PROSPECTUS SUPPLEMENT
(To Prospectus Supplement dated September 15, 1999 and Prospectus dated
September 8, 1999)
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-NC5
$500,000,000 (APPROXIMATE) CLASS A CERTIFICATES
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
DEPOSITOR
NC CAPITAL CORPORATION
MORTGAGE LOAN SELLER
NEW CENTURY MORTGAGE CORPORATION
ORIGINATOR AND MASTER SERVICER
The section entitled "Summary of Prospectus Supplement--The Mortgage Loans"
on page S-4 is hereby deleted and replaced in its entirety with the following:
THE MORTGAGE LOANS
References to percentages of the mortgage loans under this section are
calculated based on the aggregate principal balance of the mortgage loans as of
December 1, 1999.
The trust will contain approximately 4,982 conventional, one- to four-family,
adjustable-rate mortgage loans secured by first liens on residential real
properties. The mortgage loans will have an aggregate principal balance of
approximately $610,195,776 as of December 1, 1999.
The mortgage loans will have original terms to stated maturity of not greater
than 30 years and the following approximate characteristics as of December 1,
1999:
Range of mortgage rates: 5.500% to 15.100%.
Weighted average
mortgage rate: 9.924%.
Range of gross margins: 4.950% to 10.000%.
Weighted average gross
margin: 6.152%.
Range of minimum mortgage
rates: 5.500% to 15.100%.
Weighted average minimum
mortgage rate: 9.924%.
Range of maximum
mortgage rates: 12.500% to 22.100%.
Weighted average maximum
mortgage rate: 16.913%.
Weighted average original 29 years and
term to stated maturity: 11 months.
Weighted average remaining 29 years and
term to stated maturity: 10 months.
Range of principal balances: $13,250 to $800,000.
Average principal balance: $122,480.
Range of
loan-to-value ratios: 10.47% to 90.00%.
Weighted average
loan-to-value ratio: 78.04%.
Weighted average next
adjustment date: December 2001.
The interest rate on each mortgage loan will adjust semi-annually on each
adjustment date to equal the sum of six-month LIBOR and the related margin on
such mortgage, subject to periodic and lifetime limitations, as described
herein. See "The Mortgage Pool--The Index" in this prospectus supplement.
With respect to approximately 98.33% of the mortgage loans by aggregate
principal balance as of December 1, 1999, the first adjustment date will occur
only after an initial period of approximately two years or three years, as more
fully described in this prospectus supplement.
For additional information regarding the mortgage loans, see "The Mortgage Pool"
herein.
SALOMON SMITH BARNEY
The date of this Prospectus Supplement is December 13, 1999.
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In the paragraph entitled "THE MORTGAGE LOANS WILL BE CONCENTRATED IN THE
STATE OF CALIFORNIA, WHICH MAY PRESENT A GREATER RISK OF LOSS RELATING TO SUCH
MORTGAGE LOANS" on page S-9, the $2,000,000 in the fifth line is changed to read
$2,231,169.
The section entitled "The Mortgage Pool" on page S-12 s hereby deleted and
replaced in its entirety with the following:
THE MORTGAGE POOL
GENERAL
The pool of Mortgage Loans (the "Mortgage Pool") will consist of
approximately 4,982 conventional, one- to four-family, adjustable-rate mortgage
loans (the "Mortgage Loans") secured by first liens on residential real
properties (the "Mortgaged Properties") and will have an aggregate principal
balance as of December 1, 1999 (the "Cut-off Date") of approximately
$610,195,776, after application of scheduled payments due on or before the
Cut-off Date whether or not received and subject to a permitted variance of plus
or minus 5%. The Mortgage Loans have original terms to stated maturity of not
greater than 30 years. References to percentages of the Mortgage Loans, unless
otherwise noted, are calculated based on the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.
The Mortgage Loans will be secured by first mortgages or deeds of trust or
other similar security instruments creating first liens on residential
properties consisting of attached, detached or semidetached, one- to four-family
dwelling units, townhouses, individual condominium units, individual units in
planned unit developments and manufactured housing. The Mortgage Loans to be
included in the Mortgage Pool will be acquired by Salomon Brothers Mortgage
Securities VII, Inc. (the "Depositor") from NC Capital Corporation (the
"Mortgage Loan Seller"). New Century Mortgage Corporation (the "Originator")
will act as the master servicer for the Mortgage Loans (in such capacity, the
"Master Servicer") pursuant to the Agreement (as defined herein). See
"--Underwriting Standards; Representations" herein.
The "Mortgage Rate" on each Mortgage Loan will be the per annum rate of
interest specified in the related mortgage note. Each Mortgage Loan will provide
for semi-annual adjustment to the Mortgage Rate thereon (in the case of no more
than approximately 89.75% and no more than approximately 8.58% of the Mortgage
Loans by aggregate principal balance as of the Cut-off Date, after an initial
period of approximately two years and three years, respectively, from the date
of origination thereof (each such Mortgage Loan, a "Delayed First Adjustment
Mortgage Loan")), and for corresponding adjustments to the monthly payment
amount due thereon, in each case on each adjustment date applicable thereto
(each such date, an "Adjustment Date"). On each Adjustment Date, the Mortgage
Rate on each Mortgage Loan will be adjusted to equal the sum, rounded to the
nearest multiple of 0.125%, of the Index (as described below) and a fixed
percentage amount (the "Gross Margin"); provided, however, that the Mortgage
Rate on each Mortgage Loan, including each Delayed First Adjustment Mortgage
Loan, will generally not increase or decrease by more than a specified
percentage ranging from 1.00% to 1.50% per annum (the "Periodic Rate Cap"), as
provided in the related Mortgage Note, on any related Adjustment Date and will
not exceed a specified maximum Mortgage Rate over the life of such Mortgage Loan
(the "Maximum Mortgage Rate") or be less than a specified minimum Mortgage Rate
over the life of such Mortgage Loan (the "Minimum Mortgage Rate"). Effective
with the first monthly payment due on each Mortgage Loan after each related
Adjustment Date, the monthly payment amount will be adjusted to an amount that
will amortize fully the outstanding principal balance of the related Mortgage
Loan over its remaining term and pay interest at the Mortgage Rate as so
adjusted. Due to the application of the Periodic Rate Caps and the Maximum
Mortgage Rates, the Mortgage Rate on each Mortgage Loan, as adjusted on any
related Adjustment Date, may be less than the sum of the Index and Gross Margin,
calculated as described herein. See "--The Index" herein. None of the Mortgage
Loans will permit the related mortgagor to convert the adjustable Mortgage Rate
thereon to a fixed Mortgage Rate.
The Mortgage Loans will have scheduled monthly payments due generally on
the first day of the month (with respect to each Mortgage Loan, a "Due Date").
Each Mortgage Loan will contain a customary "due-on-sale" clause which provides
that the Mortgage Loan is assumable by a creditworthy
purchaser of the related Mortgaged Property.
Not less than approximately 81.01% of the Mortgage Loans by aggregate
principal balance as of the Cut-off Date, will provide for payment by the
mortgagor of a prepayment charge (a "Prepayment Charge") in limited
circumstances on certain prepayments as provided in the related Mortgage Note.
Such Mortgage Loans will provide for payment of a Prepayment Charge on certain
partial prepayments and all prepayments in full made within a specified period
not in excess of five years from the date of origination of such Mortgage Loan,
as provided in the related Mortgage Note. The amount of the Prepayment Charge is
as provided in the related Mortgage Note, but is generally equal to six month's
interest on any amounts prepaid in excess of 20% of the then outstanding
principal balance of the related Mortgage Loan in any 12 month period, as
permitted by law. The holders of the Class P
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Certificates will be entitled to all Prepayment Charges received on the Mortgage
Loans, and such amounts will not be available for distribution on the other
classes of Certificates. Under certain instances, as described in the Agreement,
the Master Servicer may waive the payment of any otherwise applicable Prepayment
Charge. Investors should conduct their own analysis of the effect, if any, that
the Prepayment Charges, and decisions by the Master Servicer with respect to the
waiver thereof, may have on the prepayment performance of the Mortgage Loans.
The Depositor makes no representation as to the effect that the Prepayment
Charges, and decisions by the Master Servicer with respect to the waiver
thereof, may have on the prepayment performance of the Mortgage Loans.
None of the Mortgage Loans will be Buydown Mortgage Loans.
The average principal balance of the Mortgage Loans at origination will be
approximately $122,559. No Mortgage Loan will have a principal balance at
origination greater than approximately $800,000 or less than approximately
$13,250. The average principal balance of the Mortgage Loans as of the Cut- off
Date will be approximately $122,480. No Mortgage Loan will have a principal
balance as of the Cutoff Date greater than approximately $800,000 or less than
approximately $13,250.
The Mortgage Loans will have Mortgage Rates as of the Cut-off Date ranging
from approximately 5.500% per annum to approximately 15.100% per annum, and the
weighted average Mortgage Rate will be approximately 9.924% per annum. As of the
Cut-off Date, the Mortgage Loans will have Gross Margins ranging from
approximately 4.950% to approximately 10.000%, Minimum Mortgage Rates ranging
from approximately 5.500% per annum to approximately 15.100% per annum and
Maximum Mortgage Rates ranging from approximately 12.500% per annum to
approximately 22.100% per annum. As of the Cut-off Date, the weighted average
Gross Margin will be approximately 6.152%, the weighted average Minimum Mortgage
Rate will be approximately 9.924% per annum and the weighted average Maximum
Mortgage Rate will be approximately 16.913% per annum. The latest first
Adjustment Date following the Cut-off Date on any Mortgage Loan will occur in
December 2002 and the weighted average next Adjustment Date for all of the
Mortgage Loans following the Cut-off Date will be December 2001.
The weighted average loan-to-value ratio of the Mortgage Loans at
origination will be approximately 78.04%. At origination no Mortgage Loan will
have a loan-to-value ratio greater than approximately 90.00% or less than
approximately 10.47%.
The weighted average original term to stated maturity of the Mortgage Loans
will be approximately 29 years and 11 months as of the Cut-off Date. None of the
Mortgage Loans will have a first Due Date prior to October 1998 or after
February 2000, or will have a remaining term to stated maturity of less than 14
years and 8 months or greater than 30 years as of the Cut-off Date. The latest
maturity date of any Mortgage Loan will be January 2030.
No more than approximately 32.06% of the Mortgage Loans will be secured by
Mortgaged Properties located in California; no more than approximately 9.15% of
the Mortgage Loans will be secured by Mortgaged Properties located in Illinois;
and no more than approximately 7.00% of the Mortgage Loans will be secured by
Mortgaged Properties located in any one other state.
No more than approximately 18.02% of the Mortgage Loans will be secured by
units in two- to four-family dwellings, condominiums, planned unit developments
or manufactured housing. No less than approximately 81.98% of the Mortgage Loans
will be secured by a Mortgaged Property with a single family residence erected
thereon.
No more than approximately 7.76% of the Mortgage Loans will be used by the
mortgagor as a secondary residence or investor property. No less than
approximately 92.24% of the Mortgage Loans will be used by the mortgagor as a
primary residence.
No less than approximately 40.14% of the Mortgage Loans will be
purchase-money mortgage loans or rate-term finance mortgage loans; no more than
approximately 59.87% of the Mortgage Loans will be equity-out refinance mortgage
loans.
No less than approximately 69.07% of the Mortgage Loans will be originated
under the Originator's "Full Documentation" residential loan program and no more
than approximately 30.93% of the Mortgage Loans will be originated under the
Originator's "Stated Income" residential loan program.
No less than approximately 30.52% of the Mortgage Loans will have a risk
category of "A+" or "A+MO"; no less than approximately 37.30% of the Mortgage
Loans will have a risk category of "A-" or "A-MO"; no less than approximately
18.71% of the Mortgage Loans will have a risk category of "B"; and no more than
13.47% of the Mortgage Loans will have a risk category of "C," "C-" or "C-HS."
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The parenthetical in the second sentence in the section entitled
"Description of the Certificates--Calculation of One-Month LIBOR" on page S-34
which reads "(adjusted to reflect the actual number of days in the first
Interest Accrual Period if such period exceeds 30 days)" is hereby deleted.
