to the possible application of the de minimis rules, the method of
accrual by the REMIC of original issue discount income and market discount
income with respect to mortgage loans that it holds will be equivalent to the
method of accruing original issue discount income for REMIC regular
certificateholders--under the constant yield method taking into account the
prepayment assumption. However, a REMIC that acquires loans at a market
discount must include the discount in income currently, as it accrues, on a
constant interest basis. See "--Taxation of Owners of REMIC Regular
Certificates" above, which describes a method of accruing discount income that
is analogous to that required to be used by a REMIC as to mortgage loans with
market discount that it holds.

     A mortgage loan will be deemed to have been acquired with discount or
premium to the extent that the REMIC's basis in the mortgage loan, determined
as described in the preceding paragraph, is less than or greater than its
stated redemption price. Any discount will be includible in the income of the
REMIC as it accrues, in advance of receipt of the cash attributable to that
income, under a method similar to the method described above for accruing
original issue discount on the REMIC regular certificates. It is anticipated
that each REMIC will elect under Section 171 of the Internal Revenue Code to
amortize any premium on the mortgage loans. Premium on any mortgage loan to
which the election applies may be amortized under a constant yield method,
presumably taking into account a prepayment assumption.

     A REMIC will be allowed deductions for interest, including original issue
discount, on the REMIC regular certificates, including any other class of REMIC
certificates constituting "regular interests" in the REMIC not offered by this
prospectus, equal to the deductions that would be allowed if the REMIC regular
certificates, including any other class of REMIC certificates constituting
"regular interests" in the REMIC not offered by this prospectus, were
indebtedness of the REMIC. Original issue discount will be considered to accrue
for this purpose as described above under "--Taxation of Owners of REMIC
Regular Certificates--Original Issue Discount," except that the de minimis rule
and the adjustments for subsequent holders of REMIC regular certificates,
including any other class of certificates constituting "regular interests" in
the REMIC not offered by this prospectus, described therein will not apply.

     If a class of REMIC regular certificates is issued at an Issue Premium,
the net amount of interest deductions that are allowed the REMIC in each
taxable year with respect to the REMIC regular certificates of that class will
be reduced by an amount equal to the portion of the Issue Premium that is
considered to be amortized or repaid in that year. Although the matter is not
entirely certain, it is likely that Issue Premium would be amortized under a
constant yield method in a manner analogous to the method of accruing original
issue discount described above under "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount."


                                       73
<PAGE>

     As a general rule, the taxable income of the REMIC will be determined in
the same manner as if the REMIC were an individual having the calendar year as
its taxable year and using the accrual method of accounting. However, no item
of income, gain, loss or deduction allocable to a prohibited transaction will
be taken into account. See "--Prohibited Transactions and Other Possible REMIC
Taxes" below. Further, the limitation on miscellaneous itemized deductions
imposed on individuals by Section 67 of the Internal Revenue Code, which allows
those deductions only to the extent they exceed in the aggregate two percent of
the taxpayer's adjusted gross income, will not be applied at the REMIC level so
that the REMIC will be allowed deductions for servicing, administrative and
other non-interest expenses in determining its taxable income. All of these
expenses will be allocated as a separate item to the holders of REMIC residual
certificates, subject to the limitation of Section 67 of the Internal Revenue
Code. See "--Possible Pass-Through of Miscellaneous Itemized Deductions." If
the deductions allowed to the REMIC exceed its gross income for a calendar
quarter, the excess will be the net loss for the REMIC for that calendar
quarter.


 Basis Rules, Net Losses and Distributions

     The adjusted basis of a REMIC residual certificate will be equal to the
amount paid for that REMIC residual certificate, increased by amounts included
in the income of the related certificateholder and decreased, but not below
zero, by distributions made, and by net losses allocated, to the related
certificateholder.

     A REMIC residual certificateholder is not allowed to take into account any
net loss for any calendar quarter to the extent the net loss exceeds the REMIC
residual certificateholder's adjusted basis in its REMIC residual certificate
as of the close of that calendar quarter, determined without regard to the net
loss. Any loss that is not currently deductible by reason of this limitation
may be carried forward indefinitely to future calendar quarters and, in
accordance with the same limitation, may be used only to offset income from the
REMIC residual certificate. The ability of REMIC residual certificateholders to
deduct net losses in accordance with additional limitations under the Internal
Revenue Code, as to which the certificateholders should consult their tax
advisors.

     Any distribution on a REMIC residual certificate will be treated as a
non-taxable return of capital to the extent it does not exceed the holder's
adjusted basis in the REMIC residual certificate. To the extent a distribution
on a REMIC residual certificate exceeds the adjusted basis, it will be treated
as gain from the sale of the REMIC residual certificate. A holder of a REMIC
residual certificates may be entitled to distributions early in the term of the
related REMIC under circumstances in which its basis in the REMIC residual
certificate will not be sufficiently large that distributions will be treated
as nontaxable returns of capital. A holder's basis in the REMIC residual
certificate will initially equal the amount paid for the REMIC residual
certificate and will be increased by its allocable shares of taxable income of
the trust. However, a holder's basis increases may not occur until the end of
the calendar quarter, or perhaps the end of the calendar year, with respect to
which the REMIC taxable income is allocated to the REMIC residual
certificateholder. To the extent the REMIC residual certificateholder's initial
basis is less than the distributions to the REMIC residual certificateholder,
and increases in the initial bases either occur after distributions or,
together with their initial bases, are less than the amount of the
distributions, gain will be recognized to the REMIC residual certificateholder
on those distributions and will be treated as gain from the sale of its REMIC
residual certificate.

     The effect of these rules is that a certificateholder may not amortize its
basis in a REMIC residual certificate, but may only recover its basis through
distributions, through the deduction of its share of any net losses of the
REMIC or upon the sale of its REMIC residual certificate. See "--Sales of REMIC
Certificates." For a discussion of possible modifications of these rules that
may require adjustments to income of a holder of a REMIC residual certificate
other than an original holder in order to reflect any difference between the
cost of the REMIC residual certificate to its holder and the adjusted basis the
REMIC residual certificate would have had in the hands of the original holder,
see "--General."


 Excess Inclusions

     Any "excess inclusions" with respect to a REMIC residual certificate will
be subject to federal income tax in all events. In general, the "excess
inclusions" with respect to a REMIC residual certificate for any calendar
quarter will be the excess, if any, of (i) the sum of the daily portions of
REMIC taxable income allocable to the REMIC residual certificate over (ii) the
sum of the "daily accruals", as defined below, for each day during that quarter
that the REMIC residual certificate was held by the REMIC residual
certificateholder. The daily accruals of a REMIC residual certificateholder
will be determined by allocating to each day during a calendar quarter its
ratable portion of the product of the "adjusted issue price" of the REMIC
residual certificate at the


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beginning of the calendar quarter and 120% of the "long-term Federal rate" in
effect on the closing date. For this purpose, the adjusted issue price of a
REMIC residual certificate as of the beginning of any calendar quarter will be
equal to the issue price of the REMIC residual certificate, increased by the
sum of the daily accruals for all prior quarters and decreased, but not below
zero, by any distributions made with respect to the REMIC residual certificate
before the beginning of that quarter. The issue price of a REMIC residual
certificate is the initial offering price to the public, excluding bond houses,
brokers and underwriters, at which a substantial amount of the REMIC residual
certificates were sold. If less than a substantial amount of a particular class
of REMIC residual certificates is sold for cash on or prior to the closing
date, the issue price of that class will be treated as the fair market value of
that class on the closing date. The "long-term Federal 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.

     For REMIC residual certificateholders, an excess inclusion:

     o   will not be permitted to be offset by deductions, losses or loss
         carryovers from other activities,

     o   will be treated as "unrelated business taxable income" to an otherwise
         tax-exempt organization and

     o   will not be eligible for any rate reduction or exemption under any
         applicable tax treaty with respect to the 30% United States withholding
         tax imposed on distributions to REMIC residual certificateholders that
         are foreign investors.

See, however, "--Foreign Investors in REMIC certificates."

     Furthermore, for purposes of the alternative minimum tax, (i) excess
inclusions will not be permitted to be offset by the alternative tax net
operating loss deduction and (ii) alternative minimum taxable income may not be
less than the taxpayer's excess inclusions; provided, however, that for
purposes of (ii), alternative minimum taxable income is determined without
regard to the special rule that taxable income cannot be less than excess
inclusions. The latter rule has the effect of preventing nonrefundable tax
credits from reducing the taxpayer's income tax to an amount lower than the
alternative minimum tax on excess inclusions.

     In the case of any REMIC residual certificates held by a real estate
investment trust, the aggregate excess inclusions with respect to the REMIC
residual certificates, reduced, but not below zero, by the real estate
investment trust taxable income, within the meaning of Section 857(b)(2) of the
Internal Revenue Code, excluding any net capital gain, will be allocated among
the shareholders of the trust in proportion to the dividends received by the
shareholders from the 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 the shareholder. Treasury regulations yet to be issued could apply
a similar rule to regulated investment companies, common trust funds and some
cooperatives; the REMIC regulations currently do not address this subject.

     Noneconomic REMIC Residual Certificates

     Under the REMIC regulations, transfers of "noneconomic" REMIC residual
certificates will be disregarded for all federal income tax purposes if "a
significant purpose of the transfer was to enable the transferor to impede the
assessment or collection of tax." If the transfer is disregarded, the purported
transferor will continue to remain liable for any taxes due with respect to the
income on the "noneconomic" REMIC residual certificate. The REMIC regulations
provide that a REMIC residual certificate is noneconomic unless, based on the
prepayment assumption and on any required or permitted clean up calls, or
required qualified liquidation provided for in the REMIC's organizational
documents, (1) the present value of the expected future distributions
(discounted using the "applicable Federal rate" for obligations whose term ends
on the close of the last quarter in which excess inclusions are expected to
accrue with respect to the REMIC residual certificate, which rate is computed
and published monthly by the IRS, on the REMIC residual certificate equals at
least the present value of the expected tax on the anticipated excess
inclusions, and (2) the transferor reasonably expects that the transferee will
receive distributions with respect to the REMIC residual certificate at or
after the time the taxes accrue on the anticipated excess inclusions in an
amount sufficient to satisfy the accrued taxes. Accordingly, all transfers of
REMIC residual certificates that may constitute noneconomic residual interests
will be subject to restrictions under the terms of the related pooling and
servicing agreement that are intended to reduce the possibility of any transfer
being disregarded. The restrictions will require each party to a transfer to
provide an affidavit that no purpose of the transfer is to impede the
assessment or collection of tax, including representations as to the financial
condition of the prospective transferee, as to which the transferor also is
required to make a reasonable investigation to determine the transferee's
historic payment of its debts and ability to continue to pay its debts as they
come due in the future. Prior to purchasing


                                       75
<PAGE>

a REMIC residual certificate, prospective purchasers should consider the
possibility that a purported transfer of the REMIC residual certificate by such
a purchaser to another purchaser at some future date may be disregarded in
accordance with the above-described rules which would result in the retention
of tax liability by that purchaser.

     The IRS has issued proposed changes to the REMIC regulations that would
add to the conditions necessary to assure that a transfer of a noneconomic
residual interest would be respected. The proposed additional condition would
require that the amount received by the transferee be no less on a present
value basis than the present value of the net tax detriment attributable to
holding a residual interest reduced by the present value of the projected
payments to be received on the residual interest. The change is proposed to be
effective for transfers of residual interests occurring after February 4, 2000

     The related prospectus supplement will disclose whether offered REMIC
residual certificates may be considered "noneconomic" residual interests under
the REMIC regulations. Any disclosure that a REMIC residual certificate will
not be considered "noneconomic" will be based upon some assumptions, and the
depositor will make no representation that a REMIC residual certificate will
not be considered "noneconomic" for purposes of the above-described rules. See
"--Foreign Investors in REMIC Certificates" for additional restrictions
applicable to transfers of certain REMIC residual certificates to foreign
persons.

     Mark-to-Market Rules

     The mark-to-market requirement applies to all securities owned by a
dealer, except to the extent that the dealer has specifically identified a
security as held for investment. The Mark-to-Market Regulations provide that
for purposes of this mark-to-market requirement, a REMIC residual certificate
acquired on or after January 4, 1995 is not treated as a security and thus may
not be marked to market. Prospective purchasers of a REMIC residual certificate
should consult their tax advisors regarding the possible application of the
mark-to-market requirement to REMIC residual certificates.

     Possible Pass-Through of Miscellaneous Itemized Deductions

     Fees and expenses of a REMIC generally will be allocated to the holders of
the related REMIC residual certificates. The applicable Treasury regulations
indicate, however, that in the case of a REMIC that is similar to a single
class grantor trust, all or a portion of those fees and expenses should be
allocated to the holders of the related REMIC regular certificates. Unless
otherwise stated in the related prospectus supplement, fees and expenses will
be allocated to holders of the related REMIC residual certificates in their
entirety and not to the holders of the related REMIC regular certificates.

     With respect to REMIC residual certificates or REMIC regular certificates
the holders of which receive an allocation of fees and expenses in accordance
with the preceding discussion, if any holder thereof is an individual, estate
or trust, or a "Pass-Through Entity" beneficially owned by one or more
individuals, estates or trusts, (i) an amount equal to the individual's,
estate's or trust's share of fees and expenses will be added to the gross
income of that holder and (ii) the individual's, estate's or trust's share of
fees and expenses will be treated as a miscellaneous itemized deduction
allowable in accordance with the limitation of Section 67 of the Internal
Revenue Code, which permits those deductions only to the extent they exceed in
the aggregate two percent of a taxpayer's adjusted gross income. In addition,
Section 68 of the Internal Revenue Code provides that the amount of itemized
deductions otherwise allowable for an individual whose adjusted gross income
exceeds a specified amount will be reduced by the lesser of (i) 3% of the
excess of the individual's adjusted gross income over that amount or (ii) 80%
of the amount of itemized deductions otherwise allowable for the taxable year.
The amount of additional taxable income reportable by REMIC certificateholders
that are in accordance with the limitations of either Section 67 or Section 68
of the Internal Revenue Code may be substantial. Furthermore, in determining
the alternative minimum taxable income of such a holder of a REMIC Certificate
that is an individual, estate or trust, or a "Pass-Through Entity" beneficially
owned by one or more individuals, estates or trusts, no deduction will be
allowed for the holder's allocable portion of servicing fees and other
miscellaneous itemized deductions of the REMIC, even though an amount equal to
the amount of such fees and other deductions will be included in the holder's
gross income. Accordingly, the REMIC certificates may not be appropriate
investments for individuals, estates, or trusts, or pass-through entities
beneficially owned by one or more individuals, estates or trusts. Any
prospective investors should consult with their tax advisors prior to making an
investment in these certificates.

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<PAGE>

     Tax and Restrictions on Transfers of REMIC Residual Certificates to
Certain Organizations

     If a REMIC residual certificate is transferred to a Disqualified
Organization, a tax would be imposed in an amount, determined under the REMIC
regulations, equal to: the product of

     o   the present value, discounted using the "applicable Federal rate" for
         obligations whose term ends on the close of the last quarter in which
         excess inclusions are expected to accrue with respect to the
         certificate, which rate is computed and published monthly by the IRS,
         of the total anticipated excess inclusions with respect to the REMIC
         residual certificate for periods after the transfer; and

     o   the highest marginal federal income tax rate applicable to
         corporations.

     The anticipated excess inclusions must be determined as of the date that
the REMIC residual certificate is transferred and must be based on events that
have occurred up to the time of transfer, the prepayment assumption and any
required or permitted clean up calls or required liquidation provided for in
the REMIC's organizational documents. This tax generally would be imposed on
the transferor of the REMIC residual certificate, except that where the
transfer is through an agent for a Disqualified Organization, the tax would
instead be imposed on that agent. However, a transferor of a REMIC residual
certificate would in no event be liable for the tax with respect to a transfer
if the transferee furnishes to the transferor an affidavit that the transferee
is not a Disqualified Organization and, as of the time of the transfer, the
transferor does not have actual knowledge that the affidavit is false.
Moreover, an entity will not qualify as a REMIC unless there are reasonable
arrangements designed to ensure that:

     o   residual interests in the entity are not held by Disqualified
         Organizations; and

     o   information necessary for the application of the tax described herein
         will be made available.

     Restrictions on the transfer of REMIC residual certificates and other
provisions that are intended to meet this requirement will be included in the
pooling and servicing agreement, including provisions:

     o   requiring any transferee of a REMIC residual certificate to provide an
         affidavit representing that it is not a Disqualified Organization and
         is not acquiring the REMIC residual certificate on behalf of a
         Disqualified Organization, undertaking to maintain that status and
         agreeing to obtain a similar affidavit from any person to whom it shall
         transfer the REMIC residual certificate;

     o   providing that any transfer of a REMIC residual certificate to a
         Disqualified Organization shall be null and void; and

     o   granting to the master servicer the right, without notice to the holder
         or any prior holder, to sell to a purchaser of its choice any REMIC
         residual certificate that shall become owned by a Disqualified
         Organization despite (1) and (2) above.

     In addition, if a Pass-Through Entity includes in income excess inclusions
with respect to a REMIC residual certificate, and a Disqualified Organization
is the record holder of an interest in that entity, then a tax will be imposed
on the entity equal to the product of (i) the amount of excess inclusions on
the REMIC residual certificate that are allocable to the interest in the
Pass-Through Entity held by the Disqualified Organization and (ii) the highest
marginal federal income tax rate imposed on corporations. A Pass-Through Entity
will not be subject to this tax for any period, however, if each record holder
of an interest in the Pass-Through Entity furnishes to that Pass-Through Entity
(i) the holder's social security number and a statement under penalties of
perjury that the social security number is that of the record holder or (ii) a
statement under penalties of perjury that the record holder is not a
Disqualified Organization. For taxable years beginning after December 31, 1997,
notwithstanding the preceding two sentences, in the case of a REMIC residual
certificate held by an "electing large partnership," all interests in such
partnership shall be treated as held by Disqualified Organizations, without
regard to whether the record holders of the partnership furnish statements
described in the preceding sentence, and the amount that is subject to tax
under the second preceding sentence is excluded from the gross income of the
partnership allocated to the partners, in lieu of allocating to the partners a
deduction for the tax paid by the partners.

     Sales of REMIC Certificates

     If a REMIC Certificate is sold, the selling certificateholder will
recognize gain or loss equal to the difference between the amount realized on
the sale and its adjusted basis in the REMIC Certificate. The adjusted basis of
a REMIC regular certificate generally will equal the cost of that REMIC regular
certificate to that certificateholder, increased by income reported by the
certificateholder with respect to that REMIC


                                       77
<PAGE>

regular certificate, including original issue discount and market discount
income, and reduced, but not below zero, by distributions on the REMIC regular
certificate received by the certificateholder and by any amortized premium. The
adjusted basis of a REMIC residual certificate will be determined as described
under "--Taxation of Owners of REMIC Residual Certificates--Basis Rules, Net
Losses and Distributions." Except as described below, any gain or loss
generally will be capital gain or loss.

     Gain from the sale of a REMIC regular certificate that might otherwise be
capital gain will be treated as ordinary income to the extent the gain does not
exceed the excess, if any, of (i) the amount that would have been includible in
the seller's income with respect to the REMIC regular certificate had income
accrued thereon at a rate equal to 110% of the "applicable federal rate", which
is typically a rate based on an average of current yields on Treasury
securities having a maturity comparable to that of the certificate, which rate
is computed and published monthly by the IRS, determined as of the date of
purchase of the REMIC regular certificate, over (ii) the amount of ordinary
income actually includible in the seller's income prior to the sale. In
addition, gain recognized on the sale of a REMIC regular certificate by a
seller who purchased the REMIC regular certificate at a market discount will be
taxable as ordinary income to the extent of any accrued and previously
unrecognized market discount that accrued during the period the certificate was
held. See "--Taxation of Owners of REMIC Regular Certificates-- Discount."

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

     A portion of any gain from the sale of a REMIC regular certificate that
might otherwise be capital gain may be treated as ordinary income to the extent
that the certificate is held as part of a "conversion transaction" within the
meaning of Section 1258 of the Internal Revenue Code. A conversion transaction
generally is one in which the taxpayer has taken two or more positions in
certificates or similar property that reduce or eliminate market risk, if
substantially all of the taxpayer's return is attributable to the time value of
the taxpayer's net investment in the transaction. The amount of gain so
realized in a conversion transaction that is recharacterized as ordinary income
generally will not exceed the amount of interest that would have accrued on the
taxpayer's net investment at 120% of the appropriate "applicable Federal rate",
which rate is computed and published monthly by the IRS, at the time the
taxpayer enters into the conversion transaction, subject to appropriate
reduction for prior inclusion of interest and other ordinary income items from
the transaction.

     Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include any net
capital gain in total net investment income for the taxable year, for purposes
of the limitation on the deduction of interest on indebtedness incurred to
purchase or carry property held for investment to a taxpayer's net investment
income.

     If the seller of a REMIC residual certificate reacquires the certificate,
any other residual interest in a REMIC or any similar interest in a "taxable
mortgage pool", as defined in Section 7701(i) of the Internal Revenue Code,
within six months of the date of the sale, the sale will be subject to the
"wash sale" rules of Section 1091 of the Internal Revenue Code. In that event,
any loss realized by the REMIC residual certificateholders on the sale will not
be deductible, but instead will be added to the REMIC residual
certificateholders adjusted basis in the newly-acquired asset.

     Prohibited Transactions and Other Possible REMIC Taxes

     The Internal Revenue Code imposes a prohibited transactions tax, which is
a tax on REMICs equal to 100% of the net income derived from prohibited
transactions. In general, subject to specified exceptions a prohibited
transaction means the disposition of a mortgage loan, the receipt of income
from a source other than a mortgage loan or other permitted investments, the
receipt of compensation for services, or gain from the disposition of an asset
purchased with the payments on the mortgage loans for temporary investment
pending distribution on the REMIC certificates. It is not anticipated that any
REMIC will engage in any prohibited transactions in which it would recognize a
material amount of net income. In addition, some contributions to a REMIC made
after the day on which the REMIC issues all of its interests could result in
the imposition of a contributions tax, which is a tax on the REMIC equal to
100% of the value of the contributed property. Each pooling and servicing
agreement will include provisions designed to prevent the acceptance of any
contributions that would be subject to the tax.

     REMICs also are 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


                                       78
<PAGE>

income from foreclosure property" generally means gain from the sale of a
foreclosure property that is inventory property and gross income from
foreclosure property other than qualifying rents and other qualifying income
for a real estate investment trust. Unless otherwise disclosed in the related
prospectus supplement, it is not anticipated that any REMIC will recognize "net
income from foreclosure property" subject to federal income tax.

     Unless otherwise disclosed in the related prospectus supplement, it is not
anticipated that any material state or local income or franchise tax will be
imposed on any REMIC.

     Unless otherwise stated in the related prospectus supplement, and to the
extent permitted by then applicable laws, 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 the REMIC will be borne by
the related master servicer or the trustee in either case out of its own funds,
provided that the master servicer or the trustee, as the case may be, has
sufficient assets to do so, and provided further that the tax arises out of a
breach of the master servicer's or the trustee's obligations, as the case may
be, under the related pooling and servicing agreement and relating to
compliance with applicable laws and regulations. Any tax not borne by the
master servicer or the trustee will be payable out of the related trust
resulting in a reduction in amounts payable to holders of the related REMIC
certificates.

     Termination

     A REMIC will terminate immediately after the distribution date following
receipt by the REMIC of the final payment from the mortgage loans or upon a
sale of the REMIC's assets following the adoption by the REMIC of a plan of
complete liquidation. The last distribution on a REMIC regular certificate will
be treated as a payment in retirement of a debt instrument. In the case of a
REMIC residual certificate, if the last distribution on the REMIC residual
certificate is less than the certificateholder's adjusted basis in the
certificate, the certificateholder should be treated as realizing a loss equal
to the amount of the difference, and the loss may be treated as a capital loss.


     Reporting and Other Administrative Matters

     Solely for purposes of the administrative provisions of the Internal
Revenue Code, the REMIC will be treated as a partnership and REMIC residual
certificateholders will be treated as partners. Unless otherwise stated in the
related prospectus supplement, the trustee will file REMIC federal income tax
returns on behalf of the related REMIC and the entity identified as the REMIC
Administrator in the related pooling and servicing agreement or REMIC
Administrator will prepare the REMIC federal income tax returns and will be
designated as and will act as the "tax matters person" for the REMIC in all
respects, and may hold a nominal amount of REMIC residual certificates.

     As the tax matters person, the REMIC Administrator will have the authority
to act on behalf of the REMIC and the REMIC residual certificateholders in
connection with the administrative and judicial review of items of income,
deduction, gain or loss of the REMIC, as well as the REMIC's classification.
REMIC residual certificateholders will be required to report the REMIC items
consistently with their treatment on the related REMIC's tax return and may in
some circumstances be bound by a settlement agreement between the REMIC
Administrator, as tax matters person, and the IRS concerning any REMIC item.

     Adjustments made to the REMIC tax return may require a REMIC residual
certificateholders to make corresponding adjustments on its return, and an
audit of the REMIC's tax return, or the adjustments resulting from an audit,
could result in an audit of the certificateholder's return. No REMIC will be
registered as a tax shelter under Section 6111 of the Internal Revenue Code
because it is not anticipated that any 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
to the related REMIC, in a manner to be provided in Treasury regulations, the
name and address of that person and other information.

     Reporting of interest income, including any original issue discount, with
respect to REMIC regular certificates is required annually, and may be required
more frequently under Treasury regulations. These information reports are
required to be sent to individual holders of REMIC regular Interests and the
IRS; holders of REMIC regular certificates that are corporations, trusts,
securities dealers and other non-individuals will be provided interest and
original issue discount income information and the information in the following
paragraph upon request in accordance with the requirements of the applicable
regulations. The information must be provided by the later of 30 days after the
end of the quarter for which the information was requested, or two weeks after
the receipt of the request. The REMIC must also comply with rules requiring a
REMIC


                                       79
<PAGE>

regular certificate issued with original issue discount to disclose on its face
information including the amount of original issue discount and the issue date,
and requiring such information to be reported to the IRS. Reporting with
respect to the REMIC residual certificates, including income, excess
inclusions, investment expenses and relevant information regarding
qualification of the REMIC's assets will be made as required under the Treasury
regulations, typically on a quarterly basis.

     As applicable, 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 required by regulations with respect to computing the
accrual of any market discount. Because exact computation of the accrual of
market discount on a constant yield method requires information relating to the
holder's purchase price that the REMIC Administrator will not have, the
regulations only require that information pertaining to the appropriate
proportionate method of accruing market discount be provided. See "--Taxation
of Owners of REMIC Regular Certificates--Market Discount."

     The responsibility for complying with the foregoing reporting rules will
be borne by the REMIC Administrator. Certificateholders may request any
information with respect to the returns described in Section 1.6049-7(e)(2) of
the Treasury regulations. Any request should be directed to the REMIC
Administrator at Residential Funding Corporation, 8400 Normandale Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437.

     Backup Withholding with Respect to REMIC Certificates

     Payments of interest and principal, as well as payments of proceeds from
the sale of REMIC certificates, may be subject to the "backup withholding tax"
under Section 3406 of the Internal Revenue Code at a rate of 31% if recipients
of payments fail to furnish to the payor certain information, including their
taxpayer identification numbers, or otherwise fail to establish an exemption
from the tax. Any amounts deducted and withheld from a distribution to a
recipient would be allowed as a credit against the recipient's federal income
tax. Furthermore, penalties may be imposed by the IRS on a recipient of
payments that is required to supply information but that does not do so in the
proper manner.

     Foreign Investors in REMIC Certificates

     A REMIC regular certificateholder that is not a United States person and
is not subject to federal income tax as a result of any direct or indirect
connection to the United States in addition to its ownership of a REMIC regular
certificate will not be subject to United States federal income or withholding
tax on a distribution on a REMIC regular certificate, provided that the holder
complies to the extent necessary with certain identification requirements,
including delivery of a statement, signed by the certificateholder under
penalties of perjury, certifying that the certificateholder is not a United
States person and providing the name and address of the certificateholder. For
these purposes, United States 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, any state thereof or the District of
Columbia, except, in the case of a partnership, to the extent provided in
regulations, provided that, for purposes solely of the restrictions on the
transfer of the residual interests, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States persons, or an estate whose income is
subject to United States federal income tax regardless of its source, or a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
To the extent prescribed in regulations by the Secretary of the Treasury, which
regulations have not yet been issued, a trust which was in existence on August
20, 1996, other than a trust treated as owned by the grantor under subpart E of
part I of subchapter J of chapter 1 of the Internal Revenue Code, and which was
treated as a United States person on August 19, 1996, may elect to continue to
be treated as a United States person notwithstanding the previous sentence. It
is possible that the IRS may assert that the foregoing tax exemption should not
apply with respect to a REMIC regular certificate held by a REMIC residual
certificateholder that owns directly or indirectly a 10% or greater interest in
the REMIC residual certificates. If the holder does not qualify for exemption,
distributions of interest, including distributions of accrued original issue
discount, to the holder may be subject to a tax rate of 30%, subject to
reduction under any applicable tax treaty.

     In addition, the foregoing rules will not apply to exempt a United States
shareholder of a controlled foreign corporation from taxation on the United
States shareholder's allocable portion of the interest income received by the
controlled foreign corporation.


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<PAGE>

     Further, it appears that a REMIC regular certificate would not be included
in the estate of a non-resident alien individual and would not be subject to
United States estate taxes. However, certificateholders who are non-resident
alien individuals should consult their tax advisors concerning this question.

     Unless otherwise stated in the related prospectus supplement, transfers of
REMIC residual certificates to investors that are not United States persons
will be prohibited under the related pooling and servicing agreement.

     New Withholding Regulations

     The Treasury Department has issued new withholding regulations. The new
withholding regulations attempt to unify certification requirements and modify
reliance standards. The new withholding regulations will generally be effective
for payments made after December 31, 2000, subject to certain transition rules.
Prospective investors are urged to consult their tax advisors regarding the new
withholding regulations.


                        STATE AND OTHER TAX CONSEQUENCES

     In addition to the federal income tax consequences described in "Material
Federal Income Tax Consequences," potential investors should consider the state
and local tax consequences of the acquisition, ownership, and disposition of
the certificates offered hereunder. State tax law may differ substantially from
the corresponding federal tax law, and the discussion above does not purport to
describe any aspect of the tax laws of any state or other jurisdiction.
Therefore, prospective investors should consult their tax advisors with respect
to the various tax consequences of investments in the certificates offered
hereby.


                              ERISA CONSIDERATIONS

     Sections 404 and 406 of the Employee Retirement Income Security Act of
1974, or ERISA, impose fiduciary and prohibited transaction restrictions on
employee pension and welfare benefit plans and certain other retirement plans
and arrangements, including individual retirement accounts and annuities and
Keogh Plans, subject to ERISA and on other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans, bank
collective investment funds and insurance company general and separate accounts
in which those plans subject to ERISA are invested. Section 4975 of the
Internal Revenue Code imposes essentially the same prohibited transaction
restrictions on tax-qualified retirement plans described in Section 401(a) of
the Internal Revenue Code and on individual retirement accounts described in
Section 408 of the Internal Revenue Code. Such plans, together with plans
subject to ERISA, are referred to as ERISA plans.

     Some employee benefit plans, including governmental plans, as defined in
Section 3(32) of ERISA, and if no election has been made under Section 410(d)
of the Internal Revenue Code, church plans, as defined in Section 3(33) of
ERISA, are not subject to the ERISA requirements discussed in this prospectus.
Accordingly, assets of these plans may be invested in certificates without
regard to the ERISA considerations described below, subject to the provisions
of applicable federal and state law. Any plan that is a tax-qualified plan and
exempt from taxation under Sections 401(a) and 501(a) of the Internal Revenue
Code, however, is subject to the prohibited transaction rules in Section 503 of
the Internal Revenue Code.

     In addition to the ERISA rules imposing general fiduciary requirements,
including those of investment prudence and diversification and the requirement
that an ERISA plan's investment be made in accordance with the documents
governing the ERISA plan, Section 406 of ERISA and Section 4975 of the Internal
Revenue Code prohibit a broad range of transactions involving "plan assets" of
ERISA plans and Parties in Interest, unless a statutory or administrative
exemption is available. Certain Parties in Interest that participate in a
prohibited transaction may be subject to a penalty, or an excise tax, imposed
under Section 502(i) of ERISA or Section 4975 of the Internal Revenue Code,
unless a statutory or administrative exemption is available with respect to any
transaction of this sort.


ERISA PLAN ASSET REGULATIONS

     An investment of ERISA plan assets in certificates may cause the
underlying mortgage loans, mortgage securities or any other assets held in a
trust to be deemed "plan assets" of the ERISA plan. The U.S. Department of
Labor, or DOL, has promulgated regulations at 29 C.F.R. Section 2510.3-101, or
the DOL Regulations, concerning whether or not an ERISA plan's assets would be
deemed to include an interest in the


                                       81
<PAGE>

underlying assets of an entity, including a trust, for purposes of applying the
general fiduciary responsibility provisions of ERISA and the prohibited
transaction provisions of ERISA and Section 4975 of the Internal Revenue Code,
when an ERISA plan assets are used to acquire an "equity interest", such as a
certificate, in that entity.

     Because of the factual nature of some of the rules in the DOL Regulations,
ERISA plan assets either may be deemed to include an interest in the assets of
an entity, including a trust, or merely to include an ERISA plan's interest in
the instrument evidencing such equity interest, such as a certificate.
Therefore, neither ERISA plans nor entities deemed to hold plan assets should
acquire or hold certificates in reliance upon the availability of any exception
under the DOL Regulations. For purposes of this section, the term ERISA plan or
"assets of an ERISA plan" has the meaning specified in the DOL Regulations and
includes an undivided interest in the underlying assets of some entities in
which an ERISA plan invests.

     The prohibited transaction provisions of Section 406 of ERISA and Section
4975 of the Internal Revenue Code may apply to a trust and cause the depositor,
the master servicer, any subservicer, the trustee, the obligor under any credit
enhancement mechanism or certain affiliates of those entities to be considered
or become Parties in Interest for an investing ERISA plan or of an ERISA plan
holding an interest in an ERISA-subject entity. If so, the acquisition or
holding of certificates by or on behalf of the investing ERISA plan could also
give rise to a prohibited transaction under ERISA and/or Section 4975 of the
Internal Revenue Code, unless a statutory or administrative exemption is
available. Certificates acquired by an ERISA plan would be assets of that ERISA
plan. Under the DOL Regulations, a trust, including the mortgage loans,
contracts, mortgage securities or any other assets held in the trust, may also
be deemed to be assets of each ERISA plan that acquires certificates. Special
caution should be exercised before ERISA plan assets are used to acquire a
certificate in those circumstances, especially if, for the ERISA plan assets,
the depositor, the master servicer, any subservicer, the trustee, the obligor
under any credit enhancement mechanism or an affiliate thereof either (i) has
investment discretion with respect to the ERISA plan assets; or (ii) has
authority or responsibility to give, or regularly gives, investment advice with
respect to ERISA plan assets for a fee under an agreement or understanding that
any advice will serve as a primary basis for investment decisions with respect
to the ERISA plan assets.

     Any person who has discretionary authority or control respecting the
management or disposition of ERISA plan assets, and any person who provides
investment advice with respect to the ERISA plan assets for a fee, in the
manner described above, is a fiduciary of the investing ERISA plan. If the
mortgage loans, mortgage securities or any other assets held in a trust were to
constitute ERISA plan assets, then any party exercising management or
discretionary control with respect to those ERISA plan assets may be deemed to
be an ERISA plan assets "fiduciary," and thus subject to the fiduciary
requirements of ERISA and the prohibited transaction provisions of ERISA and
Section 4975 of the Internal Revenue Code for any investing ERISA plan. In
addition, if the mortgage loans, mortgage securities or any other assets held
in a trust were to constitute ERISA plan assets, then the acquisition or
holding of certificates by, on behalf of an ERISA plan or with ERISA plan
assets, as well as the operation of the trust, may constitute or result in a
prohibited transaction under ERISA and the Internal Revenue Code.


PROHIBITED TRANSACTION EXEMPTIONS

     The DOL has issued an individual exemption, Prohibited Transaction
Exemption, or PTE, 94-29, 59 Fed. Reg. 14674 (March 29, 1994) as amended by PTE
97-34, 62 Fed. Reg. 39021 (July 21, 1997), to Residential Funding Corporation
and certain of its affiliates, the RFC exemption, which generally exempts from
the application of the prohibited transaction provisions of Section 406 of
ERISA, and Section 4975 of the Internal Revenue Code, various transactions,
among others, relating to the servicing and operation of mortgage pools of
secured obligations of some types, including mortgage loans, which are held in
a trust and the purchase, sale and holding of pass-through certificates issued
by that trust as to which (i) the depositor or any of its affiliates is the
sponsor if any entity which has received from the DOL an individual prohibited
transaction exemption which is similar to the exemption is the sole
underwriter, or manager or co-manager of the underwriting syndicate or a
selling or placement agent, or (ii) the depositor or an affiliate is the
underwriter or placement agent, provided that conditions in the exemption are
satisfied. For purposes of this section, the term underwriter shall include (a)
the depositor and certain of its affiliates, (b) any person directly or
indirectly, through one or more intermediaries, controlling, controlled by or
under common control with the depositor and certain of its affiliates, (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 for a class of certificates,
or (d) any entity which has received an exemption from the DOL relating to
certificates which is similar to the RFC exemption.


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<PAGE>

     The RFC exemption sets forth six general conditions which must be
satisfied for a transaction involving the purchase, sale and holding of
certificates to be eligible for exemptive relief thereunder. First, the
acquisition of certificates by an ERISA plan or with ERISA plan assets must be
on terms that are at least as favorable to the ERISA plan as they would be in
an arm's-length transaction with an unrelated party. Second, the RFC exemption
only applies to certificates evidencing rights and interests that are not
subordinated to the rights and interests evidenced by the other certificates of
the same trust. Third, at the time of acquisition by an ERISA plan or with
ERISA plan assets, the certificates must be rated in one of the three highest
generic rating categories by Standard & Poor's, a division of McGraw Hill
Companies, Inc., Moody's Investors Service, Inc., or Fitch, Inc., called the
exemption rating agencies. Fourth, the trustee cannot be an affiliate of any
other member of the restricted group which consists of any underwriter, the
depositor, the master servicer, any subservicer, the trustee and any mortgagor
with respect to assets of a trust constituting more than 5% of the aggregate
unamortized principal balance of the assets in the related trust as of the date
of initial issuance of the certificates. Fifth, the sum of all payments made to
and retained by the underwriters must represent not more than reasonable
compensation for underwriting the certificates; the sum of all payments made to
and retained by the depositor pursuant to the assignment of the assets to the
related trust must represent not more than the fair market value of those
obligations; and the sum of all payments made to and retained by the master
servicer and any subservicer must represent not more than reasonable
compensation for that person's services under the related pooling and servicing
agreement and reimbursement of that person's reasonable expenses in connection
therewith. Sixth, the RFC exemption states that the investing ERISA plan or
ERISA plan assets investor 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. In addition, except as otherwise specified in the related
prospectus supplement, the exemptive relief afforded by the exemption may not
apply to any certificates where the related trust contains a swap.

     The RFC exemption also requires that each trust meet the following
requirements:

     o   the trust must consist solely of assets of the type that have been
         included in other investment pools;

     o   certificates evidencing interests in those other investment pools must
         have been rated in one of the three highest categories of one of the
         exemption rating agencies for at least one year prior to the
         acquisition of certificates by or on behalf of an ERISA plan or with
         ERISA plan assets; and

     o   certificates in the other investment pools must have been purchased by
         investors other than ERISA plans for at least one year prior to any
         acquisition of certificates by or on behalf of an ERISA plan or with
         ERISA plan assets in reliance on the RFC exemption.

     A fiduciary of or other investor of ERISA plan assets contemplating
purchasing a certificate must make its own determination that the general
conditions described above will be satisfied for that certificate.

     If the general conditions of the RFC exemption are satisfied, the RFC
exemption may provide an exemption from application of the prohibited
transactional provisions of Sections 406(a) and 407(a) of ERISA, and Sections
4975(c)(1)(A) through (D) of the Internal Revenue Code, in connection with the
direct or indirect sale, exchange, transfer, holding or the direct or indirect
acquisition or disposition in the secondary market of certificates by or with
ERISA plan assets. However, no exemption is provided from the restrictions of
Sections 406(a)(1)(E) , 406(a)(2) and 407 of ERISA for the acquisition or
holding of a certificate by or with ERISA plan assets of an excluded plan by
any person who has discretionary authority or renders investment advice with
respect to ERISA plan assets of the excluded plan. For purposes of the
certificates, an excluded ERISA plan is an ERISA plan sponsored by any member
of the restricted group.

     If specific conditions of the RFC exemption are also satisfied, the RFC
exemption may provide an exemption from application of the prohibited
transactional provisions of Sections 406(b)(1) and (b)(2) of ERISA, and Section
4975(c)(1)(E) of the Internal Revenue Code, in connection with the following:

   (1)   the direct or indirect sale, exchange or transfer of certificates in
         the initial issuance of certificates between the depositor or an
         underwriter and an ERISA plan when the person who has discretionary
         authority or renders investment advice with respect to the investment
         of the relevant ERISA plan assets in the certificates is:

       (a) a mortgagor with respect to 5% or less of the fair market value of
the assets of a trust; or

       (b) an affiliate of such a person.

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<PAGE>

   (2)   the direct or indirect acquisition or disposition in the secondary
         market of certificates by an ERISA plan or with ERISA plan assets; and


   (3)   the holding of certificates by an ERISA plan or with ERISA plan
         assets.

     Additionally, if specific conditions of the RFC exemption are satisfied,
the RFC exemption may provide an exemption from application of the prohibited
transactional provisions of Sections 406(a), 406(b) and 407(a) of ERISA, and
Section 4975(c) of the Internal Revenue Code, for transactions in connection
with the servicing, management and operation of the mortgage pools. The
depositor expects that the specific conditions of the RFC exemption required
for this purpose will be satisfied with respect to the certificates so that the
RFC exemption would provide an exemption from application of the prohibited
transactional provisions of Sections 406(a) and (b) of ERISA, and Section
4975(c) of the Internal Revenue Code, for transactions in connection with the
servicing, management and operation of the mortgage pools, provided that the
general conditions of the RFC exemption are satisfied.

     The RFC exemption also may provide an exemption from application of the
prohibited transactional provisions of Sections 406(a) and 407(a) of ERISA,
Sections 4975(c)(1)(A) through (D) of the Internal Revenue Code, if those
restrictions are deemed to otherwise apply merely because a person is deemed to
be a Party in Interest with respect to an investing ERISA plan, or an ERISA
plan holding interests in an ERISA-subject investment entity, by virtue of
providing services to the ERISA plan or the investment entity, or by virtue of
having specified relationships to such a person, solely as a result of the
ERISA plan's ownership of certificates.

     Before purchasing a certificate, a fiduciary or other investor of ERISA
plan assets should itself confirm that (a) the certificates constitute
"certificates" for purposes of the RFC exemption and (b) the specific and
general conditions described in the RFC exemption and the other requirements in
the RFC exemption would be satisfied. In addition to making its own
determination as to the availability of the exemptive relief provided in the
RFC exemption, the fiduciary or other ERISA plan assets investor should
consider its general fiduciary obligations under ERISA in determining whether
to purchase any certificates with ERISA plan assets.

     Any fiduciary or other ERISA plan assets investor that proposes to
purchase certificates on behalf of an ERISA plan or with ERISA plan assets
should consult with its legal counsel on the potential applicability of ERISA
and the Internal Revenue Code to that investment and the availability of the
RFC exemption or any other DOL prohibited transaction exemption in connection
therewith. 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, the fiduciary or other ERISA
plan assets investor should consider the availability of the RFC exemption or
Prohibited Transaction Class Exemption, or PTCE, 83-1 for some transactions
involving mortgage pool investment trusts. However, PTCE 83-1 does not provide
exemptive relief with respect to certificates evidencing interests in trusts
which include Cooperative Loans or some types of mortgage securities, or which
contain a swap. In addition, the fiduciary or other ERISA plan assets investor
should consider the availability of other class exemptions granted by the DOL,
which provide relief from certain of the prohibited transaction provisions of
ERISA and the related excise tax provisions of Section 4975 of the Internal
Revenue Code, including Sections I and III of PTCE 95-60, regarding
transactions by insurance company general accounts. The related prospectus
supplement may contain additional information regarding the application of the
exemption, PTCE 83-1, PTCE 95-60 or other DOL class exemption for the
certificates offered thereby. There can be no assurance that any of these
exemptions will apply with respect to any particular ERISA plan's or other
ERISA plan assets investor's investment in the certificates or, even if an
exemption were deemed to apply, that any exemption would apply to all
prohibited transactions that may occur in connection with this form of
investment.


INSURANCE COMPANY GENERAL ACCOUNTS

     In addition to any exemptive relief that may be available under PTCE 95-60
for the purchase and holding of the certificates by an insurance company
general account, Section 401(c) of ERISA provides exemptive relief from the
provisions of Part 4 of Title I of ERISA and Section 4975 of the Internal
Revenue Code, including the prohibited transaction restrictions imposed by
ERISA and the related excise taxes imposed by Section 4975 of the Internal
Revenue Code, for certain transactions involving an insurance company general
account. Pursuant to Section 401(c) of ERISA, the DOL issued final regulations
on January 5, 2000. These final regulations, the 401(c) regulations, are
generally applicable on July 5, 2001. The 401(c) regulations provide guidance
for the purpose of determining, in cases where insurance policies or annuity
contracts supported by an insurer's general account are issued to or for the
benefit of a plan on or before December 31, 1998, which


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general account assets constitute plan assets. Section 401(c) of ERISA
generally provides that, until the date which is 18 months after the 401(c)
regulations become final, no person shall be subject to liability under Part 4
of Title I of ERISA or Section 4975 of the Internal Revenue Code on the basis
of a claim that the assets of an insurance company general account constitute
plan assets:

     o   except as otherwise provided by the Secretary of Labor in the 401(c)
         regulations to prevent avoidance of the regulations or

     o   unless an action is brought by the Secretary of Labor for various
         breaches of fiduciary duty which would also constitute a violation of
         federal or state criminal law.

     Any assets of an insurance company general account which support insurance
policies or annuity contracts issued to a plan after December 31, 1998 or
issued to plans on or before December 31, 1998 for which the insurance company
does not comply with the 401(c) regulations may be treated as plan assets. In
addition, because Section 401(c) does not relate to insurance company separate
accounts, separate account assets are still treated as plan assets of any plan
invested in the separate account. Insurance companies contemplating the
investment of general account assets in the certificates should consult with
their legal counsel with respect to the applicability of Sections I and III of
PTCE 95-60 and Section 401(c) of ERISA, including the general account's ability
to continue to hold the certificates after July 5, 2001.


REPRESENTATIONS FROM INVESTING PLANS

     The exemptive relief afforded by the RFC exemption currently does not
apply to the purchase, sale or holding of any class of subordinate certificates
or REMIC residual certificates. To the extent certificates are subordinate
certificates or if the related trust contains a swap, except as otherwise
specified in the related prospectus supplement, transfers of those certificates
to an ERISA plan, to a trustee or other person acting on behalf of any ERISA
plan, or to any other person using ERISA plan assets to effect the acquisition
will not be registered by the trustee unless the transferee provides the
depositor, the trustee and the master servicer with an opinion of counsel
satisfactory to the depositor, the trustee and the master servicer, which
opinion will not be at the expense of the depositor, the trustee or the master
servicer, that the purchase of the certificates by or on behalf of the ERISA
plan or with ERISA plan assets is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Internal Revenue Code and will not subject the depositor,
the trustee or the master servicer to any obligation in addition to those
undertaken in the pooling and servicing agreement.

     In lieu of an opinion of counsel, except as otherwise specified in the
related prospectus supplement, the transferee may provide a certification of
facts substantially to the effect that the purchase of the certificates by or
on behalf of the ERISA plan or with ERISA plan assets is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Internal Revenue Code, will not
subject the depositor, the trustee or the master servicer to any obligation in
addition to those undertaken in the pooling and servicing agreement, and the
following conditions are met: (a) the source of funds used to purchase the
certificates is an "insurance company general account" (as that term is defined
in PTCE 95-60), and (b) the conditions in Sections I and III of PTCE 95-60 have
been satisfied as of the date of the acquisition of the certificates


TAX-EXEMPT INVESTORS

     A Tax-Exempt Investor nonetheless will be subject to federal income
taxation to the extent that its income is "unrelated business taxable income,"
or, UBTI within the meaning of Section 512 of the Internal Revenue Code. All
"excess inclusions" of a REMIC allocated to a REMIC residual certificate held
by a Tax-Exempt Investor will be considered UBTI and thus will be subject to
federal income tax. See "Material Federal Income Tax Consequences--Taxation of
Owners of REMIC Residual Certificates--Excess Inclusions."


CONSULTATION WITH COUNSEL

     There can be no assurance that the RFC exemption or any other DOL
exemption will apply with respect to any particular ERISA plan that acquires
the certificates or, even if all of the conditions specified therein were
satisfied, that the exemption would apply to all transactions involving a
trust. Prospective ERISA plan investors should consult with their legal counsel
concerning the impact of ERISA and the Internal Revenue Code and the potential
consequences to their specific circumstances prior to making an investment in
the certificates.


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<PAGE>

     Any fiduciary or other investor of ERISA plan assets that proposes to
acquire or hold certificates on behalf of an ERISA plan or with ERISA plan
assets should consult with its counsel with respect to the potential
applicability of the fiduciary responsibility provisions of ERISA and the
prohibited transaction provisions of ERISA and Section 4975 of the Internal
Revenue Code to the proposed investment and the availability of exemptive
relief under the RFC exemption, PTCE 83-1, Sections I and III of PTCE 95-60 or
any other DOL class exemption.


                            LEGAL INVESTMENT MATTERS

     Each class of certificates offered hereby and by the related prospectus
supplement will be rated at the date of issuance in one of the four highest
rating categories by at least one rating agency. If so specified in the related
prospectus supplement, classes that are, and continue to be, rated in one of
the two highest rating categories by at least one nationally recognized
statistical rating organization will constitute "mortgage related securities"
for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as
amended, or SMMEA, and, as such, will be legal investments for persons, trusts,
corporations, partnerships, associations, business trusts and business
entities, including depository institutions, life insurance companies and
pension funds, created under or existing under the laws of the United States or
of any State 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 those entities. Under
SMMEA, if a State enacted legislation on or prior to October 3, 1991
specifically limiting the legal investment authority of any of these entities
with respect to "mortgage related securities," these securities will constitute
legal investments for entities subject to the legislation only to the extent
provided therein. Certain States enacted legislation which overrides the
preemption provisions of SMMEA. 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 the securities, so long as the
contractual commitment was made or the securities acquired prior to the
enactment of the 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 these securities, and
national banks may purchase these securities for their own account without
regard to the limitations generally applicable to investment securities set
forth in 12 U.S.C. SS24 (Seventh), subject in each case to any regulations that
the applicable federal regulatory authority may prescribe.

     The 1998 Policy Statement was adopted by the Federal Reserve Board, the
Office of the Comptroller of the Currency, the FDIC, the National Credit Union
Administration, or NCUA and the OTS with an effective date of May 26, 1998. The
1998 Policy Statement rescinded a 1992 policy statement that had required,
prior to purchase, a depository institution to determine whether a mortgage
derivative product that it was considering acquiring was high-risk, and, if so,
required that the proposed acquisition would reduce the institution's overall
interest rate risk. The 1998 Policy Statement eliminates constraints on
investing in certain "high-risk" mortgage derivative products and substitutes
broader guidelines for evaluating and monitoring investment risk.

     The OTS has issued Thrift Bulletin 13a, entitled "Management of Interest
Rate Risk, Investment Securities, and Derivatives Activities," or TB 13a, which
is effective as of December 1, 1998 and applies to thrift institutions
regulated by the OTS. One of the primary purposes of TB 13a is to require
thrift institutions, prior to taking any investment position to conduct (i) a
pre-purchase portfolio sensitivity analysis for any "significant transaction"
involving securities or financial derivatives, and (ii) a pre-purchase price
sensitivity analysis of any "complex security" or financial derivative. For the
purposes of TB 13a, "complex security" includes, among other things, any
collateralized mortgage obligation or REMIC security, other than any "plain
vanilla" mortgage pass-through security (that is, securities that are part of a
single class of securities in the related pool that are non-callable and do not
have any special features). One or more classes of certificates offered hereby
and by the related prospectus supplement may be viewed as "complex securities".
The OTS recommends that while a thrift institution should conduct its own
in-house pre-acquisition analysis, it may rely on an analysis conducted by an
independent third-party as long as management understands the analysis and its
key assumptions. Further, TB 13a recommends that the use of "complex securities
with high price sensitivity" be limited to transactions and strategies that
lower a thrift institution's portfolio interest rate risk. TB 13a warns that
investment in complex securities by thrift institutions that do not have
adequate risk measurement, monitoring and control systems may be viewed by OTS
examiners as an unsafe and unsound practice.


                                       86
<PAGE>

     Prospective investors in the certificates, including in particular the
classes of certificates that do not constitute "mortgage related securities"
for purposes of SMMEA, should consider the matters discussed in the following
paragraph.

     There may be other restrictions on the ability of some investors either to
purchase some classes of certificates or to purchase any class of certificates
representing more than a specified percentage of the investors' assets. The
depositor will make no representations as to the proper characterization of any
class of certificates for legal investment or other purposes, or as to the
ability of particular investors to purchase any class of certificates under
applicable legal investment restrictions. These uncertainties may adversely
affect the liquidity of any class of certificates. 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 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
the investor.


                                USE OF PROCEEDS

     Substantially all of the net proceeds to be received from the sale of
certificates will be applied by the depositor to finance the purchase of, or to
repay short-term loans incurred to finance the purchase of, the mortgage loans
underlying the certificates or will be used by the depositor for general
corporate purposes. The depositor expects that it will make additional sales of
securities similar to the certificates from time to time, but the timing and
amount of any additional offerings will be dependent upon a number of factors,
including the volume of mortgage loans purchased by the depositor, prevailing
interest rates, availability of funds and general market conditions.


                            METHODS OF DISTRIBUTION

     The certificates offered hereby and by the related prospectus supplements
will be offered in series through one or more of the methods described below.
The prospectus supplement prepared for each series will describe the method of
offering being utilized for that series and will state the net proceeds to the
depositor from that sale.

     The depositor intends that certificates will be offered through the
following methods from time to time and that offerings may be made concurrently
through more than one of these methods or that an offering of a particular
series of certificates may be made through a combination of two or more of the
following methods:

     o   by negotiated firm commitment or best efforts underwriting and public
         re-offering by underwriters

     o   by placements by the depositor with institutional investors through
         dealers; and

     o   by direct placements by the depositor with institutional investors.

     In addition, if specified in the related prospectus supplement, a series
of certificates may be offered in whole or in part to the seller of the related
mortgage loans that would comprise the mortgage pool securing the certificates.


     If underwriters are used in a sale of any certificates, other than in
connection with an underwriting on a best efforts basis, the certificates will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
fixed public offering prices or at varying prices to be determined at the time
of sale or at the time of commitment therefor. These underwriters may be
broker-dealers affiliated with the depositor whose identities and relationships
to the depositor will be as described in the related prospectus supplement. The
managing underwriter or underwriters with respect to the offer and sale of a
particular series of certificates will be set forth on the cover of the
prospectus supplement relating to that series and the members of the
underwriting syndicate, if any, will be named in the related prospectus
supplement.

     In connection with the sale of the certificates, underwriters may receive
compensation from the depositor or from purchasers of the certificates in the
form of discounts, concessions or commissions. Underwriters and dealers
participating in the distribution of the certificates may be deemed to be
underwriters in connection with the certificates, and any discounts or
commissions received by them from the depositor and any profit on the resale of
certificates by them may be deemed to be underwriting discounts and commissions
under the Securities Act.


                                       87
<PAGE>

     It is anticipated that the underwriting agreement pertaining to the sale
of any series of certificates will provide that the obligations of the
underwriters will be subject to certain conditions precedent, that the
underwriters will be obligated to purchase all of the certificates if any are
purchased, other than in connection with an underwriting on a best efforts
basis, and that, in limited circumstances, the depositor will indemnify the
several underwriters and the underwriters will indemnify the depositor against
certain civil liabilities, including liabilities under the Securities Act, or
will contribute to payments required to be made in respect thereof.

     The prospectus supplement with respect to any series offered by placements
through dealers will contain information regarding the nature of the offering
and any agreements to be entered into between the depositor and purchasers of
certificates of that series.

     The depositor anticipates that the certificates offered hereby will be
sold primarily to institutional investors or sophisticated non-institutional
investors. Purchasers of certificates, including dealers, may, depending on the
facts and circumstances of the purchases, be deemed to be "underwriters" within
the meaning of the Securities Act, in connection with reoffers and sales by
them of certificates. Holders of certificates should consult with their legal
advisors in this regard prior to any reoffer or sale.

     If and to the extent required by applicable law or regulation, this
prospectus and the applicable prospectus supplement will also be used by
Residential Funding Securities Corporation, an affiliate of the depositor,
after the completion of the offering in connection with offers and sales
related to market-making transactions in the offered securities in which
Residential Funding Securities Corporation may act as principal. Sales will be
made at negotiated prices determined at the time of sale.


                                 LEGAL MATTERS

     Certain legal matters, including certain federal income tax matters, will
be passed upon for the Company by Thacher Proffitt & Wood, New York, New York,
Orrick, Herrington & Sutcliffe LLP, New York, New York or by Stroock & Stroock
& Lavan LLP, as specified in the prospectus supplement.


                             FINANCIAL INFORMATION

     The depositor has determined that its financial statements are not
material to the offering made hereby. The certificates do not represent an
interest in or an obligation of the depositor. The depositor's only obligations
with respect to a series of certificates will be to repurchase the mortgage
loans upon any breach of limited representations and warranties made by the
depositor, or as otherwise provided in the applicable prospectus supplement.


                             ADDITIONAL INFORMATION

     The depositor has filed the registration statement with the Securities and
Exchange Commission. The depositor is also subject to some of the information
requirements of the Securities Exchange Act of 1934, as amended, or Exchange
Act, and, accordingly, will file reports thereunder with the Securities and
Exchange Commission. The registration statement and the exhibits thereto, and
reports and other information filed by the depositor pursuant to the Exchange
Act can be inspected and copied at the public reference facilities maintained
by the Securities and Exchange Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at certain of its Regional Offices located as
follows: Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and Northeast Regional Office, 7
World Trade Center, Suite 1300, New York, New York 10048 and electronically
through the Securities and Exchange Commission's Electronic Data Gathering,
Analysis and Retrieval System at the Securities and Exchange Commission's Web
Site (http://www.sec.gov).


                         REPORTS TO CERTIFICATEHOLDERS

     Monthly reports which contain information concerning the trust fund for a
series of certificates will be sent by or on behalf of the master servicer or
the trustee to each holder of record of the certificates of the related series.
See "Description of the Certificates--Reports to Certificateholders." Reports
forwarded to holders will contain financial information that has not been
examined or reported upon by an independent certified public accountant. The
depositor will file with the Securities and Exchange Commission those periodic
reports relating to the trust for a series of certificates as are required
under the Exchange Act.


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<PAGE>

               INCORPORATION OF CERTAIN INFORMATION BY REFERENCE


     The SEC allows the depositor to "incorporate by reference" the information
filed with the SEC by the depositor, under Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act, that relates to the trust fund for the certificates. This
means that the depositor can disclose important information to any investor by
referring the investor to these documents. The information incorporated by
reference is an important part of this prospectus, and information filed by the
depositor with the SEC that relates to the trust fund for the certificates will
automatically update and supersede this information. Documents that may be
incorporated by reference with respect to a particular series of certificates
include an insurer's financials, a certificate policy, mortgage pool policy,
computational materials, collateral term sheets, the related pooling and
servicing agreement and amendments thereto, other documents on Form 8-K and
Section 13(a), 13(c), 14 or 15(d) of Exchange Act as may be required in
connection with the related trust fund.


     The depositor will provide or cause to be provided without charge to each
person to whom this prospectus and related prospectus supplement is delivered
in connection with the offering of one or more classes of the related series of
certificates, upon written or oral request of that person, a copy of any or all
reports incorporated herein by reference, in each case to the extent the
reports relate to one or more of the classes of the related series of
certificates, other than the exhibits to those documents, unless the exhibits
are specifically incorporated by reference in the documents. Requests should be
directed in writing to Residential Funding Mortgage Securities I, Inc., 8400
Normandale Lake Boulevard, Suite 600, Minneapolis, Minnesota 55437, or by
telephone at (612) 832-7000.


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<PAGE>

                                    GLOSSARY

     1998 POLICY STATEMENT--The revised supervisory statement listing the
guidelines for investments in "high risk mortgage securities", and adopted by
the Federal Reserve Board, the Office of the Comptroller of the Currency, the
FDIC, the National Credit Union Administration, or NCUA and the OTS with an
effective date of May 26, 1998.

     ADDITIONAL COLLATERAL--With respect to an Additional Collateral Loan, (1)
financial assets owned by the mortgagor, which will consist of securities,
insurance policies, annuities, certificates of deposit, cash, accounts or
similar assets and/or (2) a third party guarantee, usually by a relative of the
mortgagor, which in turn is secured by a security interest in financial assets.


     ADDITIONAL COLLATERAL LOANS--A mortgage loan with an LTV ratio at
origination in excess of 80%, but not greater than 100% and is secured by
Additional Collateral, in addition to the related Mortgaged Property and in
lieu of any primary mortgage insurance by Additional Collateral.

     ADDITIONAL COLLATERAL REQUIREMENT--The amount of Additional Collateral
required for any Additional Collateral Loan, which in most cases will not
exceed 30% of the principal amount of such mortgage loan.

     ADVANCE--As to any mortgage loan and any distribution date, an amount
equal to the scheduled payments of principal, other than any Balloon Amount in
the case of a Balloon Loan, and interest at the applicable pass-through rate
which were delinquent as of the close of business on the business day preceding
the determination date on the mortgage loans.

     BALLOON AMOUNT--The full outstanding principal balance on a Balloon Loan
due and payable on the maturity date.

     BALLOON LOANS--Fixed rate mortgage loans having original or modified terms
to maturity of 5 or 7 years in most cases, with level monthly payments of
principal and interest based on a 30 year amortization schedule.

     BANKRUPTCY AMOUNT--The amount of Bankruptcy Losses that may be borne
solely by the subordinate certificates of the related series.

     BANKRUPTCY LOSSES--A Realized Loss attributable to certain actions which
may be taken by a bankruptcy court in connection with a mortgage loan,
including a reduction by a bankruptcy court of the principal balance of or the
mortgage rate on a mortgage loan or an extension of its maturity.

     BUY-DOWN ACCOUNT--As to a Buydown Mortgage Loan, the custodial account
where Buydown Funds are deposited.

     BUY-DOWN FUNDS--As to a Buydown Mortgage Loan, the amount contributed by
the seller of the Mortgaged Property or another source and placed in the
Buydown Account.

     BUY-DOWN MORTGAGE LOAN--A mortgage loan subject to a temporary buydown
plan.

     BUY-DOWN PERIOD--The early years of the term of or Buy-Down Mortgage Loan
when payments will be less than the scheduled monthly payments on the Mortgage
Loan, the resulting difference to be made up from the Buy-Down Funds.

     CALL CERTIFICATE--Any Certificate evidencing an interest in a Call Class.

     CALL CLASS--A class of certificates under which the holder will have the
right, at its sole discretion, to terminate the related trust resulting in
early retirement of the Certificates of the series.

     CALL PRICE--In the case of a call with respect to a Call Class, a price
equal to 100% of the principal balance of the related certificates as of the
day of that purchase plus accrued interest at the applicable pass-through rate.


     CERTIFICATE ACCOUNT--An account established and maintained by the master
servicer in the name of the trustee for the benefit of the holders of each
series of certificates, for the disbursement of payments on the mortgage loans
evidenced by each series of certificates.

     CERTIFICATE ADMINISTRATOR--In addition to or in lieu of the master
servicer for a series of certificates, the related prospectus supplement may
identify a certificate administrator for the trust. The certificate
administrator may be an affiliate of the depositor or the master servicer.

     COMPENSATING INTEREST--With respect to any mortgage loan that prepaid in
full during the related prepayment period an additional payment made by the
master servicer, to the extent funds are available from the servicing fee,
equal to the amount of interest at the mortgage rate, less the servicing fee
and Excluded Spread, if any, for that mortgage loan from the date of the
prepayment to the related Due Date.


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     CONVERTIBLE MORTGAGE LOAN--ARM loans which allow the mortgagors to convert
the adjustable rates on those mortgage loans to a fixed rate at one or more
specified periods during the life of the mortgage loans, in most cases not
later than ten years subsequent to the date of origination.

     COOPERATIVE--With respect to a Cooperative Mortgage Loan, the corporation
that owns the related apartment building.

     COOPERATIVE LOANS--Cooperative apartment loans evidenced by Cooperative
Notes secured by security interests in shares issued by Cooperatives and in the
related proprietary leases or occupancy agreements granting exclusive rights to
occupy specific dwelling units in the related buildings.

     COOPERATIVE NOTES--A promissory note with respect to a Cooperative Loan.

     CREDIT SCORES--A measurement of the relative degree of risk a borrower
represents to a Lender obtained from credit reports utilizing, among other
things, payment history, delinquencies on accounts, levels of outstanding
indebtedness, length of credit history, types of credit, and bankruptcy
experience.

     CUSTODIAL ACCOUNT--The custodial account or accounts created and
maintained pursuant to the pooling and servicing agreement in the name of a
depository institution, as custodian for the holders of the certificates, for
the holders of certain other interests in mortgage loans serviced or sold by
the master servicer and for the master servicer, into which the amounts shall
be deposited directly. Any such account or accounts shall be an Eligible
Account.

     DEBT SERVICE REDUCTION--Modifications of the terms of a mortgage loan
resulting from a bankruptcy proceeding, including a reduction in the amount of
the monthly payment on the related mortgage loan, but not any permanent
forgiveness of principal.

     DEFAULTED MORTGAGE LOSSES--A Realized Loss attributable to the mortgagor's
failure to make any payment of principal or interest as required under the
mortgage note, but not including Special Hazard Losses, Extraordinary Losses or
other losses resulting from damage to a mortgaged property, Bankruptcy Losses
or Fraud Losses.

     DEFICIENT VALUATION--In connection with the personal bankruptcy of a
mortgagor, the difference between the outstanding principal balance of a
mortgage loan and a lower value established by the bankruptcy court.

     DESIGNATED SELLER TRANSACTION--A transaction in which the mortgage loans
are provided by an unaffiliated seller described in the prospectus supplement.

     DIRECT PUERTO RICO MORTGAGE--With respect to any Puerto Rico Mortgage
Loan, a Mortgage to secure a specific obligation for the benefit of a specified
person.

     DISQUALIFIED ORGANIZATION--For these purposes means:

     o   the United States, any State or political subdivision thereof, any
         foreign government, any international organization, or any agency or
         instrumentality of the foregoing, but would not include
         instrumentalities described in Section 168(h)(2)(D) of the Code or
         Freddie Mac

     o   any organization, other than a cooperative described in Section 521 of
         the Code, that is exempt from federal income tax, unless it is subject
         to the tax imposed by Section 511 of the Code,

     o   any organization described in Section 1381(a)(2)(C) of the Code

     o   an "electing large partnership", as described in Section 775 of the
         Code or

     o   any other person so designated by the trustee based upon an opinion of
         counsel that the holding of an ownership interest in a REMIC
         certificate by that person may cause the related trust or any person
         having an ownership interest in the REMIC certificate, other than such
         person, to incur a liability for any federal tax imposed under the Code
         that would not otherwise be imposed but for the transfer of an
         ownership interest in a REMIC certificate to that person.

     DISTRIBUTION AMOUNT--As to a class of certificates for any distribution
date will be the portion, if any, of the amount to be distributed to that class
for that distribution date of principal, plus, if the class is entitled to
payments of interest on that distribution date, interest accrued during the
related interest accrual period at the applicable pass-through rate on the
principal balance or notional amount of that class specified in the applicable
prospectus supplement, less certain interest shortfalls, which will include:


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     o   any deferred interest added to the principal balance of the mortgage
         loans and/or the outstanding balance of one or more classes of
         certificates on the related due date;

     o   any other interest shortfalls, including, without limitation,
         shortfalls resulting from application of the Relief Act or similar
         legislation or regulations as in effect from time to time, allocable to
         certificateholders which are not covered by advances or the applicable
         credit enhancement; and

     o   Prepayment Interest Shortfalls not covered by Compensating Interest, in
         each case in an amount that is allocated to that class on the basis set
         forth in the prospectus supplement.

     DUE--As to any distribution date, the period starting on the second day of
the month prior to such distribution date, and ending on the first day of the
month of such distribution date.

     ELIGIBLE ACCOUNT--An account acceptable to the applicable rating agency.

     ENDORSABLE PUERTO RICO MORTGAGE--As to any Puerto Rico Mortgage Loan, a
mortgage to secure an instrument transferable by endorsement.

     ENVIRONMENTAL LIEN--A lien imposed by federal or state statute, for any
cleanup costs incurred by a state on the property that is the subject of the
cleanup costs.

     EXCESS SPREAD--A portion of interest due with respect to the mortgage
loans or mortgage securities transferred as part of the assets of the related
trust.

     EXCLUDED SPREAD--A portion of interest due with respect to the mortgage
loans or mortgage securities, excluded from the assets transferred to the
related trust.

     EXTRAORDINARY LOSSES--Realized Losses occasioned by war, civil
insurrection, certain governmental actions, nuclear reaction and certain other
risks.

     FRAUD LOSS AMOUNT--The amount of Fraud Losses that may be borne solely by
the subordinate certificates of the related series.

     FRAUD LOSSES--A Realized Loss incurred on defaulted mortgage loans as to
which there was fraud in the origination of the mortgage loans.

     HIGH COST LOANS--Mortgage loans that are subject to the special rules,
disclosure requirements and other provisions that were added to the federal
Truth-in-Lending Act by the Homeownership and Equity Protection Act of 1994,
which were originated on or after October 1, 1995, are not mortgage loans made
to finance the purchase of the mortgaged property and have interest rates or
origination costs in excess of prescribed levels.

     INSURANCE PROCEEDS--Proceeds of any special hazard insurance policy,
bankruptcy policy, mortgage pool insurance policy, primary insurance policy and
any title, hazard or other insurance policy or guaranty covering any mortgage
loan in the mortgage pool together with any payments under any letter of
credit.

     ISSUE PREMIUM--As to a class of REMIC regular certificates, the issue
price in excess of the stated redemption price of that class.

     LIQUIDATED MORTGAGE LOAN--A defaulted mortgage loan for which the related
mortgaged property has been sold by the related trust and all recoverable
Liquidation Proceeds and Insurance Proceeds have been received.

     LIQUIDATION PROCEEDS--Amounts collected by the subservicer in connection
with the liquidation of a mortgage loan, by foreclosure or otherwise.

     MARK-TO-MARKET REGULATIONS--The final regulations of the IRS, released on
December 24, 1996, relating to the requirement that a securities dealer mark to
market securities held for sale to customers.

     NET MORTGAGE RATE--As to a mortgage loan, the mortgage rate net of
servicing fees, other administrative fees and any Excess Spread or Excluded
Spread.

     NONRECOVERABLE ADVANCE--Any Advance previously made which the master
servicer has determined to not be ultimately recoverable from Liquidation
Proceeds, Insurance Proceeds or otherwise.

     NOTE MARGIN--Amounts advanced by the master servicer or related
subservicer to cover taxes, insurance premiums or similar expenses as to any
mortgaged property. With respect to an ARM loan, the fixed percentage set forth
in the related mortgage note, which when added to the related index, provides
the mortgage rate for the ARM loan.


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     PARTIES IN INTEREST--With respect to an ERISA plan, persons who have
specified relationships to the ERISA plan, either "parties in interest" within
the meaning of ERISA or "disqualified persons" within the meaning of the Code.

     PASS-THROUGH ENTITY--Any regulated investment company, real estate
investment trust, trust, partnership or other entities described in Section
860E(e)(6) of the Code. In addition, a person holding an interest in a
pass-through entity as a nominee for another person will, with respect to that
interest, be treated as a pass-through entity.

     PERMITTED INVESTMENTS--United States government securities and other
investment grade obligations specified in the related pooling and servicing
agreement.

     PLEDGED ASSET MORTGAGE LOANS--Mortgage loans that have LTV ratios at
origination of up to 100% and are secured, in addition to the related mortgaged
property, by Pledged Assets.

     PLEDGED ASSETS--As to a Pledged Asset Mortgage Loan, (1) financial assets
owned by the mortgagor, which will consist of securities, insurance policies,
annuities, certificates of deposit, cash, accounts or similar assets and/or (2)
a third party guarantee, usually by a relative of the mortgagor, which in turn
is secured by a security interest in financial assets or residential property
owned by the guarantor.

     PREPAYMENT INTEREST SHORTFALL--With respect to a mortgage loan that is
subject to a mortgagor prepayment or liquidation, the amount that equals the
difference between a full month's interest due with respect to that mortgage
loan and the amount of interest paid or recovered with respect thereto.

     PRINCIPAL PREPAYMENTS--Any principal payments received with respect to a
mortgage loan, in advance of the scheduled due date and not accompanied by a
payment of interest for any period following the date of payment.

     QUALIFIED INSURER--As to a mortgage pool insurance policy, special hazard
insurance policy, bankruptcy policy, certificate insurance policy or surety
bond, an insurer qualified under applicable law to transact the insurance
business or coverage as applicable.

     REALIZED LOSS--As to any defaulted mortgage loan that is finally
liquidated, the amount of loss realized, if any, as described in the related
pooling and servicing agreement, will equal the portion of the Stated Principal
Balance remaining after application of all amounts recovered, net of amounts
reimbursable to the master servicer for related Advances and expenses, towards
interest and principal owing on the mortgage loan. With respect to a mortgage
loan the principal balance of which has been reduced in connection with
bankruptcy proceedings, the amount of the reduction will be treated as a
Realized Loss.

     REO MORTGAGE LOAN--A mortgage loan where title to the related mortgaged
property has been obtained by the trustee or its nominee on behalf of
certificateholders of the related series.

     SERVICING ADVANCES--Amounts advanced on any mortgage loan to cover taxes,
insurance premiums or similar expenses.

     SPECIAL HAZARD AMOUNT--The amount of Special Hazard Losses that may be
allocated to the subordinate certificates of the related series.

     SPECIAL HAZARD LOSSES--A Realized Loss incurred, to the extent that the
loss was attributable to (i) direct physical damage to a mortgaged property
other than any loss of a type covered by a hazard insurance policy or a flood
insurance policy, if applicable, and (ii) any shortfall in insurance proceeds
for partial damage due to the application of the co-insurance clauses contained
in hazard insurance policies. The amount of the Special Hazard Loss is limited
to the lesser of the cost of repair or replacement of the mortgaged property;
any loss above that amount would be a Defaulted Mortgage Loss or other
applicable type of loss. Special Hazard Losses does not include losses
occasioned by war, civil insurrection, certain governmental actions, errors in
design, faulty workmanship or materials (except under certain circumstances),
nuclear reaction, chemical contamination or waste by the mortgagor.

     SPECIAL SERVICER--A special servicer named pursuant to the pooling and
servicing agreement for a series of certificates, which will be responsible for
the servicing of delinquent loans.

     STATED PRINCIPAL BALANCE--As to any mortgage loan as of any date of
determination, its principal balance as of the cut-off date, after application
of all scheduled principal payments due on or before the cut-off date, whether
received or not, reduced by all amounts allocable to principal that are
distributed to certificateholders on or before the date of determination, and
as further reduced to the extent that any Realized Loss has been allocated to
any certificates on or before that date.


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<PAGE>

     SUBORDINATE AMOUNT--A specified portion of subordinated distributions with
respect to the mortgage loans, allocated to the holders of the subordinate
certificates as set forth in the related prospectus supplement.


     SUBSERVICING ACCOUNT--An account established and maintained by a
subservicer which meets the requirements described in the Client Guide and is
otherwise acceptable to the master servicer.


     TAX-EXEMPT INVESTOR--Tax-qualified retirement plans described in Section
401(a) of the Code and individual retirement accounts described in Section 408
of the Internal Revenue Code.


                                       94
<PAGE>
CIK - 0000774352
CCC - tigers@9
File Number - 333-72493

Module - RFMSI0922


<PAGE>

                RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.






                                 $258,508,565




                       MORTGAGE PASS-THROUGH CERTIFICATES



                                SERIES 2000-S13







                             PROSPECTUS SUPPLEMENT




BEAR, STEARNS & CO. INC.            RESIDENTIAL FUNDING SECURITIES CORPORATION


                                 UNDERWRITERS




YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE
TO PROVIDE YOU WITH DIFFERENT INFORMATION.


WE ARE NOT OFFERING THE CERTIFICATES OFFERED HEREBY IN ANY STATE WHERE THE
OFFER IS NOT PERMITTED.


Dealers will be required to deliver a prospectus supplement and prospectus when
acting as underwriters of the certificates offered hereby and with respect to
their unsold allotments or subscriptions. In addition, all dealers selling the
offered certificates, whether or not participating in this offering, may be
required to deliver a prospectus supplement and prospectus until January 23,
2001.


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