<PAGE>
FURTHER SUPPLEMENT
(To Supplement dated December 11, 1995 to Prospectus dated June 18, 1993 and
Prospectus Supplement dated July 15, 1993)
THE PRUDENTIAL HOME MORTGAGE SECURITIES COMPANY, INC. [LOGO]
Seller
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1993-32
PRINCIPAL AND INTEREST PAYABLE MONTHLY, COMMENCING IN JANUARY 1996
VARIABLE RATE(1) CLASS A-9 CERTIFICATES
(1) ON THE CLASS A-9 NOTIONAL AMOUNT
------------------------
Prospective investors in the Class A-9 Certificates should be aware of the
following:
(A) As of January 30, 1996, as a result of recent flooding (the "1996
Floods"), all counties in the Commonwealth of Pennsylvania, all counties in the
State of Maryland, 21 counties in the State of West Virginia, 11 counties in the
State of New York, 6 counties in the State of Ohio and 5 counties in the
Commonwealth of Virginia (the "1996 Flood Counties") were declared federal
disaster areas eligible for federal disaster assistance. As of November 17,
1995, 37 Mortgage Loans having an Aggregate Unpaid Principal Balance of
approximately $9,940,419 were secured by Mortgaged Properties that are located
in the 1996 Flood Counties. In addition, other counties may have been and may
become affected by the 1996 Floods and such other counties may ultimately be
declared federal disaster areas. Neither the Seller nor the Servicer has
undertaken the physical inspection of any Mortgaged Properties. As a result,
there can be no assurance that material damage to any Mortgaged Property in the
affected region has not occurred.
(B) The last paragraph under "Risk Factors and Special Considerations" set
forth on page S1-3 of the Supplement dated December 11, 1995 to the Prospectus
dated June 18, 1993 and the Prospectus Supplement dated July 15, 1993 is hereby
replaced in its entirety with the following:
The Seller and the Servicer are each either a direct or indirect,
wholly-owned subsidiary of Residential Services Corporation of America, which is
a direct, wholly-owned subsidiary of The Prudential Insurance Company of
America, a mutual insurance company organized under the laws of the State of New
Jersey ("Prudential Insurance"). On January 29, 1996, Prudential Insurance
announced that it had entered into a definitive agreement (the "Sale Agreement")
to sell a substantial portion of its residential mortgage operations to Norwest
Mortgage, Inc., a California corporation ("Norwest Mortgage"), and Norwest Bank
Minnesota National Association, a national banking association ("Norwest Bank"
and, collectively with Norwest Mortgage, "Norwest"). In connection therewith, on
the closing date specified pursuant to the Sale Agreement (the "Sale Date"),
which is currently expected to be on or about April 30, 1996, Norwest Mortgage
will acquire from the Servicer substantially all of its assets and businesses,
other than certain mortgage loans and the Servicer's right to service mortgage
loans underlying series of mortgage pass-through certificates representing
interests in trusts formed by the Seller or by Securitized Asset Sales, Inc., an
affiliate of the Seller and the Servicer ("SASI"), including the Mortgage Loans
in the Trust Estate, and certain other mortgage servicing rights (all such
servicing rights collectively, the "Retained Servicing"). It is the present
intention of the Servicer to sell the Retained Servicing, from time to time as
market conditions warrant, in one or more transactions to one or more
purchasers, which may include Norwest Mortgage, and to effectively exit the
mortgage loan origination and servicing business as of the Sale Date.
In order to assure the performance of the Servicer's obligations as servicer
under the Pooling and Servicing Agreement as well as under other pooling and
servicing agreements pursuant to which the various series of the Seller's
mortgage pass-through certificates were issued and other agreements pursuant to
which the Servicer performs Retained Servicing with respect to mortgage loans
underlying series of mortgage pass-through certificates representing interests
in trusts formed by the Seller or SASI (each, a "Servicing Agreement") and under
each other agreement pursuant to which the Servicer performs Retained Servicing
with respect to mortgage loans not underlying series of mortgage pass-through
certificates representing interests in trusts formed by the Seller or SASI
(each, an "Other Servicing Agreement"), the Servicer, Prudential Insurance and
Norwest intend to enter into the following arrangements:
1. SUBSERVICING AGREEMENT. The Servicer, Prudential Insurance and Norwest
Mortgage will enter into a subservicing agreement (the "Subservicing
Agreement"), pursuant to which the Servicer will delegate to Norwest Mortgage,
and Norwest Mortgage will agree to perform, all of the Servicer's duties and
obligations as mortgage loan servicer under the Pooling and Servicing Agreement
and each Servicing Agreement and Other Servicing Agreement, other than the
Servicer's duties with respect to the administration and disposition of real
estate acquired upon foreclosure which latter duties will remain the
responsibility of the Servicer, with the particular functions to be delegated by
the Servicer to Prudential Asset Recovery, Inc. or other third party
contractors. With respect to the Series 1993-32 Certificates, such duties
include collection of mortgage payments, maintenance of tax and insurance
escrows, advancing for borrower delinquencies and unpaid taxes, to the extent
required by the Pooling and Servicing Agreement, and foreclosure or other
realization activities in connection with defaulted Mortgage Loans.
Under the Subservicing Agreement, Norwest Mortgage will be obligated to make
any principal and interest or other advances required to be made by the Servicer
under the Pooling and Servicing Agreement as well as under each Servicing
Agreement or Other Servicing Agreement, provided that the aggregate unreimbursed
amount of such advances at any time does not exceed $100 million. The Servicer
will be obligated to reimburse Norwest Mortgage for the amount of any such
advances, plus interest, from its own funds. The Servicer will remain obligated
under the Pooling and Servicing Agreement and each Servicing Agreement and Other
Servicing Agreement for all required advances which are not made by Norwest
Mortgage for any reason. In order to provide for its obligation to make advances
after the Sale Date, the Servicer will enter into a Loan Agreement with
Prudential Funding Corporation, an affiliate of the Seller, the Servicer and
Prudential Insurance ("Funding"), pursuant to which Funding will provide the
Servicer with a committed
------------------------
LEHMAN BROTHERS
January 30, 1996
<PAGE>
borrowing line (the "Loan Facility") in an amount required by each rating agency
which has assigned ratings to the mortgage pass-through certificates
representing interests in trusts formed by the Seller or SASI, for the sole
purpose of supporting advances required of the Servicer under the Pooling and
Servicing Agreement and Servicing Agreements. Although the Servicer expects that
the combination of Norwest Mortgage's advance obligation under the Subservicing
Agreement and the Loan Facility will be adequate to provide for the continuation
of all such advances, there can be no assurance that such mechanisms will be
sufficient, or that after the Sale Date the Servicer will have sufficient other
assets, to ensure that all required advances will be made.
The Servicer will pay Norwest Mortgage a portion of the Servicer's servicing
compensation under the Pooling and Servicing Agreement for its activities as
subservicer. The Subservicing Agreement will have an initial term of five years
from the Sale Date and may be extended for consecutive three year terms by the
Servicer, at its option, provided that the Servicer and Norwest Mortgage agree,
in the exercise of good faith, on the subservicing compensation for each such
renewal term. The Subservicing Agreement will be terminable by the Servicer,
from time to time, with respect to any Mortgage Loans as to which the Servicer
arranges to sell the Retained Servicing.
2. CERTIFICATE ADMINISTRATION AGREEMENT. The Servicer and Norwest Bank
will enter into an agreement (the "Certificate Administration Agreement"),
pursuant to which the Servicer will delegate to Norwest Bank, and Norwest Bank
will agree to perform, all of the Servicer's obligations, if any, with respect
to administrative and reporting functions under the Pooling and Servicing
Agreement. Such duties include calculation of distributions, preparation and
filing of tax returns, preparation of reports to investors and preparation and
filing of periodic reports under the Securities Exchange Act of 1934, as
amended.
The Subservicing Agreement and the Certificate Administration Agreement will
collectively provide for the delegation of substantially all of the Servicer's
duties and obligations under the Pooling and Servicing Agreement. While the
Pooling and Servicing Agreement provides that the Servicer will remain liable
for its obligations thereunder until the related Retained Servicing is
transferred in the manner permitted thereby, from and after the Sale Date the
Servicer is not expected to have any servicing capability or employees with
which to perform such obligations.
Under the Pooling and Servicing Agreement, the Seller is required, with
respect to any Mortgage Loan found to have defective documentation or in respect
of which the Seller has breached a representation or warranty, either to
repurchase such Mortgage Loan or to substitute a new mortgage loan therefor.
Each such Mortgage Loan was, in turn, acquired by the Seller from the Servicer
pursuant to an agreement under which the Servicer is required to repurchase or
substitute for any such Mortgage Loan so repurchased or substituted for by the
Seller. Although after the Sale Date the Servicer will continue to own the
Retained Servicing, the Servicer intends to sell the Retained Servicing as
expeditiously as market conditions permit. Accordingly, there can be no
assurance that at any time after the Sale Date the Servicer will have any
material assets with which to satisfy such obligations to the Seller. In such
event, the Seller would be unable to fulfill its repurchase or substitution
obligations under the Pooling and Servicing Agreement. However with respect to
any Mortgage Loan subserviced pursuant to the Subservicing Agreement, Prudential
Insurance will agree in the Subservicing Agreement to provide the funds to
repurchase such Mortgage Loan.
At December 31, 1995, Norwest Mortgage, the nation's largest mortgage
company, had originated $33.9 billion in mortgage loans and had a servicing
portfolio of more than $107 billion. Headquartered in Des Moines, Iowa, Norwest
Mortgage has more than 700 stores in all 50 states.
