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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 28, 1999
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC. (AS DEPOSITOR UNDER A
POOLING AND SERVICING AGREEMENT DATED AS OF NOVEMBER 1, 1999 PROVIDING FOR,
INTER ALIA, THE ISSUANCE OF FLOATING RATE MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 1999-AQ2)
Salomon Brothers Mortgage Securities VII, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 333-84249 13-3439681
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
390 Greenwich Street, 4th Floor
New York, New York 10013
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code, is (212) 723-8604
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<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 10, 1999 (the "Closing Date"), a single series of
certificates, entitled Salomon Brothers Mortgage Securities VII, Inc., Floating
Rate Mortgage Pass Through Certificates, Series 1999-AQ2 (the "Certificates"),
were issued pursuant to the Pooling and Servicing Agreement, dated as of
November 1, 1999 (the "Agreement") among Salomon Brothers Mortgage Securities
VII, Inc. (the "Depositor"), Ameriquest Mortgage Company (the "Master Servicer")
and Norwest Bank Minnesota, National Association (the "Trustee"). On December
28, 1999 following the closing of the initial issuance of the Certificates, the
Trustee purchased from the Depositor certain Subsequent Mortgage Loans, as
defined in the Agreement, with an aggregate principal balance equal to
approximately $174,041,340 with funds on deposit in the pre-funding account (the
"Pre-Funding Account") established pursuant to the Agreement at a purchase price
equal to the principal balance thereof, which Subsequent Mortgage Loans were
conveyed to the Trust Administrator pursuant to a Subsequent Transfer
Instrument, dated December 28, 1999, between the Depositor and the Trustee (the
"Instrument"). Attached to the Instrument is the Mortgage Loan Schedule listing
the Subsequent Mortgage Loans that are the subject of such Instrument.
Item 5. OTHER EVENTS
Description of the Mortgage Pool
The Certificates, issued pursuant to the Agreement, evidence in the
aggregate the entire beneficial ownership interest in a trust fund (the "Trust
Fund"), consisting primarily of a segregated pool (the "Mortgage Pool") of
conventional, one- to four- family, first lien adjustable-rate mortgage loans
having original terms to maturity of not greater than 30 years (the "Mortgage
Loans"). As of the Closing Date, the Trust Fund primarily consisted of (i) the
Mortgage Pool, which consisted of Mortgage Loans having an aggregate principal
balance of approximately $624,758,509 as of November 1, 1999 and (ii) the
Pre-Funding Account, which contained approximately $175,678,713.
As more fully described above, on December 28, 1999, the Depositor
purchased the Subsequent Mortgage Loans with the funds on deposit in the
Pre-Funding Account. The tables attached as an exhibit hereto describe certain
characteristics of the Mortgage Pool as of December, 1999, the end of the
"Funding Period" (as defined in the Agreement).
2
<PAGE>
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits
Exhibit No. Description
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4.2 Subsequent Transfer Instrument, dated as of
December 28, 1999 between Salomon Brothers
Mortgage Securities VII, Inc. as seller, and
Norwest Bank Minnesota, National Association, as
trustee.
99.1 Characteristics of the Mortgage Pool as of
December 1, 1999, relating to Salomon Brothers
Mortgage Securities VII, Inc., Floating Rate
Mortgage Pass-Through Certificates, Series
1999-AQ2.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Susan Mills
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Name: Susan Mills
Title: Vice President
Dated: December 28, 1999
4
<PAGE>
EXHIBIT INDEX
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Exhibit No. Description Page
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4.2 Subsequent Transfer Instrument
99.1 Characteristics of the Mortgage Pool
as of December 1, 1999, relating to
Salomon Brothers Mortgage Securities
VII, Inc., Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2
5
Exhibit 4.2
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<PAGE>
SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument, dated
December 28, 1999 (the "Instrument"), among Salomon Brothers Mortgage Securities
VII, Inc. as seller (the "Depositor") and Norwest Bank Minnesota, National
Association as trustee (the "Trustee") of the Salomon Brothers Mortgage
Securities VII, Inc., Floating Rate Mortgage Pass-Through Certificates, Series
1999-AQ2, and pursuant to the Pooling and Servicing Agreement, dated as of
November 1, 1999 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, Ameriquest Mortgage Company as master servicer and the Trustee as
trustee, the Depositor and the Trustee agree to the sale by the Depositor and
the purchase by the Trustee on behalf of the Trust Fund, of the Mortgage Loans
listed on the attached Schedule of Mortgage Loans (the "Subsequent Mortgage
Loans").
Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.
Section 1. Conveyance of Subsequent Mortgage Loans.
(a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.
(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, among the Depositor as
purchaser, the Master Servicer as originator and Ameriquest Securities L.L.C. as
seller, to the extent of the Subsequent Mortgage Loans, a copy of which
agreement is annexed hereto as Attachment G.
(c) Additional terms of the sale are set forth on Attachment A
hereto.
Section 2. Representations and Warranties; Conditions
Precedent.
(a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.
<PAGE>
(b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.
Section 3. Recordation of Instrument.
To the extent permitted by applicable law, this Instrument, or
a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. Governing Law.
This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. Counterparts.
This Instrument may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.
Section 6. Successors and Assigns.
This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.
<PAGE>
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as trustee
By:
Name:
Title:
Attachments
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Depositor's Officer's certificate.
D. Opinions of Depositor's counsel (true sale).
E. Trustee's Certificate.
F. Reserved
G. Subsequent Mortgage Loan Purchase Agreement.
<PAGE>
ATTACHMENT A
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: December 1, 1999
2. Subsequent Transfer Date: December 28, 1999
3. Aggregate Principal Balance of the Subsequent
Mortgage Loans as of the Subsequent Cut-off Date:
$174,041,340.04
4. Purchase Price: 100.00%
B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date is true
and correct:(i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date provided, however that
approximately 1.49% of the Subsequent Mortgage Loans, by aggregate principal
balance as of the related Subsequent Cut-off Date, may be thirty days or more
but less than sixty days delinquent in their monthly payments as of the related
Subsequent Cut-off Date and approximately 0.49% of the Subsequent Mortgage
Loans, by aggregate principal balance as of the related Subsequent Cut-off Date,
may be sixty days or more but less than ninety days delinquent in their monthly
payments as of the related Subsequent Cut-off Date; (ii) the stated term to
maturity of the Subsequent Mortgage Loan will not be less than 345 months and
will not exceed 360 months; (iii) the Subsequent Mortgage Loan may not provide
for negative amortization; (iv) the Subsequent Mortgage Loan will not have a
Loan-to-Value Ratio greater than 90.00%; (v) the Subsequent Mortgage Loans will
have as of the Subsequent Cut-off Date, a weighted average term since
origination not in excess of 15 months; (vi) no Subsequent Mortgage Loan shall
have a Mortgage Rate less than 7.50% or greater than 16.00%; (vii) the
Subsequent Mortgage Loan will have been serviced by the Master Servicer since
origination or purchased by the Depositor; (viii) the Subsequent Mortgage Loan
must have a first Monthly Payment due on or before February 1, 1999 and (ix) the
Subsequent Mortgage Loan will be underwritten in accordance with the criteria
set forth under the section "The Mortgage Pool--Underwriting Standards;
Representations" in the Prospectus Supplement.
C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will, as of
the Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than 9.556% and not more than 9.750%; (iii) have a weighted average
Loan-to-Value Ratio of not more than 74.265%; (iv) have no Mortgage Loan with a
principal balance in excess of $602,000 and (v) have a weighted average Gross
Margin of not less than 6.467%, in each case, as applicable, by aggregate
principal balance of the Mortgage Loans as of the related Subsequent Cut-off
Date. Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by any of the Rating Agencies if the inclusion of such Subsequent
Mortgage Loan would adversely affect the ratings on any class of Offered
Certificates.
<PAGE>
ATTACHMENT B
Filed by Paper
<PAGE>
ATTACHMENT C
<PAGE>
OFFICER'S CERTIFICATE
Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2, Subsequent Transfer
I, Susan Mills, hereby certify that I am a duly elected
Vice President of Salomon Brothers Mortgage Securities VII, Inc. (the
"Depositor"), a Delaware corporation, and further, to the best of my knowledge
and after due inquiry, as follows:
Each condition precedent and representation and warranty
specified in Section 2.11 of the Pooling and Servicing Agreement, dated
as of November 1, 1999, among the Depositor, New Century Mortgage
Corporation as Master Servicer, Firstar Bank, N.A. as Trustee and U.S.
Bank National Association as Trust Administrator (the "Pooling and
Servicing Agreement") and each condition precedent specified in the
Subsequent Transfer Instrument has been satisfied by the Depositor.
Capitalized terms not defined herein have the meanings set
forth in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: December 28, 1999
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Susan Mills
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Name: Susan Mills
Title: Vice President
<PAGE>
ATTACHMENT D
<PAGE>
DEWEY BALLANTINE
333 S. Hope Street
Los Angeles, California 90071
December 28, 1999
To the Parties Listed on
THE ATTACHED SCHEDULE I:
Re: SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., FLOATING
RATE MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-AQ2
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Ladies and Gentlemen:
Reference is made to (i) that certain Pooling and Servicing
Agreement, dated as of November 1, 1999 (the "Pooling and Servicing Agreement")
among Salomon Brothers Mortgage Securities VII, Inc. ("SBMSVII"), as Depositor
(the "Depositor"), Ameriquest, as Master Servicer (the "Master Servicer") and
Norwest Bank Minnesota, N.A., as Trustee (the "Trustee"). and (ii) that certain
Subsequent Transfer Instrument, dated December 28, 1999 (the "Subsequent
Transfer Instrument"), between Salomon Brothers Mortgage Securities VII, Inc. as
seller (the "Depositor") and Norwest Bank Minnesota, National Association as
trustee (the "Trustee") of the Salomon Brothers Mortgage Securities VII, Inc.,
Floating Rate Mortgage Pass-Through Certificates, Series 1999-AQ2. Capitalized
terms used but not defined herein have the meanings ascribed thereto in the
Pooling and Servicing Agreement or, if not defined therein, in the Subsequent
Transfer Agreement.
In connection with the execution and delivery of the
Subsequent Transfer Instrument, you have requested our opinion, as special
counsel, with respect to certain true sale matters. Reference is hereby made to
the opinion letter of this firm, dated November 10, 1999, which relates to
certain true sale matters (the "True Sale Opinion").
Assuming the due execution and delivery of the required
documentation and the performance by the appropriate party of its obligations
under such documentation, we hereby confirm the conclusions stated in our True
Sale Opinion insofar as such conclusions relate to the Subsequent Mortgage
Loans.
Our opinions contained herein are rendered only as of the date
hereof, and we undertake no obligation to update this letter or the opinions
contained herein after the date hereof.
This opinion may be relied upon by any holder of the Notes
issued under the Indenture, and its respective successors and assigns, to the
same extent as if it had been an addressee hereof. In addition, any holder of a
Note may show this opinion to any governmental authority or the National
Association of Insurance Commissioners to the extent necessary to comply with
any regulations governing investments held by insurance companies.
<PAGE>
Very truly yours,
/s/ Dewey Ballantine
<PAGE>
SCHEDULE I
Salomon Smith Barney, Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013
Salomon Brothers Mortgage Securities VII, Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013
Ameriquest Mortgage Company
1100 Town and Country Road
Orange, California 92868
Norwest Bank Minnesota, N.A.
Norwest Center
Sixth & Marquette
Minneapolis, Minnesota 55479
Standard & Poor's
A Division of The McGraw-Hill Companies, Inc.
26 Broadway
New York, New York 10004
Duff & Phelps Credit Rating Co.
17 State Street, 12th Floor
New York, New York 10004
Chase Bank of Texas, N.A.
Chase Tower Houston
801 West Greens Road, Suite 200
Houston, Texas 77067
Deloitte & Touche LLP
695 Town Center Drive, Suite 1200
Costa Mesa CA, 92626
<PAGE>
ATTACHMENT E
<PAGE>
TRUSTEE'S INITIAL CERTIFICATION
December 28, 1999
Salomon Brothers Mortgage Ameriquest Mortgage Company
Securities VII, Inc. 1100 Town & Country Road, Suite 1100
390 Greenwich Street, 4th Floor Orange, California 92868
New York, New York 10013
Re: Pooling and Servicing Agreement, dated as of November 1, 1999, among
Salomon Brothers Mortgage Securities VII, Inc., Ameriquest Mortgage
Company and Norwest Bank Minnesota, National Association,
Floating Rate Mortgage Pass-Through Certificates, Series 1999-AQ2,
Subsequent Transfer on December 28, 19999
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Ladies and Gentlemen:
Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Custodial Initial Certification delivered by Chase Bank
of Texas, N.A., as Custodian, pursuant to the Custodial Agreement dated as of
November 1, 1999, by and among Norwest Bank Minnesota, National Association,
Salomon Brothers Mortgage Securities VII, Inc. and Ameriquest Mortgage Company.
Neither the Trustee nor the Custodian on its behalf has made any
independent examination of any documents contained in each Mortgage File beyond
the review specifically required in the above-referenced Pooling and Servicing
Agreement. The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability due authorization, recordability or
genuineness of any of the documents contained in the Mortgage File of any of the
Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ Randy Reider
-------------------------------
Name: Randy Reider
Title: Assistant Vice President
<PAGE>
ATTACHMENT F
Reserved
<PAGE>
ATTACHMENT G
<PAGE>
SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT
This is a Subsequent Mortgage Loan Purchase Agreement (the
"Agreement"), dated December 28, 1999, among Ameriquest Mortgage Company, a
Delaware corporation (the "Originator"), Ameriquest Securities L.L.C., a Nevada
limited liability company (the "Seller") and Salomon Brothers Mortgage
Securities VII, Inc., a Delaware corporation (the "Purchaser").
Preliminary Statement
---------------------
The Seller intends to sell the Subsequent Mortgage Loans (as
hereinafter defined) to the Purchaser on the terms and subject to the conditions
set forth in this Agreement. The Purchaser will deposit the Subsequent Mortgage
Loans into a mortgage pool comprising the trust fund. The trust fund is
evidenced by a single series of floating rate mortgage pass-through certificates
designated as Series 1999-AQ2, (the "Certificates"). The Certificates consist of
ten classes of certificates. The Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as of November 1, 1999 (the "Pooling and
Servicing Agreement"), among the Purchaser as depositor (in such capacity, the
"Depositor"), the Originator as master servicer (in such capacity the "Master
Servicer") and Norwest Bank Minnesota, National Association as trustee.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Pooling and Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before December 28, 1999 (the
"Subsequent Transfer Date"), certain adjustable-rate conventional residential
mortgage loans (the "Subsequent Mortgage Loans"), having an aggregate principal
balance as of the close of business on December 1, 1999 (the " Subsequent
Cut-off Date") of approximately $174,041,340.04 (the "Closing Balance"), after
giving effect to all payments due on the Subsequent Mortgage Loans on or before
the Subsequent Cut-off Date, whether or not received including the right to any
Prepayment Charges payable by the related Mortgagors in connection with any
Principal Prepayments on the Subsequent Mortgage Loans.
SECTION 2. SUBSEQUENT MORTGAGE LOAN SCHEDULE. The Purchaser
and the Seller have agreed upon which of the mortgage loans owned by the Seller
are to be purchased by the Purchaser pursuant to this Agreement and the Seller
will prepare or cause to be prepared on or prior to the Subsequent Transfer Date
a final schedule (the "Closing Schedule") that shall describe such Subsequent
Mortgage Loans and set forth all of the Subsequent Mortgage Loans to be
purchased under this Agreement, including the Prepayment Charges. The Closing
Schedule will conform to the requirements set forth in this Agreement and to the
definition of "Mortgage Loan Schedule" under the Pooling and Servicing
Agreement. The Closing Schedule shall be used to supplement the Mortgage Loan
Schedule under the Pooling and Servicing Agreement.
SECTION 3. CONSIDERATION.
(a) In consideration for the Subsequent Mortgage
Loans to be purchased hereunder, the Purchaser shall, as described in Section 8,
(i) pay to or upon the order of the Seller in immediately available funds an
amount (the "Purchase Price") equal to the Closing Balance.
<PAGE>
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(b) The Purchaser or any assignee, transferee or
designee of the Purchaser shall be entitled to all scheduled payments of
principal due after the Subsequent Cut-off Date, all other payments of principal
due and collected after the Subsequent Cut-off Date, and all payments of
interest on the Subsequent Mortgage Loans allocable to the period after the
Subsequent Cut-off Date. Any payments (including Prepayment Charges) collected
on or before the Subsequent Cut-off Date, including all scheduled payments of
principal and interest due on or before the Subsequent Cut-off Date and
collected after the Subsequent Cut-off Date, shall belong to the Seller.
(c) Pursuant to the Pooling and Servicing Agreement,
the Depositor will assign all of its right, title and interest in and to the
Subsequent Mortgage Loans, together with its rights under this Agreement, to the
Trustee for the benefit of the Certificateholders.
SECTION 4. TRANSFER OF THE SUBSEQUENT MORTGAGE LOANS.
(a) POSSESSION OF MORTGAGE FILES. The Seller does
hereby sell and contribute, transfer, assign, set over and convey to the
Purchaser, without recourse but subject to the terms of this Agreement, all of
its right, title and interest in, to and under the Subsequent Mortgage Loans,
including the related Prepayment Charges. The contents of each Mortgage File not
delivered to the Purchaser or to any assignee, transferee or designee of the
Purchaser on or prior to the Subsequent Transfer Date are and shall be held in
trust by the Seller for the benefit of the Purchaser or any assignee, transferee
or designee of the Purchaser. Upon the sale of the Subsequent Mortgage Loans the
ownership of each Mortgage Note, the related Mortgage and the other contents of
the related Mortgage File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Subsequent Mortgage Loan
prepared by or that come into the possession of the Seller on or after the
Subsequent Transfer Date shall immediately vest in the Purchaser and shall be
delivered immediately to the Purchaser or as otherwise directed by the
Purchaser.
(b) DELIVERY OF SUBSEQUENT MORTGAGE LOAN DOCUMENTS.
The Seller will, on or prior to the Subsequent Transfer Date, deliver or cause
to be delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser each of the following documents for each Subsequent Mortgage Loan:
(i) the original Mortgage Note, endorsed in blank or in the
following form: "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee, under the applicable agreement, without
recourse," with all prior and intervening endorsements showing a
complete chain of endorsement from the originator to the Person so
endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording thereon;
(iii) an original Assignment of Mortgage in blank;
<PAGE>
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(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the originator to
the Person assigning the Mortgage in blank as contemplated by the
immediately preceding clause (iii);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy, together
with all endorsements or riders which were issued with or subsequent to
the issuance of such policy, insuring the priority of the Mortgage as a
first lien on the Mortgaged Property represented therein as a fee
interest or leasehold vested in the Mortgagor.
The Originator shall promptly (and in no event later than
thirty (30) Business Days, subject to extension upon a mutual agreement between
the Originator and the Trustee, following the later of (i) the Subsequent
Transfer Date, (ii) the date on which the Originator receives the Assignment
from the Custodian and (iii) the date of receipt by the Originator of the
recording information for a Mortgage) submit or cause to be submitted for
recording, at no expense to the Trust Fund or the Trustee, in the appropriate
public office for real property records, each Assignment referred to in (iii)
and (iv) above and shall execute each original Assignment in the following form:
"Norwest Bank Minnesota, National Association, as Trustee under the applicable
agreement". In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Originator shall promptly prepare or cause to
be prepared a substitute Assignment or cure or cause to be cured such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the assignments of
Mortgage shall not be required to be submitted for recording with respect to any
Subsequent Mortgage Loan only if the Trustee and each Rating Agency has received
an opinion of counsel, satisfactory in form and substance to the Trustee and
each Rating Agency, to the effect that the recordation of such assignments in
any specific jurisdiction is not necessary to protect the Trustee's interest in
the related Mortgage Note; provided further, however, notwithstanding the
delivery of any opinion of counsel, each assignment of Mortgage shall be
submitted for recording by the Originator in the manner described above, at no
expense to the Trust Fund or Trustee, upon the earliest to occur of: (i)
reasonable direction by Holders of Certificates entitled to at least 25% of the
Voting Rights, (ii) failure of the Master Servicer Termination Test, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the
Originator, (iv) the occurrence of a servicing transfer as described in Section
7.02 of the Pooling and Servicing Agreement and (iv) if the Originator is not
the Master Servicer and with respect to any one assignment of Mortgage, the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage. Notwithstanding the foregoing, if the Originator is
unable to pay the cost of recording the Assignments of Mortgage, such expense
will be paid by the Trustee.
Notwithstanding anything to the contrary contained in this
Section 4, if any document referred to in Section 4(b)(ii) or 4(b)(iv) above has
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public
<PAGE>
-4-
recording office has retained the original of such document, the obligations of
the Seller hereunder shall be deemed to have been satisfied upon (1) delivery by
or on behalf of the Seller promptly upon receipt thereof to or on behalf of the
Purchaser or any assignee, transferee or designee of the Purchaser of either the
original or a copy of such document certified by the Seller in the case of (x)
above or the public recording office in the case of (y) above to be a true and
complete copy of the recorded original thereof and (2) if such copy is certified
by the Seller delivery promptly upon receipt thereof of either the original or a
copy of such document certified by the public recording office to be a true and
complete copy of the original.
In the event that the original lender's title insurance policy
has not yet been issued, the Seller shall deliver to the Purchaser or any
assignee, transferee or designee of the Purchaser a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company. The Seller shall deliver to the Purchaser or any assignee,
transferee or designee of the Purchaser promptly upon receipt by the Seller of
any such original title insurance policy or original Primary Mortgage Insurance
Policy.
Each original document relating to a Subsequent Mortgage Loan
which is not delivered to the Purchaser or its assignee, transferee or designee,
if held by the Seller, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.
(c) ACCEPTANCE OF SUBSEQUENT MORTGAGE LOANS. The
documents delivered pursuant to Section 4(b) hereof shall be reviewed by the
Purchaser or any assignee, transferee or designee of the Purchaser at any time
before or after the Subsequent Transfer Date (and with respect to each document
permitted to be delivered after the Subsequent Transfer Date within seven days
of its delivery) to ascertain that all required documents have been executed and
received and that such documents relate to the Subsequent Mortgage Loans
identified on the Mortgage Loan Schedule.
(d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller, and the assignee shall
succeed to the rights and obligations hereunder of the Purchaser. Any expense
reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Seller under this Agreement
will be promptly reimbursed by the Seller.
(e) EXAMINATION OF MORTGAGE FILES. Prior to the
Subsequent Transfer Date, the Seller shall either (i) deliver in escrow to the
Purchaser or to any assignee, transferee or designee of the Purchaser, for
examination, the Mortgage File pertaining to each Subsequent Mortgage Loan or
(ii) make such Mortgage Files available to the Purchaser or to any assignee,
transferee or designee of the Purchaser for examination. Such examination may be
made by the Purchaser or the Trustee, and their respective designees, upon
reasonable notice to the Seller during normal business hours before the
Subsequent Transfer Date and within 60 days after the Subsequent Transfer Date.
If any such person makes such examination prior to the Subsequent Transfer Date
and identifies any Subsequent Mortgage Loans that do not conform to the
requirements of the Purchaser as described in this Agreement, such Subsequent
Mortgage Loans shall be deleted from
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the Closing Schedule. The Purchaser may, at its option and without notice to the
Seller, purchase all or part of the Subsequent Mortgage Loans without conducting
any partial or complete examination. The fact that the Purchaser or any person
has conducted or has failed to conduct any partial or complete examination of
the Mortgage Files shall not affect the rights of the Purchaser or any assignee,
transferee or designee of the Purchaser to demand repurchase or other relief as
provided herein or under the Pooling and Servicing Agreement.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER.
(a) The Seller hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Subsequent Transfer Date, and
covenants, that:
(i) The Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Nevada and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Seller in any state in
which a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure its ability to enforce each Subsequent Mortgage Loan;
(ii) The Seller had the full corporate power and
authority to hold and sell each Subsequent Mortgage Loan and has the full
corporate power and authority to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the Purchaser
and the Originator, constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except to
the extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought;
(iii) The execution and delivery of this Agreement by
the Seller, the consummation of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are in
the ordinary course of business of the Seller and will not (A) result in a
breach of any term or provision of the articles of formation or operating
agreement of the Seller or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any other material
agreement or instrument to which the Seller is a party or by which it may be
bound, or any statute, order or regulation applicable to the Seller of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Seller; and the Seller is not a party to, bound by, or in
breach or violation of any indenture or other agreement or instrument, or
subject to or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it, which materially and
<PAGE>
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adversely affects or, to the Seller's knowledge, would in the future materially
and adversely affect, (x) the ability of the Seller to perform its obligations
under this Agreement or (y) the business, operations, financial condition,
properties or assets of the Seller taken as a whole;
(iv) No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Seller has
obtained the same; and
(v) No litigation is pending against the Seller that
would materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of the Seller to service the Subsequent
Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof.
(b) The Originator hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Subsequent Transfer Date, and
covenants, that:
(i) The Originator is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Originator in any state in
which a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure its ability to enforce each Subsequent Mortgage Loan and to service the
Subsequent Mortgage Loans in accordance with the terms of the Pooling and
Servicing Agreement;
(ii) The Originator had the full corporate power and
authority to originate, hold and sell each Subsequent Mortgage Loan and has the
full corporate power and authority to service each Subsequent Mortgage Loan, and
to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Originator the execution, delivery
and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Purchaser, constitutes a
legal, valid and binding obligation of the Originator, enforceable against the
Originator in accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement by
the Originator, the servicing of the Subsequent Mortgage Loans by the Originator
under the Pooling and Servicing Agreement, the consummation of any other of the
transactions herein contemplated, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the
<PAGE>
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Originator and will not (A) result in a breach of any term or provision of the
charter or by-laws of the Originator or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of any
other material agreement or instrument to which the Originator is a party or by
which it may be bound, or any statute, order or regulation applicable to the
Originator of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Originator; and the Originator is not a party
to, bound by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Originator's knowledge, would in the future materially and adversely affect, (x)
the ability of the Originator to perform its obligations under this Agreement or
(y) the business, operations, financial condition, properties or assets of the
Originator taken as a whole;
(iv) No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Originator has
obtained the same;
(v) The Originator is an approved Originator/servicer
for Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act; and
(vi) No litigation is pending against the Originator
that would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Originator to service the
Subsequent Mortgage Loans or to perform any of its other obligations hereunder
in accordance with the terms hereof.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
RELATING TO THE SUBSEQUENT MORTGAGE LOANS.
The Originator hereby represents and warrants to the Purchaser, that as
of the Subsequent Transfer Date:
(i) The information set forth on the related Closing Schedule
with respect to each Subsequent Mortgage Loan is true and correct in all
material respects;
(ii) [Reserved];
(iii) No material error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Subsequent Mortgage
Loan has taken place on the part of any person, including, without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other
<PAGE>
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party involved in the origination of the Subsequent Mortgage Loan or in the
application of any insurance in relation to such Subsequent Mortgage Loan;
(iv) Except with respect to approximately 1.47% of the
Subsequent Mortgage Loans which were 30 days or more but less than 60 days
delinquent in payments and with respect to approximately 0.45% of the Subsequent
Mortgage Loans which were 60 days or more but less than 90 days delinquent in
their payments as of the Subsequent Transfer Date, in each case by outstanding
principal balance of the Subsequent Mortgage Loans as of the Subsequent Cut-off
Date, all payments due prior to the Subsequent Cut-off Date have been made and
none of the Subsequent Mortgage Loans will have been contractually delinquent
for more than one calendar month more than once since the origination thereof;
(v) Each Mortgage is a valid and enforceable first lien on the
Mortgaged Property, including all improvements thereon, subject only to (a) the
lien of nondelinquent current real property taxes and assessments, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Subsequent Mortgage Loan, and (c) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by such Mortgage;
(vi) Immediately prior to the assignment of the Subsequent
Mortgage Loans to the Seller, the Originator had good title to, and was the sole
legal and beneficial owner of, each Subsequent Mortgage Loan free and clear of
any pledge, lien, encumbrance or security interest and has full right and
authority, subject to no interest or participation of, or agreement with, any
other party to sell and assign the same;
(vii) To the best of the Originator's knowledge, there is no
delinquent tax or assessment lien against any Mortgaged Property;
(viii) There is no valid offset, defense or counterclaim to
any Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay
the unpaid principal of or interest on such Mortgage Note, nor will the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;
(ix) To the best of the Originator's knowledge, there are no
mechanics' liens or claims for work, labor or material affecting any Mortgaged
Property which are or may be a lien prior to, or equal with, the lien of the
related Mortgage, except those which are insured against by the title insurance
policy referred to in (xiii) below;
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(x) Subject to the Escrow Withhold referred to in (xx) below,
to the best of the Originator's knowledge, each Mortgaged Property is free of
material damage and is in good repair;
(xi) Each Subsequent Mortgage Loan at origination complied in
all material respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws;
(xii) Neither the Originator nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Subsequent Mortgage Loan may have been modified by a written instrument which
has been recorded, if necessary, to protect the interests of the Purchaser and
which has been delivered to the Trustee); satisfied, canceled or subordinated
such Mortgage in whole or in part; released the related Mortgaged Property in
whole or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto;
(xiii) A lender's policy of title insurance together with a
condominium endorsement, extended coverage endorsement, and an adjustable rate
mortgage endorsement, as applicable in an amount at least equal to the
Subsequent Cut-off Date principal balance of each such Subsequent Mortgage Loan
or a commitment (binder) to issue the same was effective on the date of the
origination of each Subsequent Mortgage Loan, each such policy is valid and
remains in full force and effect, the transfer of the related Subsequent
Mortgage Loan to the Seller will not affect the validity or enforceability of
such policy and each such policy was issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located and in a
form acceptable to Fannie Mae or Freddie Mac, which policy insures the
Originator and successor owners of indebtedness secured by the insured Mortgage,
as to the first priority lien of the Mortgage; to the best of the Originator's
knowledge, no claims have been made under such mortgage title insurance policy
and no prior holder of the related Mortgage, including the Originator, has done,
by act or omission, anything which would impair the coverage of such mortgage
title insurance policy;
(xiv) Each Subsequent Mortgage Loan was originated by the
Originator (or, if generated on behalf of the Originator by a person other than
the Originator, is subject to the same standards and procedures used by the
Originator in originating mortgage loans directly) or by a savings and loan
association, savings bank, commercial bank, credit union, insurance company or
similar institution which is supervised and examined by a federal or state
authority (including a mortgage broker), or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act;
(xv) On each adjustment date, the Mortgage Rate will be
adjusted to equal the Index plus the Gross Margin, rounded to the nearest
0.125%, subject to the Periodic Rate Cap, the Maximum Mortgage Rate and the
Minimum Mortgage Rate. Except for balloon loans, the related Mortgage Note is
payable on the first day of each month in self-amortizing monthly installments
of principal and interest, with interest payable in arrears, and requires a
monthly payment which is
<PAGE>
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sufficient to fully amortize the outstanding principal balance of the Subsequent
Mortgage Loan over its remaining term and to pay interest at the applicable
Mortgage Rate. No Subsequent Mortgage Loan is subject to negative amortization;
(xvi) To the best of the Originator's knowledge, all of the
improvements which were included for the purpose of determining the appraised
value of the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining properties
encroach upon the Mortgaged Property, except those, if any, which are insured
against by the title insurance policy referred to in (xiii) above.
(xvii) All inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same, including but
not limited to certificates of occupancy, have been made or obtained from the
appropriate authorities and the Mortgaged Property is lawfully occupied under
applicable law;
(xviii) All parties which have had any interest in the
Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located;
(xvix) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and with applicable laws. All parties
to the Mortgage Note and the Mortgage had legal capacity to execute the Mortgage
Note and the Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties;
(xx) The proceeds of each Subsequent Mortgage Loan have been
fully disbursed, there is no requirement for future advances thereunder and any
and all requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied with,
excepting therefrom any Mortgaged Property or Subsequent Mortgage Loan subject
to an Escrow Withhold as defined in the Originator's underwriting guidelines.
All costs, fees and expenses incurred in making, closing or recording the
Subsequent Mortgage Loans were paid;
(xxi) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(xxii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Purchaser
<PAGE>
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to the trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor;
(xxiii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary arrangements
for repayment thereof have not been made, and no escrow deposits or payments of
other charges or payments due the Originator have been capitalized under the
Mortgage or the related Mortgage Note;
(xxiv) The origination, collection and servicing practices
used by the Originator with respect to each Subsequent Mortgage Loan have been
in all material respects legal, proper, prudent and customary in the mortgage
origination and servicing business;
(xxv) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations;
(xxvi) No Subsequent Mortgage Loan has a shared appreciation
feature, or other contingent interest feature;
(xxvii) No Subsequent Mortgage Loan provides for primary
mortgage insurance;
(xxviii) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
representing coverage not less than the lesser of the outstanding principal
balance of the related Subsequent Mortgage Loan or the minimum amount required
to compensate for damage or loss on a replacement cost basis. All individual
insurance policies and flood policies referred to in clause (xxix) below contain
a standard mortgagee clause naming the Originator or the original mortgagee, and
its successors in interest, as mortgagee, and the Originator has received no
notice that any premiums due and payable thereon have not been paid; the
Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;
(xxix) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance Administration is
in effect with respect to such Mortgaged Property with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Subsequent Mortgage Loan, (B) the
minimum amount required to compensate for damage or loss on a replacement cost
basis or (C) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973;
<PAGE>
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(xxx) To the best of the Originator's knowledge, there is no
default, breach, violation or event of acceleration existing under the Mortgage
or the related Mortgage Note; and the Originator has not waived any default,
breach, violation or event of acceleration;
(xxxi) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and dwelling units
in planned unit developments, which, to the best of the Originator's knowledge,
does not include (a) cooperatives or (b) mobile homes and manufactured homes (as
defined in the Fannie Mae Seller-Servicer's Guide), except when the appraisal
indicates that the mobile or manufactured home was built under the Federal
Manufactured Home Construction and Safety Standards of 1976 or otherwise assumes
the characteristics of site-built housing and meets local building codes, is
readily marketable, has been permanently affixed to the site and is not in a
mobile home "park," and is treated as real property under the applicable state
law. With respect to any Subsequent Mortgage Loan that is secured by a leasehold
estate, (a) the lease is valid, in full force and effect, and conforms to all of
the Fannie Mae requirements for leasehold estates; (b) all rents and other
payments due under the lease have been paid; (c) the lessee is not in default
under any provision of the lease; (d) the term of the lease exceeds the maturity
date of the related Subsequent Mortgage Loan by at least five years and (e) the
Mortgagee under the Subsequent Mortgage Loan is given notice and an opportunity
to cure any defaults under the lease;
(xxxii) There is no obligation on the part of the Originator
or any other party under the terms of the Mortgage or related Mortgage Note to
make payments in addition to those made by the Mortgagor;
(xxxiii) Any future advances made prior to the related
Purchase Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
Subsequent Mortgage Loan Schedule. The consolidated principal amount does not
exceed the original principal amount of the Subsequent Mortgage Loan;
(xxxiv) Each Subsequent Mortgage Loan was underwritten in
accordance with the Originator's underwriting guidelines;
(xxxv) The Mortgage File contains an appraisal which was
performed by an appraiser who satisfied, and which was conducted in accordance
with, all of the applicable requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended;
(xxxvi) None of the Subsequent Mortgage Loans is a graduated
payment mortgage loan, nor is any Subsequent Mortgage Loan subject to a
temporary buydown or similar arrangement;
(xxxvii) With respect to each Subsequent Mortgage Loan, no
loan junior in lien priority to such Subsequent Mortgage Loan and secured by the
related Mortgaged Property was originated by the Originator at the time of
origination of such Subsequent Mortgage Loan;
<PAGE>
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(xxxviii) The Subsequent Mortgage Loans delivered on the
Subsequent Transfer Date comply with the characteristics set forth in Section
2.11 of the Pooling and Servicing Agreement;
(xxxix) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Subsequent
Mortgage Loan in the event that the Mortgaged Property is sold or transferred
without the prior written consent of the mortgagee thereunder, except as may be
limited by applicable law;
(xl) The information set forth in the Mortgage Loan Schedule
relating to the existence of a prepayment charge is complete, true and correct
in all material respects at the date or dates respecting which such information
is furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms (except to the extent that: (1) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally; (2) the
collectability thereof may be limited due to acceleration in connection with a
foreclosure or other involuntary payoff; or (3) subsequent changes in applicable
law may limit or prohibit enforceability thereof) under applicable law; and
(xli) Each Subsequent Mortgage Loan is an obligation that is
principally secured by real property for purposes of the REMIC Provisions of the
Code.
SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
AND FOR BREACH OF REPRESENTATION AND WARRANTY.
(a) The representations and warranties contained in Section 6
shall not be materially impaired by any review and examination of loan files or
other documents evidencing or relating to the Subsequent Mortgage Loans or any
failure on the part of the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of the Certificateholders. With
respect to the representations and warranties contained herein which are made to
the knowledge or the best of knowledge of the Originator, or as to which the
Originator, has no knowledge, if it is discovered that the substance of any such
representation and warranty was materially inaccurate as of the date such
representation and warranty was made or deemed to be made, and such inaccuracy
materially and adversely affects the value of the related Subsequent Mortgage
Loan or the interest therein of the Purchaser or the Purchaser's assignee,
transferee or designee, then notwithstanding the lack of knowledge by the
Originator, with respect to the substance of such representation and warranty
being materially inaccurate at the time the representation and warranty was
made, the Originator shall take such action described in the following paragraph
in respect of such Subsequent Mortgage Loan.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report), as part of, any Mortgage File or of
a breach of any of the representations and warranties contained in Section 5 or
Section 6 that materially and adversely affects the value of any Subsequent
Mortgage Loan or the
<PAGE>
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interest therein of the Purchaser or the Purchaser's assignee, transferee or
designee, the party discovering the breach shall give prompt written notice to
the other. Within ninety (90) days of its discovery or its receipt of notice of
any such missing documentation which was not transferred to the Purchaser as
described above or materially defective documentation or any such breach of a
representation and warranty the Originator promptly shall deliver such missing
document or cure such defect or breach in all material respects, or in the event
the Originator cannot deliver such missing document or such defect or breach
cannot be cured, the Originator shall, within 90 days of its discovery or
receipt of notice, either (i) repurchase the affected Subsequent Mortgage Loan
at a price equal to the Purchase Price (as such term is defined in the Pooling
and Servicing Agreement) or (ii) pursuant to the provisions of the Pooling and
Servicing Agreement, cause the removal of such Subsequent Mortgage Loan from the
Trust Fund and substitute one or more Qualified Substitute Subsequent Mortgage
Loans.
The Originator shall amend the Closing Schedule to reflect the
withdrawal of such Subsequent Mortgage Loan from the terms of this Agreement and
the Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Subsequent Mortgage Loan. The Originator shall deliver to the
Purchaser such amended Closing Schedule and shall deliver such other documents
as are required by this Agreement or the Pooling and Servicing Agreement within
five (5) days of any such amendment. Any repurchase pursuant to this Section
7(a) shall be accomplished by deposit in the Collection Account of the amount of
the Purchase Price in accor dance with Section 2.03 of the Pooling and Servicing
Agreement. Any repurchase or substitution required by this Section shall be made
in a manner consistent with Section 2.03 of the Pooling and Servicing Agreement.
In addition, upon discovery by the Seller, the Purchaser, or any
assignee, transferee or designee of the Purchaser that any Subsequent Mortgage
Loan does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering the breach shall give prompt
written notice within two Business Days to the others. Within ninety (90) days
of its discovery or its receipt of notice, the Originator promptly shall either
(i) repurchase the affected Subsequent Mortgage Loan at the Purchase Price (as
such term is defined in the Pooling and Servicing Agreement) or (ii) pursuant to
the provisions of the Pooling and Servicing Agreement, cause the removal of such
Subsequent Mortgage Loan from the Trust Fund and substitute one or more
Qualified Substitute Mortgage Loans.
(b) It is understood and agreed that the obligations of the
Originator set forth in this Section 7 to cure, repurchase or substitute for a
defective Subsequent Mortgage Loan constitute the sole remedies of the Purchaser
against the Originator respecting a missing or defective document or a breach of
the representations and warranties contained in Section 5 or Section 6. It is
understood and agreed that the obligations of the Originator set forth in this
Section 7 to repurchase or substitute for a Subsequent Mortgage Loan as to which
a material document is missing constitute the sole remedies of the Purchaser
against the Originator respecting a missing document.
<PAGE>
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SECTION 8. CLOSING; PAYMENT FOR THE SUBSEQUENT MORTGAGE LOANS.
The closing of the purchase and sale of the Subsequent Mortgage Loans shall be
held at the New York City office of Thacher Proffitt & Wood at 10:00 AM New York
City time on the Subsequent Transfer Date.
The closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the
Seller and the Originator under this Agreement shall
be true and correct in all material respects as of
the date as of which they are made and no event shall
have occurred which, with notice or the passage of
time, would constitute a default under this
Agreement;
(b) The Purchaser shall have received, or the attorneys
of the Purchaser shall have received in escrow (to be
released from escrow at the time of closing), all
Closing Documents as specified in Section 9 of this
Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required
pursuant to the respective terms thereof;
(c) The Seller shall have delivered or caused to be
delivered and released to the Purchaser or to its
designee, all documents (including without
limitation, the Subsequent Mortgage Loans) required
to be so delivered by the Purchaser pursuant to
Section 2.01 of the Pooling and Servicing Agreement;
and
(d) All other terms and conditions of this Agreement
shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Subsequent Transfer Date,
against delivery and release by the Seller to the Trustee of all documents
required pursuant to the Pooling and Servicing Agreement, the consideration for
the Subsequent Mortgage Loans as specified in Section 3 of this Agreement, by
delivery to the Seller of the Purchase Price in immediately available funds.
SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:
(a) An Officers' Certificate of the Seller,
dated the Subsequent Transfer Date, upon
which the Purchaser and Salomon Smith Barney
Inc. (the "Underwriter") may rely, in the
form of Exhibit 3 hereto, and attached
thereto copies of the certificate of
formation, by-laws and certificate of good
standing of the Seller under the laws of
Nevada;
(b) An Officers' Certificate of the Seller,
dated the Subsequent Transfer Date, upon
which the Purchaser and the Underwriter may
rely, in the
<PAGE>
-16-
form of Exhibit 4 hereto, with respect to
certain facts regarding the sale of the
Subsequent Mortgage Loans by the Seller to
the Purchaser;
(c) An Opinion of Counsel of the Seller, dated
the Subsequent Transfer Date and addressed
to the Purchaser and the Underwriter,
substan tially in the form attached hereto
as Exhibit 5;
(d) an Officers' Certificate of the Originator,
dated the Subsequent Transfer Date, upon
which the Purchaser and Salomon Smith Barney
Inc. (the "Underwriter") may rely, in the
form of Exhibit 6 hereto, and attached
thereto copies of the certificate of
incorporation, by-laws and certificate of
good standing of the Originator under the
laws of Delaware;
(e) An Officers' Certificate of the Originator,
dated the Subsequent Transfer Date, upon
which the Purchaser and the Underwriter may
rely, in the form of Exhibit 7 hereto, with
respect to certain facts regarding the sale
of the Subsequent Mortgage Loans by the
Originator to the Seller;
(f) An Opinion of Counsel of the Originator,
dated the Subsequent Transfer Date and
addressed to the Purchaser and the
Underwriter, substantially in the form
attached hereto as Exhibit 8;
(g) Such opinions of counsel as the Rating
Agencies or the Trustee may request in
connection with the sale of the Subsequent
Mortgage Loans by the Seller to the
Purchaser or the Seller's execution and
delivery of, or performance under, this
Agreement;
(h) A letter from Deloitte & Touche L.L.P.,
certified public accountants, dated the date
hereof and to the effect that the
information set forth in paragraphs (c) and
(d) of Section 2.11 of the Pooling and
Servicing Agreement is correct; and
(i) Such further information, certificates,
opinions and documents as the Purchaser or
the Underwriter may reasonably request.
SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Subsequent Mortgage Loans, including without
limitation, fees for title policy endorsements and continuations, the fees and
expenses of the Seller's in-house accountants and in-house attorneys, the costs
and expenses incurred in connection with producing the Seller's loan loss,
foreclosure and delinquency experience, and the costs and expenses incurred in
connection with obtaining the documents referred to in Sections 9(d) and 9(e).
<PAGE>
-17-
The Seller shall not be responsible for any fees related to the Assignment of
Mortgage recording costs and/or fees. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) the costs and expenses of printing (or otherwise reproducing)
and delivering this Agreement, the Pooling and Servicing Agreement, the
Certificates, the prospectus, prospectus supplement, and private placement
memorandum relating to the Certificates and other related documents, the initial
fees, costs and expenses of the Trustee, the fees and expenses of the Seller's
counsel in connection with the preparation of all documents relating to the
securitization of the Mortgage Loans, the filing fee charged by the Securities
and Exchange Commission for registration of the Certificates, the cost of
outside special counsel that may be required for the Purchaser, the cost of
obtaining the documents referred to in Section 9(g) and the fees charged by any
rating agency to rate the Certificates. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.
SECTION 11. SERVICING. The Originator has represented to the
Purchaser that the Subsequent Mortgage Loans are being serviced by the
Originator in accordance with the terms and provisions set forth in the
Aggregation Facility, as memorialized in the letter agreement dated July 30,
1999 (the "Aggregation Facility") between Salomon Brothers Realty Corp. and the
Originator, and it is understood and agreed by and between the Originator and
the Purchaser that the interim servicing arrangements under the Aggregation
Facility with the Originator will be superseded by the servicing arrangements
set forth in the Pooling and Servicing Agreement.
SECTION 12. [INTENTIONALLY OMITTED]
SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Subsequent Transfer Date of the Subsequent Mortgage
Loans described on the Subsequent Mortgage Loan Schedule in accordance with the
terms and conditions of this Agreement is mandatory. It is specifically
understood and agreed that each Subsequent Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser in the event of the Seller's failure to deliver the Subsequent
Mortgage Loans on or before the Subsequent Transfer Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Subsequent Mortgage Loan and each document and
instrument evidencing each such Subsequent Mortgage Loan to secure the
performance by the Seller of its obligation hereunder, and the Seller agrees
that it holds such Subsequent Mortgage Loans in custody for the Purchaser,
subject to the Purchaser's (i) right, prior to the Subsequent Transfer Date, to
reject any Subsequent Mortgage Loan to the extent permitted by this Agreement,
and (ii) obligation to deliver or cause to be delivered the consideration for
the Subsequent Mortgage Loans pursuant to Section 8 hereof. Any Subsequent
Mortgage Loans rejected by the Purchaser shall concurrently therewith be
released from the security interest created hereby. The Seller agrees that, upon
acceptance of the Subsequent Mortgage Loans by the Purchaser or its designee and
delivery of payment to the Seller, that its security interest in the Subsequent
Mortgage Loans shall be released. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement
<PAGE>
-18-
or afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
Notwithstanding the foregoing, if on the Subsequent Transfer
Date, each of the conditions set forth in Section 8 hereof shall have been
satisfied and the Purchaser shall not have paid or caused to be paid the
Purchase Price, or any such condition shall not have been waived or satisfied
and the Purchaser determines not to pay or cause to be paid the Purchase Price,
the Purchaser shall immediately effect the redelivery of the Subsequent Mortgage
Loans, if delivery to the Purchaser has occurred and the security interest
created by this Section 12 shall be deemed to have been released.
SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 390 Greenwich Street, 4th Floor,
New York, New York 10013, Attention: Mortgage Finance Desk, or such other
address as may hereafter be furnished to the Seller in writing by the Purchaser;
if to the Seller or the Originator, addressed to the Seller at 1100 Town &
Country Road, Suite 1100, Orange, California 92868, Attention: General Counsel,
or to such other address as the Seller or Originator may designate in writing to
the Purchaser.
SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Subsequent Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 16. AGREEMENT OF PARTIES. The Originator, the Seller
and the Purchaser agree to execute and deliver such instruments and take such
actions as either of the others may, from time to time, reasonably request in
order to effectuate the purpose and to carry out the terms of this Agreement and
the Pooling and Servicing Agreement.
SECTION 17. SURVIVAL. (a) The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Subsequent
Mortgage Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and
<PAGE>
-19-
notwithstanding subsequent termination of this Agreement, the Pooling and
Servicing Agreement or the Trust Fund.
(b) The Originator agrees that the representations, warranties and
agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by the Purchaser,
notwithstanding any investigation heretofore or hereafter made by the Purchaser
or on its behalf, and that the representations, warranties and agreements made
by the Originator herein or in any such certificate or other instrument shall
survive the delivery of and payment for the Subsequent Mortgage Loans and shall
continue in full force and effect, notwithstanding any restrictive or qualified
endorsement on the Mortgage Notes and notwithstanding subsequent termination of
this Agreement, the Pooling and Servicing Agreement or the Trust Fund.
SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.
SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
It is the express intent of the parties hereto that the
conveyance of the Subsequent Mortgage Loans by the Seller to the Purchaser as
provided in Section 4 hereof be, and be construed as, a sale of the Subsequent
Mortgage Loans by the Seller to the Purchaser and not as a pledge of the
Subsequent Mortgage Loans by the Seller to the Purchaser to secure a debt or
other obligation of the Seller. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Subsequent Mortgage Loans are held to
be property of the Seller, then, (a) it is the express intent of the parties
that such conveyance be deemed a pledge of the Subsequent Mortgage Loans by the
Seller to the Purchaser to secure a debt or other obligation of the Seller and
(b) (1) this Agreement shall also be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2) the
conveyance provided for in Section 4 hereof shall be deemed to be a grant by the
Seller to the Purchaser of a security interest in all of the Seller's right,
title and interest in and to the Subsequent Mortgage Loans and all amounts
payable to the holders of the Subsequent Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, includ-
<PAGE>
-20-
ing without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 of the New York
Uniform Commercial Code; and (4) notifications to persons holding such property,
and acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or con
firmations from, financial intermediaries, bailees or agents (as applicable) of
the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to
Section 4(d) hereof shall also be deemed to be an assignment of any security
interest created hereby. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Subsequent Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Originator, the Purchaser and the
Seller have caused their names to be signed by their respective officers
thereunto duly authorized as of the date first above written.
AMERIQUEST SECURITIES L.L.C.
By: /s/ John P. Grazer
--------------------------
Name: John P. Grazer
Title: Manager
AMERIQUEST MORTGAGE COMPANY
By: /s/ John P. Grazer
-------------------------
Name: John P. Grazer
Title: EVP, CFO
SALOMON BROTHERS MORTGAGE SECURITIES
VII, INC.
By: /s/ Susan Mills
------------------------
Name: Susan Mills
Title: Vice President
<PAGE>
EXHIBIT 1
[INTENTIONALLY OMITTED]
<PAGE>
EXHIBIT 2
[RESERVED]
<PAGE>
EXHIBIT 3
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER]
I, __________, hereby certify that I am a duly elected
_____________________ of Salomon Brothers Mortgage Securities VII, Inc. (the
"Depositor"), a Delaware corporation, and further, to the best of my knowledge
and after due inquiry, as follows:
Each condition precedent and representation and warranty
specified in Section 2.11 of the Pooling and Servicing Agreement, dated
as of November 1, 1999, among the Depositor, New Century Mortgage
Corporation as Master Servicer, Firstar Bank, N.A. as Trustee and U.S.
Bank National Association as Trust Administrator (the "Pooling and
Servicing Agreement") and each condition precedent specified in the
Subsequent Transfer Instrument has been satisfied by the Depositor.
Capitalized terms not defined herein have the meanings set
forth in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: December __, 1999
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT 4
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER]
Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2, Subsequent Transfer
This Certificate is being delivered to Thacher Proffitt & Wood
("TPW") for reliance hereon by TPW in rendering its opinion letter to which this
Certificate is annexed, dated the date hereof (the "Opinion Letter"). The
undersigned and the individual signing on its behalf understand, acknowledge and
agree that the facts set forth in the Opinion Letter have been relied upon by
TPW in rendering the Opinion Letter and by the addressee thereof and other
parties to the transactions to which the Opinion Letter relates in the
consummation of those transactions.
Reference is made to the sale of subsequent mortgage loans
(the "Subsequent Mortgage Loans") by Ameriquest Mortgage Company ("Ameriquest")
to Ameriquest Securities L.L.C. (the "Ameriquest L.L.C.") pursuant to a
Subsequent Mortgage Loan Sale and Contribution Agreement, dated December __,
1999, between Ameriquest and the Ameriquest L.L.C. (the "Sale and Contribution
Agreement") and the transfer of the Mortgage Loans by Ameriquest L.L.C. to
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor") pursuant to a
Subsequent Mortgage Loan Purchase Agreement, dated December __, 1999 (the
"Purchase Agreement"). In consideration for its purchase of the Mortgage Loans,
the Depositor will deliver to Ameriquest immediately available funds. The Sale
and Contribution Agreement and the Purchase Agreement are hereinafter referred
to as the "Agreements." Capitalized terms not defined herein have the meanings
set forth in the Opinion Letter and the Agreements.
The undersigned, a duly elected _______________ of the
Depositor, hereby certifies after reasonable investigation that:
1. The transfer of the Subsequent Mortgage Loans by the undersigned
pursuant to the Agreements was intended to be a sale and to be reported as such
under generally accepted accounting principles ("GAAP") and for federal income
tax purposes.
2. In connection with the sale of the Subsequent Mortgage Loans by the
undersigned pursuant to the Agreements, the undersigned (i) was solvent at all
relevant times prior thereto and was not rendered insolvent thereby, (ii) after
giving effect thereto, is able to pay its debts as they mature, (iii) was not
left with unreasonably small capital for the business in which engaged and
proposed to be engaged, (iv) had and has no intention of commencing any
bankruptcy, insolvency or similar proceeding, (v) did not and does not have any
intent to hinder, delay or defraud any of the undersigned's creditors, (vi) had
a valid business reason therefor and (vii) received new value and consideration
constituting reasonably equivalent value and fair consideration.
3. The undersigned has not acquired, and will not acquire at any time,
any direct or indirect ownership or other economic interest in, or other right
or obligation with respect to, any Subsequent Mortgage Loan or Certificate,
except as described in the Agreements.
<PAGE>
-2-
The undersigned has executed this Certificate as of December __, 1999.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:
---------------------------
Name:
Title:
<PAGE>
EXHIBIT 5
[FORM OF OPINION OF COUNSEL TO THE SELLER]
TO: Addressees on Schedule A
December __, 1999
Re: Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2
------------------------------------------------
Ladies and Gentlemen:
I am General Counsel of Ameriquest Securities L.L.C. (the "Company")
and have acted as counsel to the Company in connection with the sale by the
Company of certain residential first mortgage loans (the "Subsequent Mortgage
Loans") pursuant to the Subsequent Mortgage Loan Purchase Agreement, dated as of
December 8, 1999 (the "Purchase Agreement"), among the Company as seller,
Salomon Brothers Mortgage Securities VII, Inc. as purchaser (the "Purchaser")
and Ameriquest Mortgage Company as originator (the "Originator"). In connection
with the sale of the Subsequent Mortgage Loans, the Company has entered into the
Subsequent Mortgage Loan Sale and Contribution Agreement, dated as of December
8, 1999, between the Company and the Originator (the "Sale and Contribution
Agreement"). The Sale and Contribution Agreement and the Purchase Agreement are
referred to herein as the "Agreements". Capitalized terms not defined herein
have the meanings set forth in the Agreements.
As such counsel, I have examined original or reproduced or certified
copies of the articles of formation and operating agreement of the Company, as
amended to date, records of actions taken by the Board of Directors of the
Company and copies of the Agreements, the Prospectus Supplement, dated November
8, 1999 (the "Prospectus Supplement"), to the Prospectus, dated June 23, 1999,
relating to the Class A-1, Class A-2, Class M-1, Class M-2 and Class M-3
Certificates. I have also examined such other documents, papers, statutes and
authorities as I deem necessary as a basis for the opinions hereinafter set
forth. In all such examinations made by me in connection with this opinion, I
have assumed the genuineness of all signatures and the completeness and
authenticity of all records and all documents submitted to me as copies thereof.
As to various matters of fact relevant to the opinions hereinafter expressed, I
have relied upon the representations and warranties contained in the Agreements
and statements and certificates of officers and representatives of the Company.
As to matters in Paragraph 5 below with respect to which I opine based on my
knowledge, I have relied solely upon inquiries made to and responses received
from officers and representatives of the Company and the documents furnished to
me by representatives of the Company, which documents such representatives have
informed me include the only material indentures, agreements and instruments to
which the Company is a party or by which it or any of its properties or assets
are bound.
<PAGE>
Salomon Brothers Mortgage Securities VII, Inc.
Salomon Smith Barney Inc.
December __, 1999 Page 2.
In addition to the foregoing, I have assumed that, if the Trustee, the
Company or any Certificateholder seeks to enforce any of their respective rights
under the Agreements, they will do so only in good faith and only in
circumstances and in a manner in which it is commercially reasonable to do so.
In addition to rendering legal advice and assistance to the Company in
the course of the negotiation and preparation of the Agreements, involving,
among other things, discussions and inquiries concerning various legal matters
and the review of certain corporate records, documents and proceedings, I also
participated in conferences with representatives of the Depositor and the
Company's independent certified public accountants, at which the contents of the
Prospectus Supplement and related matters were discussed and revised. I have
not, however, except with respect to matters expressly covered by this opinion,
independently verified the accuracy, completeness or fairness of the statements
contained in the Prospectus Supplement, and, due to the limitations inherent in
the information available to me and the nature and extent of my participation in
such conferences, I am unable to assume, and I do not assume, any responsibility
for the accuracy, completeness or fairness of such statements.
I express no opinion except as to (i) United States federal law and
(ii) the laws of the State of Nevada.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Company is duly authorized and qualified to transact any and
all business contemplated by the Agreements in any state in which a Mortgaged
Property securing a Subsequent Mortgage Loan is located or is otherwise not
required under applicable law to effect such qualification and, in any event, is
in compliance with the doing business laws of any such State, to the extent
necessary to ensure the enforceability of each Subsequent Mortgage Loan.
2. The Company has the power to engage in the transactions
contemplated by each and all of the Agreements and has all requisite power,
authority and legal right to execute and deliver the Agreements and any other
documents delivered in connection therewith and to perform and observe the terms
and conditions of such instruments.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement enforceable
in accordance with its respective terms against the Company, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general equity principles regardless of whether such
enforcement is considered in a proceeding in equity or at law.
4. No consent, approval, authorization, license, permit or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the
<PAGE>
Salomon Brothers Mortgage Securities VII, Inc.
Salomon Smith Barney Inc.
December __, 1999 Page 3.
Company of, or compliance by the Company with, any or all of the Agreements or
the consummation of the transactions contemplated by the Agreements.
5. The execution and delivery of the Agreements by the Company, the
consummation of any other of the transactions contemplated by the Agreements and
the fulfillment of or compliance with the terms of the Agreements are in the
ordinary course of business of the Company and will not (A) result in a material
breach of any term or provision of the certificate of formation or by-laws of
the Company or (B) materially conflict with, result in a material breach,
violation or acceleration of or result in a material default under the terms of
any other material agreement or instrument of which I have knowledge to which
the Company is a party or by which it may be bound, or any statute, order or
regulation applicable to the Company of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the Company;
and the Company is not a party to, bound by or in material breach or violation
of any material indenture or other material agreement or instrument of which I
have knowledge, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it, which materially and adversely affects or, to
the best of my knowledge, will in the future materially and adversely affect,
(x) the ability of the Company to perform its obligations under the Agreements
or (y) the business, operations, financial condition, properties or assets of
the Company taken as a whole.
6. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which would
draw into question the validity of the Agreements, the Certificates or the
Subsequent Mortgage Loans or of any action taken or to be taken in connection
with the transactions contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform its obligations under the terms
of the Agreements.
This opinion is solely for the benefit of the addressees hereof, and
may not be relied upon in any manner by any other person or entity.
Respectfully submitted,
<PAGE>
SCHEDULE A
Salomon Brothers Mortgage Moody's Investors Service
Securities VII, Inc. 99 Church Street
390 Greenwich Street, 4th Floor New York, New York 10007
New York, New York 10013
Standard and Poor's Rating Services Duff & Phelps Credit Rating Co.
26 Broadway 17 State Street, 12th Floor
New York, New York 10004 New York, New York 10004
Norwest Bank Minnesota, N.A. Salomon Smith Barney Inc.
Norwest Center 390 Greenwich Street, 4th Floor
Sixth & Marquette New York, New York 10013
Minneapolis, Minnesota 55479
Chase Bank of Texas National Association
712 Main Street
Houston, Texas 77002
<PAGE>
EXHIBIT 6
[FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]
I, ________________ hereby certify that I am the duly appointed
___________________ of Ameriquest Mortgage Company, a Delaware corporation (the
"Originator"), and further certify, on behalf of the Originator, as follows:
1. Attached hereto as Exhibit A is a true and correct copy of
the Certificate of Incorporation and By-laws of the Originator, both
of which are in full force and effect on the date hereof. There has
been no amendment or other document filed affecting the Certificate of
Incorporation of the Originator since April 29, 1997, and no such
amendment has been authorized. There has been no amendment or other
document filed affecting the By-laws of the Originator since September
14, 1994, and no such amendment has been authorized. Attached hereto
as Exhibit B is a certificate of good standing, dated November 9, 1999
issued by the State of Delaware with respect to the Originator. No
event has occurred since the date thereof that has affected the good
standing of the Originator under the laws of the State of Delaware.
2. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the
Originator that, if adversely determined, individually or in the
aggregate, would adversely affect the Originator's ability to perform
its obligations under (i) the Subsequent Mortgage Loan Sale and
Contribution Agreement, dated as of December __, 1999 (the "Subsequent
Mortgage Loan Sale and Contribution Agreement"), between Ameriquest
Securities L.L.C. (the "Purchaser") and the Originator; (ii) the
Subsequent Mortgage Loan Purchase Agreement, dated December __, 1999
(the "Purchase Agreement") among the Originator, the Purchaser and
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor") or
(iii) the Pooling and Servicing Agreement, dated as of November 1,
1999 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, the Originator as master servicer (in such capacity, the
"Master Servicer") and Norwest Bank Minnesota, National Association as
Trustee. No proceedings looking toward merger, consolidation or
liquidation, dissolution or bankruptcy of the Originator are pending
or contemplated.
3. Each person who, as an officer or representative of the
Originator or the Master Servicer, signed the Subsequent Mortgage Loan
Sale and Contribution Agreement, the Purchase Agreement or the Pooling
and Servicing Agreement and any other document delivered prior hereto
or on the date hereof in connection with the purchase described in the
Subsequent Mortgage Loan Sale and Contribution Agreement or the
Purchase Agreement, or the transactions described in the Pooling and
Servicing Agreement was, at the respective times of such signing and
delivery, and is now, duly elected or appointed, qualified and acting
as such officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures.
<PAGE>
Page 3.
4. Each of the Mortgage Loans referred to in the Subsequent
Mortgage Loan Sale and Contribution Agreement, the Purchase Agreement
and the Pooling and Servicing Agreement was originated in accordance
with Section 6 (xvi) of the Purchase Agreement.
5. All of the representations and warranties of the Originator
under the Subsequent Mortgage Loan Sale and Contribution Agreement and
the Purchase Agreement, and of the Master Servicer under the Pooling
and Servicing Agreement are true and correct in all material respects
as of the Subsequent Transfer Date (subject, in the case of the
Closing Schedule delivered pursuant to the Subsequent Mortgage Loan
Sale and Contribution Agreement, to such amendments thereto as were
duly made on or before the date hereof) and no event has occurred
which, with notice or the passage of time or both, would constitute a
default under the Subsequent Mortgage Loan Sale and Contribution
Agreement or the Purchase Agreement, or an Event of Default under the
Pooling and Servicing Agreement.
6. The information regarding the Subsequent Mortgage Loans set
forth in the Mortgage Loan Schedule as an exhibit to the Subsequent
Mortgage Loan Sale and Contribution Agreement, the Purchase Agreement
and the Pooling & Servicing Agreement are true and correct in all
material respects.
7. With respect to its sale of the Subsequent Mortgage Loans
and the related transactions and undertakings contemplated by the
Subsequent Mortgage Loan Sale and Contribution Agreement and the
Purchase Agreement, the Originator has complied with all the
obligations by which it is bound and has satisfied all the conditions
on its part to be performed or satisfied prior to the Subsequent
Transfer Date.
8. Capitalized terms used but not defined herein shall have
the meanings assigned in the Subsequent Mortgage Loan Sale and
Contribution Agreement.
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Originator.
Dated: December __, 1999
By:
----------------------------
Name:
Title:
I, _______________, an ______________________ of Ameriquest
Mortgage Company hereby certify that ___________________ is the duly appointed,
qualified and acting _____________________ of the Originator and that the
signature appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: December __, 1999
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT 7
[FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]
Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2, Subsequent Transfer
Reference is made to the sale of subsequent mortgage loans
(the "Subsequent Mortgage Loans") by Ameriquest Mortgage Company ("Ameriquest")
to Ameriquest Securities L.L.C. (the "Purchaser") pursuant to a Subsequent
Mortgage Loan Sale and Contribution Agreement (the "Sale and Contribution
Agreement"), dated December __, 1999, between Ameriquest and the Purchaser (the
"Purchase Agreement"), the transfer of the Mortgage Loans by the Purchaser to
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor") pursuant to a
Subsequent Mortgage Loan Purchase Agreement, dated December __, 1999 (the
"Purchase Agreement"). The Sale and Contribution Agreement and the Purchase
Agreement are hereinafter collectively referred to as the "Agreements". In
consideration for its purchase of the Subsequent Mortgage Loans, the Depositor
will deliver to Ameriquest Securities L.L.C immediately available funds.
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Agreements.
The undersigned is a duly appointed _______________ of
Ameriquest and hereby certifies after reasonable investigation that:
1. The transfer of the Subsequent Mortgage Loans by the undersigned
pursuant to the Agreements was intended to be a sale and to be reported as such
under generally accepted accounting principles ("GAAP") and for federal income
tax purposes.
2. In connection with the sale of the Subsequent Mortgage Loans by the
undersigned pursuant to the Agreements, the undersigned (i) was solvent at all
relevant times prior thereto and was not rendered insolvent thereby, (ii) after
giving effect thereto, is able to pay its debts as they mature, (iii) was not
left with unreasonably small capital for the business in which engaged and
proposed to be engaged, (iv) had and has no intention of commencing any
bankruptcy, insolvency or similar proceeding, (v) did not and does not have any
intent to hinder, delay or defraud any of the undersigned's creditors, (vi) had
a valid business reason therefor and (vii) received new value and consideration
constituting reasonably equivalent value and fair consideration.
3. The undersigned has not acquired, and will not acquire at any time,
any direct or indirect ownership or other economic interest in, or other right
or obligation with respect to, any Subsequent Mortgage Loan or Certificate,
except as described in the Agreements.
<PAGE>
Page 2.
The undersigned has executed this Certificate as of December __, 1999.
AMERIQUEST MORTGAGE COMPANY
By:
------------------------------
Name:
Title:
<PAGE>
EXHIBIT 8
[FORM OF OPINION OF COUNSEL TO THE ORIGINATOR]
TO: Addressees on Schedule A
November __, 1999
Re: Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2
------------------------------------------------
Ladies and Gentlemen:
I am General Counsel of Ameriquest Mortgage Company (the "Company")
and have acted as counsel to the Company in connection with the servicing by the
Company of certain residential first mortgage loans (the "Subsequent Mortgage
Loans") pursuant to the Pooling and Servicing Agreement, dated as of November 1,
1999 (the "Pooling and Servicing Agreement"), among Salomon Brothers Mortgage
Securities VII, Inc. as depositor (the "Depositor"), the Company and Norwest
Bank Minnesota, National Association as trustee (the "Trustee"), relating to the
issuance and sale by the Depositor of Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2, designated as the Class A-1, Class A-2, Class
M-1, Class M-2, Class M-3, Class CE, Class P, Class R-I, Class R-II and Class
R-III (collectively, the "Certificates"). In connection with the sale and
servicing of the Subsequent Mortgage Loans, the Company has entered into the
Custodial Agreement, dated as of November __, 1999, among the Trustee, the
Company, the Depositor and Chase Bank of Texas National Association as custodian
(the "Custodial Agreement") and the Subsequent Mortgage Loan Sale and
Contribution Agreement, dated November __, 1999, between the Company and
Ameriquest Securities L.L.C. (the "Purchaser") (the "Sale and Contribution
Agreement"). The Sale and Contribution Agreement, the Purchase Agreement, the
Custodial Agreement, the Pooling and Servicing Agreement, are collectively
referred to herein as the "Agreements". Capitalized terms not defined herein
have the meanings set forth in the Agreements.
As such counsel, I have examined original or reproduced or certified
copies of the certificate of incorporation and bylaws of the Company, as amended
to date, records of actions taken by the Board of Directors of the Company and
copies of the Agreements, the Prospectus Supplement, dated November __, 1999
(the "Prospectus Supplement"), to the Prospectus, dated June 23, 1999, relating
to the Class A-1, Class A-2, Class M-1, Class M-2 and Class M-3 Certificates. I
have also examined such other documents, papers, statutes and authorities as I
deem necessary as a basis for the opinions hereinafter set forth. In all such
examinations made by me in connection with this opinion, I have assumed the
genuineness of all signatures and the completeness and authenticity of all
records and all documents submitted to me as copies thereof. As to various
matters of fact relevant to the opinions hereinafter expressed, I have relied
upon the representations and warranties contained in the Agreements and
statements and certificates of officers and representatives of the Company. As
to matters in Paragraph 5 below with respect to which I opine based on my
knowledge, I have relied
<PAGE>
Salomon Brothers Mortgage Securities VII, Inc.
Salomon Smith Barney Inc.
Ameriquest Securities L.L.C.
November __, 1999 Page 2.
solely upon inquiries made to and responses received from officers and
representatives of the Company and the documents furnished to me by
representatives of the Company, which documents such representatives have
informed me include the only material indentures, agreements and instruments to
which the Company is a party or by which it or any of its properties or assets
are bound.
In addition to the foregoing, I have assumed that, if the Trustee, the
Company or any Certificateholder seeks to enforce any of their respective rights
under the Agreements, they will do so only in good faith and only in
circumstances and in a manner in which it is commercially reasonable to do so.
In addition to rendering legal advice and assistance to the Company in
the course of the negotiation and preparation of the Agreements, involving,
among other things, discussions and inquiries concerning various legal matters
and the review of certain corporate records, documents and proceedings, I also
participated in conferences with representatives of the Depositor and the
Company's independent certified public accountants, at which the contents of the
Prospectus Supplement and related matters were discussed and revised. I have
not, however, except with respect to matters expressly covered by this opinion,
independently verified the accuracy, completeness or fairness of the statements
contained in the Prospectus Supplement, and, due to the limitations inherent in
the information available to me and the nature and extent of my participation in
such conferences, I am unable to assume, and I do not assume, any responsibility
for the accuracy, completeness or fairness of such statements.
I express no opinion except as to (i) United States federal law and
(ii) the laws of the State of California.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Company is duly authorized and qualified to transact any and
all business contemplated by the Agreements in any state in which a Mortgaged
Property securing a Subsequent Mortgage Loan is located or is otherwise not
required under applicable law to effect such qualification and, in any event, is
in compliance with the doing business laws of any such State, to the extent
necessary to ensure the enforceability of each Subsequent Mortgage Loan and the
servicing of the Subsequent Mortgage Loans in accordance with the terms of the
Pooling and Servicing Agreement.
2. The Company has the power to engage in the transactions
contemplated by each and all of the Agreements and has all requisite power,
authority and legal right to execute and deliver the Agreements and any other
documents delivered in connection therewith and to perform and observe the terms
and conditions of such instruments.
<PAGE>
Salomon Brothers Mortgage Securities VII, Inc.
Salomon Smith Barney Inc.
Ameriquest Securities L.L.C.
November __, 1999 Page 3.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement enforceable
in accordance with its respective terms against the Company, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general equity principles regardless of whether such
enforcement is considered in a proceeding in equity or at law.
4. No consent, approval, authorization, license, permit or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Company of, or compliance by the Company with, any or all
of the Agreements or the consummation of the transactions contemplated by the
Agreements.
5. The execution and delivery of the Agreements by the Company, the
servicing of the Subsequent Mortgage Loans by the Company, the consummation of
any other of the transactions contemplated by the Agreements and the fulfillment
of or compliance with the terms of the Agreements are in the ordinary course of
business of the Company and will not (A) result in a material breach of any term
or provision of the charter or by-laws of the Company or (B) materially conflict
with, result in a material breach, violation or acceleration of or result in a
material default under the terms of any other material agreement or instrument
of which I have knowledge to which the Company is a party or by which it may be
bound, or any statute, order or regulation applicable to the Company of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Company; and the Company is not a party to, bound by or in
material breach or violation of any material indenture or other material
agreement or instrument of which I have knowledge, or subject to or in violation
of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the best of my knowledge, will in the
future materially and adversely affect, (x) the ability of the Company to
perform its obligations under the Agreements or (y) the business, operations,
financial condition, properties or assets of the Company taken as a whole.
6. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which would
draw into question the validity of the Agreements, the Certificates or the
Subsequent Mortgage Loans or of any action taken or to be taken in connection
with the transactions contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform its obligations under the terms
of the Agreements.
7. Based upon my participation, nothing has come to my attention that
has caused me to believe that the information contained in the Prospectus
Supplement, dated November __, 1999 relating to the Subsequent Mortgage Loans,
the Seller, and its loan portfolio, specifically the
<PAGE>
information, in the summary under the subheadings "Summary--The Subsequent
Mortgage Loans","Risk Factors--Certain Subsequent Mortgage Loans Have High
Loan-to-Value Ratios Which May Present a Greater Risk of Loss With Respect to
Such Subsequent Mortgage Loans, --Certain Subsequent Mortgage Loans Are
Delinquent as of the Subsequent Cut-off Date, Which May Present a Greater Risks
of Loss With Respect to Such Subsequent Mortgage Loans, --The Subsequent
Mortgage Loans Are Concentrated in the State of California, Which May Present a
Greater Risk of Loss With Respect to Such Subsequent Mortgage Loans, --The Rate
and Timing of Principal Distributions on the Offered Certificates Will Be
Affected by Prepayment Speeds, --Violation of Various Federal and State Laws May
Result in Losses on the Subsequent Mortgage Loans, the "Mortgage Pool" and
"Pooling and Servicing Agreement--The Originator and Master Servicer" and with
respect to any private placement memorandum or other offering document, any
information of a comparable nature, is true and accurate and does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
This opinion is solely for the benefit of the addressees hereof, and
may not be relied upon in any manner by any other person or entity.
Respectfully submitted,
-------------------------------
Exhibit 99.1
------------
<PAGE>
THE MORTGAGE POOL
GENERAL
The pool of mortgage loans (the "Mortgage Pool") will consist of
approximately 8,252 conventional, one- to four-family, adjustable-rate mortgage
loans (the "Mortgage Loans") secured by first liens on residential real
properties (the "Mortgaged Properties") and having an aggregate principal
balance as of December 1, 1999 (the "Cut-off Date") of approximately
$798,362,627 after application of scheduled payments due on or before the
Cut-off Date whether or not received. The Mortgage Loans have original terms to
maturity of not greater than 30 years from the date on which the first payment
was made on each Mortgage Loan.
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 Rate" on each Mortgage Loan is the per annum rate of interest
specified in the related mortgage note. Each Mortgage Loan provides for
semi-annual adjustment to its Mortgage Rate; provided, however, that the rate
adjusts after an initial period of approximately three years. In connection with
each Mortgage Rate adjustment, the Mortgage Loans have and for corresponding
adjustments to their monthly payment amounts, in each case on each applicable
adjustment date (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") for that Mortgage Loan specified
in the related Mortgage Note; provided, however, that with respect to all of the
Mortgage Loans, the Mortgage Rate on each Mortgage Loan, will generally increase
or decrease by no more than 1.00% per annum on any related Adjustment Date (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"). Notwithstanding the foregoing, the Mortgage Loans
generally have a Periodic Rate Cap of 3.00%, specified in the related Mortgage
Note, for their first Adjustment Date. 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 that 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, calculated as described herein, and the related Gross Margin.
See "--The Index" herein. None of the Mortgage Loans permits the related
mortgagor to convert the adjustable Mortgage Rate thereon to a fixed Mortgage
Rate.
The Mortgage Loans have scheduled monthly payments due 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 must be repaid at the time of sale of the related Mortgaged Property or
assumed by a creditworthy purchaser of the related Mortgaged Property.
Approximately 67.13% of the Mortgage Loans by aggregate principal balance
as of the Cut-off Date provide for payment by the mortgagor of a prepayment
charge (a "Prepayment Charge") on certain
<PAGE>
voluntary prepayments in full.
None of the Mortgage Loans are Buydown Mortgage Loans.
The average principal balance of the Mortgage Loans at origination was
approximately $96,972. No Mortgage Loan had a principal balance at origination
greater than approximately $604,000 or less than approximately $11,700. The
average principal balance of the Mortgage Loans as of the Cut-off Date was
approximately $96,748. No Mortgage Loan had a principal balance as of the
Cut-off Date greater than approximately $602,807 or less than approximately
$11,580.
The Mortgage Loans had Mortgage Rates as of the Cut-off Date ranging from
approximately 7.500% per annum to approximately 16.000% per annum, and the
weighted average Mortgage Rate was approximately 9.622% per annum. As of the
Cut-off Date, the Mortgage Loans had Gross Margins ranging from approximately
3.750% to approximately 7.125%, Minimum Mortgage Rates ranging from
approximately 7.500% per annum to approximately 16.000% per annum and Maximum
Mortgage Rates ranging from approximately 13.500% per annum to approximately
22.000% per annum. As of the Cutoff Date, the weighted average Gross Margin was
approximately 6.474%, the weighted average Minimum Mortgage Rate was
approximately 9.622% per annum and the weighted average Maximum Mortgage Rate
was approximately 15.622% per annum. The latest first Adjustment Date following
the Cut-off Date on any Mortgage Loan occurs in January 2003 and the weighted
average next Adjustment Date for all of the Mortgage Loans following the Cut-off
Date is July 2002.
The weighted average loan-to-value ratio at origination of the Mortgage Loans
was approximately 74.251%. At origination, no Mortgage Loan had a loan-to-value
ratio greater than approximately 90.00% or less than approximately 11.76%.
The weighted average remaining term to stated maturity of the Mortgage Loans
was approximately 28 years and 11 months as of the Cut-off Date. None of the
Mortgage Loans will have a first Due Date prior to November 1998 or after
February 2000, or will have a remaining term to stated maturity of less than 14
years and 3 months or greater than 30 years as of the Cut-off Date. The latest
maturity date of any Mortgage Loan is January 2030.
The Mortgage Loans are expected to have the following characteristics as of
the Cut-off Date (the sum in any column may not equal the total indicated due to
rounding):
<PAGE>
PRINCIPAL BALANCES OF THE MORTGAGE LOANS AT ORIGINATION
% OF
NUMBER AGGREGATE ORIGINAL AGGREGATE ORIGINAL
RANGE ($) OF LOANS PRINCIPAL BALANCE PRINCIPAL BALANCE
--------- -------- ------------------ ------------------
0.01 - 50,000.00....... 1,988 $ 70,610,645.00 8.82%
50,000.01 - 100,000.00....... 3,347 242,809,569.00 30.34
100,000.01 - 150,000.00....... 1,568 189,893,895.00 23.73
150,000.01 - 200,000.00....... 707 122,264,007.00 15.28
200,000.01 - 250,000.00....... 358 80,662,570.00 10.08
250,000.01 - 300,000.00....... 130 35,550,305.00 4.44
300,000.01 - 350,000.00....... 71 22,860,850.00 2.86
350,000.01 - 400,000.00....... 31 11,554,873.00 1.44
400,000.01 - 450,000.00....... 27 11,616,738.00 1.45
450,000.01 - 500,000.00....... 23 11,203,749.00 1.40
550,000.01 - 600,000.00....... 1 585,000.00 0.07
600,000.01 - 650,000.00....... 1 604,000.00 0.08
----- -------------- ------
Total........................ 8,252 $800,216,201.00 100.00%
===== ============== ======
PRINCIPAL BALANCES OF THE MORTGAGE LOANS AS OF THE CUT-OFF DATE
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
RANGE ($) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
--------- -------- ----------------- -----------------
0.01 - 50,000.00.......... 2,005 $ 71,213,393.30 8.92%
50,000.01 - 100,000.00.......... 3,339 242,315,072.66 30.35
100,000.01 - 150,000.00.......... 1,559 188,587,762.43 23.62
150,000.01 - 200,000.00.......... 707 122,004,316.64 15.28
200,000.01 - 250,000.00.......... 358 80,485,789.08 10.08
250,000.01 - 300,000.00.......... 130 35,476,485.74 4.44
300,000.01 - 350,000.00.......... 71 22,794,833.33 2.86
350,000.01 - 400,000.00.......... 31 11,526,588.17 1.44
400,000.01 - 450,000.00.......... 27 11,591,315.42 1.45
450,000.01 - 500,000.00.......... 23 11,179,872.11 1.40
550,000.01 - 600,000.00.......... 1 584,391.11 0.07
600,000.01 - 650,000.00.......... 1 602,806.66 0.08
----- -------------- ------
Total.......................... 8,252 $798,362,626.65 100.00%
===== ============== ======
<PAGE>
MORTGAGE RATES OF THE MORTGAGE LOANS AT ORIGINATION
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MORTGAGE RATE(%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------- -------- ----------------- -----------------
7.500 - 7.999................ 551 $ 77,268,918.86 9.68%
8.000 - 8.499................ 405 52,408,200.45 6.56
8.500 - 8.999................ 1,329 165,097,385.31 20.68
9.000 - 9.499................ 683 78,950,602.77 9.89
9.500 - 9.999................ 1,593 160,162,197.23 20.06
10.000 - 10.499............... 686 60,443,711.69 7.57
10.500 - 10.999............... 1,402 109,550,061.38 13.72
11.000 - 11.499............... 450 30,119,617.59 3.77
11.500 - 11.999............... 418 27,036,866.91 3.39
12.000 - 12.499............... 173 8,745,188.08 1.10
12.500 - 12.999............... 263 13,461,123.54 1.69
13.000 - 13.499............... 86 4,246,997.04 0.53
13.500 - 13.999............... 119 6,030,770.01 0.76
14.000 - 14.499............... 43 2,077,307.40 0.26
14.500 - 14.999............... 35 1,666,296.03 0.21
15.000 - 15.499............... 14 974,039.81 0.12
15.500 - 15.999............... 2 123,342.55 0.02
----- -------------- ------
Total.................... 8,252 $798,362,626.65 100.00%
===== ============== ======
MORTGAGE RATES OF THE MORTGAGE LOANS AS OF THE CUT-OFF DATE
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MORTGAGE RATE(%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------- -------- ----------------- -----------------
7.500 - 7.999.................. 551 $ 77,268,918.86 9.68%
8.000 - 8.499.................. 405 52,408,200.45 6.56
8.500 - 8.999.................. 1,329 165,097,385.31 20.68
9.000 - 9.499.................. 683 78,950,602.77 9.89
9.500 - 9.999.................. 1,593 160,162,197.23 20.06
10.000 - 10.499................. 686 60,443,711.69 7.57
10.500 - 10.999................. 1,402 109,550,061.38 13.72
11.000 - 11.499................. 450 30,119,617.59 3.77
11.500 - 11.999................. 418 27,036,866.91 3.39
12.000 - 12.499................. 173 8,745,188.08 1.10
12.500 - 12.999................. 263 13,461,123.54 1.69
13.000 - 13.499................. 86 4,246,997.04 0.53
13.500 - 13.999................. 119 6,030,770.01 0.76
14.000 - 14.499................. 43 2,077,307.40 0.26
14.500 - 14.999................. 35 1,666,296.03 0.21
15.000 - 15.499................. 14 974,039.81 0.12
15.500 - 15.999................. 2 123,342.55 0.02
----- -------------- ------
Total...................... 8,252 $798,362,626.65 100.00%
===== ============== ======
<PAGE>
MAXIMUM MORTGAGE RATES OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
MAXIMUM NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MORTGAGE RATE(%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------- -------- ----------------- -----------------
13.500 - 13.999................ 551 $ 77,268,918.86 9.68%
14.000 - 14.499................ 405 52,408,200.45 6.56
14.500 - 14.999................ 1,329 165,097,385.31 20.68
15.000 - 15.499................ 683 78,950,602.77 9.89
15.500 - 15.999................ 1,593 160,162,197.23 20.06
16.000 - 16.499................ 686 60,443,711.69 7.57
16.500 - 16.999................ 1,402 109,550,061.38 13.72
17.000 - 17.499................ 450 30,119,617.59 3.77
17.500 - 17.999................ 418 27,036,866.91 3.39
18.000 - 18.499................ 173 8,745,188.08 1.10
18.500 - 18.999................ 263 13,461,123.54 1.69
19.000 - 19.499................ 86 4,246,997.04 0.53
19.500 - 19.999................ 119 6,030,770.01 0.76
20.000 - 20.499................ 43 2,077,307.40 0.26
20.500 - 20.999................ 35 1,666,296.03 0.21
21.000 - 21.499................ 14 974,039.81 0.12
21.500 - 21.999................ 2 123,342.55 0.02
----- -------------- ------
Total..................... 8,252 $798,362,626.65 100.00%
===== ============== ======
MINIMUM MORTGAGE RATES OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
MINIMUM NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MORTGAGE RATE(%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------- -------- ----------------- -----------------
7.500 - 7.999................. 551 $ 77,268,918.86 9.68%
8.000 - 8.499................. 405 52,408,200.45 6.56
8.500 - 8.999................. 1,329 165,097,385.31 20.68
9.000 - 9.499................. 683 78,950,602.77 9.89
9.500 - 9.999................. 1,593 160,162,197.23 20.06
10.000 - 10.499................ 686 60,443,711.69 7.57
10.500 - 10.999................ 1,402 109,550,061.38 13.72
11.000 - 11.499................ 450 30,119,617.59 3.77
11.500 - 11.999................ 418 27,036,866.91 3.39
12.000 - 12.499................ 173 8,745,188.08 1.10
12.500 - 12.999................ 263 13,461,123.54 1.69
13.000 - 13.499................ 86 4,246,997.04 0.53
13.500 - 13.999................ 119 6,030,770.01 0.76
14.000 - 14.499................ 43 2,077,307.40 0.26
14.500 - 14.999................ 35 1,666,296.03 0.21
15.000 - 15.499................ 14 974,039.81 0.12
15.500 - 15.999................ 2 123,342.55 0.02
----- -------------- ------
Total..................... 8,252 $798,362,626.65 100.00%
===== ============== ======
<PAGE>
GROSS MARGINS OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
GROSS MARGIN (%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- --------------- -------- ----------------- -----------------
3.750 - 3.999................ 66 $ 7,702,128.65 0.96%
4.000 - 4.249................ 25 2,825,809.24 0.35
4.250 - 4.499................ 16 1,533,560.83 0.19
4.500 - 4.749................ 39 3,763,401.13 0.47
4.750 - 4.999................ 11 1,070,534.22 0.13
5.000 - 5.249................ 49 4,304,397.43 0.54
5.250 - 5.499................ 14 707,103.05 0.09
5.500 - 5.749................ 473 42,525,002.43 5.33
5.750 - 5.999................ 143 11,293,329.26 1.41
6.000 - 6.249................ 177 15,946,826.12 2.00
6.250 - 6.499................ 261 25,421,944.68 3.18
6.500 - 6.749................ 4,786 520,690,430.32 65.22
6.750 - 6.999................ 364 31,194,662.63 3.91
7.000 - 7.249................ 1,828 129,383,496.66 16.21
----- -------------- ------
Total................... 8,252 $798,362,626.65 100.00%
===== ============== ======
ORIGINAL LOAN-TO-VALUE RATIOS OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
ORIGINAL NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
LOAN-TO-VALUE RATIO(%) OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------------------- -------- ----------------- -----------------
Less than or equal to 25.00.. 29 $ 945,323.03 0.12%
25.01 - 30.00................ 45 2,118,169.91 0.27
30.01 - 35.00................ 35 1,412,108.22 0.18
35.01 - 40.00................ 60 2,863,163.06 0.36
40.01 - 45.00................ 100 6,225,372.11 0.78
45.01 - 50.00................ 163 9,915,376.88 1.24
50.01 - 55.00................ 229 15,694,065.77 1.97
55.01 - 60.00................ 695 48,843,318.49 6.12
60.01 - 65.00................ 522 40,423,696.04 5.06
65.01 - 70.00................ 1,170 96,857,459.79 12.13
70.01 - 75.00................ 1,489 151,100,429.00 18.93
75.01 - 80.00................ 3,047 337,873,904.43 42.32
80.01 - 85.00................ 532 66,912,943.70 8.38
85.01 - 90.00................ 136 17,177,296.22 2.15
----- -------------- ------
Total................... 8,252 $798,362,626.65 100.00%
===== ============== ======
<PAGE>
GEOGRAPHIC DISTRIBUTION OF THE MORTGAGED PROPERTIES
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
LOCATION OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- -------- -------- ----------------- -----------------
Alabama....................... 185 $ 10,871,341.15 1.36%
Alaska........................ 4 537,382.76 0.07
Arizona....................... 169 14,299,801.09 1.79
Arkansas...................... 31 1,493,351.54 0.19
California.................... 1,193 188,146,868.61 23.57
Colorado...................... 192 20,616,487.36 2.58
Connecticut................... 120 14,770,761.41 1.85
Delaware...................... 4 256,170.49 0.03
District of Columbia.......... 36 3,956,172.70 0.50
Florida....................... 642 51,547,457.00 6.46
Georgia....................... 181 16,423,265.87 2.06
Hawaii........................ 28 4,812,584.06 0.60
Idaho......................... 25 1,943,973.85 0.24
Illinois...................... 345 36,193,295.24 4.53
Indiana....................... 191 12,771,361.34 1.60
Iowa.......................... 57 3,452,550.59 0.43
Kansas........................ 35 2,386,231.59 0.30
Kentucky...................... 45 2,716,760.16 0.34
Louisiana..................... 99 6,122,205.24 0.77
Maine......................... 11 815,337.98 0.10
Maryland...................... 146 16,058,209.69 2.01
Massachusetts................. 264 33,583,708.35 4.21
Michigan...................... 399 30,521,688.63 3.82
Minnesota..................... 300 29,667,736.01 3.72
Mississippi................... 13 605,578.12 0.08
Missouri...................... 118 6,151,727.42 0.77
Montana....................... 2 138,485.35 0.02
Nebraska...................... 48 3,361,107.14 0.42
Nevada........................ 18 1,723,465.31 0.22
New Hampshire................. 51 4,793,589.96 0.60
New Jersey.................... 321 37,596,149.87 4.71
New Mexico.................... 107 8,416,137.73 1.05
New York...................... 376 43,522,241.08 5.45
North Carolina................ 178 12,007,442.55 1.50
North Dakota.................. 1 24,426.24 0.00
Ohio.......................... 293 19,591,884.51 2.45
Oklahoma...................... 98 4,655,569.83 0.58
Oregon........................ 59 6,164,230.85 0.77
Pennsylvania.................. 401 30,798,606.57 3.86
Rhode Island.................. 61 6,110,106.01 0.77
South Carolina................ 115 6,591,266.10 0.83
South Dakota.................. 2 132,896.59 0.02
Tennessee..................... 196 13,736,733.34 1.72
Texas......................... 647 42,835,113.83 5.37
Utah.......................... 126 13,187,412.21 1.65
Vermont....................... 14 1,128,304.44 0.14
Washington.................... 204 23,797,635.78 2.98
West Virginia................. 15 845,714.20 0.11
Wisconsin..................... 76 5,821,332.03 0.73
Wyoming....................... 10 660,766.88 0.08
----- -------------- ------
8,252 $798,362,626.65 100.00%
Total.................... ===== ============== ======
<PAGE>
MORTGAGED PROPERTY TYPES OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
PROPERTY TYPE OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------- -------- ----------------- -----------------
Single Family................... 7,005 $685,661,038.33 85.88%
Two- to Four-Family............. 468 50,771,906.30 6.36
Condominium..................... 191 20,158,538.84 2.53
Town House...................... 64 4,871,687.63 0.61
Planned Unit Development........ 167 20,059,958.23 2.51
Manufactured Housing............ 357 16,839,497.32 2.11
----- -------------- ------
Total...................... 8,252 $798,362,626.65 100.00%
===== ============== ======
MORTGAGED PROPERTY OCCUPANCY STATUS OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
OCCUPANCY STATUS OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------- -------- ----------------- -----------------
Owner-Occupied.................. 7,547 $752,016,208.83 94.19%
Non Owner Occupied.............. 670 43,423,328.18 5.44
Second Home..................... 35 2,923,089.64 0.37
----- -------------- ------
Total................. 8,252 $798,362,626.65 100.00%
===== ============== ======
The occupancy status of a Mortgaged Property is as represented by the
mortgagor in its loan application.
PURPOSE OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
LOAN PURPOSE OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------ -------- ----------------- -----------------
Purchase........................ 80 $ 9,604,776.44 1.20%
Equity-out Refinance............ 4,037 341,058,219.73 42.72
Refinance....................... 4,135 447,699,630.48 56.08
----- -------------- ------
Total................. 8,252 $798,362,626.65 100.00%
===== ============== ======
<PAGE>
LOAN PROGRAMS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
LOAN PROGRAM OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------ -------- ----------------- -----------------
<S> <C> <C> <C>
Full Documentation Program............. 6,758 $635,360,465.67 79.58%
Fast Trac Documentation Program........ 766 95,173,327.65 11.92
Stated Income Documentation Program.... 728 67,828,833.33 8.50
----- -------------- ------
Total........................ 8,252 $798,362,626.65 100.00%
===== ============== ======
</TABLE>
RISK CATEGORIES OF THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
RISK CATEGORIES OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- --------------- -------- ----------------- -----------------
AAA............................. 410 $ 45,664,627.44 5.72%
AA.............................. 997 113,731,639.83 14.25
A............................... 2,542 269,555,768.37 33.76
B............................... 1,895 193,640,955.51 24.25
C............................... 1,898 139,581,341.92 17.48
D............................... 510 36,188,293.58 4.53
----- --------------- ------
Total....................... 8,252 $798,362,626.65 100.00%
===== =============== ======
NEXT ADJUSTMENT DATES FOR THE MORTGAGE LOANS
AGGREGATE % OF AGGREGATE
PRINCIPAL BALANCE PRINCIPAL BALANCE
NUMBER OUTSTANDING AS OF OUTSTANDING AS OF
MONTH OF NEXT ADJUSTMENT DATE OF LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------------------- -------- ----------------- -----------------
October 2001................. 1 $ 96,094.25 0.01%
November 2001................ 5 479,143.00 0.06
December 2001................ 2 146,856.91 0.02
January 2002................. 1 88,881.04 0.01
March 2002................... 17 1,580,878.75 0.20
April 2002................... 277 23,080,251.77 2.89
May 2002..................... 641 63,260,456.53 7.92
June 2002.................... 1,014 102,356,762.80 12.82
July 2002.................... 1,437 137,746,205.45 17.25
August 2002.................. 1,440 144,401,405.89 18.09
September 2002............... 2,645 252,148,127.18 31.58
October 2002................. 64 6,472,997.18 0.81
November 2002................ 255 25,417,867.90 3.18
December 2002................ 213 20,348,750.00 2.55
January 2003................. 240 20,737,948.00 2.60
----- -------------- ------
Total.............. 8,252 $798,362,626.65 100.00%
===== ============== ======
